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

§
Marginalia
Code · REGISTER · 2007-12-26 · Federal Aviation Administration (FAA), Department of Transportation (DOT) · Rules and Regulations

Rules and Regulations. Final rule

77,566 words·~353 min read·/register/2007/12/26/07-5968·

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

BILLING CODE 1505-01-D DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28876; Directorate Identifier 2000-NE-08-AD; Amendment 39-15311; AD 2007-26-09] RIN 2120-AA64 Airworthiness Directives; Hartzell Propeller Inc. Compact Series Propellers AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is superseding an existing airworthiness directive
(AD)for all Hartzell Propeller Inc. models ( )HC-( )( )Y( )-( )( )( ) compact series, constant speed or feathering propellers with Hartzell manufactured “Y” shank aluminum blades. That AD currently requires initial blade inspections, with no repetitive inspections; rework of all “Y” shank aluminum blades including cold rolling of the blade shank retention radius, blade replacement and modification of pitch change mechanisms for certain propeller models; and changing the airplane operating limitations with specific models of propellers installed. This AD requires the same actions but clarifies certain areas of the compliance, and updates a certain service bulletin
(SB)reference to the most recent SB. This AD results from operators requesting clarification of certain portions of AD 2002-09-08. We are issuing this AD to prevent failure of the propeller blade from fatigue cracks in the blade shank radius, which can result in damage to the airplane and loss of airplane control. DATES: This AD becomes effective January 30, 2008. The Director of the Federal Register previously approved the incorporation by reference of certain publications listed in the regulations as of June 13, 2002 (67 FR 31113, May 9, 2002). The Director of the Federal Register approved the incorporation by reference of certain publications listed in the regulations as of January 30, 2008. ADDRESSES: You can get the service information identified in this AD from Hartzell Propeller Inc. Technical Publications Department, One Propeller Place, Piqua, OH 45356; telephone
(937)778-4200; fax
(937)778-4391. The Docket Operations office is located at Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue, SE., West Building Ground Floor, Room W12-140, Washington, DC 20590-0001. FOR FURTHER INFORMATION CONTACT: Tim Smyth, Senior Aerospace Engineer, Chicago Aircraft Certification Office, FAA, Small Airplane Directorate, 2300 East Devon Avenue, Des Plaines, IL 60018-4696; e-mail: *timothy.smyth@faa.gov* ; telephone
(847)294-8110; fax
(847)294-7132. SUPPLEMENTARY INFORMATION: The FAA proposed to amend 14 CFR part 39 by superseding AD 2002-09-08, Amendment 39-12741 (67 FR 31113, May 9, 2002) with a proposed AD. The proposed AD applies to Hartzell Propeller Inc. models ( )HC-( )( )Y( )-( )( )( ) compact series, constant speed or feathering propellers with Hartzell manufactured “Y” shank aluminum blades. We published the proposed AD in the **Federal Register** on August 14, 2006 (71 FR 46413). That action proposed to require the same actions as AD 2002-09-08, but would clarify certain areas of the compliance and would update a certain SB reference to the most recent SB. 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 AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone
(800)647-5527) is provided in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comment received. Incorporate Service Documents by Reference and Publish Them in the Document Management System The Modification and Replacement Parts Association requests that all service documents deemed essential to the accomplishment of the AD be incorporated by reference into the regulatory instrument, and published in the Docket Management System. We partially agree. We have incorporated pertinent service material into the regulatory section of this AD. However, at this time, the FAA does not post service material on the Federal Docket Management System. We are in the process of reviewing issues surrounding the posting of service bulletins on the Federal Docket Management System as part of an AD docket. Once we have thoroughly examined all aspects of this issue and have made a final determination, we will consider whether our current practice needs to be revised. Format Changes We changed the propeller blade shank cold rolling information from being a note, to paragraphs. We also added paragraphs to the alternative methods of compliance, to make the information more readable. Conclusion We have carefully reviewed the available data, including the comment received, and determined that air safety and the public interest require adopting the AD with the changes described previously. Costs of Compliance We estimate that this AD will affect 35,750 propellers installed on airplanes of U.S. registry. We expect this AD will cost about $700 per propeller. Total cost to U.S. operators for this AD would be about $25.025 million. However, we also expect that all of the affected propellers should have already been inspected to comply with the existing AD's requirements to inspect, and rework or replace the aluminum blades. Therefore, we expect that this AD will have no additional cost. Docket Number Change We are transferring the docket for this AD to the Federal Docket Management System as part of our on-going docket management consolidation efforts. The new Docket No. is FAA-2007-28876. The old Docket No. became the Directorate Identifier, which is 2000-NE-08-AD. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and
(3)Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a summary of the costs to comply with this AD and placed it in the AD Docket. You may get a copy of this summary at the address listed under ADDRESSES . List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the Federal Aviation Administration amends 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by removing Amendment 39-12741 (67 FR 31113, May 9, 2002), and by adding a new airworthiness directive, Amendment 39-15311, to read as follows: **2007-26-09 Hartzell Propeller Inc.:** Amendment 39-15311. Docket No. FAA-2007-28876; Directorate Identifier 2000-NE-08-AD. Effective Date
(a)This airworthiness directive
(AD)becomes effective January 30, 2008. Affected ADs
(b)This AD supersedes AD 2002-09-08, Amendment 39-12741. Applicability
(c)This AD applies to all Hartzell Propeller Inc. models ( )HC-( )( )Y( )-( )( )( ) compact series constant speed or feathering propellers with Hartzell manufactured “Y” shank aluminum blades. These propellers are used on, but not limited to, the following airplanes: Manufacturer Airplane Model Aermacchi S.pA. (formerly Siai-Marchetti) S-208 Aero Commander 200B and 200D Aerostar 600 Beech 24, 35, 36, 45, 55, 56TC, 58, 60, and 95 Bellanca 14 and 17 series Cessna 182 and 188 Embraer EMB-200A Maule M5 Mooney M20 and M22 Pilatus Britten Norman, or Britten Norman BN-2, BN-2A, and BN-2A-6 Piper PA-23, PA-24, PA-28, PA-30, PA-31, PA-32, PA-34, PA-36, and PA-39 Pitts S-1T and S-2A Rockwell 112, 114, 200, 500, and 685 series
(d)The parentheses appearing in the propeller model number indicates the presence or absence of an additional letter(s) that varies the basic propeller model. This AD applies regardless of whether these letters are present or absent in the propeller model designation. Unsafe Condition
(e)This AD results from operators requesting clarification of certain portions of AD 2002-09-08. We are issuing this AD to prevent failure of the propeller blade from fatigue cracks in the aluminum blade shank radius, which can result in damage to the airplane and loss of airplane control. Compliance
(f)You are responsible for having the actions required by this AD performed within the compliance times specified unless the actions have already been done.
(g)If the propeller maintenance records show compliance with AD 77-12-06R2, then compliance was previously done and no further action is required.
(h)Propellers are considered in compliance with the one-time inspection and rework requirements only, of this AD if:
(1)All blades are serial number D47534 and above, or
(2)All blades are identified with the letters “PR” or “R” which are ink-stamped on the camber side, or the letters “RD” which are metal-stamped on the blade butt. Models ( )HC-( )( )Y( ) Compact Series “Y” Shank Propellers
(i)If propeller models ( )HC-( )( )Y( ) have not been inspected and reworked in accordance with AD 77-12-06R2, then before further flight, do a one-time action to remove, inspect, rework, or replace blades if necessary using Hartzell Service Bulletin
(SB)No. 118A, dated February 15, 1977. Propeller Blade Shank Cold Rolling
(j)One requirement in Hartzell SB No. 118A is the cold rolling of the propeller blade shank.
(1)Cold rolling is a critical requirement in the prevention of cracks in the blade. Propeller repair shops must obtain and maintain proper certification to perform the cold rolling procedure.
(2)For a current list of propeller overhaul facilities approved to perform the blade shank cold rolling procedure, contact Hartzell Product Support, telephone
(937)778-4200.
(3)Not all propeller repair facilities have the equipment to properly perform a cold roll of the blade shanks.
(4)In addition, any rework in the blade shank area will also necessitate the cold rolling of the blade shank area, apart from the one-time cold rolling requirement of this AD. Instrument Panel Modifications
(k)If airplanes with propeller models ( )HC-C2YK-( )( )( )/( )( )7666A-( ), installed on (undampered) 200 or more horsepower Lycoming IO-360 series engines, have not been modified using AD 77-12-06R2, then modify the airplane instrument panel according to the following subparagraphs before further flight. Airplanes include, but are not limited to, Mooney M20E and M20F (normal category), Piper PA-28R-200 (normal category), and Pitts S-1T and S-2A (acrobatic category).
(1)For normal category airplanes, before further flight, remove the present vibration placard and affix a new placard near the engine tachometer that states: “Avoid continuous operation: Between 2,000 and 2,350 rpm.”
(2)For utility and acrobatic category airplanes, before further flight, remove the present vibration placard and affix a new placard near the engine tachometer that states: “Avoid continuous operation: Between 2,000 and 2,350 rpm. Above 2,600 rpm in acrobatic flight.”
(3)For normal category airplanes, re-mark the engine tachometer face or bezel with a red arc for the restricted engine speed range, between 2,000 and 2,350 rpm.
(4)For acrobatic and utility airplanes, re-mark the engine tachometer face or bezel with a red arc for each restricted engine speed range, i.e., between 2,000 and 2,350 rpm and between 2,600 and 2,700 rpm (red line). Models ( )HC-C2YK-( )( )( )/( )( )8475( )-( ) or ( )( )8477( )-( ) Propellers
(l)If propeller models ( )HC-C2YK-( )( )( )/( )( )8475( )-( ) or ( )( )8477( )-( ) have not been inspected and reworked in accordance with AD 74-15-02, then do the following maintenance before further flight.
(1)Remove propeller from airplane.
(2)Modify pitch change mechanism, and replace blades with equivalent model blades prefixed with letter “F” using Hartzell Service Letter No. 69, dated November 30, 1971 and Hartzell SB No. 101D, dated December 19, 1974.
(3)Inspect and repair or replace, if necessary, using Hartzell SB No. 118A, dated February 15, 1977. Alternative Methods of Compliance
(m)The Manager, Chicago Aircraft Certification Office, has the authority to approve alternative methods of compliance for this AD if requested using the procedures found in 14 CFR 39.19.
(n)Alternative methods of compliance for Hartzell SB No. 118A, dated February 15, 1977, are: Hartzell SB No. 118B, November 28, 1977; SB No. 118C, May 13, 1983; SB No. 118D, March 25, 1991; SB No. HC-SB-61-118E, December 14, 2001; SB No. HC-SB-61-118 revision F, dated August 15, 2002, and Hartzell Manual 133C.
(o)An alternative method of compliance to Hartzell SB No. 101D, dated December 19, 1974, is Hartzell Manual 133C.
(p)No adjustment in the compliance time is allowed. Related Information
(q)Contact Tim Smyth, Senior Aerospace Engineer, Chicago Aircraft Certification Office, FAA, Small Airplane Directorate, 2300 East Devon Avenue, Des Plaines, IL 60018-4696; e-mail: *timothy.smyth@faa.gov* ; telephone
(847)294-7132; fax
(847)294-7834, for more information about this AD. Material Incorporated by Reference
(r)You must use the service information specified in Table 1 of this AD to perform the actions required by this AD. The Director of the Federal Register previously approved the incorporation by reference of the documents listed in Table 1 of this AD in accordance with 5 U.S.C. 552(a) and 1 CFR part 51 on June 13, 2002. Contact Hartzell Propeller Inc. Technical Publications Department, One Propeller Place, Piqua, OH 45356; telephone
(937)778-4200; fax
(937)778-4391, for a copy of this service information. You may review service information copies at the FAA, New England Region, 12 New England Executive Park, Burlington, MA; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call
(202)741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html* . Table 1.—Incorporation by Reference Hartzell service information Page Revision Date SB No. 101D All D December 19, 1974. SB No. 118A All A February 15, 1977. SL No. 69 All 1 November 30, 1971. Issued in Burlington, Massachusetts, on December 17, 2007. Peter A. White, Assistant Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. E7-24855 Filed 12-21-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF COMMERCE Bureau of Economic Analysis 15 CFR Part 806 [Docket No. 070301044-7814-02] RIN 0691-AA64 Direct Investment Surveys: BE-12, 2007 Benchmark Survey of Foreign Direct Investment in the United States AGENCY: Bureau of Economic Analysis, Commerce. ACTION: Final rule. SUMMARY: This final rule amends regulations concerning the reporting requirements for the BE-12, Benchmark Survey of Foreign Direct Investment in the United States. The BE-12 survey is conducted once every 5 years and covers virtually the entire universe of foreign direct investment in the United States in terms of value. The benchmark survey will be conducted for 2007. BEA is changing the reporting requirements on the BE-12 Benchmark survey to: Increase the exemption level for reporting on the BE-12(LF) (Long Form) from $125 million to $175 million; increase the exemption level for reporting on the BE-12(SF) (Short Form) from $10 million to $40 million; and increase the exemption level for reporting on the BE-12 Bank Form from $10 million to $15 million. In addition, BEA is amending Form BE-12(X) by: Re-naming it the Form BE-12 Claim for Not Filing and deleting several questions, which will be moved to a new Form BE-12 Mini. The Claim for Not Filing will be completed only by persons that are not subject to the reporting requirements of the BE-12 survey but have been contacted by BEA concerning their reporting status. The BE-12 Mini is an abbreviated form for reporting U.S. affiliates with total assets, sales or gross operating revenues, and net income
(loss)less than or equal to $40 million. DATES: This final rule will be effective January 25, 2008. FOR FURTHER INFORMATION CONTACT: David H. Galler, Chief, Direct Investment Division (BE-50), Bureau of Economic Analysis, U.S. Department of Commerce, Washington, DC 20230; phone
(202)606-9835 or e-mail ( *david.galler@bea.gov* ). SUPPLEMENTARY INFORMATION: In the September 21, 2007, **Federal Register** , 72 FR 53970-53973, BEA published a notice of proposed rulemaking setting forth revised reporting requirements for the BE-12, Benchmark Survey of Foreign Direct Investment in the United States. No comments on the proposed rule were received. Thus, the proposed rule is adopted without change. This final rule amends 15 CFR 806.17 to set forth the reporting requirements for the BE-12, 2007 Benchmark Survey of Foreign Direct Investment in the United States, and 15 CFR 806.18 to list the OMB control number for this survey. Description of Changes The BE-12 benchmark survey is a mandatory survey and is conducted once every five years by BEA under the authority of the International Investment and Trade in Services Survey Act (22 U.S.C. 3101-3108), hereinafter, “the Act.” BEA will send the survey to potential respondents in March 2008; responses will be due by May 31, 2008. This final rule
(1)increases the exemption level for reporting on the BE-12(LF) (Long Form) from $125 million to $175 million;
(2)increases the exemption level for reporting on the BE-12(SF) (Short Form) from $10 million to $40 million; and
(3)increases the exemption level for reporting on the BE-12 Bank form from $10 million to $15 million. In addition, it amends Form BE-12(X) by:
(1)Re-naming it the Form BE-12 Claim for Not Filing; and
(2)deleting several questions, which have been moved to a new Form BE-12 Mini. The Claim for Not Filing will be completed only by persons that are not subject to the reporting requirements of the BE-12 survey but have been contacted by BEA concerning their reporting status. The BE-12 Mini is a new abbreviated form for reporting U.S. affiliates with total assets, sales or gross operating revenues, and net income
(loss)less than or equal to $40 million. U.S. affiliates with assets, sales, and net income
(loss)less than or equal to $15 million are required to report only selected items on the BE-12 Mini. In addition to these changes in the reporting criteria, this final rule adds questions to the BE-12(LF) (Long Form), BE-12(SF) (Short Form), and BE-12 Bank form to:
(1)Collect detail on the broad occupational structure of employment;
(2)identify companies that engage in cross-border services transactions; and
(3)identify the financial reporting standards used to compile and report the survey. For the BE-12(LF) (Long Form), this rule adds questions to collect additional detail on the composition of external finances, trade, and research and development. For the BE-12(SF) (Short Form), this rule adds questions to collect sales of goods, sales of services, and investment income for majority-owned U.S. affiliates, including sales of services to U.S. persons and to foreign persons. For the BE-12 Bank form, this rule adds questions to make it easer to integrate data collected for banks with data collected for nonbank U.S affiliates. The items to be collected on this form include those needed to calculate value added as well as expenditures for property, plant, and equipment; sales of goods; and sales of services to the foreign parent group(s), to foreign affiliates owned by the U.S. affiliate, and to other foreign persons. To offset the burden imposed by these additional questions, this final rule amends the BE-12 survey to discontinue collecting information on U.S. trade in goods by product, which had been collected on previous versions of the BE-12(LF) (Long Form), and to reduce the amount of detail collected for minority-owned U.S. affiliates on the BE-12(SF) (Short Form) and BE-12 Bank form. In addition, questions on services transactions between U.S. affiliates and their foreign parent group(s) are dropped from the BE-12 survey because collection of this information has been shifted to BEA's surveys of cross-border transactions in services and intangible assets (the BE-120, BE-125, and BE-185). Survey Background The Bureau of Economic Analysis (BEA), U.S. Department of Commerce, conducts the BE-12 survey under the authority of the International Investment and Trade in Services Survey Act (22 U.S.C. 3101-3108), hereinafter, “the Act.” Section 4(b) of the Act provides that with respect to foreign direct investment in the United States, the President shall conduct a benchmark survey covering year 1980, a benchmark survey covering year 1987, and benchmark surveys covering every fifth year thereafter. In conducting surveys pursuant to this subsection, the President shall, among other things and to the extent he determines necessary and feasible—
(1)Identify the location, nature, and magnitude of, and changes in the total investment by any parent in each of its affiliates and the financial transactions between any parent and each of its affiliates;
(2)Obtain
(A)information on the balance sheet of parents and affiliates and related financial data,
(B)income statements, including the gross sales by primary line of business (with as much product line detail as is necessary and feasible) of parents and affiliates in each country in which they have significant operations, and
(C)related information regarding trade, including trade in both goods and services, between a parent and each of its affiliates and between each parent or affiliate and any other person;
(3)Collect employment data showing both the number of United States and foreign employees of each parent and affiliate and the levels of compensation, by country, industry, and skill level;
(4)Obtain information on tax payments by parents and affiliates by country; and
(5)Determine, by industry and country, the total dollar amount of research and development expenditures by each parent and affiliate, payments or other compensation for the transfer of technology between parents and their affiliates, and payments or other compensation received by parents or affiliates from the transfer of technology to other persons. In Section 3 of Executive Order 11961, as amended by Executive Orders 12318 and 12518, the President delegated the responsibility for performing functions under the Act concerning direct investment to the Secretary of Commerce, who has redelegated it to BEA. The benchmark surveys are BEA's censuses, intended to cover the universe of foreign direct investment in the United States in terms of value, and are BEA's most comprehensive surveys of such investment in terms of subject matter. Foreign direct investment in the United States is defined as the ownership or control, directly or indirectly, by one foreign person (foreign parent) of 10 percent or more of the voting securities of an incorporated U.S. business enterprise or an equivalent interest in an unincorporated U.S. business enterprise, including a branch. The purpose of the benchmark survey is to obtain universe data on the financial and operating characteristics of U.S. affiliates, and on positions and transactions between U.S. affiliates and their foreign parent groups (which are defined to include all foreign parents and foreign affiliates of foreign parents). These data are needed to measure the size and economic significance of foreign direct investment in the United States, measure changes in such investment, and assess its impact on the U.S. economy. Such data are generally found in enterprise-level accounting records of respondent companies. These data are used to derive current universe estimates of direct investment from sample data collected in other BEA surveys in nonbenchmark years. In particular, they would serve as benchmarks for the quarterly direct investment estimates included in the U.S. international transactions and national income and product accounts, and for annual estimates of the foreign direct investment position in the United States and of the operations of the U.S. affiliates of foreign companies. The survey consists of a number of report forms and a claim for not filing. The amount and type of data required to be reported will vary according to the size of the U.S. affiliate, whether it is a bank or a nonbank, and whether or not it is majority-owned by foreign direct investors. The report forms to be used in the survey consist of the following: 1. Form BE-12(LF) (Long Form)—Report for a majority-owned nonbank U.S. affiliate (a majority-owned U.S. affiliate is one in which the combined direct and indirect ownership interest of all foreign parents of the U.S. affiliate exceeds 50 percent) with total assets, sales or gross operating revenues, or net income greater than $175 million (positive or negative); 2. Form BE-12(SF) (Short Form)—Report for
(1)a majority-owned nonbank U.S. affiliate with total assets, sales or gross operating revenues, or net income greater than $40 million (positive or negative), but not greater than $175 million (positive or negative), and
(2)a minority-owned nonbank U.S. affiliate (owned 50 percent or less) with total assets, sales or gross operating revenues, or net income greater than $40 million (positive or negative); 3. Form BE-12 Bank—Report for a U.S. affiliate that is a bank; and 4. Form BE-12 Mini—Report for a nonbank U.S. affiliate with total assets, sales or gross operating revenues, and net income (positive or negative) less than or equal to $40 million. The Form BE-12 Claim for Not Filing will be provided for response by persons that are not subject to the reporting requirements of the BE-12 survey but have been contacted by BEA concerning their reporting status. Executive Order 12866 This final rule has been determined to be not significant for purposes of E.O. 12866. Executive Order 13132 This final rule does not contain policies with Federalism implications sufficient to warrant preparation of a Federalism assessment under E.O. 13132. Paperwork Reduction Act The collection-of-information in this final rule has been approved by the Office of Management and Budget
(OMB)under the Paperwork Reduction Act (PRA). Not withstanding any other provisions of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection-of-information subject to the requirements of the Paperwork Reduction Act unless that collection displays a currently valid OMB control number. The OMB number for the BE-12 is 0608-0042; the collection will display this control number. The BE-12 survey is expected to result in the filing of reports from approximately 18,550 respondents. The respondent burden for this collection of information is estimated to vary from 20 minutes to 715 hours per response, with an average of 11.3 hours per response, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Thus, the total respondent burden for the survey is estimated at 209,650 hours (18,550 times 11.3 hours average burden). Comments regarding the burden estimate or any other aspect of this collection of information should be addressed to: Director, Bureau of Economic Analysis (BE-1), U.S. Department of Commerce, Washington, DC 20230; Fax: 202-606-5311; and to the Office of Management and Budget, O.I.R.A., Paperwork Reduction Project 0608-0042, Attention PRA Desk Officer for BEA, via e-mail at *pbugg@omb.eop.gov,* or by Fax at 202-395-7245. Regulatory Flexibility Act The Chief Counsel for Regulation, Department of Commerce, has certified to the Chief Counsel for Advocacy, Small Business Administration, under the provisions of the Regulatory Flexibility Act (5 U.S.C. 605(b)), that this rule will not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding the economic impact of the rule. As a result, no final regulatory flexibility analysis was prepared. List of Subjects in 15 CFR Part 806 International transactions, Economic statistics, Foreign investment in the United States, Penalties, Reporting and record keeping requirements. Dated: December 6, 2007. Rosemary D. Marcuss, Acting Director, Bureau of Economic Analysis. For the reasons set forth in the preamble, BEA amends 15 CFR part 806 as follows: PART 806—DIRECT INVESTMENT SURVEYS 1. The authority citation for 15 CFR part 806 continues to read as follows: Authority: 5 U.S.C. 301; 22 U.S.C. 3101-3108; E.O. 11961 (3 CFR, 1977 Comp., p. 86), as amended by E.O. 12318 (3 CFR, 1981 Comp., p. 173) and E.O. 12518 (3 CFR, 1985 Comp., p. 348). 2. Sections 806.17 and 806.18 are revised to read as follows: § 806.17 Rules and regulations for BE-12, 2007 Benchmark Survey of Foreign Direct Investment in the United States. A BE-12, Benchmark Survey of Foreign Direct Investment in the United States will be conducted covering 2007. All legal authorities, provisions, definitions, and requirements contained in § 806.1 through § 806.13 and § 806.15(a) through
(g)are applicable to this survey. Specific additional rules and regulations for the BE-12 survey are given in this section.
(a)Response required. A response is required from persons subject to the reporting requirements of the BE-12, 2007 Benchmark Survey of Foreign Direct Investment in the United States, contained in this section, whether or not they are contacted by BEA. Also, a person, or their agent, contacted by BEA about reporting in this survey, either by sending them a report form or by written inquiry, must respond pursuant to § 806.4. This may be accomplished by:
(1)Filing the properly completed BE-12 report—Form BE-12(LF), Form BE-12(SF), Form BE-12 Mini, or Form BE-12 Bank, by May 31, 2008, as required;
(2)Completing and returning the Form BE-12 Claim for Not Filing by May 31, 2008; or
(3)Certifying in writing, by May 31, 2008, to the fact that the person is not a U.S. affiliate of a foreign person and not subject to the reporting requirements of the BE-12 survey.
(b)Who must report. A BE-12 report is required for each U.S. affiliate, that is, for each U.S. business enterprise in which a foreign person (foreign parent) owned or controlled, directly or indirectly, 10 percent or more of the voting securities in an incorporated U.S. business enterprise, or an equivalent interest in an unincorporated U.S. business enterprise, at the end of the business enterprise's fiscal year that ended in calendar year 2007. A BE-12 report is required even if the foreign person's ownership interest in the U.S. business enterprise was established or acquired during the 2007 reporting year. Beneficial, not record, ownership is the basis of the reporting criteria.
(c)Forms to be filed. (1)—Form BE-12(LF) (Long Form) must be completed by a U.S. affiliate that was majority-owned by one or more foreign parents (for purposes of this survey, a “majority-owned” U.S. affiliate is one in which the combined direct and indirect ownership interest of all foreign parents of the U.S. affiliate exceeds 50 percent), if:
(i)It is not a bank and is not owned directly or indirectly by a U.S. bank holding company or financial holding company, and
(ii)On a fully consolidated basis, or, in the case of real estate investment, on an aggregated basis, any one of the following three items for the U.S. affiliate (not just the foreign parent's share), was greater than $175 million (positive or negative) at the end of, or for, its fiscal year that ended in calendar year 2007:
(A)Total assets (do not net out liabilities);
(B)Sales or gross operating revenues, excluding sales taxes; or
(C)Net income after provision for U.S. income taxes.
(2)Form BE-12(SF) (Short Form) must be completed by a U.S. affiliate if:
(i)It is not a bank and is not owned directly or indirectly by a U.S. bank holding company or financial holding company, and
(ii)On a fully consolidated basis, or, in the case of real estate investment, on an aggregated basis, any one of the three items listed in paragraph (c)(1)(ii) of this section for a majority-owned U.S. affiliate (not just the foreign parent's share), was greater than $40 million (positive or negative) but none of these items was greater than $175 million (positive or negative) at the end of, or for, its fiscal year that ended in calendar year 2007.
(iii)On a fully consolidated basis, or, in the case of real estate investment, on an aggregated basis, any one of the three items listed in paragraph (c)(1)(ii) of this section for a minority-owned U.S. affiliate (not just the foreign parent's share), was greater than $40 million (positive or negative) at the end of, or for, its fiscal year that ended in calendar year 2007. (A “minority-owned” U.S. affiliate is one in which the combined direct and indirect ownership interest of all foreign parents of the U.S. affiliate is 50 percent or less.)
(3)Form BE-12 Mini must be completed by a U.S. affiliate if:
(i)It is not a bank, and is not owned directly or indirectly by a U.S. bank holding company or financial holding company, and
(ii)On a fully consolidated basis, or, in the case of real estate investment, on an aggregated basis, none of the three items listed in paragraph (c)(1)(ii) of this section for a U.S. affiliate (not just the foreign parent's share), was greater than $40 million (positive or negative) at the end of, or for, its fiscal year that ended in calendar year 2007.
(4)Form BE-12 Bank must be completed by a U.S. affiliate if:
(i)The U.S. affiliate is a bank. For purposes of the BE-12 survey, a “bank” is a business entity engaged in deposit banking or closely related functions, including commercial banks, Edge Act corporations engaged in international or foreign banking, U.S. branches and agencies of foreign banks whether or not they accept domestic deposits, savings and loans, savings banks, bank holding companies and financial holding companies under the Gramm-Leach-Bliley Act, including all subsidiaries or units of a bank holding company or financial holding company, and
(ii)On a fully consolidated basis any one of the three items listed in paragraph (c)(1)(ii) of this section for a U.S. affiliate (not just the foreign parent's share), was greater than $15 million (positive or negative) at the end of, or for, its fiscal year that ended in calendar year 2007.
(5)Form BE-12 Claim for Not Filing will be provided for response by persons that are not subject to the reporting requirements of the BE-12 survey but have been contacted by BEA concerning their reporting status.
(d)Aggregation of real estate investments. All real estate investments of a foreign person must be aggregated for the purpose of applying the reporting criteria. A single report form must be filed to report the aggregate holdings, unless written permission has been received from BEA to do otherwise. Those holdings not aggregated must be reported separately on the same type of report that would have been required if the real estate holdings were aggregated.
(e)Due date. A fully completed and certified Form BE-12(LF), BE-12(SF), BE-12 Mini, BE-12 Bank, or Form BE-12 Claim for Not Filing is due to be filed with BEA not later than May 31, 2008. § 806.18 OMB control numbers assigned to the Paperwork Reduction Act.
(a)*Purpose.* This section complies with the requirements of section 3507
(f)of the Paperwork Reduction Act
(PRA)which requires agencies to display a current control number assigned by the Director of OMB for each agency information collection requirement.
(b)*Display.* 15 CFR section where identified and described Current OMB control No. 806.1 through 806.17 0608-0020 0024 0032 0004 0035 0030 0009 0023 0034 0042 0053 [FR Doc. E7-24972 Filed 12-21-07; 8:45 am] BILLING CODE 3510-06-P DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 510 New Animal Drugs; Change of Sponsor's Name AGENCY: Food and Drug Administration, HHS. ACTION: Final rule. SUMMARY: The Food and Drug Administration
(FDA)is amending the animal drug regulations to reflect a change of sponsor's name from Altana, Inc., to Nycomed US, Inc. DATES: This rule is effective December 26, 2007. FOR FURTHER INFORMATION CONTACT: David R. Newkirk, Center for Veterinary Medicine (HFV-100), Food and Drug Administration, 7500 Standish Pl., Rockville, MD 20855, 301-827-6967, e-mail: *david.newkirk@fda.hhs.gov* . SUPPLEMENTARY INFORMATION: Altana, Inc., 60 Baylis Rd., Melville, NY 11747, has informed FDA that it has changed its name to Nycomed US, Inc. Accordingly, the agency is amending the regulations in 21 CFR 510.600(c) to reflect these changes. This rule does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a rule of “particular applicability.” Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801-808. List of Subjects in 21 CFR Part 510 Administrative practice and procedure, Animal drugs, Labeling, Reporting and recordkeeping requirements. Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs and redelegated to the Center for Veterinary Medicine, 21 CFR part 510 is amended as follows: PART 510—NEW ANIMAL DRUGS 1. The authority citation for 21 CFR part 510 continues to read as follows: Authority: 21 U.S.C. 321, 331, 351, 352, 353, 360b, 371, 379e. 2. In § 510.600 in the table in paragraph (c)(1), remove the entry for “Altana, Inc.” and alphabetically add a new entry for “Nycomed US, Inc.”; and in the table in paragraph (c)(2), revise the entry for “025463” to read as follows: § 510.600 Names, addresses, and drug labeler codes of sponsors of approved applications.
(c)* * *
(1)* * * Firm name and address Drug labeler code * * * * * Nycomed US, Inc., 60 Baylis Rd., Melville, NY 11747 025463 * * * * *
(2)* * * Drug labeler code Firm name and address * * * * * 025463 Nycomed US, Inc., 60 Baylis Rd., Melville, NY 11747 * * * * * Dated: December 12, 2007. Bernadette Dunham, Deputy Director, Center for Veterinary Medicine. [FR Doc. E7-24974 Filed 12-21-07; 8:45 am] BILLING CODE 4160-01-S DEPARTMENT OF JUSTICE Drug Enforcement Administration 21 CFR Part 1312 [Docket No. DEA-276F] RIN 1117-AB00 Reexportation of Controlled Substances AGENCY: Drug Enforcement Administration (DEA), Department of Justice. ACTION: Final rule. SUMMARY: The Controlled Substances Export Reform Act of 2005 amended the Controlled Substances Import and Export Act to provide authority for the Drug Enforcement Administration
(DEA)to authorize the export of controlled substances from the United States to another country for subsequent export from that country to a second country, if certain conditions and safeguards are satisfied. DEA is amending its regulations to implement the new legislation. DATES: *Effective Date:* This rule is effective January 25, 2008. FOR FURTHER INFORMATION CONTACT: Mark W. Caverly, Chief, Liaison and Policy Section, Office of Diversion Control, Drug Enforcement Administration, Washington, DC 20537, Telephone
(202)307-7297. SUPPLEMENTARY INFORMATION: Background The Controlled Substances Export Reform Act of 2005 (Pub. L. 109-57) was enacted on August 2, 2005. The Act amends the Controlled Substances Import and Export Act (CSIEA) to provide authority for the Attorney General (and DEA, by delegation) 1 to authorize the export of controlled substances in schedules I and II, and narcotic controlled substances in schedules III and IV, from the United States to another country for subsequent export from that country to a second country, if certain conditions and safeguards are satisfied. 1 28 CFR 0.100(b). Previously under the CSIEA (prior to the 2005 legislation), there were no circumstances in which it was permissible to export a controlled substance in schedules I and II, or a narcotic controlled substance in schedules III and IV, for the purpose of reexport to another country. Such controlled substances could lawfully be exported only to the immediate country where they would be consumed. The Controlled Substances Export Reform Act requires the following: Notwithstanding [21 U.S.C. 953] subsections (a)(4) and (c)(3), the Attorney General may authorize any controlled substance that is in schedule I or II, or is a narcotic drug in schedule III or IV, to be exported from the United States to a country for subsequent export from that country to another country, if each of the following conditions is met:
(1)Both the country to which the controlled substance is exported from the United States (referred to in this subsection as the ‘first country’) and the country to which the controlled substance is exported from the first country (referred to in this subsection as the ‘second country’) are parties to the Single Convention on Narcotic Drugs, 1961, and the Convention on Psychotropic Substances, 1971.
(2)The first country and the second country have each instituted and maintain, in conformity with such Conventions, a system of controls of imports of controlled substances which the Attorney General deems adequate.
(3)With respect to the first country, the controlled substance is consigned to a holder of such permits or licenses as may be required under the laws of such country, and a permit or license to import the controlled substance has been issued by the country.
(4)With respect to the second country, substantial evidence is furnished to the Attorney General by the person who will export the controlled substance from the United States that—
(A)The controlled substance is to be consigned to a holder of such permits or licenses as may be required under the laws of such country, and a permit or license to import the controlled substance is to be issued by the country; and
(B)The controlled substance is to be applied exclusively to medical, scientific, or other legitimate uses within the country.
(5)The controlled substance will not be exported from the second country.
(6)Within 30 days after the controlled substance is exported from the first country to the second country, the person who exported the controlled substance from the United States delivers to the Attorney General documentation certifying that such export from the first country has occurred.
(7)A permit to export the controlled substance from the United States has been issued by the Attorney General. 21 U.S.C. 953(f). DEA Proposed Implementation of the Controlled Substances Export Reform Act of 2005 To address the provisions of the Controlled Substances Export Reform Act of 2005, DEA published a Notice of Proposed Rulemaking
(NPRM)(71 FR 61436, October 18, 2006). This rulemaking proposed amending DEA regulations to implement this new legislation. Most of the proposed amendments to the regulations either reiterated the new statutory provisions added by the 2005 Act or specified the procedural details for complying with the new statutory provisions. In three respects, however, the proposed rule contained substantive requirements not contained in the statute. The first additional proposed requirement was that the exporter notify DEA when the shipment for reexport has left the United States. The second additional proposed requirement was that the reexport from the first country to the second country take place within 90 days after the shipment leaves the United States. The third additional proposed requirement was that bulk materials undergo further manufacturing in the first country prior to being shipped to the second country. This was the same requirement contained in existing DEA regulations for reexports of nonnarcotic controlled substances in schedules III and IV and schedule V controlled substances (21 CFR 1312.27(b)(5)). Comments Received DEA received nine comments on the Notice of Proposed Rulemaking. Commenters included one pharmaceutical research and manufacturing association, seven manufacturers (including one represented by a law firm), and one member of the public. Most of the commenters generally supported the rulemaking, but had a variety of comments regarding certain aspects of the proposed rule. DEA has made certain modifications to the proposed rule in view of the comments. The comments, and DEA's responses, are discussed below. *Authority of DEA to issue substantive requirements not contained in the statute:* One commenter asserted that DEA is without authority under the Controlled Substances Export Reform Act of 2005 “to create new criteria” and thus that this final rule should be limited to those substantive requirements mandated by Congress under the 2005 Act. In support of this contention, this commenter asserted that “Congress was extraordinary [sic] specific in the Act on the conditions and criteria under which schedule I and II controlled substances may be exported for reexport.” *DEA Response:* Under the CSIEA, Congress granted the Attorney General express authority to “promulgate and enforce any rules, regulations, and procedures which he may deem necessary and appropriate for the efficient execution of his functions under [the CSIEA].” (21 U.S.C. 871(b) (incorporated into the CSIEA by 21 U.S.C. 965)). This authority has been delegated to the DEA Administrator (28 CFR 0.100(b)). Thus, DEA has such rulemaking authority with respect to all provisions of the CSIEA, including amendments thereto, such as those made by the Controlled Substances Export Reform Act of 2005. Indeed, if DEA were without such general rulemaking authority, the agency would have no ability to issue any regulations implementing the Controlled Substances Export Reform Act of 2005, as the 2005 legislation itself contains no express delegation of regulatory authority. Accordingly, this final rule is being issued pursuant to DEA's general authority granted by Congress to promulgate regulations necessary and appropriate for the efficient enforcement of the CSIEA. That Congress included in the 2005 legislation very specific criteria under which certain controlled substances may be reexported in no way precludes or limits DEA's general rulemaking authority under the CSIEA. This is illustrated by, among other things, reviewing the longstanding import and export provisions of the CSIEA (21 U.S.C. 952 and 953), which also contain great specificity. Notwithstanding this specificity in the statutes, DEA has promulgated a variety of regulations (21 CFR part 1312) that impose restrictions beyond those mandated by Congress. *Time for reexportation:* In its NPRM, DEA proposed requiring that the reexport from the first country to the second country take place within 90 days after the shipment leaves the United States. Eight commenters disagreed with this proposed requirement, citing a variety of concerns. Commenters who disagreed with the 90-day timeframe asserted that, in some cases, it can take longer than 90 days to complete the additional manufacturing and testing in the first country and to obtain the permit from the second country. Further, these commenters asserted that other controls required by the Controlled Substances Export Reform Act are sufficient to ensure proper reexportation of controlled substances. One commenter asked that DEA, when evaluating time considerations, bear in mind the system of estimates imposed under the treaties and implement the reexport allowance in a manner that will “prevent an accumulation of raw materials and distortion of estimates.” *DEA Response:* DEA has considered the commenters' concerns and their explanations for those concerns. In addressing these comments, it is useful to begin with a reiteration of some important general principles. First, it should be noted that the United States has always been a world leader in promoting international and domestic control of narcotics and other controlled substances. As our nation is the world's largest producer of pharmaceutical controlled substances, the controls implemented by the United States play a crucial role in preventing diversion worldwide. Moreover, taking steps to prevent the United States from being a source of worldwide diversion directly benefits our country since a portion of the controlled substances diverted into illicit channels abroad can end up being sent back to the United States through illicit channels. Another key principle is that, as one of the commenters suggested, reducing the accumulation of stocks of controlled substances tends to decrease the opportunity for, and likelihood of, diversion. It has long been recognized that the longer large supplies of controlled substances remain idly stockpiled, the greater the possibility of diversion. Consistent with these considerations, it should be noted that Congress, in enacting the 2005 legislation allowing for reexports, contemplated that “[a]ll subsequent transfers of controlled substances would still be subject to strict oversight by the DEA and will require a permit from the Attorney General to prevent any potential abuse.” 151 Cong. Rec. H6671 (July 27, 2005). Given these principles, DEA strongly believes that, from an international drug control perspective, it is essential that the export from the first country to the second country occur in a finite period of time. The reexport allowance was not intended, and should not be construed, to allow the United States to become a source of stockpiling of controlled substances abroad for indefinite time periods. Moreover, without some limitation on the time controlled substances may remain in the first country, a scenario could arise in which DEA has issued a permit authorizing a reexport, yet be without sufficient documentation to determine whether the shipment
(i)has remained for many months in the first country without being reexported,
(ii)has been improperly reexported to a different second country than that indicated on the reexport application, or
(iii)was properly reexported to the second country but the reexporter failed to notify DEA within 30 days as required by the statute. As DEA noted in the NPRM, it can be inferred that one purpose of Congress' inclusion of the requirement that the United States exporter notify DEA within 30 days of the exportation from the first country to the second country is to provide a means for DEA to maintain an awareness of the status of shipments leaving the United States for reexport and thereby enhance the agency's ability to monitor and prevent diversion of such shipments. Requiring that there be a finite time within which the exportation from the first country to the second country must occur eliminates the possibility that DEA would be unable to ascertain the status of an approved reexport for an indefinite period of time. Nonetheless, based on the comments received, DEA has decided to amend the regulation to double the time limit originally proposed. Under this Final Rule, the exportation from the first country to the second country may take place up to 180 days after the controlled substance was exported from the United States. *Use of National Drug Codes:* Proposed § 1312.22(a) would require that applicants for export permits include the National Drug Code
(NDC)number. One commenter suggested that the NDC number should only be required if the drug or product exported is listed with the U.S. Food and Drug Administration (FDA), because, this commenter asserted, some research compounds, reference standards, and samples are not required by the FDA to have an NDC number. Another commenter expressed its opinion that, based on FDA regulations, NDC numbers are not assigned to products for export, and countries outside the United States do not require NDC numbers, so the requirement to provide an NDC number on the DEA reexport permit application should be removed. *DEA Response:* Requirements relating to NDC numbers are set forth in regulations issued by FDA. The NDC number consists of three parts: The labeler code, the product code, and the package code. Currently, FDA assigns the labeler code, and the product and package codes are assigned by the regulated industry within certain FDA parameters. On August 29, 2006, FDA published a Notice of Proposed Rulemaking [“Requirements for Foreign and Domestic Establishment Registration and Listing for Human Drugs, Including Drugs that are Regulated Under a Biologics License Application, and Animal Drugs” (Docket No. 2005N-0403, RIN 0910-AA49) (71 FR 51276)] proposing, among other things, requirements regarding NDC numbers. In view of the comments, DEA is modifying the proposed rule to indicate that persons applying for a reexport permit must supply to DEA the NDC number of a drug in accordance with FDA regulations. DEA anticipates that the overwhelming majority of controlled substances that will be reexported under this Final Rule will have NDC numbers. However, the Final Rule has been modified so that, if no NDC number is required under FDA regulations for a drug being exported from the United States, the applicant for reexport will not be required to supply an NDC number. *System of controls of imports:* Consistent with the 2005 legislation, proposed § 1312.22(c)(1) and (c)(2) would require the countries to which the controlled substance is exported to be parties to certain international conventions and to maintain, in conformity with such conventions, a system of controls that DEA deems adequate. In the text accompanying the proposed rule, DEA stated that DEA must be able to make the foregoing determinations based on the information contained in the permit application (DEA Form 161R). With respect to these aspects of the proposed rule, one commenter stated: “[I]t will be extremely difficult for U.S. exporters to determine in advance of applying for an export permit (to reexport) which countries the DEA has determined maintain a system of controls that the agency ‘deems adequate.’ ” Another commenter requested “that the permit application not require the applicant to certify that the country maintains a system of control of imports consistent with the requirements of the treaties.” However, a third commenter stated that “the export permit applicant should be able to state that to the best of their knowledge and belief, the country of ultimate consumption maintains a system of control of imports consistent with the requirements of the treaties.” *DEA Response:* The requirements to which these comments pertain were specifically included in the Controlled Substances Export Reform Act, as codified in 21 U.S.C. 953(f)(1) and (2). These statutory requirements are repeated essentially verbatim in the text of the Proposed and Final rule (§ 1312.22(c)(1) and (c)(2)). However, in view of the comments, DEA wishes to clarify the following points. First, it was not DEA's intent to require the reexport permit applicant to certify that the first and second countries maintain systems of control which DEA deems adequate. Rather, as the statute indicates, *DEA* must make the determination—as a prerequisite to issuing the permit—that both the first and second countries are parties to the Single Convention and Psychotropic Convention and maintain, in conformity with such conventions, a system of controls of imports of controlled substances which DEA deems adequate. The applicant will be required to certify, on the DEA Form 161R, to the best of his/her belief, that “the first and second countries have each instituted and maintain a system for the control of these substances.” This is the same certification that traditional exporters have always been required to make under the DEA Form 161. *Responsible official:* Proposed § 1312.22(c)(7) would require the documentation to DEA to be signed by “the responsible company official.” One commenter pointed out that large companies might have several persons who meet these requirements and recommended that the provision be changed to “a responsible official.” *DEA Response:* DEA agrees that there are circumstances in which companies might have more than one official authorized or permitted to sign documents providing the required information of DEA. Therefore, DEA is amending 21 CFR 1312.22(c)(7) and 1312.22(d)(6) to permit a responsible company official to sign the documents in question. *Further manufacture of bulk materials:* Proposed § 1312.22(d)(1) would prohibit bulk substances from being reexported in the same form as they were exported from the United States, *i.e.* , the material must undergo further manufacturing processes. Two commenters requested definitions or clarifications of the terms “further manufacturing” and “bulk materials.” One commenter suggested that further manufacturing should include processing, packaging, or relabeling and that bulk materials should include bulk product, such as tablets, capsules, solutions, suspensions, etc. That commenter also requested clarification in the Final Rule that bulk dosage forms may be reexported for labeling and packaging in the second country. *DEA Response:* The Controlled Substances Act
(CSA)defines “manufacture” as: “the production, preparation, propagation, compounding, or processing of a drug or other substance, either directly or indirectly or by extraction from substances of natural origin, or independently by means of chemical synthesis or by a combination of extraction and chemical synthesis, and includes any packaging or repackaging of such substance or labeling or relabeling of its container” (21 U.S.C. 802(15)). DEA believes that this definition established by Congress is broad enough to encompass all controlled substance manufacturing activities. The requirement in the Final Rule that further manufacturing of bulk material take place in the first country will be satisfied by any bona fide manufacturing activity that fits within the broad CSA definition of “manufacture.” As mentioned in the NPRM, this further manufacturing requirement is the same requirement that exists in the current regulations for the reexportation of nonnarcotic controlled substances in schedules III and IV, and of controlled substances in schedule V. Those regulations have been in place for many years, and are well-understood by the regulated industry. DEA believes that the intent of this regulation, and the definition of remanufacture, is clear; there is nothing in the export regulations to supersede or otherwise interpret the definition of “manufacture” and DEA does not believe that further clarification is warranted here. Similarly, DEA believes that the concept of bulk substances is well-understood within the regulated industry and does not require further clarification. Congress used the term “bulk manufacture” in the CSIEA without defining that term, see 21 U.S.C. 958(i), and DEA has never attempted to define this term by regulation. DEA does not believe that the issuance of this rule necessitates such a definition. One example of how the term “bulk manufacture” has long been used by registrants without difficulty is that all persons who seek to become registered to manufacture schedule I and II controlled substances are required to specify on their applications for registration (DEA Form 225) whether they are seeking to engage in “bulk” manufacturing or some other type of manufacturing, such as dosage form manufacturing. *Reports of reexport to the second country:* Proposed § 1312.22(d)(4) and (d)(5) would require the United States exporter to identify the second countries and quantities at the time of shipment. One commenter asserted that shifts in demand may occur after the product has been exported to the first country, so a list of second countries and potential quantities should be a permissible option. Another commenter believed that DEA should recognize that because of manufacturing processes in the first country, the amounts of reexports to the second country may vary from the original estimates. Thus, this commenter asserted that the Final Rule should allow the United States exporter to amend the 30-day export reports to keep DEA informed of changes. *DEA Response:* While DEA recognizes that international demand for controlled substances may shift over time, the statute plainly contemplates that both the first and second country must be identified to DEA before the shipment leaves the United States in order for the agency to make the assessments required by the statute. Among other things, for DEA to meet its statutory and international treaty obligations, DEA cannot issue a permit for the exportation, or reexportation, of any controlled substance to any country when DEA has information to show that the estimates or assessments submitted with respect to that country for the current period, under the Single Convention on Narcotic Drugs, 1961, or the Convention on Psychotropic Substances, 1971, have been, or, considering the quantity proposed to be imported, will be exceeded. Thus, the permit issued by DEA authorizing the reexport must specify both the first and second countries and may not be modified to change the second country after the shipment leaves the United States. Regarding variances in reexports to second countries due to manufacturing in the first country, it should be noted that the statute requires the applicant for reexport to provide DEA with substantial evidence, prior to the shipment leaving the United States, that a permit to import the controlled substance is to be issued by the second country and that the proposed amount of controlled substance to be reexported to the second country is needed for a medical, scientific, or other legitimate use in that country. Also, as indicated above and in the NPRM, the quantity of controlled substances must be such that the importing country will not exceed its estimates or assessments provided to the International Narcotics Control Board
(INCB)of the United Nations. Thus, before any shipment leaves the United States for reexport, considerable planning and preparation should go into determining the quantity of controlled substances that is ultimately destined for the second country. Accordingly, there should be minimal variance between the quantity set forth in the export permit and that which is actually shipped to the second country. (DEA recognizes that there may be some slight wastage of controlled substances in manufacturing processes in the first country.) Section 1312.22(c)(7) requires the United States exporter, within 30 days of exportation from the first country to the second country, to report to DEA on company letterhead the actual quantity shipped. Those who submit such reports will be reporting on quantifiable transactions that have already occurred and have a responsibility to provide accurate information in doing so. Therefore, amendments to this report should not be necessary. *Time to report reexportation:* One commenter requested that DEA extend beyond 30 days the time required for the United States exporter to provide notification of reexports from the first country to the second country, because of the need to obtain information from other parties. *DEA Response:* This requirement was set by Congress (21 U.S.C. 953(f)(6)) and DEA is without authority to modify it by regulation. *Return of the product to the United States:* Proposed § 1312.22(d)(8) would provide for the reexporter to seek authorization from DEA to return a shipment to the United States if such shipment has been refused by the second country. One commenter urged DEA to allow the reexporter to seek the same return authorization where the shipment has been refused by the first country. This same commenter further asked that, if the shipment is refused by the second country, the reexporter be permitted to return the shipment to the first country. Two other commenters requested clarification as to whether the United States itself can serve as the second country. *DEA Response:* As DEA discussed in the proposed rule, there are circumstances in which a shipment has been exported from the United States, but is refused by the consignee in the second country, or is otherwise unacceptable or undeliverable. In these circumstances, the exporter may seek permission from DEA, in appropriate circumstances, to return the shipment to the registered exporter in the United States. The language DEA proposed regarding this provision parallels the same language as is currently in place for reexportation of nonnarcotic controlled substances in schedules III and IV, and controlled substances in schedule V. Under this provision, DEA will assess each situation on a case-by-case basis in determining whether it is appropriate to authorize the return of the shipment to the United States. DEA is adopting the first suggestion of the commenter to modify the rule to state expressly that if either the first or second country refuses the shipment, the reexporter may seek authorization from DEA to return the shipment to the United States. It should be noted, however, that DEA's experiences with reexportation of nonnarcotic controlled substances in schedules III and IV, and controlled substances in schedule V, indicate that such returns are expected to be very infrequent. However, DEA cannot adopt the commenter's second suggestion—that DEA allow shipments which have been rejected by the second country to be returned to the first country. To do so would be the equivalent of allowing an export to the first country without having obtained proper approval before the shipment left the United States. Traditional exports of narcotic drugs in schedule I, II, III, or IV, and nonnarcotic controlled substances in schedule I or II are governed by 21 U.S.C. 953(a) and (c). Among the requirements of these provisions are: That DEA determine, before the shipment leaves the United States, that substantial evidence has been furnished that the controlled substance is to be applied exclusively to medical, scientific, or other legitimate uses within the country of import; that there is an actual need for the controlled substance for medical, scientific, or other legitimate uses within the country; and that DEA has issued a permit to export the controlled substance for consumption in the country of import. In order for DEA to make these determinations, the applicant for the export permit must supply certain information and make certain certifications on DEA Form 161. None of the foregoing requirements would be satisfied if DEA allowed a shipment that it authorized for reexport to be returned from the second country to the first country. In addition, allowing such returns from the second country to the first country could potentially disrupt the system of estimates and assessments and statistical returns maintained by the INCB, which is crucial to international drug control. Regarding whether the United States may serve as the second country, to allow controlled substances to be re-imported into the United States by interpreting the term “second country” to include the United States would be contrary to the intent of Congress in enacting the legislation. As stated in House Report 109-115, part 1, at 2 (2005): “The purpose of this legislation is to amend Section 1003 of the Controlled Substances Import and Export Act [21 U.S.C. 953] by allowing a controlled substance that has been exported from the United States to be subsequently exported to a *third* country under certain conditions and pending a permit from the Attorney General.” (Emphasis added.) Similarly, part 2 of the same House Report stated (at 2) that the legislation “will allow pharmaceutical companies to export controlled substances to distribution centers for export to one *additional* country.” (Emphasis added.) Along the same lines, in remarks made on the House floor upon moving to pass the Senate version of the bill (S. 1395), Congressman Deal stated: Under [then current law, as set forth in] the Controlled Substances Import and Export Act, a company is not allowed to export controlled substances to one country and then send it to a *third* country. Companies that export controlled substances must make a large number of long-distance, small shipments to individual countries, incurring large shipping costs. Due to this restriction, American manufacturers are less competitive than their foreign competitors, which results in high-paying U.S. jobs being sent overseas. 151 Cong. Rec. H6671 (July 27, 2005) (emphasis added). Thus, the scenario that Congress sought to address through the legislation entails the exportation of controlled substance drug products manufactured (initially) in the United States for ultimate consumption abroad (i.e., in a “third country”). In addition, even if Congress had expressed no intent as to whether the “second country” referred to in 21 U.S.C. 953(f) could be the United States (which was not the case), re-importation into the United States would be impermissible unless the re-importer were able to demonstrate that it met the requirements of 21 U.S.C. 952(a)(2). Section 952(a)(2) governs importation of “any controlled substance in schedule I or II or any narcotic drug in schedule III, IV, or V,” which encompasses all the controlled substances subject to 21 U.S.C. 953(f), the Controlled Substances Export Reform Act. The requirements of § 952(a)(2) are highly restrictive and unlikely to be demonstrated where the applicant seeks to export a controlled substance from the United States for re-importation into the United States. *Estimated times per response for filing DEA Form 161 and 161R:* As discussed in the preamble to the NPRM, DEA Form 161 is currently used to report the exportation of controlled substances in schedules I and II and narcotic controlled substances in schedules III and IV. DEA proposed the establishment of new Form 161R for the reporting of reexportations. The discussion of the Paperwork Reduction Act in the preamble to the proposed rule included a table of the estimated number of respondents and the amount of time estimated for an average respondent to respond regarding the completion of these forms. One commenter believed that the time estimates for completion of the required forms were too low because they apparently did not consider the time required to obtain the information needed to complete the forms. The commenter did not provide its own estimates regarding the time needed to complete the forms. *DEA Response:* DEA estimates that it takes 30 minutes for a respondent to complete DEA Form 161 for exportation of controlled substances. DEA estimates that it takes a respondent 45 minutes to complete DEA Form 161R for reexportation of controlled substances. DEA recognizes that a variety of factors contribute to the time required to complete these forms including, but not limited to, the number and variety of controlled substances being exported or reexported, the number of countries to which controlled substances are exported or reexported, and the respondent's familiarity with the form. DEA notes that these estimates are average estimates; it may take some persons more time to complete these forms and it may take some less time. Therefore, as the time burdens are estimates of the time an average respondent takes to respond, and based on the varying factors associated with each exportation or reexportation of controlled substances, DEA believes that these estimates are accurate, on average, and is not adjusting the time burdens associated with this collection. Other Considerations Treaty Considerations As discussed in the NPRM, the first two subsections of the Controlled Substances Export Reform Act of 2005 pertain to the Single Convention on Narcotic Drugs, 1961 (Single Convention), and the Convention on Psychotropic Substances, 1971 (Psychotropic Convention). Under these provisions, a reexport may take place only if both the first and second country are parties to both treaties and only if the Attorney General (DEA by delegation) determines that both the first country and the second country maintain an adequate system of controls in conformity with the treaties. Thus, Congress expressly intended that reexports take place in accordance with the treaties. The control measures imposed under the Controlled Substances Export Reform Act of 2005, along with the regulations being finalized here, are intended to work in tandem with the international control regimes under the treaties. The ultimate goal of the 2005 Act and this Final Rule is to permit exportation of controlled substances in schedules I and II and narcotic controlled substances in schedules III and IV from the United States to a first country for subsequent exportation to one or more second countries while preventing international diversion resulting from reexports. Whenever considering safeguards against diversion of international shipments, one must bear in mind the backdrop of the treaties. Toward this end, the following treaty principles are noted. Under the Single Convention, each country that is a party to the treaty is required to furnish the International Narcotics Control Board
(INCB)with annual estimates of, among other things, the quantities of narcotic drugs on hand, the anticipated amounts that will be consumed by the party for legitimate purposes, and the anticipated production quantities. The Single Convention also requires parties to furnish the INCB with statistical returns for the prior year, indicating the amounts of drugs produced, utilized, consumed, imported, exported, seized, disposed of, and in stock. The Psychotropic Convention requires the parties to provide the INCB with statistical reports and assessments containing similar information with respect to psychotropic substances. Through the collection of this information, the INCB provides exporting countries with information on the legitimate requirements of the importing countries and can take steps to reduce the likelihood of international diversion. For example, the INCB may notify parties if the quantity of drugs exported to a particular country exceeded the estimates for that country. Parties that receive such notification from the INCB are prohibited from authorizing further exports of the drug concerned to that country. Issuance of Permits Under the 2005 Act, before a controlled substance can be exported for subsequent reexport, the exporter must obtain from DEA a permit that authorizes the export for this purpose. Consistent with the 2005 Act, DEA may issue such a permit only if each of the conditions specified in the Act is met. Each of these conditions is restated in this Final Rule. Although most of these conditions are self-explanatory, some additional explanation is warranted. DEA will be issuing a new application form, DEA Form 161R, for a permit to export controlled substances for subsequent reexport in accordance with the 2005 Act. The statute requires the reexporter (as a condition of obtaining an export permit from DEA) to specify both the first and the second countries, and to provide substantial evidence that, with respect to the second country, the controlled substance is to be consigned to a holder of such permits or licenses as may be required under the laws of such country, and a permit or license to import the controlled substance is to be issued by the country. In its NPRM, DEA discussed what would constitute “substantial evidence” for purposes of subsection
(4)of the 2005 Act. Specifically, if on the completed DEA Form 161R, the applicant has identified an appropriately licensed or permitted consignee in the second country and certified that the second country is a party to the Conventions and maintains a system of controls of imports consistent with the requirements of the treaties, and so affirmed in the affidavit section of the application, DEA will consider this substantial evidence that a permit or license to import the controlled substance will be issued by the second country. Failure to comply with the CSIEA and its implementing regulations, including those set forth in this rulemaking, may result in the imposition of penalties and/or administrative remedies as provided in the CSIEA. As with all statutory and regulatory provisions that DEA administers, the agency will evaluate any transgressions involving this Final Rule on a case-by-case basis, taking into account the totality of the circumstances, in determining the appropriate course of action. Reexportation to More Than One Second Country DEA believes it is consistent with the text, structure, and purpose of the 2005 Act to allow a shipment of controlled substances to be exported from the United States to a “first country” for reexport to more than one “second country” (but not further export from any second country to a third country), provided the exporter notifies DEA of this intent in the application for export permit, and provided further that the statute is fully complied with in all other respects. DEA received one comment discussing this issue. The commenter supported DEA's position, agreeing that such an interpretation was contemplated in the Controlled Substances Export Reform Act. Therefore, this provision is being finalized without change. This Final Rule expressly provides for reexport to more than one second country, and the new Form 161R is structured accordingly. Refused Shipments As discussed previously, there are circumstances in which a shipment has been exported from the United States, but is refused by the consignee in the second country, or is otherwise unacceptable or undeliverable. In these circumstances, the exporter may seek permission from DEA, in appropriate circumstances, to return the shipment to the registered exporter in the United States. DEA proposed applying the same procedures to address this circumstance as already exist for the reexportation of nonnarcotic controlled substances in schedule III and IV, and controlled substances in schedule V (21 CFR 1312.27(b)(5)(iv)). DEA did not receive any comments seeking revision of this proposed language. Therefore, it is adopted as proposed. Regulatory Certifications Regulatory Flexibility Act The Deputy Assistant Administrator hereby certifies that this rulemaking has been drafted in accordance with the Regulatory Flexibility Act (5 U.S.C. 601-612), has reviewed this regulation, and by approving it certifies that this regulation will not have a significant economic impact on a substantial number of small entities. This rulemaking permits schedule I and II controlled substances, and narcotic controlled substances in schedules III and IV, to be exported from the United States to the first country for subsequent reexport to second countries for consumption. Previously such reexportation was not permitted within DEA law and regulations. Executive Order 12866 The Deputy Assistant Administrator further certifies that this rulemaking has been drafted in accordance with the principles in Executive Order 12866 § 1(b). It has been determined that this is a significant regulatory action. Therefore, this action has been reviewed by the Office of Management and Budget. Executive Order 12988 This regulation meets the applicable standards set forth in §§ 3(a) and 3(b)(2) of Executive Order 12988 Civil Justice Reform. Executive Order 13132 This rulemaking does not preempt or modify any provision of state law; nor does it impose enforcement responsibilities on any state; nor does it diminish the power of any state to enforce its own laws. Accordingly, this rulemaking does not have federalism implications warranting the application of Executive Order 13132. Unfunded Mandates Reform Act of 1995 This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $120,000,000 or more (adjusted for inflation) in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995. Paperwork Reduction Act of 1995 The Department of Justice, Drug Enforcement Administration, is revising the information collection entitled “Application for Permit to Export Controlled Substances”, by adding a new DEA Form 161R to be used by persons applying for a permit to reexport controlled substances in schedules I and II, and narcotic controlled substances in schedules III and IV. DEA has submitted the new DEA Form 161R and the information collection request to the Office of Management and Budget for review and clearance in accordance with review procedures of the Paperwork Reduction Act of 1995. Overview of this information collection
(1)*Type of Information Collection:* Revision of an existing collection.
(2)*Title of the Form/Collection:* Application for Permit to Export Controlled Substances.
(3)*Agency form number, if any, and the applicable component of the Department of Justice sponsoring the collection:* *Form Number:* DEA Form 161, Application for Permit to Export Controlled Substances; DEA Form 161R, Application for Permit to Export Controlled Substances for Subsequent Reexport. Office of Diversion Control, Drug Enforcement Administration, U.S. Department of Justice.
(4)*Affected public who will be asked or required to respond, as well as a brief abstract:* *Primary:* Business or other for-profit. *Other:* None. *Abstract:* Title 21 CFR 1312.21 and 1312.22 require persons who export controlled substances in schedules I and II and who reexport controlled substances in schedules I and II and narcotic controlled substances in schedules III and IV to obtain a permit from DEA. Information is used to issue export permits, exercise control over exportation of controlled substances, and compile data for submission to the United Nations to comply with treaty requirements.
(5)*An estimate of the total number of respondents and the amount of time estimated for an average respondent to respond:* It is estimated that 90 respondents will respond, with submissions as follows: Number of responses Average time per response Total (hours) DEA Form 161 (exportation only) 2,200 30 minutes (0.5 hours) 1,100 DEA Form 161R (reexportation) 400 45 minutes (0.75 hours) 300 Certification of exportation from United States to first country 400 15 minutes (0.25 hours) 100 Certification of reexportation from first country to second country* 1,200 15 minutes (0.25 hours) 300 Total 4,200 1,800 * Assumes three separate reexports to second countries
(6)*An estimate of the total public burden (in hours) associated with the collection:* The total public burden (in hours) for this collection is estimated to be 1,800 hours. Congressional Review Act This rule is not a major rule as defined by § 804 of the Small Business Regulatory Enforcement Fairness Act of 1996 (Congressional Review Act). This rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets. List of Subjects in 21 CFR Part 1312: Administrative practice and procedure, Drug traffic control, Exports, Imports, Reporting and recordkeeping requirements. For the reasons set out above, 21 CFR part 1312 is amended as follows: PART 1312—[AMENDED] 1. The authority citation for part 1312 continues to read as follows: Authority: 21 U.S.C. 952, 953, 954, 957, 958. 2. Section 1312.22 is amended by revising paragraph
(a)and adding paragraphs
(c)through
(e)to read as follows: § 1312.22 Application for export permit.
(a)An application for a permit to export controlled substances shall be made on DEA Form 161, and an application for a permit to reexport controlled substances shall be made on DEA Form 161R. Forms may be obtained from, and shall be filed with, the Drug Enforcement Administration, Import/Export Unit, Washington, DC 20537. Each application shall show the exporter's name, address, and registration number; a detailed description of each controlled substance desired to be exported including the drug name, dosage form, National Drug Code
(NDC)number (in accordance with Food and Drug Administration regulations), the Administration Controlled Substance Code Number as set forth in Part 1308 of this chapter, the number and size of packages or containers, the name and quantity of the controlled substance contained in any finished dosage units, and the quantity of any controlled substance (expressed in anhydrous acid, base, or alkaloid) given in kilograms or parts thereof. The application shall include the name, address, and business of the consignee, foreign port of entry, the port of exportation, the approximate date of exportation, the name of the exporting carrier or vessel (if known, or if unknown it should be stated whether shipment will be made by express, freight, or otherwise, exports of controlled substances by mail being prohibited), the date and number, if any, of the supporting foreign import license or permit accompanying the application, and the authority by whom such foreign license or permit was issued. The application shall also contain an affidavit that the packages are labeled in conformance with obligations of the United States under international treaties, conventions, or protocols in effect on May 1, 1971. The affidavit shall further state that to the best of affiant's knowledge and belief, the controlled substances therein are to be applied exclusively to medical or scientific uses within the country to which exported, will not be reexported therefrom and that there is an actual need for the controlled substance for medical or scientific uses within such country, unless the application is submitted for reexport in accordance with paragraphs
(c)and
(d)of this section. In the case of exportation of crude cocaine, the affidavit may state that to the best of affiant's knowledge and belief, the controlled substances will be processed within the country to which exported, either for medical or scientific use within that country or for reexportation in accordance with the laws of that country to another for medical or scientific use within that country. The application shall be signed and dated by the exporter and shall contain the address from which the substances will be shipped for exportation.
(c)Notwithstanding paragraphs
(a)and
(b)of this section, the Administration may authorize any controlled substance listed in Schedule I or II, or any narcotic drug listed in Schedule III or IV, to be exported from the United States to a country for subsequent export from that country to another country, if each of the following conditions is met, in accordance with § 1003(f) of the Act (21 U.S.C. 953(f)):
(1)Both the country to which the controlled substance is exported from the United States (referred to in this section as the “first country”) and the country to which the controlled substance is exported from the first country (referred to in this section as the “second country”) are parties to the Single Convention on Narcotic Drugs, 1961, and the Convention on Psychotropic Substances, 1971;
(2)The first country and the second country have each instituted and maintain, in conformity with such Conventions, a system of controls of imports of controlled substances which the Administration deems adequate;
(3)With respect to the first country, the controlled substance is consigned to a holder of such permits or licenses as may be required under the laws of such country, and a permit or license to import the controlled substance has been issued by the country;
(4)With respect to the second country, substantial evidence is furnished to the Administration by the applicant for the export permit that—
(i)The controlled substance is to be consigned to a holder of such permits or licenses as may be required under the laws of such country, and a permit or license to import the controlled substance is to be issued by the country; and
(ii)The controlled substance is to be applied exclusively to medical, scientific, or other legitimate uses within the country;
(5)The controlled substance will not be exported from the second country;
(6)The person who exported the controlled substance from the United States has complied with paragraph
(d)of this section and a permit to export the controlled substance from the United States has been issued by the Administration; and
(7)Within 30 days after the controlled substance is exported from the first country to the second country, the person who exported the controlled substance from the United States must deliver to the Administration documentation certifying that such export from the first country has occurred. If the permit issued by the Administration authorized the reexport of a controlled substance from the first country to more than one second country, notification of each individual reexport shall be provided. This documentation shall be submitted on company letterhead, signed by a responsible company official, and shall include all of the following information:
(i)Name of second country;
(ii)Actual quantity shipped;
(iii)Actual date shipped; and
(iv)DEA export permit number for the original export.
(d)Where a person is seeking to export a controlled substance for reexport in accordance with paragraph
(c)of this section, the following requirements shall apply in addition to (and not in lieu of) the requirements of paragraphs
(a)and
(b)of this section:
(1)Bulk substances will not be reexported in the same form as exported from the United States, *i.e.* , the material must undergo further manufacturing process. This further manufactured material may only be reexported to a second country.
(2)Finished dosage units, if reexported, must be in a commercial package, properly sealed and labeled for legitimate medical use in the second country.
(3)Any proposed reexportation must be made known to the Administration at the time the initial DEA Form 161R is submitted. In addition, the following information must also be provided where indicated on the form:
(i)Whether the drug or preparation will be reexported in bulk or finished dosage units;
(ii)The product name, dosage strength, commercial package size, and quantity;
(iii)The name of consignee, complete address, and expected shipment date, as well as the name and address of the ultimate consignee in the second country.
(4)The application (DEA Form 161R) must also contain an affidavit that the consignee in the second country is authorized under the laws and regulations of the second country to receive the controlled substances. The affidavit must also contain the following statement, in addition to the statements required under paragraph
(a)of this section:
(i)That the packages are labeled in conformance with the obligations of the United States under the Single Convention on Narcotic Drugs, 1961, the Convention on Psychotropic Substances, 1971, and any amendments to such treaties;
(ii)That the controlled substances are to be applied exclusively to medical or scientific uses within the second country;
(iii)That the controlled substances will not be further reexported from the second country, and
(iv)That there is an actual need for the controlled substances for medical or scientific uses within the second country.
(5)If the applicant proposes that the shipment of controlled substances will be separated into parts after it arrives in the first country and then reexported to more than one second country, the applicant shall so indicate on the DEA Form 161R, providing all the information required in this section for each second country.
(6)Within 30 days after the controlled substance is exported from the United States, the person who exported the controlled substance shall deliver to the Administration documentation on the DEA Form 161R initially completed for the transaction certifying that such export occurred. This documentation shall be signed by a responsible company official and shall include all of the following information:
(i)Actual quantity shipped;
(ii)Actual date shipped; and
(iii)DEA export permit number.
(7)The controlled substance will be reexported from the first country to the second country (or second countries) no later than 180 days after the controlled substance was exported from the United States.
(8)Shipments that have been exported from the United States and are refused by the consignee in either the first or second country, or are otherwise unacceptable or undeliverable, may be returned to the registered exporter in the United States upon authorization of the Administration. In these circumstances, the exporter in the United States shall file a written request for the return of the controlled substances to the United States with a brief summary of the facts that warrant the return, along with a completed DEA Form 357, Application for Import Permit, with the Drug Enforcement Administration, Import/Export Unit, Washington, DC 20537. The Administration will evaluate the request after considering all the facts as well as the exporter's registration status with the Administration. If the exporter provides sufficient documentation, the Administration will issue an import permit for the return of these drugs, and the exporter can then obtain an export permit from the country of original importation. The substance may be returned to the United States only after affirmative authorization is issued in writing by the Administration.
(e)In considering whether to grant an application for a permit under paragraphs
(c)and
(d)of this section, the Administration shall consider whether the applicant has previously obtained such a permit and, if so, whether the applicant complied fully with the requirements of this section with respect to that previous permit. 3. Section 1312.23 is amended by revising paragraphs
(a)and
(f)to read as follows: § 1312.23 Issuance of export permit.
(a)The Administrator may authorize exportation of any controlled substance listed in Schedule I or II or any narcotic controlled substance listed in Schedule III or IV if he finds that such exportation is permitted by subsections 1003(a), (b), (c), (d), or
(f)of the Act (21 U.S.C. 953(a), (b), (c), (d), or (f).
(f)No export permit shall be issued for the exportation, or reexportation, of any controlled substance to any country when the Administration has information to show that the estimates or assessments submitted with respect to that country for the current period, under the Single Convention on Narcotic Drugs, 1961, or the Convention on Psychotropic Substances, 1971, have been, or, considering the quantity proposed to be imported, will be exceeded. If it shall appear through subsequent advice received from the International Narcotics Control Board of the United Nations that the estimates or assessments of the country of destination have been adjusted to permit further importation of the controlled substance, an export permit may then be issued if otherwise permissible. Dated: December 5, 2007. Joseph T. Rannazzisi, Deputy Assistant Administrator, Office of Diversion Control. [FR Doc. E7-24919 Filed 12-21-07; 8:45 am] BILLING CODE 4410-09-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9369] RIN 1545-BG40 Calculating and Apportioning the Section 11(b)(1) Additional Tax under Section 1561 for Controlled Groups. AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final and temporary regulations. SUMMARY: This document removes the final regulation for § 1.1561-2, amends §§ 1.1561-2T and 1.1563-1T, and adds § 1.1502-47T. These temporary regulations affect component members of a controlled group of corporations and consolidated groups filing life-nonlife Federal income tax returns. These temporary regulations provide guidance for calculating and apportioning between component members any amount of additional tax and any reduction in the amount exempted from the alternative minimum tax. These temporary regulations also update and clarify the allocation of tax-benefit items in the case in which a component member has a short taxable year not including a December 31st date. Finally, these temporary regulations provide explanations of two concepts: a group's testing date and a member's testing period for use in determining which members of the group and which taxable years of those members are subject to the controlled group rules. The text of these temporary regulations also serves as the text of the proposed regulations set forth in the notice of proposed rulemaking on this subject in the Proposed Rules section in this issue of the **Federal Register** . DATES: *Effective Date:* These temporary regulations are effective on *December 26, 2007.* *Applicability Dates:* For the dates of applicability, see §§ 1.1502-47T(t)(1), 1.1561-2T(f)(1) and 1.1563-1T(e)(1). The applicability of these temporary regulations will expire on December 21, 2010. FOR FURTHER INFORMATION CONTACT: Grid Glyer,
(202)622-7930 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background A. Summary of Limitations on Controlled Groups of Corporations Regarding Lower Tax Brackets and Alternative Minimum Tax Exemption Amounts Section 1561(a) of the Internal Revenue Code
(Code)provides that the *component members* of a *controlled group of corporations* (as those terms are defined in section 1563) are limited for their taxable years which include the same December 31st date to an amount of each of the tax-benefit items listed therein to which a corporation that is not a component member of a controlled group is entitled. Two of those items are the section 11(b)(1) tax-bracket amounts and the section 55(d)(2) exemption from the alternative minimum tax (the “exemption amount”). See section 1561(a)(1) and (a)(3). Each of these two Code provisions requires reductions in calculating the amounts of each of these two tax-benefit items after the taxpayer has passed certain thresholds. The “additional taxes” under section 11(b)(1) serve to reduce a corporation's use of the lower tax brackets after certain specified threshold levels of income are reached. Section 55(d)(3) requires reductions to the amount exempted from the alternative minimum tax. B. The Additional Taxes Imposed by Section 11(b)(1) and the Alternative Minimum Tax Exemption Amount In general, section 11(b)(1) provides for a graduated income tax rate structure for taxing the income of a corporation. The income tax rates imposed on a corporation's income increase with each higher bracketed range of taxable income. The following chart shows the various tax rates imposed on a corporation and the ranges of taxable income that are subject to each of these tax rates: Rate of tax Range of taxable income subject to a rate of tax 15% $50,000 (first $50,000 of corporation's taxable income). 25% $25,000 ($75,000−$50,000). 34% $9,925,000 ($10,000,000−$75,000). 35% > $10,000,000. Section 11(b)(1) also imposes additional tax on the corporation's taxable income where its income exceeds two designated income thresholds. This additional tax is designed to reduce the tax benefit that a corporation derives from having some of its income taxed at a lower rate. For example, if a corporation's taxable income exceeds $100,000 (but is not greater than $15 million), the total amount of the additional tax is the lesser of
(1)the amount of 5 percent of the excess over $100,000 or
(2)$11,750. This $11,750 amount represents the maximum tax benefit available to a corporation from having all of the first $75,000 of its taxable income taxed at the 15 and 25 percent tax rates rather than at a 34 percent tax rate. Similarly, if a corporation's taxable income exceeds $15 million, there is a further additional tax equal to the lesser of
(1)the amount of 3 percent of the excess over $15 million, or
(2)$100,000. This $100,000 amount represents the maximum tax benefit available to a corporation from having all of the first $10 million of its taxable income taxed at the 34 percent tax rate rather than at a 35 percent tax rate. Section 55(d)(3) provides that a taxpayer's exemption amount shall be phased out (but not below zero) as the taxpayer's alternative minimum taxable income increases. C. The Controlled Group Rules Under section 1561(a), the component members of a controlled group, with regard to taxable years containing a particular December 31st “testing date,” are collectively limited to using one full amount of certain tax-benefit items. As noted above, one of the tax benefits so limited is the benefit of the lower tax brackets. Another is the $40,000 amount for exemption from the alternative minimum tax. Section 1561(a) generally provides that the lower tax brackets and the $40,000 exemption from alternative minimum tax are divided equally among the component members of the controlled group unless the group adopts an apportionment plan that provides for an unequal allocation. Section 1563(a) defines the four types of controlled groups. The two most common are parent-subsidiary (defined in section 1563(a)(1)) and brother-sister (defined in section 1563(a)(2)). Under section 1563(b), a corporation is a component member of a controlled group for a given taxable year if it was a member of such group on the December 31st date of its taxable year for at least one-half the number of days of its taxable year that precedes that December 31st date. In addition, pursuant to section 1563(b)(3), a corporation is treated as a component member of a controlled group if it was a member of such group during a calendar year, although not on December 31st, but was a member of such group for at least one-half the number of days of its taxable year that precede that December 31st date (referred to as an “additional member”). Conversely, pursuant to section 1563(b)(2), a corporation which is a member of a controlled group of corporations on December 31st of any taxable year is treated as an excluded member of the controlled group (with regard to that December 31st testing date), if such corporation is a member of such group for less than one-half the number of days in its taxable year which precede such December 31st. The December 31st date of a specified calendar year will be referred to as the group's testing date. The December 31st testing date is used for determining which taxable years of which members will be subject to the limitation rules imposed by, for example, section 1561(a). Furthermore, the total number of days of a member's taxable year that precede a specified December 31st testing date will be referred to as that member's “testing period.” Section 1561(a) provides that in computing the amount of additional tax imposed by section 11(b)(1), and the phase-out of the exemption amount under section 55(d)(3), the component members shall, as a first step, combine their taxable incomes. Most controlled groups will easily be able to compute the total of their members' taxable incomes and determine whether this sum exceeds the applicable income thresholds. Therefore, it is unnecessary to provide any regulatory guidance with regard to such determination. However, the IRS and the Treasury Department recognize that various situations exist where a component member may encounter difficulties with obtaining the information needed to calculate its entitlement to the benefit of a lower bracket or its obligation to pay additional taxes. For the benefit of taxpayers that confront such problems, several such situations are discussed below and illustrated in the examples of the regulation, although they are not addressed in the text of these temporary regulations. Section 1561(a) provides that the taxable income of all of the component members of a controlled group of corporations for the taxable years which are subjected to the same December 31st testing date shall be taken into account, that is, added together, for the purpose of determining whether any member owes the additional tax imposed by section 11(b)(1) as well as for determining what portion of that additional tax is to be allocated to each member. As in the case of the additional tax, section 1561(a) provides that the alternative minimum taxable income of all of the component members of a controlled group of corporations for the taxable years that include the same December 31st date shall be taken into account, that is, added together, for the purpose of determining the reduction (under section 55(d)(3)) to the exemption amount as set forth in section 55(d)(2). Section 1561(a) further provides that the additional taxes, as well as the reduction to the exemption amount, shall each be apportioned among those members in the same manner that the corresponding tax-benefit item is apportioned. However, the current regulations do not provide any guidance on how to calculate and apportion these reductions to these two tax-benefit items. Explanation of Provisions A. Allocation of the Benefit Recapture Items Given that the additional taxes must be apportioned among the component members in the same manner as the tax-bracket amounts, these temporary regulations provide two methods for apportioning the amount of those additional taxes among the component members: the “proportionate method” and the first-in-first-out (“FIFO”) method. Under the proportionate method, the additional tax is allocated to any component member to whom a tax-bracket amount was apportioned in the same proportion as the portion of the tax benefit from that tax bracket which was allocated to that member bears to the total tax-benefit amount provided to all members from the use of that tax bracket. These tax benefits are attributable to the tax savings to the members of the group resulting from having ranges of income (tax-bracket amounts) being taxed at lower rates, instead of the higher tax rates to which income of the group is subject. The text of the regulations sets out the steps for applying this method. Under the FIFO method, the first dollars of the additional tax are to be allocated proportionately to each member to whom a tax-bracket amount was apportioned, starting with the lowest tax bracket and continuing on successively to each next higher tax bracket until the entire amount of the additional tax has been fully apportioned among the members. For example, under the FIFO method of apportionment, the first $9,500 of additional tax liability of a controlled group would be apportioned entirely to the member(s) that were apportioned the 15 percent tax bracket. Unless the component members of a controlled group elect to use the FIFO method, they are required to use the proportionate method in apportioning the additional taxes among the component members. These temporary regulations also provide guidance in calculating and apportioning the reduction to the exemption amount. Specifically, they provide that any reduction to the exemption amount shall be apportioned to the component members in the same manner as the exemption amount. B. Apportioning Certain Tax-Benefit Items Where a Component Member Has a Short Taxable Year Not Including a December 31st Date Section 1561(b) provides that where a corporation has a short taxable year which does not include a December 31st date, but is a component member of a controlled group of corporations for such year (a “short-year member”), then, for purposes of subtitle A of the Code, the tax-benefit items described in section 1561(b) (the “section 1561(b) tax-benefit items”) of such corporation for such year shall be the amount specified in section 1561(a) for that item, divided by the number of corporations which are component members of such group on the last day of that member's short taxable year. Thus, a short-year member is not permitted to be apportioned a different amount. Section 1561(b) further provides that the rules of section 1563(b) shall be applied as if the last day of the short-year member's short taxable year were substituted for December 31st. Thus, the determination of whether a short-year member qualifies as a member of the group is determined by looking to its testing period, which begins on the first day of its taxable year and ends on the day before the last day of such short taxable year. See the discussion of testing date and testing period in the following section of this preamble. Section 1.1561-2(e) interprets this provision. These temporary regulations update and clarify the rules of current § 1.1561-2(e). It is not intended that any such updating and clarification constitute a substantive change. C. Definitions of a Group's Testing Date and a Member's Testing Period Section 1.1563-1T(b) defines component members and excluded members of controlled groups. These definitions depend upon whether a corporation was a member of a group on the December 31st of its taxable year (its “testing date”) and was a member for at least one-half the number of days of its taxable year beginning on the first day of its taxable year and ending on December 30th of its taxable year (its “testing period”). These temporary regulations amend § 1.1563-1T(b) to provide explanations of the concepts: Testing date and testing period. A testing date is defined as the date that a controlled group is required to use in determining which of its members and which of their taxable years will be subject to the controlled group rules. Generally, a group's testing date is the December 31st date included within all the members' taxable years, whether such corporations are on a calendar or fiscal taxable year. However, if a component member of a controlled group has a short taxable year that does not include a December 31st date, then the last day of its short taxable year serves as the member's testing date. A testing period is defined as the period of time that a member of a controlled group uses to determine its status as either a component member or an excluded member. The testing period begins on the first day of a member's taxable year and ends on the day before its testing date. Thus, in the case of a member on a fiscal taxable year, the portion of its taxable year beginning after December 31st and ending on the last day of its taxable year is not taken into account in determining its status as a component member or an excluded member. D. Information Sharing Among Controlled Group Members The IRS and the Treasury Department wish to note certain circumstances in which corporations may experience complications in applying the controlled group rules generally or with respect to tax brackets and the alternative minimum tax exemption amount in particular. As noted above, no new rules are provided with respect to these situations, although they are illustrated in several examples in these temporary regulations. Because the controlled group rules apply to multiple corporations each filing its own return, the corporations must have access to sufficient information regarding the other members or potential members to comply with the rules. Taxpayers are alerted to their responsibilities to obtain this information. In certain situations, such information may have to be obtained from corporations that are no longer owned by related parties and taxpayers will need to make arrangements to ensure that they will have access to information that will enable them to meet their compliance obligations. Ideally, the corporations and their shareholders will take these issues into account when contemplating transfers of interests in the corporations to provide access to adequate information sharing afterwards. For example, if a corporation in a group changes hands during or shortly after the end of a taxable year, the formerly related corporations in the selling group will need information from the sold corporation about its income levels under the regular and alternative minimum tax systems, and the sold corporation will need information about the formerly related selling group members. In addition, if a corporation changes hands during a calendar year in a transaction that does not close the corporation's taxable year, events later in the year after the corporation is no longer related could affect the corporation's status as a member of the controlled group. For example, if the corporation changes hands early in the calendar year, the selling group might assume that the bulk of the testing period will fall after the sale and the corporation will not be a member for the year. However, if the corporation is liquidated by its new owners during the calendar year, the testing period for the year will be truncated and the corporation may be included for the taxable year in the selling controlled group because it was there for more than one-half of the now shorter testing period. The selling group will need to know that the sold corporation will now be treated as included in its group and the relevant data about its income for the taxable year. Furthermore, events after the close of the taxable year, such as amended returns, audit adjustments or loss carrybacks, could affect the entitlement of other group members to tax benefits such as the lower brackets or the alternative minimum tax exemption amount, as well as other issues that might affect whether the group members will be under the regular or alternative minimum tax. In this case, again, the various members of the controlled group in the earlier year will need to have adequate information sharing to comply with their responsibilities. E. Consolidated Return Amendment Section 1.1502-47 provides rules for a life-nonlife consolidated group to calculate its consolidated taxable income. Paragraph
(s)of § 1.1502-47 previously required a consolidated group to clearly indicate “by notation” on the face of its return that it is a life-nonlife consolidated return. This requirement presented an impediment to e-filing. Accordingly, as part of TD 9304, the IRS and the Treasury Department amended § 1.1502-47(s) and published § 1.1502-47T(s) to remove this impediment by deleting the requirement that it indicate this “by notation.” However, § 1.1502-47T(s) was inadvertently removed from the Code of Federal Regulations by TD 9342 when other portions of § 1.1502-47T were published as final regulations. These temporary regulations republish § 1.1502-47T(s). Special Analyses It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to this regulation. For the applicability of the Regulatory Flexibility Act (5 U.S.C. chapter 6) refer to the Special Analyses section of the preamble to the cross-reference notice of proposed rulemaking published in the Proposed Rules section in this issue of the **Federal Register** . Pursuant to section 7805(f) of the Internal Revenue Code, this regulation will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Drafting Information The principal author of this regulation is Grid Glyer, Office of Associate Chief Counsel (Corporate). The other author of and principal reviewer for this regulation is Steven J. Hankin, Office of Associate Chief Counsel (Corporate). Other personnel from the IRS and the Treasury Department, however, participated in its development. List of Subjects in 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. Amendments to the Regulations Accordingly, 26 CFR part 1 is amended as follows: PART 1—INCOME TAXES **Paragraph 1.** The authority citation for part 1 continues to read, in part, as follows: Authority: 26 U.S.C. 7805 * * * Section 1.1502-47T also issued under 26 U.S.C. 1502. * * * **Par. 2.** Section 1.1502-47T is added to read as follows: § 1.1502-47T Consolidated returns by life-nonlife groups (temporary).
(a)through
(r)(Reserved). For further guidance, see § 1.1502-47(a) through (r).
(s)*Filing requirements.* Nonlife consolidated taxable income or loss under paragraph
(h)of § 1.1502-47 shall be determined on a separate Form 1120 “U.S. Corporation Income Tax Return” or 1120-PC, “U.S. Property and Casualty Insurance Company Income Tax Return”, and consolidated partial Life Insurance Company Taxable Income [defined in § 1.1502-47(d)(3)] under paragraph
(j)of § 1.1502-47 shall be determined on a separate Form 1120-L “U.S. Life Insurance Company Income Tax Return”. The consolidated return shall be made on a separate Form 1120, 1120-PC, or 1120-L filed by the common parent (if the group includes a life company), which shows the set-offs under paragraphs (g), (m), and
(n)of § 1.1502-47 and clearly indicates on the face of the return that it is a life-nonlife consolidated return (if the group includes a life company). See also § 1.1502-75(j), relating to statements and schedules for subsidiaries.
(t)*Effective date* —(1) *Applicability date.* Paragraph
(s)of this section applies to any consolidated Federal income tax return due (without extensions) after *December 26, 2007* . However, a consolidated group may apply paragraph
(s)of this section to any consolidated Federal income tax return filed on or after *December 26, 2007* .
(2)*Expiration date.* The applicability of paragraph
(s)of this section will expire on December 21, 2010. **Par. 3.** Section 1.1561-0T is added to read as follows: § 1.1561-0T Table of contents (temporary). This section lists the table of contents for §§ 1.1561-1T through 1.1561-3T. § 1.1561-1T General rules regarding certain tax benefits available to the component members of a controlled group of corporations (temporary).
(a)In general.
(b)Special rules.
(c)Tax avoidance.
(d)Effective date.
(1)Applicability date.
(2)Expiration date. § 1.1561-2T Special rules for allocating reductions to certain Section 1561(a) tax-benefit items (temporary).
(a)Additional tax.
(1)Calculation.
(2)Apportionment.
(i)General rule.
(ii)Apportionment methods.
(A)Proportionate method.
(B)FIFO method.
(3)Examples.
(b)Reduction to the amount exempted from the alternative minimum tax.
(1)Calculation.
(2)Apportionment.
(3)Example.
(c)Accumulated earnings credit.
(d)Reserved.
(e)Short taxable year not including a December 31st date.
(1)General rule.
(2)Additional rules.
(3)Examples.
(f)Effective date.
(1)Applicability dates.
(i)Paragraphs
(a)and
(b)of this section.
(ii)Paragraph
(c)of this section.
(iii)Paragraph
(e)of this section.
(2)Expiration dates. § 1.1561-3T Allocation of the section 1561(a) tax items (temporary).
(a)Filing of form.
(1)In general.
(2)Exception for component members that are members of consolidated group.
(b)No apportionment plan in effect.
(c)Apportionment plan in effect.
(1)Adoption of plan.
(2)Limitation on adopting a plan.
(i)Sufficient statute of limitations period.
(ii)Insufficient statute of limitations period.
(3)Termination of plan.
(d)Effective date.
(1)Applicability date.
(2)Expiration date. § 1.1561-2 [Removed] **Par. 4.** Section 1.1561-2 is removed. **Par. 5.** Section 1.1561-2T is amended by revising the heading, adding paragraphs
(a)and (b), and revising paragraphs
(e)and
(f)to read as follows: § 1.1561-2T Special rules for allocating reductions to certain section 1561(a) tax-benefit items (temporary).
(a)*Additional tax* —
(1)*Calculation.* For the purpose of determining the amount, if any, of the additional tax imposed by section 11(b)(1), the taxable incomes of all of the component members of a controlled group of corporations for the taxable years that include the same December 31st date shall be combined for determining whether either of the income thresholds for imposing an additional tax have been attained.
(2)*Apportionment* —
(i)*General rule.* Any additional tax determined under paragraph (a)(1) of this section shall be apportioned among such members in the same manner as the corresponding tax bracket of section 11(b)(1) is apportioned. For rules to apportion the section 11(b)(1) tax brackets among the component members of a controlled group, see § 1.1561-3T(b) or (c).
(ii)*Apportionment methods.* Unless the component members of a controlled group elect to use the first-in-first-out
(FIFO)method described in paragraph (a)(2)(ii)(B) of this section, such members are required to apportion the amount of the additional tax using the proportionate method described in paragraph (a)(2)(ii)(A) of this section. These component members can elect the FIFO method by specifically adopting such method in their apportionment plan.
(A)*Proportionate method.* Under the proportionate method, the additional tax is allocated to each component member in the same proportion as the portion of the tax-benefit amount that inured to a member from utilizing lower tax brackets bears to the amount of the group's total tax-benefit amount inuring to the group from utilizing those lower tax brackets. The tax-benefit amount that inures to a corporation from using a particular tax bracket is the tax savings that such corporation realizes from having a portion of its taxable income taxed at the lower rate attributed to that tax bracket instead of the high tax rates to which it would otherwise be subject. The steps for applying the proportionate method of allocation are as follows: ( *1* ) *Step 1.* The regular tax (not including the additional tax) owed by a component member under a particular tax bracket is divided by the total tax owed by all component members under that tax bracket; ( *2* ) *Step 2.* The percentage calculated under *Step 1* is multiplied by the total tax-benefit amount inuring to all the members of the group from their use of this tax bracket. This computed amount equals the portion of the group's tax-benefit amount that inured to such member from using its portion of this tax bracket; ( *3* ) *Step 3.* The amount determined under *Step 2* is divided by the total tax-benefit amount, inuring to all the component members of the group from using all the tax brackets to which any component member's income was subject; ( *4* ) *Step 4.* The percentage calculated under *Step 3* is multiplied by the amount of the group's additional tax. The amount determined under this *Step 4* equals the amount of the additional tax apportioned to such member for that tax bracket; and ( *5* ) *Step 5.* If a component member is liable for regular tax (not including the additional tax) under more than one tax bracket, that member must calculate the amount of the additional tax apportioned to it with respect to each tax bracket. Accordingly, steps 1 through 4 must be applied for each tax bracket applicable to that member. The sum of all the apportioned amounts of additional tax from each tax bracket for which the member is subject is the total amount of the additional tax apportioned to that member.
(B)*FIFO method.* Under the FIFO method, the first dollars of the additional tax are to be allocated proportionately to the members starting with the lowest tax bracket (that is, the first tax bracket), up to the amount of the tax benefit inuring to those members from using that tax bracket. Any remaining amount of additional tax is then allocated proportionately among the component members who use the next higher tax bracket, and so on, until the entire amount of the additional tax has been fully apportioned among the members. For example, the first $9,500 of the additional tax liability of a controlled group is apportioned entirely to the member(s) that availed themselves of the benefit of the 15 percent tax bracket.
(3)*Examples.* The provisions of this paragraph
(a)may be illustrated by the following examples: Example 1.
(i)*Facts.* A controlled group of corporations consists of three members: X, Y and Z. X owns all the stock of Y and Z. Each corporation files its separate return on a calendar year basis. For calendar year 2007, the component members of the controlled group have an apportionment plan in effect. The members apportioned 80% of the 15 percent tax-bracket amount ($40,000) to X and the remaining 10% ($10,000) to Y. The members apportioned 100% of the 25 percent tax-bracket amount ($25,000) to Y. However, these members have not adopted the FIFO method for apportioning the additional taxes. Therefore, they must follow the proportionate method. For 2007, X had taxable income
(TI)of $40,000, Y had TI of $60,000 and Z had TI of $100,000. Thus the total TI of the group is $200,000.
(ii)*Calculating the tax from the tax brackets and the tax benefit derived from such tax.*
(A)*Regular tax of group subjected to a 15 percent tax rate.* ( *1* ) *Calculating the group's tax which resulted from applying a 15 percent tax rate.* The amount of tax under the 15 percent tax bracket is $7,500 (15% × $50,000). ( *2* ) *The tax-benefit amount inuring to the group from using the 15 percent tax bracket.* A tax benefit inures to those members of the group who avail themselves of the 15 percent tax bracket. That tax benefit results from having the first $50,000 of its income taxed at the 15 percent tax rate, instead of at the 34 percent tax rate. Thus, the tax-benefit amount inuring to this group from using the 15 percent tax bracket is $9,500 ($17,000 (34% × $50,000) minus $7,500 (15% × $50,000)).
(B)*Regular tax of group subjected to a 25 percent tax rate.* ( *1* ) *Calculating the group's tax which resulted from applying a 25 percent tax rate.* The amount of tax under the 25 percent tax bracket is $6,250 (25% × $25,000 ($75,000 − $50,000)). ( *2* ) *The tax-benefit amount inuring to the group from using the 25 percent tax bracket.* A tax benefit inures to those members of the group who avail themselves of the 25 percent tax bracket. That tax benefit results from having $25,000 of its income taxed at the 25 percent tax rate, instead of at the 34 percent tax rate. Thus, the tax-benefit amount inuring to this group from using the 25 percent tax bracket is $2,250 ($8,500 (34% × $25,000) minus $6,250 (25% × $25,000)).
(C)*Regular tax of group subjected to a 34 percent tax rate.* ( *1* ) *Calculating the group's tax which resulted from applying a 34 percent tax rate.* The amount of tax under the 34 percent tax bracket is $42,500 (34% × $125,000 ($200,000 (total TI) − $75,000) (amount taxed at lower rates)). ( *2* ) *The tax-benefit amount inuring to the group from using the 34 percent tax bracket.* The group's total TI of $200,000 is less than the $15,000,000 income threshold for imposing any 3 percent additional tax on the group. Therefore, there is no tax benefit inuring to the members of this group for using the 34 percent tax bracket.
(D)*The computation of the additional tax.* Since the combined TI of the group exceeds $100,000, a 5 percent additional tax is imposed on the group. That 5 percent additional tax is the lesser amount of 5 percent of the group's taxable income exceeding $100,000 or $11,750. Five percent of that excess amount of taxable income is $5,000 (5% × $100,000 ($200,000 −$100,000)). Since $5,000 is less than $11,750, the group's 5 percent additional tax is $5,000.
(iii)*Apportioning the amount of additional tax to each applicable tax bracket.*
(A)*The apportioned tax under each bracket.* The amount of tax owed by each member under each tax bracket pursuant to the apportionment plan is as follows: Name of component member Amount of tax owed under the 15% tax bracket Amount of tax owed under the 25% tax bracket Amount of tax owed under the 34% tax bracket X $6,000 0 0 Y $1,500 $6,250 $8,500 Z 0 0 $34,000
(B)*Apportioning the 5 percent additional tax among the component members of the controlled group.* Since the group did not elect to adopt the FIFO method of apportionment, it is required to apportion the $5,000 of its 5 percent additional tax pursuant to the proportionate method in the following manner: ( *1* ) *Amount of the additional tax apportioned to X.* Pursuant to the plan, X was liable for $6,000 of the group's $7,500 regular tax (80%) owed under the 15 percent tax bracket (and X is not liable for any regular tax under any higher tax bracket). See *Step 1* of paragraph (a)(2)(ii)(A) of this section. X's portion of the group's tax benefit which it derived from using the 15 percent tax rate is $7,600 (0.8 × $9,500). See *Step 2.* The tax benefit inuring to the entire group from using the 15 percent and 25 percent tax brackets is $11,750 ($9,500 (from the 15 percent tax bracket) + $2,250 (from the 25 percent tax bracket)). So, X's percentage portion of the group's total tax benefit is $7,600/$11,750 (64.68%). See *Step 3.* Thus, X's allocated portion of the 5 percent additional tax from using the 15 percent tax bracket is $3,234 (0.6468 × $5,000). See *Step 4.* ( *2* ) *Amount of the additional tax apportioned to Y.* ( *i* ) *Regular tax apportioned to Y from using the 15 percent tax bracket.* Pursuant to the plan, Y was liable for the remaining $1,500 of the group's $7,500 regular tax (20%) owed under the 15 percent tax bracket. See *Step 1.* Y's portion of the group's tax benefit which it derived from using the 15 percent tax rate is $1,900 ($9,500 − $7,600, or 0.2 × $9,500). See *Step 2.* So, Y's percentage portion of the group's total tax benefit is $1,900/$11,750 (16.17%). See *Step 3.* Thus, Y's allocated portion of the 5 percent additional tax from using the 15 percent tax bracket is $809 (0.1617 × $5,000). See *Step 4.* ( *ii* ) *Regular tax apportioned to Y from using the 25 percent tax bracket.* Pursuant to the plan, Y was liable for 100% of the group's regular tax owed under the 25 percent tax bracket, an amount of $6,250. See *Step 1.* Y is, therefore, entitled to 100% of the group's tax benefit which it derived from using this tax bracket, an amount of $2,250. See *Step 2.* So, Y's percentage portion of the group's total tax benefit is $2,250/$11,750 (19.15%). See *Step 3.* Thus, Y's allocated portion of the 5 percent additional tax from using the 25 percent tax bracket is $957 (0.1915 × $5,000). See *Step 4.* Y's total allocated portion of the additional tax is $1,766 ($809 + $957). See *Step 5.* Example 2.
(i)*Facts.* The facts are the same as in *Example 1* , except that on August 31, 2007, X of the X-Y-Z controlled group sold all of the stock of Z to M of the M-N controlled group, a pair of corporations unrelated to the X-Y group. Pursuant to the terms of the sales agreement, the members of the M-N group properly notified the members of the X-Y group on a timely basis that Z's taxable income for its 2007 taxable year, as based on the group's December 31st testing date, was $100,000.
(ii)*Controlled group analysis.* On December 31, 2007, X and Y are members of the selling controlled group and M, N, and Z are members of the buying controlled group. However, pursuant to section 1563(b)(3), Z is treated as an additional member of the X-Y group on December 31, 2007, since it was a member for at least one-half the number of days (243 out of 364) during the period beginning on January 1 and ending on December 30, 2007. Conversely, pursuant to section 1563(b)(2)(A), Z is treated as an excluded member of the M-N controlled group. Therefore, on December 31, 2007, X, Y, and Z qualify as component members of the selling group, and only M and N qualify as component members of the buying group.
(iii)*Additional tax analysis.* With regard to X and Y's 2007 taxable years, X and Y together owed $5,000 of additional tax, as calculated in *Example 1.* X's allocated portion of the additional tax is $3,234, as calculated in the manner set forth in *Example 1* . Y's allocated portion of the additional tax is $1,766, also as calculated in the manner set forth in *Example 1.* Example 3.
(i)*Facts.* The facts are the same as in *Example 2* , except that in 2012, pursuant to an IRS audit, Z's 2007 taxable income was redetermined. It was adjusted by an income increase of $10,000. Pursuant to the terms of the sales agreement, the members of the M-N group timely notified the members of the X-Y group of Z's income adjustment.
(ii)*Additional tax analysis.* For 2007 the X-Y-Z group owed a revised additional tax in the amount of $5,500, allocated as follows: $3,557.40 to X and $1,942.60 to Y. X and Y each filed an amended 2007 tax return to report their portions of the $500 increase to the group's additional tax. Pursuant to their apportionment plan for allocating their regular tax, and as a result of defaulting to the proportionate method for allocating the group's additional tax, X reported $323.40 as its share of the group's increase to its additional tax and Y reported $176.60 as its share of the group's increase to its additional tax. Example 4. The facts are the same as in *Example 1,* except that the members elected in their apportionment plan to adopt the FIFO method for apportioning the additional tax. Under the FIFO method, the 5 percent additional tax amount of $5,000 will be apportioned entirely to those members who would benefit from using the 15 percent tax bracket, by reason that $5,000 of the group's additional tax is less than $9,500, which is the full tax-benefit amount inuring to a controlled group from having a 15 percent tax rate applied to the full income bracket subject to that rate. Since X derived 80 percent of the group's tax benefit by its use of the 15 percent tax bracket, its share of the group's 5 percent additional tax is $4,000 (80% × $5,000), and Y's share of the group's 5 percent additional tax is, therefore, $1,000, which is the remaining amount of the group's 5 percent additional tax, attributable to the 15 percent tax bracket.
(b)*Reduction to the amount exempted from the alternative minimum tax—*
(1)*Calculation.* The alternative minimum taxable incomes for all the taxable years of the component members of a controlled group of corporations subjected to the same December 31st testing date shall be taken into account in calculating the reduction set forth in section 55(d)(3) to the amount exempted from the alternative minimum tax exemption (the exemption amount).
(2)*Apportionment.* Any reduction to the exemption amount shall be apportioned to the component members of a controlled group in the same manner that the amount of the exemption (provided in section 55(d)(2)) to the alternative minimum tax was allocated under section 1561(a). For rules to apportion the section 55(d)(2) exemption amount among the component members of a controlled group, see § 1.1561-3T(b) or (c).
(3)*Example.*
(i)*Facts.* A controlled group of corporations consists of three members: X, Y, and Z. X owns all of the stock of Y and Z. Each corporation files its separate return on a calendar year basis. For calendar year 2007, the component members of this controlled group have an apportionment plan in effect. The group has chosen to apportion the entire section 55(d)(2) exemption amount of $40,000 to Z. For 2007, X had alternative minimum taxable income
(AMTI)of $40,000, Y had AMTI of $60,000 and Z had AMTI of $100,000. Thus the total AMTI of the group is $200,000.
(ii)*Calculating the reduction to the exemption amount.* Section 55(d)(3)(A) provides that the section 55(d)(2) exemption amount shall be reduced by an amount equal to 25 percent of the amount by which the AMTI of a corporation exceeds $150,000. For the purpose of computing the group's AMTI, the AMTI of each of the component members, for their taxable years that have the same December 31st testing date, shall be taken into account. In accordance with these provisions, the $40,000 exemption amount is reduced by $12,500 (25% × $50,000 ($200,000 − $150,000)). Pursuant to the group's allocation plan, the entire $12,500 reduction to the exemption amount is allocated to Z. Thus, after such allocation, Z's $40,000 exemption amount is reduced to $27,500 ($40,000 − $12,500).
(e)*Short taxable years not including a December 31st date* —
(1)*General rule.* If a corporation has a short taxable year not including a December 31st testing date and, after applying the rules of section 1561(b) and paragraph (e)(2)(i) of this section, it qualifies as a component member of the group with respect to its short taxable year (short-year member), then, for purposes of subtitle A of the Internal Revenue Code, the amount of any tax-benefit item described in section 1561(b) allocated to that component member's short taxable year shall be the amount specified in section 1561(a) for that item, divided by the number of corporations which are component members of that group on the last day of that component member's short taxable year. The component members of such group may not apportion, by their apportionment plan, an amount of such tax-benefit item to any short-year member that differs from an amount based on equal apportionment.
(2)*Additional rules.* For purposes of paragraph (e)(1) of this section—
(i)Section 1563(b) shall be applied as if the last day of the taxable year of a short-year member were substituted for December 31, and
(ii)The term *short taxable year* does not include any portion of a taxable year of a corporation for which its income is required to be included in a consolidated return under § 1.1502-76.
(3)*Examples.* The provisions of this paragraph
(e)may be illustrated by the following examples: Example 1. *Formation of a new member of a controlled group.*
(i)*Facts.* On January 2, 2007, corporation X transfers cash to newly formed corporation Y (which begins business on that date) and receives all of the stock of Y in return. X also owns all of the stock of corporation Z on each day of 2006 and 2007. X, Y, and Z have an apportionment plan in effect, apportioning the 15 percent tax-bracket amount as follows: 40% ($20,000) to each of X and Y and 20% ($10,000) to Z. X, Y, and Z each file a separate return with respect to the group's December 31st 2007 testing date. X is on a calendar taxable year and Z is on a fiscal taxable year ending on March 31. Y adopts a fiscal year ending on June 30 and timely files a tax return for its short taxable year beginning on January 2, 2007, and ending on June 30, 2007.
(ii)*Y's short taxable year.* On June 30, 2007, Y is a component member of a parent-subsidiary controlled group of corporations composed of X, Y and Z. Pursuant to paragraph (e)(1) of this section, the group may not apportion any amount of the 15 percent tax bracket to Y's short taxable year ending on June 30, 2007. Rather, Y is entitled to exactly 1/3 of such bracket amount, or $16,667.
(iii)*The members' subsequent taxable years.* On December 31, 2007, X, Y and Z are component members of a parent-subsidiary controlled group of corporations. For their taxable years that include December 31, 2007 (X's calendar year ending December 31, 2007, Z's fiscal year ending March 31, 2008 and Y's fiscal year ending June 30, 2008), X, Y and Z apportion among themselves the full amount of all of the applicable tax brackets pursuant to their apportionment plan. For example, 40% of the 15 percent tax-bracket amount, or $20,000, was apportioned to each of X and Y, and the remaining 10%, or $10,000, was apportioned to Z. Example 2. *Allocation of tax bracket to a liquidated member of a controlled group having a short taxable year.*
(i)*Facts.* On January 1, 2007, corporation P owns all of the stock of corporations S <sup>1</sup> , S <sup>2</sup> and S <sup>3</sup> (the P group). Each of these four component members of the P group, with respect to the group's December 31, 2007 testing date, files its separate return on a calendar year basis. These members have an apportionment plan in effect (the P group plan) under which S <sup>1</sup> and S <sup>2</sup> are each entitled to 40% of the 15 percent tax-bracket amount ($20,000), and P and S <sup>3</sup> are each entitled to 10% of the 15 percent tax-bracket amount ($5,000). On May 31, 2007, S <sup>1</sup> liquidates and therefore files a return for the short taxable year beginning on January 1, 2007, and ending on May 31, 2007. On July 31, 2007, S <sup>2</sup> liquidates and therefore files a return for the short taxable year beginning on January 1, 2007 and ending on July 31, 2007. P and S <sup>3</sup> each file a return for their 2007 calendar taxable years.
(ii)*Apportionment of the 15 percent tax bracket to S* 1 *for its short taxable year.* On May 31, 2007, S <sup>1</sup> is a component member of the P group composed of P, S <sup>1</sup> , S <sup>2</sup> and S <sup>3</sup> . Pursuant to paragraph (e)(1) of this section, the group may not apportion any amount of the 15 percent tax bracket to S <sup>1</sup> 's short taxable year ending on June 30, 2007. Rather, S <sup>1</sup> is entitled to exactly 1/4 of such bracket amount, or $12,500.
(iii)*Apportionment of the 15 percent tax bracket to S* 2 *for its short taxable year.* On July 31, 2007, S <sup>2</sup> is a component member of the P group composed of P, S <sup>2</sup> and S <sup>3</sup> . Pursuant to paragraph (e)(1) of this section, the group may not apportion any amount of the 15 percent tax bracket to S <sup>2</sup> 's short taxable year ending on June 30, 2007. Rather, S <sup>2</sup> is entitled to exactly 1/3 of such bracket amount, or $16,667.
(iv)*Apportionment of the 15 percent tax bracket to P and S* 3 *for each of their calendar taxable years.* On December 31, 2007, P and S <sup>3</sup> are component members of the P group. Accordingly, for P and S <sup>3</sup> 's 2007 calendar taxable year, they are each apportioned $25,000 of the 15 percent tax bracket, pursuant to the applicable P group plan. Example 3. *Liquidation of member after its transfer to another controlled group.*
(i)*Facts.* The facts are the same as in *Example 2,* except that P, on April 30, 2007, sold all of the stock of S <sup>2</sup> to the M-N controlled group. At the time of the sale, M and N are both unrelated to any members of the P group. As in *Example 2,* S <sup>2</sup> liquidates on July 31, 2007, and therefore files a tax return for its short taxable year beginning on January 1, 2007, and ending on July 31, 2007. Pursuant to the sales agreement, the N-M group timely notified P that S <sup>2</sup> had liquidated.
(ii)*Controlled group analysis.* On April 30, 2007, the date of the sale of S <sup>2</sup> , the P group reasonably expected that S <sup>2</sup> would be treated as an excluded member with respect to its December 31, 2007 testing date. On that April 30th date, S <sup>2</sup> had been a member of the P group for less than one-half the number of days of what it expected would be a full 2007 calendar taxable year preceding December 31, 2007 (120 days (January 1-April 30) out of 364 days (January 1-December 30)). Yet, as a result of S <sup>2</sup> 's subsequent liquidation by the M-N group prior to December 31, 2007, S <sup>2</sup> became a component member of the P group with respect to the P group's December 31, 2007 testing date. With respect to that December 31st testing date, S <sup>2</sup> thus was a member of the P group for more than one-half of the number of days of its taxable year ending on July 31, 2007, which days proceeded December 31st 2007 (120 days (January 1-April 30 of 2007) out of 211 days (January 1-July 30 of 2007)). The allocation of the 15 percent tax-bracket amount to the P group members is determined in the same manner as in *Example 2* and, therefore, the bracket amounts allocated to P, S <sup>1</sup> , S <sup>2</sup> and S <sup>3</sup> are the same as determined in *Example 2.* The allocation of the bracket amounts would be the same if, at the time P sold all of the S <sup>2</sup> stock, the parties had made a section 338(h)(10) election. Example 4. *Short taxable year including a December 31st date.* Corporation X owns all of the stock of corporations Y and Z. X, Y and Z each file separate returns. X and Y are on a calendar taxable year and Z is on a fiscal taxable year beginning October 1 and ending September 30. On January 2, 2007, Z liquidates. Because Z's final taxable year (beginning on October 1, 2006 and ending on January 2, 2007) includes a December 31st date, that is, December 31, 2006, it is not subject to the short taxable year rule of section 1561(b) and paragraph
(e)of this section. Accordingly, Z is a component member of the X-Y-Z group, for the group's December 31, 2006 testing date. Thus, the rules of this paragraph
(e)do not limit the amount of any of the tax-benefit items of section 1561(a) available to Z or to this controlled group.
(f)*Effective date* —(1) *Applicability dates* —(i) *Paragraphs
(a)and
(b)of this section.* Paragraphs
(a)and
(b)of this section apply to any taxable year beginning after December 31, 2007. However, taxpayers may apply paragraphs
(a)and
(b)of this section to any Federal income tax return filed on or after December 26, 2007, provided that all of the component members of a controlled group of corporations apply such paragraphs
(a)and (b).
(ii)*Paragraph
(c)of this section.* Paragraph
(c)of this section applies to any taxable year beginning on or after December 22, 2006. However, taxpayers may apply paragraph
(c)of this section to any Federal income tax return filed on or after December 22, 2006, provided that all of the component members of a controlled group of corporations apply such paragraph (c).
(iii)*Paragraph
(e)of this section.* Paragraph
(e)of this section applies to any taxable year beginning on or after *December 26, 2007.* However, taxpayers may apply paragraph
(e)of this section to any Federal income tax return filed on or after December 26, 2007.
(2)*Expiration dates.* The applicability of paragraph
(c)of this section will expire on December 21, 2009. The applicability of paragraphs (a),
(b)and
(e)of this section will expire on *December 21, 2010.* **Par. 6.** Section 1.1563-1T is amended by revising the heading and paragraphs (b)(1), (b)(2)(i), (b)(2)(ii) introductory text, (b)(3), and
(e)to read as follows: § 1.1563-1T Definition of controlled group of corporations and component members and related concepts (temporary).
(b)*Component members* —(1) *In general* —(i) *Definition.* For purposes of sections 1561 through 1563, a corporation is with respect to its taxable year a component member of a controlled group of corporations for the group's testing date if such corporation—
(A)Is a member of such controlled group on such testing date and is not treated as an excluded member under paragraph (b)(2) of this section; or
(B)Is not a member of such controlled group on such testing date but is treated as an additional member under paragraph (b)(3) of this section.
(ii)*Member of a controlled group of corporations.* For purposes of sections 1561 through 1563, a member of a controlled group is a corporation connected with other member(s) of a controlled group under the stock ownership rules and the stock qualification rules set forth in section 1563. Under the above rules, for a corporation to qualify as a component member of the group with respect to a group's December 31st testing date (or the short-year testing date for a short-year member), that corporation does not have to be a member of that group on that group's testing date. In addition, a corporation that is a member of a controlled group on the group's testing date does not necessarily qualify as a component member of that group with respect to that testing date.
(iii)*Additional concepts used in applying the controlled group rules* —
(A)*Testing date* is the date used for determining the status of controlled group members as either component members or excluded members. That testing date is then also used to determine which taxable years of those component members are to be subjected to the controlled group rules. Generally, a member's testing date is the December 31st date included within that member's taxable year, whether such member is on a calendar or fiscal taxable year. However, if a component member of a controlled group has a short taxable year that does not include a December 31st date, then the last day of that short taxable year becomes that member's testing date; and
(B)*Testing period* is the time period used for determining the status of controlled group members as either component members or excluded members. The testing period begins on the first day of a member's taxable year and ends on the day before its testing date (Generally, the testing date is December 31st, but for a component member having a short taxable year not ending on December 31st, the testing date for the short taxable year of that member (and only that member) becomes the last day of that member's short taxable year). Thus, for a member on a fiscal taxable year, the portion of its taxable year beginning after December 31st and ending on the last day of its taxable year is not taken into account for determining its status as a component member or an excluded member.
(2)*Excluded members* —(i) A corporation, which is a member of a controlled group of corporations on the group's testing date, a date included within that member's taxable year, but who was a member of such group for less than one-half of the number of days of its testing period, shall be treated as an excluded member of such group for that group's testing date.
(ii)A corporation which is a member of a controlled group of corporations on a testing date shall be treated as an excluded member of such group on such date if, for its taxable year including such date, such corporation is—
(3)*Additional members.* A corporation shall be treated as an additional member of a controlled group of corporations, that is, an additional component member, on the group's testing date if it—
(i)Is not a member of such group on such date;
(ii)Is not described, with respect to such taxable year, in paragraph (b)(2)(ii)(A), (B), (C), (D), or
(E)of this section; and
(iii)Was a member of such group for one-half (or more) of the number of days in its testing period.
(e)*Effective date* —(1) *Applicability date.* Paragraph
(b)of this section applies to any taxable year beginning on or after *December 26, 2007.* However, taxpayers may apply paragraph
(b)of this section to any Federal income tax return filed on or after *December 26, 2007.* Paragraphs
(a)and
(b)(as contained in 26 CFR part 1 in effect on April 1, 2007), and paragraphs (c)(1), (c)(2)(iv) and
(d)of this section apply to taxable years beginning on or after December 22, 2006. However, taxpayers may apply the paragraphs described in the preceding sentence to any Federal income tax return filed on or after December 22, 2006. Paragraphs (c)(2)(i) through
(iii)of this section apply to any original Federal income tax return (including any amended return filed on or before the due date (including extensions) of such original return) timely filed on or after May 30, 2006.
(2)*Expiration date.* The applicability of paragraph
(b)of this section will expire on December 21, 2010. The applicability of paragraphs
(a)and
(b)(as contained in 26 CFR part 1 in effect on April 1, 2007), and paragraphs (c)(1), (c)(2)(iv) and
(d)of this section will expire on December 21, 2009. The applicability of paragraphs (c)(2)(i) through
(iii)of this section will expire on May 26, 2009. Linda E. Stiff, Deputy Commissioner for Services and Enforcement. Approved: December 17, 2007. Eric Solomon, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. E7-24874 Filed 12-21-07; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF JUSTICE Bureau of Alcohol, Tobacco, Firearms, and Explosives 27 CFR Part 447 [Docket No. ATF-9F; AG Order No. 2922—2007] RIN 1140-AA29 U.S. Munitions Import List and Import Restrictions Applicable to Certain Countries (2005R-5P) AGENCY: Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Department of Justice. ACTION: Final rule. SUMMARY: This final rule conforms the regulations in 27 CFR Part 447 to the revised International Traffic in Arms Regulations by amending the list of countries from which the importation of defense articles into the United States is proscribed by adding Afghanistan and removing South Africa and some of the states composing the former Soviet Union (Armenia, Azerbaijan and Tajikistan). The rule also removes the arms embargo against the countries of Serbia and Montenegro. It also clarifies an outdated reference in the regulations to Zaire, currently known as the “Democratic Republic of the Congo,” and makes a miscellaneous technical amendment to the regulations. DATES: This rule is effective December 26, 2007. FOR FURTHER INFORMATION CONTACT: Lawrence G. White; Firearms and Explosives Imports Branch; Bureau of Alcohol, Tobacco, Firearms, and Explosives; U.S. Department of Justice; 99 New York Avenue, NE., Washington, DC 20226;
(202)648-7113. SUPPLEMENTARY INFORMATION: Background The Arms Export Control Act of 1976 (“AECA”), 22 U.S.C. 2778, gives the President of the United States the authority to control the import and export of defense articles and defense services. The Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) is responsible for administering the import provisions of the AECA. Importation regulations issued under this law are in 27 CFR Part 447. Executive Order (“E.O.”) 11958 of January 18, 1977 (42 FR 4311, Jan. 24, 1977), as amended by E.O. 13284 of January 23, 2003 (68 FR 4075, Jan. 28, 2003), delegated authority to control exports of defense articles and defense services to the Secretary of State. The Executive Order also delegated to the Attorney General the authority to control the import of such articles and services. However, as stated in 27 CFR 447.55, ATF is guided by the views of the Secretaries of State and Defense on matters affecting world peace and the external security and foreign policy of the United States. After consulting the Department of State, ATF is revising the provisions of 27 CFR Part 447 to conform to the International Traffic in Arms Regulations (22 CFR Parts 120-130). On March 17, 2005, the Department of State informed ATF that on August 27, 1994, the Department of State rescinded the sanctions on trade in defense articles and services from South Africa and technical data relating to defense articles from South Africa as set forth in Category XXII of the U.S. Munitions Import List, 27 CFR 447.21. In an open letter, dated July 11, 2005, ATF advised federally licensed firearms importers and registered importers of this change and that it planned to revise § 447.21. Accordingly, this rule amends § 447.21 by removing Category XXII and the reference to Category XXII in the definition of “Defense articles” in § 447.11. On March 28, 2003, the Department of State advised ATF of the publication of a final rule on March 29, 2002 (67 FR 15101), formally removing Armenia and Azerbaijan from the list of proscribed destinations for the exports and imports of defense articles and defense services. ATF is therefore amending 27 CFR Part 447 to conform to this change. The Department of State also advised ATF of the publication of a final rule on January 9, 2002 (67 FR 1074), formally removing Tajikistan, Serbia and Montenegro (formerly known as the Federal Republic of Yugoslavia) from the arms embargo with the United States. Accordingly, the list of proscribed countries in part 447 is being amended to reflect this change in foreign policy. On November 20, 2005, the Department of State advised ATF of the publication of a final rule on June 27, 1996 (61 FR 33313), formally adding Afghanistan to the list of proscribed countries for the exports and imports of defense articles and defense services. ATF is therefore amending 27 CFR Part 447 to conform to this change. Miscellaneous Amendments The Department is also taking this opportunity to clarify an outdated reference contained in § 447.52(a). “Zaire” is currently listed as a country to which the United States maintains an arms embargo and this listing is amended to read “the Democratic Republic of the Congo.” The Department also is making a technical amendment to § 447.52 to indicate the current phone number for ATF's Firearms and Explosives Imports Branch. How This Document Complies With the Federal Administrative Requirements for Rulemaking A. Executive Order 12866 Because the amendments to 27 CFR Part 447 involve a foreign affairs function of the United States, Executive Order 12866 does not apply. B. Executive Order 13132 This regulation will 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. Therefore, in accordance with section 6 of Executive Order 13132, the Attorney General has determined that this regulation does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. C. Executive Order 12988 This regulation meets the applicable standards set forth in subsections 3(a) and 3(b)(2) of Executive Order 12988. D. Administrative Procedure Act As reflected in 27 CFR 447.54, amendments made to 27 CFR Part 447 are excluded from the rulemaking provisions of 5 U.S.C. 553 because this part involves a foreign affairs function of the United States. Accordingly, it is not necessary to issue this rule using the notice and public procedure set forth in 5 U.S.C. 553(b), and the requirement of a delayed effective date in 5 U.S.C. 553(d) does not apply. E. Regulatory Flexibility Act The provisions of the Regulatory Flexibility Act relating to an initial and final regulatory flexibility analysis are not applicable to this rule because the agency was not required to publish a general notice of proposed rulemaking under 5 U.S.C. 553 or any other law. F. Small Business Regulatory Enforcement Fairness Act of 1996 This rule is not a “major rule,” as defined by section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 804. This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets. G. Unfunded Mandates Reform Act of 1995 This rule will not result in the expenditure by State, local and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995. H. Paperwork Reduction Act The provisions of the Paperwork Reduction Act of 1995, Public Law 104-13, 44 U.S.C. Chapter 35, and its implementing regulations, 5 CFR Part 1320, do not apply to this rule because there are no reporting or recordkeeping requirements. Drafting Information The author of this document is Elizabeth Gillis; Enforcement Programs and Services; Bureau of Alcohol, Tobacco, Firearms, and Explosives. List of Subjects in 27 CFR Part 447 Administrative practice and procedure, Arms control, Arms and munitions, Authority delegation, Chemicals, Customs duties and inspection, Imports, Penalties, Reporting and recordkeeping requirements, Scientific equipment, Seizures and forfeitures. Authority and Issuance Accordingly, for the reasons discussed in the preamble, 27 CFR Part 447 is amended as follows: PART 447—IMPORTATION OF ARMS, AMMUNITION AND IMPLEMENTS OF WAR 1. The authority citation for 27 CFR Part 447 continues to read as follows: Authority: 22 U.S.C. 2778. § 447.11 [Amended] 2. Section 447.11 is amended by removing the last sentence in the definition of the term “Defense articles”. § 447.21 [Amended] 3. Section 447.21 is amended by removing Category XXII (South Africa) in its entirety from the U.S. Munitions Import List. 4. Section 447.52 is amended by revising the second and third sentences in paragraph (a), and by removing “(202) 927-8320” in the “Note” at the end of paragraph
(a)and adding in its place “(304) 616-4550”, to read as follows: § 447.52 Import restrictions applicable to certain countries.
(a)* * * This policy applies to Afghanistan, Belarus (one of the states composing the former Soviet Union), Cuba, Iran, Iraq, Libya, Mongolia, North Korea, Sudan, Syria, and Vietnam. This policy applies to countries or areas with respect to which the United States maintains an arms embargo (e.g., Burma, China, the Democratic Republic of the Congo, Haiti, Liberia, Rwanda, Somalia, Sudan, and UNITA (Angola)). Dated: December 17, 2007. Michael B. Mukasey, Attorney General. [FR Doc. E7-24910 Filed 12-21-07; 8:45 am] BILLING CODE 4410-FY-P EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 29 CFR Parts 1625 and 1627 RIN 3046-AA72 Age Discrimination in Employment Act; Retiree Health Benefits AGENCY: U.S. Equal Employment Opportunity Commission ACTION: Final rule. SUMMARY: The Equal Employment Opportunity Commission is publishing this final rule so that employers may create, adopt, and maintain a wide range of retiree health plan designs, such as Medicare bridge plans and Medicare wrap-around plans, without violating the Age Discrimination in Employment Act of 1967 (ADEA). To address concerns that the ADEA may be construed to create an incentive for employers to eliminate or reduce retiree health benefits, EEOC is creating a narrow exemption from the prohibitions of the ADEA for the practice of coordinating employer-sponsored retiree health benefits with eligibility for Medicare or a comparable State health benefits program. 1 The rule does not otherwise affect an employer's ability to offer health or other employment benefits to retirees, consistent with the law. 1 The EEOC recognizes that eligibility for Medicare and comparable state health benefits is not necessarily limited to retirees. As explained below, this rule only concerns application of the Age Discrimination in Employment Act to employer-sponsored retiree health benefits for individuals who also happen to be eligible to participate in Medicare or a comparable state health benefit. Individuals who are eligible for and/or receive Medicare or comparable state health benefits, but who are not retired, are not affected by this rule. DATES: Effective December 26, 2007. FOR FURTHER INFORMATION CONTACT: Raymond Peeler, Senior Attorney Advisor, at
(202)663-4537 (voice) or Dianna B. Johnston, Assistant Legal Counsel, at
(202)663-4637 (voice) or
(202)663-7026
(TTY)(These are not toll free numbers). This final rule is also available in the following formats: large print, braille, audio tape, and electronic file on computer disk. Requests for this document in an alternative format should be made to the Publications Information Center at 1-800-669-3362. SUPPLEMENTARY INFORMATION: Employer-sponsored retiree health benefits provide a much-needed source of health coverage for older Americans at a time when their health care needs are greatest. Without employer-sponsored retiree health benefits, many retirees are forced to go without health benefits between the time they retire and the time they become eligible for Medicare. Older retirees also rely on employer-sponsored retiree health benefits to cover medical costs that are not covered by Medicare. Employers are not legally obligated to provide retiree health benefits, and many do not. Moreover, over the past several years, the number of employers who offer such benefits has begun to decline. According to an independent study by the United States General Accounting Office (GAO), about one-third of large employers and less than 10% of small employers offered their retirees health benefits in 2000, compared to about 70% of employers in the 1980s. 2 Of those employers that do offer coverage, many “have reduced the terms of coverage by tightening eligibility requirements, increasing the share of premiums retirees pay for health benefits, or increasing copayments and deductibles—thus contributing to a gradual erosion of benefits.” 3 2 U.S. GENERAL ACCOUNTING OFFICE, “Retiree Health Benefits: Employer-Sponsored Benefits May Be Vulnerable to Further Erosion,” GAO Doc. No. GAO-01-374 (May 2001). 3 *Id.,* at 6. Rising health care costs, larger numbers of workers nearing retirement age, and mandated changes in the way employers must account for the long-term costs of providing retiree health coverage have been substantial factors contributing to the erosion of this valuable employment benefit. However, the Equal Employment Opportunity Commission (Commission or EEOC) believes that concern about the potential application of the Age Discrimination in Employment Act of 1967, 29 U.S.C. 621 *et seq.* (ADEA or Act) to employer-sponsored retiree health benefits also has adversely affected the availability of this benefit. A wide range of stakeholders, including labor organizations, benefits consultants, state and local governments, and private employers, agree that ADEA concerns have created an additional incentive to reduce or eliminate employer-sponsored retiree health benefits. In August 2000, the United States Court of Appeals for the Third Circuit became the first federal court of appeals to examine the relationship between the ADEA and employer-provided retiree health benefits. The Third Circuit held that an employer violated the ADEA if it reduced or eliminated retiree health benefits when retirees became eligible for Medicare, unless the employer could show either that the benefits available to Medicare-eligible retirees were equivalent to the benefits provided to retirees not yet eligible for Medicare or that it was expending the same costs for both groups of retirees. 4 The Commission subsequently adopted this ruling as its national enforcement policy. 5 Before the Third Circuit's decision, many employers had relied on legislative history to the Older Workers Benefit Protection Act of 1990, Public Law No. 101-433, 104 Stat. 978
(1990)(OWBPA), that states that the practice of eliminating, reducing, or altering employer-sponsored retiree health benefits with Medicare eligibility is lawful under the ADEA. 6 4 *Erie County Retirees Ass'n v. County of Erie,* 220 F.3d 193 (3d Cir. 2000). The Commission submitted an *amicus curiae* brief in *Erie County,* asserting, based on the plain language of the ADEA, that
(1)retirees are covered by the ADEA and
(2)employer reliance on Medicare eligibility in making distinctions in employee benefits violated the ADEA, unless the employer satisfied one of the Act's specified defenses or exemptions. 5 In its October 2000 Compliance Manual Chapter on “Employee Benefits,” the Commission explicitly adopted the position taken by the Third Circuit in *Erie County* as its national enforcement policy. When the Commission announced in August 2001 that it wished to further study the relationship between the ADEA and employer-sponsored retiree health plans, the Commission unanimously voted to rescind those portions of its Compliance Manual that discussed the *Erie County* decision. 6 Final Substitute: Statement of Managers, 136 Cong. Rec. S25353 (Sept. 24, 1990); 136 Cong. Rec. H27062 (Oct. 2, 1990). In addition, the Conference Report for the recently enacted Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. No. 108-173, 117 Stat. 2066
(2003)also provides that “the conferees reviewed the ADEA and its legislative history and believe the legislative history clearly articulates the intent of Congress that employers should not be prevented from providing voluntary benefits to retirees only until they become eligible to participate in the Medicare program.” H.R. Conf. Rep. No. 108-391, at 365 (2003). After the Commission implemented the Third Circuit's rule, labor organizations, benefits experts, state and municipal governments, and employers informed us that our actions were further eroding employer-sponsored retiree health benefits by creating an additional incentive for employers to reduce, or eliminate altogether, health benefits for retirees. Under the Commission policy in effect prior to August 2001 (see nn. 2 & 3), employers that chose to provide retiree health benefits had to prove either
(1)that the benefits available to Medicare-eligible retirees were the same as the benefits provided to retirees not yet eligible for Medicare or
(2)that they were expending the same costs for both groups of retirees. Making such a showing requires complex comparisons of multiple objective and subjective variables, including types of plans, levels and types of coverage, deductibles, geographical areas covered, and level of provider choice offered by each plan. Employers could avoid the problem by simply eliminating retiree health benefits entirely, since no law requires that employers provide retiree health benefits. Alternatively, employers could reduce the coverage they provided to those retirees who were not yet eligible for Medicare, leaving these retirees with fewer benefits. Unions, in particular, argued that the Commission's prior policy made it increasingly difficult to negotiate for the future provision of employer-sponsored retiree health benefits. The prior policy also had a particularly harsh impact on public school employees, who often retire early and rely on employer-provided retiree health benefits until they become eligible for Medicare. These comments prompted the Commission to study the relationship between the ADEA and employer-sponsored retiree health benefits. On July 14, 2003, EEOC published a Notice of Proposed Rulemaking
(NPRM)in the **Federal Register** to address these concerns. 7 In its NPRM, the Commission proposed to create a narrow exemption from the prohibitions of the ADEA for the practice of coordinating retiree health benefits with eligibility for Medicare or a comparable State health benefits program. The Commission now responds to public comments submitted in response to its NPRM and issues a final rule, adopting the NPRM exemption as modified. 7 The preamble to the Commission's NPRM provides detailed information about the Commission's study, including a comprehensive analysis of why the Commission believes that concern about the application of the ADEA to retiree health benefits is contributing to the erosion of this important benefit. *See* 68 FR 41542-41549 (July 14, 2003), available at *http://edocket.access.gpo.gov/2003/03-17738.htm.* The final rule permits employers and labor organizations to offer retirees a wide range of health plan designs that incorporate Medicare or comparable State health benefit programs without violating the ADEA. For example, in order to ensure that all retirees have access to some health care coverage, the ADEA will not prohibit employers and unions from providing retiree health coverage only to those retirees who are not yet eligible for Medicare. They also may supplement a retiree's Medicare coverage without having to demonstrate that the coverage is identical to that of non-Medicare eligible retirees. Thus, for example, employers providing prescription drug benefits to Medicare-eligible retirees under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. No. 108-173, 117 Stat. 2066 (2003), need not be concerned about whether the drug benefits provided to Medicare-eligible retirees differ from those provided to retirees not yet eligible for Medicare. The final rule concerns only the ADEA. It does not affect any non-ADEA obligation that employers may have to provide health benefits under Medicare or any other law. For example, this rule does not affect employers' obligation to use Medicare as a secondary payer, when required by Medicare law. In promulgating this rule, the Commission recognizes that the issues surrounding health care coverage, especially for retirees, are complex and that retiree health benefits are highly valued by older Americans. Although employers are under no legal obligation to offer retiree health benefits, some employers choose to do so and thereby provide retired workers with access to affordable health coverage at a time when private health insurance coverage might be otherwise cost prohibitive. Because the Commission has determined that its prior policy created an incentive for employers to reduce or eliminate retiree health benefits, the agency has concluded the public interest is best served by an ADEA policy that permits employers greater flexibility to offer these valuable benefits. The final rule is not intended to encourage employers to eliminate any retiree health benefits they may currently provide. Overview of Public Comments The Commission received forty-four organizational comments in response to the NPRM. Twenty-seven commenters expressed support for the proposed exemption, including sixteen organizations that requested no revisions to the proposed rule. The Commission also received approximately 30,000 letters from individual citizens. Most of these individual comments were a form letter expressing concern that if the practice of coordinating retiree health benefits with eligibility for Medicare or comparable State health benefits programs is exempted from ADEA coverage, employers might reduce or even eliminate the health benefits of Medicare-eligible retirees. Scope of the Exemption Two organizational commenters questioned whether the language in Section 1625.32(b) clearly defined the scope of the proposed exemption. One of these two commenters requested that the Commission clearly state that, under the rule, an employer-sponsored health plan that alters, reduces, or eliminates health care benefits based upon the receipt of health benefits under Medicare or a comparable State health benefits program is entirely exempt from coverage under the ADEA, even if a challenged practice is unrelated to the plan's interaction with Medicare (or comparable State health benefits program). The Commission declines to adopt this suggestion because it is wholly inconsistent with the intended scope of the rule. The rule only exempts the narrow practice of coordinating employer-sponsored retiree health benefits with eligibility for Medicare or a comparable State health benefits program. A comparable state health benefits program refers to plans that were created to provide primary health benefits for state and local government employees who were not covered by Medicare and that, like Medicare, base eligibility on age. ADEA coverage of any other aspect of an employer-sponsored retiree health plan, or of any other employer act, practice, or benefit of employment, including employer-sponsored health plans for current employees, is not affected by the rule. Additionally, as discussed below, the Commission will apply the exemption to the practice of coordinating employer-sponsored retiree health benefits with eligibility for Medicare or a comparable State health benefits program regardless of whether an individual participant actually receives such benefits. Another organization argued that the phrase “eligible for” in Section 1625.32(b) was vague because it was unclear whether the rule requires that an individual retiree actually enroll in, rather than merely be eligible for, Medicare or a comparable State health benefits program before the exemption would apply. The effect and intent of the proposed rule was that the exemption would apply whether or not a particular retiree actually enrolls in Medicare or a comparable State health benefits program, as long as the retiree was eligible for such benefits. While we believe the phrase “eligible for” is plain on its face, we have added the phrase “whether or not the participant actually enrolls in the other benefit program” to Section 1625.32(b) to further clarify our intent. This same commenter also questioned whether “Medicaid offsets” would be covered by the exemption, but did not further explain the type of employer-sponsored plan contemplated. Medicaid is the joint Federal-state program which provides primarily medical care to low-income Americans pursuant to Title XIX of the Social Security Act, 42 U.S.C. 1396 *et seq.* Section 1396a(a)(25)(G) of that Title requires that each State Medicaid plan prohibit any health insurer, including an employer-sponsored group health plan, “from taking into account that [an] individual is eligible for or is provided medical assistance” under a State Medicaid plan when making enrollment or benefit payment decisions. In light of this specific prohibition under the Medicaid law, the Commission declines to apply its exemption to employer-sponsored group health plans that coordinate benefits with an individual's eligibility for or receipt of Medicaid. Coverage of Non-Health Retiree Benefits While expressing overall support for the proposed rule, two organizations requested that the Commission provide a definition of the term “retiree health benefits” in Section 1625.32(a) of the rule. Both commenters also requested that the Commission make clear that no inference is intended as to how the ADEA might apply to non-health retiree benefits, such as life insurance or disability programs. Section 1625.32(c) of the rule provides that the exemption shall be narrowly construed. The only practice exempted by the rule is the coordination of employer-sponsored retiree health benefits with eligibility for Medicare or a comparable State health benefits program. No other aspects of ADEA coverage or benefits other than retiree health benefits are affected by the exemption. In order to further clarify the scope of the exemption, the Commission has added an additional statement to the rule explaining that the exemption only applies to retiree health benefits and not other non-health retiree benefits. The Commission also revised question and answer five in the Appendix to better reflect the scope of the exemption. In light of these revisions, the Commission concludes that adding a definition of retiree health benefits is unnecessary. Section 1625.32 and the accompanying Appendix set forth the types of employer-sponsored health benefits that may be permissibly coordinated with eligibility for Medicare or a comparable State health benefits program pursuant to the exemption. Under Paragraph
(b)of Section 1625.32, the exemption applies to any employee benefit plan that provides health benefits for retired workers that are coordinated with eligibility for Medicare or a comparable State health benefits program. The Appendix further makes clear that the exemption applies to employer-sponsored health benefits that are provided to a retired worker's spouse or dependents. The Commission does not believe that further clarification of the types of employer-sponsored retiree health benefits covered by the rule is needed. Coverage of Retirees Several commenters, although generally supportive of the proposed rule, expressed concern about the statement in the Appendix that the ADEA continues to apply to retirees to the same extent that it did prior to the issuance of the exemption. These commenters argued that the ADEA, as amended by OWBPA, only protects older workers, not retirees. It is the Commission's position, however, that all of the anti-discrimination statutes also protect former employees when they are subjected to discrimination arising from the former employment relationship. 8 8 *Robinson* v. *Shell Oil Co.* , 519 U.S. 337, 346
(1997)(former employees covered under Title VII); *Passer* v. *American Chem. Soc'y,* 935 F.2d 322, 330 (D.C. Cir. 1991) (former employees covered under ADEA); *Ford* v. *Schering-Plough Corp.* , 145 F.3d 601, 607 (3d Cir. 1998) (former employees covered under ADA), *cert. denied,* 525 U.S. 1093 (1999). Coverage of Existing Employer-Sponsored Retiree Health Benefit Plans Several commenters requested that EEOC clarify how the rule would apply to existing employer-sponsored retiree health benefit plans. Until the Third Circuit's ruling in *Erie County,* many employers designed coordinating retiree health benefit plans in reliance on statements in the legislative history to OWBPA that the practice of eliminating, reducing, or altering employer-sponsored retiree health benefits with Medicare eligibility is lawful under the ADEA. It is the Commission's intent to allow employers to continue the practice of coordinating retiree health benefits with Medicare eligibility with as little disruption as possible. The Commission does not believe that additional changes to the rule are required in order to achieve this result. The Appendix to the rule states that the Commission will apply the exemption to all retiree health benefits that coordinate with Medicare (or a comparable State health benefits plan), whether or not those benefits are provided for in an existing or newly created employee benefit plan. The Commission's Exemption Authority The Commission received seventeen comments from advocacy organizations and other groups representing retirees that did not support the Commission's proposal. These commenters questioned the Commission's authority to issue an exemption for the practice of coordinating employer-sponsored retiree health benefits with Medicare eligibility. Many of these commenters also argued that an exemption is inconsistent with the primary purposes of the ADEA. Three of these organizational commenters also asserted that the Commission did not sufficiently support the need for an exemption to the Act. In addition, the Commission received approximately 30,000 letters from individual citizens (the majority of which were a form letter) expressing concern that employers might reduce or even eliminate the health benefits of Medicare-eligible retirees in response to the EEOC's proposal. Section 9 of the ADEA provides that EEOC “may establish such reasonable exemptions to and from any or all provisions of [the Act] as it may find necessary and proper in the public interest.” Implicit in this authority is the recognition that the application of the ADEA could, in certain circumstances, foster unintended consequences that are not consistent with the purposes of the law and are not in the public interest. Such circumstances are rare. However, after carefully studying the issue and reviewing the public comments received in response to the NPRM, the Commission concludes that the practice of coordinating employer-sponsored retiree health benefits with Medicare eligibility presents a circumstance that warrants Commission exercise of its authority under Section 9. The Commission does not agree that EEOC lacks the authority to enact such a rule. Section 9 confers broad discretion on the Commission to issue rules and regulations interpreting the ADEA and to establish reasonable exemptions from any or all prohibitions of the Act. 9 Nor is the Commission persuaded that the rule is inconsistent with the primary purposes of the ADEA. Given the continuing decline in the availability of employer-provided retiree health benefits, and the disincentive to provide such benefits created by the Third Circuit's ruling and the Commission's prior policy, this final rule reasonably addresses a problem confronting older Americans. The Commission is persuaded that, in order to comply with the Commission's prior policy, many employers would reduce the overall level of health benefits they offer to retirees or cease providing such benefits altogether, leaving many retirees without access to affordable health coverage. Indeed, the Commission has been presented with evidence that some public school districts already have reduced the health benefits they provide to retirees in response to the Commission's prior policy. Clearly, this result is inconsistent with the Act's primary purpose of protecting older workers. 9 *See,* *e.g.* , *American Association of Retired Persons* v. *Equal Employment Opportunity Commission,* 823 F.2d 600, 604-605 (D.C. Cir. 1987) (EEOC has “unusually broad discretion” under Section 9). Finally, the Commission believes it has provided the strong and affirmative showing required to justify an exemption from the Act. The Commission conducted a comprehensive study of the relationship between the ADEA and retiree health benefits before it published its NPRM. As part of that study, the Commission met with a wide range of interested parties, including employers, employee and retiree groups, labor unions, human resource consultants, benefits consultants, actuaries, and state and local government representatives. Labor unions, benefits experts, and public and private sector employers all agreed that the Commission's prior policy would have a deleterious effect on the provision of employer-sponsored retiree health benefits, especially given the numerous other factors negatively impacting the availability of such benefits. Public comments filed in response to the Commission's NPRM only buttress this conclusion. Several organizations representing public school districts and employees noted that many school districts responded to the Commission's prior policy by reducing the overall level of retiree health coverage they were providing or by eliminating the benefit altogether. Moreover, this is what ultimately happened in *Erie County.* After the county made changes to its retiree health benefit plans to comply with the court's ruling, the net effect was a decrease in health benefits for retirees generally; older retirees received no better health benefits, while younger retirees were required to pay more for health benefits that offered fewer choices. Various other proposals considered by the Commission did not adequately protect and preserve the important employer practice of providing health coverage for retirees. Many of the alternative proposals considered would have required complex calculations regarding the costs of retiree health care. 10 Given the number of variables involved in these calculations, including numerous subjective factors that are difficult to quantify, the Commission concludes that none of the alternatives considered would adequately address the incentive created by the Commission's prior policy to eliminate employer-sponsored retiree health coverage. It is the Commission's view that the ADEA should not present a barrier for employers and labor unions to provide the broadest possible health coverage for retirees. Accordingly, after reviewing all data, views, and arguments presented, EEOC is persuaded that a narrow exemption from the prohibitions of the ADEA for the practice of coordinating employer-sponsored retiree health benefits with Medicare eligibility is necessary and proper in the public interest. 10 For a more detailed discussion of the alternatives considered by the EEOC, please refer to the “Executive Order 12866” portion of this preamble. *See also* 68 FR 41542-41549 (July 14, 2003) (Discussing the alternatives in the Retiree Health Notice of Proposed Rulemaking). Litigation Regarding the Exemption AARP filed suit to enjoin publication and implementation of the exemption on Feb. 4, 2005, alleging, *inter alia,* that the exemption violated the ADEA and the Administrative Procedure Act. AARP argued that the rule was age discriminatory because it would allow employers to reduce the benefits of older retirees. 11 11 Brief in Support of Complaint at 24-25, *AARP* v. *EEOC,* 383 F. Supp. 2d 705 (E.D. Pa. 2005) (No. 05-CV-509). The EEOC agreed not to publish the exemption rule until the district court ruled on AARP's challenges. Although the court initially ruled in favor of AARP on March 30, 2005, it subsequently reversed itself and entered summary judgment in favor of the EEOC on September 27, 2005, finding that the Commission did not exceed its authority in issuing this exemption, that the exemption was not arbitrary or capricious, and that the *Erie County* case did not render the exemption invalid. However, the court did continue its injunction prohibiting publication of the exemption until the Third Circuit could resolve AARP's promised appeal. The Third Circuit resolved AARP's appeal on June 4, 2007, holding that the EEOC properly exercised its exemption power under Section 9 of the ADEA, thereby affirming the district court's decision and lifting the injunction that prohibited publication of the final rule. 12 The court, noting the Commission's evidence that
(1)health care costs continue to rise,
(2)employers are not required to provide any retiree health care benefits, and
(3)some employers chose to avoid ADEA discrimination by reducing retiree health benefits, specifically rejected AARP's argument that the EEOC exceeded its authority under the ADEA as follows: 12 *AARP* v. *EEOC,* 489 F.3d 558, 2007 WL 1584385 (3d Cir., June 4, 2007). The Third Circuit confirmed that its decision lifted the district court's injunction in response to a motion for clarification. *Id.* , Case No. 05-4594 (3d Cir., August 31, 2007). We recognize with some dismay that the proposed exemption may allow employers to reduce health benefits to retirees over the age of sixty-five while maintaining greater benefits for younger retirees. Under the circumstances, however, the EEOC has shown that [its] narrow exemption from the ADEA is a reasonable, necessary, and proper exercise of its section 9 authority, as over time it will likely benefit all retirees. 13 13 *AARP* v. *EEOC* , 489 F.3d at 564-565. AARP asked the Third Circuit to rehear the case *en banc* , but that request was denied on August 21, 2007. AARP then petitioned the Supreme Court for a stay of the Third Circuit's mandate pending AARP's writ of certiorari, but that request was denied on September 19, 2007. AARP filed its writ of certiorari asking the Supreme Court to review the Third Circuit's decision on November 20, 2007. Additional Revisions to the Rule The Commission made a minor editorial change to Section 1625.32(a)(3) by changing the word “are” to “is.” The change is not intended to alter the definition of a comparable State health benefit plan for purposes of the exemption. The Commission also simplified the language in question and answer three in the Appendix. Executive Order 12866 This final rule has been drafted and reviewed in accordance with Executive Order 12866, Section 1(b), Principles of Regulation. This rule is considered a significant regulatory action, but not economically significant, under section 3(f)(4) of that Order and therefore was reviewed by the Office of Management and Budget (OMB). As discussed below, the rule exempts certain practices from the prohibitions of the ADEA in order to ensure that employers may offer retirees a wide range of health plan designs that coordinate with Medicare without violating the Act. Labor organizations, employees, and employers favor coordinating retiree health plans with Medicare benefits as a way to provide affordable health coverage for older Americans. 14 The final rule benefits employers by allowing them to continue to coordinate retiree health benefits with Medicare. It will decrease, not increase, costs to covered employers by reducing the risks of liability for noncompliance with the statute. 15 Further, this rule also will benefit retirees by eliminating the incentive for employers to reduce or eliminate retiree health coverage in order to comply with the equal benefit/equal cost defense. 16 Thus, the rule should not adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State and local tribal governments or communities. 14 That view is reflected in public comments made by groups such as the American Federation of Teachers, the National Education Association, the Wisconsin Education Association Council, the Delaware State Education Association, the National Council on Teacher Retirement, the American Benefits Council, the American Association of Health Plans, the ERISA Industry Committee, the Equal Employment Advisory Council, the Minnesota School Boards Association, the National Rural Electric Cooperative Association, the Society for Human Resource Management, the U.S. Chamber of Commerce, the Washington Business Group on Health, and the Wisconsin Association of School Boards, among others. 15 NPRM, 68 FR at 41548. 16 *See id.* at 41546 (explaining that without the final rule, “[t]his lack of regulatory protection may cause a class of people—retirees not yet 65—to be left without any health insurance. It also may contribute to the loss of valuable employer-sponsored coverage that supplements Medicare for retirees age 65 and over.”) The ADEA applies to all employers with at least 20 employees. 29 U.S.C. § 630(b). The Act prohibits covered employers from discriminating against an employee or job applicant who is at least 40 years of age. 29 U.S.C. 623, 631. According to Census Bureau information, approximately 1,976,216 establishments employed 20 or more employees in 2000. 17 17 CENSUS BUREAU, U.S. DEPARTMENT OF COMMERCE, “Statistics of U.S. Businesses” (2000). The exemption would apply to all covered employers who provide health benefits to their retirees. In 2001, the GAO concluded that about one-third of large employers and less than 10% of small employers provided such benefits to current retirees. 18 According to the GAO, in 1999, such employer-sponsored health plans were relied on by 10 million retired individuals aged 55 and over as either their primary source of health coverage or as a supplement to Medicare coverage. 19 18 Hearing Before the House Comm. on Education and the Workforce, 107th Cong.(2001) (statement of William J. Scanlon, Director of Health Care Services, GAO). 19 U.S. GENERAL ACCOUNTING OFFICE, “Retiree Health Benefits: Employer-Sponsored Benefits May Be Vulnerable to Further Erosion,” GAO Doc. No. GAO-01-374, at 1 (May 2001). After the Commission took the position that the practice of coordinating retiree health benefits with Medicare eligibility was unlawful unless an employer could meet the equal benefit/equal cost test set forth in Section 4(f)(2)(B)(i) of the ADEA, labor unions and employers expressed concern that the easiest way for an employer-sponsored retiree health plan to comply with the Commission's policy was to reduce or eliminate already existing retiree health benefit coverage. This result has become increasingly likely given the myriad other factors impacting the availability of employer-sponsored retiree health benefits. In recent years, the cost of employee health care has consistently increased, making it difficult for employers to continue to provide retiree health benefits. 20 As explained in the NPRM, two widely-cited surveys of employer-sponsored health plans—(1) the Health Research and Educational Trust survey sponsored by The Henry J. Kaiser Family Foundation (Kaiser/HRET) and
(2)the William M. Mercer, Incorporated survey (formerly produced by Foster Higgins) (Mercer/Foster Higgins)—estimate that premiums for employer-sponsored health insurance increased an average of about 11% in 2001. 21 These studies also identify how cost increases were expected to continue and how such ongoing premium increases are particularly difficult for small employers to cover and continue offering retiree health benefits. 22 20 NPRM, 68 Fed. at 41543. 21 THE HENRY J. KAISER FAMILY FOUNDATION & HEALTH RESEARCH AND EDUCATIONAL TRUST, “Employer Health Benefits, 2001 Annual Survey” (Menlo Park, CA: The Henry J. Kaiser Family Foundation and Health Research and Educational Trust 2001); WILLIAM M. MERCER, “Mercer/Foster Higgins National Survey of Employer-Sponsored Health Plans 2001” (New York, NY: William M. Mercer, Inc. 2002). The 2001 Kaiswer/HRET study, conducted between January and May 2001, surveyed more than 2,500 randomly selected public and private companies in the United States. The 2001 Mercer/Foster Higgins study used a national probability sampling of public and private employers and the results represented about 600,000 employers. 22 The NPRM explains that the 2001 Kaiser/HRET survey suggests that these changes would affect small employers, defined as those employing between 3-199 workers, at a greater rate than larger companies, THE HENRY J. KAISER FAMILY FOUNDATION & HEALTH RESEARCH AND EDUCATIONAL TRUST, “Employer Health Benefits, 2001 Annual Survey” (2001), and the 2002 Kaiser/HRET survey suggests that the number of small employers offering retiree health benefits has eroded. THE HENRY J. KAISER FAMILY FOUNDATION & HEALTH RESEARCH AND EDUCATIONAL TRUST, “Employer Health Benefits, 2002 Annual Survey” (Menlo Park, CA: The Henry J. Kaiser Family Foundation and Health Research and Educational Trust 2002) (reporting that the number of small employers who offer retiree health benefits dropped 6% between 2000 and 2002). Increased longevity and, thus, increased numbers of retirees, also will continue to mean larger and more frequent payments for health care services on behalf of retired workers. 23 “The United States General Accounting Office
(GAO)projects that, by 2030, the number of people age 65 or older will be double what it is today, while the number of individuals between the ages of 55 and 64 will increase 75 percent by 2020.” 24 Further, “it is well-established that utilization of health care services generally rises with age.” 25 Thus, the demand for and cost of retiree health coverage is likely to grow significantly during a time that there will be comparatively fewer active workers to subsidize such benefits. 26 23 NPRM, 68 FR 41543. 24 *Id* . (citing U.S. GENERAL ACCOUNTING OFFICE, “Retiree Health Benefits: Employer-Sponsored Benefits May Be Vulnerable to Further Erosion,” GAO Doc. No. GAO-01-374, at 17 (May 2001)). 25 NPRM, 68 FR 41543 (citing ANNA M. RAPPAPORT, “Planning for Health Care Needs in Retirement,” *in* FORECASTING RETIREMENT NEEDS AND RETIREMENT WEALTH 288, 288-294 (Olivia S. Mitchell *et al.* eds., University of Pennsylvania Press 2000)). 26 NPRM, 68 FR 41543 (citing U.S. GENERAL ACCOUNTING OFFICE, “Retiree Health Benefits: Employer-Sponsored Benefits May Be Vulnerable to Further Erosion,” GAO Doc. No. GAO-01-374, at 17-18 (May 2001)). Changes in accounting rules also have dramatically impacted the way employers account for retiree health benefit costs. 27 The Financial Accounting Standards Board, which is charged with establishing U.S. standards of financial accounting and reporting, promulgated new rules for retiree health accounting in 1990, referred to as Financial Accounting Standards Number 106 or FAS 106. 28 27 NPRM, 68 FR 41543 (citing ANNA M. RAPPAPORT, “FAS 106 and Strategies for Managing Retiree HealthBenefits,” *in* COMPENSATION AND BENEFITS MANAGEMENT, 37 (Spring 2001); PAUL FRONSTIN, “Retiree Health Benefits: Trends and Outlook,” EBRI ISSUE BRIEF No. 236 (Employee Benefit Research Institute Aug. 2001)). 28 NPRM, 68 FR at 41543. FAS 106 requires employers to apportion the costs of retiree health over the working lifetime of employees and to report unfunded retiree health benefit liabilities in accordance with generally accepted accounting principles beginning with fiscal years after December 15, 1992. Because “the recognition of these liabilities in financial statements dramatically impacts a company's calculation of its profits and losses,” some companies have said that FAS 106 led to reductions in reported income, thus creating an incentive to reduce expenditures for employee benefits such as retiree health. 29 29 *Id* . at 41544 (quoting PAUL FRONSTIN, “Retiree Health Benefits: Trends and Outlook,” EBRI ISSUE BRIEF No. 236, at 3 (Employee Benefit Research Institute Aug. 2001)). “As a result of these increased costs and accounting changes, employers have actively examined ways to reduce health care costs, including by reducing, altering, or eliminating retiree health coverage.” 30 As explained in the NPRM, studies revealed that employers already were less likely to offer retiree health benefits than in the past and that this trend was expected to continue. 31 30 NPRM, 68 FR at 41544 (noting that a 2001 survey found that both public and private employers considered controlling health care costs as a top business issue for the next two to three years. THAP! ET AL., “Productive Workforce Survey: Report of Findings Private Employer/Public Agency” (THAP!, Andersen and CalPERS Aug. 2001); *see also* ANNA M. RAPPAPORT, “Postemployment Benefits: Retiree Health Challenges and Trends—2001 and Beyond,” *in* COMPENSATION AND BENEFITS MANAGEMENT, 52, 56 (Autumn 2001) (“Companies seeking to reduce costs are closely examining retiree medical benefits.”)). 31 The 2001 Mercer/Foster Higgins study showed a 17% decline between 1993 and 2001 in the number of employers with 500 or more workers offering retiree health benefits, William M. Mercer, “Mercer/Foster Higgins National Survey of Employer-Sponsored Health Plans 2001” (New York, NY: William M. Mercer, Inc. 2002), the 2002 Kaiser/HRET study found that only 34% of employers with at least 200 employees offered retiree health coverage in 2002, as opposed to 66% in 1998, The Henry J. Kaiser Family Foundation & Health Research and Educational Trust,” “Employer Health Benefits, 2002 Annual Survey” (Menlo Park, CA: The Henry J. Kaiser Family Foundation and Health Research and Educational Trust 2002), and a study by Hewitt Associates LLC reached similar conclusions. Hewitt Associates LLC, “Trends in Retiree Health Plans” (Lincolnshire, IL: Hewitt Associates LLC 2001). The Kaiser study also forecast that this trend would continue. [Further, a]s the number of employers offering retiree health coverage declines, so has the incentive for employers to provide future retirees with such coverage. Unions report that meaningful negotiations about the future provisions of employer-sponsored retiree health benefits are becoming increasingly futile. Union representatives have informed EEOC that increasing numbers of employers have refused to include retiree health among the benefits to be provided to employees. 32 32 NPRM, 68 FR at 41544. In this environment, employers are not likely to increase any retiree's benefit in order to comply with the ADEA's equal benefit/equal cost defense. To the contrary, the equal benefit/equal cost rule creates an additional incentive for employers to reduce benefits. In light of the other factors affecting an employer's decision to provide retiree health benefits, the Commission believes that the current regulatory framework of the ADEA does not provide a sufficient safe harbor to protect and preserve the important employer practice of providing health coverage for retirees. This lack of regulatory protection may cause a class of people—retirees not yet 65—to be left without any health insurance. It also may contribute to the loss of valuable employer-sponsored coverage that supplements Medicare for retirees age 65 and over. Because almost 60% of retirees between the ages of 55 to 64 rely on employer-sponsored health coverage as their primary source of health coverage, and about one-third of retirees over age 65 rely on employer-provided retiree health plans to supplement Medicare, the Commission believes that such a result is contrary to the public interest and necessitates regulatory action. 33 33 NPRM, 68 FR at 41546-47 (citing Hearing Before the House Comm. on Education and the Workforce, 107th Cong.
(2001)(statement of William J. Scanlon, Director of Health Care Services, GAO); THE HENRY J. KAISER FAMILY FOUNDATION ET AL., “Erosion of Private Health Insurance Coverage For Retirees: Findings from the 2000 and 2001 Retiree Health and Prescription Drug Coverage Survey,” at iv (Menlo Park, CA: The Henry J. Kaiser Family Foundation, Health and Research Educational Trust and The Commonwealth Fund April 2002); and additionally noting that “[o]f the 56.8% of retirees covered by employer-sponsored health coverage in 1999, 36.3% were covered in their own name and 20.5% received health benefits through a spouse. PAUL FRONSTIN, “Retiree Health Benefits: Trends and Outlook,” EBRI ISSUE BRIEF No. 236, at 6-7 (Employee Benefit Research Institute Aug. 2001).”). As detailed in the NPRM, the Commission examined a variety of ways to end this incentive towards further benefit erosion. These alternatives included various proposals that would have allowed employers to take the cost of Medicare into account when assessing whether they satisfied the equal cost test, or regulations that would require employers to adopt or maintain benefits programs that supplement Medicare in order to satisfy the equal benefits test. However, none of these alternatives reduced the risk to employers of noncompliance with the ADEA while providing them with the flexibility to continue providing coordinated retiree health benefits. After extensive study, the Commission concluded that “it does not appear that retiree health costs or benefits can be reasonably quantified in a regulation.” 34 34 NPRM, 68 FR at 41546. Unlike valuation of costs associated with life insurance or long-term disability benefits, calculati[on of] retiree health costs is complex due to the multitude of variables, including types of plans, levels and types of coverage, deductibles, and geographical areas covered. In addition, the subjective nature of some health benefits, such as a greater choice in providers, makes any such valuation more complicated. Even allowing an employer to take into account the “cost” of Medicare is problematic because the government's cost[s in] provid[ing] Medicare services does not reflect what similar benefits would cost an employer in the marketplace. Nor can an employer's Medicare tax obligation, pursuant to the Federal Insurance Contributions Act, 26 U.S.C. §§ 3101 *et seq.* (FICA), be considered the “cost” of any specific retiree's Medicare benefits inasmuch as most retirees have been employed by multiple employers over the course of their careers and employer FICA contributions are paid into a general Medicare fund that is not employee-specific. Additionally, the fact that employees themselves pay for a portion of the cost of Medicare further complicates cost valuation. The Commission therefore believes that quantifying the cost to employers of post-Medicare retiree health benefits under any formulation of the equal cost test would not be practicable. This is particularly true for employers who maintain multiple plans for different categories of employees. Even for employers with only one plan, the variability in health claims data from year to year can be great. As a result, calculating retiree health benefit expenses would be cost prohibitive for many employers. 35 35 *Id* . This is particularly true for small and medium sized employers, and those unable to hire sophisticated employee benefit professionals. 36 “As a result, repeatedly having to calculate retiree health benefit expenses under the alternative proposals considered by the Commission would have been cost prohibitive or otherwise impracticable for many employers.” 37 36 *See id* . at 41548 (noting that “[i]t is clear that small and medium-sized employers, and those unable to hire sophisticated employee benefit professionals, would be most affected by a complicated rule.”). 37 NPRM, 68 FR at 41548. Thus, even if it were possible to capture the myriad of complexities involved in a retiree health cost analysis in a regulation, the likelihood is that far too many employers might simply reduce or eliminate existing retiree health benefit plans instead of attempting to comply with such a regulation. Further complicating compliance with many of the alternative proposals considered by the Commission is the fact that employers do not have the same flexibility in designing retiree health benefit programs as they do when designing other types of retirement benefit programs, such as cash-based retirement incentives. For example, providing supplemental health benefits to retirees who are eligible for Medicare may require that the employer obtain and administer a separate policy just for that coverage. Many employers are unable or unwilling to bear such a burden. Instead, if faced with such a choice, employers are more likely to simply eliminate retiree health coverage altogether—for retirees under and over age 65. Furthermore, future changes in the private health insurance market or in Medicare likely would necessitate further regulatory action were the Commission to adopt many of the alternative proposals considered. [Thus, t]he Commission does not believe that it is possible to apply the equal benefit/equal cost test, or a variant of that rule, to the rapidly changing landscape of retiree health care. 38 38 *Id* . at 41546. In contrast, the Commission's final rule allows employers to offer a wide range of retiree health plan designs that coordinate with Medicare without violating the ADEA. The rule does not otherwise affect an employer's ability to offer health benefits to retirees, consistent with the law. “This approach also benefits the significant number of [retirees] who rely on employer-sponsored retiree health coverage and would otherwise have to obtain retiree health coverage in the private individual marketplace at substantial personal expense.” 39 39 NPRM, 68 FR at 41548. *See id* . at 41544 (discussing how those who lose coverage have limited options, such as temporary coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, 29 U.S.C. § 1161 *et seq.* (COBRA) or coverage in the private individual insurance market). COBRA coverage is very expensive because, while it allows the employee to remain in the employer's insurance plan, it requires the employee to pay the entire premium. 68 FR 41544. Coverage in the private health insurance often provides limited benefits, or is prohibitively expensive. *Id* . (citing U.S. General Accounting Office, “Retiree Health Benefits: Employer-Sponsored Benefits May Be Vulnerable to Further Erosion,” GAO Doc. No. GAO-01-374, at 20-22 (May 2001)). It is not likely that the final regulation will disrupt the efficient functioning of the economy and private market forces. Until recently, when structuring retiree health benefits, most employers relied on legislative history to the OWBPA stating that the practice of coordinating employer-sponsored retiree health benefits with Medicare eligibility is lawful under the ADEA. This final regulation permits the practice of unrestricted coordination of retiree health benefits with Medicare eligibility to continue. Paperwork Reduction Act This final rule contains no information collection requirements subject to review by the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35). Regulatory Flexibility Act The Commission certifies under 5 U.S.C. 605(b) that this final rule will not have a significant economic impact on a substantial number of small entities, because it imposes no additional economic or reporting burdens on such firms. The rule—which exempts certain practices from regulation—will decrease, not increase, costs to covered employers by reducing the risks of liability for noncompliance with the statute. For this reason, a regulatory flexibility analysis is not required. List of Subjects in 29 CFR Part 1625 and 1627 Advertising, Aged, Employee benefit plans, Equal employment opportunity, Reporting and recordkeeping requirements, Retirement. For the reasons discussed in the preamble, Chapter XIV of Title 29 of the Code of Federal Regulations is amended as follows: PART 1627—RECORDS TO BE MADE OR KEPT RELATING TO AGE: NOTICES TO BE POSTED 1. Revise the heading of part 1627 to read as set forth above. 2. The authority citation for 29 CFR part 1627 shall continue to read as follows: Authority: Sec. 7, 81 Stat. 604; 29 U.S.C. 626; sec. 11, 52 Stat. 1066, 29 U.S.C. 211; sec. 12, 29 U.S.C. 631, Pub. L. 99-592, 100 Stat. 3342; sec. 2, Reorg. Plan No. 1 of 1978, 43 FR 19807. 3. In § 1627.1, remove paragraph
(b)and redesignate paragraph
(c)as new paragraph (b). 4. In part 1627, redesignate subpart C (consisting of §§ 1627.15 and 1627.16) as subpart C of Part 1625 (consisting of §§ 1625.30 and 1625.31), respectively. PART 1625—AGE DISCRIMINATION IN EMPLOYMENT ACT 5. The authority citation for 29 CFR Part 1625 is revised to read as follows: Authority: 81 Stat. 602; 29 U.S.C. 621; 5 U.S.C. 301; Secretary's Order No. 10-68; Secretary's Order No. 11-68; Sec. 9, 81 Stat. 605; 29 U.S.C. 628; sec. 12, 29 U.S.C. 631, Pub. L. 99-592, 100 Stat. 3342; sec. 2, Reorg. Plan No. 1 of 1978, 43 FR 19807. 6. In newly redesignated subpart C of part 1625, revise the heading of newly redesignated § 1625.31 and the first sentence of paragraph
(a)to read as follows: § 1625.31 Special employment programs.
(a)Pursuant to the authority contained in section 9 of the Act and in accordance with the procedure provided therein and in § 1625.30(b) of this part, it has been found necessary and proper in the public interest to exempt from all prohibitions of the Act all activities and programs under Federal contracts or grants, or carried out by the public employment services of the several States, designed exclusively to provide employment for, or to encourage the employment of, persons with special employment problems, including employment activities and programs under the Manpower Development and Training Act of 1962, Pub. L. No. 87-415, 76 Stat. 23 (1962), as amended, and the Economic Opportunity Act of 1964, Pub. L. No. 88-452, 78 Stat. 508 (1964), as amended, for persons among the long-term unemployed, handicapped, members of minority groups, older workers, or youth. * * * 7. Add section 1625.32 to Subpart C of part 1625 to read as follows: § 1625.32 Coordination of retiree health benefits with Medicare and State health benefits. *(a) Definitions* .
(1)*Employee benefit plan* means an employee benefit plan as defined in 29 U.S.C. 1002(3).
(2)*Medicare* means the health insurance program available pursuant to Title XVIII of the Social Security Act, 42 U.S.C. 1395 *et seq.*
(3)*Comparable State health benefit plan* means a State-sponsored health benefit plan that, like Medicare, provides retired participants who have attained a minimum age with health benefits, whether or not the type, amount or value of those benefits is equivalent to the type, amount or value of the health benefits provided under Medicare.
(b)*Exemption.* Some employee benefit plans provide health benefits for retired participants that are altered, reduced or eliminated when the participant is eligible for Medicare health benefits or for health benefits under a comparable State health benefit plan, whether or not the participant actually enrolls in the other benefit program. Pursuant to the authority contained in section 9 of the Act, and in accordance with the procedures provided therein and in § 1625.30(b) of this part, it is hereby found necessary and proper in the public interest to exempt from all prohibitions of the Act such coordination of retiree health benefits with Medicare or a comparable State health benefit plan.
(c)*Scope of Exemption.* This exemption shall be narrowly construed. No other aspects of ADEA coverage or employment benefits other than those specified in paragraph
(b)of this section are affected by the exemption. Thus, for example, the exemption does not apply to the use of eligibility for Medicare or a comparable State health benefit plan in connection with any act, practice or benefit of employment not specified in paragraph
(b)of this section. Nor does it apply to the use of the age of eligibility for Medicare or a comparable State health benefit plan in connection with any act, practice or benefit of employment not specified in paragraph
(b)of this section. 8. In Subpart C of part 1625, add an Appendix to newly added § 1625.32 as follows: Appendix to § 1625.32—Questions and Answers Regarding Coordination of Retiree Health Benefits With Medicare and State Health Benefits Q1. Why is the Commission issuing an exemption from the Act? A1. The Commission recognizes that while employers are under no legal obligation to offer retiree health benefits, some employers choose to do so in order to maintain a competitive advantage in the marketplace—using these and other benefits to attract and retain the best talent available to work for their organizations. Further, retiree health benefits clearly benefit workers, allowing such individuals to acquire affordable health insurance coverage at a time when private health insurance coverage might otherwise be cost prohibitive. The Commission believes that it is in the best interest of both employers and employees for the Commission to pursue a policy that permits employers to offer these benefits to the greatest extent possible. Q2. Does the exemption mean that the Act no longer applies to retirees? A2. No. Only the practice of coordinating retiree health benefits with Medicare (or a comparable State health benefit plan) as specified in paragraph
(b)of this section is exempt from the Act. In all other contexts, the Act continues to apply to retirees to the same extent that it did prior to the issuance of this section. Q3. May an employer offer a “carve-out plan” for retirees who are eligible for Medicare or a comparable State health plan? A3. Yes. A “carve-out plan” reduces the benefits available under an employee benefit plan by the amount payable by Medicare or a comparable State health plan. Employers may continue to offer such “carve-out plans”and make Medicare or a comparable State health plan the primary payer of health benefits for those retirees eligible for Medicare or the comparable State health plan. Q4. Does the exemption also apply to dependent and/or spousal health benefits that are included as part of the health benefits provided for retired participants? A4. Yes. Because dependent and/or spousal health benefits are benefits provided to the retired participant, the exemption applies to these benefits, just as it does to the health benefits for the retired participant. However, dependent and/or spousal benefits need not be identical to the health benefits provided for retired participants. Consequently, dependent and/or spousal benefits may be altered, reduced or eliminated pursuant to the exemption whether or not the health benefits provided for retired participants are similarly altered, reduced or eliminated. Q5. Does the exemption address how the ADEA may apply to other acts, practices or employment benefits not specified in the rule? A5. No. The exemption only applies to the practice of coordinating employer-sponsored retiree health benefits with eligibility for Medicare or a comparable State health benefit program. No other aspects of ADEA coverage or employment benefits other than retiree health benefits are affected by the exemption. Q6. Does the exemption apply to existing, as well as to newly created, employee benefit plans? A6. Yes. The exemption applies to all retiree health benefits that coordinate with Medicare (or a comparable State health benefit plan) as specified in paragraph
(b)of this section, whether those benefits are provided for in an existing or newly created employee benefit plan. Q7. Does the exemption apply to health benefits that are provided to current employees who are at or over the age of Medicare eligibility (or the age of eligibility for a comparable State health benefit plan)? A7. No. The exemption applies only to retiree health benefits, not to health benefits that are provided to current employees. Thus, health benefits for current employees must be provided in a manner that comports with the requirements of the Act. Moreover, under the laws governing the Medicare program, an employer must offer to current employees who are at or over the age of Medicare eligibility the same health benefits, under the same conditions, that it offers to any current employee under the age of Medicare eligibility. Dated: December 17, 2007. For the Commission. Naomi C. Earp, Chair. [FR Doc. E7-24867 Filed 12-21-07; 8:45 am] BILLING CODE 6570-01-P DEPARTMENT OF DEFENSE Department of the Navy 32 CFR Part 706 Certifications and Exemptions Under the International Regulations for Preventing Collisions at Sea, 1972 AGENCY: Department of the Navy, DoD. ACTION: Final rule. SUMMARY: The Department of the Navy is amending its certifications and exemptions under the International Regulations for Preventing Collisions at Sea, 1972 (72 COLREGS), to reflect that the Deputy Assistant Judge Advocate General (Admiralty and Maritime Law) has determined that USS FREEDOM (LCS 1) is a vessel of the Navy which, due to its special construction and purpose, cannot fully comply with certain provisions of the 72 COLREGS without interfering with its special function as a naval ship. The intended effect of this rule is to warn mariners in waters where 72 COLREGS apply. DATES: This rule is effective December 26, 2007 and is applicable beginning November 19, 2007. FOR FURTHER INFORMATION CONTACT: Commander Gregg A. Cervi, JAGC, U.S. Navy, Deputy Assistant Judge Advocate General (Admiralty and Maritime Law), Office of the Judge Advocate General, Department of the Navy, 1322 Patterson Ave., SE., Suite 3000, Washington Navy Yard, DC 20374-5066, telephone 202-685-5040. SUPPLEMENTARY INFORMATION: Pursuant to the authority granted in 33 U.S.C. 1605, the Department of the Navy amends 32 CFR part 706. This amendment provides notice that the Deputy Assistant Judge Advocate General (Admiralty and Maritime Law), under authority delegated by the Secretary of the Navy, has certified that USS FREEDOM (LCS 1) is a vessel of the Navy which, due to its special construction and purpose, cannot fully comply with the following specific provisions of 72 COLREGS without interfering with its special function as a naval ship: Annex I, paragraph 2(a)(i), pertaining to the location of the forward masthead light at a height not less than 12 meters above the hull; Annex I, paragraph 3 (a), pertaining to the location of the forward masthead light in the forward quarter of the ship and the horizontal distance between the masthead lights shall not be less than one-half of the length of the vessel; Annex I, paragraph 2(i)iii, pertaining to the three lights in the task light array being equally spaced; Rule 27, paragraph
(b)ii, pertaining to the three all-round lights in a vertical line where they can best be seen. The Deputy Assistant Judge Advocate General (Admiralty and Maritime Law) has also certified that the lights involved are located in closest possible compliance with the applicable 72 COLREGS requirements. Moreover, it has been determined, in accordance with 32 CFR Parts 296 and 701, that publication of this amendment for public comment prior to adoption is impracticable, unnecessary, and contrary to public interest since it is based on technical findings that the placement of lights on this vessel in a manner differently from that prescribed herein will adversely affect the vessel's ability to perform its military functions. List of Subjects in 32 CFR Part 706 Marine safety, Navigation (water), and Vessels. For the reasons set forth in the preamble, amend part 706 of title 32 of the Code of Federal Regulations as follows: PART 706-CERTIFICATIONS AND EXEMPTIONS UNDER THE INTERNATIONAL REGULATIONS FOR PREVENTING COLLISIONS AT SEA, 1972 1. The authority citation for part 706 continues to read as follows: Authority: 33 U.S.C. 1605. 2. Table One, of § 706.2 is amended by adding, in alpha numerical order by ship number, the following entry for USS FREEDOM: § 706.2 Certifications of the Secretary of the Navy under Executive Order 11964 and 33 U.S.C. 1605. Vessel Number Distance in meters of forward masthead light below minimum required height. Annex I, para 2(a)(i) * * * * * * * USS FREEDOM LCS 1 5.99 * * * * * * * 3. Table Five of § 706.2 is amended by adding, in alpha numerical order by ship number, the following entry for USS FREEDOM: § 706.2 Certifications of the Secretary of the Navy under Executive Order 11964 and 33 U.S.C. 1605. Table Five Vessel No. Masterhead lights not over all other lights and obstructions, annex I, sec.2(f) Forward Masthead light not in forward quarter of ship. annex I, sec. 3(a) After Mast-head Light less than 1/2 ship's length of forward masthead light. annex i, sec. 3(a) Percentage horizontal separation attained * * * * * * * USS FREEDOM LCS 1 X X 23 * * * * * * * 4. Section 706.2 is amended by adding paragraphs 22 and 23 following Table Five to read as follows: § 706.2 Certifications of the Secretary of the Navy under Executive Order 11964 and 33 U.S.C. 1605. 22. On the following ships the vertical separation of the task lights do not meet the vertical spacing requirements described by Annex I, 2(i)(iii). Vessel Number Vertical separation of the task light array is not equally spaced, the separation between the middle and lower task light exceed the separation between the upper and middle light by USS FREEDOM LCS 1 0.39 meter. 23. On the following ships the verticality of the task lights do not meet verticality requirements described in Rule 27(b)(ii). Vessel Number Verticality of lights, when viewed from directly port or starboard, the lower task light is out of alignment with the upper and middle task light by: USS FREEDOM LCS 1 0.37 meter. Approved: November 19, 2007. C.J. Spain, Commander, JAGC, U.S. Navy, Deputy Assistant Judge Advocate, General (Admiralty and Maritime Law), Acting. [FR Doc. E7-24934 Filed 12-21-07; 8:45 am] BILLING CODE 3810-FF-P DEPARTMENT OF EDUCATION 34 CFR Parts 668, 674, 682, and 685 Federal Student Aid Programs (Student Assistance General Provisions, Federal Perkins Loan Program, Federal Direct Loan Program, Federal Family Education Loan Program) AGENCY: Office of Postsecondary Education, Department of Education. ACTION: Notice extending the waivers and modifications of statutory and regulatory provisions pursuant to the Higher Education Relief Opportunities for Students (HEROES) Act of 2003, Public Law 108-76. SUMMARY: We are extending the actions taken by the Secretary pursuant to the HEROES Act of 2003, as announced in a notice published in the **Federal Register** on December 12, 2003 (68 FR 69312), and extended in a notice published in the **Federal Register** on October 20, 2005 (70 FR 61037). DATES: Effective Date: December 26, 2007. Applicability Date: The actions announced in the December 12, 2003, **Federal Register** notice and extended in the October 20, 2005, **Federal Register** notice are applicable from September 30, 2007, until September 30, 2012. FURTHER INFORMATION CONTACT: Wendy Macias, Office of Postsecondary Education, U.S. Department of Education, 1990 K Street, NW., room 8017, Washington, DC 20006-8544. Telephone:
(202)502-7526. E-mail: *Wendy.Macias@ed.gov.* If you use a telecommunications device for the deaf (TDD), you can call the Federal Relay Service (FRS), toll free at 1-800-877-8339. Individuals with disabilities can obtain this document in an alternative format (e.g., Braille, large print, audiotape, or computer diskette) by contacting the contact person listed in this section. SUPPLEMENTARY INFORMATION: In a notice published in the **Federal Register** on December 12, 2003 (68 FR 69312), the Secretary exercised the authority granted to her by the HEROES Act of 2003 and announced the waivers and modifications of statutory or regulatory provisions that were appropriate to assist individuals who are applicants and recipients of student financial assistance under Title IV of the Higher Education Act of 1965, as amended (HEA), and who— • Are serving on active military duty during a war or other military operation or national emergency; • Are performing qualifying National Guard duty during a war or other military operation or national emergency; • Reside or are employed in an area that is declared a disaster area by any Federal, State, or local official in connection with a national emergency; or • Suffered direct economic hardship as a direct result of a war or other military operation or national emergency, as determined by the Secretary. Under the terms of the HEROES Act of 2003, the Secretary's authority to provide the waivers and modifications would expire on September 30, 2005. On September 30, 2005, Pub. L. 109-78 extended the expiration date of the Secretary's authority to September 30, 2007. Accordingly, the Secretary extended the expiration of the waivers and modifications published on December 12, 2003, in a notice in the **Federal Register** published on October 20, 2005 (70 FR 61037). On September 30, 2007, the President signed into law Public Law 110-93, which eliminated the September 30, 2007, expiration date of the HEROES Act of 2003, thereby making permanent the Secretary's authority to issue waivers and modifications of statutory and regulatory provisions under the HEROES Act of 2003. As a result, we are extending the waivers and modifications announced by the Secretary in the notice published in the **Federal Register** on December 12, 2003. The actions will remain in effect until September 30, 2012, unless the Secretary issues a notice in the **Federal Register** terminating or changing those actions before September 30, 2012. The Secretary intends to review the waivers and modifications published on December 12, 2003, in light of recent statutory and regulatory changes. After completing that review, the Secretary will consider whether to change some or all of the published waivers and modifications. Any changes to these waivers and modifications will be published in a notice in the **Federal Register** as required by the HEROES Act of 2003. Electronic Access to This Document You can view this document, as well as other documents of this Department published in the **Federal Register** , in text or Adobe Portable Document Format
(PDF)on the Internet at the following site: *http://www.ed.gov/news/fedregister.* To use PDF you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about using PDF, call the U.S. Government Printing Office (GPO), toll free, at 1-888-293-6498; or in the Washington, DC, area at
(202)512-1530. Note: The official version of this document is the document published in the **Federal Register** . Free Internet access to the official edition of the **Federal Register** and the Code of Federal Regulations is available on GPO Access at: *http://www.gpoaccess.gov/nara/index.html.* Catalog of Federal Domestic Assistance Numbers: 84.007 Federal Supplemental Educational Opportunity Grant Program; 84.032 Federal Family Education Loan Program; 84.032 Federal PLUS Program; 84.033 Federal Work Study Program; 84.038 Federal Perkins Loan Program; and 84.268 William D. Ford Federal Direct Loan Program. Program Authority: 20 U.S.C. 1071, 1082, 1087a, 1087aa, Pub. L. 108-76, Pub. L. 109-78, Pub. L. 110-93. Dated: December 19, 2007. Diane Auer Jones, Assistant Secretary for Postsecondary Education. [FR Doc. E7-24947 Filed 12-21-07; 8:45 am] BILLING CODE 4000-01-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 52 and 81 [EPA-R04-OAR-2007-0601-200747; FRL-8510-4] Approval and Promulgation of Implementation Plans and Designation of Areas for Air Quality Planning Purposes; North Carolina; Redesignation of the Raleigh-Durham-Chapel Hill 8-Hour Ozone Nonattainment Area to Attainment for Ozone AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: EPA is taking final action to approve a request submitted on June 7, 2007, from the State of North Carolina, through the North Carolina Department of Environment and Natural Resources (NCDENR), to redesignate the Raleigh-Durham-Chapel Hill 8-hour ozone nonattainment area to attainment for the 8-hour ozone National Ambient Air Quality Standard (“NAAQS”, or “standard”). The Raleigh-Durham-Chapel Hill 8-hour ozone area is comprised of Durham, Franklin, Granville, Johnston, Orange, Person and Wake Counties in their entireties, and Baldwin, Center, New Hope and Williams Townships in Chatham County in North Carolina (hereafter referred to as the “Triangle Area”). EPA's approval of the redesignation request is based on the determination that North Carolina has demonstrated that the Triangle Area has met the criteria for redesignation to attainment specified in the Clean Air Act (CAA), including the determination that the Triangle Area has attained the 8-hour ozone standard. Additionally, EPA is approving a revision to the North Carolina State Implementation Plan
(SIP)including the 8-hour ozone maintenance plan for the Triangle Area that contains the new subarea 2008 and 2017 motor vehicle emission budgets (MVEBs) for nitrogen oxides (NO <sup>X</sup> ), and an insignificance determination for volatile organic compounds
(VOCs)contribution from motor vehicle emissions to the 8-hour ozone pollution in the entire Triangle Area. Through this action, EPA is also finding the new subarea 2008 and 2017 NO <sup>X</sup> MVEBs, and the VOC insignificance determination, adequate for the purposes of transportation conformity. The above described actions were proposed for public comment on October 3, 2007; no comments were received. EPA is also making corrections to inadvertent errors made in the proposed rulemaking published on October 3, 2007, (72 FR 56312) to Tables 1, 6, and 7. DATES: *Effective Date:* This action is effective December 26, 2007. ADDRESSES: EPA has established a docket for this action under Docket Identification No. EPA-R04-OAR-2007-0601. All documents in the docket are listed on the *www.regulations.gov* Web site. Although listed in the index, some information is not publicly available, *i.e.* , Confidential Business Information or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through *www.regulations.gov* or in hard copy at the Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. EPA requests that if at all possible, you contact the person listed in the FOR FURTHER INFORMATION CONTACT section to schedule your inspection. The Regional Office's official hours of business are Monday through Friday, 8:30 to 4:30, excluding federal holidays. FOR FURTHER INFORMATION CONTACT: Nacosta Ward, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, Region 4, U.S. Environmental Protection Agency, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. Ms. Nacosta Ward can be reached via telephone at
(404)562-9140 or electronic mail at *ward.nacosta@epa.gov* . SUPPLEMENTARY INFORMATION: Table of Contents I. What Is the Background for the Actions? II. What Actions Is EPA Taking? III. Why Is EPA Taking These Actions? IV. What Are the Effects of These Actions? V. Final Action VI. When Is This Action Effective? VII. Statutory and Executive Order Reviews I. What Is the Background for the Actions? On June 7, 2007, North Carolina, through NCDENR, submitted a request to redesignate the Triangle Area to attainment for the 8-hour ozone standard, and for EPA approval of the North Carolina SIP revision containing a maintenance plan for the Triangle Area. In an action published on October 3, 2007 (72 FR 56312), EPA proposed to approve the redesignation of the Triangle Area to attainment. EPA also proposed approval of North Carolina's SIP revision including a plan for maintaining the 8-hour NAAQS as a SIP revision, and proposed to approve the new subarea 1 2008 and 2017 NO <sup>X</sup> MVEBs, and the VOC insignificance determination for the Triangle Area that were contained in the maintenance plan. In the October 3, 2007, proposed action, EPA also provided information on the status of its transportation conformity adequacy determination for the Triangle Area subarea NO <sup>X</sup> MVEBs and VOC insignificance determination. EPA received no comments on the October 3, 2007, proposal. This rule is EPA's final action following the October 3, 2007, proposal. 1 The term “subarea” refers to the portion of the area, in a nonattainment or maintenance area, for which the motor vehicle emissions budgets (MVEBs) apply. In this case, the “subareas” are established at the county level so this indicates that the MVEBs cover individual counties and also indicates to transportation conformity implementers in this area that there are separate county-level MVEBs for each county in this area. *EPA's Companion Guidance for the July 1, 2004, Final Transportation Conformity Rule: Conformity Implementation in Multi-Jurisdictional Nonattainment and Maintenance Areas for Existing and New Air Quality Standards* explains more about the possible geographical extent of a MVEB, how these geographical areas are defined, and how transportation conformity is implemented in these different geographical areas. In this action, EPA is also announcing its finding that the new subarea NO <sup>X</sup> MVEBs for the Triangle Area and the VOC insignificance determination are adequate for transportation conformity purposes. The new subarea NO <sup>X</sup> MVEBs included in the maintenance plan are as follows: Triangle Subarea NO X MVEBs [kilograms per day] County 2008 2017 Chatham 1,565 948 Durham 13,106 4,960 Franklin 2,048 1,139 Granville 4,649 1,714 Johnston 12,583 5,958 Orange 9,933 3,742 Person 1,359 791 Wake 36,615 16,352 EPA's adequacy public comment period on the subarea NO <sup>X</sup> MVEBs and the VOC insignificance determination began on March 21, 2007, and closed on April 20, 2007. No comments were received during EPA's adequacy public comment period. Through this **Federal Register** document, EPA is finding the new subarea 2008 and 2017 NO <sup>X</sup> MVEBs, as contained in North Carolina's submittal, adequate. These subarea NO <sup>X</sup> MVEBs meet the adequacy criteria contained in the transportation conformity rule. The new subarea NO <sup>X</sup> MVEBs must be used for future transportation conformity determinations. EPA is also finding adequate North Carolina's demonstration that the VOC emissions from motor vehicles are insignificant, and therefore no MVEBs are necessary for VOC. As a result of this finding (and approval which is discussed later in this rulemaking), the transportation partners are not required to complete a regional emissions analysis for VOC as a precursor for the 8-hour ozone standard for transportation conformity, but all of the other transportation conformity requirements must be met. As was discussed in greater detail in the October 3, 2007, proposal, this redesignation is for the Triangle Area's 8-hour ozone designation finalized in 2004 (69 FR 23857, April 30, 2007). Various aspects of EPA's Phase 1 8-hour ozone implementation rule were challenged in court and on December 22, 2006, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit Court) vacated EPA's Phase 1 Implementation Rule for the 8-hour Ozone Standard. (69 FR 23951, April 30, 2004). *South Coast Air Quality Management Dist. (SCAQMD)* v. *EPA,* 472 F.3d 882 (DC.Cir. 2006). On June 8, 2007, in response to several petitions for rehearing, the DC Circuit Court clarified that the Phase 1 Rule was vacated only with regard to those parts of the rule that had been successfully challenged. Therefore, the Phase 1 Rule provisions related to classifications for areas currently classified under subpart 2 of title I, part D of the CAA as 8-hour nonattainment areas, the 8-hour attainment dates and the timing for emissions reductions needed for attainment of the 8-hour ozone NAAQS remain effective. The June 8th decision left intact the Court's rejection of EPA's reasons for implementing the 8-hour standard in certain nonattainment areas under subpart 1 in lieu of subpart 2. By limiting the vacatur, the Court let stand EPA's revocation of the 1-hour standard and those anti-backsliding provisions of the Phase 1 Rule that had not been successfully challenged. The June 8th decision affirmed the December 22, 2006, decision that EPA had improperly failed to retain measures required for 1-hour nonattainment areas under the anti-backsliding provisions of the regulations:
(1)Nonattainment area New Source Review
(NSR)requirements based on an area's 1-hour nonattainment classification;
(2)Section 185 penalty fees for 1-hour severe or extreme nonattainment areas; and
(3)measures to be implemented pursuant to section 172(c)(9) or 182(c)(9) of the CAA, on the contingency of an area not making reasonable further progress toward attainment of the 1-hour NAAQS, or for failure to attain that NAAQS. The June 8th decision clarified that the Court's reference to conformity requirements for anti-backsliding purposes was limited to requiring the continued use of 1-hour MVEBs until 8-hour budgets were available for 8-hour conformity determinations, which is already required under EPA's conformity regulations. The Court thus clarified that 1-hour conformity determinations are not required for anti-backsliding purposes. With respect to the requirement for transportation conformity under the 1-hour standard, the Court in its June 8th decision clarified that for those areas with 1-hour MVEBs in their 1-hour maintenance plans, anti-backsliding requires only that those 1-hour budgets must be used for 8-hour conformity determinations until replaced by 8-hour budgets. To meet this requirement, conformity determinations in such areas must continue to comply with the applicable requirements of EPA's conformity regulations at 40 CFR Part 93. A portion of the Triangle Area was previously designated nonattainment for the 1-hour ozone standard and thus has 1-hour MVEBs which are currently being used in that area to demonstrate transportation conformity. For the above reasons, and those set forth in the October 3, 2007, proposal for the redesignation of the Triangle Area, EPA does not believe that the Court's rulings alter any requirements relevant to this redesignation action so as to preclude redesignation, and do not prevent EPA from finalizing this redesignation. EPA believes that the Court's December 22, 2006, and June 8, 2007, decisions impose no impediment to moving forward with redesignation of the Triangle Area to attainment. Even in light of the Court's decisions, redesignation is appropriate under the relevant redesignation provisions of the CAA and longstanding policies regarding redesignation requests. II. What Actions is EPA Taking? EPA is taking final action to approve North Carolina's redesignation request and to change the legal designation of the Triangle Area from nonattainment to attainment for the 8-hour ozone NAAQS. EPA is also approving North Carolina's 8-hour ozone maintenance plan for the Triangle Area (such approval being one of the CAA criteria for redesignation to attainment status). The maintenance plan is designed to help keep the Triangle Area in attainment for the 8-hour ozone NAAQS through 2017. These approval actions are based on EPA's determination that North Carolina has demonstrated that the Triangle Area has met the criteria for redesignation to attainment specified in the CAA, including a demonstration that the Triangle Area has attained the 8-hour ozone standard. EPA's analyses of North Carolina's 8-hour ozone redesignation request and maintenance plan are described in detail in the proposed rule published October 3, 2007 (72 FR 56312). Consistent with the CAA, the maintenance plan that EPA is approving also includes new subarea 2008 and 2017 MVEBs for NO <sup>X</sup> ; and a VOC insignificance determination for the Triangle Area. In this action, EPA is approving these new subarea 2008 and 2017 NO <sup>X</sup> MVEBs, and the VOC insignificance determination for the Triangle Area. For regional emission analysis years that involve years prior to 2017, the applicable budgets (for the purpose of conducting transportation conformity analyses) are the new subarea 2008 NO <sup>X</sup> MVEBs. For regional emission analysis years that involve the year 2017 and beyond, the applicable budgets, for the purpose of conducting transportation conformity analyses, are the new subarea 2017 NO <sup>X</sup> MVEBs. In this action, EPA is also finding adequate and approving the Triangle Area's new subarea MVEBs for NO <sup>X</sup> . Further, EPA is finding adequate and approving the VOC insignificance determination for motor vehicles' contribution to the 8-hour ozone pollution for the Triangle Area. EPA is also making corrections to inadvertent errors made to Table 1. “TRIANGLE SUBAREA NO <sup>X</sup> MVEBS,” Table 6. “TRIANGLE SUBAREA NO <sup>X</sup> MVEBs,” and Table 7. “NO <sup>X</sup> SAFETY MARGIN ALLOCATION” in the proposed rulemaking published on October 3, 2007 (72 FR 56312). The error was the misspelling of Granville County as “Graham County.” See the corrected tables below: Table 1.—Triangle Subarea NO <sup>X</sup> MVEBs [kilograms per day] County 2008 2017 Chatham 1,565 948 Durham 13,106 4,960 Franklin 2,048 1,139 Granville 4,649 1,714 Johnston 12,583 5,958 Orange 9,933 3,742 Person 1,359 791 Wake 36,615 16,352 Table 6.—Triangle Subarea NO <sup>X</sup> MVEBs* [kilograms per day] County 2008 2017 Chatham 1,565 948 Durham 13,106 4,960 Franklin 2,048 1,139 Granville 4,649 1,714 Johnston 12,583 5,958 Orange 9,933 3,742 Person 1,359 791 Wake 36,615 16,352 * Includes an allocation from the available NO <sup>X</sup> safety margins (see Table 7). Table 7.—NO <sup>X</sup> Safety Margin Allocation [kilograms per day] County 2008 2017 Chatham 204 190 Durham 1,191 827 Franklin 186 190 Granville 606 343 Johnston 1,144 993 Orange 903 624 Person 177 158 Wake 3,329 2,725 Total 7,741 6,049 III. Why Is EPA Taking These Actions? EPA has determined that the Triangle Area has attained the 8-hour ozone standard and has also determined that North Carolina has demonstrated that all other criteria for the redesignation of the Triangle Area from nonattainment to attainment of the 8-hour ozone NAAQS have been met. See, section 107(d)(3)(E) of the CAA. EPA is also taking final action to approve the maintenance plan for the Triangle Area as meeting the requirements of sections 175A and 107(d) of the CAA. Furthermore, EPA is finding adequate and approving the new subarea 2008 and 2017 NO <sup>X</sup> MVEBs, and the VOC insignificance determination contained in North Carolina's maintenance plan because these MVEBs and the insignificance determination are consistent with maintenance for the Triangle Area. In the October 3, 2007, proposal to redesignate the Triangle Area, EPA described the applicable criteria for redesignation to attainment and its analysis of how those criteria have been met. The rationale for EPA's findings and actions is set forth in the proposed rulemaking and summarized in this rulemaking. IV. What Are the Effects of These Actions? Approval of the redesignation request changes the legal designation of the Triangle Area for the 8-hour ozone NAAQS, found at 40 CFR Part 81. The approval also incorporates into the North Carolina SIP a plan for maintaining the 8-hour ozone NAAQS in the Triangle Area through 2017. The maintenance plan includes contingency measures to remedy future violations of the 8-hour ozone NAAQS, and a VOC insignificance determination under 40 CFR 93.109(k) for regional motor vehicle emissions contribution to the 8-hour ozone pollution in the Triangle Area. Additionally, the maintenance plan establishes new subarea NO <sup>X</sup> MVEBs for the years 2008 and 2017 for each county in the Triangle Area. These subarea budgets are established for each metropolitan planning organization (MPO), and in some instances, counties that are “donut areas.” The conformity rule defines a donut area as the portion of a metropolitan nonattainment or maintenance area that is located outside an MPO's planning boundary (40 CFR 93.101). Donut areas are not considered isolated rural nonattainment and maintenance areas under the transportation conformity rule. Sections 93.124(c) and
(d)of the transportation conformity rule provide the regulatory mechanism for establishing and implementing subarea SIP budgets. In July 2004, EPA released a guidance document that provided additional details for implementing conformity in multi-jurisdictional areas, including establishing subarea SIP budgets in areas with multiple MPOs, entitled “Companion Guidance for the July 1, 2004 Final Transportation Conformity Rule Conformity Implementation in Multi-Jurisdictional Nonattainment and Maintenance Areas for Existing and New Air Quality Standards,” EPA 420-B-04-012. While that guidance did not address the case where subarea budgets are established for a donut area, such budgets can be established in a manner consistent with the requirements of the CAA that ensures that conformity determinations in the Triangle Area will continue to meet federal conformity requirements. EPA believes that statutory and regulatory requirements can be met for the entire nonattainment or maintenance area if conformity is determined for every subarea SIP budget at least every four years. Only by meeting all subarea SIP budgets can the SIP's overall purpose be met. As described on page 21 of the 2004 guidance, CAA section 176(c) states that the federal government and MPOs cannot approve transportation activities unless they conform to the SIP and its budgets. In a nonattainment or maintenance area with more than one MPO, all MPOs must conform even if the SIP has established subarea budgets. EPA believes that this same legal standard applies in the case where the SIP establishes a subarea budget for a donut area. In the case of the Triangle Area 8-hour ozone SIP, subarea budgets have been established for the Area's MPOs and donut areas. Conformity determinations must be completed for all subarea budgets according to the statutory requirement to determine conformity at least every four years in areas with MPOs, transportation plans, and Transportation Improvement Programs (TIPs). MPOs must determine conformity to their respective transportation plans and TIPs every four years, and the interagency consultation process for the Triangle Area should ensure that conformity is demonstrated to any subarea budget for a donut area at least every four years as well. In the event that an MPO or donut area cannot demonstrate conformity on a four-year cycle, the other subareas cannot complete a conformity determination until all subareas conform. See, EPA's 2004 guidance (pages 20-21) for further information regarding the conformity implications of not meeting subarea budgets. V. Final Action After evaluating North Carolina's redesignation request, EPA is taking final action to approve the redesignation and change the legal designation of the Triangle Area from nonattainment to attainment for the 8-hour ozone NAAQS. Through this action, EPA is also approving into the North Carolina SIP the 8-hour ozone maintenance plan for the Triangle Area, which includes the subarea 2008 and 2017 MVEBs for NO <sup>X</sup> , and VOC insignificance determination for the entire Triangle Area. Within 24 months from the publication date for this final rule, the North Carolina transportation partners will need to demonstrate conformity to these new subarea NO <sup>X</sup> MVEBs pursuant 172(c)(2)(E) of the CAA as added by the Safe, Accountable, Flexible, Efficient Transportation Equity Act—A Legacy for Users (SAFETEA-LU), which was signed into law on August 10, 2005. Additionally, the Triangle Area transportation partners should note EPA's finding of adequacy and approval for the VOC insignificance determination in future transportation conformity determinations. VI. When Is This Action Effective? EPA finds that there is good cause for these determinations (approval of redesignation and 10-year maintenance plan, including the 2017 MVEBs) to become effective on December 26, 2007, because a delayed effective date is unnecessary due to the nature of these determinations, which relieves the Triangle Area from certain CAA requirements that otherwise would apply to it. The expedited effective date for this action is authorized under both 5 U.S.C. 553(d)(1), which provides that rule actions may become effective less than 30 days after publication if the rule “grants or recognizes an exemption or relieves a restriction” and section 5 U.S.C. 553(d)(3), which allows an effective date less than 30 days after publication “as otherwise provided by the agency for good cause found and published with the rule.” A redesignation to attainment relieves the Triangle Area from certain CAA requirements that otherwise would apply to it. North Carolina's relief from these obligations is sufficient reason to allow an expedited effective date of this rule under 5 U.S.C. 553(d)(1) and provides good cause to make this rule effective December 26, 2007, pursuant to 5 U.S.C. 553(d)(3). The purpose of the 30-day waiting period prescribed in 5 U.S.C. 553(d) is to give affected parties a reasonable time to adjust their behavior and prepare before the final rule takes effect. Whereas here, the final rule relieves obligations associated with nonattainment designations rather than imposing these obligations on affected parties, such as the State of North Carolina. Therefore, there is no need for time to adjust and prepare before the rule takes effect. VII. Statutory and Executive Order Reviews Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601, *et seq.* ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L.104-4). This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely affects the status of a geographical area, does not impose any new requirements on sources or allow a state to avoid adopting or implementing other requirements, and does not alter the relationship or the distribution of power and responsibilities established in the CAA. This rule also is not subject to Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant and because the Agency does not have reason to believe that the rule concerns an environmental health risk or safety risk that may disproportionately affect children. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the CAA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, *et seq.* ). The Congressional Review Act, 5 U.S.C. 801, *et seq.* , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the **Federal Register** . A major rule cannot take effect until 60 days after it is published in the **Federal Register** . This action is not a “major rule” as defined by 5 U.S.C. 804(2). Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by *February 25, 2008* . Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See, section 307(b)(2) of the CAA). List of Subjects 40 CFR Part 52 Environmental protection, Air pollution control, Intergovernmental relations, Incorporation by reference, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds. 40 CFR Part 81 Environmental protection, Air pollution control, National parks, Wilderness areas. Dated: December 13, 2007. J.I. Palmer, Jr., Regional Administrator, Region 4. 40 CFR parts 52 and 81 is amended as follows: PART 52—[AMENDED] 1. The authority citation for part 52 continues to read as follows: Authority: 42 U.S.C. 7401, *et seq.* Subpart II—North Carolina 2. Section 52.1770(e), is amended by adding a new entry at the end of the table for “8-Hour Ozone Maintenance plan for the Raleigh-Durham-Chapel Hill, North Carolina area” to read as follows: § 52.1770 Identification of plan.
(e)* * * EPA Approved North Carolina Non-Regulatory Provisions Provision State effective date EPA approval date Federal Register citation * * * * * * * 8-Hour Ozone Maintenance plan for the Raleigh-Durham-Chapel Hill, North Carolina area (Durham, Franklin, Granville, Johnston, Orange, Person and Wake Counties in their entireties, and Baldwin, Center, New Hope and Williams Townships in Chatham County) June 7, 2007 December 26, 2007 [Insert first page of publication] PART 81—[AMENDED] 3. The authority citation for part 81 continues to read as follows: Authority: 42 U.S.C. 7401, *et seq.* 4. In § 81.334, the table entitled “North Carolina-Ozone (8-Hour Standard)” is amended under “Raleigh-Durham-Chapel Hill, NC” by revising the entries for “Chatham County
(part)Baldwin Township, Center Township, New Hope Township, Williams Township,” “Durham County,” “Franklin County,” “Granville County,” “Johnston County,” “Orange County,” “Person County,” and “Wake County” to read as follows: § 81.334 North Carolina. North Carolina—Ozone (8-Hour Standard) Designated area Designation a Date 1 Type Category/classification Date 1 Type * * * * * * * Raleigh-Durham-Chapel Hill, NC: Chatham County
(part)Baldwin Township, Center Township, New Hope Township, Williams Township This action is effective December 26, 2007 Attainment Durham County This action is effective December 26, 2007 Attainment Franklin County This action is effective December 26, 2007 Attainment Granville County This action is effective December 26, 2007 Attainment Johnston County This action is effective December 26, 2007 Attainment Orange County This action is effective December 26, 2007 Attainment Person County This action is effective December 26, 2007 Attainment Wake County This action is effective December 26, 2007 Attainment * * * * * * * a Includes Indian Country located in each county or area, except as otherwise specified. 1 This date is June 15, 2004, unless otherwise noted. 2 Early Action Compact Area, effective date deferred until April 15, 2008. 3 November 22, 2004. [FR Doc. E7-24959 Filed 12-21-07; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 62 [EPA-R07-OAR-2007-0655; FRL-8510-6] Approval and Promulgation of State Plans for Designated Facilities and Pollutants; Iowa; Clean Air Mercury Rule AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: EPA is taking final action to approve the State Plan submitted by Iowa on August 15, 2006, and updates to rules submitted on April 26, 2007. The plan addresses the requirements of EPA's Clean Air Mercury Rule (CAMR), promulgated on May 18, 2005, and subsequently revised on June 9, 2006. EPA has determined that the submitted State Plan fully meets the CAMR requirements for Iowa. CAMR requires States to regulate emissions of mercury
(Hg)from large coal-fired electric generating units (EGUs). CAMR establishes State budgets for annual EGU Hg emissions and requires States to submit State Plans to ensure that annual EGU Hg emissions will not exceed the applicable State budget. States have the flexibility to choose which control measures to adopt to achieve the budgets, including participating in the EPA-administered CAMR cap-and-trade program. In the State Plan that EPA is approving today, Iowa has met the CAMR requirements by electing to participate in the EPA trading program. DATES: This rule is effective on January 25, 2008. ADDRESSES: EPA has established a docket for this action under Docket ID No. EPA-R07-OAR-2007-0655. All documents in the docket are listed on the *http://www.regulations.gov* Web site. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through *http://www.regulations.gov* or in hard copy at the Environmental Protection Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas 66101. The Regional Office's official hours of business are Monday through Friday, 8 to 4:30 excluding Federal holidays. The interested persons wanting to examine these documents should make an appointment with the office at least 24 hours in advance. FOR FURTHER INFORMATION CONTACT: Michael Jay at
(913)551-7460 or by e-mail at *jay.michael@epa.gov.* SUPPLEMENTARY INFORMATION: Table of Contents I. What Action Is EPA Taking? II. What Is the Regulatory History of CAMR? III. What Are the General Requirements of CAMR State Plans? IV. How Can States Comply With CAMR? V. Analysis of Iowa's CAMR State Plan Submittal A. State Budgets B. CAMR State Plan VI. Statutory and Executive Order Reviews I. What Action Is EPA Taking? EPA is taking final action to approve Iowa's State Plan, submitted on August 15, 2006, and the incorporation by reference date changes submitted on April 26, 2007. In its State Plan, Iowa has met CAMR by requiring certain coal-fired EGUs to participate in the EPA-administered cap-and-trade program addressing Hg emissions. EPA proposed to approve Iowa's request to amend the State's Plan on September 5, 2007 (72 FR 50913). No comments were received. EPA is finalizing the approval as proposed based on the rationale stated in the proposal and in this final action. II. What Is the Regulatory History of CAMR? CAMR was published by EPA on May 18, 2005 (70 FR 28606, “Standards of Performance for New and Existing Stationary Sources: Electric Utility Steam Generating Units; Final Rule”). In this rule, acting pursuant to its authority under section 111(d) of the Clean Air Act (CAA), 42 U.S.C. 7411(d), EPA required that all States and the District of Columbia (all of which are referred to herein as States) meet Statewide annual budgets limiting Hg emissions from coal-fired EGUs (as defined in 40 CFR 60.24(h)(8)) under CAA section 111(d). EPA required all States to submit State Plans with control measures that ensure that total, annual Hg emissions from the coal-fired EGUs located in the respective States do not exceed the applicable statewide annual EGU mercury budget. Under CAMR, States may implement and enforce these reduction requirements by participating in the EPA-administered cap-and-trade program or by adopting any other effective and enforceable control measures. CAA section 111(d) requires States, and along with CAA section 301(d) and the Tribal Air Rule (40 CFR part 49) allows Tribes granted treatment as States (TAS), to submit State Plans to EPA that implement and enforce the standards of performance. CAMR explains what must be included in State Plans to address the requirements of CAA section 111(d). The State Plans were due to EPA by November 17, 2006. Under 40 CFR 60.27(b), the EPA proposes, and subsequently approves or disapproves, the State Plans. III. What Are the General Requirements of CAMR State Plans? CAMR establishes Statewide annual EGU Hg emission budgets and is to be implemented in two phases. The first phase of reductions starts in 2010 and continues through 2017. The second phase of reductions starts in 2018 and continues thereafter. CAMR requires States to implement the budgets by either:
(1)Requiring coal-fired EGUs to participate in the EPA-administered cap-and-trade program; or
(2)adopting other coal-fired EGU control measures of the respective State's choosing and demonstrating that such control measures will result in compliance with the applicable State annual EGU Hg budget. Each State Plan must require coal-fired EGUs to comply with the monitoring, recordkeeping, and reporting provisions of 40 CFR part 75 concerning Hg mass emissions. Each State Plan must also show that the State has the legal authority to adopt emission standards and compliance schedules necessary for attainment and maintenance of the State's annual EGU Hg budget and to require the owners and operators of coal-fired EGUs in the State to meet the monitoring, recordkeeping, and reporting requirements of 40 CFR part 75. IV. How Can States Comply With CAMR? Each State Plan must impose control requirements that the State demonstrates will limit Statewide annual Hg emissions from new and existing coal-fired EGUs to the amount of the State's applicable annual EGU Hg budget. States have the flexibility to choose the type of EGU control measures they will use to meet the requirements of CAMR. EPA anticipates that many States will choose to meet the CAMR requirements by selecting an option that requires EGUs to participate in the EPA-administered CAMR cap-and-trade program. EPA also anticipates that many States may choose to control Statewide annual Hg emissions for new and existing coal-fired EGUs through an alternative mechanism other than the EPA-administered CAMR cap-and-trade program. Each State that chooses an alternative mechanism must include with its plan a demonstration that the State Plan will ensure that the State will meet its assigned State annual EGU Hg emission budget. A State submitting a State Plan that requires coal-fired EGUs to participate in the EPA-administered CAMR cap-and-trade program may either adopt regulations that are substantively identical to the EPA model Hg trading rule (40 CFR part 60, subpart HHHH) or incorporate by reference the model rule. CAMR provides that States may only make limited changes from the model rule if the States want to participate in the EPA-administered trading program. A State Plan may deviate from the model rule only by altering the allowance allocation provisions to provide for State-specific allocation of Hg allowances using a methodology chosen by the State. A State's alternative allowance allocation provisions must meet certain allocation timing requirements and must ensure that total allocations for each calendar year will not exceed the State's annual EGU Hg budget for that year. V. Analysis of Iowa's CAMR State Plan Submittal A. State Budgets In this action, EPA is taking final action to approve Iowa's State Plan that adopts the annual EGU Hg budgets established for the State in CAMR, i.e., 0.727 tons for EGU Hg emissions in 2010-2017 and 0.287 tons for EGU Hg emissions in 2018 and thereafter. Iowa's State Plan sets these budgets as the total amount of allowances available for allocation for each year under the EPA-administered CAMR cap-and-trade program. B. CAMR State Plan The Iowa State Plan requires coal-fired EGUs to participate in the EPA-administered CAMR cap-and-trade program. The State Plan incorporates by reference the EPA model Hg trading rule but has adopted an alternative allowance allocation methodology. States may establish in their State Plan submissions a different Hg allowance allocation methodology that will be used to allocate allowances to sources in the States if certain requirements are met concerning the timing of submission of units' allocations to the Administrator for recordation and the total amount of allowances allocated for each control period. In adopting alternative Hg allowance allocation methodologies, States have flexibility with regard to: 1. The cost to recipients of the allowances, which may be distributed for free or auctioned; 2. The frequency of allocations; 3. The basis for allocating allowances, which may be distributed, for example, based on historical heat input or electric and thermal output; and 4. The use of allowance set-asides and, if used, their size. In Iowa's alternative allowance methodology, as authorized by the CAMR, Iowa has deviated from the portion of the model rule, described above, relating to the basis for allocating allowances to new units commencing operation on or after January 1, 2001. In Iowa's rule 567-34.304, the State has limited the timeframe within which a unit can meet the requirements to apply for allowances under the new unit set-aside to units that commence operation on or after January 1, 2001, and commence construction before January 1, 2006. As a result, one facility meets this criterion and is provided the full allocation under the new source set-aside for both phases amounting to 5 percent of the State's budget for phase I and 3 percent for phase II. Also in the section relating to new units, in the event a generator is served by two or more units, the nameplate capacity will be attributed to each unit in equal fraction of the total nameplate capacity multiplied by 7900 British Thermal Units per Kilowatt Hour for the determination of heat input for each unit. Iowa's State Plan requires coal-fired EGUs to comply with the monitoring, recordkeeping, and reporting provisions of 40 CFR part 75 concerning Hg mass emissions. Iowa's State Plan also demonstrates that the State has the legal authority to adopt emission standards and compliance schedules necessary for attainment and maintenance of the State's annual EGU Hg budget and to require the owners and operators of coal-fired EGUs in the State to meet the monitoring, recordkeeping, and reporting requirements of 40 CFR part 75. Iowa cites Section 455B.133 of the Iowa Code, which contains the broad enabling authority for Iowa's air pollution control regulations, as containing the legal authority for the Iowa Environmental Protection Commission to adopt the State's rule that allows for Iowa's participation in the nationwide cap and trade program for mercury. Iowa has addressed the issue related to the definition of “permit authority” discussed in the proposal of September 5, 2007 (72 FR 50913). As discussed in more detail in that notice, on February 17, 2007, EPA provided a letter to Iowa that requested and outlined necessary definition revisions for all rules intended to meet the Clean Air Interstate Rule
(CAIR)and CAMR. The EPA requested revisions were adopted by the Iowa Environmental Protection Commission on October 1, 2007, and were published in the Iowa Administrative Code on October 24, 2007. The revisions became State effective on November 28, 2007. Once submitted to EPA, and through separate rulemaking, EPA will act on the State's revisions to its 111(d) plan for CAMR and its SIP for CAIR. EPA's review of Iowa's State Plan has found that it meets the requirements of CAMR. As a result, EPA is taking final action to approve Iowa's State Plan. VI. Statutory and Executive Order Reviews Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves State law as meeting Federal requirements and imposes no additional requirements beyond those imposed by State law. Accordingly, the Administrator certifies that this rule would not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601, *et seq.* ). Because this action approves pre-existing requirements under State law and does not impose any additional enforceable duty beyond that required by State law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). This action also does not have Tribal implications because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a State rule implementing a Federal standard. It does not alter the relationship or the distribution of power and responsibilities established in the CAA. This action also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it approves a State rule implementing a Federal standard. Executive Order 12898, “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations,” requires Federal agencies to consider the impact of programs, policies, and activities on minority populations and low-income populations. EPA guidance 1 states that EPA is to assess whether minority or low-income populations face risk or a rate of exposure to hazards that is significant and that “appreciably exceed[s] or is likely to appreciably exceed the risk or rate to the general population or to the appropriate comparison group.” (EPA, 1998) Because this rule merely approves a state rule implementing the Federal standard established by CAMR, EPA lacks the discretionary authority to modify today's regulatory decision on the basis of environmental justice considerations. However, EPA has already considered the impact of CAMR, including this Federal standard, on minority and low-income populations. In the context of EPA's CAMR published in the **Federal Register** on May 18, 2005, in accordance with Executive Order 12898, the Agency has considered whether CAMR may have disproportionate negative impacts on minority or low income populations and determined it would not. 1 U.S. Environmental Protection Agency, 1998. Guidance for Incorporating Environmental Justice Concerns in EPA's NEPA Compliance Analyses. Office of Federal Activities, Washington, DC, April, 1998. In reviewing State Plan submissions, EPA's role is to approve State choices, provided that they meet the criteria of the CAA. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a State Plan for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a State Plan submission, to use VCS in place of a State Plan submission that otherwise satisfies the provisions of the CAA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, *et seq.* ). The Congressional Review Act, 5 U.S.C. 801, *et seq.* , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the **Federal Register** . A major rule cannot take effect until 60 days after it is published in the **Federal Register** . This action is not a “major rule” as defined by 5 U.S.C. 804(2). Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by *February 25, 2008.* Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).) List of Subjects in Part 62 Environmental protection, Air pollution control, Electric utilities, Intergovernmental relations, Mercury, Reporting and recordkeeping. Dated: December 14, 2007. John B. Askew, Regional Administrator, Region 7. Chapter I, title 40 of the Code of Federal Regulations is amended as follows: PART 62—[AMENDED] 1. The authority citation for part 62 continues to read as follows: Authority: 42 U.S.C. 7401, *et seq.* Subpart Q—Iowa 2. Subpart Q is amended by adding an undesignated center heading and § 62.3918 to read as follows: Mercury Emissions From Coal-Fired Electric Steam Generating Units § 62.3918 Identification of Plan.
(a)*Identification of plan.* Section 111(d) plan and associated State regulations as adopted in the Iowa Administrative Bulletin on June 7, 2006, page 1811 and associated amendments on February 28, 2007, page 1157.
(b)*Identification of sources.* The plan applies to all new and existing mercury budget units meeting the applicability requirements in Iowa's State rule 567-34.301.
(c)*Effective date.* The effective date for the portion of the plan applicable to mercury budget units as described in Iowa State rule 567-34.301 is January 25, 2008. [FR Doc. E7-24962 Filed 12-21-07; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 89 [EPA-HQ-OAR-2007-0652; FRL-8509-9] RIN 2060-A037 Partial Removal of Direct Final Rule and Revision of the Nonroad Diesel Technical Amendments and Tier 3 Technical Relief Provision AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule; partial removal; revision. SUMMARY: Because EPA received adverse comment, we are making a partial withdrawal and revision of the direct final rule for “Nonroad Diesel Technical Amendments and Tier 3 Technical Relief Provision” published on September 18, 2007. DATES: This rule and partial withdrawal are effective December 26, 2007. FOR FURTHER INFORMATION CONTACT: Zuimdie Guerra, Assessment and Standards Division, Office of Transportation and Air Quality, 2000 Traverwood Drive, Ann Arbor, MI, 48105; *telephone number:*
(734)214-4387; *fax number:*
(734)214-4050; *e-mail address: guerra.zuimdie@epa.gov* . SUPPLEMENTARY INFORMATION: On September 18, 2007 EPA published a direct final rule for “Nonroad Diesel Technical Amendments and Tier 3 Technical Relief Provision” (72 FR 53118). We stated in that direct final rule that if we received adverse comment by October 18, 2007, we would publish a timely withdrawal in the **Federal Register** . EPA subsequently received adverse comments to Tier 3 technical relief provision in 40 CFR 89.102(i) through (m). Although we were not able to accomplish this action prior to the effective date of the direct final rule, we are now, in light of the adverse comment, withdrawing the direct final rule's revisions to 40 CFR 89.102 paragraphs
(i)through (m). The other provisions of the the direct final rule are not affected by this partial withdrawal and are incorporated into the **Federal Register** as of the effective date of November 18, 2007 direct final action. Concurrent with the direct final rule, we published a separate notice of proposed rulemaking, to provide for the contingency of adverse comments on the DFR. (72 FR 53294). We are now issuing a final rule based on the notice of proposed rulemaking and on comments received. Notice and an opportunity for additional comment on the withdrawal of the direct final rule is unnecessary, within the meaning of 5 U.S.C. 553(b)(B). EPA has a legal obligation to withdraw those portions of the direct final rule that were subject to adverse comments[j1]. In addition, by its terms, the direct final rule would become effective only in the absence of adverse comment. <sup>[j2]</sup> In today's final rule, EPA is adopting the technical relief provisions originally proposed as 40 CFR 89.102 paragraphs
(i)through (m), including a variety of modifications to address the comments received. The main comment EPA received was to correct an inappropriate cross-reference in the rule language, and this final rule corrects this inadvertent drafting error as the commenter properly suggested. We made the changes the commenter properly suggested. The provision on technical relief is now found in paragraph
(i)exclusively. We responded to comments that did not require changes to the rule in a memo to the docket. One concern of the commenter was that manufacturers may ask for more relief than is needed. The rule is clear that the Agency is not obligated to provide any amount of technical relief if the Agency is not convinced of the need for it. The other concern of the commenter was that manufacturers that use the Tier 3 technical relief may request additional relief for Tier 4 equipment. Manufacturers are aware of this provision in advance of Tier 4 so manufacturers should be able to reconcile their Tier 3 and Tier 4 relief needs. List of Subjects in 40 CFR Part 89 Environmental protection, Administrative practice and procedure, Air pollution control, Confidential business information, Imports, Penalties, Reporting and recordkeeping requirements, Warranties. Dated: December 17, 2007. Stephen L. Johnson, Administrator. For the reasons set forth in the preamble, title 40, chapter I of the Code of Federal Regulations is amended as follows: PART 89—CONTROL OF EMISSIONS FROM NEW AND IN-USE NONROAD COMPRESSION-IGNITION ENGINES 1. The authority citation for part 89 is continues to read as follows: Authority: 42 U.S.C. 7401-7671q. Subpart B—[Amended] 2. Section 89.102 is amended by revising paragraph
(i)and removing paragraphs
(j)through (m). The revison reads as follows: § 89.102 Effective dates, optional inclusion, flexibility for equipment manufacturers.
(i)*Additional exemptions for technical or engineering hardship.* You may request additional engine allowances under paragraph (d)(1) of this section for 56-560 kW power categories or, if you are a small equipment manufacturer, under paragraph (d)(2) of this section for engines at or above 37 and below 75 kW. However, you may use these extra allowances only for those equipment models for which you, or an affiliated company, do not also produce the engine. After considering the circumstances, we may permit you to introduce into U.S. commerce equipment with such engines that do not comply with Tier 3 emission standards, as follows:
(1)We may approve additional exemptions if extreme and unusual circumstances that are clearly outside your control and that could not have been avoided with reasonable discretion have resulted in technical or engineering problems that prevent you from meeting the requirements of this part. You must show that you exercised prudent planning and have taken all reasonable steps to minimize the scope of your request for additional allowances.
(2)To apply for exemptions under this paragraph (i), send the Designated Compliance Officer and the Designated Enforcement Officer a written request as soon as possible before you are in violation. In your request, include the following information:
(i)Describe your process for designing equipment.
(ii)Describe how you normally work cooperatively or concurrently with your engine supplier to design products.
(iii)Describe the engineering or technical problems causing you to request the exemption and explain why you have not been able to solve them. Describe the extreme and unusual circumstances that led to these problems and explain how they were unavoidable.
(iv)Describe any information or products you received from your engine supplier related to equipment design—such as written specifications, performance data, or prototype engines—and when you received it.
(v)Compare the design processes of the equipment model for which you need additional exemptions and that for other models for which you do not need additional exemptions. Explain the technical differences that justify your request.
(vi)Describe your efforts to find and use other compliant engines, or otherwise explain why none is available.
(vii)Describe the steps you have taken to minimize the scope of your request.
(viii)Include other relevant information. You must give us other relevant information if we ask for it.
(ix)Estimate the increased percent of production you need for each equipment model covered by your request, as described in paragraph (i)(3) of this section. Estimate the increased number of allowances you need for each equipment model covered by your request, as described in paragraph (i)(4) of this section.
(3)We may approve your request to increase the allowances under paragraph (d)(1) of this section, subject to the following limitations:
(i)The additional allowances will not exceed 50 percent for each power category.
(ii)You must use up the allowances under paragraph (d)(1) of this section before using any additional allowance under this paragraph (i).
(iii)Any allowances we approve under this paragraph (i)(3) expire 24 months after the provisions of this section start for a given power category. You may use these allowances only for the specific equipment models covered by your request.
(4)We may approve your request to increase the allowances for the 37-75 kW power category under paragraph (d)(2) of this section, subject to the following limitations:
(i)You are eligible for additional allowances under this paragraph (i)(4) only if you are a small equipment manufacturer and you do not use the provisions of paragraph (i)(3) of this section to obtain additional allowances for the 37-75 kW power category.
(ii)You must use up all the available allowances for the 37-75 kW power category under paragraph (d)(2) of this section in a given year before using any additional allowances under this paragraph (i)(4).
(iii)Base your request only on equipment you produce with engines at or above 37 kW and below 75 kW. You may use any additional allowances only for equipment you produce with engines at or above 37 kW and below 75 kW.
(iv)Any allowances we approve under this paragraph (i)(4) expire 24 months after the provisions of this section start for this power category. These additional allowances are not subject to the annual limits specified in paragraph (d)(2) of this section. You may use these allowances only for the specific equipment models covered by your request.
(v)The total allowances under paragraph (d)(2) of this section for the 37-75 kW power category will not exceed 700 units. The total allowances under this paragraph (i)(4) follow the requirements under paragraph (d)(2) of this section for the 37-75 kW power category and will not exceed 200 units. Therefore, the total maximum allowances for the 37-75 kW power category will not exceed 900 units.
(5)For purposes of this paragraph (i), small equipment manufacturer means an equipment manufacturer that had annual U.S.-directed production volume of equipment using nonroad diesel engines between 37 and 75 kW of no more than 3,000 units in 2002 and all earlier calendar years, and has 750 or fewer employees (500 or fewer employees for nonroad equipment manufacturers that produce no construction equipment or industrial trucks). For manufacturers owned by a parent company, the production limit applies to the production of the parent company and all its subsidiaries and the employee limit applies to the total number of employees of the parent company and all its subsidiaries.
(6)The following provisions for adjusted flexibilities for Tier 4 engines apply to equipment manufacturers that are granted additional exemptions for technical or engineering hardship:
(i)If you use the additional allowance under this paragraph
(i)you shall forfeit percent of production flexibility plus technical or engineering hardship exemptions available for Tier 4 engines in the amounts shown in Table 1 of this section.
(ii)Table 1 of this section shows the percent of production flexibility and technical or engineering hardship exemptions that you must forfeit for Tier 4 engines. The amount of Tier 4 flexibility forfeited by each equipment manufacturer depends on the percent of production flexibility used for Tier 2 engines and the technical or engineering hardship exemptions granted for Tier 3 engines in the proportions shown in Table 1. For example, if you used 45 percent of your production flexibility for Tier 2 engines, you must forfeit 2 percent of your production flexibility for Tier 4 engines for every 1 percent of technical or engineering hardship flexibility granted for Tier 3 engines. In addition you must also forfeit 1 percent of any technical or engineering hardship exemptions available for Tier 4 engines for every 1 percent technical or engineering hardship exemptions available for Tier 3 engines. If you use the Tier 3 technical or engineering hardship allowances for 5 percent of your equipment in each of two different years, you have used a total allowance of 10 percent. Therefore you must forfeit a total of 20 percent of production flexibility for Tier 4 engines plus 10 percent of any technical or engineering hardship exemptions available for Tier 4 engines. Table 1 of § 89.102.—Adjustments to Tier 4 Flexibilities Percent of use Tier 2 production flexibility Percent of forfeit Tier 4 production flexibility Percent of forfeit Tier 4 tech./eng. exemption Greater than 0% and up to 20% 0 1 Greater than 20% and up to 40% 1 1 Greater than 40% and up to 60% 2 1 Greater than 60% and up to 80% 3 1
(iii)Because the Tier 3 and Tier 4 rules have different power category ranges, the availability of technical relief will be further adjusted based on the sales volume by power category. Table 2 of this section shows the applicable power categories for Tier 3 and Tier 4. The Tier 3 power categories of 37kW to 75kW and 75kW to 130kW correspond to the Tier 4 power category of 56kW to 130kW. For the Tier 3 equipment in the 37 to 75kW category, you must only use the sales volume for equipment that uses engines with a rated power greater than 56kW. For example, if you have a Tier 3 piece of equipment that uses a 40 kW engine, the sales of the equipment are counted in the Tier 4 power category of 19kW to 56kW. If you have a Tier 3 piece of equipment that uses a 60kW engine, the sales of the equipment are counted in the Tier 4 power category of 56kW to 130kW. The Tier 3 power categories of 130kW to 225kW, 225kW to 450kW and 450kW to 560kW correspond to the Tier 4 power category of 130kW to 560kW. You will need to sum the sales of the Tier 3 power categories that correspond to the Tier 4 power category during each calendar year in which Tier 3 technical relief is used. The sum of all the Tier 3 units that are produced and exempted by the technical relief divided by the sum of all the Tier 3 units sold in the corresponding Tier 4 power category will determine the percentage of Tier 4 flexibility affected. For example, if you produce 50 units using Tier 3 technical relief in the range of 130kW to 225kW, and you produce 50 units using Tier 3 technical relief in the range of 225 to 450kW, and no units are produced in the 450kW to 560kW range, and your overall sales volume for the power ranges of 130kW to 560kW in Tier 3 is 400 units, the amount of Tier 3 technical relief used is 100/400 or 25 percent. Because you forfeit 1 percent of your Tier 4 technical relief for every 1 percent of Tier 3 technical relief used, then you will lose 25 percent of your Tier 4 technical relief in the 130kW to 560kW power range category. If you used 45 percent of your production flexibility for Tier 2 engines, you must forfeit 2 percent of production flexibility for Tier 4 engines for every 1 percent of Tier 3 technical relief. Therefore, you will forfeit 50 percent of your Tier 4 production allowance in the 130kW to 560kW power range category. Table 2 of § 89.102.—Corresponding Tier 3 and Tier 4 Power Categories Tier 3 power categories Tier 4 power categories 37≤kW<75 * 19≤kW<56 37≤kW<75 ** , 75≤kW<130 56≤kW<130 130≤kW<225, 225≤kW<450, 450≤kW<560 130≤kW≤560 * Applies only to use of engines rated between 37kW and 56kW by small volume equipment manufacturers. ** Includes only equipment that uses engines with a rated power greater than 56kw.
(iv)Manufacturers using allowances under this paragraph
(i)must comply with the notification and reporting requirements specified in paragraph (i)(7) of this section.
(7)Notification and reporting. You must notify us of your intent to use the technical relief provisions of this paragraph
(i)and send us an annual report to verify that you are not exceeding the allowances, as follows:
(i)Before the first year you intend to use the provisions of this section, send the Designated Compliance Officer and the Designated Enforcement Officer a written notice of your intent, including:
(A)Your company's name and address, and your parent company's name and address, if applicable.
(B)Whom to contact for more information.
(C)The calendar years in which you expect to use the exemption provisions of this section.
(D)The name and address of the company that produces the engines you will be using for the equipment exempted under this section.
(E)Your best estimate of the number of units in each power category you will produce under this section and whether you intend to comply under paragraph (d)(1) or (d)(2) of this section.
(F)The number of units in each power category you have sold in previous calendar years under paragraph
(d)of this section.
(ii)For each year that you use the provisions of this section, send the Designated Compliance Officer and the Designated Enforcement Officer a written report by March 31 of the following year. Include in your report the total number of engines you sold in the preceding year for each power category, based on actual U.S.-directed production information. Also identify the percentages of U.S.-directed production that correspond to the number of units in each power category and the cumulative numbers and percentages of units for all the units you have sold under this section for each power category. You may omit the percentage figures if you include in the report a statement that you will not be using the percent-of-production allowances in paragraph
(d)of this section.
(8)*Recordkeeping.* Keep the following records of all equipment with exempted engines you produce under this paragraph
(i)for at least five full years after the final year in which allowances are available for each power category:
(i)The model number, serial number, and the date of manufacture for each engine and piece of equipment.
(ii)The maximum power of each engine.
(iii)The total number or percentage of equipment with exempted engines, as described in paragraph
(d)of this section and all documentation supporting your calculation.
(iv)The notifications and reports we require under paragraph (i)(7) of this section.
(9)*Equipment Labeling.* Any engine produced under this paragraph
(i)must meet the labeling requirements of 40 CFR 89.110, but add the following statement instead of the compliance statement in 40 CFR 89.110 (b)(10): THIS ENGINE MEETS U.S. EPA EMISSION STANDARDS UNDER 40 CFR 89.102. SELLING OR INSTALLING THIS ENGINE FOR ANY PURPOSE OTHER THAN FOR THE EQUIPMENT FLEXIBILITY PROVISIONS OF 40 CFR 89.102 MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.
(10)*Enforcement.* Producing more exempted engines or equipment than we allow under this paragraph
(i)or installing engines that do not meet the applicable Tier 1 emission standards described in § 89.112 violates the prohibitions in § 89.1003(a)(1). You must give us the records we require under this paragraph
(i)if we ask for them ( *see* § 89.1003(a)(2)). [FR Doc. E7-24976 Filed 12-21-07; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 180 [EPA-HQ-OPP-2007-0309; FRL-8342-8] Etoxazole; Pesticide Tolerance AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: This regulation establishes tolerances for residues of etoxazole in or on cherry; hop, dried cones; and vegetable, cucurbit subgroup 9A. The Interregional Research Project No. 4 (IR-4) requested these tolerances under the Federal Food, Drug, and Cosmetic Act (FFDCA). DATES: This regulation is effective December 26, 2007. Objections and requests for hearings must be received on or before February 25, 2008, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION ). ADDRESSES: EPA has established a docket for this action under docket identification
(ID)number EPA-HQ-OPP-2007-0309. To access the electronic docket, go to *http://www.regulations.gov* , select “Advanced Search,” then “Docket Search.” Insert the docket ID number where indicated and select the “Submit” button. Follow the instructions on the regulations.gov website to view the docket index or access available documents. All documents in the docket are listed in the docket index available in regulations.gov. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information
(CBI)or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available in the electronic docket at *http://www.regulations.gov* , or, if only available in hard copy, at the OPP Regulatory Public Docket in Rm. S-4400, One Potomac Yard (South Bldg.), 2777 S. Crystal Dr., Arlington, VA. The Docket Facility is open from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The Docket Facility telephone number is
(703)305-5805. FOR FURTHER INFORMATION CONTACT: Sidney Jackson, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone number:
(703)305-7610; e-mail address: *jackson.sidney@epa.gov* . SUPPLEMENTARY INFORMATION: I. General Information A. Does this Action Apply to Me? You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected entities may include, but are not limited to those engaged in the following activities: • Crop production (NAICS code 111), e.g., agricultural workers; greenhouse, nursery, and floriculture workers; farmers. • Animal production (NAICS code 112), e.g., cattle ranchers and farmers, dairy cattle farmers, livestock farmers. • Food manufacturing (NAICS code 311), e.g., agricultural workers; farmers; greenhouse, nursery, and floriculture workers; ranchers; pesticide applicators. • Pesticide manufacturing (NAICS code 32532), e.g., agricultural workers; commercial applicators; farmers; greenhouse, nursery, and floriculture workers; residential users. This listing is not intended to be exhaustive, but rather to provide a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT . B. How Can I Access Electronic Copies of this Document? In addition to accessing an electronic copy of this **Federal Register** document through the electronic docket at *http://www.regulations.gov* , you may access this **Federal Register** document electronically through the EPA Internet under the “ **Federal Register** ” listings at *http://www.epa.gov/fedrgstr* . You may also access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's pilot e-CFR site at *http://www.gpoaccess.gov/ecfr* . C. Can I File an Objection or Hearing Request? Under section 408(g) of FFDCA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2007-0309 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk as required by 40 CFR part 178 on or before February 25, 2008. In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket that is described in ADDRESSES . Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit this copy, identified by docket ID number EPA-HQ-OPP-2007- 0309, by one of the following methods: • *Federal eRulemaking Portal* : *http://www.regulations.gov* . Follow the on-line instructions for submitting comments. • *Mail* : Office of Pesticide Programs
(OPP)Regulatory Public Docket (7502P), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001. • *Delivery* : OPP Regulatory Public Docket (7502P), Environmental Protection Agency, Rm. S-4400, One Potomac Yard (South Bldg.), 2777 S. Crystal Dr., Arlington, VA. Deliveries are only accepted during the Docket's normal hours of operation (8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays). Special arrangements should be made for deliveries of boxed information. The Docket Facility telephone number is
(703)305-5805. II. Petition for Tolerance In the **Federal Register** of June 27, 2007 (72 FR 35237) (FRL-8133-4), EPA issued a notice pursuant to section 408(d)(3) of FFDCA, 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 6E7150) by the IR-4, 500 College Road East, Suite 201 W, Princeton, NJ 08540. The petition requested that 40 CFR 180.593 be amended by establishing a tolerance for residues of the insecticide etoxazole, 2-(2,6-difluorophenyl)-4-[4-(1,1-dimethylethyl)-2-ethoxyphenyl]-4,5-dihydrooxazole, in or on cherry at 0.70 parts per million (ppm), hops, dried cones, at 7.0 ppm, and melon subgroup 9A at 0.15 ppm. That notice referenced a summary of the petition prepared by Valent U.S.A. Corporation, the registrant, which is available to the public in the docket, *http://www.regulations.gov* . There were no comments received in response to the notice of filing. Based upon current data supporting the petition, EPA has corrected the commodity definition and revised proposed tolerance levels as follows: 1. For commodity cherry, a revised tolerance at 1.0 ppm from 0.70 ppm; and 2. For the melon subgroup, the crop definition has been changed from “melon subgroup 9A” to “vegetable, cucurbit subgroup 9A” and the tolerance revised from 0.15 to 0.20 ppm. III. Aggregate Risk Assessment and Determination of Safety Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue....” These provisions were added to FFDCA by the Food Quality Protection Act
(FQPA)of 1996. Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for the petitioned-for tolerance for residues of in or on cherry, sweet at 0.60 ppm, cherry, tart at 0.20 ppm, hop, dried cones, at 5.0 ppm, and vegetable, cucurbit subgroup 9A at 0.15 ppm. EPA's assessment of exposures and risks associated with establishing the tolerance follows. A. Toxicological Profile EPA has evaluated the available toxicity data and considered their validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. Specific information on the studies received and the nature of the adverse effects caused by etoxazole as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at *http://www.regulations.gov* . The referenced document is available in the docket established by this action, which is described under Docket #: EPA-HQ-OPP-2007-0309 and is identified in that docket as PP 6E7150; Revised: Etoxazole in/on Cherries, Hops, and Melon Subgroup 9A; Health Effects Division
(HED)Risk Assessment. B. Toxicological Endpoints For hazards that have a threshold below which there is no appreciable risk, the toxicological level of concern
(LOC)is derived from the highest dose at which no adverse effects are observed (the NOAEL) in the toxicology study identified as appropriate for use in risk assessment. However, if a NOAEL cannot be determined, the lowest dose at which adverse effects of concern are identified (the LOAEL) is sometimes used for risk assessment. Uncertainty/safety factors
(UFs)are used in conjunction with the LOC to take into account uncertainties inherent in the extrapolation from laboratory animal data to humans and in the variations in sensitivity among members of the human population as well as other unknowns. Safety is assessed for acute and chronic risks by comparing aggregate exposure to the pesticide to the acute population adjusted dose
(aPAD)and chronic population adjusted dose (cPAD). The aPAD and cPAD are calculated by dividing the LOC by all applicable UFs. Short-term, intermediate-term, and long-term risks are evaluated by comparing aggregate exposure to the LOC to ensure that the margin of exposure
(MOE)called for by the product of all applicable UFs is not exceeded. For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk and estimates risk in terms of the probability of occurrence of additional adverse cases. Generally, cancer risks are considered non-threshold. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see *http://www.epa.gov/fedrgstr/EPA-PEST/1997/November/Day-26/p30948.htm* . A summary of the toxicological endpoints for etoxazole used for human risk assessment can be found at *http://www.regulations.gov* in document PP#: 6E7150. Revised: Etoxazole in/on Cherries, Hops, and Melon Subgrou 9A. Health Effects Division
(HED)Risk Assessment in docket ID number EPA-HQ-OPP-2007-0309. C. Exposure Assessment *Dietary exposure from food and feed uses* . In evaluating dietary exposure to etoxazole, EPA considered exposure under the petitioned-for tolerances as well as all existing etoxazole tolerances in (40 CFR 180.593 EPA assessed dietary exposures from etoxazole in food as follows: i. *Acute exposure* . Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure. An endpoint of concern attributable to a single oral dose was not selected for either the general U.S. population (including infants and children) or the females 13-50 years old population subgroup for etoxazole. The EPA evaluated the suitability of the developmental toxicity study in rabbits in which the developmental NOAEL of 200 mg/kg/day is based upon increased incidences of 27 presacral vertebrae and 27 presacral vertebrae with 13th ribs (skeletal variations) in the fetuses at the LOAEL of 1,000 mg/kg/day (limit dose). Although these developmental effects may be attributed to a single dose, the EPA concluded that etoxazole is unlikely to pose an acute risk because these effects are minor in magnitude and were observed only at the limit dose (1000 mg/kg/day). Therefore, an acute dietary exposure assessment was not performed . ii. *Chronic exposure* . In conducting the chronic dietary exposure assessment EPA used DEEM-FCID, Version 2.03), which incorporates consumption data from United States Department of Agriculture's (USDA's) Continuing Surveys of Food Intakes by Individuals (CSFII), 1994-1996 and 1998. The 1994-96, 1998 data are based on the reported consumption of more than 20,000 individuals over two non-consecutive survey days. Foods “as consumed” (e.g., apple pie) are linked to EPA-defined food commodities (e.g. apples, peeled fruit - cooked; fresh or N/S; baked; or wheat flour - cooked; fresh or N/S, baked) using publicly available recipe translation files developed jointly by USDA/ARS and EPA. Consumption data are averaged for the entire U.S. population and within population subgroups for chronic exposure assessment. An unrefined, chronic dietary exposure assessment was conducted for the general U.S. population and various population subgroups using EPA-calculated residues of concern (parent and metabolites) for livestock commodities and tolerance-level residues for all other commodities. For all registered and proposed uses, 100% crop treated
(CT)information was used, as well as DEEM 7.81 default processing factors for all commodities other than apple and grape (apple and grape residue data showed that there was no concentration in processed commodities; therefore; these default values were set to 1). iii. *Cancer* . EPA classified etoxazole as “not likely to be carcinogenic to humans”. This decision was based on the lack of carcinogenicity in two studies in mice, lack of carcinogenicity in one study in rats, and the lack of hormonal and reproductive effects in special studies. Etoxozole is not a mutagen. Therefore, an exposure assessment related to cancer risk was not performed. 2. *Dietary exposure from drinking water* . The Agency lacks sufficient monitoring data to complete a comprehensive dietary exposure analysis and risk assessment for etoxazole in drinking water. Because the Agency does not have comprehensive monitoring data, drinking water concentration estimates are made by reliance on simulation or modeling taking into account data on the environmental fate characteristics of etoxazole. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at *http://www.epa.gov/oppefed1/models/water/index.htm* . The Agency conducted Tier 1 estimated drinking water concentrations (EDWCs) for etoxazole in assessing water exposure. Environmental fate data indicate that parent (etoxazole) has low mobility and relatively low persistence in soil. The major route of degradation based on the label use pattern will likely be aerobic soil degradation. Based on the aerobic soil metabolism study, Metabolite R-8 was found as a major degradate in 4 out of 5 soils tested, with a maximum of 38% of the applied dose. Metabolite R-8 is mobile and relatively persistent and could be available for runoff and leaching for periods of up to months. Metabolite R-13 was also found as a major degradate in 3 out of 5 soils tested, with a maximum of 30.0% (at 62 days) in an aerobic soil metabolism study. Based on submitted mobility data, Metabolite R-13 appears to be immobile. The Agency believes that metabolites R-8 and R-13 are likely to have similar toxicity to the parent; and, therefore, should be included in the drinking water assessment. Metabolites R-4 and R-7 were also found in aerobic soil dissipation studies, but less frequently. EPA concluded that the inclusion of Metabolite R-8 should cover the exposure from R-4 and R-7. In summary, the Agency finds that for drinking water risk assessment, the residues of concern are parent, Metabolite R-8, and Metabolite R-13. FQPA Index Reservoir Screening Tool (FIRST) and Screening Concentrations In Ground Water (SCI-GROW) models were used to calculate the chronic surface water and groundwater EDWCs (parent and metabolites), respectively. Drinking water was incorporated directly in the dietary assessment using the acute concentration for surface water generated by the FIRST model. Tier 1 EDWCs results for etoxazole and metabolites R-8 and R-13 show annual average surface water concentrations of 0.332 parts per billion (ppb), 0.913 ppb and 0.0285 ppb, respectively. Tier 1 EDWCs results for etoxazole and metabolites R-8 and R-13 show ground water concentrations of 0.00173ppb, 0.316 ppb and 0.000322 ppb, respectively. Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For chronic dietary risk assessment, the total sum of the annual average surface water concentrations for etoxazole and metabolites R-8 and R-13 of 1.27 ppb was used to assess the contribution to drinking water. 3. *From non-dietary exposure* . The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets). Etoxazole is not registered for use in or on any sites that would result in residential exposure. 4. *Cumulative effects from substances with a common mechanism of toxicity* . Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.” Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, EPA has not made a common mechanism of toxicity finding as to etoxazole and any other substances and etoxazole does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has not assumed that etoxazole has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's website at *http://www.epa.gov/pesticides/cumulative* . D. Safety Factor for Infants and Children 1. * In general* . Section 408 of FFDCA provides that EPA shall apply an additional (“10X”) tenfold margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the FQPA safety factor. In applying this provision, EPA either retains the default value of 10X when reliable data do not support the choice of a different factor, or, if reliable data are available, EPA uses a different additional FQPA safety factor value based on the use of traditional UFs and/or special FQPA safety factors, as appropriate. 2. *Prenatal and postnatal sensitivity* . No quantitative or qualitative evidence of increased susceptibility was seen following *in utero* exposure to rats or rabbits in developmental studies. Offspring toxicity was more severe (pup mortality) than maternal toxicity (increased liver and adrenal weights) at the same dose in the rat reproduction study. Since there is qualitative evidence of increased susceptibility following exposure to etoxazole in the rat reproduction study, the EPA performed a Degree-of-Concern Analysis to: i. Determine the LOC for the effects observed when considered in the context of all available toxicity data; and ii. Identify any residual uncertainties after establishing toxicity endpoints and traditional uncertainty factors to be used in the risk assessment of this chemical. There is evidence of increased qualitative susceptibility in the rat reproduction study, but the concern is low since: a. The effects in pups are well-characterized with a clear NOAEL; b. The pup effects occur at the same dose as maternal toxicity; and, c. The doses selected for various risk assessment scenarios are lower than the doses that caused off spring toxicity. Therefore, there are no residual uncertainties for pre-/post-natal toxicity in this study. 3. *Conclusion* . EPA has determined that reliable data show that it would be safe for infants and children to reduce the FQPA safety factor to 1X. That decision is based on the following findings: i. The toxicity database for etoxazole is complete for FQPA assessment. ii. There is no indication that etoxazole is a neurotoxic chemical and there is no need for a developmental neurotoxicity study or additional UFs to account for neurotoxicity. iii. No quantitative or qualitative evidence of increased susceptibility was seen following *in utero* exposure to rats or rabbits in developmental studies. Although there is qualitative evidence of increased susceptibility in the rat reproduction study, the Agency did not identify any residual uncertainties after establishing toxicity endpoints and traditional UFs to be used in the risk assessment of etoxazole. The degree of concern for prenatal and/or postnatal toxicity is low. iv. There are no residual uncertainties identified in the exposure databases. The chronic dietary food exposure assessment utilizes EPA-calculated residues of concern (parent and metabolites) for livestock commodities; tolerance-level residues for other commodities; and 100% crop treated
(CT)information for all proposed uses. By using these screening-level assumptions, actual exposures/risks will not be underestimated. The dietary drinking water assessment utilized modeling results which included conservative assumptions for the parent and all degradates of concern. Conservative assumptions were used in the water models. Therefore, the water exposure assessment will not underestimate the potential risks for infant and children. v. There are no registered or proposed residential uses for etoxazole. E. Aggregate Risks and Determination of Safety Safety is assessed for acute and chronic risks by comparing aggregate exposure to the pesticide to the aPAD and cPAD. The aPAD and cPAD are calculated by dividing the LOC by all applicable UFs. For linear cancer risks, EPA calculates the probability of additional cancer cases given aggregate exposure. Short-term, intermediate-term, and long-term risks are evaluated by comparing aggregate exposure to the LOC to ensure that the MOE called for by the product of all applicable UFs is not exceeded. 1. *Acute risk* . An acute aggregate risk assessment was not performed because an endpoint of concern attributable to a single oral dose was not selected for any population subgroup (including infants and children). No acute risk is expected from exposure to etoxazole. 2. *Chronic risk* . Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that exposure to etoxazole from food and water will utilize 8.3% of the cPAD for children 1-2 years old, the most highly exposed population subgroup. There are no residential uses for etoxazole that result in chronic residential exposure to etoxazole. Therefore, EPA does not expect the aggregate exposure to exceed 100% of the cPAD. 3. *Short-term and intermediate-term risk* . Short-term and intermediate-term aggregate exposure takes into account residential exposure plus chronic exposure to food and water (considered to be a background exposure level). Etoxazole is not registered or proposed for use on any sites that would result in residential exposure. Therefore, the aggregate risk is the sum of the risk from food and water, which do not exceed the Agency's LOC. 4. *Aggregate cancer risk for U.S. population* . A cancer aggregate risk assessment was not performed because etoxazole is not carcinogenic. Etoxazole is not expected to pose a cancer risk to humans. 5. *Determination of safety* . Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to etoxazole residues. IV. Other Considerations A. Analytical Enforcement Methodology Adequate enforcement methodology is available to enforce the tolerance expression. The following analytical enforcement methods have been validated: The gas chromatography/mass-selective detector (GC/MSD) method used to determine etoxazole residues in/on cherry matrices is a slightly modified version of a previously-validated method (Method RM-37HM). The validated limit of quantitation
(LOQ)was 0.0037 ppm and the limit of detection
(LOD)was 0.0012 ppm for etoxazole in/on cherries. The GC with nitrogen-phosphorus detector
(NPD)method used to determine etoxazole residues in/on hop matrices is a modified version of a previously-validated method (Method RM-37). The validated LOQ was 0.2 ppm and the LOD was 0.1 ppm for etoxazole in/on dried hop cones.The nitrogen-phosphorus specific flame-ionization detector
(NPD)method used to determine etoxazole residues in/on cantaloupe matrices is a slightly modified version of a previously-validated method (Method RM-37). The validated LOQ was 0.0046 ppm and the LOD was 0.0015 ppm for etoxazole in/on cantaloupe. The methods may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Road, Fort Meade, MD 20755-5350; telephone number:
(410)305-2905; e-mail address: *residuemethods@epa.gov* . B. International Residue Limits There are no established or proposed Codex, Canadian or Mexican maximum residue limits
(MRLs)for etoxazole. Therefore, tolerances are established for residues of the insecticide etoxazole, 2-(2,6-difluorophenyl)-4-[4-(1,1-dimethylethyl)-2-ethoxyphenyl]-4,5-dihydrooxazole, in or on cherry at 1.0 ppm, hop, dried cones at 7.0 ppm, and vegetable, cucurbit subgroup 9A at 0.20 ppm. VI. Statutory and Executive Order Reviews This final rule establishes a tolerance under section 408(d) of FFDCA in response to a petition submitted to the Agency. The Office of Management and Budget
(OMB)has exempted these types of actions from review under Executive Order 12866, entitled *Regulatory Planning and Review* (58 FR 51735, October 4, 1993). Because this rule has been exempted from review under Executive Order 12866, this rule is not subject to Executive Order 13211, *Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use* (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled *Protection of Children from Environmental Health Risks and Safety Risks* (62 FR 19885, April 23, 1997). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 *et seq* ., nor does it require any special considerations under Executive Order 12898, entitled *Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations* (59 FR 7629, February 16, 1994). Since tolerances and exemptions that are established on the basis of a petition under section 408(d) of FFDCA, such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act
(RFA)(5 U.S.C. 601 *et seq* .) do not apply. This final rule directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of FFDCA. As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled *Federalism* (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled *Consultation and Coordination with Indian Tribal Governments* (65 FR 67249, November 6, 2000) do not apply to this rule. In addition, This rule does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995
(UMRA)(Public Law 104-4). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). VII. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 *et seq* ., generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of this final rule in the **Federal Register** . This final rule is not a “major rule” as defined by 5 U.S.C. 804(2). List of Subjects in 40 CFR Part 180 Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements. Dated: December 14, 2007. Lois Rossi, Director, Registration Division, Office of Pesticide Programs. Therefore, 40 CFR chapter I is amended as follows: PART 180—[AMENDED] 1. The authority citation for part 180 continues to read as follows: Authority: 21 U.S.C. 321(q), 346a and 371. 2. Section 180.593 is amended by alphabetically adding the following commodities to the table in paragraph
(a)to read as follows: § 180.593 Etoxazole; tolerances for residues.
(a)* * * Commodity Parts per million * * * * * Cherry 1.0 * * * * * Hop, dried cones 7.0 * * * * * Vegetable, cucurbit subgroup 9A 0.20 [FR Doc. E7-24983 Filed 12-21-07; 8:45 am] BILLING CODE 6560-50-S ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 180 [EPA-HQ-OPP-2007-0545; FRL-8342-1] Aspergillus Flavus AF36 on Corn; Temporary Exemption From the Requirement of a Tolerance AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: This regulation establishes a temporary exemption from the requirement of a tolerance for residues of the *Aspergillus flavus* AF36 on corn when applied/used before corn tasseling occurs. Arizona Cotton Research and Protection Council submitted a petition to EPA under the Federal Food, Drug, and Cosmetic Act (FFDCA), as amended by the Food Quality Protection Act of 1996 (FQPA), requesting the temporary tolerance exemption. This regulation eliminates the need to establish a maximum permissible level for residues of *Aspergillus flavus* AF36. The temporary tolerance exemption expires on December 31, 2011. DATES: This regulation is effective December 26, 2007. Objections and requests for hearings must be received on or before February 25, 2008, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION ). ADDRESSES: EPA has established a docket for this action under docket identification
(ID)number EPA-HQ-OPP-2007-0545. To access the electronic docket, go to *http://www.regulations.gov* , select “Advanced Search,” then “Docket Search.” Insert the docket ID number where indicated and select the “Submit” button. Follow the instructions on the regulations.gov website to view the docket index or access available documents. All documents in the docket are listed in the docket index available in regulations.gov. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information
(CBI)or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available in the electronic docket at *http://www.regulations.gov* , or, if only available in hard copy, at the OPP Regulatory Public Docket in Rm. S-4400, One Potomac Yard (South Bldg.), 2777 S. Crystal Dr., Arlington, VA. The Docket Facility is open from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The Docket Facility telephone number is
(703)305-5805. FOR FURTHER INFORMATION CONTACT: Shanaz Bacchus, Biopesticides and Pollution Prevention Division (7511P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone number:
(703)308-8097; e-mail address: *bacchus.shanaz@epa.gov* . SUPPLEMENTARY INFORMATION: I. General Information A. Does this Action Apply to Me? You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected entities may include, but are not limited to: • Crop production (NAICS code 111). • Animal production (NAICS code 112). • Food manufacturing (NAICS code 311). • Pesticide manufacturing (NAICS code 32532). This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. To determine whether you or your business may be affected by this action, you should carefully examine the applicability provisions in section 5 of Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the regulations promulgated to carry out that provision of FIFRA (40 CFR part 172). If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT . B. How Can I Access Electronic Copies of this Document? In addition to accessing an electronic copy of this **Federal Register** document through the electronic docket at *http://www.regulations.gov* , you may access this “ **Federal Register** ” document electronically through the EPA Internet under the “ **Federal Register** ” listings at *http://www.epa.gov/fedrgstr* . You may also access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's pilot e-CFR site at *http://www.gpoaccess.gov/ecfr* . C. Can I File an Objection or Hearing Request? Under section 408(g) of FFDCA, as amended by FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2007-0545 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before February 25, 2008. In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket that is described in ADDRESSES . Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit your copies, identified by docket ID number EPA-HQ-OPP-2007-0545, by one of the following methods. • *Federal eRulemaking Portal: http://www.regulations.gov* . Follow the on-line instructions for submitting comments. • *Mail* : Office of Pesticide Programs
(OPP)Regulatory Public Docket (7502P), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001. • *Delivery* : OPP Regulatory Public Docket (7502P), Environmental Protection Agency, Rm. S-4400, One Potomac Yard (South Bldg.), 2777 S. Crystal Dr., Arlington, VA. Deliveries are only accepted during the Docket's normal hours of operation (8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays). Special arrangements should be made for deliveries of boxed information. The Docket Facility telephone number is
(703)305-5805. II. Background and Statutory Findings In the **Federal Register** of August 8, 2007 (72 FR 44521) (FRL-8139-7), EPA issued a notice pursuant to section 408(d)(3) of FFDCA, 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide tolerance petition (PP 7E7205) by Interregional Research Project Number 4 (IR-4), Rutgers University, 500 College Road East, Suite 201W, Princeton, NJ 08540 on behalf of the Arizona Cotton Research and Protection Council, 3721 E. Wier Ave., Phoenix, AZ 85040. The petition requested that 40 CFR 180.1206 be amended by establishing a temporary exemption from the requirement of a tolerance for residues of *Aspergillus flavus* AF36. This notice included a summary of the petition prepared by the petitioner IR-4, on behalf of the Arizona Cotton Research and Protection Council. There were no comments received in response to the notice of filing. Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” Section 408(c)(2)(A)(ii) of FFDCA defines “safe ” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Pursuant to section 408(c)(2)(B) of FFDCA, in establishing or maintaining in effect an exemption from the requirement of a tolerance, EPA must take into account the factors set forth in section 408(b)(2)(C) of FFDCA, which require EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue....” Additionally, section 408(b)(2)(D) of FFDCA requires that the Agency consider “available information concerning the cumulative effects of a particular pesticide's residues” and “other substances that have a common mechanism of toxicity.” EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. First, EPA determines the toxicity of pesticides. Second, EPA examines exposure to the pesticide through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings. III. Toxicological Profile Consistent with section 408(b)(2)(D) of FFDCA, EPA has reviewed the available scientific data and other relevant information in support of this action and considered its validity, completeness, and reliability and the relationship of this information to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. The toxicological profile of the unconditionally registered microbial pesticide *Aspergillus flavus* AF36 for use on cotton has been previously described in the final rule of the **Federal Register** of July 14, 2003 (68 FR 41535). Those health effects data were the basis for establishing the exemption from tolerance of *Aspergillus flavus* AF36, a non-aflatoxin-producing strain of *Aspergillus flavus* , on cotton in 40 CFR 180.1206. This exemption from tolerance was amended to include a temporary exemption from tolerance for use of *Aspergillus flavus* AF36 on pistachio on May 23, 2007 (72 FR 28868) (FRL-8129-4). The database supporting the current exemption from tolerance also supports the proposed temporary exemption of this active ingredient on corn. The pesticide is neither toxic nor infective via the oral and pulmonary routes. It was placed in Toxicity Category IV for acute oral effects. The Toxicity Category III designation for acute inhalation effects is based on the granular nature of the pesticide and the submitted pulmonary studies. This pesticide has been used for more than a decade in experimental laboratory and field trials and in agricultural practice on cotton in Arizona, California, and Texas without any reports of adverse dermal irritation or hypersensitivity effects. The petitioner, Arizona Cotton Research and Protection Council, now seeks to amend that exemption from tolerance of *Aspergillus flavus* AF36 on cotton, to include a temporary exemption from tolerance for residues of the fungal active ingredient on corn. An Experimental Use Permit (EUP), EPA Registration Number 71693-EUP-E, is proposed for three years to treat corn fields by ground or aerial application before corn tasseling occurs. The applicant also submitted additional data to support the EUP. This data included information from the public literature and from small field trials which indicate that there will not be any incremental harm from the use of the pesticide during the EUP. No further toxicological data are required for this temporary exemption from the requirement of a tolerance for *Aspergillus flavus* AF36 on corn. IV. Aggregate Exposures In examining aggregate exposure, section 408 of FFDCA directs EPA to consider available information concerning exposures from the pesticide residue in food and all other non-occupational exposures, including drinking water from ground water or surface water and exposure through pesticide use in gardens, lawns, or buildings (residential and other indoor uses). A. Dietary Exposure 1. *Food* . The aforesaid final rule for the exemption from tolerance for residues of *Aspergillus flavus* AF 36 on cotton considered all studies submitted by the applicant and found them to be acceptable. Peeling or shucking of corn, washing, cooking, and processing of treated commodities will mitigate against potential dietary exposure. 2. *Drinking water exposure* . Those data are also acceptable to demonstrate that the proposed use of *Aspergillus flavus* AF36 on corn will not harm the U.S adult, infant, and children population from dietary exposure, including food and drinking water. Percolation through the soil and municipal treatment of drinking water are expected to preclude exposure of the U.S. population, infants, and children to residues of the pesticide. B. Other Non-Occupational Exposure 1. *Dermal exposure* . Dermal non-occupational exposure is expected to be minimal to non-existent for the proposed use of *Aspergillus flavus* AF36 on corn. The pesticide is to be applied to agricultural sites not in the proximity of residential areas, schools, nursing homes, or daycares. 2. *Inhalation exposure* . For the same reasons non-occupational inhalation exposure to AF36 is expected to be minimal to non-existent. V. Cumulative Effects Another non-aflatoxin-producing strain of *Aspergillus flavus* , NRRL 21882, is undergoing research trials on corn in Texas, but not in the same areas to be treated during this EUP for AF36. Cumulative effects of these strains are not expected to exceed the risk cup for the registered *Aspergillus flavus* strains, AF36 and NRRL 21882. Furthermore, these strains are expected to decrease the presence of aflatoxin-producing colonies of the fungus on treated commodities and, thus, decrease the risks posed by the potent liver carcinogen, aflatoxin. VI. Determination of Safety for U.S. Population, Infants, and Children Based on the previously evaluated data, it is not necessary to use a safety factor to determine safety to children (see **Federal Register** of July 14, 2003 (68 FR 41535), as cited in Unit III.). VII. Other Considerations A. Endocrine Disruptors See **Federal Register** of July 14, 2003 (68 FR 41535), as cited in Unit III. B. Analytical Method(s) See **Federal Register** of July 14, 2003 (68 FR 41535), as cited in Unit III. C. Codex Maximum Residue Level There is no Codex Maximum Residue Level
(MRL)for residues of *Aspergillus flavus* AF36 on corn. VIII. Statutory and Executive Order Reviews This final rule establishes a tolerance under section 408(d) of FFDCA in response to a petition submitted to the Agency. The Office of Management and Budget
(OMB)has exempted these types of actions from review under Executive Order 12866, entitled *Regulatory Planning and Review* (58 FR 51735, October 4, 1993). Because this rule has been exempted from review under Executive Order 12866, this rule is not subject to Executive Order 13211, *Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use* (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled *Protection of Children from Environmental Health Risks and Safety Risks* (62 FR 19885, April 23, 1997). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 *et seq* ., nor does it require any special considerations under Executive Order 12898, entitled *Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations* (59 FR 7629, February 16, 1994). Since tolerances and exemptions that are established on the basis of a petition under section 408(d) of FFDCA, such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act
(RFA)(5 U.S.C. 601 *et seq* .) do not apply. This final rule directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of FFDCA. As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled *Federalism* (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled *Consultation and Coordination with Indian Tribal Governments* (65 FR 67249, November 6, 2000) do not apply to this rule. In addition, this rule does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995
(UMRA)(Public Law 104-4). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). IX. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 *et seq* ., generally provides that before a rule may take effect, the Agency promulgating the rule must submit a rule report to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of this final rule in the **Federal Register** . This final rule is not a “major rule” as defined by 5 U.S.C. 804(2). List of Subjects in 40 CFR Part 180 Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements. Dated: December 14, 2007. Janet L. Andersen, Director, Biopesticides and Pollution Prevention Division, Office of Pesticide Programs. Therefore, 40 CFR part 180 is amended as follows: PART 180—[AMENDED] 1. The authority citation for part 180 continues to read as follows: Authority: 21 U.S.C. 321(q), 346a and 371. 2. Section 180.1206 is amended by adding paragraph
(c)to read as follows: § 180.1206 Aspergillus flavus AF36; exemption from the requirement of a tolerance.
(c)*Apergillus flavus* AF36 is temporarily exempt from the requirement of a tolerance on corn when used in accordance with the Experimental Use Permit 71693-EUP-2. This temporary exemption from tolerance will expire December 31, 2011. [FR Doc. E7-24979 Filed 12-21-07; 8:45 am] BILLING CODE 6560-50-S DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 648 [Docket No. 070808450-7714-02] RIN 0648-AV83 Fisheries of the Northeastern United States; Northeast
(NE)Multispecies Fishery; Regulatory Amendment to Adopt Fishing Gear Standards for the NE Multispecies Regular B Day-At-Sea
(DAS)Program and the Eastern U.S./Canada Haddock Special Access Program
(SAP)AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Final rule. SUMMARY: NMFS amends the regulations governing minimum performance standards of fishing gear proposed for use in both the NE multispecies Regular B DAS Program and the Eastern U.S./Canada Haddock SAP. The New England Fishery Management Council (Council) may request the Administrator, Northeast Region, NMFS (Regional Administrator) approve additional gear types for use in these programs if they meet the standard. The purpose of this rule is to provide greater flexibility to fishermen participating in these programs. DATES: Effective January 25, 2008. FOR FURTHER INFORMATION CONTACT: Douglas Potts, Fishery Management Specialist,
(978)281-9341, FAX
(978)281-9135. SUPPLEMENTARY INFORMATION: Background On June 21, 2007, the Council approved a motion to recommend that the Regional Administrator approve gear performance standards for additional gear types in the Eastern U.S./Canada Haddock SAP, or additional trawl gear in the Regular B DAS Program. On October 15, 2007, NMFS published a proposed rule in the **Federal Register** (72 FR 58280) to amend the regulations on procedures and requirements to approve additional gear types for use in these two programs. Public comment was accepted through November 14, 2007, and two comments were received, as summarized below. The NE multispecies DAS effort control system and the history of these two programs were outlined in the proposed rule and are not repeated here. This final rule also corrects an inadvertent omission by reinserting relevant regulatory text specific to the U.S./Canada Management Area gear requirements that was inadvertently removed through the final rule implementing Framework Adjustment 42 to the Northeast Multispecies Fishery Management Plan. Additional details were provided in the proposed rule and are not repeated here. Comments and Responses NMFS received two comments during the comment period for the proposed rule. These comments were submitted by the Council and by the Cape Cod Commercial Hook Fisherman's Association (CCCHFA). The specific issues raised in these two comments are addressed below. *Comment 1* : The Council noted that the term “stock of concern” is only defined in the regulations as regulated groundfish stocks that are overfished or subject to overfishing and would not be applicable for non-regulated groundfish species. *Response* : The proposed rule language specific to “other stocks of concern” was based upon the language in the original Council motion. To avoid any uncertainty about the phrase “other stocks of concern,” the regulatory language has been further modified to define such other stocks as other non-groundfish stocks that are overfished or subject to overfishing identified by the Council. *Comment 2* : The Council commented that the proposed rule was unclear on whether the required reductions in catch were for all regulated groundfish or just stocks of concern. From Council discussions it is clear the intent was to limit the reductions to stocks that are overfished or are experiencing overfishing. *Response* : The regulatory language has been modified to clarify that reductions are specific to stocks that are overfished or experiencing overfishing. *Comment 3* : The CCCHFA commented that the NMFS Regional Administrator should have greater flexibility to add or remove gear from these programs based on how that gear is used in the fishery, and not solely on its performance in a controlled research setting. *Response* : To be consistent with the Council's request for gear standards, and the purpose of allowing certain types of gear in areas where bycatch of groundfish stocks of concern may occur, rigorous experimental comparison is necessary to thoroughly demonstrate that a new proposed gear is comparable to those currently approved. The potential for bycatch, and the impacts of environmental conditions, vessel size, or crew behavior are difficult to properly account for when monitoring the performance of gear in the commercial fishery. However, the performance of gear in the fishery will continue to be monitored and the use of inappropriate modification or misuse of gear to negate the required catch reduction may result in removal of gear from these programs. *Comment 4* : The CCCHFA stated that allowing the Council to specify which stocks are subject to the standard and which are not would reduce flexibility in these programs. *Response* : This provision was included in the regulatory text specifically to increase the flexibility for both the Council and the NMFS Regional Administrator. If the regulations specified which stocks had to show reduced catch and which could sustain increased mortality, it would require a regulatory change to modify the regulations if rebuilt stocks, or stocks in relatively good condition, for example, declined in the future. *Comment 5* : The CCCHFA expressed concern that experimental results may not translate well into gear performance in the fishery. Gear could be misused and either result in reduced harvest of the intended target species, or increased catch of bycatch species. *Response* : The proper use of any approved gear is a legitimate concern. To the extent practical, important aspects of approved gear will be specified in the regulations. As noted in the response to Comment 3, the performance of gear in the fishery will continue to be monitored and possession limits, for example, could be adjusted to encourage the proper use of specific gear. If it becomes evident that a gear is not working effectively in the field, it may be removed from these programs. Changes From the Proposed Rule NMFS has made changes to the proposed rule. In § 648.85, paragraphs (b)(6)(iv)(J)( *2* )( *i* ) and ( *ii* ) have been revised, in response to comment and in order to be consistent with Council intent, by specifying that required catch reductions apply to regulated species stocks of concern and non-groundfish stocks that are overfished or subject to overfishing. Classification The Administrator, Northeast Region, NMFS, determined that the final rule is necessary for the conservation and management of the NE multispecies fishery and that it is consistent with the Magnuson-Stevens Fishery Conservation and Management Act and other applicable laws. This final rule has been determined to be not significant for purposes of Executive Order 12866. The Regional Administrator has determined that this final rule is a minor technical addition, correction, or change to a management plan and is therefore categorically excluded from the requirement to prepare an Environmental Impact Statement or equivalent document under the National Environmental Policy Act. The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding this certification or on the economic impacts of the proposed rule. As a result, a regulatory flexibility analysis was not required and none was prepared. List of Subjects in 50 CFR Part 648 Fisheries, Fishing, Reporting and recordkeeping requirements. Dated: December 18, 2007 Samuel D. Rauch III, Deputy Assistant Administrator For Regulatory Programs, National Marine Fisheries Service. For the reasons stated in the preamble, 50 CFR part 648 is amended as follows: PART 648—FISHERIES OF THE NORTHEASTERN UNITED STATES 1. The authority citation for part 648 continues to read as follows: Authority: 16 U.S.C. 1801 *et seq.* 2. In § 648.14, paragraphs (a)(132) and (c)(81) are revised to read as follows: § 648.14 Prohibitions.
(a)* * *
(132)If fishing with trawl gear under a NE multispecies DAS in the Eastern U.S./Canada Area defined in § 648.85(a)(1)(ii), fail to fish with a haddock separator trawl or a flounder trawl net, as specified in § 648.85(a)(3)(iii); unless using other gear as authorized under § 648.85 (b)(6) or (b)(8).
(c)* * *
(81)If fishing with trawl gear in the Regular B DAS Program specified in § 648.85(b)(6), fail to use a haddock separator trawl as described under § 648.85(a)(3)(iii)(A); or other gear as authorized under § 648.85(b)(6)(iv)(J). 3. In § 648.85, paragraph (a)(3)(iii) introductory text is added, and paragraphs (b)(6)(iv)(J)( *2* ) and (b)(8)(v)(E)( *2* ) are revised to read as follows: § 648.85 Special management programs.
(a)* * *
(3)* * *
(iii)*Gear requirements* . NE multispecies vessels fishing with trawl gear in the Eastern U.S./Canada Area defined in paragraph (a)(1)(ii) of this section, unless otherwise provided in paragraphs (b)(6) and (b)(8) of this section, must fish with a haddock separator trawl or a flounder trawl net, as described in paragraphs (a)(3)(iii)(A) and
(B)of this section (both nets may be onboard the fishing vessel simultaneously). Gear other than the haddock separator trawl or the flounder trawl net as described in paragraph (a)(3)(iii) of this section, or gear authorized under paragraphs (b)(6) and (b)(8) of this section, may be on board the vessel during a trip to the Eastern U.S./Canada Area, provided the gear is stowed according to the regulations at § 648.23(b). The description of the haddock separator trawl and flounder trawl net in this paragraph (a)(3)(iii) may be further specified by the Regional Administrator through publication of such specifications in the **Federal Register** , consistent with the requirements of the Administrative Procedure Act.
(b)* * *
(6)* * *
(iv)* * *
(J)* * * ( *2* ) *Approval of additional gear* . At the request of the Council or the Council's Executive Committee, the Regional Administrator may authorize additional gear for use in the Regular B DAS Program, through notice consistent with the Administrative Procedure Act. The proposed gear must satisfy standards specified in paragraph (b)(6)(iv)(J)( *2* )( *i* ) or ( *ii* ) of this section in a completed experiment that has been reviewed according to the standards established by the Council's research policy before the gear can be considered and approved by the Regional Administrator. Comparisons of the criteria specified in this paragraph (b)(6)(iv)(J)( *2* ) will be made to an appropriately selected control gear. ( *i* ) The gear must show a statistically significant reduction in catch of at least 50 percent (by weight, on a trip-by-trip basis) of each regulated species stock of concern, unless otherwise allowed in this paragraph (b)(6)(iv)(J)( *2* )( *i* ), or other non-groundfish stocks that are overfished or subject to overfishing identified by the Council. This requirement does not apply to regulated species identified by the Council as not being subject to gear performance standards; or ( *ii* ) The catch of each regulated species stock of concern, unless otherwise allowed in this paragraph (b)(6)(iv)(J)( *2* )( *ii* ), or other non-groundfish stocks that are overfished or subject to overfishing identified by the Council, must be less than 5 percent of the total catch of regulated groundfish (by weight, on a trip-by-trip basis). This requirement does not apply to regulated species identified by the Council as not being subject to gear performance standards.
(8)* * *
(v)* * *
(E)* * * ( *2* ) *Approval of additional gear* . The Regional Administrator may authorize additional gear for use in the Eastern U.S./Canada Haddock SAP in accordance with the standards and requirements specified at § 648.85(b)(6)(iv)(J)( *2* ). [FR Doc. E7-24948 Filed 12-21-07; 8:45 am] BILLING CODE 3510-22-S 72 246 Wednesday, December 26, 2007 Proposed Rules DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-0371; Directorate Identifier 2007-NM-269-AD] RIN 2120-AA64 Airworthiness Directives; BAE Systems (Operations) Limited Model BAe 146 and Model Avro 146-RJ Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: We propose to adopt a new airworthiness directive
(AD)for the products listed above. This proposed AD results from service history of incidents and accidents involving transport category turbojet airplanes without leading edge high lift devices, that shows that even small amounts of frost, ice, snow, or slush on the wing leading edges or forward upper wing surfaces can cause an adverse change in the stall speeds, stall characteristics, and the protection provided by the stall protection system. This proposed AD requires revising the airplane flight manual to include a new cold weather operations limitation. We are proposing this AD to prevent possible loss of control on takeoff resulting from even small amounts of frost, ice, snow, or slush on the wing leading edges or forward upper wing surfaces. The proposed AD would require actions that are intended to address the unsafe condition. DATES: We must receive comments on this proposed AD by January 25, 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: Todd Thompson, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 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-2007-0371; Directorate Identifier 2007-NM-269-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 In February 2005, the FAA began a review of certain airplanes of concern—turbojet airplanes without leading edge high lift devices—to determine their sensitivity to takeoff in ice/frost conditions. We have taken a broad and proactive approach to this issue. This approach involved a review of the effect of small amounts of wing contamination on the takeoff safety margins of the existing fleet of turbojet transport category airplanes that do not have leading edge high lift devices. Included in this review were the BAE Systems (Operations) Limited Model BAe 146 and Model Avro 146-RJ airplanes. We have already taken airworthiness action against certain airplane types that have experienced accidents and incidents due to a contaminated wing. Although there have been no accidents or incidents related to wing contamination associated with the BAE Systems (Operations) Limited Model BAe 146 and Model Avro 146-RJ airplanes, the wings of these airplanes are similarly sensitive to small amounts of wing contamination. Small, almost visually imperceptible, amounts of ice on the wing's leading edge or upper surface can cause severe aerodynamic penalties and result in a loss of control of the airplane during takeoff. Despite operating rules, procedures, and training programs stressing the importance of a clean wing for takeoff, continued accidents and incidents show that airplanes are still departing with ice-contaminated wings. This proposed AD would require revising the airplane flight manual
(AFM)to include new limitations for cold weather operation. The actions in this proposed AD are intended to prevent possible loss of control on takeoff resulting from even small amounts of frost, ice, snow, or slush on the wing leading edges or forward upper wing surfaces. FAA's Determination and Requirements of the Proposed AD These airplanes are manufactured in the United Kingdom and are type certificated for operation in the United States under the provisions of section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and the applicable bilateral airworthiness agreement. We are proposing this AD because we evaluated all relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design. 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 1 work-hour per product to comply with 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 $80, or $80 per product. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **BAE Systems (Operations) Limited (Formerly British Aerospace Regional Aircraft):** Docket No. FAA-2007-0371; Directorate Identifier 2007-NM-269-AD. Comments Due Date
(a)We must receive comments by January 25, 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; and all Model Avro 146-RJ70A, 146-RJ85A, and 146-RJ100A airplanes, certificated in any category. Subject
(d)Air Transport Association
(ATA)of America Code 30: Ice and Rain Protection. Reason
(e)This AD results from service history of incidents and accidents involving transport category turbojet airplanes without leading edge high lift devices, that shows that even small amounts of frost, ice, snow, or slush on the wing leading edges or forward upper wing surfaces can cause an adverse change in the stall speeds, stall characteristics, and the protection provided by the stall protection system. We are issuing this AD to prevent possible loss of control on take-off resulting from even small amounts of frost, ice, snow, or slush on the wing leading edges or forward upper wing surfaces. Actions and Compliance
(f)Within 14 days after the effective date of this AD, revise the Limitations Section of the Airplane Flight Manual
(AFM)to include the following statement. This may be done by inserting a copy of this AD in the AFM. “1. Takeoff is prohibited with frost, ice, snow, or slush adhering to the wings, control surfaces, engine inlets, or other critical surfaces. 2. A visual and tactile (hand on surface) check of the wing leading edge and the wing upper surface must be performed to ensure the wing is free from frost, ice, snow, or slush when the outside air temperature is less than 42 degrees F (6 degrees C), or if it cannot be ascertained that the wing fuel temperature is above 32 degrees F (0 degrees C); and a. There is visible moisture (rain, drizzle, sleet, snow, fog, etc.) present; or b. Water is present on the wing; or c. The difference between the dew point and the outside air temperature is 5 degrees F (3 degrees C) or less; or d. The atmospheric conditions have been conducive to frost formation.” Note 1: When a statement identical to that in paragraph
(f)of this AD has been included in the general revisions of the AFM, the general revisions may be inserted into the AFM, and the copy of this AD may be removed from the AFM. Other FAA AD Provisions
(g)The following provisions also apply to this AD:
(1)*Alternative Methods of Compliance (AMOCs):* The Manager, International Branch, Transport Airplane Directorate, ANM-116, 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, Transport Airplane Directorate, FAA, 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)None. Issued in Renton, Washington, on December 14, 2007. Michael J. Kaszycki, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-24922 Filed 12-21-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG-104713-07] RIN 1545-BG39 Calculating and Apportioning the Section 11(b)(1) Additional Tax Under Section 1561 for Controlled Groups AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking by cross-reference to temporary regulations. SUMMARY: In the Rules and Regulations section of this issue of the **Federal Register** , the IRS is issuing temporary regulations that affect component members of a controlled group of corporations and consolidated groups filing life-nonlife Federal income tax returns. These temporary regulations provide guidance for calculating and apportioning between component members any amount of additional tax and any reduction in the amount exempted from the alternative minimum tax. These temporary regulations also update and clarify the allocation of tax-benefit items in the case in which a component member has a short taxable year not including a December 31st date. Finally, these temporary regulations provide explanations of two concepts: A group's testing date and a member's testing period for use in determining which members of the group and which taxable years of those members are subject to the controlled group rules. The text of those regulations also serves as the text of these proposed regulations. DATES: Written or electronic comments and a request for a public hearing must be received by March 25, 2008. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-104713-07), room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-104713-07), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC, or sent electronically via the Federal eRulemaking Portal at *http://www.regulations.gov* (IRS REG-104713-07). FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulation, Grid Glyer,
(202)622-7930, concerning submissions of comments and requests for public hearings, Richard A. Hurst,
(202)622-7180 (not toll-free numbers). SUPPLEMENTARY INFORMATION: Background and Explanation of Provisions Temporary regulations in the Rules and Regulations section of this issue of the **Federal Register** amend 26 CFR part 1 to add §§ 1.1502-47T and 1.1561-0T, remove § 1.1561-2, and amend §§ 1.1561-2T and 1.1563-1T. The text of those regulations also serves as the text of these proposed regulations. The preamble to the final and temporary regulations explains these proposed regulations. Special Analyses It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. With respect to § 1.1502-47, it is hereby certified that these regulations will not have a significant economic impact on a substantial number of small entities. This certification is based on the fact that these regulations primarily affect affiliated groups of corporations that have elected to file consolidated returns, which tend to be larger businesses. Further, these regulations do not require any additional collection of information under § 1.1502-47 because these regulations simply add a section that had been inadvertently removed from the Code of Federal Regulations. Therefore, a regulatory flexibility analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business. Comments and Requests for a Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (a signed original and eight
(8)copies) or electronic comments that are submitted timely to the IRS. The IRS and the Treasury Department specifically request comments on the clarity of the proposed regulations and how they can be made easier to understand. All comments will be available for public inspection and copying. A public hearing may be scheduled if requested in writing by any person that timely submits written or electronic comments. If a public hearing is scheduled, notice of the date, time and place for the public hearing will be published in the **Federal Register** . Drafting Information The principal author of these regulations is Grid Glyer of the Office of Associate Chief Counsel (Corporate). Other personnel from the Treasury Department and the IRS participated in their development. List of Subjects in 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. Proposed Amendments to the Regulations Accordingly, 26 CFR part 1 is proposed to be amended as follows: PART 1—INCOME TAXES **Paragraph 1.** The authority citation for part 1 continues to read, in part, as follows: Authority: 26 U.S.C. 7805 * * * **Par. 2.** Section 1.1561-0 is added to read as follows: § 1.1561-0 Table of contents. [The text of the proposed § 1.1561-0 is the same as the text for § 1.1561-0T published elsewhere in this issue of the **Federal Register** ]. **Par. 3.** Section 1.1561-2 is added to read as follows: § 1.1561-2 Special rules for allocating reductions to certain section 1561(a) tax-benefit items. [The text of the proposed § 1.1561-2 is the same as the text for § 1.1561-2T(a) through (f)(1) published elsewhere in this issue of the **Federal Register** ]. **Par. 4.** Section 1.1563-1 is amended to read as follows: § 1.1563-1 Definition of controlled group of corporations and component members and related concepts. [The text of the proposed § 1.1563-1 is the same as the text for § 1.1563-1T published elsewhere in this issue of the **Federal Register** ]. Linda E. Stiff, Deputy Commissioner for Services and Enforcement. [FR Doc. E7-24886 Filed 12-21-07; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF LABOR Occupational Safety and Health Administration 29 CFR Part 1910 [Docket No. OSHA-2007-0006] RIN 1218-AC29 Abbreviated Bitrex® Qualitative Fit-Testing Protocol AGENCY: Occupational Safety and Health Administration (OSHA); Labor. ACTION: Notice of proposed rulemaking and request for comments. SUMMARY: OSHA is proposing to include the protocol for the abbreviated Bitrex® qualitative fit test (“ABQLFT”) in its Respiratory Protection Standard; the proposed protocol would apply to employers in general industry, shipyard employment, and the construction industry. The proposed ABQLFT protocol consists of seven exercises described in the existing Bitrex® qualitative fit-testing protocol specified in OSHA's Respiratory Protection Standard. However, each of the exercises in the proposed ABQLFT protocol lasts 15 seconds, compared to 60 seconds for exercises in the existing Bitrex® qualitative fit-testing protocol. This proposal describes the test sensitivity, predictive value of a pass, test specificity, and predictive value of a fail for the ABQLFT protocol, and requests the public to comment on whether this evidence supports OSHA including the ABQLFT in the Respiratory Protection Standard. DATES: Comments to this proposal, including comments to the information-collection (paperwork) determination described under the SUPPLEMENTARY INFORMATION section, must be submitted (postmarked, sent, or received) by February 25, 2008. ADDRESSES: Comments may be submitted as follows: • *Electronic:* Comments may be submitted electronically to *http://www.regulations.gov* , which is the Federal eRulemaking portal. Follow the instructions online for submitting comments. • *Facsimile:* OSHA allows facsimile transmission of comments that are 10 pages or fewer in length (including attachments). Send these comments to the OSHA Docket Office at
(202)693-1648; hard copies of these comments are not required. Instead of transmitting facsimile copies of attachments that supplement their comments (e.g., studies, journal articles), commenters may submit these attachments, in triplicate hard copy, to the OSHA Docket Office, Technical Data Center, Room N-2625, OSHA, U.S. Department of Labor, 200 Constitution Ave., NW., Washington, DC 20210. These attachments must clearly identify the sender's name, date, subject, and docket number (i.e., OSHA-2007-0006) so that the Agency can attach them to the appropriate comments. • *Regular mail, express delivery, hand (courier) delivery, and messenger service:* Submit three copies of comments and any additional material (e.g., studies, journal articles) to the OSHA Docket Office, Docket No. OSHA-2007-0006 or RIN No. 1218-AC29, Technical Data Center, Room N-2625, OSHA, Department of Labor, 200 Constitution Ave., NW., Washington, DC 20210; *telephone:*
(202)693-2350. (OSHA's TTY number is
(877)889-5627.) Please contact the OSHA Docket Office for information about security procedures concerning delivery of materials by express delivery, hand delivery, and messenger service. The hours of operation for the OSHA Docket Office are 8:15 a.m. to 4:45 p.m., e.t. • *Instructions:* All submissions must include the Agency name and the OSHA docket number (i.e., OSHA-2007-0006). Comments and other material, including any personal information, are placed in the public docket without revision, and will be available online at *http://www.regulations.gov* . Therefore, the Agency cautions commenters about submitting statements they do not want made available to the public, or submitting comments that contain personal information (either about themselves or others) such as social security numbers, birth dates, and medical data. • *Docket:* To read or download comments or other material in the docket, go to *http://www.regulations.gov* or to the OSHA Docket Office at the address above. Documents in the docket are listed in the *http://www.regulations.gov* index; however, some information (e.g., copyrighted material) is not publicly available to read or download through this Web site. All submissions, including copyrighted material, are available for inspection and copying at the OSHA Docket Office. Contact the OSHA Docket Office for assistance in locating docket submissions. FOR FURTHER INFORMATION CONTACT: For general information and press inquiries, contact Mr. Kevin Ropp, Director, Office of Communications, OSHA, U.S. Department of Labor, Room N-3637, 200 Constitution Avenue, NW., Washington, DC 20210; telephone:
(202)693-1999; facsimile:
(202)693-1634. For technical inquiries, contact Mr. John E. Steelnack, Directorate of Standards and Guidance, Room N-3718, OSHA, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210; *telephone:*
(202)693-2289; *facsimile:*
(202)693-1678. Copies of this **Federal Register** notice are available from the OSHA Office of Publications, Room N-3101, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington DC 20210; *telephone:*
(202)693-1888. Electronic copies of this **Federal Register** notice, as well as news releases and other relevant documents, are available at OSHA's Web page at *http://www.osha.gov* . SUPPLEMENTARY INFORMATION: Table of Contents I. Background II. Summary and Explanation of the Proposal A. Introduction B. Summary of the Peer-Reviewed Article C. Conclusions D. Issues for Public Comment III. Procedural Determinations A. Legal Considerations B. Preliminary Economic Analysis and Regulatory Flexibility Certification C. Paperwork Reduction Act D. Federalism E. State-Plan States F. Unfunded Mandates Reform Act G. Applicability of Existing Consensus Standards H. Review of the Proposed Standard by the Advisory Committee for Construction Safety and Health (ACCSH) List of Subjects Authority and Signature IV. Proposed Amendment to the Standard I. Background Appendix A of OSHA's Respiratory Protection Standard at 29 CFR 1910.134 currently includes four qualitative fit-testing protocols using the following challenge agents: isoamyl acetate; saccharin-solution aerosol; Bitrex® (denatonium benzoate) aerosol in solution; and irritant smoke (stannic chloride). Appendix A of the Respiratory Protection Standard also specifies the procedure for adding new test protocols to this standard. The criteria for determining whether OSHA must publish a fit-testing protocol for notice-and-comment rulemaking under Section 6(b)(7) of the Occupational Safety and Health Act of 1970 (29 U.S.C. 655) include:
(1)A test report prepared by an independent government research laboratory (e.g., Lawrence Livermore National Laboratory, Los Alamos National Laboratory, the National Institute for Standards and Technology) stating that the laboratory tested the protocol and found it to be accurate and reliable; or
(2)an article published in a peer-reviewed industrial-hygiene journal describing the protocol and explaining how the test data support the protocol's accuracy and reliability. II. Summary and Explanation of the Proposal A. Introduction In the letter submitting the abbreviated Bitrex® qualitative fit-testing (“ABQLFT”) protocol for review under the provisions of Appendix A of OSHA's Respiratory Protection Standard (Ex. OSHA-2007-0006-0002), Dr. Michael L. Runge of the 3M Company included a copy of a peer-reviewed article from an industrial-hygiene journal describing the accuracy and reliability of the proposed ABQLFT protocol (Ex. OSHA-2007-0006-0003). This article also described in detail the equipment and procedures required to administer the proposed ABQLFT protocol. According to this description, the proposed protocol is a variation of the existing Bitrex® qualitative fit-testing protocol developed by the 3M Company in the early 1990s, which OSHA approved for inclusion in the final Respiratory Protection Standard. The proposed ABQLFT protocol uses the same fit-testing requirements and instrumentation specified for the existing Bitrex® qualitative fit-testing protocol in paragraphs
(a)and
(b)of Part I.B.4 of Appendix A of the Respiratory Protection Standard, with the following two exceptions: • Exercise times are reduced from 60 seconds to 15 seconds; and • The proposed ABQLFT protocol is used only with test subjects who can taste the Bitrex® screening solution within the first 10 squeezes of the nebulizer bulb (referred to as “Level 1 sensitivity”). B. Summary of the Peer-Reviewed Article The peer-reviewed article, entitled “Development of an Abbreviated Qualitative Fit Test Using Bitter Aerosol,” appeared in the Fall/Winter 2003 issue of the Journal of the International Society for Respiratory Protection (Ex. OSHA-2007-0006-0003). The authors of this study were T.J. Nelson of NIHS, Inc., and L.L. Janssen, M.D. Luinenburg, and H.E. Mullins of the 3M Company; the 3M Company supported the study. This article describes a study that determined whether performing a fit test involving seven exercises lasting 15 seconds each while exposed to Bitrex® (referred to as the abbreviated Bitrex® qualitative fit test or “ABQLFT”) yielded fit-testing results similar to results obtained with a generated-aerosol (i.e., corn oil) quantitative fit test (“GAQNFT”) using one-minute exercises (i.e., the GAQNFT was the criterion measure or “gold standard”). The study involved 43 experienced respirator users, 20 females and 23 males. The test subjects followed the existing Bitrex® qualitative fit-testing protocol in Appendix A of OSHA's Respiratory Protection Standard except that they performed each of the fit-testing exercises for 15 seconds (instead of 60 seconds) while wearing a NIOSH-certified elastomeric half-mask respirator equipped with P100 filters. The authors selected the best fitting respirator for each test subject from among four models, each available in three sizes; some test subjects used more than one model during fit testing. In addition, the authors induced poor respirator fits by assigning a respirator to test subjects that was one or two sizes too small or too large as determined by the Los Alamos National Laboratory panel-grid size and observation of the test subjects' facial characteristics. Test subjects could adjust the respirator facepiece for comfort, but they did not perform user seal checks. In conducting the study, the authors used the recommendations for evaluating new fit-test methods specified by Annex A2 of ANSI Z88.10-2001, including sequencing the ABQLFT and GAQNFT in random order without disturbing facepiece fit. The authors used fit-test sample adaptors or respirators with fixed probes to collect samples inside the respirator. The sample point inside the respirator was located between the nose and the mouth. For both fit tests, the authors had the test subjects perform seven of the eight exercises listed in Part I.A.14 of Appendix A of OSHA's Respiratory Protection Standard, which included: normal breathing, deep breathing, turning the head side to side, moving the head up and down, reading a passage, bending over, and normal breathing. 1 For the GAQNFT, the authors performed particle counts at one-second intervals inside a test chamber for 15-30 seconds before and after fit testing, and inside the respirator for the 60-second duration of each exercise. 1 The test subjects did not perform the grimace exercise. The 43 test subjects used in the study had Level 1 sensitivity to Bitrex® because they were able to taste the Bitrex® aerosol within 10 squeezes of the nebulizer bulb. Subjects having Level 2 or 3 sensitivity to Bitrex® were excluded from further participation in thestudy because the nebulizer could not be replenished for additional taste testing within the 15 seconds allotted to perform each fit-testing exercise. After the test subjects passed a Bitrex® sensitivity-screening test, the authors administered the ABQLFT using the procedures and techniques specified for the existing Bitrex® qualitative fit-testing protocol in Part I.B.14 of Appendix A of OSHA's Respiratory Protection Standard, and determined the fit factor using the particle count for the 15-second duration of each exercise. The authors required a fit factor of 100 to pass a fit test, which served as the basis for determining the following statistics for the ABQLFT: test sensitivity; predictive value of a pass; test specificity; and predictive value of a fail. In calculating these statistics, the authors adopted the variables defined by ANSI Z88.10-2001, in which: A = false positives (passed the fit test with a fit factor < 100); B = true positives (passed the fit test with a fit factor > 100); C = true negatives (failed the fit test with a fit factor ≥ 100); and D = false negatives (failed the fit test with a fit factor ≥ 100). Using these variables, ANSI Z88.10-2001 specifies the formula and recommended value (“RV”) for each statistic as follows: Test sensitivity = C / (A + C), RV > 0.95; predictive value of a pass = B / (A + B), RV > 0.95; test specificity = B / (B + D), RV > 0.50; and predictive value of a fail = C / (C + D), RV > 0.50. Using the GAQNFT as the criterion measure, the variables for the ABQLFT had the following values: A = 4; B = 95; C = 48; and D = 20. The statistics calculated for the ABQLFT from these values were: test sensitivity = 0.92; predictive value of a pass = 0.96; test specificity = 0.83; and predictive value of a fail = 0.71. Therefore, every statistic for the ABQLFT, except test sensitivity, attained a value in excess of the ANSI Z88.10-2001 recommended value. The test-sensitivity value of 0.92 for the ABQLFT fell below the ANSI recommended value of 0.95. The authors state that this slight difference represents a single false positive value for the ABQLFT (i.e., failed the GAQNFT but passed the ABQLFT). However, an additional peer-reviewed article submitted by Dr. Runge of the 3M Company suggests an alternative approach to examining these test-sensitivity values (see Ex. OSHA-2007-0006-0004). This article, entitled “Recommendations for the Acceptance Criteria for New Fit Test Methods” and published in the Spring/Summer 2004 issue of the *Journal of the International Society for Respiratory Protection* , describes an analytical study conducted by T.J. Nelson of NIHS, Inc. and H. Mullins of the 3M Company, and supported by the 3M Company. In this study, the authors performed a binary logistic-regression analysis on pass-fail fit-testing data from published studies involving two quantitative, and two qualitative, fit tests. The authors justify using the binary logistic-regression analysis for this purpose as follows: When a simple sensitivity test is used to describe a new test, the result can be affected by the distribution of the data. In several cases using the theoretical distributions described in this paper, the outcome of a sensitivity test for the Bitrex and Ambient Particle Counter fit tests could have failed to meet the ANSI Z88.10 sensitivity requirement. The method used to determine acceptability should be independent of specific data collected. (See Ex. OSHA-2007-0006-0004, p. 8.) The results of the binary logistic-regression analysis performed on the ABQLFT data showed that the ABQLFT had a 0.20 probability of passing a respirator user with a fit factor of 50 and a 0.33 probability of passing a respirator user with a fit factor of 100. Figure 3 of the article compares the binary logistic-regression analysis results of test-sensitivity values obtained for a popular quantitative fit test and the existing 60-second Bitrex® qualitative fit test. The authors conclude that the analysis demonstrates that the distribution of fit-testing data affected the test-sensitivity values derived using the ANSI Z88.10-2001 test-sensitivity calculations. Based on this analysis, the authors assert that “a sensitivity calculation may not be the best indicator of fit test method performance. The binary logistic regression analysis shows that the result of the 15 second exercise time test is very similar to the ambient aerosol and 60 second bitter aerosol tests” (Ex. OSHA-2007-0006-0003, p. 108). In summarizing the study's results, the authors state that “[t]he 15 second bitter aerosol protocol sufficiently screens for adequate respirator fit in subjects with Level 1 Bitrex taste sensitivity.” C. Conclusions OSHA believes that the information submitted by Dr. Runge in support of the proposed ABQLFT protocol meets the criteria for proposed fit-testing protocols established by the Agency in Part II of Appendix A of its Respiratory Protection Standard. Therefore, the Agency concludes that the proposed ABQLFT protocol warrants notice-and-comment rulemaking under Section 6(b)(7) of the OSH Act, and is initiating this rulemaking to determine whether to approve the proposed protocol for inclusion in Part I of Appendix A of its Respiratory Protection Standard. An important difference between the proposed ABQLFT protocol and the existing Bitrex® qualitative fit-testing protocol specified currently in Part I.B.4 of Appendix A of the Respiratory Protection Standard is the duration of the exercises used during fit testing. The Agency is taking comments on whether to add the ABQLFT protocol to Part I.B.4 of Appendix A (see section IV, “Proposed Amendment to the Standard,” below); in addition to decreasing exercise durations from 60 seconds to 15 seconds each, the new regulatory text would limit use of the proposed ABQLFT to respirator users who demonstrate Level 1 sensitivity to Bitrex®. If approved, the proposed ABQLFT protocol would be an alternative to the existing qualitative fit-testing protocols already listed in the Part I of Appendix A of the Respiratory Protection Standard; employers would be free to select this alternative or to continue using any of the other protocols currently listed in the Appendix. D. Issues for Public Comment OSHA invites comments and data from the public regarding the accuracy and reliability of the proposed ABQLFT protocol, its effectiveness in detecting respirator leakage, and its usefulness in selecting respirators that will protect employees from airborne contaminants in the workplace. Specifically, the Agency invites public comment on the following issues: • Were the studies described in the submitted articles well controlled, and conducted according to accepted experimental design practices and principles? • Were the results of the studies described in the submitted articles properly, fully, and fairly presented and interpreted? • Will the proposed ABQLFT protocol generate reproducible fit-testing results, and what additional experiments or analyses of existing data are necessary to answer this question? • Will the proposed ABQLFT protocol reliably identify respirators with unacceptable fit as effectively as the qualitative fit-testing protocols, including the existing Bitrex® qualitative fit-testing protocol, already listed in Part I.B of Appendix A of the Respiratory Protection Standard? • What is the significance of the test-sensitivity value of 0.92 obtained for the ABQLFT relative to the test-sensitivity value of 0.95 recommended by ANSI Z88.10-2001, and does the authors' assertion that “a sensitivity calculation may not be the best indicator of fit test method performance” adequately account for the lower test-sensitivity value? • What is the significance of limiting the ABQLT to respirator users who demonstrate Level 1 sensitivity to Bitrex®? III. Procedural Determinations A. Legal Considerations The purpose of the Occupational Safety and Health Act of 1970 (“OSH Act”; 29 U.S.C. 651 *et seq.* ) is “to assure so far as possible every working man and woman in the nation safe and healthful working conditions and to preserve our human resources.” (29 U.S.C. 651(b).) To achieve this goal, Congress authorized the Secretary of Labor to promulgate and enforce occupational safety and health standards. (29 U.S.C. 655(b) and 654(b).) A safety or health standard is a standard that “requires conditions, or the adoption or use of one or more practices, means, methods, operations, or processes, reasonably necessary or appropriate to provide safe or healthful employment or places of employment.” (29 U.S.C. 652(8).) A standard is reasonably necessary or appropriate within the meaning of Section 652(8) of the OSH Act when a significant risk of material harm exists in the workplace, and the standard will substantially reduce or eliminate that workplace risk. Employers covered by this proposal already must comply with the fit-testing requirements specified in paragraph
(f)of OSHA's Respiratory Protection Standard at 29 CFR 1910.134. Accordingly, these provisions currently are protecting their employees from the significant risk that results from poorly fitting respirators. For this proposal, the Agency preliminarily determined that the proposed ABQLFT fit-testing protocol provides employees with protection that is comparable to the protection afforded to them by the existing Bitrex® qualitative fit-testing provisions. In this regard, the proposal is not expected to replace existing fit-testing protocols, but instead would be an alternative to them. Therefore, OSHA preliminarily finds that the proposal would not directly increase or decrease the protection afforded to employees, nor would it increase employers' compliance burdens. As demonstrated in the following section, the proposal may reduce employers' compliance burdens by decreasing the time required to fit test respirators for employee use. Accordingly, OSHA concludes that it is unnecessary to determine significant risk or the extent to which this proposal would reduce that risk, as typically would be required by *Industrial Union Department, AFL-CIO* v. *American Petroleum Institute* , 448 U.S. 607 (1980). B. Preliminary Economic Analysis and Regulatory Flexibility Certification The proposal is not economically significant within the context of Executive Order (“E.O.”) 12866 (58 FR 51735). Additionally, the proposal is not a “major rule” under Section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996 (“SBREFA”; 5 U.S.C. 804). The proposal would impose no additional costs on any private- or public-sector entity, and does not meet any of the criteria for an economically significant or major rule specified by E.O. 12866 or other relevant statutes. The proposal offers employers an additional option to fit test their employees for respirator use. In addition to the existing Bitrex® qualitative fit-testing protocol, which would continue to be an option, the Agency would add the ABQLFT protocol as a supplemental option if OSHA approves it as a result of this proposed rulemaking. According to a recent National Institute for Occupational Safety and Health-Bureau of Labor Statistics survey of respirator use, approximately 25,000 establishments currently use the existing Bitrex® qualitative fit-testing protocol out of nearly 282,000 establishments requiring respirator use (Ex. 6-3, Docket H-049C). Under this proposal, employers would have a choice between any of the existing fit-testing protocols, including the existing Bitrex® qualitative fit-testing protocol consisting of exercises lasting one minute each, or the new ABQLFT protocol. By providing regulatory flexibility to these employers, the proposal may reduce their costs by decreasing fit-testing time. In this regard, OSHA assumes that the proposed ABQLFT protocol would be adopted by some employers who use the existing Bitrex® qualitative fit-testing protocol for those employees with Level 1 sensitivity. These employers would adopt the proposed ABQLFT protocol because it consists of exercises lasting a shorter duration than the exercises in the existing Bitrex® qualitative fit-testing protocol, thereby decreasing the time and cost required for fit testing their employees. However, the Agency believes that the proposed protocol is unlikely to be adopted by employers who currently use the generated-aerosol, ambient-aerosol condensation-nuclei counter, or contingent-negative pressure quantitative fit-testing systems because of the significant equipment and training investment they already have made to administer these fit tests. Based on the above discussion, the Agency preliminarily concludes that this proposed rulemaking would impose no additional costs on employers, thereby eliminating the need for a preliminary economic analysis. Moreover, OSHA certifies that the proposal would not have a significant impact on a substantial number of small entities, and that the Agency does not have to prepare an initial regulatory flexibility analysis for this rulemaking under the SBREFA (5 U.S.C. 601 *et seq.* ). C. Paperwork Reduction Act After thoroughly analyzing the proposed fit-testing provisions in terms of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* and 5 CFR part 1320), OSHA believes that these provisions would not add to the existing collection-of-information (i.e., paperwork) requirements regarding fit testing employees for respirator use. The paperwork requirement specified in paragraph (m)(2) of OSHA's Respiratory Protection Standard at 29 CFR 1910.134 specifies that employers must document and maintain the following information on qualitative fit tests administered to employees: The name or identification of the employee tested; the type of fit test performed; the specific make, model, style, and size of respirator tested; the date of the test; and the test results. The employer must maintain this record until the next fit test is administered. However, this paperwork requirement would remain the same whether employers currently use the other fit-testing protocols already listed in Part I of Appendix A of the Respiratory Protection Standard, or implement the proposed fit-testing protocol instead. Therefore, using the proposed fit-testing protocol in the context of the existing fit-testing protocols would not involve an additional paperwork-burden determination by OSHA because it already accounts for this burden under the paperwork analysis for the Respiratory Protection Standard (OMB Control Number 1218-0099). Members of the public may send comments on this paperwork analysis to: Office of Information and Regulatory Affairs (Attention: Desk Officer for OSHA), Office of Management and Budget, Room 10235, 725 17th Street, NW., Washington, DC 20503. The Agency also encourages commenters to submit a copy of their comments on this paperwork analysis to OSHA, along with their other comments on the proposed rule. D. Federalism The Agency reviewed the proposal according to the most recent Executive Order (“E.O.”) on Federalism (E.O. 13132; 64 FR 43225), which requires that Federal agencies, to the extent possible, refrain from limiting State policy options, consult with States before taking actions that restrict their policy options, and take such actions only when clear constitutional authority exists and the problem is national in scope. E.O. 13132 allows Federal agencies to preempt State law only with the expressed consent of Congress. In such cases, Federal agencies must limit preemption of State law to the extent possible. Under Section 18 of the Occupational Safety and Health Act of 1970 (“OSH Act”; 29 U.S.C. 651 *et seq.* ), Congress expressly authorizes OSHA to preempt State occupational safety and health standards. Under the OSH Act, a State can avoid such preemption only when it has an OSHA-approved occupational safety and health plan ( *i.e.* , is a “State-plan State”; see 29 U.S.C. 667). Occupational safety and health standards developed by a State-Plan State must be at least as effective in providing safe and healthful employment and places of employment as the Federal standards. Subject to the limitations specified by the OSH Act at 29 U.S.C. 667, State-Plan States are free to develop and enforce their own requirements for safety and health standards under State law. This proposed rulemaking complies with E.O. 13132. In States without OSHA-approved State Plans, Congress expressly provides for Agency standards to preempt State job safety and health rules in areas addressed by the Federal standards; in these States, the proposed rule would limit State policy options in the same manner as every OSHA standard. Therefore, with respect to States that do not have OSHA-approved plans, the Agency concludes that this proposal conforms to the preemption provisions of the OSH Act. Additionally, Section 18 of the OSH Act prohibits States without approved plans from issuing citations for violations of OSHA standards; the Agency finds that the proposed rulemaking does not expand this limitation. OSHA has authority under E.O. 13132 to propose the use of the ABQLFT protocol under its Respiratory Protection Standard at 29 CFR 1910.134 because the problems addressed by these fit-testing requirements are national in scope. In this regard, the proposal offers hundreds of thousands of employers across the nation an opportunity to use an additional protocol to assess respirator fit among their employees. Therefore, the proposal would provide employers in every State with an alternative means of complying with the fit-testing requirements specified in paragraph
(f)of OSHA's Respiratory Protection Standard. Should the Agency adopt a proposed standard in a final rulemaking, Section 18(c)(2) of the OSH Act (29 U.S.C. 667(c)(2)) requires State-plan States to adopt the same standard, or develop an alternative that is at least as effective as the OSHA standard. However, the new fit-testing protocol proposed in this rulemaking would only provide employers with an alternative to the existing requirements for fit-testing protocols specified in the Respiratory Protection Standard; therefore, the alternative is not, itself, a mandatory standard. Accordingly, States with OSHA-approved State Plans would not be obligated to adopt the final provisions that may result from this rulemaking. Nevertheless, OSHA strongly encourages them to adopt the final provisions to provide compliance options to employers in their States. E. State-Plan States When Federal OSHA promulgates a new standard or imposes additional or more stringent requirements than an existing standard, the 26 States and U.S. Territories with their own OSHA-approved occupational safety and health plans ( *i.e.* , “State-Plan States”) must revise their standards to reflect the new OSHA standard or amendment, or show the Agency why such action is unnecessary ( *e.g.* , because an existing State standard covering this area already is at least as effective in protecting employees as the new Federal standard or amendment (29 CFR 1953.5(a))). The State standard must be
(1)at least as effective as the final Federal rule in protecting employees,
(2)applicable to both the private and public ( *i.e.* , State and local government employees) sectors, and
(3)completed within six months of the publication date of the final Federal rule. When OSHA promulgates a new standard or amendment that does not impose additional or more stringent requirements than an existing standard, State-Plan States are not required to revise their standards, although the Agency may encourage them to do so. Accordingly, the Agency strongly encourages the 26 States and U.S. Territories with their own OSHA-approved occupational safety and health plans to revise their current Respiratory Protection Standard should the Agency adopt the proposed fit-testing protocol based on this rulemaking. OSHA preliminarily concludes that such a revision would provide employers in the State-plan States with any economic benefits that may accrue from such enactment, while protecting the safety and health of employees who use respirators against hazardous airborne substances in the workplace at least as well as the existing Bitrex® qualitative fit-test protocol. These States and U.S. Territories are: Alaska, Arizona, California, Hawaii, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, Puerto Rico, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, and Wyoming. Connecticut, New Jersey, New York, and the Virgin Islands have OSHA-approved State Plans that apply to State and local government employees only. F. Unfunded Mandates Reform Act OSHA reviewed the proposal according to the Unfunded Mandates Reform Act of 1995 (“UMRA”; 2 U.S.C. 1501 *et seq.* ) and Executive Order 12875. As discussed above in section III.B (“Preliminary Economic Analysis and Regulatory Flexibility Certification”) of this preamble, the Agency made a preliminary determination that the proposal imposes no additional costs on any private- or public-sector entity. The substantive content of the proposal applies only to employers whose employees use respirators for protection against airborne workplace contaminants, and compliance with the proposal would be strictly optional for these employers. Accordingly, the proposal would require no additional expenditures by either public or private employers. As noted above under section III.E (“State-Plan States”) of this preamble, OSHA standards do not apply to State and local governments except in States that have voluntarily elected to adopt a State Plan approved by the Agency. Consequently, this proposal does not meet the definition of a “Federal intergovernmental mandate” (see Section 421(5) of the UMRA (2 U.S.C. 658(5))). Therefore, for the purposes of the UMRA, the Agency certifies that the proposal does not mandate that State, local, or tribal governments adopt new, unfunded regulatory obligations, or increase expenditures by the private sector of more than $100 million in any year. G. Applicability of Existing Consensus Standards When OSHA promulgated its original respirator fit-testing protocols under Appendix A of its final Respiratory Protection Standard (29 CFR 1910.134), no national consensus standards addressed these protocols. However, the American National Standards Institute
(ANSI)subsequently developed a national consensus standard on fit-testing protocols (“Respirator Fit Testing Methods,” ANSI Z88.10-2001) as an adjunct to its national consensus standard on respiratory-protection programs. Paragraph 7.3 of ANSI Z88.10-2001 provides the requirements for conducting the Bitrex® qualitative fit test, including requirements for administering the fit test; these requirements are consistent with the existing Bitrex® qualitative fit-testing requirements specified in Part I.B.4 of OSHA's Respiratory Protection Standard, except that the ANSI exercises must last at least 30 seconds each while the exercises required by the OSHA standard must last 60 seconds each. In addition, section 9 and Table 1 of ANSI Z88.10-2001 describe the exercises required during fit testing; these exercises duplicate the exercises described in the proposed ABQLFT protocol, except that, as noted previously, the ANSI standard requires that the test exercises last at least 30 seconds each. H. Review of the Proposed Standard by the Advisory Committee for Construction Safety and Health (“ACCSH”) By adding the ABQLFT as an optional qualitative fit-testing protocol to Part I.B of Appendix A of OSHA's Respiratory Protection Standard, 2 this proposal would revise the fit-testing requirements specified by that standard for the construction industry. Whenever the Agency proposes a rulemaking that involves the occupational safety and health of construction employees, OSHA's regulation governing the ACCSH at 29 CFR 1912.3 requires the Agency to consult with the ACCSH. Having provided the ACCSH members with copies of the proposal and other relevant information several weeks before the regular meeting, OSHA staff then met with them at the regular meeting on October 11, 2006. At this meeting, OSHA staff discussed the proposal with, and answered questions from, the ACCSH members. At their regular meeting the following day (October 12, 2006), the ACCSH members recommended, by a vote of nine in favor with one abstention, that OSHA publish the proposal. 2 The Respiratory Protection Standard for the construction industry at 29 CFR 1926.103 cross-references Respiratory Protection Standard for general industry at 29 CFR 1910.134. List of Subjects in 29 CFR Part 1910 Hazardous substances, Health, Occupational safety and health, Toxic substances. Authority and Signature Edwin G. Foulke, Jr., Assistant Secretary of Labor for Occupational Safety and Health, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210, directed the preparation of this notice. Accordingly, the Agency issues the proposed amendment under the following authorities: Sections 4, 6(b), 8(c), and 8(g) of the Occupational Safety and Health Act of 1970 (29 U.S.C. 653, 655, 657); Section 3704 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 3701 *et seq.* ); Section 41 of the Longshore and Harbor Worker's Compensation Act (33 U.S.C. 941); Secretary of Labor's Order No. 5-2007 (72 FR 31159); and 29 CFR part 1911. Signed at Washington, DC on December 17, 2007. Edwin G. Foulke, Jr., Assistant Secretary of Labor for Occupational Safety and Health. IV. Proposed Amendment to the Standard For the reasons stated above in the preamble, the Agency proposes to amend 29 CFR part 1910 as follows: PART 1910—[AMENDED] Subpart I—[AMENDED] 1. Revise the authority citation for subpart I of part 1910 to read as follows: Authority: Sections 4, 6, and 8 of the Occupational Safety and Health Act of 1970 (29 U.S.C. 653, 655, and 657); Section 3704 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 3701 *et seq.* ); Section 41, Longshore and Harbor Worker's Compensation Act (33 U.S.C. 941); and Secretary of Labor's Order Nos. 8-76 (41 FR 25059), 9-83 (48 FR 35736), 1-90 (55 FR 9033), 6-96 (62 FR 111), 3-2000 (65 FR 50017), or 5-2007 (72 FR 31159), as applicable. Sections 29 CFR 1910.132, 1910.134, and 1910.138 also issued under 29 CFR part 1911. Sections 29 CFR 1910.133, 1910.135, and 1910.136 also issued under 29 CFR part 1911 and 5 U.S.C. 553. 2. Amend section B.4(b)(8) of Appendix A to § 1910.134 to read as follows: § 1910.134 Respiratory protection. Appendix A to § 1910.134: Fit Testing Procedures (Mandatory) B. * * * 4. * * *
(b)* * *
(8)After generating the aerosol, the employer shall:
(i)Instruct the test subject to perform the exercises specified by section I.A.14 of this appendix; and
(ii)Ensure that the test subject performs each of these test exercises for one minute; however, if the test subject is able to detect the taste of the Bitrex® sensitivity screening solution within the first 10 squeezes of the nebulizer bulb (“Level 1 sensitivity”), the employer may elect to have the test subject perform each of the test exercises for a minimum of 15 seconds. [FR Doc. E7-24792 Filed 12-21-07; 8:45 am] BILLING CODE 4510-26-P DEPARTMENT OF EDUCATION 34 CFR Part 8 [Docket ID ED-2007-OS-0138] Demands for Testimony or Records in Legal Proceedings AGENCY: Office of the Secretary, Department of Education. ACTION: Notice of proposed rulemaking. SUMMARY: The Secretary proposes to amend the Department's regulations regarding the production of information pursuant to demands in judicial or administrative proceedings. The changes are intended to promote consistency in the Department's assertion of privileges and objections, and thereby prevent harm that may result from inappropriate disclosure of confidential information or inappropriate allocation of agency resources. These changes would apply only where employees are subpoenaed in litigation to which the agency is not a party. Former Department employees would be expressly required to seek the Secretary's approval prior to responding to subpoenas that seek non-public materials and information acquired during their employment at the Department. DATES: We must receive your comments on or before February 25, 2008. ADDRESSES: Submit your comments through the Federal eRulemaking Portal or via postal mail, commercial delivery, or hand delivery. We will not accept comments by fax or by e-mail. Please submit your comments only one time, in order to ensure that we do not receive duplicate copies. In addition, please include the Docket ID at the top of your comments. • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov* Under “Search Documents” go to “Optional Step 2” and select “Department of Education” from the agency drop-down menu; then click “Submit.” In the Docket ID column, select ED-2007-OS-0138 to add or view public comments and to view supporting and related materials available electronically. Information on using *www.regulations.gov,* including instructions for submitting comments, accessing documents, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. • *Postal Mail, Commercial Delivery, or Hand Delivery.* If you mail or deliver your comments about these proposed regulations, address them to Christine M. Rose, U.S. Department of Education, 400 Maryland Avenue, SW., Room 6C122, Washington, DC 20202-2110. Privacy Note: The Department's policy for comments received from members of the public (including those comments submitted by mail, commercial delivery, or hand delivery) is to make these submissions available for public viewing in their entirety on the Federal eRulemaking Portal at *http://www.regulations.gov.* Therefore, commenters should be careful to include in their comments only information that they wish to make publicly available on the Internet. FOR FURTHER INFORMATION CONTACT: Christine M. Rose, *Telephone:*
(202)401-6700. If you use a telecommunications device for the deaf (TDD), you may call the Federal Relay Service
(FRS)at 1-800-877-8339. Individuals with disabilities can obtain this document in an alternative format (e.g., Braille, large print, audiotape, or computer diskette) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT . SUPPLEMENTARY INFORMATION: Invitation to Comment We invite you to submit comments regarding these proposed regulations. To ensure that your comments have maximum effect in developing the final regulations, we urge you to identify clearly the specific section or sections of the proposed regulations that each of your comments addresses and to arrange your comments in the same order as the proposed regulations. We invite you to assist us in complying with the specific requirements of Executive Order 12866 and its overall requirement of reducing regulatory burden that might result from these proposed regulations. Please let us know of any further opportunities we should take to reduce potential costs or increase potential benefits while preserving the effective and efficient administration of the program. During and after the comment period, you may inspect all public comments about these proposed regulations by accessing *www.regulations.gov.* You may also inspect the comments, in person, in Room 6C122, 400 Maryland Avenue, SW., Washington, DC, between the hours of 8:30 a.m. and 4 p.m., Eastern time, Monday through Friday of each week except Federal holidays. Assistance to Individuals With Disabilities in Reviewing the Rulemaking Record On request, we will supply an appropriate aid, such as a reader or print magnifier, to an individual with a disability who needs assistance to review the comments or other documents in the public rulemaking record for these proposed regulations. If you want to schedule an appointment for this type of aid, please contact the person listed under FOR FURTHER INFORMATION CONTACT . Background The Secretary proposes to amend §§ 8.1 through 8.3 of title 34 of the Code of Federal Regulations (CFR). The regulations in 34 CFR part 8 pertain to production of information pursuant to demands in judicial or administrative proceedings. We are proposing these amendments to require that former Department employees follow the same set of prescribed instructions and procedures that are required of current employees, with respect to the production and disclosure of material or information acquired during the performance of the former employee's official duties or because of the former employee's official status when responding to judicially enforceable subpoenas or demands in judicial or administrative proceedings, except demands from the Congress or in Federal grand jury proceedings. Significant Proposed Regulations We do not address proposed regulatory provisions that are technical or otherwise minor in effect. Sections 8.1 Through 8.3—Production of Information Pursuant to Demands in Judicial or Administrative Proceedings *Statute:* 5 U.S.C. 301 allows an agency head to prescribe regulations concerning the conduct of its employees, the performance of its business and the custody and use of agency records. *Current Regulations:* The current regulations in 34 CFR part 8 pertain to production of information pursuant to demands in judicial or administrative proceedings. The regulations prescribe instructions and procedures to be followed by current Department employees with respect to the production and disclosure of material or information acquired as a result of performance of the person's official duties or because of the person's official status in response to judicially enforceable subpoenas or demands in judicial or administrative proceedings, except demands from the Congress or in Federal grand jury proceedings. The current regulations also specify what requirements requestors must follow when submitting a demand for testimony or records. *Proposed Regulations:* The proposed regulations would modify the definition of *employee* to include both current and former employees. With this change, the regulations would expressly require former employees to follow the uniform prescribed instructions and procedures that current employees must follow concerning disclosure or production of agency materials or information acquired during their employment with the Department in response to a judicially enforceable subpoena or demand. The proposed regulations also provide that a demand for testimony or records expressly include a statement of why the release of information would not be contrary to an interest of the Department or the United States. *Reason:* The Department is proposing to amend the definition of employee to include both current and former employees in order to eliminate any confusion regarding whether the regulations concerning disclosure or production of agency materials or information in judicial or administrative proceedings in response to a judicially enforceable subpoena or demand apply to former employees. These proposed regulations are intended to provide an orderly means by which both current and former employees respond to demands for material and information covered by the regulations, and to protect the interests of the United States, including the safeguarding of privileged or otherwise sensitive information. The increase in the number of subpoenas and other demands to current and former employees in judicial or administrative proceedings, particularly in cases in which neither the Department nor the United States is a party, necessitates detailed and uniform instructions to be followed by both current and former employees. Additionally, the express inclusion of former employees aligns the Department's regulations to be more consistent with those of other agencies, including the U.S. Department of Justice. We are proposing to amend the requirements for submitting a demand for testimony or records in order to be consistent with current regulations which identify the items the Secretary must consider when determining whether to grant the request. The Department has an interest in protecting nonpublic materials and information, which extends to subpoenas that seek information that is privileged or confidential, or both, acquired during employment at the Department. The changes are intended to promote consistency in the agency's assertion of privileges and objections, and thereby prevent harm that may result from inappropriate disclosure of confidential information. These proposed regulations are consistent with the decision in the landmark case of *United States ex rel. Touhy* v. *Ragen,* 340 U.S. 462 (1951), in which the Supreme Court upheld the ability of an agency head to issue regulations for the preservation of agency records, and determined that an agency employee, acting pursuant to such instructions, could not be held in contempt of court for declining to produce records in response to a subpoena duces tecum. We do not intend the proposed regulations to preclude disclosures or productions in compliance with Court orders except where disclosure would be inappropriate even if required by a court, e.g., where disclosure would be legally prohibited or would be contrary to a recognized privilege. Executive Order 12866 1. Potential Costs and Benefits Under Executive Order 12866, we have assessed the potential costs and benefits of this regulatory action. The potential costs associated with the proposed regulations are those resulting from statutory requirements and those we have determined to be necessary for administering this program effectively and efficiently. In assessing the potential costs and benefits—both quantitative and qualitative—of this regulatory action, we have determined that the benefits would justify the costs. We have also determined that this regulatory action would not unduly interfere with State, local, and tribal governments in the exercise of their governmental functions. Summary of Potential Costs and Benefits The Secretary has assessed the potential costs and benefits of this regulatory action and has determined that the benefits would justify the costs. These changes are intended to promote consistency in the Department's assertion of privileges and objections, and thereby prevent harm that may result from inappropriate disclosure of confidential information or inappropriate allocation of agency resources. The anticipated costs of this regulatory action would be minimal. 2. Clarity of the Regulations Executive Order 12866 and the Presidential memorandum on “Plain Language in Government Writing” require each agency to write regulations that are easy to understand. The Secretary invites comments on how to make these proposed regulations easier to understand, including answers to questions such as the following: • Are the requirements in the proposed regulations clearly stated? • Do the proposed regulations contain technical terms or other wording that interferes with their clarity? • Does the format of the proposed regulations (grouping and order of sections, use of headings, paragraphing, etc.) aid or reduce their clarity? • Would the proposed regulations be easier to understand if we divided them into more (but shorter) sections? (A “section” is preceded by the symbol “§ ” and a numbered heading; for example, § 8.1 What is the scope and application of this part?.) • Could the description of the proposed regulations in the SUPPLEMENTARY INFORMATION section of this preamble be more helpful in making the proposed regulations easier to understand? If so, how? • What else could we do to make the proposed regulations easier to understand? To send any comments that concern how the Department could make these proposed regulations easier to understand, see the instructions in the ADDRESSES section of this preamble. Regulatory Flexibility Act Certification The Secretary certifies that these proposed regulations would not have a significant economic impact on a substantial number of small entities. Paperwork Reduction Act of 1995 These proposed regulations do not contain any information collection requirements. Intergovernmental Review These proposed regulations are not subject to Executive Order 12372 and the regulations in 34 CFR part 79. Electronic Access to This Document You may view this document, as well as all other Department of Education documents published in the **Federal Register** , in text or Adobe Portable Document Format
(PDF)on the Internet at the following site: *http://www.ed.gov/news/fedregister.* To use PDF you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about using PDF, call the U.S. Government Printing Office (GPO), toll free, at 1-888-293-6498; or in the Washington, DC, area at
(202)512-1530. Note: The official version of this document is the document published in the **Federal Register** . Free Internet access to the official edition of the **Federal Register** and the Code of Federal Regulations is available on GPO Access at: *http://www.gpoaccess.gov/nara/index.html.* (Catalog of Federal Domestic Assistance Number does not apply.) List of Subjects in 34 CFR Part 8 Courts, Government employees, Reporting and recordkeeping requirements. Dated: December 18, 2007. Margaret Spellings, Secretary of Education. For the reasons discussed in the preamble, the Secretary of Education proposes to amend part 8 of title 34 of the Code of Federal Regulations as follows: PART 8—DEMANDS FOR TESTIMONY OR RECORDS IN LEGAL PROCEEDINGS 1. The authority citation for part 8 continues to read as follows: Authority: 5 U.S.C. 301; 5 U.S.C. 552; 20 U.S.C. 3474, unless otherwise noted. § 8.1 [Amended] 2. The introductory text of § 8.1(a) is amended by removing the words “if the Department or any departmental employee” and adding, in their place, the words “when the Department or any employee of the Department”. § 8.2 [Amended] 3. The definition of “Employee” in § 8.2 is amended by adding the words “or former” between the words “current” and “employee”. § 8.3 [Amended] 4. Section 8.3 is amended by: A. In the introductory text of paragraph (a), removing the words “or former employee,”. B. In paragraph (a)(2), removing the words “and why the information sought is unavailable by any other means” and adding, in their place, the words “, why the information sought is unavailable by any other means, and the reason why the release of the information would not be contrary to an interest of the Department or the United States”. C. In paragraph (b), removing the words “or former employee” each time they appear. D. In paragraph (b), removing the words “room 4083, FOB-6,” and adding, in their place, the words “room 6E300, Lyndon Baines Johnson Building,”. E. In paragraph (c), removing the words “or former employee”. F. In paragraph (c), removing the words “Records Management Branch Chief, Office of Information Resources Management, U.S. Department of Education, 7th and D Streets, SW., ROB-3” and adding, in their place, the words “Records Officer, Information Policy and Standards Team, Regulatory Information Management Services, Office of Management, U.S. Department of Education, 400 Maryland Avenue, SW., room 9161, PCP”. [FR Doc. E7-24966 Filed 12-21-07; 8:45 am] BILLING CODE 4000-01-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 62 [EPA-R07-OAR-2007-1143; FRL-8510-7] Approval and Promulgation of State Plans for Designated Facilities and Pollutants; Kansas; Clean Air Mercury Rule AGENCY: Environmental Protection Agency (EPA). ACTION: Proposed rule. SUMMARY: EPA is proposing to approve the State Plan submitted by Kansas on June 19, 2007. The plan addresses the requirements of EPA's Clean Air Mercury Rule (CAMR), promulgated on May 18, 2005, and subsequently revised on June 9, 2006. EPA is proposing to determine that the submitted State Plan fully meets the CAMR requirements for Kansas. CAMR requires States to regulate emissions of mercury
(Hg)from large coal-fired electric generating units (EGUs). CAMR establishes State budgets for annual EGU Hg emissions and requires States to submit State Plans to ensure that annual EGU Hg emissions will not exceed the applicable State budget. States have the flexibility to choose which control measures to adopt to achieve the budgets, including participating in the EPA-administered CAMR cap-and-trade program. In the State Plan that EPA is proposing to approve, Kansas would meet CAMR requirements by participating in the EPA trading program. DATES: Comments must be received on or before January 25, 2008. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R07-OAR-2007-1143, by one of the following methods: 1. *www.regulations.gov:* Follow the on-line instructions for submitting comments. 2. *E-mail: jay.michael@epa.gov.* 3. *Mail:* Michael Jay, Environmental Protection Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas 66101. 4. *Hand Delivery or Courier:* Deliver your comments to Michael Jay, Environmental Protection Agency, 901 North 5th Street, Kansas City, Kansas 66101. Such deliveries are only accepted during the Regional Office's normal hours of operation. The Regional Office's official hours of business are Monday through Friday, 8 a.m. to 4:30 p.m., excluding Federal holidays. *Instructions:* Direct your comments to Docket ID No. EPA-R07-OAR-2007-1143. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at *www.regulations.gov,* including any personal information provided, unless the comment includes information claimed to be Confidential Business Information
(CBI)or other information whose disclosure is restricted by statute. Do not submit through *www.regulations.gov* or e-mail, information that you consider to be CBI or otherwise protected. The *www.regulations.gov* Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through *www.regulations.gov,* your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters and any form of encryption and should be free of any defects or viruses. *Docket:* All documents in the electronic docket are listed in the *www.regulations.gov* index. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in *www.regulations.gov* or in hard copy at the Environmental Protection Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas 66101. EPA requests that if at all possible, you contact the person listed in the FOR FURTHER INFORMATION CONTACT section to schedule your inspection. The Regional Office's official hours of business are Monday through Friday, 8 a.m. to 4:30 p.m., excluding Federal holidays. FOR FURTHER INFORMATION CONTACT: Michael Jay at
(913)551-7460 or bye-mail at *jay.michael@epa.gov.* SUPPLEMENTARY INFORMATION: Table of Contents I. What Action Is EPA Proposing To Take? II. What Is the Regulatory History of CAMR? III. What Are the General Requirements of CAMR State Plans? IV. How Can States Comply With CAMR? V. Analysis of Kansas's CAMR State Plan Submittal A. State Budgets B. CAMR State Plan VI. Statutory and Executive Order Reviews I. What Action Is EPA Proposing To Take? EPA is proposing to approve Kansas's State Plan, submitted on June 19, 2007. In its State Plan, Kansas would meet CAMR by requiring certain coal-fired EGUs to participate in the EPA-administered cap-and-trade program addressing Hg emissions. EPA is proposing to determine that the State Plan meets the applicable requirements of CAMR. Kansas has included as part of its submittal Kansas rule K.A.R. 28-19-720, relating to new source performance standards. EPA will take action on those provisions in a separate rulemaking. II. What Is the Regulatory History of CAMR? CAMR was published by EPA on May 18, 2005 (70 FR 28606, “Standards of Performance for New and Existing Stationary Sources: Electric Utility Steam Generating Units; Final Rule”). In this rule, acting pursuant to its authority under section 111(d) of the Clean Air Act (CAA), 42 U.S.C. 7411(d), EPA required that all States and the District of Columbia (all of which are referred to herein as States) meet Statewide annual budgets limiting Hg emissions from coal-fired EGUs (as defined in 40 CFR 60.24(h)(8)) under CAA section 111(d). EPA required all States to submit State Plans with control measures that ensure that total, annual Hg emissions from the coal-fired EGUs located in the respective States do not exceed the applicable statewide annual EGU mercury budget. Under CAMR, States may implement and enforce these reduction requirements by participating in the EPA-administered cap-and-trade program or by adopting any other effective and enforceable control measures. CAA section 111(d) requires States, and along with CAA section 301(d) and the Tribal Air Rule (40 CFR part 49), allows Tribes granted treatment as States (TAS), to submit State Plans to EPA that implement and enforce the standards of performance. CAMR explains what must be included in State Plans to address the requirements of CAA section 111(d). The State Plans were due to EPA by November 17, 2006. Under 40 CFR 60.27(b), the EPA proposes, and subsequently approves or disapproves, the State Plans. III. What Are the General Requirements of CAMR State Plans? CAMR establishes Statewide annual EGU Hg emission budgets and is to be implemented in two phases. The first phase of reductions starts in 2010 and continues through 2017. The second phase of reductions starts in 2018 and continues thereafter. CAMR requires States to implement the budgets by either:
(1)requiring coal-fired EGUs to participate in the EPA-administered cap-and-trade program; or
(2)adopting other coal-fired EGU control measures of the respective State's choosing and demonstrating that such control measures will result in compliance with the applicable State annual EGU Hg budget. Each State Plan must require coal-fired EGUs to comply with the monitoring, recordkeeping, and reporting provisions of 40 CFR part 75 concerning Hg mass emissions. Each State Plan must also show that the State has the legal authority to adopt emission standards and compliance schedules necessary for attainment and maintenance of the State's annual EGU Hg budget and to require the owners and operators of coal-fired EGUs in the State to meet the monitoring, recordkeeping, and reporting requirements of 40 CFR part 75. IV. How Can States Comply With CAMR? Each State Plan must impose control requirements that the State demonstrates will limit Statewide annual Hg emissions from new and existing coal-fired EGUs to the amount of the State's applicable annual EGU Hg budget. States have the flexibility to choose the type of EGU control measures they will use to meet the requirements of CAMR. EPA anticipates that many States will choose to meet the CAMR requirements by selecting an option that requires EGUs to participate in the EPA-administered CAMR cap-and-trade program. EPA also anticipates that many States may choose to control Statewide annual Hg emissions for new and existing coal-fired EGUs through an alternative mechanism other than the EPA-administered CAMR cap-and-trade program. Each State that chooses an alternative mechanism must include with its plan a demonstration that the State Plan will ensure that the State will meet its assigned State annual EGU Hg emission budget. A State submitting a State Plan that requires coal-fired EGUs to participate in the EPA-administered CAMR cap-and-trade program may either adopt regulations that are substantively identical to the EPA model Hg trading rule (40 CFR part 60, subpart HHHH) or incorporate by reference the model rule. CAMR provides that States may only make limited changes from the model rule if the States want to participate in the EPA-administered trading program. A State Plan may deviate from the model rule only by altering the allowance allocation provisions to provide for State-specific allocation of Hg allowances using a methodology chosen by the State. A State's alternative allowance allocation provisions must meet certain allocation timing requirements and must ensure that total allocations for each calendar year will not exceed the State's annual EGU Hg budget for that year. V. Analysis of Kansas's CAMR State Plan Submittal A. State Budgets In this action, EPA is proposing to approve Kansas's State Plan that adopts the annual EGU Hg budgets established for the State in CAMR, i.e., 0.723 tons for EGU Hg emissions in 2010-2017 and 0.285 tons for EGU Hg emissions in 2018 and thereafter. Kansas's State Plan sets these budgets as the total amount of allowances available for allocation for each year under the EPA-administered CAMR cap-and-trade program. B. CAMR State Plan The Kansas State Plan requires coal-fired EGUs to participate in the EPA-administered CAMR cap-and-trade program. The State Plan incorporates by reference the EPA model Hg trading rule but has adopted an alternative allowance allocation methodology. Under the Hg allowance allocation methodology in the model rule, Hg allowances are allocated to units that have operated for 5 years, based on heat input data from a 3-year period that are adjusted for coal rank by using coal factors of 3.0 for the lignite combusted by the unit, 1.25 for the subbituminous combusted by the unit, and 1 for other coal ranks combusted by the unit. The model rule also provides a new unit set-aside from which units without 5 years of operation are allocated allowances based on the units' prior year emissions. States may establish in their State Plan submissions a different Hg allowance allocation methodology that will be used to allocate allowances to sources in the States if certain requirements are met concerning the timing of submission of units' allocations to the Administrator for recordation and the total amount of allowances allocated for each control period. In adopting alternative Hg allowance allocation methodologies, States have flexibility with regard to: 1. The cost to recipients of the allowances, which may be distributed for free or auctioned; 2. The frequency of allocations; 3. The basis for allocating allowances, which may be distributed, for example, based on historical heat input or electric and thermal output; and 4. The use of allowance set-asides and, if used, their size. In Kansas's alternative allowance methodology, as authorized by the CAMR, Kansas has deviated from the portion of the model rule described above relating to the basis for allocating allowances to new units and existing units. For existing units, 97 percent of the total annual allowances are distributed based on the individual unit's pro-rata share of total heat input for all existing units, adjusted by coal type, for the years 2000 through 2004. The baseline for each unit was established by averaging the three highest annual adjusted heat input rates for the five-year period. For new units, allowances will be distributed from a set-aside pool of allowances equal to 3 percent of the State's budget for each year of the program. The new unit methodology distributes allowances based on an emission rate (up to 5 ounces of Hg/MW for 2010-2017 and up to 2 ounces of Hg/MW in 2018 and thereafter) multiplied by the nameplate capacity. However, no single unit can receive more than one-third of the set-aside in a control period nor can the total number of new units receive more than the 3 percent set-aside pool of allowances. Mercury allowances for new and existing units are permanent. Because allocations are considered permanent, if the new unit set-aside is fully subscribed as new units make requests for allowances, there may be future new units that are not allocated allowances from the new unit set-aside. There are also provisions for distribution of allowances in the new unit set-aside for the case of undersubscription. The Kansas allowance distribution methodologies are acceptable under CAMR. Kansas's State Plan requires coal-fired EGUs to comply with the monitoring, recordkeeping, and reporting provisions of 40 CFR part 75 concerning Hg mass emissions. Kansas's State Plan also demonstrates that the State has the legal authority to adopt emission standards and compliance schedules necessary for attainment and maintenance of the State's annual EGU Hg budget and to require the owners and operators of coal-fired EGUs in the State to meet the monitoring, recordkeeping, and reporting requirements of 40 CFR part 75. The State cites provisions in Kansas State Law, K.S.A. 65-3005, as containing the legal authority for the Kansas Department of Health and Environment to adopt the State's rule that allows for Kansas's participation in the nationwide cap-and-trade program for mercury. EPA's review of Kansas's State Plan has found that it meets the requirements of CAMR. As a result, EPA is proposing to approve Kansas's State Plan. VI. Statutory and Executive Order Reviews Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely proposes to approve State law as meeting Federal requirements and would impose no additional requirements beyond those imposed by State law. Accordingly, the Administrator certifies that this proposed rule would not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). Because this action proposes to approve pre-existing requirements under State law and would not impose any additional enforceable duty beyond that required by State law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). This proposal also does not have Tribal implications because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This proposed action also does 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, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely proposes to approve a State rule implementing a Federal standard. It does not alter the relationship or the distribution of power and responsibilities established in the CAA. This proposed rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it proposes to approve a State rule implementing a Federal standard. Executive Order 12898, “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations,” requires Federal agencies to consider the impact of programs, policies, and activities on minority populations and low-income populations. EPA guidance 1 states that EPA is to assess whether minority or low-income populations face risk or a rate of exposure to hazards that is significant and that “appreciably exceed[s] or is likely to appreciably exceed the risk or rate to the general population or to the appropriate comparison group.” (EPA, 1998) Because this rule merely proposes to approve a state rule implementing the Federal standard established by CAMR, EPA lacks the discretionary authority to modify today's regulatory decision on the basis of environmental justice considerations. However, EPA has already considered the impact of CAMR, including this Federal standard, on minority and low-income populations. In the context of EPA's CAMR published in the **Federal Register** on May 18, 2005, in accordance with Executive Order 12898, the Agency has considered whether CAMR may have disproportionate negative impacts on minority or low-income populations and determined it would not. 1 U.S. Environmental Protection Agency, 1998. Guidance for Incorporating Environmental Justice Concerns in EPA's NEPA Compliance Analyses. Office of Federal Activities, Washington, DC, April, 1998. In reviewing State Plan submissions, EPA's role is to approve State choices, provided that they meet the criteria of the CAA. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a State Plan for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a State Plan submission, to use VCS in place of a State Plan submission that otherwise satisfies the provisions of the CAA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This proposed rule would not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, *et seq.* ). List of Subjects in 40 CFR Part 62 Environmental protection, Air pollution control, Electric utilities, Intergovernmental relations, Mercury, Reporting and recordkeeping requirements. Dated: December 14, 2007. John B. Askew, Regional Administrator, Region 7. [FR Doc. E7-24967 Filed 12-21-07; 8:45 am] BILLING CODE 6560-50-P 72 246 Wednesday, December 26, 2007 Notices DEPARTMENT OF AGRICULTURE Submission for OMB Review; Comment Request December 18, 2007. The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments regarding
(a)whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(b)the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used;
(c)ways to enhance the quality, utility and clarity of the information to be collected;
(d)ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), *OIRA_Submission@OMB.EOP.GOV* or fax
(202)395-5806 and to Departmental Clearance Office, USDA, OCIO, Mail Stop 7602, Washington, DC 20250-7602. Comments regarding these information collections are best assured of having their full effect if received within 30 days of this notification. Copies of the submission(s) may be obtained by calling
(202)720-8958. An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number. Animal Plant and Health Inspection Service *Title:* Exotic Newcastle Disease in Birds and Poultry; Chlamydiosis in Poultry. *OMB Control Number:* 0579-0116. *Summary Of Collection:* The Animal Health Protection Act (7 U.S.C. 8301), authorizes the Secretary of Agriculture to take such measures as he may deem proper to prevent the introduction or dissemination of the contagion of any contagious or communicable disease of animals and/or live poultry from a foreign country into the United States or from one State to another. Velogenic or exotic Newcastle disease
(END)is the most severe form of Newcastle disease and is foreign to the United States. It is one of the most serious diseases of poultry throughout the world. The virus also infects and causes disease in wild birds including parrots and parakeets. Disease prevention is the most effective method for maintaining a healthy animal population and for enhancing the Animal Plant and Health Inspection Service (APHIS) ability to compete in the world market of animals and animal product trade. *Need and Use of the Information:* APHIS will collect information through the use of documents attesting to the health status of the birds or poultry being moved, the number and types of birds or poultry being moved in a particular shipment, the shipment's point of origin, and shipment's designation, and the reason for the interstate movement. These documents provide useful “trace back” information in the event an infected bird or chicken is discovered and an investigation must be launched to determine where the bird or chicken originated. The information provided by these documents is critical to APHIS ability to prevent the interstate spread of END, which is highly contagious and capable of causing significant economic harm to the U.S. poultry industry. *Description of Respondents:* Business or other for profit. *Number of Respondents:* 2. *Frequency of Responses:* Reporting: On occasion. *Total Burden Hours:* 6. Ruth Brown, Departmental Information Collection Clearance Officer. [FR Doc. E7-24901 Filed 12-21-07; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF AGRICULTURE Forest Service Roadless Area Conservation; National Forest System Lands in Colorado AGENCY: Forest Service, USDA. ACTION: Notice of intent to prepare an environmental impact statement. SUMMARY: The Forest Service, U.S. Department of Agriculture, is initiating a public rulemaking process to address the management of roadless areas on National Forest System lands within the State of Colorado. This rulemaking is the result of a petition submitted by Governor Bill Ritter on behalf of the State of Colorado pursuant to 7 CFR 1.28, reviewed and recommended by the Department's Roadless Area Conservation National Advisory Committee, and accepted by the Secretary. The State requests specific regulatory protections with certain management flexibility for the approximately four million acres of affected lands. The Forest Service will prepare an environmental impact statement to analyze and disclose potential environmental consequences associated with this rulemaking. DATES: Comments concerning the scope of the analysis must be received by February 25, 2008. ADDRESSES: Comments may be sent via e-mail to *COcomments@fsroadless.org.* Written comments concerning this notice should be addressed to Roadless Area Conservation-Colorado, P.O. Box 162909, Sacramento, CA 95816-2909, or via facsimile to 916-456-6724. All comments, including names and addresses, when provided, are placed in the record and are available for public inspection and copying. The public may inspect comments received at *http://www.roadless.fs.fed.us/colorado.* FOR FURTHER INFORMATION CONTACT: Kathy Kurtz, Colorado Roadless Interdisciplinary Team Leader, 303-275-5083, *kkurtz@fs.fed.us.* Individuals who use telecommunication devices for the deaf
(TDD)may call the Federal Information Relay Service
(FIRS)at 1-800-877-8339 between 8 a.m. and 8 p.m., Eastern Time, Monday through Friday. SUPPLEMENTARY INFORMATION: Background As a leader in natural resource conservation, the Forest Service provides direction for the management and use of the Nation's forests, rangeland, and aquatic ecosystems. Similarly, the State of Colorado is committed to intelligent, sustained natural resource use and conservation of State and Federal lands within its borders. Furthermore, the Forest Service is charged to collaborate cooperatively with States and other interested parties regarding the use and management of the National Forest System (NFS). In May 2005, then-Governor Bill Owens signed Colorado Senate Bill 05-243, creating a 13-member bipartisan task force to provide official recommendations regarding the management of inventoried roadless areas in National Forests in the State of Colorado. The task force held nine public meetings throughout the State, reviewed over 40,000 public comments and conducted a comprehensive review of Colorado's approximately four million acres of inventoried roadless areas. Colorado's petition was submitted to the Secretary of Agriculture for consideration on November 13, 2006, by then-Governor Owens, hereinafter referred to as the 2006 Petition, with the provision that it be considered under section 553(e) of the Administrative Procedure Act and Department regulations at 7 CFR 1.28. On April 11, 2007, Governor Ritter submitted the 2006 Petition with modifications, hereinafter referred to as the 2007 Petition. Governor Ritter's transmittal letter requested that State specific rulemaking be undertaken to provide an “insurance policy for protection of our roadless areas.” The Roadless Area Conservation National Advisory Committee reviewed the Colorado petition on June 13 and 14, 2007, in Washington, DC. The Executive Director of the Colorado Department of Natural Resources, representing Governor Ritter, discussed the scope and intent of the petition during the first day of the meeting. The committee also heard comments from other State and Forest Service officials, task force members, and members of the public. On August 8, 2007, the committee issued a unanimous consensus-based recommendation that the Secretary direct the Forest Service, with the State of Colorado as a cooperating agency, to proceed with rulemaking. On August 24, 2007, the Secretary accepted the 2007 Petition based on the Advisory Committee's review and report and directed the Forest Service to initiate rulemaking. Additional information on how the State of Colorado petition was developed can be found in the State's petition at: *http://www.keystone.org/html/roadless_areas_task_force.html* . Colorado's original 2006 Petition, Governor Ritter's 2007 Petition, a summary of the November 29 and 30, 2006, Advisory Committee meeting, the recommendation made by the Roadless Area Conservation National Advisory Committee to the Secretary, and the Secretary's letter to the Governor can be found at the Forest Service Roadless Area Conservation Web site: *http://www.roadless.fs.fed.us/colorado.* Purpose and Need for Action The purpose of the proposed rule is to review and consider the State of Colorado's 2007 Petition for rulemaking, which presents direction for the conservation and management of inventoried roadless areas within the State of Colorado. The proposed rule integrates local management concerns with the national objectives for protecting roadless area values and characteristics. The Department of Agriculture and the State of Colorado are committed to conserving and managing inventoried roadless areas and consider these areas an important component of the National Forest System (NFS). The Department and the State of Colorado believe that the most viable path for lasting conservation of these areas must properly integrate local, State, and national perspectives on roadless area management. The 2007 Petition took into account State and local resource management challenges along with the national interest in maintaining roadless characteristics, and provides for management flexibility. Currently, the conservation and management of inventoried roadless areas is under the direction of the 2001 Roadless Rule, which was reinstated when the 2005 State Petitions Rule was invalidated in *Cal. ex rel. Lockyer* v. *United States Dep't of Agric.,* 2006 U.S, Dist. LEXIS 72226, 52 (N. D. Cal. 2006). As litigation continues over the 2001 Roadless Rule, the State of Colorado desires to institute durable protections for inventoried roadless areas in the State. Therefore, there is a desire to establish a Colorado Roadless Rule to protect and manage the approximately four million acres of National Forest System inventoried roadless areas in Colorado, while working to accomplish the following goals (see 2007 Petition):
(1)Conserve roadless area values and characteristics;
(2)protect human health and safety;
(3)reduce hazardous fuels;
(4)restore essential wildlife habitats;
(5)maintain existing facilities; and
(6)provide reasonable access to public and private property or public and privately owned facilities. Petitioned Action The Forest Service, in cooperation with the State of Colorado, is initiating a public rulemaking process in response to the 2007 Petition presented by the Colorado Department of Natural Resources on behalf of Governor Ritter on June 13 and 14, 2007, to the Roadless Area Conservation National Advisory Committee. The rulemaking, using the 2007 Petition with input from Roadless Area Conservation National Advisory Committee, would designate Colorado Roadless Areas to protect and manage these areas as described below. This new designation, Colorado Roadless Areas, would supersede previous roadless inventories conducted under the Roadless Area Review Evaluation and the 2001 Roadless Rule. Colorado Roadless Areas would be identified using the 2001 Roadless Area Conservation Rule inventoried roadless areas as a basis, amended by technical corrections to the inventory as well as any revisions to an individual roadless area through revised Forest Plans (Arapaho/Roosevelt, Routt, Rio Grande, and White River) and ongoing Forest Plan Revision (Grand Mesa, Uncompahgre, and Gunnison NFs; San Juan NF; Pike/San Isabel NFs; and Manti-La Sal NFs). Lands located within ski permit area boundaries and/or adjacent to existing ski areas currently allocated to such uses by Forest Plan revisions would be removed from roadless designation and managed subject to forest plan direction. Maps may be found at *http://www.roadless.fs.fed.us/colorado.* The rulemaking would examine the 2007 Petition's specific proposal to prohibit road construction or reconstruction in Colorado Roadless Areas unless the responsible official determines the proposal cannot be reasonably accomplished without a road, there are no other reasonable alternatives, and one of the listed circumstances exists. The 2007 Petition sought to have the Forest Service, to the extent practicable, emphasize the use of temporary roads and where a temporary road is specified in the listed circumstance, only a temporary road is allowed. Further, the Forest Service would prepare an Environmental Impact Statement
(EIS)whenever proposing construction of a permanent road in designated Colorado Roadless Areas. No-road and temporary road alternatives would be part of such an EIS. Except for Federal Aid Highway projects, these roads would be closed to all motorized vehicles not specifically used for the purpose of the access. The circumstances for road construction are as follows: a. To conduct a response action under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) or to conduct a natural resource restoration action under CERCLA; b. Pursuant to reserved or outstanding rights, or by statute or treaty; c. To provide access to existing or future grazing allotments, where roading is consistent with the Forest Plan in question; d. For a Federal Aid Highway project; e. To allow for construction of, maintenance of, and emergency response to utility and water conveyance structures, where roading is consistent with the Forest Plan in question. f. A temporary road is needed for treatment actions in areas identified in a community wildfire protection plan or within areas of the wildland-urban interface, as defined by the Healthy Forests Restoration Act of 2003 (HFRA); g. A temporary road is needed for public health or safety in cases of threat of flood, fire, or other potential catastrophic event that, without intervention, would cause loss of life, property, or natural resource values; h. A temporary road is needed in conjunction with the continuation, extension, or renewal of a mineral lease; or i. A temporary road is needed to support the leasing of federal coal reserves under certain lands in the North Fork Valley on the Grand Mesa, Uncompahgre and Gunnison National Forests. Any temporary road would be obliterated and reclaimed and the affected landscape restored immediately upon termination of the purpose for the road. Roadless areas in which temporary roads are allowed, built, and obliterated would not lose their roadless inventory status. The 2007 Petition also provided two other circumstances under which road re-construction may be allowed in a Colorado Roadless Area:
(1)When road realignment is needed to prevent irreparable resource damage from the original design, use, location, or deterioration of a forest road; or
(2)when road reconstruction is needed to implement a road safety project based on local knowledge of a forest road or accident history. The 2007 Petition specifically proposes to prohibit the cutting, selling or removal of timber from a Colorado Roadless Area unless the responsible official determines that the action falls within one of the following circumstances: a. Is needed for wildlife habitat management and improvement for wildlife species, in consultation with Colorado Department of Natural Resources and Division of Wildlife, while maintaining or improving roadless characteristics as defined in the 2007 Petition; b. Is needed to reduce the risk of wildfire effects or large scale insect and disease outbreak effects in areas covered by and as provided in a community wildfire protection plan, or if a protection plan is not present within areas of the wildland urban interface (WUI), as defined in the HFRA; c. Is incidental to the implementation of a management activity not otherwise prohibited by the Rule; d. Is needed and appropriate for personal or administrative use; or e. Roadless characteristics have been substantially altered in a portion of a roadless area due to the construction of a forest road and subsequent timber harvest—which occurred after the roadless area was designated and prior to the effective date of this rule. The 2007 Petition did not seek to impose limitations on reasonable access to valid and existing rights and authorizations including reasonable access to locatable minerals as allowed under the General Mining Law of 1872 and the ability of the Colorado State Land Board to develop its mineral interest underlying certain Forest Service surface ownership. The Forest Service would emphasize exchange of State mineral interests for Federal interests of comparable value. The 2007 Petition indicated that it did not seek to affect certain other policies or activities including current or future management status of existing roads or trails in Colorado Roadless Areas or the status of existing grazing allotments. Existing Forest roads within Colorado Roadless Areas would continue to be maintained. Current forms of mechanized access would continue for permits, contracts, or other legal instruments authorizing the occupancy and use of NFS lands that were issued prior to the effective date of the Rule. The 2007 Petition also stated that the Colorado specific rule would provide for the adjustment of Colorado Roadless Area boundaries as applicable when forests are amending or revising their Forest Plans. Further, the 2007 Petition provided that no new roads would be constructed in Colorado Roadless Areas for exploration, development or transportation purposes relating to oil and gas leases issued after the date of implementation of the Rule. The 2007 Petition also contained specific provisions concerning the leasing of federal coal reserves under certain lands in the North Fork Valley on the Grand Mesa/ Uncompahgre/Gunnison National Forests (GMUG). These lands would remain as Colorado Roadless Areas, but would be managed in a way that permits roads and other activities associated with coal exploration and development. Once coal mining is complete, all roads would be reclaimed and restored to natural conditions and all activities within the area would be consistent with Roadless designation. The 2007 Petition did not address inventoried roadless acres in national forests and grasslands outside of Colorado. The 2007 Petition did not address travel management or wilderness recommendations. Possible Alternatives to the Proposed Action Possible alternatives to the promulgation of a rule pursuant to the 2007 Petition to be considered in the Draft Environmental Impact Statement
(DEIS)include: • Roadless management direction as set forth in the 2001 Roadless Rule. • Roadless management direction as set forth in current Land and Resource Management Plans. Additional alternatives may arise from public comments or new information. Cooperating Agencies The State of Colorado will participate as a cooperating agency in the preparation of the DEIS. The State has requested that the Department of Natural Resources and the Division of Wildlife be provided cooperating agency status through a Memorandum of Understanding
(MOU)with the Forest Service to assure participation in the evaluation of proposed activities in Colorado Roadless Areas associated with Federal coal reserves under certain lands in the North Fork Valley on the Grand Mesa/Uncompahgre/Gunnison National Forests
(GMUG)and lands removed from the roadless inventory associated with ski areas. Responsible Official The Responsible Official for the rulemaking is the Secretary, USDA, or his designee. Nature of Decision To Be Made The Responsible Official, with concurrence of the State of Colorado, will select a management strategy to address the management of roadless areas on National Forest System Lands within the State of Colorado. Scoping Process As part of its scoping process, the Forest Service solicits public comment on the nature and scope of the environmental, social, and economic issues related to the rulemaking that should be analyzed in depth in the Draft Environmental Impact Statement. Comments collected during promulgation of the 2001 Roadless Rule and the extensive public involvement process used by the State and Task Force to craft their petition will be heavily relied upon. The nature and scope of the analysis for the Draft Environmental Impact Statement will focus on the land management direction sought in the petition, and the alternatives to it. Because of the extensive amount of public comment that has already been received on the issue of protecting roadless areas in Colorado, no public meetings are planned for this 60-day scoping effort. However, public meetings will be held after the Draft Environmental Impact Statement and proposed rule have been released, and the public has had a chance to take a careful look at the State site-specific proposed rule, alternatives, and effects. Comment Requested Reviewers should provide their comments during the comment period. Timely comments will enable the agency to analyze and respond to them at one time and to use them in the preparation of the Environmental Impact Statement, thus avoiding undue delay in the decision making process. The submission of specific and substantive comments usually results in more effective use of public input and often results in better decisions. As a reminder, reviewers have an obligation to “structure their participation in the National Environmental Policy Act process so that it is meaningful and alerts the agency to the reviewer's position and contentions.” *Vermont Yankee Nuclear Power Corp.* v. *NRDC, 435 U.S. 519, 552 (1978). Dept. of Transportation* v. *Public Citizen, 541 U.S. 752, 764 (2004)* . Estimated Dates The draft environmental impact statement is expected May, 2008, and the final environmental impact statement is expected December, 2008. Dated: December 18, 2007. Gloria Manning, Associate Deputy Chief, NFS. [FR Doc. E7-24894 Filed 12-21-07; 8:45 am] BILLING CODE 3410-11-P DEPARTMENT OF AGRICULTURE Forest Service Roadless Area Conservation National Advisory Committee AGENCY: Forest Service, USDA. ACTION: Notice of meeting. SUMMARY: The Roadless Area Conservation National Advisory Committee will meet in Washington, DC. The purpose of the meeting is to discuss the proposed rule for the management of roadless areas on National Forest System lands in the State of Idaho and to discuss other related roadless area matters. DATES: The meeting will be held January 16 to January 17, 2008, from 9 a.m. to 5 p.m each day. ADDRESSES: The meeting will be held at the Forest Service, Sidney R.Yates Building, 201 14th Street, SW., Washington, DC. Written comments concerning this meeting should be addressed to Forest Service, U.S. Department of Agriculture, EMC, Jessica Call, 201 14th Street, SW., Mailstop 1104, Washington, DC 20024. Comments may also be sent via e-mail to *jessicacall@fs.fed.us* , or via facsimile to 202-205-1012. All comments, including names and addresses when provided, are placed in the record and are available for public inspection and copying. The public may inspect comments received at the Forest Service, Sidney R.Yates Building, 201 14th Street, SW., Washington, DC. Visitors are encouraged to call ahead to 202-205-1056 to facilitate entry into the building. FOR FURTHER INFORMATION CONTACT: Jessica Call, Roadless Area Conservation National Advisory Committee (RACNAC) Coordinator, at *jessicacall@fs.fed.us* or 202-205-1056. Individuals who use telecommunication devices for the deaf
(TDD)may call the Federal Information Relay Service
(FIRS)at 1-800-877-8339 between 8 a.m. and 8 p.m., Eastern Standard Time, Monday through Friday. SUPPLEMENTARY INFORMATION: The meeting is open to the public and interested parties are invited to attend; building security requires you to provide your name to Jessica Call, RACNAC Coordinator by January 11, 2008. You will need photo identification to enter the building. While meeting discussion is limited to Forest Service staff and Committee members, the public will be allowed to offer written and oral comments for the Committee's consideration. Attendees wishing to comment orally will be allotted a specific amount of time to speak during a public comment period at the end of the first day's agenda. To offer oral comment, please contact the RACNAC Coordinator at 202-205-1056. Dated: December 17, 2007. Gloria Manning, Associate Deputy Chief, NFS. [FR Doc. E7-24893 Filed 12-21-07; 8:45 am] BILLING CODE 3410-11-P DEPARTMENT OF AGRICULTURE Rural Utilities Service Information Collection Activity; Comment Request AGENCY: Rural Utilities Service, USDA. ACTION: Notice and request for comments. SUMMARY: In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35, as amended), the Rural Utilities Service, an agency delivering the United States Department of Agriculture's
(USDA)Rural Development Utilities Programs, hereinafter referred to as Rural Development and/or Agency, invites comments on this information collection for which the Agency intends to request approval from the Office of Management and Budget (OMB). DATES: Comments on this notice must be received by February 25, 2008. FOR FURTHER INFORMATION CONTACT: Michele L. Brooks, Acting Director, Program Development and Regulatory Analysis, Rural Utilities Service, 1400 Independence Ave., SW., STOP 1522, Room 5174 South Building, Washington, DC 20250-1522. Telephone:
(202)690-1078, FAX:
(202)720-4120. SUPPLEMENTARY INFORMATION: The Office of Management and Budget's
(OMB)regulation (5 CFR 1320) implementing provisions of the Paperwork Reduction Act of 1995 (Pub. L. 104-13) requires that interested members of the public and affected agencies have an opportunity to comment on information collection and recordkeeping activities (see 5 CFR 1320.8(d)). This notice identifies an information collection that the Agency is submitting to OMB for extension. Comments are invited on:
(a)Whether the proposed collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility;
(b)the accuracy of the Agency's estimate of the burden of the proposed collection of information including the validity of the methodology and assumptions used;
(c)ways to enhance the quality, utility and clarity of the information to be collected; and
(d)ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. Comments may be sent to: Michele L. Brooks, Acting Director, Program Development and Regulatory Analysis, Rural Utilities Service, U.S. Department of Agriculture, STOP 1522, Room 5174, 1400 Independence Ave., SW., Washington, DC 20250-1522. FAX:
(202)720-4120. *Title:* Public Television Station Digital Transition Grant Program. *OMB Control Number:* 0572-0134. *Type of Request:* Extension of a currently approved information collection. *Abstract:* As part of the nation's evolution to digital television, the Federal Communications Commission had ordered all television broadcasters to initiate the broadcast of a digital television signal. Public television stations rely largely on community financial support to operate. In many rural areas the cost of the transition to digital broadcasting may exceed community resources. Since rural communities depend on public television stations for services ranging from educational course content in their schools to local news, weather, and agricultural reports, any disruption of public television broadcasting would be detrimental. Initiating a digital broadcast requires the installation of a new antenna, transmitter or translator, and new digital program management facilities consisting of processing and storage systems. Public television stations use a combination of transmitters and translators to serve the rural public. If the public television station is to perform program origination functions, as most do, digital cameras, editing and mastering systems are required. A new studio-to-tower site communications link may be required to transport the digital broadcast signal to each transmitter and translator. The capability to broadcast some programming in a high definition television format is inherent in the digital television standard, and this can require additional facilities at the studio. These are the new components of the digital transition. In designing the national competition for the distribution of these grant funds, priority is given to public television stations serving the areas that would be most unable to fund the digital transition without a grant. The largest sources of funding for public television stations are public membership and business contributions. In rural areas, lower population density reduces the field of membership, and rural areas have fewer businesses per capita than urban and suburban areas. Therefore, rurality is a primary predictor of the need for grant funding for a public television station's digital transition. In addition, some rural areas have per capita income levels that are lower than the national average, and public television stations covering these areas in particular are likely to have difficulty funding the digital transition. As a result, the consideration of the per capita income of a public television station's coverage area is a secondary predictor of the need for grant funding. Finally, some public television stations may face special difficulty accomplishing the transition, and a third scoring factor for station hardship will account for conditions that make these public television stations less likely to accomplish the digital transition without a grant. *Estimate of Burden:* Public reporting burden for this collection of information is estimated to average 21 hours per response. *Respondents:* Not-for-profit institutions; State, Local or Tribal Government. *Estimated Number of Respondents:* 50. *Estimated Number of Responses per Respondent:* 1.12. *Estimated Total Annual Burden on Respondents:* 1,168 hours. Copies of this information collection can be obtained from MaryPat Daskal, Program Development and Regulatory Analysis, at
(202)720-7853. FAX:
(202)720-4120. All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record. Dated: December 18, 2007. Curtis M. Anderson, Acting Administrator, Rural Utilities Service. [FR Doc. E7-24936 Filed 12-21-07; 8:45 am] BILLING CODE 3410-15-P DEPARTMENT OF COMMERCE Submission for OMB Review; Comment Request The Department of Commerce will submitted to the Office of Management and Budget
(OMB)for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35). *Agency:* International Trade Administration (ITA). *Title:* Special American Business Internship Training (SABIT) Program: Applications and Questionnaires. *OMB Control Number:* 0625-0225. *Form Number(s):* ITA-4143P-5. *Type of Request:* Regular submission. *Burden Hours:* 5,875. *Number of Respondents:* 2,250 *Average Hours Per Response:* Application—3 hours; Feedback form—1 hour; and End-of-Internship form—2 hours. *Needs and Uses:* The participant applications and feedback
(exit)surveys are needed to enable SABIT to find the most qualified people for the training programs and to track the success of the program as regards trade to between the United States and the countries of Eurasia. The information also aids in the improvement of content and administration of the programs. *Affected Public:* Foreign nationals residing in Eurasia and U.S. company employees. *Frequency:* On occasion. *Respondent's Obligation:* Voluntary. *OMB Desk Officer:* David Rostker,
(202)395-3897. Copies of the above information collection proposal can be obtained by calling or writing Diana Hynek, Departmental Paperwork Clearance Officer,
(202)482-0266, Department of Commerce, Room 6625, 14th and Constitution Avenue, NW., Washington, DC 20230 (or via the Internet at *dHynek@doc.gov.* Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to David Rostker, OMB Desk Officer, Fax number
(202)395-7285 or via the Internet at *David_Rostker@omb.eop.gov* . Dated: December 18, 2007. Gwellnar Banks, Management Analyst, Office of the Chief Information Officer. [FR Doc. E7-24883 Filed 12-21-07; 8:45 am] BILLING CODE 3510-HE-P DEPARTMENT OF COMMERCE Submission for OMB Review; Comment Request The Department of Commerce will submit to the Office of Management and Budget
(OMB)for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35). *Agency:* National Oceanic and Atmospheric Administration (NOAA). *Title:* NOAA Awareness Study. *OMB Approval Number:* None. *Form Number(s):* None. *Type of Request:* Regular submission. *Burden Hours:* 1,192. *Number of Respondents:* 3,096. *Average Hours Per Response:* Focus groups, 2 hours; web-based surveys, 20 minutes. *Needs and Uses:* Through the recently signed America COMPETES Act (“America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science Act”), NOAA is charged with developing and promoting education and outreach activities at all levels for the purpose of heightening the public's current understanding of issues related to atmospheric science, the Earth's environment, and protecting life and property. NOAA proposes to collect information to assess the general public's understanding and awareness of NOAA programs and services, especially as it relates to the collection and dissemination of scientific, operational, and climate data. The immediate collection of information would allow NOAA to implement a tailored approach to programmatic priorities for outreach and communications as effectively as possible. This would improve service for NOAA users and provide the public with warnings and forecasts that save lives and property and better disseminate products/services to aid in emergency preparedness. To conduct this evaluation, NOAA has contracted with Harmonics International to conduct 3,000 online surveys and 96 two-hour interviews in a three phase research project among the following target audiences: The American public, key NOAA stakeholders, and other organizations with similar missions. These statistically valid research methodologies will provide NOAA with a complete and accurate assessment of current awareness, perceptions, emotions, and attitudes pertaining to NOAA, its programs, services, and operational data dissemination methods. *Affected Public:* Individuals or households. *Frequency:* One-time only. *Respondent's Obligation:* Voluntary. *OMB Desk Officer:* David Rostker,
(202)395-3897. Copies of the above information collection proposal can be obtained by calling or writing Diana Hynek, Departmental Paperwork Clearance Officer,
(202)482-0266, Department of Commerce, Room 6625, 14th and Constitution Avenue, NW., Washington, DC 20230 (or via the Internet at *dHynek@doc.gov* ). Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to David Rostker, OMB Desk Officer, Fax number
(202)395-7285, or *David_Rostker@omb.eop.gov* . Dated: December 18, 2007. Gwellnar Banks, Management Analyst, Office of the Chief Information Officer. [FR Doc. E7-24884 Filed 12-21-07; 8:45 am] BILLING CODE 3510-22-P DEPARTMENT OF COMMERCE International Trade Administration Proposed Information Collection; Comment Request: Annual Report from Foreign-Trade Zones AGENCY: International Trade Administration, Commerce. ACTION: Notice. SUMMARY: The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal Agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. DATES: Written comments must be submitted on or before February 25, 2008. ADDRESSES: Direct all written comments to Diana Hynek, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6625, 14th and Constitution Avenue, NW., Washington, DC 20230 (or via the Internet at *dHynek@doc.gov* ). FOR FURTHER INFORMATION CONTACT: Requests for additional information or copies of the information collection instrument and instructions should be directed to Christopher J. Kemp,
(202)482-0862, *christopher_kemp@ita.doc.gov* , fax number
(202)482-0002. SUPPLEMENTARY INFORMATION: I. Abstract The Foreign-Trade Zone Annual Report is the vehicle by which Foreign-Trade Zone grantees report annually to the Foreign-Trade Zones Board, pursuant to the requirements of the Foreign Trade Zones Act (19 U.S.C. 81a-81u). The annual reports submitted by grantees are the only complete source of compiled information on FTZ's. The data and information contained in the reports relates to international trade activity in FTZ's. The reports are used by the Congress and the Department to determine the economic effect of the FTZ program. The reports are also used by the FTZ Board and other trade policy officials to determine whether zone activity is consistent with U.S. international trade policy, and whether it is in the public interest. The public uses the information regarding activities carried on in FTZ's to evaluate their effect on industry sectors. The information contained in annual reports also helps zone grantees in their marketing efforts. II. Method of Collection The Foreign-Trade Zone Annual Report is collected from zone grantees in paper format. The Foreign-Trade Zones Board is in the process of evaluating possible optional Web-based alternatives to the paper collection method. III. Data *OMB Control Number:* 0625-0109. *Form Number:* ITA 359P. *Type of Review:* Regular submission. *Affected Public:* State, local, or tribal government; not-for-profit institutions. *Estimated Number of Respondents:* 163. *Estimated Time Per Response:* 38-211 hours (depending on size and structure of foreign-trade zones). *Estimated Total Annual Burden Hours:* 14,594. *Estimated Total Annual Cost to Public:* $607,350. IV. Request for Comments *Comments are invited on:*
(a)Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility;
(b)the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information;
(c)ways to enhance the quality, utility and clarity of the information to be collected; and
(d)ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they will also become a matter of public record. Dated: December 18, 2007. Gwellnar Banks, Management Analyst, Office of the Chief Information Officer. [FR Doc. E7-24882 Filed 12-21-07; 8:45 am] BILLING CODE 3510-FP-P DEPARTMENT OF COMMERCE International Trade Administration A-570-912 Certain New Pneumatic Off-the-Road Tires From the People's Republic of China: Postponement of Preliminary Determination of Antidumping Duty Investigation AGENCY: Import Administration, International Trade Administration, Department of Commerce. DATES: *Effective Date:* December 26, 2007. FOR FURTHER INFORMATION CONTACT: Contact Laurel LaCivita at
(202)482-4243 or Charles Riggle at(202) 482-0650, AD/CVD Operations, Office 8, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230. SUPPLEMENTARY INFORMATION: Background On August 6, 2007, the Department of Commerce (“Department”) published the initiation of the antidumping duty investigation of certain new pneumatic off-the-road tires from the People's Republic of China (“PRC”). *See Initiation of Antidumping Duty Investigation: Certain New Pneumatic Off-the-Road Tires From the People's Republic of China,* 72 FR 43591 (August 6, 2007) (“ *Notice of Initiation* ”). The notice of initiation stated that we would make our preliminary determination for this antidumping duty investigation no later than 140 days after the date of issuance of the initiation. Currently, the preliminary determination is due December 17, 2007. Postponement of Preliminary Determination On November 15, 2007, the Titan Tire Corporation, a subsidiary of Titan International, Inc. (“Titan”), and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC (“USW”) (collectively, “Petitioners”), made a timely request pursuant to 19 CFR 351.205(e) for a 50-day postponement of the preliminary determination. Petitioners requested postponement of the preliminary determination because it will provide the Department additional time to evaluate the questionnaire responses. Petitioners argue that issues have emerged concerning potential PRC government involvement in the export and other commercial activities of certain of certain respondents. Finally, Petitioners argue that if the Department issues supplemental questionnaires to the mandatory respondents and the separate-rates companies, those responses would be due in December, which would not provide the Department or the parties sufficient time for analysis and comment, or permit the Department to issue further supplemental questionnaires prior to the currently scheduled December 17, 2007, preliminary determination. Under section 733(c)(1)(A) of the Tariff Act of 1930, as amended (“the Act”), if Petitioners make a timely request for a postponement of the preliminary determination, the Department may postpone the preliminary determination under subsection (b)(1) until no later than the 190th day after the initiation of the investigation. Therefore, for reasons identified by Petitioners, we are postponing the preliminary determination under section 733(c)(1)(A) of the Act by 50 days to February 5, 2008. Pursuant to 735(a) of the Act, the deadline for the final determination will continue to be 75 days after the date of the preliminary determination, or if extended, up to 135 days after the date of publication of the preliminary determination in the **Federal Register** . This notice is issued and published pursuant to sections 733(c)(2) of the Act and 19 CFR 351.205(f)(1). Dated: November 29, 2007. David M. Spooner, Assistant Secretary for Import Administration. [FR Doc. 07-5968 Filed 12-21-07; 8:45 am]
Connectionstraces to 79
Traces to 79 documents
U.S. Code
CFR
80 references not yet in our index
  • 14 CFR 39
  • 1 CFR 51
  • 15 CFR 806
  • 15 CFR 806.17
  • 15 CFR 806.18
  • 22 USC 3101-3108
  • 21 CFR 510
  • 5 USC 801-808
  • 21 CFR 1312
  • Pub. L. 109-57
  • 5 USC 601-612
  • 26 CFR 1
  • T.D. 9369
  • T.D. 9304
  • T.D. 9342
  • 27 CFR 447
  • Pub. L. 104-13
  • 5 CFR 1320
  • Pub. L. 101-433
  • 104 Stat. 978
  • 220 F.3d 193
  • Pub. L. 108-173
  • 117 Stat. 2066
  • 519 U.S. 337
  • 935 F.2d 322
  • 145 F.3d 601
  • 525 U.S. 1093
  • 823 F.2d 600
  • 383 F. Supp. 2d 705
  • 489 F.3d 558
  • 29 CFR 1625
  • 29 CFR 1627
  • 81 Stat. 604
  • 52 Stat. 1066
  • Pub. L. 99-592
  • 100 Stat. 3342
  • 81 Stat. 605
  • Pub. L. 87-415
  • 76 Stat. 23
  • Pub. L. 88-452
+ 40 more
Citation graph
cites case law
Rules and Regulations
Final rule
Fed. Reg.Proposed Rules
Fed. Reg.Notices
U.S.C.§ 106
C.F.R.§ 39.19
U.S.C.§ 552
Fed. Reg.Rules and Regulations
U.S.C.§ 605
U.S.C.§ 301
C.F.R.§ 510.600
F. App'x220 F.3d 193
SCOTUS519 U.S. 337
F. App'x935 F.2d 322
Cites 159 · showing 12Cited by 0 across 0 sources
★   the supreme law of the land   ★
Don't Tread on Me
E Pluribus Unum — out of many, one

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

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