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Code · REGISTER · 2008-01-03 · Animal and Plant Health Inspection Service, USDA · Rules and Regulations

Rules and Regulations. Proposed rule; withdrawal and reproposal

36,535 words·~166 min read·/register/2008/01/03/07-6259

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

BILLING CODE 3510-22-S 73 2 Thursday, January 3, 2008 Proposed Rules DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 9 CFR Parts 2 and 3 [Docket No. 99-014-2] RIN 0579-AC41 Animal Welfare; Climatic and Environmental Conditions for Transportation of Warmblooded Animals Other Than Marine Mammals AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Proposed rule; withdrawal and reproposal. SUMMARY: We are proposing to amend the Animal Welfare Act regulations regarding transportation of live animals other than marine mammals by removing the current ambient temperature requirements for various stages in the transportation of those animals.
We would replace those requirements with a single performance standard under which the animals would be transported under climatic and environmental conditions that are appropriate for their welfare. The regulations currently require that ambient temperatures be maintained within certain ranges during transportation, but animals may be transported at ambient temperatures below the minimum temperatures if their consignor provides a certificate signed by a veterinarian certifying that the animals are acclimated to temperatures lower than the minimum temperature.
This proposal would make acclimation certificates for live animals other than marine mammals unnecessary. This proposal replaces a previously published proposed rule, which we are withdrawing as part of this document, that would have required that the acclimation certificate for a dog or cat be signed by the owner of the dog or cat being transported rather than by a veterinarian. This proposal does not address marine mammals due to their unique requirements for care and handling.
These changes would remove potentially confusing temperature requirements and acclimation certificate provisions from the regulations governing the transportation of animals other than marine mammals and focus those regulations on ensuring that climatic and environmental conditions are maintained appropriately during transportation of those animals. DATES: We will consider all comments that we receive on or before March 3, 2008. ADDRESSES: You may submit comments by either of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov/fdmspublic/component/main?main=DocketDetail&d=APHIS-2006-0150* to submit or view comments and to view supporting and related materials available electronically. • *Postal Mail/Commercial Delivery:* Please send two copies of your comment to Docket No. 99-014-2, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238.
Please state that your comment refers to Docket No. 99-014-2. *Reading Room:* You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call
(202)690-2817 before coming. *Other Information:* Additional information about APHIS and its programs is available on the Internet at *http://www.aphis.usda.gov.* FOR FURTHER INFORMATION CONTACT: Dr. Jerry D. DePoyster, Veterinary Medical Officer, Animal Care, APHIS, 4700 River Road Unit 84, Riverdale, MD 20737-1234;
(301)734-7586. SUPPLEMENTARY INFORMATION: Background Under the Animal Welfare Act
(AWA)(7 U.S.C. 2131 *et seq.* ), the Secretary of Agriculture is authorized to promulgate regulations and standards governing the humane handling, housing, care, treatment, and transportation of certain animals by dealers, research facilities, exhibitors, and carriers and intermediate handlers. The Secretary has delegated the responsibility for enforcing the AWA to the U.S. Department of Agriculture's
(USDA)Animal and Plant Health Inspection Service (APHIS). Regulations and standards established under the AWA are contained in 9 CFR parts 1, 2, and 3 (referred to below as the regulations). Parts 1 and 2 contain definitions and general requirements, and part 3 contains specific standards for the care of animals. The regulations in part 3 are divided into six subparts, designated as subparts A through F, each of which contains facility and operating standards, animal health and husbandry standards, and transportation standards for a specific category of animals. Respectively, these categories of animals are: Dogs and cats (Subpart A); guinea pigs and hamsters (Subpart B); rabbits (Subpart C); nonhuman primates (Subpart D); marine mammals (Subpart E); and warmblooded animals other than those addressed in the previous subparts (Subpart F). In each of these subparts, the final seven sections contain standards for the transportation of the type of animals addressed in the subpart. These transportation standards are very similar across the subparts, although some details of their requirements differ. Each of the subparts specifies a range of ambient temperatures to which live animals may be exposed during transportation. For example, § 3.18 of subpart A contains minimum requirements for terminal facilities used in the transportation of dogs and cats. Among other things, § 3.18 requires that the ambient temperature in an animal holding area containing dogs and cats must not fall below 45 °F (7.2 °C) or rise above 85 °F (29.5 °C) for more than 4 consecutive hours at any time dogs or cats are present. Section 3.19 of subpart A contains minimum requirements for handling dogs and cats when they are moved within, to, or from an animal holding area of a terminal facility or a primary conveyance when being transported. Among other things, § 3.19 requires that dogs or cats must not be exposed to an ambient temperature below 45 °F (7.2 °C) or above 85 °F (29.5 °C) for a period of more than 45 minutes. Section 3.13, paragraph (e), requires that carriers and intermediate handlers must not accept a dog or cat for transport in commerce unless their animal holding area meets the minimum temperature requirements provided in §§ 3.18 and 3.19, or unless the consigner provides them with a certificate signed by a veterinarian certifying that the animal is acclimated to temperatures lower than those required in §§ 3.18 and 3.19. Such a certificate is commonly referred to as an acclimation certificate. Also related to climatic conditions, § 2.131 of the regulations contains requirements for the handling of animals that apply to all animals. Paragraph
(e)of this section requires that whenever climatic conditions present a threat to an animal's health or well-being, appropriate measures must be taken to alleviate the impact of those conditions. This requirement is in addition to, not in place of, the specific temperature requirements in 9 CFR part 3. The June 1999 Proposed Rule Regarding Acclimation Certificates On June 7, 1999, we published in the **Federal Register** (64 FR 30527-30529, Docket No. 99-014-1) a proposal to amend the regulations by requiring that acclimation certificates be signed by the owner of the dog or cat rather than by a veterinarian. We proposed this change because veterinarians are often asked to sign certificates of acclimation for dogs and cats that they have seen only for routine examinations or if the animals are ill. It is difficult for a veterinarian to determine if a dog or cat has been acclimated to a specific temperature based on a veterinary examination. Therefore, we determined that it was inappropriate to place responsibility for such certification on veterinarians. We solicited comments concerning our proposal for 60 days ending August 6, 1999. We received a total of 19 comments by that date. They were from animal welfare organizations, veterinary medical associations, a federation of dog sports associations, and private citizens. The comments we received have led us to withdraw the June 1999 proposed rule and issue this reproposal. This reproposal would remove the current ambient temperature requirements for various stages in the transportation of dogs and cats, as well as all other live animals other than marine mammals. It would replace those requirements with a performance standard under which those animals must be transported under climatic conditions that are not detrimental to the animals' welfare. The comments are described below. Of the 19 commenters, six commenters, all veterinary medical associations, strongly supported the proposal. These commenters stated that, under the current regulations, veterinarians are requested to issue acclimation certificates without being able to ensure the accuracy of the certificates, due to unfamiliarity with the animal to be transported under the acclimation certificate. Often, these commenters said, the veterinarian asked to issue the certificate has never before seen the animal for which the certificate is requested. Veterinarians who are unfamiliar with a dog or cat for which an acclimation certificate is requested must either deny certification due to their lack of knowledge about the animal or issue a certificate that is worded to reflect uncertainty about its appropriateness. The commenters stated that this could result in the veterinarian being exposed to liability if the animal being transported under an acclimation certificate suffers harm in transit. These commenters agreed that the owner of a dog or cat that is to be transported is likely to have the most knowledge about whether the animal is acclimated to temperatures below 45 °F (7.2 °C). One commenter supported the proposal but stated that it was unclear to many regulated parties how the acclimation certificate is used and to what stages of the transportation of dogs and cats it applies. The commenter also expressed doubt that the requirements of the acclimation certificate were consistently enforced. This commenter urged that we reexamine the regulations to address other issues relating to the transportation of dogs and cats. The other 12 commenters opposed the proposed rule. Noting that the analysis under the heading “Executive Order 12866 and Regulatory Flexibility Act” in the proposed rule stated that licensed dealers transport animals more often than other dog and cat owners, these commenters were concerned that licensed dealers might have an interest in falsely certifying the animals they transport as being acclimated to ambient temperatures lower than 45 °F (7.2 °C) in order to reduce the cost of transporting the animals. Some of these commenters also expressed concern that individual dog and cat owners might lack the knowledge necessary to evaluate whether their dogs or cats are acclimated to low temperatures. One of the commenters opposed to the proposal stated that the availability of the acclimation certificate, regardless of whether it is signed by a veterinarian or by the owner of the animal, has the potential to weaken the effectiveness of the temperature requirements in §§ 3.18 and 3.19. This commenter suggested that we eliminate the acclimation certificate entirely and add to our current temperature requirements a performance standard stating that “at no time may an animal be exposed to a combination of temperature, humidity, and time that would pose a threat to the animal's health and well-being.” The commenter's proposed language was drawn from paragraph
(e)of § 2.131, which was quoted earlier in this document and which applies to the handling of all animals. We agree with the commenters that there may be some confusion about the purpose and applicability of acclimation certificates. In addition, we agree that the acclimation certificate would not be necessary if a single performance standard for maintaining climatic and environmental conditions were in place instead of the temperature requirement. Other considerations also indicate that a single performance standard may be preferable to the specific requirements for ambient temperature ranges currently in the regulations. A specific case arises in the regulations governing the transportation of dogs and cats. Besides the temperature requirements in §§ 3.18 and 3.19, which have been described previously in this document, § 3.15 requires that, during surface transportation, the ambient temperature may not exceed 85 °F (29.5 °C) or fall below 45 °F (7.2 °C) for more than 4 consecutive hours. While the time limits in §§ 3.15, 3.18, and 3.19 regarding exposure to temperatures outside the prescribed ranges provide some flexibility to carriers and intermediate handlers transporting dogs and cats, they could also result in dogs and cats being exposed to ambient temperatures outside the prescribed ranges during transport for lengthy periods. This is because the temperature requirements apply to different stages of transportation for dogs and cats, and each change in a stage of transportation allows for an additional period during which temperatures outside the prescribed range can be maintained without violating the regulations. The regulations divide the transportation of dogs and cats into stages for regulatory purposes: Transportation in a primary conveyance; transportation from a terminal facility into a primary conveyance, from a primary conveyance into a terminal facility, or from a primary conveyance to another primary conveyance; and holding time in a terminal facility. A typical itinerary for the transportation of a dog or cat thus might include time at a terminal facility awaiting departure, time for transportation from that terminal facility into a surface transportation primary conveyance, time in the primary conveyance, time for transportation from the primary conveyance to a destination terminal facility, and time at the destination terminal facility awaiting pick-up. Under the current regulations, dogs and cats may be exposed to ambient temperatures above 85 °F (29.5 °C) or below 45 °F (7.2 °C) for up to 4 consecutive hours at a terminal facility, for up to 45 minutes during transportation between a terminal facility and a primary conveyance, and for up to 4 consecutive hours in a primary surface transportation conveyance. Dogs or cats following the typical itinerary described in the previous paragraph could conceivably be exposed to temperatures outside the prescribed ranges for up to 13.5 hours (4 hours each at the initial terminal facility, the primary conveyance, and the final terminal facility, and 45 minutes for two stages of transportation between the primary conveyance and the terminal facilities) without violating the specific ambient temperature requirements in the regulations. The temperature requirements in §§ 3.15, 3.18, and 3.19 are in addition to, not in place of, other temperature requirements in 9 CFR parts 2 and 3, such as the requirements in § 2.131(e); therefore, if prolonged exposure to temperatures above 85 °F (29.5 °C) or below 45 °F (7.2 °C) was detrimental to the welfare of a dog or cat, the persons transporting that dog or cat would be required to take measures to avoid a situation like the one described above. We work with carriers and intermediate handlers to ensure that they are aware of all the requirements related to climatic and environmental conditions that apply to the transportation of animals. If we suspect that climatic or environmental conditions have not been properly maintained, an inspector will observe the animal for clinical signs of exposure to adverse conditions, examine the enclosure, and record the ambient temperature. However, exposure to temperatures outside the prescribed ranges for the periods permitted under the current regulations for transportation of dogs and cats could adversely affect animal welfare, contrary to the regulations in § 2.131(e). The other regulations governing the transportation of live animals in part 3 also contain similar provisions allowing the ambient temperature to rise above or fall below prescribed limits for periods of time. The regulations should ensure that live animals are transported in climatic and environmental conditions that provide for their continued welfare during transportation. A performance standard that replaces the specific temperature requirements and sets out the various factors in climatic and environmental conditions that need to be addressed and the hazards of transportation in suboptimal climatic and environmental conditions that must be avoided would provide for more flexibility while ensuring that live animals are transported in conditions that promote their welfare. Accordingly, for the reasons discussed above, we are proposing to remove the provisions for an acclimation certificate from the regulations governing the transportation of all live animals, except marine mammals, in part 3. (Marine mammals have unique requirements for climatic and environmental conditions, and we believe the more specific standards that currently apply to them under subpart E of 9 CFR part 3 are necessary to ensure their welfare.) We are also proposing to remove from the regulations all the requirements that the ambient temperature be maintained within a specific temperature range for live animals other than marine mammals and replace those requirements with a single performance standard for maintaining climatic and environmental conditions that promote the welfare of live animals during their transportation. The new performance standard is described below. Proposed Performance Standard for Climatic and Environmental Conditions During Transportation of Live Animals Other Than Marine Mammals We would add the proposed performance standard to the regulations in 9 CFR part 2 by adding a new paragraph
(f)in § 2.131 that is specific to climatic and environmental conditions during transportation of live animals other than marine mammals. Paragraph (f)(1) of the proposed performance standard would state that transportation of all live animals shall be done in a manner that does not cause overheating, excessive cooling, or adverse environmental conditions that could cause unnecessary discomfort or stress. When climatic or environmental conditions, including temperature, humidity, exposure, ventilation, pressurization, time, or other environmental condition, or any combination thereof, present a threat to the health or well-being of a live animal, appropriate measures would have to be taken immediately to alleviate the impact of those conditions. The different climatic and environmental factors prevailing during a journey would always have to be considered when arranging for the transportation of and when transporting live animals. Corrections may include, but would not be limited to: • The temperature and humidity level of any enclosure used during transportation of live animals would have to be controlled by adequate ventilation or any other means necessary; • Appropriate care would have to be taken to ensure that live animals are not subjected to drafts; • Appropriate care would have to be taken to ensure that live animals are not exposed to direct heat, such as placement in direct sunlight or near a hot radiator; • Appropriate care would have to be taken to ensure that live animals are not exposed to direct sources of cold, and; • During prolonged air transit stops in local climatic conditions that could produce excess heat for live animals held in aircraft compartments, the aircraft doors would have to be opened and if necessary ground equipment would have to be used to control the condition of the air within compartments containing live animals. Proposed paragraph (f)(2) of the performance standard provides examples of factors to consider when meeting the requirements of proposed paragraph (f)(1). Paragraph (f)(2) would state that, in order to determine what climatic and environmental conditions are appropriate for a warmblooded animal, factors such as, but not limited to, the animal's age, type or breed, physiological state, last feeding, and acclimation would have to be considered when such information is available. Proposed Changes to 9 CFR Part 3 As part of adding the new performance standard in § 2.131(f), we would amend references to specific standards for climatic and environmental conditions in each of the six subparts in 9 CFR part 3, except the marine mammals subpart, to refer to § 2.131(f). We would also add new sections at the end of each of the six subparts in 9 CFR part 3, except the marine mammals subpart, that would state that climatic and environmental conditions for the transport of the animals in question would have to be maintained in accordance with the requirements of § 2.131(f). The new sections would be added to the regulations as §§ 3.20 (dogs and cats), 3.42 (guinea pigs and hamsters), 3.67 (rabbits), 3.93 (nonhuman primates), and 3.143 (warmblooded animals other than dogs, cats, rabbits, hamsters, guinea pigs, nonhuman primates, and marine mammals). Each of the sections would be titled “Climatic and environmental conditions during transportation.” The transportation requirements in the subparts of 9 CFR part 3 are structured similarly, with identical section titles addressing various aspects of the transportation of live animals. The changes we are proposing for the regulations governing the transportation of the various types of live animals other than marine mammals are similar as well. We will discuss the changes we are proposing in general terms and cite the paragraphs we are proposing to change below. A complete list of the changes we are proposing to make in 9 CFR part 3 can be found in the regulatory text at the end of this document. • *Consignments to carriers and intermediate handlers.* These sections currently contain provisions stating that carriers and intermediate handlers must not accept a live animal for transport in commerce unless their animal holding area can maintain a required temperature range or unless the animal being transported is being transported with an acclimation certificate. We would replace these provisions with a statement that carriers and intermediate handlers must not accept a live animal for transport in commerce unless their animal holding area can maintain climatic and environmental conditions in accordance with the proposed performance standard in § 2.131(f). This change would be made in §§ 3.13(e), 3.35(c), 3.60(c), 3.86(e), and 3.136(c). • *Primary conveyances (motor vehicle, rail, air, and marine).* These sections currently contain various requirements related to maintaining climatic conditions while in transit in a primary conveyance. For example, the regulations in § 3.15(d) require that, during air transportation, dogs and cats must be held in cargo areas that are heated or cooled as necessary to maintain an ambient temperature that ensures the health and well-being of the dogs or cats. Paragraph
(e)in § 3.15 contains temperature requirements for surface transportation. The regulations for rabbits in § 3.62(g) contain requirements for the use of auxiliary fans and for the maintenance of ambient temperatures. All these requirements (and other, similar requirements) would be replaced with provisions requiring that, during transportation, climatic and environmental conditions in the animal cargo area must be maintained in accordance with the proposed performance standard in § 2.131(f). This change would be made in §§ 3.15(d) and (e), 3.37(g), 3.62(g), and 3.88(d) and (e). • *Care in transit.* These sections require, among other things, that persons transporting live animals in commerce must observe the animals periodically to ensure that the ambient temperature is within the limits prescribed elsewhere in the relevant subpart. We are proposing to require instead that such persons ensure that climatic and environmental conditions are being maintained in accordance with the proposed performance standard in § 2.131(f). This change would be made in §§ 3.17, 3.39(a), 3.64(a), 3.90, and 3.140. • *Terminal facilities.* These sections contain ambient temperature requirements for the animal holding areas at terminal facilities. We would replace these requirements with requirements that the climatic and environmental conditions in animal holding areas be maintained in accordance with the proposed performance standard in § 2.131(f). This change would be made in §§ 3.18(d), 3.40, 3.65, 3.91(d), and 3.141. • *Handling.* In all these sections, paragraph
(a)contains various requirements relating to the handling of live animals as they are moved within, to, or from the animal holding area of a terminal facility or a primary conveyance. We are proposing to remove all the requirements relating to maintaining an ambient temperature and replace them with a new paragraph (a)(3) that would require that climatic and environmental conditions be maintained in accordance with the proposed performance standard in § 2.131(f). However, we would retain the specific requirements that live animals be sheltered from the direct rays of the sun and that protection be provided to allow the live animals to remain dry during rain, snow, and other precipitation. These would be found in paragraphs (a)(1) and (a)(2), respectively. This change would be made in §§ 3.19, 3.41, 3.66, 3.92, and 3.141. Miscellaneous We also propose to correct typographical errors in §§ 3.35, 3.36, 3.64, and 3.137. Executive Order 12866 and Regulatory Flexibility Act This proposed rule has been reviewed under Executive Order 12866. The rule has been determined to be significant for the purposes of Executive Order 12866 and, therefore, has been reviewed by the Office of Management and Budget. We have prepared an economic analysis for this proposed rule. It provides a cost-benefit analysis, as required by Executive Order 12866, as well as an initial regulatory flexibility analysis that considers the potential economic effects of this proposed rule on small entities, as required by the Regulatory Flexibility Act. The economic analysis is summarized below. Copies of the full economic analysis are available by contacting the person listed under FOR FURTHER INFORMATION CONTACT or on the Regulations.gov Web site (see ADDRESSES above for instructions for accessing Regulations.gov). APHIS has promulgated minimum standards for the humane transportation, in commerce, of live dogs, cats, guinea pigs, hamsters, rabbits, nonhuman primates, marine mammals, and certain other warmblooded animals. Among other things, the standards govern the animals' exposure to temperature extremes during the various stages of transportation ( *e.g.* , while in animal holding areas of terminals, while in primary conveyances). The current regulations generally prescribe ambient temperature ranges, usually from a low of 45 °F to a high of 85 °F. Animals may be exposed to lower temperatures as long as the consignor provides a certificate, signed by a veterinarian, certifying that the animal has been acclimated to temperatures outside the prescribed range. Some animals, including dogs and cats, may also be exposed to temperatures outside the prescribed temperature range for specified time periods. The proposed rule would remove the current ambient temperature requirements for all covered animals except marine mammals and replace those requirements with a single performance standard under which the animals would have to be transported under climatic and environmental conditions that are not detrimental to their welfare. The proposal would also remove the current provisions relating to acclimation certificates for live animals other than marine mammals, since those certificates would no longer be necessary. The proposed changes are intended to ensure that the affected animals are transported in climatic conditions that are not detrimental to their welfare while allowing for variations as to what climatic conditions are suitable for individual animals. The proposed rule has the potential to have an economic impact on carriers and intermediate handlers that accept the affected animals for transport in commerce. Consignors and practicing veterinarians would no longer have to provide acclimation certificates, and therefore the rule would relieve them from having to fulfill a requirement. Veterinarians would forego the fees that they might otherwise charge consignor-owners for certifications, but any such fees are likely to be insignificant, when judged against the veterinarians' overall revenues from all sources. From an economic standpoint, the proposal has the potential to impact carriers and intermediate handlers-large and small-because compliance may require that they modify the climatic conditions to which they currently expose animals. However, based on our experience enforcing the regulations, it appears that, for most carriers and handlers, a modification of existing climatic conditions would not be necessary, since those conditions appear to be appropriate already. In addition, the proposed rule would afford carriers and intermediate handlers some flexibility in providing appropriate climatic conditions for each animal they transport. Within the overall carrier and handler category, the airline and to a lesser extent motor freight line industries are most likely to include entities affected by the proposed rule. It is likely that the rule may affect an unknown number of small entities. Although we believe that the proposal would not have a significant economic impact on a substantial number of small entities, hard data to support that conclusion is not available. Accordingly, we have prepared this initial regulatory flexibility analysis so that the public may have the opportunity to offer comments on expected effects of the proposed rule on small entities. Executive Order 12372 This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.) Executive Order 12988 This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. This rule would not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule. The Act does not provide administrative procedures which must be exhausted prior to a judicial challenge to the provisions of this rule. Paperwork Reduction Act This proposed rule contains no new information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). Further, this proposed rule would reduce information collection or recordkeeping requirements in 9 CFR part 3. Lists of Subjects 9 CFR Part 2 Animal welfare, Pets, Reporting and recordkeeping requirements, Research. 9 CFR Part 3 Animal welfare, Marine mammals, Pets, Reporting and recordkeeping requirements, Research, Transportation. Accordingly, we are proposing to amend 9 CFR parts 2 and 3 as follows: PART 2—REGULATIONS 1. The authority citation for part 2 continues to read as follows: Authority: 7 U.S.C. 2131-2159; 7 CFR 2.22, 2.80, and 371.7. 2. In § 2.131, a new paragraph
(f)is added to read as follows: § 2.131 Handling of animals. (f)(1) Transportation of all live animals shall be done in a manner that does not cause overheating, excessive cooling, or adverse environmental conditions that could cause unnecessary discomfort or stress. When climatic or environmental conditions, including temperature, humidity, exposure, ventilation, pressurization, time, or other environmental conditions, or any combination thereof, present a threat to the health or well-being of a live animal, appropriate measures shall be taken immediately to alleviate the impact of those conditions. The different climatic and environmental factors prevailing during a journey shall be considered when arranging for the transportation of and when transporting live animals. Corrections may include, but would not be limited to:
(i)The temperature and humidity level of any enclosure used during transportation of live animals must be controlled by adequate ventilation or any other means necessary;
(ii)Appropriate care must be taken to ensure that live animals are not subjected to drafts;
(iii)Appropriate care must be taken to ensure that live animals are not exposed to direct heat, such as placement in direct sunlight or near a hot radiator;
(iv)Appropriate care must be taken to ensure that live animals are not exposed to direct sources of cold; and
(v)During prolonged air transit stops in local climatic conditions that could produce excessive heat for live animals held in aircraft compartments, the aircraft doors shall be opened and if necessary ground equipment shall be used to control the condition of the air within compartments containing live animals.
(2)In order to determine what climatic and environmental conditions are appropriate for a live animal, factors such as, but not limited to, the animal's age, type or breed, physiological state, last feeding, and acclimation shall be considered when such information is available. PART 3—STANDARDS 3. The authority citation for part 3 continues to read as follows: Authority: 7 U.S.C. 2131-2159; 7 CFR 2.22, 2.80, and 371.7. 4. In § 3.13, paragraph
(e)is revised to read as set forth below. § 3.13 Consignments to carriers and intermediate handlers.
(e)Carriers and intermediate handlers shall not accept a dog or cat for transport in commerce unless their animal holding area can maintain climatic and environmental conditions in accordance with the requirements of § 2.131(f). 5. Section 3.15 is amended as follows: a. By revising paragraph
(d)to read as set forth below. b. By removing paragraph
(e)and redesignating paragraphs (f), (g), and
(h)as paragraphs (e), (f), and (g), respectively. § 3.15 Primary conveyances (motor vehicle, rail, air, and marine).
(d)During transportation, the climatic and environmental conditions in the animal cargo area shall be maintained in accordance with § 2.131(f). § 3.17 [Amended] 6. Section 3.17 is amended as follows: a. In paragraph (a), by removing the words “the ambient temperature is within the limits provided in § 3.15(e)” and adding the words “climatic and environmental conditions are being maintained in accordance with the requirements of § 2.131(f)” in their place. b. In paragraph (b), by removing the words “the animal cargo area meets the heating and cooling requirements of § 3.15(d)” and adding the words “climatic and environmental conditions are being maintained in the animal cargo area in accordance with the requirements of § 2.131(f)” in their place. 7. Section 3.18 is amended as follows: a. In paragraph (c), by removing the last sentence. b. By revising paragraph
(d)to read as set forth below. § 3.18 Terminal facilities.
(d)Climatic and environmental conditions. The climatic and environmental conditions in an animal holding area containing dogs and cats shall be maintained in accordance with the requirements of § 2.131(f). 8. In § 3.19, paragraph
(a)is revised to read as follows: § 3.19 Handling.
(a)Any person subject to the Animal Welfare regulations (9 CFR parts 1, 2, and 3) who moves (including loading and unloading) dogs or cats within, to, or from the animal holding area of a terminal facility or a primary conveyance shall do so as quickly and efficiently as possible and shall provide the following during movement of the dog or cat:
(1)*Shelter from sunlight and extreme heat.* Sufficient shade shall be provided to protect the dog or cat from the direct rays of the sun.
(2)*Shelter from rain and snow.* Sufficient protection shall be provided to allow the dogs and cats to remain dry during rain, snow, and other precipitation.
(3)*Climatic and environmental conditions.* Climatic and environmental conditions during movement shall be maintained in accordance with the requirements of § 2.131(f). 9. A new § 3.20 is added to read as follows: § 3.20 Climatic and environmental conditions during transportation. Climatic and environmental conditions during transportation of dogs and cats shall be maintained in accordance with the requirements of § 2.131(f) of this subchapter. 10. Section 3.35 is amended as follows: a. In paragraph (a), by removing the word “govenment” and adding the word “government” in its place. b. By revising paragraph
(c)to read as set forth below. § 3.35 Consignments to carriers and intermediate handlers.
(c)Carriers and intermediate handlers shall not accept a live guinea pig or hamster for transport in commerce unless their animal holding area can maintain climatic and environmental conditions in accordance with the requirements of § 2.131(f). § 3.36 [Amended] 11. In § 3.36, paragraph
(b)is amended by removing the word “tranported” and adding the word “transported” in its place. 12. In § 3.37, paragraph
(g)is amended by removing the second and third sentences and adding a new second sentence to read as follows: § 3.37 Primary conveyances (motor vehicle, rail, air, and marine).
(g)* * * During transportation, the climatic and environmental conditions in the animal cargo area shall be maintained in accordance with the requirements of § 2.131(f). § 3.39 [Amended] 13. In § 3.39, paragraph
(a)is amended as follows: a. In the first sentence, by removing the words “their ambient temperatures are within the prescribed limits,” and adding the words “climatic and environmental conditions are being maintained in accordance with the requirements of § 2.131(f),” in their place. b. In the third sentence, by removing the words “their ambient temperatures are within the prescribed limits,” and adding the words “climatic and environmental conditions are being maintained in accordance with the requirements of § 2.131(f), and” in their place. 14. Section 3.40 is amended by removing the fifth, sixth, and seventh sentences and adding a new fifth sentence to read as follows: § 3.40 Terminal facilities. * * * Climatic and environmental conditions in the animal holding area shall be maintained in accordance with the requirements of § 2.131(f). 15. In § 3.41, paragraph
(a)is revised to read as follows: § 3.41 Handling.
(a)Any person subject to the Animal Welfare regulations (9 CFR parts 1, 2, and 3) who moves (including loading and unloading) live guinea pigs or hamsters within, to, or from the animal holding area of a terminal facility or a primary conveyance shall do so as quickly and efficiently as possible and shall provide the following during movement of the live guinea pig or hamster:
(1)*Shelter from sunlight and extreme heat.* Sufficient shade shall be provided to protect the live guinea pigs and hamsters from the direct rays of the sun.
(2)*Shelter from rain and snow.* Sufficient protection shall be provided to allow the live guinea pigs and hamsters to remain dry during rain, snow, and other precipitation.
(3)*Climatic and environmental conditions.* Climatic and environmental conditions during movement shall be maintained in accordance with the requirements of § 2.131(f). 16. A new § 3.42 is added to read as follows: § 3.42 Climatic and environmental conditions during transportation. Climatic and environmental conditions during transportation of live guinea pigs and hamsters shall be maintained in accordance with the requirements of § 2.131(f) of this subchapter. 17. Section 3.60 is amended by revising paragraph
(c)to read as set forth below: § 3.60 Consignments to carriers and intermediate handlers.
(c)Carriers and intermediate handlers shall not accept a live rabbit for transport in commerce unless their animal holding area can maintain climatic and environmental conditions in accordance with the requirements of § 2.131(f). 18. In § 3.62, paragraph
(g)is amended by removing the second and third sentences and adding a new second sentence to read as follows: § 3.62 Primary conveyances (motor vehicle, rail, air, and marine).
(g)* * * During transportation, the climatic and environmental conditions in the animal cargo area shall be maintained in accordance with the requirements of § 2.131(f). § 3.64 [Amended] 19. In § 3.64, paragraph
(a)is amended as follows: a. In the first sentence, by removing the word “th” and adding the word “the” in its place; by removing the words “their ambient temperatures are within the prescribed limits,” and adding the words “climatic and environmental conditions are being maintained in accordance with the requirements of § 2.131(f),” in their place; and by removing the word “disress” and adding the word “distress” in its place. b. In the third sentence, by removing the words “their ambient temperatures are within the prescribed limits,” and adding the words “climatic and environmental conditions are being maintained in accordance with the requirements of § 2.131(f), and” in their place. 20. Section 3.65 is amended by removing the fifth, sixth, and seventh sentences and adding a new fifth sentence to read as follows: § 3.65 Terminal facilities. * * * Climatic and environmental conditions in the animal holding area shall be maintained in accordance with the requirements of § 2.131(f). 21. In § 3.66, paragraph
(a)is revised to read as follows: § 3.66 Handling.
(a)Any person subject to the Animal Welfare regulations (9 CFR parts 1, 2, and 3) who moves (including loading and unloading) live rabbits within, to, or from the animal holding area of a terminal facility or a primary conveyance shall do so as quickly and efficiently as possible and shall provide the following during movement of the live rabbits:
(1)*Shelter from sunlight and extreme heat.* Sufficient shade shall be provided to protect the live rabbits from the direct rays of the sun.
(2)*Shelter from rain and snow.* Sufficient protection shall be provided to allow the live rabbits to remain dry during rain, snow, and other precipitation.
(3)*Climatic and environmental conditions.* Climatic and environmental conditions during movement shall be maintained in accordance with the requirements of § 2.131(f). 22. A new § 3.67 is added to read as follows: § 3.67 Climatic and environmental conditions during transportation. Climatic and environmental conditions during transportation of live rabbits shall be maintained in accordance with the requirements of § 2.131(f) of this subchapter. 23. Section 3.86 is amended by revising paragraph
(e)to read as set forth below: § 3.86 Consignments to carriers and intermediate handlers.
(e)Carriers and intermediate handlers shall not accept a nonhuman primate for transport in commerce unless their animal holding area can maintain climatic and environmental conditions in accordance with the requirements of § 2.131(f). 24. Section 3.88 is amended as follows: a. By revising paragraph
(d)to read as follows. b. By removing paragraph
(e)and redesignating paragraphs
(f)through
(i)as paragraphs
(e)through (h), respectively. § 3.88 Primary conveyances (motor vehicle, rail, air, and marine).
(d)During transportation, the climatic conditions in the animal cargo area shall be maintained in accordance with the requirements of § 2.131(f). 25. In § 3.90, paragraphs
(a)and
(b)are amended by removing the words “the ambient temperature is within the limits provided in § 3.88(d) of this subpart” and adding the words “climatic and environmental conditions are being maintained in accordance with the requirements of § 2.131(f)” in their place. 26. Section 3.91 is amended as follows: a. In paragraph (c), by removing the last sentence. b. By revising paragraph
(d)to read as set forth below. § 3.91 Terminal facilities.
(d)*Climatic and environmental conditions.* The climatic and environmental conditions in an animal holding area containing nonhuman primates shall be maintained in accordance with the requirements of § 2.131(f). 27. In § 3.92, paragraph
(a)is revised to read as follows: § 3.92 Handling.
(a)Any person subject to the Animal Welfare regulations (9 CFR parts 1, 2, and 3) who moves (including loading and unloading) nonhuman primates within, to, or from the animal holding area of a terminal facility or a primary conveyance shall do so as quickly and efficiently as possible and shall provide the following during movement of the nonhuman primates:
(1)*Shelter from sunlight and extreme heat.* Sufficient shade shall be provided to protect the nonhuman primates from the direct rays of the sun.
(2)*Shelter from rain and snow.* Sufficient protection shall be provided to allow the nonhuman primates to remain dry during rain, snow, and other precipitation.
(3)*Climatic and environmental conditions.* Climatic and environmental conditions during movement shall be maintained in accordance with the requirements of § 2.131(f). 28. A new § 3.93 is added to read as follows: § 3.93 Climatic and environmental conditions during transportation. Climatic and environmental conditions during transportation of nonhuman primates shall be maintained in accordance with the requirements of § 2.131(f) of this subchapter. 29. Section 3.136 is amended by revising paragraph
(c)to read as follows: § 3.136 Consignments to carriers and intermediate handlers.
(c)Carriers and intermediate handlers shall not accept a live animal for transport in commerce unless their animal holding area can maintain climatic and environmental conditions in accordance with the requirements of § 2.131(f). § 3.137 [Amended] 30. In § 3.137, paragraph (a)(3) is amended by removing the word “opernings” and adding the word “openings” in its place. § 3.140 [Amended] 31. In § 3.140, paragraph
(a)is amended as follows: a. In the first sentence, by removing the words “their ambient temperatures are within the prescribed limits,” and adding the words “climatic and environmental conditions are being maintained in accordance with the requirements of § 2.131(f),” in their place. b. In the third sentence, by removing the words “their ambient temperatures are within the prescribed limits,” and adding the words “climatic and environmental conditions are being maintained in accordance with the requirements of § 2.131(f), and” in their place. 32. Section 3.141 is amended by removing the fifth, sixth, and seventh sentences and adding a new fifth sentence to read as follows: § 3.141 Terminal facilities. * * *Climatic and environmental conditions in the animal holding area shall be maintained in accordance with the requirements of § 2.131(f). 33. In § 3.142, paragraph
(a)is revised to read as follows: § 3.142 Handling.
(a)Any person subject to the Animal Welfare regulations (9 CFR parts 1, 2, and 3) who moves (including loading and unloading) live animals within, to, or from the animal holding area of a terminal facility or a primary conveyance shall do so as quickly and efficiently as possible and shall provide the following during movement of the live animals:
(1)*Shelter from sunlight and extreme heat.* Sufficient shade shall be provided to protect the live animals from the direct rays of the sun.
(2)*Shelter from rain and snow.* Sufficient protection shall be provided to allow the live animals to remain dry during rain, snow, and other precipitation.
(3)*Climatic and environmental conditions.* Climatic and environmental conditions during movement shall be maintained in accordance with the requirements of § 2.131(f). 34. A new § 3.143 is added to read as follows: § 3.143 Climatic and environmental conditions during transportation. Climatic and environmental conditions during transportation of live animals shall be maintained in accordance with the requirements of § 2.131(f) of this subchapter. Done in Washington, DC, this 26th day of December 2007. Kevin Shea, Acting Under Secretary for Marketing and Regulatory Programs. [FR Doc. E7-25530 Filed 1-2-08; 8:45 am] BILLING CODE 3410-34-P FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Part 361 RIN 3064-AD23 Minority and Women Outreach Program Contracting AGENCY: Federal Deposit Insurance Corporation (FDIC). ACTION: Notice of proposed rulemaking. SUMMARY: This proposal would amend existing FDIC regulations regarding the FDIC's contracting activities under its Minority and Women Outreach Program (MWOP). These are relatively minor amendments designed to eliminate several provisions rendered obsolete by significant reductions in FDIC contracting activities and decreases in FDIC staff to monitor the contracting activities of Minority and Women-Owned Businesses (MWOBs). DATES: Comments must be received on or before March 3, 2008. ADDRESSES: You may submit comments by any of the following methods: • *Agency Web site: http://www.fdic.gov/regulations/laws/federal/propose.html.* Follow instructions for submitting comments on the Agency Web site. • *E-mail: Comments@FDIC.gov.* Include “Part 361—Minority and Women Outreach Program Contracting” in the subject line of the message. • *Mail:* Robert E. Feldman, Executive Secretary, Attention: Comments, Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 20429. • *Hand Delivery/Courier:* Guard station at the rear of the 550 17th Street Building (located on F Street) on business days between 7 a.m. and 5 p.m. • *Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.* *Public Inspection:* All comments received will be posted without change to *http://www.fdic.gov/regulations/laws/federal* including any personal information provided. Comments may be inspected and photocopied in the FDIC Public Information Center, 3501 North Fairfax Drive, Room E-1002, Arlington, VA 22226, between 9 a.m. and 5 p.m. on business days. Paper copies of public comments may be ordered from the Public Information Center by telephone at
(877)275-3342 or
(703)562-2200. FOR FURTHER INFORMATION CONTACT: Robert P. Elcan, Chief, Minority & Women Outreach Program Section, Office of Diversity and Economic Opportunity, at *RElcan@fdic.gov* or
(703)562-6070; or Trisha M. Bursey, Assistant Director, Division of Administration, Acquisition Services Branch, Policy and Operations Section, at *TBursey@fdic.gov* or
(703)562-2212; or Chris J. Conanan, Counsel, Legal Division, Corporate Operations Branch, Corporate and Legal Operations Section, Contracting and Internal Review Unit, at *CConanan@fdic.gov* or
(703)562-2335. SUPPLEMENTARY INFORMATION: I. Background Section 1216 of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 provides that the FDIC shall “prescribe regulations to establish and oversee a minority outreach program[s] * * * to ensure inclusion, to the maximum extent possible, of minorities and women, and entities owned by minorities and women * * * in all contracts entered into by the agency * * *.” 12 U.S.C. 1833e(c). Since 1992, the FDIC has promulgated Outreach Regulations implementing this statutory directive and has used various approaches to ensure the maximum inclusion of MWOBs in contracts entered into by the agency, including, among other things, formal solicitations and a focus on Small Disadvantaged Businesses (SDBs). The MWOP is administered by the FDIC's Office of Diversity and Economic Opportunity (ODEO); however, actual contracts are awarded by the FDIC through the Acquisition Services Branch, Division of Administration. Nonetheless, since promulgation of the Outreach Regulations, and amendments made in 1995 and 2000, FDIC contracting activities have significantly declined, which has resulted in fewer contract awards to MWOBs. Consequently, FDIC staff involved in MWOB registration, monitoring, and data collection has been significantly reduced, and the provisions in the Outreach Regulations that correspond to these staff activities have not been operational for several years. For these reasons, the FDIC proposes elimination of obsolete regulatory provisions. Specifically, the FDIC proposes to eliminate current regulatory provisions that call for registration of MWOBs; quarterly MWOB data reports from Offices or Divisions within the FDIC to ODEO; and the designation of MWOP coordinators within FDIC Offices or Divisions. II. Request for Comments The FDIC welcomes comments on all aspects of this proposal. III. Solicitation of Comments on Use of Plain Language Section 722 of the Gramm-Leach-Bliley Act, Pub. L. 106-102, sec. 722, 113 Stat. 1338, 1471 (Nov. 12, 1999), requires the federal banking agencies to use plain language in all proposed and final rules published after January 1, 2000. We invite your comments on how to make this proposal easier to understand. For example: • Have we organized the material to suit your needs? If not, how could this material be better organized? • Are the requirements in the proposed regulation clearly stated? If not, how could the regulation be more clearly stated? • Does the proposed regulation contain language or jargon that is not clear? If so, which language requires clarification? • Would a different format (grouping and order of sections, use of headings, paragraphing) make the regulation easier to understand? If so, what changes to the format would make the regulation easier to understand? • What else could we do to make the regulation easier to understand? IV. Regulatory Flexibility Act Analysis The Regulatory Flexibility Act
(RFA)requires that each Federal agency either certify that a proposed rule would not, if adopted in final form, have a significant impact on a substantial number of small entities or prepare an initial regulatory flexibility analysis
(IRFA)of the proposal and publish the analysis for comment. See 5 U.S.C. 603, 605. The proposed rule primarily affects the internal operations of the FDIC, does not impose any obligations or restrictions on depository institutions, including small depository institutions, and does not impact the contracting opportunities of small businesses or SDBs. The FDIC certifies pursuant to 5 U.S.C. 605(b) that this proposed rule, if it is adopted in final form, will not have a significant impact on a substantial number of small entities. Commenters are nevertheless invited to provide the FDIC with any information they may have about the likely quantitative effects of the proposal. V. Paperwork Reduction Act The FDIC has determined that this proposed rule does not involve a collection of information pursuant to the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). VI. The Treasury and General Government Appropriations Act, 1999— Assessment of Federal Regulations and Policies on Families The FDIC has determined that the proposed rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, enacted as part of the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat. 2681). List of Subjects in 12 CFR Part 361 Government contracts, Individuals with disabilities, Lawyers, Legal services, Minority businesses, Reporting and recordkeeping requirements, Women. For the reasons set forth in the preamble, the Board of Directors of the Federal Deposit Insurance Corporation proposes to amend title 12, chapter III, of the Code of Federal Regulations as follows: PART 361—MINORITY AND WOMEN OUTREACH PROGRAM CONTRACTING 1. The authority citation for part 361 continues to read as follows: Authority: 12 U.S.C. 1833e. 2. Revise § 361.3 to read as follows: § 361.3 Who may participate in this outreach program? Any MWOB contractor qualified to provide goods and services to the FDIC. 3. Revise § 361.5 to read as follows: § 361.5 What are the FDIC's oversight and monitoring responsibilities in administering this program? The FDIC Office of Diversity and Economic Opportunity
(ODEO)has overall responsibility for nationwide outreach oversight which includes, but is not limited to, the monitoring, review and interpretation of relevant regulations. In addition, the ODEO is responsible for providing the FDIC with technical assistance and guidance to facilitate the identification and solicitation of MWOBs. ODEO shall also collect and analyze data on contracting dollars awarded to MWOBs as provided by the FDIC's Division of Administration. 4. Revise § 361.6 to read as follows: § 361.6 What outreach efforts are included in this program? Outreach includes the identification and solicitation of MWOBs who can provide goods and services to the FDIC and the distribution of information concerning the MWOP. The identification and solicitation of MWOBs for the provision of legal and non-legal services will primarily be accomplished by:
(a)Obtaining lists and directories of MWOBs maintained by other federal, state, and local governmental agencies;
(b)Participating in conventions, seminars and professional meetings comprised of, or attended predominately by MWOBs;
(c)Conducting seminars, meetings, workshops and other various functions to promote the identification and solicitation of MWOBs;
(d)Placing MWOP promotional advertisements in minority- and women-owned media indicating opportunities with the FDIC; and
(e)Monitoring FDIC staff interacting with the contracting community to ensure they are knowledgeable of, and actively promote the MWOP. By order of the Board of Directors. Dated at Washington, DC, this 19th day of December 2007. Federal Deposit Insurance Corporation. Valerie J. Best, Assistant Executive Secretary. [FR Doc. E7-25028 Filed 1-2-08; 8:45 am] BILLING CODE 6714-01-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG-136701-07] RIN1545-BH04 Diversification Requirements for Certain Defined Contribution Plans AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking. SUMMARY: This document contains proposed regulations under section 401(a)(35) of the Internal Revenue Code
(Code)relating to diversification requirements for certain defined contribution plans and to publicly traded employer securities. These regulations will affect administrators of, employers maintaining, participants in, and beneficiaries of defined contribution plans that are invested in employer securities. DATES: Written or electronic comments and requests for a public hearing must be received by April 2, 2008. ADDRESSES: Send submissions to: CC:PA:LPD:PR (Reg-136701-07), room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (Reg-136701-07), 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-136701-07). FOR FURTHER INFORMATION CONTACT: Concerning the regulations, R. Lisa Mojiri-Azad or Dana Barry at
(202)622-6060; concerning submission of comments or to request a public hearing, Kelly Banks at
(202)622-7180 (not toll-free numbers). SUPPLEMENTARY INFORMATION: Background This document contains proposed regulations under section 401(a)(35) of the Code, which was added by section 901 of the Pension Protection Act of 2006, Public Law 109-280, 120 Stat. 780 (PPA '06). 1 1 Section 901 of PPA '06 also added a parallel provision at section 204(j) of the Employee Retirement Income Security Act of 1974, Public Law 93-406, 88 Stat. 829 (ERISA). Under section 101 of Reorganization Plan No. 4 of 1978 (43 FR 47713), the Secretary of Treasury has interpretative jurisdiction over the subject matter addressed in these proposed regulations for purposes of section 204(j) of ERISA. Thus, the guidance provided in these proposed regulations with respect to section 401(a)(35) of the Code also applies for purposes of section 204(j) of ERISA. Section 401(a)(35)(A) provides that a trust which is part of an applicable defined contribution plan is not a qualified trust under section 401(a) unless the plan satisfies the diversification requirements of sections 401(a)(35)(B), (C), and (D). Under section 401(a)(35)(B), each individual must have the right to direct the plan to divest employer securities allocated to the individual's account that are attributable to employee contributions or elective deferrals and to reinvest an equivalent amount in other investment options meeting the requirements of section 401(a)(35)(D). 2 2 Section 401(a)(28) provides certain diversification rights to participants in an employee stock ownership plan within the meaning of section 4975(e)(7) (ESOP). Section 401(a)(28)(B) also generally requires that the plan offer at least three alternative investment options. Section 401(a)(28)(B) permits a plan to satisfy these diversification requirements by distributing, within 90 days after the period during which the election may be made, the portion of the participant's account that is subject to section 401(a)(28)(B). Section 401(a)(28)(B) was amended by section 901(a)(2)(A) of PPA '06 not to apply to a plan to which section 401(a)(35) applies. Under section 401(a)(35)(C), each individual who is a participant who has completed at least three years of service, a beneficiary of a participant who has completed at least three years of service, or a beneficiary of a deceased participant must be permitted to elect to direct the plan to divest employer securities allocated to the individual's account and to reinvest an equivalent amount in other investment options meeting the requirements of section 401(a)(35)(D). Section 401(a)(35)(D)(i) requires an applicable defined contribution plan to offer individuals not less than three investment options, other than employer securities, to which the individuals may direct the proceeds from the divestment of employer securities, each of which is diversified and has materially different risk and return characteristics. Under section 401(a)(35)(D)(ii)(I), a plan does not fail to meet the requirements of section 401(a)(35)(D) if it allows individuals to divest employer securities and reinvest the proceeds at periodic, reasonable opportunities occurring no less frequently than quarterly. Under section 401(a)(35)(D)(ii)(II), a plan is not permitted to impose restrictions or conditions with respect to the investment of employer securities that are not imposed on the investment of other assets of the plan. However, this rule does not apply to restrictions or conditions imposed to comply with securities laws. The Secretary is authorized to issue regulations providing additional exceptions to the requirements of section 401(a)(35)(D)(ii)(II). An applicable defined contribution plan under section 401(a)(35) is a defined contribution plan that holds any publicly traded employer securities. A publicly traded employer security is defined as an employer security under section 407(d)(1) of the Employee Retirement Income Security Act of 1974, Public Law 93-406, 88 Stat. 829 (ERISA) which is readily tradable on an established securities market. Section 401(a)(35)(F)(i) provides that a plan that does not hold publicly traded employer securities is nevertheless treated as holding publicly traded employer securities if any employer corporation or any member of a controlled group of corporations which includes the employer (determined by applying section 1563(a), except substituting 50 percent for 80 percent) has issued a class of stock that is a publicly traded employer security. However, section 401(a)(35)(F) does not apply to a plan if no employer corporation, or parent corporation (as defined in section 424(e)) of an employer corporation, has issued any publicly traded employer security and no employer or parent corporation has issued any special class of stock which grants particular rights to, or bears particular risks for, the holder or issuer with respect to any corporation described in section 401(a)(35)(F)(i) which has issued any publicly traded employer security. Section 401(a)(35)(E) provides that section 401(a)(35) does not apply to an employee stock ownership plan within the meaning of section 4975(e)(7)
(ESOP)that holds no contributions (or earnings thereunder) that are subject to section 401(k) or
(m)(generally relating to elective deferrals and matching and employee after-tax contributions) and the ESOP is a separate plan for purposes of section 414(l) with respect to any other defined benefit plan or defined contribution plan maintained by the same employer or employers. Section 401(a)(35)(E) further provides that section 401(a)(35) does not apply to one-participant retirement plans. Section 401(a)(35) is generally effective for plan years beginning after December 31, 2006. Section 401(a)(35)(H) generally provides a three year phase-in rule with respect to an individual's right to direct the divestment of employer securities attributable to employer contributions, except with respect to certain participants who have attained age 55. Section 901(c)(2) of PPA '06 includes a special rule for a plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers that was ratified on or before August 17, 2006. Under this rule, section 401(a)(35) is not effective until plan years beginning after the earlier of
(1)the later of
(a)December 31, 2007 or
(b)the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof after August 17, 2006) or
(2)December 31, 2008. Notice 2006-107 (2006-2 CB 1114 (December 18, 2006)) (see § 601.601(d)(2)(ii)( *b* ) of this chapter), includes guidance and transitional rules with respect to the diversification requirements of section 401(a)(35). 3 Notice 2006-107 provides that a plan (and an investment option described in section 401(a)(35)(D)(i)) is not treated as holding employer securities to which section 401(a)(35) applies with respect to any securities held through either an investment company registered under the Investment Company Act of 1940 or a similar pooled investment vehicle that is regulated and subject to periodic examination by a State or Federal agency and with respect to which investment in securities is made both in accordance with the stated investment objectives of the investment vehicle and independent of the employer and any affiliate thereof, but only if the holdings of the investment company or similar investment vehicle are diversified so as to minimize the risk of large losses. Notice 2006-107 also provides that investment options satisfy the requirement that investment options be diversified and have materially different risk and return characteristics under section 401(a)(35)(D)(i) if the investment options satisfy the requirements of section 2550.404c-1(b)(3) of the Department of Labor regulations. 3 Notice 2006-107 also includes guidance regarding the related notice requirements of section 101(m) of ERISA, including a model notice. Notice 2006-107 further provides that, for purposes of section 401(a)(35), the date on which a participant completes three years of service occurs immediately after the end of the third vesting computation period provided for under the plan that constitutes the completion of a third year of service under section 411(a)(5). For a plan using the elapsed time method of crediting service for vesting purposes (or a plan that provides for immediate vesting without using a vesting computation period or elapsed time method of determining vesting), the date on which a participant completes three years of service is the third anniversary of the participant's date of hire. Notice 2006-107 includes special rules regarding restrictions or conditions with respect to employer securities under section 401(a)(35)(D)(ii)(II). An impermissible restriction or condition is either a restriction on an individual's right to divest an investment in employer securities that is not imposed on an investment that is not in employer securities or a benefit that is conditioned on an investment in employer securities. Examples of restrictions or conditions that are prohibited by section 401(a)(35)(D)(ii)(II) under Notice 2006-107 include:
(1)A plan allows an individual the right to divest employer securities on a quarterly basis but permits divestiture of another investment on a more frequent basis;
(2)a plan provides that a participant who divests his or her account of employer securities receives less favorable treatment (such as a lower rate of matching contributions) than a participant whose account remains invested in employer securities; and
(3)a plan that provides if a participant divests his or her account balance with respect to investment in a class of employer securities, the participant is not permitted for a period of time to reinvest in that class of securities where that restriction is not imposed on other investments. Notice 2006-107 also provided examples of restrictions or conditions that are not prohibited by section 401(a)(35)(D)(ii)(II):
(1)A provision that limits the extent to which an individual's account balance can be invested in employer securities;
(2)a provision under which an employer securities fund is closed;
(3)a restriction imposed by reason of application of securities laws or a restriction that is reasonably designed to ensure compliance with such laws;
(4)an imposition of fees on other investment options under the plan but not on investments in employer securities; and
(5)a plan restriction on the availability of otherwise applicable diversification rights under the plan for up to 90 days following an initial public offering of the employer's stock. Notice 2006-107 provides certain transition rules. For example, for the period prior to January 1, 2008, a plan does not impose a restriction or condition prohibited by section 401(a)(35)(D)(ii)(II) merely because the plan, as in effect on December 18, 2006,
(1)does not impose an otherwise applicable restriction on a stable value fund or
(2)allows individuals the right to divest employer securities on a periodic basis (at least quarterly), but permits divestiture of another investment on a more frequent basis, provided that the other investment is not a generally available investment. Explanation of Provisions Overview The proposed regulations would provide guidance with respect to the requirements of section 401(a)(35) that incorporate much of the guidance provided under Notice 2006-107. The regulations would clarify the scope of the rule in section 401(a)(35)(D)(ii)(II) that generally prohibits restrictions and conditions on investment in employer securities, but would specifically permit certain restrictions and conditions on such investment that are consistent with the statute, and would also define when employer securities are publicly traded on an established securities market under section 401(a)(35)(D). Basic Diversification Rights The proposed regulations incorporate the guidance on the basic diversification rights of section 401(a)(35) that is contained in Notice 2006-107. Thus, if an applicable defined contribution plan holds employee contributions (including rollover contributions) or elective deferrals with respect to an individual that are invested in employer securities, the plan must provide that the individual is given the opportunity to divest the employer securities and reinvest an equivalent amount in another investment. These rights must be provided to each participant, to each alternate payee who has an account under the plan, and to each beneficiary of a deceased participant. If employer contributions (other than elective deferrals) are invested in employer securities under the plan, the divestment right must be provided to each participant who has completed at least three years of service, to each alternate payee who has an account under the plan with respect to a participant who has at least three years of service, and to each beneficiary of a deceased participant (regardless of whether the participant had completed at least three years of service). For this purpose, the regulations would provide that a participant has completed three years of service on the last day of the vesting computation period as determined under the plan that constitutes the completion of the third year of service (or the third anniversary of hire for a plan that either uses the elapsed time method or that does not define the vesting computation period because the plan provides for full and immediate vesting). The regulations would require a plan to provide individuals who have section 401(a)(35) diversification rights the opportunity to divest the employer securities and reinvest an equivalent amount in another investment at least quarterly. The individuals must be permitted to select among no less than three investment options, each of which is diversified and has materially different risk and return characteristics. For this purpose, investment options that constitute a broad range of investment alternatives within the meaning of Department of Labor Regulations section 2550.404c-1(b)(3) are treated as being diversified and having materially different risk and return characteristics. Plans Subject to Section 401(a)(35) Under the proposed regulations, a defined contribution plan, which holds publicly traded employer securities (referred to as an applicable defined contribution plan), is subject to the diversification requirements of section 401(a)(35), unless it is exempted under section 401(a)(35)(E) as a stand-alone ESOP or as a one-participant retirement plan. For this purpose, an employer security is defined by reference to section 407(d)(1) of ERISA. Under section 401(a)(35)(G)(v), an employer security is a publicly traded employer security if it is readily tradable on an established securities market. The regulations would provide separate rules for securities traded on domestic securities exchanges and foreign securities exchanges. If a security is traded on a securities exchange that is registered under section 6 of the Securities Exchange Act of 1934, then the security would be deemed to be readily tradable on an established securities market. This definition is consistent with the definition of publicly traded found in § 54.4975-7(b)(1)(iv), but deletes the reference to a system sponsored by the National Association of Securities Dealers (NASDAQ) registered under section 15A(b) of the Act (15 U.S.C. 78o) because NASDAQ is now registered as a securities exchange under section 6 of the Securities Exchange Act of 1934. Thus, if a security is not traded on a national securities exchange that is registered under section 6 of the Securities Exchange Act of 1934, then the security would not be publicly traded for purposes of section 401(a)(35) (unless it is traded on a foreign securities exchange and has a “ready market” as described in the next paragraph). This would apply to U.S. securities that are only traded on the “Over-The-Counter Bulletin Board” and the “pink sheets.” Under the proposed regulations, if a security is not listed on a securities exchange that is registered under section 6 of the Securities Exchange Act of 1934, but is traded on a foreign national securities exchange that is officially recognized, sanctioned, or supervised by a governmental authority, then under the proposed regulations, the security would be traded on an established securities market. The proposed regulations would provide that such a security is readily tradable if the security is deemed by the Securities and Exchange Commission
(SEC)as having a “ready market” under SEC Rule 15c3-1 (17 CFR 240.15c3-1). 4 4 Under the current SEC rules, a security is deemed to have a ready market if it is included on the FTSE Group
(FTSE)World Index. The proposed regulations would reflect section 401(a)(35)(F), which, subject to certain exceptions, treats a plan holding employer securities that are not publicly traded as nonetheless subject to the rules of section 401(a)(35) if any employer sponsoring the plan, or any member of the controlled group of corporations (determined by applying section 1563(a), except substituting 50 percent for 80 percent) has issued a class of stock which is publicly traded (as defined above). Section 401(a)(35)(E)(ii) provides that an ESOP that is a separate plan holding no contributions that are subject to section 401(k) or section 401(m) is not an applicable defined contribution plan. (As noted earlier in this preamble, such a plan is subject to the diversification requirements of section 401(a)(28)(B).) The proposed regulations would clarify that a plan does not lose this exemption merely because it receives rollover contributions of amounts from another plan that are held in a separate account, even if those amounts were attributable to contributions that were subject to section 401(k) or 401(m) in the other plan. In addition, the proposed regulations would reflect the exemption for one-participant retirement plans under section 401(a)(35)(E)(iv). Notice 2006-107 provides that employer securities held by an investment company registered under the Investment Company Act of 1940 or similar pooled investment vehicle are not treated as being held by the plan. Some comments on Notice 2006-107 had recommended a broader rule, under which a commingled fund that holds employer securities and other securities would not be treated as holding employer securities that are subject to the section 401(a)(35) diversification requirement. The proposed regulations would not adopt this broad exemption from the diversification rules. The proposed regulations, however, clarify the types of pooled investment vehicles that are exempt from the diversification requirements. Under the proposed regulations, in order to be exempt from the diversification requirements, the pooled investment vehicle must be a common or collective trust fund or pooled investment fund maintained by a bank or trust company supervised by a State or Federal agency, a pooled investment fund of an insurance company that is qualified to do business in a State, or an investment fund designated by the Commissioner in revenue rulings, notices, or other guidance published in the Internal Revenue Bulletin. As under Notice 2006-107, the regulations would include the requirement that in order to be exempt from the diversification requirements the pooled investment fund that holds the employer securities must have stated investment objectives and the investment must be independent of the employer and any affiliate thereof. The proposed regulations would add a percentage limitation rule to ensure that the investment in the employer securities through a pooled fund is not an attempt to evade the rules of section 401(a)(35). Under this rule, if the employer securities held by such fund is more than 10 percent of the total value of all of the fund's investment, then the fund is not considered to be independent of the employer. Prohibition on Restrictions or Conditions The proposed regulations would provide that the section 401(a)(35)(D)(ii)(II) prohibition on restrictions or conditions with respect to the investment of employer securities which are not imposed on the investment of other assets of the plans applies to a direct or indirect restriction on an individual's rights to divest an investment in employer securities that is not imposed on an investment that is not employer securities as well as a direct or indirect benefit that is conditioned on investment in employer securities. However, like Notice 2006-107, the regulations would not apply this prohibition to restrictions that are imposed by reason of the application of securities laws and in certain other situations described below. Like Notice 2006-107, the proposed regulations would allow a plan to impose a restriction on divestiture that is reasonably designed to comply with securities law, even if the restriction is broader than the minimum restriction needed to comply with securities laws. The proposed regulations incorporate the example of such a restriction from Notice 2006-107. This is merely an example and broader restrictions on divestiture are permitted, provided they are reasonably designed to comply with securities law. For example, in some smaller entities a broad restriction allowing divestiture to occur only once a quarter might be a restriction that is reasonably designed to comply with securities law. Notice 2006-107 includes a rule that permits a plan to restrict the otherwise applicable diversification rights under section 401(a)(35) for a period of up to 90 days following an initial public offering of the employer's stock. The proposed regulations would extend this rule to apply to the first 90 days after the plan becomes an applicable defined contribution plan. This could happen, for example, when some other entity in the controlled group first issues stock which is publicly traded or when a stand-alone ESOP first provides for contributions that are subject to section 401(k) or section 401(m). Notice 2006-107 permits a plan to impose a restriction on an investment in employer securities that is not imposed on a stable value fund. The proposed regulations extend this rule to a fund that is similar to a stable value fund. Specifically, the proposed regulations would provide that in the case of a plan that has several investment funds, including a fund invested in employer securities, a fund which is a stable value or similar fund, and other funds which are not invested in employer securities, the plan does not impose a restriction prohibited under section 401(a)(35)(D)(ii)(II) merely because the plan permits transfers to be made into the stable value or similar fund more frequently than into the fund invested in employer securities (assuming the plan does not impose a restriction on transfers to or from the employer securities fund that it does not impose with respect to the other funds). While the proposed regulations would generally prohibit indirect restrictions on an individual's exercise of diversification rights (such as a plan provision that limits the right of an individual who diversifies out of employer securities by providing that such a participant is not permitted to reinvest in employer securities for a period of time), the rules would permit certain indirect restrictions, as well as certain indirect benefits that are conditioned on investment in employer securities. Under the proposed regulations, a plan would be permitted to limit the extent to which an individual's account balance can be invested in employer securities. For example, a plan would not be treated as imposing a restriction that violates section 401(a)(35)(D)(ii)(II) merely because the plan prohibits a participant from investing additional amounts in employer securities if more than 10 percent of that participant's account balance is (or would be after the change) invested in employer securities. In addition, an applicable defined contribution plan does not violate a prohibition against reinvestment in employer securities if the plan has terminated any further investment in employer securities. The proposed regulations would provide that a plan is not providing an indirect benefit that is conditioned on investment in employer securities merely because the plan imposes fees on other investment options that are not imposed on the investment in employer securities. In addition, a plan is not providing a restriction on the right to divest an investment in employer securities merely because the plan imposes a reasonable fee for the divestment of employer securities. The proposed regulations would permit a restriction on the frequency of investment elections that was not in Notice 2006-107. Under this rule, a plan would be permitted to impose reasonable restrictions on the timing and number of investment elections that an individual can make to invest in employer securities, provided that the restrictions are designed to limit short-term trading in the employer securities. For example, a fund could limit the purchase of employer securities if there has been a sale within a short period of time, such as 7 days. The regulations, however, would not permit a plan to limit an individual's right to divest employer securities. Proposed Effective Date Section 401(a)(35) is applicable to plan years beginning on or after January 1, 2007, subject to certain deferred effective dates and transition rules. The proposed regulations would provide guidance on these effective dates and transition rules. In particular, the regulations would provide that a plan is eligible for the deferred effective date applicable to collectively bargained plans only if at least 25 percent of the participants in the plan are members of collective bargaining units for which the contributions under the plan are specified under a collective bargaining agreement. The regulations under section 401(a)(35) are proposed to be effective for plan years beginning on or after January 1, 2009. Until the regulations go into effect, Notice 2006-107 will continue to apply. For this purpose, the transitional relief provided for the period prior to January 1, 2008, in paragraph 4 of Section III.D. of Notice 2006-107 will continue to apply after 2007 until the regulations go into effect. 5 In addition, plans are also permitted to apply the proposed regulations for plan years before the regulations go into effect. 5 The Treasury and IRS are issuing a notice to reflect this extension. The notice is expected to be published as Notice 2008-7 in the 2008-3 issue of the IRB on january 22, 2008 (see § 601.601(d)(2)(ii)( *b* ) of this chapter). 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 also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and, because § 1.401(a)(35)-1 would not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Comments and Requests for Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any written (one signed 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. In particular, the IRS and the Treasury Department request comments on whether the determination of when an employer security is readily tradable on an established securities market under these proposed regulations should also be applied for purposes of determining whether an employer security is readily tradable on an established securities market in applying other provisions relating to qualified plans, given that the same words used in interrelated provisions of the Code are presumed to have the same meaning. These interrelated provisions include section 401(a)(28)(C) (requiring the use of an independent appraiser for valuation of employer securities that are not readily tradable on an established securities market), section 409(h)(1)(B) (relating to put options for employer securities that are not readily tradable on an established market), the definition of employer securities under section 409(l)(1) (including regulations under section 4975), and the special rules under section 1042 (providing nonrecognition treatment for certain sales to an ESOP). All comments will be available for public inspection and copying. A public hearing will be scheduled if requested in writing by any person who timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place of the public hearing will be published in the **Federal Register** . Drafting Information The principal authors of these regulations are Dana A. Barry and Lisa Mojiri-Azad, Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). However, other personnel from the IRS and the Treasury participated in the development of these regulations. 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 is amended by adding an entry in numerical order to read as follows: Authority: 26 U.S.C. 7805 * * * Section 1.401(a)(35)-1 is also issued under 26 U.S.C. 401(a)(35).* * * **Par. 2.** Section 1.401(a)(35)-1 is added to read as follows: § 1.401(a)(35)-1 Diversification Requirements for Certain Defined Contribution Plans.
(a)*General rule* —(1) *Diversification requirements.* Section 401(a)(35) imposes diversification requirements on applicable defined contribution plans. A trust that is part of an applicable defined contribution plan is not a qualified trust under section 401(a) unless the plan—
(i)Satisfies the diversification election requirements for elective deferrals and employee contributions set forth in paragraph
(b)of this section;
(ii)Satisfies the diversification election requirements for employer nonelective contributions set forth in paragraph
(c)of this section;
(iii)Satisfies the investment option requirement set forth in paragraph
(d)of this section; and
(iv)Does not apply any restrictions or conditions on investments in employer securities that violate the requirements of paragraph
(e)of this section.
(2)*Definitions, effective dates, and transition rules.* The definitions of applicable defined contribution plan, employer security, parent corporation, and publicly traded are set forth in paragraph
(f)of this section. Effective/applicability dates and transition rules are set forth in paragraph
(g)of this section.
(b)*Diversification requirements for elective deferrals and employee contributions invested in employer securities* —(1) *General rule.* With respect to any individual described in paragraph (b)(2) of this section, if any portion of the individual's account under an applicable defined contribution plan attributable to elective deferrals (as described in section 402(g)(3)(A)), after-tax employee contributions, or rollover contributions is invested in employer securities, then the plan satisfies the requirements of this paragraph
(b)if the individual may elect to divest those employer securities and reinvest an equivalent amount in other investment options. The plan may limit the time for divestment and reinvestment to periodic, reasonable opportunities occurring no less frequently than quarterly.
(2)*Applicable individual with respect to elective deferrals and employee contributions.* An individual is described in this paragraph (b)(2) if the individual is—
(i)A participant;
(ii)An alternate payee who has an account under the plan; or
(iii)A beneficiary of a deceased participant.
(c)*Diversification requirements for employer nonelective contributions invested in employer securities* —(1) *General rule.* With respect to any individual described in paragraph (c)(2) of this section, if a portion of the individual's account under an applicable defined contribution plan attributable to employer nonelective contributions, other than elective deferrals, is invested in employer securities, then the plan satisfies the requirements of this paragraph
(c)if the individual may elect to divest those employer securities and reinvest an equivalent amount in other investment options. The plan may limit the time for divestment and reinvestment to periodic, reasonable opportunities occurring no less frequently than quarterly.
(2)*Applicable individual with respect to employer nonelective contributions.* An individual is described in this paragraph (c)(2) if the individual is—
(i)A participant who has completed at least three years of service;
(ii)An alternate payee who has an account under the plan with respect to a participant who has completed at least three years of service; or
(iii)A beneficiary of a deceased participant.
(3)*Completion of 3 years of service.* For purposes of paragraph (c)(2) of this section, a participant completes three years of service on the last day of the vesting computation period provided for under the plan that constitutes the completion of the third year of service under section 411(a)(5). However, for a plan that uses the elapsed time method of crediting service for vesting purposes (or a plan that provides for immediate vesting without using a vesting computation period or the elapsed time method of determining vesting), a participant completes three years of service on the day immediately preceding the third anniversary of the participant's date of hire.
(d)*Investment option.* An applicable defined contribution plan must offer not less than three investment options, other than employer securities, to which an individual who has the right to divest under paragraph (b)(1) or (c)(1) of this section may direct the proceeds from the divestment of employer securities. Each of the three investment options must be diversified and have materially different risk and return characteristics. For this purpose, investment options that constitute a broad range of investment alternatives within the meaning of Department of Labor Regulation section 2550.404c-1(b)(3) are treated as being diversified and having materially different risk and return characteristics.
(e)*Restrictions or conditions on investments in employer securities* —(1) *Impermissible restrictions or conditions* —(i) *General rule.* Except as provided in paragraph (e)(2) of this section, an applicable defined contribution plan violates the requirements of this paragraph
(e)if the plan imposes restrictions or conditions with respect to the investment of employer securities that are not imposed on the investment of other assets of the plan. A restriction or condition with respect to employer securities means—
(A)A restriction on an individual's right to divest an investment in employer securities that is not imposed on an investment that is not employer securities; and
(B)A benefit that is conditioned on investment in employer securities.
(ii)*Indirect restrictions or conditions.* Except as provided in paragraph (e)(3) of this section, a plan violates the requirements of this paragraph
(e)if the plan imposes a restriction or condition in paragraph (e)(1)(i)(A) or
(B)of this section either directly or indirectly. For example, a plan imposes an indirect restriction on an individual's right to divest an investment in employer securities if the plan provides that a participant who divests his or her account balance with respect to investment in employer securities is not permitted for a period of time thereafter to reinvest in employer securities.
(2)*Permitted restrictions or conditions* —(i) *In general.* An applicable defined contribution plan does not violate the requirements of this paragraph
(e)merely because it imposes a restriction or a condition set forth in paragraph (e)(2)(ii) or (e)(2)(iii) of this section.
(ii)*Securities laws.* A plan is permitted to impose a restriction or condition on the divestiture of employer securities that is either required in order to ensure compliance with applicable securities laws or is reasonably designed to ensure compliance with applicable securities laws. For example, it is permissible for a plan to limit divestiture rights for participants who are subject to section 16(b) of the Securities Exchange Act of 1934 to a reasonable period (such as 3 to 12 days) following publication of the employer's quarterly earnings statements because it is reasonably designed to ensure compliance with Rule 10b-5 of the Securities and Exchange Commission.
(iii)*Deferred application of the diversification requirements.* An applicable defined contribution plan is permitted to restrict the application of the diversification requirements of section 401(a)(35) and this section for up to 90 days after the plan becomes an applicable defined contribution plan (for example, the date on which the employer securities held under the plan become publicly traded).
(3)*Permitted indirect restrictions or conditions* —(i) *In general.* An applicable defined contribution plan does not violate the requirements of this paragraph
(e)merely because it imposes an indirect restriction or condition set forth in paragraphs (e)(3)(ii) through (e)(3)(v) of this section.
(ii)*Limitation on investment in employer securities.* The plan is permitted to limit the extent to which an individual's account balance can be invested in employer securities, provided the limitation applies without regard to a prior exercise of rights to divest employer securities. For example, a plan does not impose a restriction that violates this paragraph
(e)merely because the plan prohibits a participant from investing additional amounts in employer securities if more than 10 percent of that participant's account balance is invested in employer securities.
(iii)*Trading frequency.* A plan is permitted to impose reasonable restrictions on the timing and number of investment elections that an individual can make to invest in employer securities, provided that the restrictions are designed to limit short-term trading in the employer securities. For example, a plan could provide that a participant may not elect to invest in employer securities if the employee has elected to divest employer securities within a short period of time, such as seven days.
(iv)*Frozen funds.* A plan is permitted to prohibit any further investment in employer securities.
(v)*Fees.* The plan has not provided an indirect benefit that is conditioned on investment in employer securities merely because the plan imposes fees on other investment options that are not imposed on the investment in employer securities. In addition, the plan has not provided a restriction on the right to divest an investment in employer securities merely because the plan imposes a reasonable fee for the divestment of employer securities.
(vi)*Transfers to stable value fund.* In the case of a plan that has several investment funds, including one or more funds invested in employer securities, a fund which is a stable value or similar fund, and other funds which are not invested in employer securities, the plan does not impose a restriction prohibited under this paragraph
(e)merely because the plan permits transfers to be made into the stable value or similar fund more frequently than other funds (including funds invested in employer securities).
(f)*Definitions* —(1) *Application of definitions.* This paragraph
(f)contains definitions that are applicable for purposes of this section.
(2)*Applicable defined contribution plan* —(i) *General rule.* Except as provided in this paragraph (f)(2), an applicable defined contribution plan means any defined contribution plan which holds employer securities that are publicly traded. See paragraph (f)(2)(iv) of this section for a special rule that treats certain plans that hold employer securities that are not publicly traded as applicable defined contribution plans and paragraph (f)(3)(ii) of this section for a special rule that treats certain plans as not holding publicly traded employer securities for purposes of this section.
(ii)*Exception for certain ESOPs.* An employee stock ownership plan (ESOP), as defined in section 4975(e)(7), is not an applicable defined contribution plan if the plan is a separate plan for purposes of section 414(l) with respect to any other defined benefit plan or defined contribution plan maintained by the same employer or employers and holds no contributions (or earnings thereunder) that are (or were ever) subject to section 401(k) or 401(m). Thus, an employee stock ownership plan is an applicable defined contribution plan if that ESOP is a portion of a larger plan (whether or not that larger plan includes contributions that are subject to section 401(k) or 401(m)). For purposes of this paragraph (f)(2)(ii), a plan is not considered to hold amounts ever subject to section 401(k) or 401(m) merely because the plan holds amounts attributable to rollover amounts in a separate account that were previously subject to section 401(k) or 401(m).
(iii)*Exception for one-participant plans.* A one-participant plan, as defined in section 401(a)(35)(E)(iv), is not an applicable defined contribution plan.
(iv)*Certain defined contribution plans treated as holding publicly traded employer securities* —(A) *General rule.* A defined contribution plan holding employer securities that are not publicly traded is treated as an applicable defined contribution plan if any employer maintaining the plan or any member of a controlled group of corporations that includes such employer has issued a class of stock which is publicly traded. For purposes of this paragraph (f)(2)(iv), a controlled group of corporation has the meaning given such term by section 1563(a), except that “50 percent” is substituted for “80 percent” each place it appears.
(B)*Exception for certain plans.* Paragraph (f)(2)(iv)(A) of this section does not apply to a plan if— ( *1* ) No employer maintaining the plan (or a parent corporation with respect to such employer) has issued stock that is publicly traded; and ( *2* ) No employer maintaining the plan (or parent corporation with respect to such employer) has issued any special class of stock which grants to the holder or issuer particular rights, or bears particular risks for the holder or issuer, with respect to any employer maintaining the plan (or any member of a controlled group of corporations that includes such employer) which has issued any stock that is publicly traded.
(3)*Employer security* —(i) *General rule.* Employer security has the meaning given such term by section 407(d)(1) of the Employee Retirement Income Security Act of 1974, as amended.
(ii)*Certain defined contribution plans or investment funds not treated as holding employer securities* —(A) *Exception for certain flow-through investments.* Subject to paragraph (f)(3)(ii)(B) and
(C)of this section, a plan (and an investment option described in paragraph
(d)of this section) is not treated as holding employer securities for purposes of this section to the extent the employer securities are held indirectly through— ( *1* ) An investment company registered under the Investment Company Act of 1940; ( *2* ) A common or collective trust fund or pooled investment fund maintained by a bank or trust company supervised by a State or a Federal agency; ( *3* ) A pooled investment fund of an insurance company that is qualified to do business in a State; or ( *4* ) Any other investment fund designated by the Commissioner in revenue rulings, notices, or other guidance published in the Internal Revenue Bulletin.
(B)*Investment must be independent.* The exception set forth in paragraph (f)(3)(ii)(A) of this section applies only if the investment in the employer securities are held in a fund under which— ( *1* ) There are stated investment objectives of the fund; and ( *2* ) The investment is independent of the employer and any affiliate thereof.
(C)*Percentage limitation rule.* For purposes of paragraph (f)(3)(ii)(B)( *2* ) of this section, an investment in employer securities in a fund is considered to be independent of the employer and any affiliate thereof only if the aggregate value of the employer securities held in the fund is not in excess of 10 percent of the total value of all of the fund's investments.
(4)*Parent corporation.* Parent corporation has the meaning given such term by section 424(e).
(5)*Publicly traded* —(i) *In general.* A security is publicly traded if it is readily tradable on an established securities market.
(ii)*Established securities market.* For purposes of this paragraph (f)(5), a security is traded on an established securities market if—
(A)The security is traded on a national securities exchange that is registered under section 6 of the Securities and Exchange Act of 1934 (15 U.S.C. 78f); or
(B)The security is traded on a foreign national securities exchange that is officially recognized, sanctioned, or supervised by a governmental authority.
(iii)*Readily tradable.* For purposes of this paragraph (f)(5), except as provided by the Commissioner in revenue rulings, notices, or other guidance published in the Internal Revenue Bulletin, a security is readily tradable if—
(A)The security is traded on a securities exchange that is described in paragraph (f)(5)(ii)(A) of this section; or
(B)The security is traded on a securities exchange that is described in paragraph (f)(5)(ii)(B) of this section and the security is deemed by the Securities and Exchange Commission
(SEC)as having a “ready market” under SEC Rule 15c3-1 (17 CFR 240.15c3-1).
(g)*Effective date and transition rules* —(1) *Statutory effective date* —(i) *General rule.* Except as otherwise provided in this paragraph (g), section 401(a)(35) is effective for plan years beginning after December 31, 2006.
(ii)*Collectively bargained plans* —(A) *Delayed effective date.* In the case of a plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified on or before August 17, 2006, section 401(a)(35) is effective for plan years beginning after the earlier of ( *1* ) the later of— ( *i* ) December 31, 2007; or ( *ii* ) the date on which the last such collective bargaining agreement terminates (determined without regard to any extension thereof); or ( *2* ) December 31, 2008.
(B)*Definition of collectively bargained plans.* For purposes of this paragraph (g)(1)(ii), in the case of a plan for which one or more collective bargaining agreements apply to some, but not all, of the plan participants, the plan is considered a collectively bargained plan if at least 25 percent of the participants in the plan are members of collective bargaining units for which the contributions under the plan are specified under a collective bargaining agreement.
(iii)*Special rule for certain employer securities held in an ESOP.* Section 901(c)(3)(A) and
(B)of the Pension Protection Act of 2006, Public Law 109-280, 120 Stat. 780 (PPA '06), provides a special effective date for an employee stock ownership plan that holds a class of preferred stock with a guaranteed minimum value, as described in that section.
(2)*Statutory transition rules* —(i) *General rule.* Pursuant to section 401(a)(35)(H), in the case of the portion of an account to which paragraph
(c)of this section applies and that consists of employer securities acquired in a plan year beginning before January 1, 2007, the requirements of paragraph
(c)of this section only apply to the applicable percentage of such securities.
(ii)*Applicable percentage* —(A) *Phase-in percentage.* For purposes of this paragraph (g)(2), the applicable percentage is determined as follows— Plan year to which paragraph
(c)of this section applies: The applicable percentage is: 1st 33 2nd 66 3rd and following 100
(B)*Special rule.* For a plan described in paragraph (g)(1)(iii) of this section for which the special effective date under section 901(c)(3) of PPA '06 applies, the applicable percentage under this paragraph (g)(2)(ii) is determined without regard to the delayed effective date in section 901(c)(3)(A) and
(B)of PPA '06.
(iii)*Nonapplication for participants age 55 with three years of service.* Paragraph (g)(2)(i) of this section does not apply to an individual who is a participant who attained age 55 and had completed at least three years of service (as defined in paragraph (c)(3) of this section) before the first day of the first plan year beginning after December 31, 2005.
(iv)*Separate application by class of securities.* This paragraph (g)(2) applies separately with respect to each class of securities.
(3)*Regulatory effective date.* This section is effective for plan years beginning on or after January 1, 2009. Linda E. Stiff, Deputy Commissioner for Services and Enforcement. [FR Doc. E7-25533 Filed 1-2-08; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF VETERANS AFFAIRS 38 CFR Part 4 RIN 2900-AM55 Schedule for Rating Disabilities; Evaluation of Scars AGENCY: Department of Veterans Affairs. ACTION: Proposed rule. SUMMARY: This document proposes to amend the Department of Veterans Affairs
(VA)Schedule for Rating Disabilities by revising that portion of the Schedule that addresses the Skin, so that it more clearly reflects our policies concerning the evaluation of scars. DATES: Comments must be received on or before February 4, 2008. ADDRESSES: Written comments may be submitted through *www.Regulations.gov* ; by mail or hand-delivery to the Director, Regulations Management (00REG), Department of Veterans Affairs, 810 Vermont Ave., NW., Room 1068, Washington, DC 20420; or by fax to
(202)273-9026. Comments should indicate that they are submitted in response to RIN 2900-AM55 “Schedule for Rating Disabilities; Evaluation of Scars.” Copies of comments received will be available for public inspection in the Office of Regulation Policy and Management, Room 1063B, between the hours of 8 a.m. and 4:30 p.m. Monday through Friday (except holidays). Please call
(202)461-4902 for an appointment. (This is not a toll-free number.) In addition, during the comment period, comments may be viewed online through the Federal Docket Management System
(FDMS)at *www.Regulations.gov* . FOR FURTHER INFORMATION CONTACT: Maya Ferrandino, Regulations Staff (211D), Compensation and Pension Service, Veterans Benefits Administration, Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420,
(727)319-5847. (This is not a toll-free number.) SUPPLEMENTARY INFORMATION: This document proposes to amend the Department of Veterans Affairs
(VA)Schedule for Rating Disabilities (38 CFR part 4) by revising the portions of § 4.118, the Skin, that address scars. A prior proposed rulemaking addressing the evaluation of scars was published in the **Federal Register** (67 FR 65915) on October 29, 2002, but it was subsequently withdrawn as VA determined that the proposed amendments did not accomplish the stated purpose or intended effect. The withdrawal was published at 71 FR 78391 on December 29, 2006. Scars resulting from burns potentially involve a wide range of locations, extent and severity. This rule would clarify that VA's diagnostic codes and means for evaluating scars, set forth under § 4.118, also encompass burn scars by incorporating “burn scars” into the title of the diagnostic codes most appropriate for evaluating them. At the same time, it would revise diagnostic codes 7800, 7801, 7802, 7804, and 7805, and remove diagnostic code 7803, to update and clarify the rating schedule. Diagnostic Code 7800 Diagnostic code 7800 addresses disfigurement of the head, face, or neck, and provides criteria for evaluation based on eight possible characteristics of disfigurement and the extent of any gross distortion or asymmetry of facial features. We propose to change the title of diagnostic code 7800 from “Disfigurement of the head, face, or neck” to “Burn scar(s); scar(s) due to other causes; or other disfigurement of the head, face, or neck” to more clearly indicate that scarring, including burn scarring, may be the cause of disfigurement. There are currently three notes under diagnostic code 7800, and we propose to add two more. New note #4 directs that disabling effects other than disfigurement that are associated with individual scar(s) of the head, face, or neck, such as pain, instability, and residuals of associated muscle or nerve injury, be evaluated under the appropriate diagnostic code(s) and combined under § 4.25. This note would provide clear guidance to raters for assessing disability other than disfigurement that is related to scars of the head, face, and neck. We propose to add new note #5 to explain that the number of characteristics of disfigurement required to reach a particular evaluation level need not be present in a single scar in order to assign that level. The purpose of this proposed change is to ensure clarity in the method of application of the eight characteristics of disfigurement. Diagnostic Code 7801 We propose to change the title of diagnostic code 7801 from “Scars, other than head, face, or neck, that are deep or that cause limited motion” to “Burn scar(s) or scar(s) due to other causes, not of the head, face, or neck, that are deep and nonlinear.” First, this change indicates that this is the appropriate diagnostic code for the evaluation of burn scars that are deep, as well as for nonburn scars that are deep. Second, the addition of “that are nonlinear” further clarifies what types of scars require evaluation under this diagnostic code. Because evaluation under diagnostic code 7801 is based on the surface area of scar(s), with the minimum compensable level requiring an area of at least 6 square inches (39 square centimeters), linear scars, which may have considerable length but only minimal width, could virtually never reach even the minimum evaluation under this diagnostic code. Therefore, it is not an appropriate diagnostic code to use for their evaluation. Linear scars, which would include, for example, most surgical scars, would be evaluated under diagnostic code 7804, as well as 7805, if applicable. Third, the removal of reference to scars that limit motion reflects other changes proposed by this rule. Currently a scar that limits motion is assigned a rating under diagnostic code 7801, but the rating is based solely on the area of the scar and thus may not accurately reflect the degree of limitation of motion. As proposed by this rule, diagnostic code 7805 would make clear that veterans may receive a rating for the limitation of motion, or other functional effects of scars, under the diagnostic codes specifically governing such effects on the relevant body part, and that such a rating may be assigned in addition to any rating under diagnostic code 7801 or 7802 based on the area of the scar. We believe this practice would more accurately reflect the true level of disability where a scar limits motion. Accordingly, there is no need to refer to limitation of motion in diagnostic code 7801. The evaluation criteria for diagnostic code 7801 are based on the area(s) of scars that fall under this diagnostic code and are currently: Area or areas exceeding 144 square inches (929 sq. cm.) for 40 percent, area or areas exceeding 72 square inches (465 sq. cm.) for 30 percent, area or areas exceeding 12 square inches (77 sq. cm.) for 20 percent, and area or areas exceeding 6 square inches (39 sq. cm.) for 10 percent. We propose to make a nonsubstantive change to these evaluation criteria to eliminate any possible confusion in the current criteria and to provide clear guidance on evaluating scars that fall between the sizes indicated at various percentage levels, for example a scar that exceeds 72 square inches but does not reach 144 square inches in area. This amendment would change the criteria to: Area or areas of at least 6 square inches (39 sq. cm.) but less than 12 square inches (77 sq. cm.) for 10 percent, area or areas of at least 12 square inches (77 sq. cm.) but less than 72 square inches (465 sq. cm.) for 20 percent, area or areas of at least 72 square inches (465 sq. cm.) but less than 144 square inches (929 sq. cm.) for 30 percent, and area or areas of 144 square inches (929 sq. cm.) or greater for 40 percent. We propose to redesignate current Note
(2)as Note (1). We propose to revise current Note
(1)under diagnostic code 7801 (which is renumbered as note (2)) to make clearer the guidance on evaluating multiple scars under this diagnostic code and to assure that it reflects current policy. The current note says: “Scars in widely separated areas, as on two or more extremities or on anterior and posterior surfaces of extremities or trunk, will be separately rated and combined in accordance with § 4.25 of this part.” We propose to revise this note to clarify that if multiple scars are present, VA will assign a separate evaluation for each affected extremity, based on the total area of the qualifying scars of that extremity, and assign a separate evaluation for the trunk, if affected, based on the total area of the qualifying scars of the trunk. Note
(2)would also direct that the separate evaluations be combined under § 4.25. Qualifying scars are deep scars that are not located on the head, face, or neck. Multiple scars on different parts of the body (i.e, each extremity and the trunk), such as a scar on each arm or separate scars on the right leg and torso, would be evaluated separately based on the surface area of the scar located on each affected body part. Similarly, multiple scars on one part of the body, such as two scars on the right arm, would be evaluated based on the surface area of the scars on that part of the body. In this manner, a veteran with two scars on one arm would receive a single rating but a veteran with one scar on each arm would receive two ratings, but both evaluations would reflect the area of the scar(s). We recognize that a veteran with one affected body part may be compensated at a slightly lower rate than a veteran with two affected body parts, depending on the size of the areas of scarring. However, this difference reflects the somewhat greater difficulty in obtaining and maintaining employment that is caused by two scars that are not located near each other as compared to two scars proximate to each other. Note (2), as revised, would also acknowledge that a scar may run into two separate areas (for example a scar of the trunk that runs across the shoulder onto the left arm). This one scar would be treated as two separate scars to ensure that the ratings reflect the effects on distinct areas of the body. For example, we would separately evaluate the surface area of the portion of the scar located on the extremity and the surface area of the portion of the scar located on the trunk, and then combine those ratings under 38 CFR 4.25. This revised note would remove any possible ambiguity regarding the appropriate rating for a scar that affects the trunk and one or more extremities, a scar that affects two or more extremities, and multiple scars. In addition, it would clarify that each extremity and the trunk represent the only body areas for which we may assign ratings. In other words, it would clarify the possible ambiguity present in the current regulation as to whether these areas of the body are merely examples of scarred body parts eligible for a disability rating. Further, although the current note addresses the anterior and posterior surfaces of the trunk as widely separated areas, we propose that the trunk be considered as a single area. This would ensure that the area of all deep scars of the trunk are taken into account in the evaluation. Scars of the trunk of considerable area may extend from one surface of the trunk to another, crossing the sides of the trunk, and as such the anterior and posterior surfaces of the trunk are not widely separate areas. Under this note #2, a maximum of 40 percent could be assigned for each of the five areas, including the trunk. This proposed note is clearer and easier to apply than the current note, represents an accurate view of our current policy, and provides appropriate levels of evaluation for these types of scars. Diagnostic Code 7802 We propose to change the title of this diagnostic code from “Scars, other than head, face, or neck, that are superficial and that do not cause limited motion” to “Burn scar(s) or scar(s) due to other causes, not of the head, face, or neck, that are superficial and nonlinear.” As with diagnostic code 7801, we propose to add burn scar(s) to the title to indicate that this is the appropriate diagnostic code for the evaluation of superficial burn scars and other superficial scars that are nonlinear. As under diagnostic code 7801, evaluation under diagnostic code 7802 is based on area, and it is therefore not an appropriate diagnostic code for the evaluation of linear scars. We propose to revise Note
(1)in a similar manner to the revision of Note
(1)under diagnostic code 7801, in order to make the guidance on evaluating multiple scars under this diagnostic code clearer and to ensure that it reflects current policy. Diagnostic Codes 7803 and 7804 Diagnostic code 7803 is now titled “Scars, superficial, unstable,” and provides a single evaluation level of 10 percent for such scars. It also includes two notes, one defining an unstable scar and the other defining a superficial scar. Diagnostic code 7804 is now titled “Scars, superficial, painful on examination” and provides a single evaluation level of 10 percent for such scars. We propose deleting diagnostic code 7803 and amending diagnostic code 7804 so that it will govern the evaluation of both unstable and painful scars. Because a deep scar can also be unstable, painful, or both, we propose removing “superficial” from the title of diagnostic code 7804, so that it will apply to both deep and superficial scars. The new title of diagnostic code 7804 would be: “Scar(s), unstable or painful”. We propose removing the “on examination” language in the new title because VA's disability ratings are based on relevant medical evidence; as such, to include “on examination” in the title is redundant. We propose providing evaluation criteria that encompass both unstable and painful scars and apply to one or more scars. We propose assigning a 10 percent evaluation if there are one or two scars that are unstable or painful, a 20 percent evaluation if there are three or four scars that are unstable or painful, and a 30 percent evaluation if there are five or more scars that are unstable or painful. Furthermore, we propose adding a note #2 explaining that if one or more scars are both unstable and painful, 10 percent will be added to the evaluation based on the total number of unstable or painful scars. The existing criteria provide no specific guidance on evaluating multiple painful or unstable scars, and we propose providing new criteria that reflect our policies concerning the evaluation of multiple superficial scars that are unstable, painful, or both. In our judgment, these criteria are equitable, in that if five painful scars are present on a single extremity, for example, they would receive the same evaluation (30 percent) as would five painful scars, if one were on each extremity, and one on the trunk. Unlike the physical effects of a deep or superficial scar, which may be limited to a particular part of the body, pain tends to affect the person as a whole; therefore, in cases of multiple scars, this diagnostic code does not distinguish scars based on where they are located but rather considers their cumulative effect. Finally, we propose adding note #3, which indicates that scars evaluated under diagnostic codes 7800, 7801, 7802, or 7805 may also receive an evaluation under diagnostic code 7804, when applicable. This would clarify which types of scars may be evaluated under diagnostic code 7804 as well as under another diagnostic code. We propose deleting note #1 to diagnostic code 7804, which defines a superficial scar, because we propose to make this diagnostic code applicable to both deep and superficial scars, and there will therefore no longer be a need to define a superficial scar under this diagnostic code. We propose replacing it with new note #1, which defines an unstable scar (using the same definition as in Note
(1)under current diagnostic code 7803). We also propose deleting Note
(2)to diagnostic code 7804, concerning the evaluation of a scar on the tip of a finger or toe. The note is unnecessary because a scar on the tip of a finger or toe is evaluated under the same criteria as any other scar. In other words, a fingertip is part of the arm extremity and a toe is part of the leg extremity. We propose replacing that note with new note #2, discussed above. Diagnostic Code 7805 Current diagnostic code 7805 has been most commonly used to evaluate well-healed, asymptomatic, linear surgical or wound scars. This diagnostic code includes a direction to rate on limitation of function of affected part. We propose revising the provision in order to clarify its intended applicability, but substantively it continues to serve the same purpose. We propose that diagnostic code 7805 now be titled, “Scars, other (including linear scars) and other effects of scars evaluated under Diagnostic Codes 7800, 7801, 7802, and 7804”, in order to emphasize that a single scar may receive, for example, a rating under both diagnostic codes 7801 and 7805. The purpose of the rating under diagnostic code 7805 is to ensure that we evaluate the disabling effects of a scar other than those reflected in an evaluation under the criteria set forth in diagnostic codes 7800-04. Most often, this diagnostic code is used to evaluate healed scars that are linear, are not tender or unstable, and are not of head, face, or neck, but may cause functional limitation to the affected body part, for example, a healed appendectomy scar or a scar related to gall bladder removal. An evaluation under this diagnostic code would therefore consist of a hyphenated diagnostic code, with diagnostic code 7805 being the primary, and the affected body part being secondary, with the rating percentage based on the body part. Applicability Date VA proposes to make the provisions of this rule applicable to all applications for benefits received by VA on or after the effective date of this rule. A veteran who VA rated under diagnostic codes 7800, 7801, 7802, 7803, 7804, or 7805 of § 4.118, as in effect prior to the effective date of this rule, will be permitted to request review under these clarified criteria, irrespective of whether his or her disability has worsened since the last review. VA would review that veteran's disability rating to determine whether the veteran may be entitled to a higher disability rating under the provisions established by this rulemaking. The effective date of any award of an increase in disability compensation based on the clarifications in this rule would not be earlier than the effective date of the new criteria, but will otherwise be assigned under the current regulations regarding effective dates for increases in disability compensation, 38 CFR 3.400, etc. We propose adding this provision in the regulation to ensure veterans are fully notified of the availability of the review. We propose establishing this process for veterans potentially affected by this rulemaking in order to ensure that veterans, especially those wounded during Operation Enduring Freedom or Operation Iraqi Freedom, are compensated as fully as possible for their wounds. Paperwork Reduction Act This document contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). Regulatory Flexibility Act The Secretary hereby certifies that this proposed rule would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. This amendment would not significantly impact any small entities. Therefore, pursuant to 5 U.S.C. 605(b), this amendment is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604. Executive Order 12866—Regulatory Planning and Review Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Executive Order classifies a “significant regulatory action,” requiring review by the Office of Management and Budget, as any regulatory action that is likely to result in a rule that may:
(1)Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;
(2)create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;
(3)materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or
(4)raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. The economic, interagency, budgetary, legal, and policy implications of this proposed rule have been examined and it has been determined to be a significant regulatory action under Executive Order 12866. Unfunded Mandates The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any year. This proposed rule would have no such effect on State, local, and tribal governments, or on the private sector. Catalog of Federal Domestic Assistance Numbers and Titles The Catalog of Federal Domestic Assistance program numbers and titles for this proposal are 64.104, Pension for Non-Service-Connected Disability for Veterans, and 64.109, Veterans Compensation for Service-Connected Disability. List of Subjects in 38 CFR Part 4 Disability benefits, Pensions, Veterans. Approved: November 16, 2007. Gordon H. Mansfield, Acting Secretary of Veterans Affairs. For the reasons set out in the preamble, 38 CFR part 4, subpart B, is proposed to be amended as set forth below: PART 4—SCHEDULE FOR RATING DISABILITIES Subpart B—Disability Ratings 1. The authority citation for part 4 continues to read as follows: Authority: 38 U.S.C. 1155, unless otherwise noted. 2. Section 4.118 is amended by: a. Adding an introductory paragraph to § 4.118. b. Revising the heading to diagnostic code 7800 and adding new notes
(4)and (5). c. Revising diagnostic codes 7801, 7802, 7804, and 7805. d. Removing diagnostic code 7803. The additions and revisions read as follows: § 4.118 Schedule of ratings—skin. A veteran who VA rated under diagnostic codes 7800, 7801, 7802, 7803, 7804, or 7805, before [ *date 30 days after date of publication of the final rule in the* **Federal Register** ], can request review under diagnostic code 7800, 7801, 7802, 7804, and 7805, irrespective of whether his or her disability has increased since the last review. VA will review that veteran's disability rating to determine whether the veteran may be entitled to a higher disability rating under diagnostic code 7800, 7801, 7802, 7804, and 7805. A request for review pursuant to this rulemaking will be treated as a claim for an increased rating for purposes of determining the effective date of an increased rating awarded as a result of such review; however, in no case will the award be effective before [ *date 30 days after date of publication of the final rule in the* **Federal Register** ]. Rating 7800 Burn scar(s); scar(s) due to other causes; or other disfigurement of the head, face, or neck: Note (4): Separately evaluate disabling effects other than disfigurement that are associated with individual scar(s) of the head, face, or neck, such as pain, instability, and residuals of associated muscle or nerve injury, under the appropriate diagnostic code(s) and apply § 4.25 to combine the evaluation(s) with the evaluation assigned under this diagnostic code Note (5): The characteristic(s) of disfigurement may be caused by one scar or by multiple scars; the characteristic(s) required to assign a particular evaluation need not be caused by a single scar in order to assign that evaluation 7801 Burn scar(s) or scar(s) due to other causes, not of the head, face, or neck, that are deep and nonlinear: Area or areas of 144 square inches (929 sq. cm.) or greater 40 Area or areas of at least 72 square inches (465 sq. cm.) but less than 144 square inches (929 sq. cm.) 30 Area or areas of at least 12 square inches (77 sq. cm.) but less than 72 square inches (465 sq. cm.) 20 Area or areas of at least 6 square inches (39 sq. cm.) but less than 12 square inches (77 sq. cm.) 10 Note (1): A deep scar is one associated with underlying soft tissue damage Note (2): If multiple scars are present, or if a single scar affects more than one extremity, assign a separate evaluation for each affected extremity, based on the total area of the qualifying scars that affect that extremity, and assign a separate evaluation for the trunk, if affected, based on the total area of the qualifying scars of the trunk. Combine the separate evaluations under § 4.25. Qualifying scars are scars that are nonlinear, deep, and are not located on the head, face, or neck 7802 Burn scar(s) or scar(s) due to other causes, not of the head, face, or neck, that are superficial and nonlinear: Area or areas of 144 square inches (929 sq. cm.) or greater 10 Note (1): A superficial scar is one not associated with underlying soft tissue damage Note (2): If multiple superficial scars are present, assign a separate evaluation for each affected extremity, based on the total area of the superficial scars of that extremity, and assign a separate evaluation for the trunk, if affected, based on the total area of the superficial scars of the trunk. Combine the separate evaluations under § 4.25 7804 Scar(s), unstable or painful: Five or more scars that are unstable or painful 30 Three or four scars that are unstable or painful 20 One or two scars that are unstable or painful 10 Note (1): An unstable scar is one where, for any reason, there is frequent loss of covering of skin over the scar Note (2): If one or more scars are both unstable and painful, add 10 percent to the evaluation that is based on the total number of unstable or painful scars Note (3): Scars evaluated under diagnostic codes 7800, 7801, 7802, or 7805 may also receive an evaluation under this diagnostic code, when applicable 7805 Scars, other (including linear scars) and other effects of scars evaluated under Diagnostic Codes 7800, 7801, 7802, and 7804: Evaluate any disabling effect(s) not considered in a rating provided under diagnostic codes 7800-04 under an appropriate diagnostic code. [FR Doc. E7-25525 Filed 1-2-08; 8:45 am] BILLING CODE 8320-01-P DEPARTMENT OF VETERANS AFFAIRS 38 CFR Part 4 RIN 2900-AM75 Schedule for Rating Disabilities; Evaluation of Residuals of Traumatic Brain Injury
(TBI)AGENCY: Department of Veterans Affairs. ACTION: Proposed rule. SUMMARY: This document proposes to amend the Department of Veterans Affairs
(VA)Schedule for Rating Disabilities by revising that portion of the Schedule that addresses neurological conditions and convulsive disorders, in order to provide detailed and updated criteria for evaluating residuals of traumatic brain injury (TBI). DATES: Comments must be received on or before February 4, 2008. ADDRESSES: Written comments may be submitted through *http://www.Regulations.gov* ; by mail or hand-delivery to the Director, Regulations Management (00REG), Department of Veterans Affairs, 810 Vermont Ave., NW., Room 1068, Washington, DC 20420; or by fax to
(202)273-9026. Comments should indicate that they are submitted in response to RIN 2900-AM75—“Schedule for Rating Disabilities; Evaluation of Residuals of Traumatic Brain Injury (TBI).” Copies of comments received will be available for public inspection in the Office of Regulation Policy and Management, Room 1063B, between the hours of 8 a.m. and 4:30 p.m., Monday through Friday (except holidays). Please call
(202)461-4902 (this is not a toll-free number) for an appointment. In addition, during the comment period, comments may be viewed online through the Federal Docket Management System
(FDMS)at *http://www.Regulations.gov.* FOR FURTHER INFORMATION CONTACT: Maya Ferrandino, Regulations Staff (211D), Compensation and Pension Service, Veterans Benefits Administration, Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420,
(727)319-5847. (This is not a toll-free number.) SUPPLEMENTARY INFORMATION: This document proposes to amend the Department of Veterans Affairs
(VA)Schedule for Rating Disabilities (38 CFR part 4) by revising the material under diagnostic code 8045, Brain disease due to trauma, in 38 CFR 4.124a (neurological conditions and convulsive disorders). TBI has been called a signature injury of the conflict in Iraq, and VA is seeing a statistically larger number of veterans of the Iraq and Afghanistan conflicts with residuals of TBI than has been seen in previous conflicts. In addition, the effects of injuries stemming from blasts resulting from roadside explosions of improvised explosive devices, which have been common sources of injury in these conflicts, appear to be somewhat different from the effects of brain trauma seen from other sources of injury. VA proposes to amend the criteria for rating residuals of TBI to update them in light of current knowledge of the condition. We propose changing the title of diagnostic code 8045 from “Brain disease due to trauma” to “Residuals of traumatic brain injury (TBI),” which reflects modern terminology for this condition. TBI is an injury to the brain from an external force that results in immediate effects such as loss or alteration of consciousness, amnesia, and sometimes neurological impairments. These abnormalities may all be transient, but more prolonged or even permanent problems with a wide range of impairment in such areas as physical, mental, and emotional/behavioral functioning may occur. TBI is classified as mild, moderate, or severe at, or close to, the time of the original injury, and while this classification will often correspond to the future level of functional impairment, that will not always be the case. This original designation as to severity of the original injury does not change, whatever the speed or extent of recovery, or the long-term disabling effects. Therefore, it does not affect the rating assigned under diagnostic code 8045. We propose to include the information that “mild,” “moderate,” and “severe” refer to a classification of TBI at, or close to, the time of injury rather than to the current level of functioning in the regulation itself to make it clear to raters that these designations that may appear in medical records refer only to the initial evaluation and not to current functioning. We propose to provide guidance for the evaluation of the most common, but not all possible, residuals of TBI. These residuals fall into three main areas of dysfunction: Cognitive, emotional/behavioral, and physical. In addition, a cluster of largely subjective symptoms (symptoms cluster) falling into these categories may develop following TBI. This proposed rule provides several sets of guidelines and criteria for the evaluation of TBI residuals because of the breadth of the possible effects. These include guidance on evaluating physical (neurologic) residuals, criteria for evaluating cognitive impairment, criteria for evaluating the symptoms cluster that sometimes follows TBI (sometimes referred to as post-concussion syndrome (PCS)), and guidance on evaluating emotional/behavioral dysfunction. Evaluating Physical Dysfunction In the current schedule, under diagnostic code 8045, purely neurological disabilities following brain trauma, such as hemiplegia, epileptiform seizures, facial nerve paralysis, etc., are rated under the diagnostic codes dealing with the specific disabilities, using a hyphenated code to indicate the rating criteria used. We propose deleting the discussion of the use of hyphenated codes because that use is explained in 38 CFR 4.27, “Use of diagnostic code numbers,” and therefore need not be repeated here. When the brain is injured, almost any function of the body can be affected, depending on the location, type, and severity of the injury. We propose to provide a list of the most common, but not all possible, physical (neurological) problems that may be seen after TBI. These problems are motor and sensory dysfunction, including pain, of the extremities and face; visual impairment; hearing loss and tinnitus; loss of sense of smell and taste; seizures; gait, coordination, and balance problems; speech and other communication difficulties, including aphasia and related disorders, and dysarthria; neurogenic bladder; neurogenic bowel; cranial nerve dysfunctions; autonomic nerve dysfunctions; and endocrine dysfunctions. We propose to rate each condition separately evaluated under an appropriate diagnostic code, as long as the same signs and symptoms are not used to support more than one evaluation, and to combine those evaluations under the provisions of 38 CFR 4.25 (Combined ratings table). Residuals that are reported but not mentioned on this list would be evaluated under the most appropriate diagnostic code. We are also proposing to direct raters to consider special monthly compensation for such problems as loss of use of an extremity, certain sensory impairments, bowel and bladder impairments, erectile dysfunction, the need for aid and attendance (including when assistance or supervision is needed on the basis of cognitive impairment), and being housebound. Evaluating Emotional/Behavioral Dysfunction and Comorbid Mental Disorders Comorbid (coexisting with another medical disorder) mental disorders are common with TBI. Most common is depression, which may occur in up to 60 percent of those with TBI, but anxiety and post-traumatic stress disorder
(PTSD)also commonly occur. We propose requiring comorbid mental disorders to be evaluated under 38 CFR 4.130 (Schedule of ratings—mental disorders). Some emotional/behavioral symptoms that do not reach the level of a mental disorder, as defined in DSM-IV (the 4th edition of the Diagnostic and Statistical Manual of Mental Disorders, which is published by the American Psychiatric Association), would be evaluated under the criteria provided for the evaluation of cognitive impairment or for the evaluation of the symptoms cluster, as discussed below, because the symptoms of cognitive impairment and the symptoms cluster encompass many emotional/behavioral symptoms (Department of Veterans Affairs, Veterans Health Initiative, “Traumatic Brain Injury,” 83-85 (Rodney Vanderploeg, Ph.D., ed., 2003)). Evaluating the Symptoms Cluster Due to TBI Following TBI, a cluster of symptoms (or syndrome) is commonly seen. The symptoms fall into emotional/behavioral, cognitive, and physical areas, and may have both neurological and psychological components, but there are no objective neurologic findings or abnormalities on routine imaging. While in the majority of affected people these symptoms resolve in about 3 months, in a small percentage, they become permanent. In the medical literature, this symptoms cluster is sometimes referred to as post-concussion syndrome (although loss of consciousness at the time of the original injury is not a requirement), or simply as residuals of mild TBI (Veterans Health Initiative, “Traumatic Brain Injury,” 23-27). The symptoms cluster includes such symptoms as headache (migraine or tension-type), dizziness or vertigo, fatigue, malaise, sleep disturbance, cognitive impairment, difficulty concentrating, delayed reaction time, behavioral changes (such as irritability, restlessness, apathy, inappropriate social behavior, aggression, impulsivity), emotional changes (such as mood swings, anxiety, depression), tinnitus or hypersensitivity to sound, hypersensitivity to light, blurred vision, double vision, decreased sense of smell and taste, and difficulty hearing in noisy situations or with competing sounds in the absence of objective hearing loss. In the current schedule, under diagnostic code 8045, purely subjective complaints such as headache, dizziness, insomnia, etc., recognized as symptomatic of brain trauma, are rated 10 percent and no more under diagnostic code 9304. Furthermore, this 10-percent rating is not combined with any other rating for a disability due to brain trauma, and ratings in excess of 10 percent for brain disease due to trauma under diagnostic code 9304 are not assignable in the absence of a diagnosis of multi-infarct dementia associated with brain trauma. This guidance about evaluating subjective complaints after brain trauma is at least 45 years old and seems to reflect views that were once prevalent, that these symptoms might be due to hysteria or malingering. In recent years, abnormalities of the brain following mild TBI have been reported on the basis of the following types of special studies: Neuropathologic, neurophysiologic, neuroimaging, and neuropsychologic. Current medical thinking is that these symptoms may be due to subtle brain pathology following trauma that was undetectable on previously available studies. These symptoms may be more than 10-percent disabling. Therefore, we propose replacing the current guidance concerning the evaluation of subjective complaints after brain trauma under diagnostic code 8045 with a set of criteria to evaluate this symptoms cluster, with evaluation levels of 20, 30, and 40 percent. We propose to require that for evaluation under the new criteria, at least three of the symptoms listed above be present. If there are nine or more of the listed symptoms, 40 percent would be assigned; if there are five to eight of the listed symptoms, 30 percent would be assigned; and if there are three or four of the listed symptoms, 20 percent would be assigned. These levels of evaluation are consistent with the range of disability that may result from these symptoms and would promote consistent evaluations. If, on the other hand, there is a definite diagnosis that includes one or more of these symptoms, such as migraine (which is common after TBI) or Meniere's syndrome (which has symptoms of tinnitus, vertigo, fluctuating hearing loss, and a sense of fullness in the ear), it would be separately evaluated. If there are at least 3 remaining symptoms, they would be evaluated under the criteria for evaluating the symptoms cluster. Evaluating Cognitive Impairment Cognitive impairment is defined as decreased memory, concentration, attention, and executive functions of the brain. Executive functions are speed of information processing, goal setting, planning, organizing, prioritizing, self-monitoring, problem solving, judgment, decision making, spontaneity, and flexibility in changing actions when they are not productive. Not all of these brain functions may be affected in a given individual with cognitive impairment, and some functions may be affected more severely than others. In a given individual, symptoms may fluctuate in severity from day to day. Cognitive impairment of varying degrees is most common and most severe following moderate or severe TBI. Therefore, primarily those who experienced a moderate or severe TBI would require evaluation under these criteria. However, an individual with mild TBI may also have these conditions. The effects of cognitive impairment are numerous and far reaching with profound effects on many areas of functioning: mental, physical, behavioral, and emotional. Some of the major functional effects of cognitive impairment can be found at *http://grants.nih.gov/grants/guide/pa-files/PA-97-050.html, http://web.uccs.edu/dsimons/cognitive%20impairment%20handouts.pdf* , and *http://www.guideline.gov/summary/summary.aspx?ss=15&doc_id=3508&nbr=2734* . We propose to provide criteria that take into account 11 of the common major effects of cognitive impairment. These effects or facets of cognitive impairment are work or school; memory, attention, concentration; activities of daily living (ADLs); judgment; supervision for safety; appropriate response in social situations; orientation; motor activity (with intact motor and sensory system); visual-spatial function; other neurobehavioral effects; and speech and language disorders. There is a wide variation in the occurrence and severity of cognitive impairments. Some individuals may have impairments in some facets but not others, some individuals may have impairments in all facets, and some functions affected by cognitive impairment may be impaired more severely than others in a given individual (for example, one may have severe speech and other communication problems but no problem with activities of daily living, while another may have no problem with speech, but considerable difficulty with ADLs and other facets). Using a standard set of evaluation criteria by assigning a specific level of evaluation for a standard set of signs or symptoms would disadvantage veterans who do not have the particular signs and symptoms in the standard set chosen, but who have equally disabling signs and symptoms of cognitive impairment. On the other hand, it would be too burdensome to include criteria for all possible signs and symptoms of cognitive impairment. Therefore, we propose using the table we have developed for evaluating cognitive impairment that includes the 11 most important types or facets of impairment, titled “EVALUATION OF COGNITIVE IMPAIRMENT UNDER DIAGNOSTIC CODE 8045.” In addition, we propose providing separate criteria, representing logical increments of functioning for each facet, for assessing the severity of each of these 11 common facets of impairment following TBI. Scores of severity for each facet would range from 0 to 4, although not all facets would have all 5 levels of severity. For example, for ADLs, a score of 0 would be assigned if the individual is able to perform all activities of daily living without assistance. However, if some assistance is needed for ADLs, even part of the time, a level of 1 or 2 would be too low for such a substantial impairment. Therefore, if the individual requires assistance with activities of daily living some of the time (but less than half of the time), a score of 3 would be assigned, and if the individual requires assistance with activities of daily living most or all of the time, a score of 4 would be assigned. For the “judgment” facet, a score of 0 would be assigned for “Normal.” A score of 1 would be assigned for “Mildly impaired.” A score of 2 would be assigned for “Moderately impaired.” A score of 4 would be assigned for “Severely impaired.” Note that there would be no score of 3 for judgment. The rater would assign the appropriate score from 0 to 4 for each facet, based on the information about the severity of impairment for each facet that has been provided (on the disability examination report). The rater would then add only the 3 highest scores and divide that sum by 3 to determine the overall score for cognitive impairment, that is, 0, 1, 2, 3, or 4. Numbers between whole numbers would be rounded to the nearest whole number. For example, scores of 1.0, 1.1, 1.2, 1.3, and 1.4 would all be rounded to 1, while scores of 1.5, 1.6, 1.7, 1.8, and 1.9 would all be rounded to 2. The percentage evaluations available for cognitive impairment would be 0, 10, 40, 70, and 100 percent. A score of 1 would equate to an evaluation of 10 percent, a score of 2, to 40 percent, a score of 3, to 70 percent, and a score of 4, to 100 percent. As in all cases, per 38 CFR 4.31 (0 percent evaluations), an evaluation of 0 percent would be assigned if the score is below 1, after rounding. Using the three most impaired facets of functioning balances the problems of using only one or two facets, which would result in a limited view of overall functioning, and using all 11 facets, which would cause the better areas of functioning to dilute the more severely impaired ones, and would result in an impression of better overall functioning than is actually present. The proposed criteria are long and complex. To assist the rater, we propose providing the 11 facets, the levels of impairment, and the criteria for each level in the table, “Evaluation of Cognitive Impairment Under Diagnostic Code 8045.” Because of the length of the table, we are not repeating it in this summary. Note #1—Cognitive Impairment and Comorbid Mental Disorder We also propose adding two notes under the cognitive impairment criteria for further clarification. Note #1 would explain the evaluation process when both cognitive impairment and one or more comorbid mental disorders are present, in which case there may be an overlap of signs and symptoms. In such cases, two evaluations, one under the cognitive impairment criteria and another under the General Rating Formula for Mental Disorders, based on the same findings would not be assigned. If the signs and symptoms of the mental disorder(s) and of cognitive impairment cannot be clearly separated, a single evaluation either under the General Rating Formula for Mental Disorders or under the evaluation criteria for cognitive impairment, whichever provides the better assessment of overall impaired functioning due to both conditions, would be assigned. If the signs and symptoms are clearly separable, separate evaluations for the mental disorder(s) and for cognitive impairment would be assigned. Note #2—Prohibition of Evaluation Under Cognitive Impairment Criteria and Under the Symptoms Cluster Note #2 would point out that cognitive impairment may not be evaluated both under the cognitive impairment criteria and as part of the symptoms cluster because this would constitute pyramiding. In addition, cognitive impairment encompasses many more symptoms than are specifically listed in the rating table for evaluation of cognitive impairment, including some of the subjective symptoms in the symptoms cluster. Therefore, if evaluation is made under the cognitive impairment criteria, no evaluation would be assigned for the symptoms cluster. When cognitive impairment is present, it would be evaluated either as part of the symptoms cluster, if cognitive impairment and at least 2 of the additional cluster symptoms listed are present, or under the cognitive impairment criteria, whichever method of evaluation is more advantageous to the veteran. Note #3—TBI That Is Unclassified as to Severity We propose adding a third note to direct raters to evaluate under the set of criteria that is most in accord with the reported residuals, regardless of whether a classification of the severity of TBI (mild, moderate, or severe) determined at, or close to, the time of injury is available. In other words, if subjective symptoms are the primary residuals, evaluation would be made under the criteria for evaluating the symptoms cluster. If cognitive impairment alone is diagnosed, evaluation would be made instead under the criteria for evaluating cognitive impairment. In any case, physical (neurologic) residuals would be evaluated as directed under diagnostic code 8045, and comorbid mental disorders would be evaluated as directed under § 4.130. Applicability Date VA proposes to make the provisions of this rule applicable to all applications for benefits received by VA on or after the effective date of this rule. A veteran whose residuals of TBI are rated under a prior version of § 4.124a, diagnostic code 8045, will be permitted to request review under the new criteria, irrespective of whether his or her disability has worsened since the last review. VA would review that veteran's disability rating to determine whether the veteran may be entitled to a higher disability rating under the provisions established by this rulemaking. The effective date of any award of an increase in disability compensation based on the new criteria would be no earlier than the effective date of the new criteria. The effective date of an award would be decided under the current regulations regarding effective dates for increases in disability compensation, 38 CFR 3.400, etc. and 38 CFR 3.114, if applicable, would be considered. We propose adding this information under diagnostic code 8045 as Note #4 to insure veterans are fully notified of the availability of the review. We propose establishing this process for veterans potentially affected by this rulemaking in order to ensure that veterans, especially those wounded during Operation Enduring Freedom or Operation Iraqi Freedom, are compensated as fully as possible for their wounds. Benefits Costs Two groups of veterans may be affected by this regulation change. The first group is those veterans who will come on the rolls in the future. VA also anticipates some current TBI beneficiaries will reopen their claims. Future caseload estimates are based on historical trends of service connected accessions related to TBI by degree of disability. VA identified the potential population of reopened claims based on current beneficiaries on the rolls with a combined evaluation that included a rating for TBI. Average monthly payments for each disability rating were applied to calculate the benefits cost. The assumptions used to generate the affected population are based on historical caseload trends and are not based on DoD information, nor should they be construed to imply any future DoD policy decisions. VA estimates the total caseload affected for years 2008-2017 as follows: 2,846, 3,546, 3,746, 3,946, 4,146, 4,343, 4,546, 4,746, 4,946, and 5,146. Benefits costs ($ in millions) associated with the caseload for the same time period are as follows: $3.6, $10.1, $10.1, $11.1, $12.1, $13.1, $14.2, $15.3, $16.5, and $17.7 for a 10-year total of $123.8 million over 10 years. Paperwork Reduction Act This document contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). Regulatory Flexibility Act The Secretary hereby certifies that this proposed rule would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. This proposed rule would govern disability ratings in individual cases and would not directly affect small entities. Therefore, pursuant to 5 U.S.C. 605(b), this proposed amendment is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604. Executive Order 12866—Regulatory Planning and Review Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Executive Order classifies a “significant regulatory action,” requiring review by the Office of Management and Budget (OMB), as any regulatory action that is likely to result in a rule that may:
(1)Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;
(2)create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;
(3)materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or
(4)raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. The economic, interagency, budgetary, legal, and policy implications of this proposed rule have been examined, and it has been determined to be a significant regulatory action under Executive Order 12866 because it is likely to result in a rule that may raise novel legal or policy issues arising out of legal mandates, the President's priorities, or principles set forth in the Executive Order. Unfunded Mandates The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any 1 year. This proposed rule would have no such effect on State, local, and tribal governments, or on the private sector. Catalog of Federal Domestic Assistance Numbers and Titles The Catalog of Federal Domestic Assistance program numbers and titles for this proposal are 64.104, Pension for Non-Service-Connected Disability for Veterans, and 64.109, Veterans Compensation for Service-Connected Disability. List of Subjects in 38 CFR Part 4 Disability benefits, Pensions, Veterans. Approved: November 16, 2007. Gordon H. Mansfield, Acting Secretary of Veterans Affairs. For the reasons set out in the preamble, 38 CFR part 4, subpart B, is proposed to be amended as set forth below: PART 4—SCHEDULE FOR RATING DISABILITIES 1. The authority citation for part 4 continues to read as follows: Authority: 38 U.S.C. 1155, unless otherwise noted. Subpart B—Disability Ratings 2. In § 4.124a, in the table entitled, “Organic Diseases Of The Central Nervous System”, the entry for 8045 is revised in its entirety and a new table titled “Evaluation Of Cognitive Impairment Under Diagnostic Code 8045” is added after the “Organic Diseases Of The Central Nervous System” table, to read as follows: § 4.124a Schedule of ratings—neurological conditions and convulsive disorders. Organic Diseases Of The Central Nervous System Rating 8045 Residuals of traumatic brain injury (TBI): There are three main areas of dysfunction that may result from TBI and require evaluation: Cognitive, emotional/behavioral, and physical effects. In addition, a cluster of largely subjective symptoms, which may include Cognitive, emotional/behavioral, and physical symptoms, may develop that may also require evaluation. “Mild,” “moderate,” and “severe” refer to a classification of TBI at, or close to, the time of injury rather than to the current level of functioning. This classification does not affect the rating assigned under diagnostic code 8045 Evaluate cognitive impairment under the criteria in the table titled “Evaluation Of Cognitive Impairment Under Diagnostic Code 8045.” Evaluate the symptoms cluster that sometimes follows TBI under the set of criteria for evaluating the symptoms cluster due to TBI provided as part of the rating criteria under diagnostic code 8045 Evaluate emotional/behavioral dysfunction under § 4.130 (Schedule of ratings—mental disorders) when there is a diagnosis of a mental disorder. When there is no diagnosis of a mental disorder, evaluate symptoms under the criteria in the table titled “Evaluation Of Cognitive Impairment Under Diagnostic Code 8045” or under the criteria for evaluation of the symptoms cluster due to TBI Evaluate physical (neurological) dysfunction based on the following list, under an appropriate diagnostic code, as applicable Motor and sensory dysfunction, including pain, of the extremities and face; visual impairment; hearing loss and tinnitus; loss of sense of smell and taste; seizures; gait, coordination, and balance problems; speech and other communication difficulties, including aphasia and related disorders, and dysarthria; neurogenic bladder; neurogenic bowel; cranial nerve dysfunctions; autonomic nerve dysfunctions; and endocrine dysfunctions. These lists do not encompass all possible residuals of TBI. For residuals not listed here that are reported on an examination, evaluate under the most appropriate diagnostic code. Evaluate each condition separately, as long as the same signs and symptoms are not used to support more than one evaluation, and combine the evaluations for each separately rated condition under § 4.25. Consider special monthly compensation for such problems as loss of use of an extremity, certain sensory impairments, bowel and bladder impairments, erectile dysfunction, the need for aid and attendance (including when assistance or supervision is needed on the basis of cognitive impairment), and being housebound. Evaluation of Symptoms Cluster due to TBI A cluster of symptoms, physical, cognitive, and emotional/behavioral, often occurs following TBI. There are usually no objective neurologic findings or abnormalities on routine imaging. While in the majority of affected people this cluster of symptoms resolves in about 3 months, in a small percentage, the symptoms become permanent. In the medical literature, this symptoms cluster may be referred to as post-concussion syndrome, or simply as residuals of mild TBI. For evaluating such residuals of TBI under the criteria below, at least three of the following symptoms must be present: Headache (migraine or tension-type), dizziness or vertigo, fatigue, malaise, sleep disturbance, cognitive impairment, difficulty concentrating, delayed reaction time, behavioral changes (such as irritability, restlessness, apathy, inappropriate social behavior, aggression, impulsivity), emotional changes (such as mood swings, anxiety, depression), tinnitus or hypersensitivity to sound, hypersensitivity to light, blurred vision, double vision, decreased sense of smell and taste, and difficulty hearing in noisy situations or with competing sounds in the absence of objective hearing loss. If there is a definite diagnosis of a condition that includes one or more of these symptoms, such as migraine headache or Meniere's disease, evaluate that condition separately under the appropriate diagnostic code and evaluate the remaining symptoms based on the following criteria, as long as there are at least three symptoms remaining. With nine or more of the listed symptoms 40 With five to eight of the listed symptoms 30 With three or four of the listed symptoms 20 Evaluation of Cognitive Impairment Cognitive impairment is defined as decreased memory, concentration, attention, and executive functions of the brain. Executive functions are speed of information processing, goal setting, planning, organizing, prioritizing, self-monitoring, problem solving, judgment, decision making, spontaneity, and flexibility in changing actions when they are not productive. Not all of these brain functions may be affected in a given individual with cognitive impairment, and some functions may be affected more severely than others. In a given individual, symptoms may fluctuate in severity from day to day. These types of losses can have profound effects on many areas of functioning: mental, physical, behavioral, and emotional. Cognitive impairment of varying degrees is common after TBI. The table titled “EVALUATION OF COGNITIVE IMPAIRMENT UNDER DIAGNOSTIC CODE 8045” contains 11 common facets of cognitive impairment with levels of impairment for each ranging from 0 to 4, with 4 representing the most severe level. Not all facets have criteria for every level from 0 to 4. Add the *3 highest numbers* from 0 to 4 assigned to facets of cognitive impairment, divide that sum by 3, and round to the nearest whole number (for example, 1.0, 1.1, 1.2, 1.3, and 1.4 are rounded to 1, while 1.5, 1.6, 1.7, 1.8, and 1.9 are rounded to 2). Once the whole number from 0 to 4 has been calculated, assign the percentage evaluation as follows: 0 = 0%; 1 = 10%; 2 = 40%; 3 = 70%; and 4 = 100%. Note (1): When both cognitive impairment and one or more comorbid mental disorders are present, there may be an overlap of signs and symptoms. In such cases, do not assign two evaluations, one under the cognitive impairment criteria and another under the General Rating Formula for Mental Disorders, based on the same findings. If the signs and symptoms of the mental disorder(s) and of cognitive impairment cannot be clearly separated, assign a single evaluation either under the General Rating Formula for Mental Disorders or under the evaluation criteria for cognitive impairment, whichever provides the better assessment of overall impaired functioning due to both conditions. However, if the signs and symptoms are clearly separable, assign separate evaluations for the mental disorder(s) and for cognitive impairment. Note (2): Do not assign separate evaluations for cognitive impairment and for the symptoms cluster due to TBI; rather, assign one or the other, whichever results in a higher evaluation. However, separate evaluations may be assigned for cognitive impairment or for the symptoms cluster, and for other physical (neurological) abnormalities or comorbid mental disorders if the same signs and symptoms are not used to support more than one evaluation. Note (3): Whether or not a classification of the severity of TBI (mild, moderate, or severe) determined at, or close to, the time of injury is available, evaluate under the set of criteria that is most in accord with the reported residuals. If a cluster of subjective symptoms is the primary residual, evaluate under the criteria for symptoms cluster due to TBI. If cognitive impairment is diagnosed, evaluate under the criteria for cognitive impairment if it is the only residual, or under either the criteria for cognitive impairment or under the symptoms cluster if there are at least 2 other residual subjective symptoms. In any case, evaluate physical (neurologic) residuals and comorbid mental disorders as directed under diagnostic code 8045. Note (4): A veteran whose residuals of TBI are rated under a version of § 4.124a, diagnostic code 8045, in effect prior to [insert date 30 days after date of publication of the final rule in the **Federal Register** ], can request review under diagnostic code 8045, irrespective of whether his or her disability has worsened since the last review. VA will review that veteran's disability rating to determine whether the veteran may be entitled to a higher disability rating under diagnostic code 8045. A request for review pursuant to this rulemaking will be treated as a claim for an increased rating for purposes of determining the effective date of an increased rating awarded as a result of such review; however, in no case will the award be effective before [insert date 30 days after date of publication of the final rule in the **Federal Register** ]. For the purposes of determining the effective date of an increased rating awarded as a result of such review, VA will apply the provisions of 38 CFR 3.114, if applicable. Evaluation of Cognitive Impairment Under Diagnostic Code 8045 Facets of cognitive impairment Level of impairment Criteria Work or school 0 Able to work or attend school at a level equivalent to that prior to injury with no special accommodation, and without difficulty. 1 Able to work or attend school at a level equivalent to that prior to injury with no special accommodation, and with only minor difficulty, mainly at times of increased duties or demands. 2 Able to work or attend school, but requires some accommodation (for example, may need special environment, special equipment, or closer supervision). 3 Able to work or attend school, but only in a situation with decreased demands compared to pre-injury employment or school or in a sheltered workplace. 4 Unable to work or attend school. Memory, attention, concentration 0 No complaints of memory loss and no objective evidence of memory loss. 1 Mildly impaired. Any combination of memory loss (although memory tests on exam are normal), occasional difficulty following a conversation, occasional difficulty recalling recent conversations, occasional difficulty remembering names of new acquaintances, occasional difficulty finding words, misplaces items. 2 Any combination of mild impairment of memory (which must be objectively shown), mildly impaired attention, mildly impaired concentration, difficulty following complex instructions, easily distractible, poor retention of written material, difficulty multi-tasking, problems planning, problems organizing, difficulty completing tasks. 3 Any combination of moderately impaired memory, attention, concentration, or executive functions. 4 Any combination of severely impaired memory, attention, concentration, or executive functions. ADLs (activities of daily living) 0 Able to perform all activities of daily living without assistance. 3 Requires assistance with activities of daily living some of the time (but less than half of the time). 4 Requires assistance with activities of daily living most or all of the time. Judgment 0 Normal. 1 Mildly impaired. 2 Moderately impaired. 4 Severely impaired. Supervision for safety 0 Does not need supervision for safety, even in risky situations. 2 Rarely or occasionally needs supervision for safety, but only for risky activities. 3 Often requires supervision for safety (but less than half of the time). 4 Requires supervision for safety most or all of the time. Appropriate response in social situations 0 Appropriate response in social situations always. 1 Appropriate response in social situations almost always. 2 Inappropriate response in social situations much of the time. 3 Inappropriate response in social situations most or all of the time. Orientation 0 Always oriented to person, time, and place. 2 Oriented to person and time; occasional or rare disorientation to place. 3 Sometimes disoriented to time or place. 4 Often or always disoriented, especially to time or place. Motor activity (with intact motor and sensory system) 0 Motor activity normal. 1 Motor activity normal most of the time. May be slowed at times. 2 Motor activity mildly decreased due to apraxia (inability to perform previously learned motor activities, despite normal motor function), or with moderate slowing. 3 Motor activity moderately decreased due to apraxia. 4 Motor activity severely decreased due to apraxia. Visual-spatial function 0 Normal. 1 Rare indication of slight impairment, such as getting lost in unfamiliar surroundings. 2 Mildly impaired. May get lost in unfamiliar surroundings, occasional difficulty recognizing faces. 3 Moderately impaired. May get lost even in familiar surroundings, frequent difficulty recognizing faces. 4 Severely impaired. May be unable to touch or name own body parts when asked by the examiner, identify the relative position in space of two different objects, copy sentences, read maps, or find way from one room to another. Other neurobehavioral effects Symptoms: Physically aggressive, verbally aggressive, impulsive, uninhibited, sleep problems, apathetic, inflexible, fatigability, mood swings, lack of motivation, impaired awareness of disability. 0 None of these effects. 1 One or two of these effects. 2 Three to five of these effects. 3 Six or more of these effects. Speech and language disorders 0 Able to communicate by spoken and written language, and to comprehend spoken and written language. 1 Impaired articulation for some words, but speech is understandable, or comprehension of either spoken language, written language, or both, is only occasionally impaired. 2 Inability to communicate either by spoken language, written language, or both, more than occasionally but less than half of the time, or to comprehend spoken language, written language, or both, more than occasionally but less than half of the time. 3 Inability to communicate either by spoken language, written language, or both, at least half of the time but not all of the time, or to comprehend spoken language, written language, or both, at least half of the time but not all of the time. 4 Complete inability to communicate either by spoken language, written language, or both, or to comprehend spoken language, written language, or both. [FR Doc. E7-25522 Filed 1-2-08; 8:45 am] BILLING CODE 8320-01-P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 622 [Docket No. 070709302-7309-01] RIN 0648-AV17 Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic; Atlantic Group Spanish Mackerel Commercial Trip Limit in the Southern Zone; Change in Start Date AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Proposed rule, request for comments. SUMMARY: In accordance with the framework procedure for adjusting management measures of the Fishery Management Plan for the Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic (FMP), NMFS proposes to change the start date for the commercial trip limit for Atlantic migratory group Spanish mackerel in the southern zone to March 1. The intended effect of this proposed rule is to conform the trip limit to the beginning of the fishing year for Atlantic migratory group Spanish mackerel. DATES: Written comments must be received on or before January 18, 2008. ADDRESSES: You may submit comments, identified by RIN 0648-AV17, by any one of the following methods: • Electronic Submissions: Submit all electronic public comments via the Federal e-Rulemaking Portal *http://www.regulations.gov* . • Fax: 727-824-5308, Attn: Susan Gerhart. • Mail: Susan Gerhart, Southeast Regional Office, NMFS, 263 13th Avenue South, St. Petersburg, FL 33701. Instructions: All comments received are a part of the public record and will generally be posted to *http://www.regulations.gov* without change. All Personal Identifying Information (for example, name, address, etc.) voluntarily submitted by the commenter may be publicly accessible. Do not submit Confidential Business Information or otherwise sensitive or protected information. NMFS will accept anonymous comments. Attachments to electronic comments will be accepted in Microsoft Word, Excel, WordPerfect, or Adobe PDF file formats only. Copies of the South Atlantic Fishery Management Council's framework recommendation for adjustment of the start date of the commercial trip limits for Atlantic group Spanish mackerel in the southern zone and related matters may be obtained from the South Atlantic Fishery Management Council, 4055 Faber Place, Suite 201, North Charleston, SC 29405; phone: 843-571-4366 or 866-SAFMC-10 (toll free); fax: 843-769-4520; e-mail: *safmc@safmc.net* . FOR FURTHER INFORMATION CONTACT: Susan Gerhart, telephone: 727-824-5305, fax: 727-824-5308, e-mail: *Susan.Gerhart@noaa.gov* . SUPPLEMENTARY INFORMATION: The fisheries for coastal migratory pelagic resources are regulated under the FMP. The FMP was prepared jointly by the Gulf of Mexico and South Atlantic Fishery Management Councils and is implemented under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622. In accordance with the framework procedures of the FMP, the South Atlantic Fishery Management Council (Council) made a recommendation to the Regional Administrator, Southeast Region, NMFS (RA), relating to Atlantic migratory group Spanish mackerel. The recommended change is within the scope of the management measures that may be adjusted under the framework procedure, as specified in 50 CFR 622.48(c). Background Amendment 15 to the FMP revised the fishing year for Atlantic migratory group Spanish mackerel from April through March to March through February. However, the start date for the trip limit in the southern zone was not similarly changed from April 1 to March 1. The commercial sectors of the king and Spanish mackerel fisheries are managed under both quotas and trip limits. Currently, the commercial trip limits for Atlantic group Spanish mackerel south of the Georgia/Florida boundary are as follows: From April 1 through November 30 - 3,500 lb (1,588 kg); from December 1 until 75 percent of the adjusted quota is taken, Mondays through Fridays--unlimited, and Saturdays and Sundays--1,500 lb (680 kg); after 75 percent of the adjusted quota is taken until 100 percent of the adjusted quota is taken, 1,500 lb (680 kg); and after 100 percent of the adjusted quota is taken through the end of the fishing year, 500 lb (227 kg). The adjusted quota is currently 3.62 million lb (1.64 million kg), which is the quota for Atlantic migratory group Spanish mackerel reduced by an amount calculated to allow continued harvests of Atlantic migratory group Spanish mackerel at the rate of 500 lb (227 kg) per vessel per day for the remainder of the fishing year after the adjusted quota is reached. As proposed by the Council for the commercial fishery off Florida, the trip limit of 3,500 lb (1,588 kg) would apply March 1 in lieu of April 1, without other change. The proposed change would conform to the current fishing year, which starts March 1, and would allow fishermen to fish for Spanish mackerel during March when there are few other fishing opportunities. It would also assure that Spanish mackerel can be harvested during Lent when ex-vessel prices are typically at their highest during the year. Classification Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this proposed rule is consistent with the FMP, other provisions of the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment. This proposed rule has been determined to be not significant for purposes of E.O. 12866. The Council prepared an IRFA, as required by section 603 of the Regulatory Flexibility Act, for this proposed rule. The IRFA describes the economic impact this proposed rule, if adopted, would have on small entities. A description of the action, why it is being considered, and the legal basis for this action are contained at the beginning of this section in the preamble and in the SUMMARY section of the preamble. A copy of the full analysis is available from the Council (see ADDRESSES ). A summary of the IRFA follows. The proposed rule would change the start date for the 3,500-pound trip limit in the southern zone for Atlantic migratory group Spanish mackerel to March 1. This action would correct an unintended inconsistency created by Amendment 15 to the FMP, effective August 8, 2005, which redefined the fishing year for Atlantic migratory group king mackerel and Spanish mackerel from April-March to March-February, but did not specify the Spanish mackerel trip limit for March. The Magnuson-Stevens Act provides the statutory basis for the proposed rule. No duplicative, overlapping, or conflicting Federal rules have been identified. This proposed rule would not alter existing reporting, record-keeping, or permitting requirements. The proposed rule would affect all federally permitted commercial vessels that harvest Atlantic migratory group Spanish mackerel off the Florida east coast. As of January 2006, 1,333 vessels possessed Federal commercial Spanish mackerel permits. However, only 532 of these vessels had homeports on the Atlantic coast (Maine through Miami-Dade County, Florida), of which 300 vessels had homeports on the Florida east coast, and only 312 vessels reported landings of Atlantic migratory group Spanish mackerel in the required Federal logbook system for the 2005-2006 fishing year. Additional vessels may fish exclusively within state waters, where neither a Federal permit nor logbook reporting is required. While these vessels would not directly be subject to the proposed rule, Florida commercial trip limits for Spanish mackerel have to date been adjusted to mirror those of adjacent Federal waters. Although the total number of vessels that operate in the Atlantic migratory group Spanish mackerel fishery, as well as their production characteristics, varies from year to year, information on the 312 vessels that reported landings of this species in the 2005-2006 fishing year were used to determine average revenue characteristics for this fishery. Most of the vessels that operate in the Spanish mackerel fishery have permits and participate in other commercial fisheries, king mackerel and snapper-grouper. During the 2005-2006 fishing season, these vessels harvested, on average, 5,391 pounds of Atlantic group Spanish mackerel. This accounted for 24 percent, approximately $5,300 (2006 dollars), of the estimated average annual gross revenue, approximately $22,200 (2006 dollars), from all logbook-reported landings. The annual vessel maximum estimated gross revenue from all species harvested by vessels operating in the Spanish mackerel fishery ranged from approximately $182,000 to $342,000 (2006 dollars) for the fishing years 2001-2002 through 2005-2006. The Atlantic migratory group Spanish mackerel fishery has been managed via staged trip limits since November 1992 for Florida's east coast, starting with a 3,500-pound trip limit in April through November, unlimited week-day limits and 1,500-pound weekend limits from December 1 until 75 percent of the adjusted quota is harvested, followed by a 1,500-pound trip limit on all days until 100 percent of the adjusted quota is harvested, and a 500-pound limit thereafter until the end of the fishing year. The trip limit elsewhere (Georgia through New York) remains at 3,500 pounds all year. Over the past decade, the Florida east coast has accounted for over 70 percent of the fishery's landings. Under these trip limits, very few logbook-reported trips in the fishery as a whole have reached 3,500 pounds, usually accounting for less than one percent of all trips each year since the 1998-1999 fishing season. The average Atlantic migratory group Spanish mackerel harvest per trip since the 1998-1999 fishing season has been approximately 500-700 pounds, and the median harvest approximately 100-300 pounds. Over this period, Atlantic migratory group Spanish mackerel accounted for on average approximately 60-72 percent of the estimated gross revenue from all species harvested by these fishermen. Gear use in the fishery has changed since the mid-1990s. Prior to the mid-1990s, gillnets were the leading gear in the fishery. Since the implementation of Federal regulations that limit the use of gillnets in Federal waters in 1994 and the prohibition of the use of gillnets in Florida state waters in 1995, fishermen have adjusted their fishing practices resulting in cast nets becoming the predominant gear on the Florida east coast. Hand lines have challenged gillnets for second place, and the proportion of logbook reported landings from the Florida east coast has declined from approximately 70-80 percent of total logbook reported Spanish mackerel landings in the early 2000's to 50-60 percent in more recent years. Little data are available since the start of the fishing year was changed to March 1. While the inconsistency between the fishing year and trip limits created the opportunity for unlimited harvests in March, to date the fishery has not responded with increased harvests relative to previous years, with March harvests in 2006 and 2007 less than those of either 2004 or 2005. Some fleet activity may exist in the commercial fishery for Atlantic migratory group Spanish mackerel, but the extent of such activity is unknown. Additional permits, both state and Federal, and associated revenues may be linked to an entity through affiliation rules, but such affiliation links cannot be made using existing data. Therefore, all vessels operating in the Atlantic migratory group Spanish mackerel fishery are assumed to represent independent entities for the purpose of this analysis. The Small Business Administration
(SBA)has established size criteria for all major industry sectors in the U.S. including fish harvesters, for-hire operations, fish processors, and fish dealers. A business involved in fish harvesting is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including its affiliates), and has combined annual receipts not in excess of $4.0 million (NAICS code 114111, finfish fishing) for all affiliated operations worldwide. Based on the annual averages and maximums for estimated gross revenue per vessel provided above, it is determined that, for purpose of this analysis, all entities that would be affected by the proposed rule are small business entities. No direct or indirect adverse economic effects on any affected entities have been identified or are expected to occur as a result of this proposed rule. Although the current inconsistency between the start of the Atlantic migratory group Spanish mackerel fishing year and the specification of the commercial trip limit created the opportunity for increased harvests in March, available data do not indicate this has altered fishing behavior that would be adversely impacted by the establishment of a 3,500-pound trip limit. Further, even if the proposed rule were to result in a harvest reduction of and reduced revenues from Spanish mackerel for some entities, the intent of the action is to enable access to and larger harvests of Spanish mackerel in the months prior to March, when harvests of other species, notably snapper-grouper species, are constrained due to recent regulatory change. Allowing unlimited trip limits for Spanish mackerel at the start of the season increases the likelihood of quota-triggered lower limits at the end of the fishing year, leading to reduced alternative fishing opportunities and lower profits for fishermen subject to reduced harvest opportunities in the snapper-grouper fishery. Improving access to Spanish mackerel at the end of the fishing year, as would be accomplished by limiting harvest in March, would, therefore, be expected to result in increased total harvest opportunities and net benefits (profits) to the participants in these fisheries. These increased benefits, however, cannot be quantified with available data. One alternative to the proposed action, the status quo, was considered. The status quo would not establish a trip limit for the Florida east coast in March and would not, therefore, achieve the Council's objective. No other alternatives to the proposed action were considered because no other start date for the trip limit would be reasonable other than the beginning of the fishing year. Current rules already establish trip limits for April 1-end of February, so this amendment only applies to March. This proposed rule does not contain a collection-of-information requirement subject to review and approval by OMB under the Paperwork Reduction Act. List of Subjects in 50 CFR Part 622 Fisheries, Fishing, Puerto Rico, Reporting and recordkeeping requirements, Virgin Islands. Dated: December 27, 2007 John Oliver, Deputy Assistant Administrator for Operations, National Marine Fisheries Service. For the reasons set out in the preamble, 50 CFR part 622 is proposed to be amended as follows: PART 622—FISHERIES OF THE CARIBBEAN, GULF, AND SOUTH ATLANTIC 1. The authority citation for part 622 continues to read as follows: Authority: 16 U.S.C. 1801 *et seq.* 2. In § 622.44, paragraph (b)(1)(ii)(A) is revised to read as follows: § 622.44 Commercial trip limits.
(b)* * *
(1)* * *
(ii)* * *
(A)From March 1 through November 30, in amounts exceeding 3,500 lb (1,588 kg). [FR Doc. E7-25583 Filed 1-2-08; 8:45 am] BILLING CODE 3510-22-S DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 648 [Docket No. 071004577-7578-01] RIN 0648-AW13 Fisheries of the Northeastern United States; Northeast Multispecies Fishery; Total Allowable Catches for Eastern Georges Bank Cod, Eastern Georges Bank Haddock, and Georges Bank Yellowtail Flounder in the U.S./Canada Management Area for Fishing Year 2008 AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Proposed rule; request for comments. SUMMARY: NMFS proposes 2008 fishing year
(FY)Total Allowable Catches
(TACs)for Eastern Georges Bank
(GB)cod, Eastern GB haddock, and GB yellowtail flounder in the U.S./Canada Management Area, as recommended by the New England Fishery Management Council (Council). These TACs may be adjusted during FY 2008, if NMFS determines that the harvest of these stocks in FY 2007 exceeded the TACs specified for FY 2007. NMFS is also considering for the Eastern U.S./Canada Area, postponing the FY 2008 opening until August 1, 2008, allowing longline gear vessels during the May through July period, and setting a cap on the cod caught by such vessels during this period at 5 percent of the cod TAC. The intent of this action is to provide for the conservation and management of those three stocks of fish. DATES: Comments must be received by February 4, 2008. ADDRESSES: You may submit comments, identified by 0648-AW13, by any one of the following methods: • Electronic Submissions: Submit all electronic public comments via the Federal e-rulemaking portal: *http://www.regulations.gov* • Mail: Paper, disk, or CD-ROM comments should be sent to Patricia A. Kurkul, Regional Administrator, National Marine Fisheries Service, One Blackburn Drive, Gloucester, MA 01930. Mark the outside of the envelope, “Comments on the U.S./Canada TACs.” • Fax:
(978)281-9135. Instructions: All comments received are part of the public record and will generally be posted to *http://www.regulations.gov* without change. All Personal Identifying Information (for example, name, address, etc.) voluntarily submitted by the commenter may be publically accessible. Do not submit Confidential Business Information or otherwise sensitive or protected information. NMFS will accept anonymous comments. Attachments to electronic comments will be accepted in Microsoft Word, Excel, WordPerfect, or Adobe PDF formats only. Copies of the Transboundary Management Guidance Committee's 2007 Guidance Document and copies of the Environmental Assessment
(EA)of the 2008 TACs (including the Regulatory Impact Review and Regulatory Flexibility Analysis
(IRFA)may be obtained from NMFS at the mailing address specified above; telephone
(978)281-9315. NMFS prepared a summary of the IRFA, which is contained in the Classification section of this proposed rule. FOR FURTHER INFORMATION CONTACT: Thomas Warren, Fishery Policy Analyst,
(978)281-9347, fax
(978)281-9135, e-mail *Thomas.Warren@NOAA.gov* . SUPPLEMENTARY INFORMATION: The Northeast
(NE)Multispecies Fishery Management Plan
(FMP)specifies a procedure for setting annual hard TAC levels (i.e., the fishery or area closes when a TAC is reached) for Eastern GB cod, Eastern GB haddock, and GB yellowtail flounder in the U.S./Canada Management Area. The regulations governing the annual development of TACs (§ 648.85(a)(2)) were implemented by Amendment 13 to the FMP (69 FR 22906; April 27, 2004) in order to be consistent with the U.S./Canada Resource Sharing Understanding (Understanding), which is an informal (i.e. non-binding) understanding between the United States and Canada that outlines a process for the management of the shared GB groundfish resources. The Understanding specifies an allocation of TAC for these three stocks for each country, based on a formula that considers historical catch percentages and current resource distribution. Annual TACs are determined through a process involving the Council, the Transboundary Management Guidance Committee (TMGC), and the U.S./Canada Transboundary Resources Steering Committee (§ 648.85(a)(2)(i)). In September 2007, the TMGC approved the 2007 Guidance Document for Eastern GB cod, Eastern GB haddock, and GB yellowtail flounder, which included recommended U.S. TACs for these stocks. The recommended 2008 TACs were based upon the most recent stock assessments (Transboundary Resource Assessment Committee
(TRAC)Status Reports for 2007), and the fishing mortality strategy shared by both the United States and Canada. The strategy is to maintain a low to neutral (less than 50 percent) risk of exceeding the fishing mortality limit reference (F ref = 0.18, 0.26, and 0.25, for cod, haddock, and yellowtail flounder, respectively). When stock conditions are poor, fishing mortality rates
(F)should be further reduced to promote rebuilding. For Eastern GB cod, the TMGC concluded that the most appropriate combined Canada/USA TAC for Eastern Georges Bank cod for the 2008 fishing year is 2,300 mt. This corresponds to a low risk (less than 25%) of exceeding the F ref of 0.18 in 2008 and that stock biomass will not increase from 2008 to 2009, though that increase is estimated to be nominal. The annual allocation shares between countries for 2008 are based on a combination of historical catches (20% weighting) and resource distribution based on trawl surveys (80% weighting). Combining these factors entitles the USA to 29% and Canada to 71%, resulting in a national quota of 667 mt for the USA and 1,633 mt for Canada. For Eastern GB haddock, the TMGC concluded that the most appropriate combined Canada/USA TAC for Eastern Georges Bank haddock for the 2008 fishing year is 23,000 mt. This represents a low risk (less than 25%) of exceeding the F ref of 0.26. Adult biomass is projected to peak at 159,000 mt in 2008, reflecting the recruitment and growth of the exceptional 2003 year class, and then decline to 146,000 mt in 2009. The annual allocation shares between countries for 2008 are based on a combination of historical catches (20% weighting) and resource distribution based on trawl surveys (80% weighting). Combining these factors entitles the USA to 35% and Canada to 65%, resulting in a national quota of 8,050 mt for the USA and 14,950 mt for Canada. For GB yellowtail flounder, the TMGC concluded that the most appropriate combined Canada/USA TAC for the 2008 fishing year is 2,500 mt. This corresponds to an F of 0.17, lower than the Fref of 0.25. With a catch of 2,500 mt in 2008, the age 3+ biomass is expected to increase by 22%. The annual allocation shares between countries for 2008 are based on a combination of historical catches (20% weighting) and resource distribution based on trawl surveys (80% weighting). Combining these factors entitles the USA to 78% and Canada to 22%, resulting in a national quota of 1,950 mt for the USA and 550 mt for Canada. On September 18, 2007, the Council approved, consistent with the 2007 Guidance Document, the following U.S. TACs recommended by the TMGC: 667 mt of Eastern GB cod, 8,050 mt of Eastern GB haddock, and 1,950 mt of GB yellowtail flounder. The Council, in a letter dated September 27, 2007, requested that NMFS implement these TACs. The proposed 2008 Fishing Year TACs represent an increase for all three stocks from the 2007 TAC levels (Tables 1 and 2). Table 1: 2008 U.S./Canada TACs
(mt)and percentage shares (in parentheses) GB Cod GB Haddock GB Yellowtail flounder Total Shared TAC 2,300 23,000 2,500 U.S. TAC 667
(29)8,050
(35)1,950
(78)Canada TAC 1,633
(71)14,950
(65)550
(22)Table 2: 2007 U.S./Canada TACs
(mt)and percentage shares (in parentheses) GB Cod GB Haddock GB Yellowtail flounder Total Shared TAC 1,900 19,000 1,250 U.S. TAC 494
(26)6,270
(33)900
(72)Canada TAC 1,406
(74)12,730
(67)350
(28)The 2008 TACs are based upon stock assessments conducted in June 2007 by the TRAC. The proposed TACs are consistent with the results of the TRAC and the TMGC's harvest strategy and, therefore, NMFS proposes that they be implemented through this action. The regulations for the U.S./Canada Management Understanding, implemented by Amendment 13, at § 648.85(a)(2)(ii), state the following: “Any overages of the GB cod, haddock, or yellowtail flounder TACs that occur in a given fishing year will be subtracted from the respective TAC in the following fishing year.” Therefore, should an analysis of the catch of the shared stocks by U.S. vessels indicate that an overage occurred during FY 2007, the pertinent TAC will be adjusted downward in order to be consistent with the FMP and the Understanding. Although it is very unlikely, it is possible that a very large overage could result in an adjusted TAC of zero. If an adjustment to one of the 2008 TACs for cod, haddock, or yellowtail flounder is necessary, the public will be notified through publication in the **Federal Register** and through a letter to permit holders. NMFS is also notifying the public that it is considering adjusting the rules governing the Eastern U.S./Canada Area
(Area)for FY 2008. The current regulations under 648.85(a)(3)(iv)(D) provide the Regional Administrator authority to implement in-season adjustments to various management measures in order to prevent over-harvesting or facilitate achieving the TAC. On November 7, 2007, the Council voted to postpone the FY 2008 opening of the Eastern U.S./Canada Area for vessels fishing with trawl gear (from May 1, 2008) until August 1, 2008, in order to reduce cod bycatch, while allowing vessels fishing with more selective longline gear access during the May through July period. Such vessels would be limited to a cod catch of five percent of the cod TAC, or 33.35 mt of cod. The Regional Administrator is considering implementing these measures based upon the Council's recommendation and pertinent information. The objective of the in-season action is to prevent trawl fishing in the Area during the time period when cod bycatch is likely to be very high. The goal of the measure is to prolong access to the Area in order to maximize the catch of available cod, haddock, and yellowtail flounder. During FYs 2005, 2006, and 2007, the Regional Administrator restricted management measures and access to the Area in June or July when a substantial percentage of the cod TAC had been harvested by trawl gear. When the Area closes vessels lose access not only to cod, haddock, and yellowtail flounder, but also to other valuable groundfish and non-groundfish species. When the Regional Administrator implements restrictions to slow the catch of cod, the profitability of trips may decline and there is reduced incentive to fish in the Area. Delaying access to the Area until August for trawl vessels would reduce the catch of cod because the availability of cod is high in the Area during the time period May through July, and historically, the cod catch has been almost all by trawl vessels. By limiting access to the Area to vessels fishing with hook gear only during the period May through July, it is likely that once the Area opens to trawl vessels on August 1, the length of time the Area will be open or unrestricted will be prolonged, and the catch of haddock and yellowtail flounder, as well as other species will be maximized. Classification NMFS has determined that the proposed rule is consistent with the FMP and preliminarily determined that the rule is consistent with the Magnuson-Stevens Fishery Conservation and Management Act and other applicable laws. This proposed rule is exempt from review under Executive Order 12866 because this action contains no implementing regulations. An initial regulatory flexibility analysis
(IRFA)was prepared, as required by section 603 of the Regulatory Flexibility Act (RFA). The IRFA describes the economic impact this proposed rule, if adopted, would have on small entities. A description of the action, why it is being considered, and the legal basis for this action are contained at the beginning of this section in the preamble and in the SUMMARY section of the preamble. A summary of the analysis follows. A copy of this analysis is available from the NMFS (see ADDRESSES ). The specification of hard TACs is necessary in order to ensure that the agreed upon U.S./Canada fishing mortality levels for these shared stocks of fish are achieved in the U.S./Canada Management Area (the geographic area on GB defined to facilitate management of stocks of cod, haddock, and yellowtail flounder that are shared with Canada). A description of the objectives and legal basis for the proposed TACs is contained in the SUMMARY of this proposed rule. Under the Small Business Administration
(SBA)size standards for small fishing entities ($3.5 million), all permitted and participating vessels in the groundfish fishery are considered to be small entities and, therefore, there are no differential impacts between large and small entities. Gross sales by any one entity (vessel) do not exceed this threshold. The maximum number of small entities that could be affected by the proposed TACs are approximately 1,000 vessels, i.e., those with limited access NE multispecies days-at-sea
(DAS)permits that have an allocation of Category A or B DAS. Realistically, however, the number of vessels that choose to fish in the U.S./Canada Management Area, and that therefore would be subject to the associated restrictions, including hard TACs, would be substantially less. During fishing years 2004 through 2006, the number of vessels fishing in the U.S./Canada Area ranged from 161 to 184. Because the regulatory regime in FY 2008 will be similar to that in place in the past, and based on data from FY 2007, it is likely that the number of vessels that choose to fish in the U.S./Canada Area during FY 2008 will be similar to the past. The economic impacts of the proposed TACs are difficult to predict due to numerous factors that affect the amount of catch, as well as the price of the fish. In general, the rate at which cod is caught in the Eastern U.S./Canada Area, and the rate at which yellowtail flounder is caught in the Eastern and Western U.S./Canada Area will determine the length of time the Eastern U.S./Canada Area will remain open. The length of time the Eastern U.S./Canada Area is open will determine the amount of haddock that is caught. During the 2004, 2005, and 2006 fishing years, the TACs were not fully utilized, and inseason changes to the regulations impacted the fishery. The amount of GB cod, haddock, and yellowtail flounder landed and sold will not be equal to the sum of the TACs, but will be reduced as a result of discards (discards are counted against the hard TAC), and may be further reduced by limitations on access to stocks that may result from the associated rules. Reductions to the value of the fish may result from fishing derby behavior and the potential impact on markets. The overall economic impact of the proposed 2008 U.S./Canada TACs will likely be more positive than the economic impacts of the 2007 TACs due to increased TACs for cod, haddock, and yellowtail flounder, that will likely result in increased revenue. For example, based on the estimates in the EA revenues from cod caught in the Eastern U.S./Canada Area may increase by approximately $ 786,000 and haddock revenue may increase by $ 1,069,000. It should be noted that the revenue associated with the cod, haddock, and yellowtail flounder represented about 2 %, 4 %, and 10%, respectively of the total revenue from trips to the U.S./Canada Area in FY 2006. Examples of other valuable species caught are winter flounder, witch flounder, and monkfish. If the proposed larger GB cod TAC and delayed opening of the Eastern U.S./Canada Area to trawl vessels result in a longer period of time that the Eastern U.S./Canada Area is open and maximizes the catch of the available TACs, it may result in additional revenue from all species. Although unlikely, a downward adjustment to the TACs specified for FY 2008 could occur after the start of the fishing year, if it is determined that the U.S. catch of one or more of the shared stocks during the 2007 fishing year exceeded the relevant TACs specified for FY 2007. The economic effects of this downward adjustment would likely result in a short term loss of revenue proportional to the magnitude of the adjustment. Three alternatives were considered for FY 2008: The proposed TACs, the status quo TACs, and the no action alternative. No additional set of TACs are proposed because the process involving the TMGC and the Council yields only one proposed set of TACs. Accordingly, NMFS chooses to either accept or reject the recommendation of the Council. The proposed TACs would have a more positive economic impact as the status quo TACs. Adoption of the status quo TACs would not be consistent with the FMP because the status quo TACs do not represent the best available scientific information incorporated from the most recent TRAC. Although the no action alternative (no TACs) would not constrain catch in the U.S./Canada Management Area, and therefore would likely provide some additional fishing opportunity, the no action alternative is not a reasonable alternative because it is inconsistent with the FMP in both the short and long term. The FMP requires specification of hard TACs in order to limit catch of shared stocks to the appropriate level (i.e., consistent with the Understanding and the FMP). As such, the no action alternative would likely provide less economic benefits to the industry in the long term than the proposed alternative. The proposed TACs do not modify any collection of information, reporting, or recordkeeping requirements. The proposed TACs do not duplicate, overlap, or conflict with any other Federal rules. Authority: 16 U.S.C. 1801 *et seq.* Dated: December 27, 2007 John Oliver, Deputy Assistant Administrator for Operations, National Marine Fisheries Service. [FR Doc. E7-25580 Filed 1-2-08; 8:45 am] BILLING CODE 3510-22-S 73 2 Thursday, January 3, 2008 Notices DEPARTMENT OF AGRICULTURE Forest Service Plumas National Forest, CA, Plumas National Forest Public Wheeled Motorized Travel Management EIS AGENCY: Forest Service, USDA. ACTION: Notice of intent to prepare an Environmental Impact Statement. SUMMARY: The Plumas National Forest
(PNF)will prepare an Environmental Impact Statement to disclose the impacts associated with the following proposed actions: 1. The prohibition of wheeled motorized vehicle travel by the public off designated National Forest System
(NFS)roads and NFS motorized trails and open areas except as allowed by permit or other authorization. 2. The addition of approximately 375 miles of existing unauthorized routes (including 2 miles in vehicle restricted areas) to the current system of NFS motorized trails. 3. The addition of 36 acres in 1 open area where use of wheeled motorized vehicles by the public would be allowed anywhere within that area. DATES: The comment period on the proposed action will extend 60 days from the date the Notice of Intent is published in the **Federal Register** . Completion of the Draft Environmental Impact Statement
(DEIS)is expected in September 2008 and the Final Environmental Impact Statement
(FEIS)is expected in December 2008. ADDRESSES: Send written comments to: Travel Management Team, c/o Plumas National Forest, PO Box 11500 Quincy California 95971. FOR FURTHER INFORMATION CONTACT: Peter Hochrein, Plumas National Forest, PO Box 11500 Quincy California 95971. Phone: 530-283-7718. *E-mai1: plumas_ohv_mail_in_database@fs.fed.us* SUPPLEMENTARY INFORMATION: Background Over the past few decades, the availability and capability of motorized vehicles, particularly off-highway vehicles
(OHVs)and sport utility vehicles
(SUVs)has increased. Nationally, the number of OHV users has increased sevenfold in the past 30 years, from approximately 5 million in 1972 to 36 million in 2000. California is experiencing the highest level of OHV use of any state in the nation. There were 786,914 ATVs and OHV motorcycles registered in 2004, up 330% since 1980. Annual sales of ATVs and OHV motorcycles in California were the highest in the U.S. for the last 5 years. Four-wheel drive vehicle sales in California also increased by 1500% to 3,046,866 from 1989 to 2002. Unmanaged OHV use has resulted in unplanned roads and trails, erosion, watershed and habitat degradation, and impacts to cultural resource sites. Compaction and erosion are the primary effects of OHV use on soils. Riparian areas and aquatic dependent species are particularly vulnerable to OHV use. Unmanaged recreation, including impacts from OHVs, is one of “Four Key Threats Facing the Nation's Forests and Grasslands.” (USDA Forest Service, June 2004). On August 11, 2003, the Pacific Southwest Region of the Forest Service entered into a Memorandum of Intent
(MOI)with the California Off-Highway Motor Vehicle Recreation Commission, and the Off-Highway Motor Vehicle Recreation Division of the California Department of Parks and Recreation. That MOI set in motion a region-wide effort to “Designate OHV roads, trails, and any specifically defined open areas for motorized wheeled vehicles on maps of the 19 National Forests in California by 2007.” On November 9, 2005, the Forest Service published final travel management regulations in the **Federal Register** (FR Vol. 70, No. 216—Nov. 9, 2005, pp 68264-68291). This final Travel Management Rule requires designation of those roads, trails, and areas that are open to motor vehicle use on National Forests. Designations will be made by class of vehicle. The final rule prohibits the use of motor vehicles off the designated system as well as use of motor vehicles on routes and in areas that are not designated. On some NFS lands, long managed as open to cross-country motor vehicle travel, repeated use has resulted in unplanned, roads and trails. These routes were generally developed without environmental analysis or public involvement, and do not have the same status as NFS roads and NFS trails included in the forest transportation system. Nevertheless, some unauthorized routes are well-sited, provide excellent opportunities for outdoor recreation by motorized and non-motorized users, and would enhance the National Forest system of designated roads, trails and open areas. Other unauthorized routes are poorly located and cause unacceptable impacts. Only NFS roads and NFS trails can be designated for wheeled motorized vehicle use. In order for an unauthorized route to be designated, it must be added to the forest transportation system. In accordance with the MOI, the PNF completed an inventory of unauthorized routes on NFS lands and identified approximately 1,073 miles of unauthorized routes. The PNF then used an interdisciplinary process to conduct travel analysis that included working with interested members of the public to determine whether any of the unauthorized routes should be proposed for addition to the PNF transportation system. Roads, trails and open areas that are currently part of the PNF transportation system and are open to wheeled motorized vehicle travel will remain designated for such use. This proposal focuses on the prohibition of wheeled motorized vehicle travel off designated routes and the addition of unauthorized routes and open areas to the PNF transportation system. The proposed action is being carried forward in accordance with the Travel Management Rule (36 CFR Part 212). In accordance with the rule, following a decision on this proposal, the Plumas National Forest will publish a Motor Vehicle Use Map
(MVUM)identifying all PNF roads, trails and open areas that are designated for motor vehicle use. The MVUM shall specify the classes of vehicles for which use is designated. Purpose and Need for Action The following needs have been identified for this proposal: 1. There is a need for reglation of unmanaged wheeled motorized vehicle travel by the public. Currently, wheeled motorized vehicle travel by the public is not prohibited off designated routes. In their enjoyment of the National Forest, motorized vehicle users have created numerous unauthorized routes. The number of such routes continues to grow each year with many routes having environmental impacts and safety concerns that have not been addressed. The Travel Management Rule, 36 CFR Part 212, provides policy for ending this trend of unauthorized route proliferation and managing the Forest transportation system in a sustainable manner through designation of motorized NFS roads, trails and open areas, and the prohibition of cross-country travel. 2. There is a need for limited changes and additions to the PNF transportation system to: 2.1. Provide a diversity of wheeled motorized recreation opportunities (4X4 vehicles, motorcycles, ATVs, passenger vehicles, etc.) 2.2. Provide wheeled motorized access for recreational opportunities. It is Forest Service policy to provide a diversity of road and trail opportunities for experiencing a variety of environments and modes of travel consistent with the National Forest recreation role and land capability (FSM 2353.03(2)). In meeting these needs the proposed action will also achieve the following purposes: A. Avoid impacts to cultural resources. B. Provide for public safety. C. Provide for a diversity of recreational opportunities. D. Assure adequate access to public and private lands. E. Provide for adequate maintenance and administration of road, trail and area designations based on availability of resources and funding to do so. F. Minimize damage to soil, vegetation and other forest resources. G. Avoid harassment of wildlife and significant disruption of wildlife habitat. H. Minimize conflicts between wheeled motor vehicles and other existing or proposed recreational uses of NFS lands. I. Minimize conflicts among different classes of wheeled motor vehicle uses of NFS lands or neighboring federal lands. J. Assure compatibility of wheeled motor vehicle use with existing conditions in populated areas, taking into account sound, emissions, etc. K. Insure valid existing rights of use and access (rights-of-way). Proposed Action *1. Prohibition of wheeled motorized vehicle travel off the designated NFS roads, NFS trails and open areas by the public except as allowed by permit or other authorization.* *2. Additions to the National Forest Transportation System* —The PNF currently manages and maintains approximately 4,150 miles of NFS roads and 102 miles of NFS motorized trails. Based on the stated purpose and need for action, and as a result of the recent travel analysis process, the PNF proposes to add approximately 375 miles of existing unauthorized routes. These additions would bring the total NFS motorized trails to 477 miles. The additional NFS motorized trails are listed below along with the permitted vehicle class. NFS Motorized Trail Additions From Unclassified Routes for Yearlong Use Route ID Length (miles) Permitted vehicle class 4M01 1.55 Motorcycle Only. 4M02 0.76 Motorcycle Only. 5M01 2.16 Motorcycle Only. 5M02 2.41 Motorcycle Only. 5M03 0.25 Motorcycle Only. 5M04 2.02 Motorcycle Only. 5M05 0.79 Motorcycle Only. 5M06 0.47 Motorcycle Only. 5M07 0.29 Motorcycle Only. 5M08 0.45 Motorcycle Only. 5M08A 0.12 Motorcycle Only. 5M09 0.65 Motorcycle Only. 5M10 0.28 Motorcycle Only. 5M11 0.65 Motorcycle Only. 5M12 1.92 Motorcycle Only. 5M13 1.11 Motorcycle Only. 5M14 0.55 Motorcycle Only. 5M15 1.05 Motorcycle Only. 5M16 0.84 50″ or less in width. 5M17 0.90 Motorcycle Only. 5M18 1.00 Motorcycle Only. 5M19 0.60 Motorcycle Only. 5M20 0.80 Motorcycle Only. 5M21 1.32 Motorcycle Only. 5M22 1.60 Motorcycle Only. 5M23 1.69 Motorcycle Only. 5M24 1.17 Motorcycle Only. 5M25 0.76 Motorcycle Only. 5M25A 0.34 Motorcycle Only. 5M26 0.49 Motorcycle Only. 5M27 1.22 Motorcycle Only. 5M28 1.19 Motorcycle Only. 5M29 2.34 All. 5M30 1.42 Motorcycle Only. 6M02 0.87 Motorcycle Only. 6M03 1.15 Motorcycle Only. 6M03A 0.08 Motorcycle Only. 6M04 1.39 Motorcycle Only. 6M05 0.41 Motorcycle Only. 6M06 0.88 All. 6M08 1.74 Motorcycle Only. 6M09 0.48 Motorcycle Only. 6M10 3.62 Motorcycle Only. 6M11 0.98 Motorcycle Only. 6M12 0.85 All. 6M13 1.41 Motorcycle Only. 6M14 2.62 Motorcycle Only. 6M14A 0.17 Motorcycle Only. 6M15 0.49 Motorcycle Only. 6M16 2.26 Motorcycle Only. 6M16A 0.29 Motorcycle Only. 6M16B 0.11 Motorcycle Only. 6M17 1.00 Motorcycle Only. 6M17A 0.12 Motorcycle Only. 6M19 2.90 Motorcycle Only. 6M20 1.72 Motorcycle Only. 6M21 0.77 All. 6M22 2.98 Motorcycle Only. 6M22A 0.64 Motorcycle Only. 6M23 1.11 Motorcycle Only. 6M23A 0.19 Motorcycle Only. 6M24 0.23 Motorcycle Only. 6M25 0.20 All. 6M26 1.36 Motorcycle Only. 6M27 0.83 Motorcycle Only. 6M28 0.09 Motorcycle Only. 6M29 3.91 Motorcycle Only. 6M29A 0.20 Motorcycle Only. 6M29B 0.47 Motorcycle Only. 6M29C 0.76 Motorcycle Only. 6M30 0.50 Motorcycle Only. 6M30A 0.06 Motorcycle Only. 6M31 0.32 Motorcycle Only. 6M32 0.36 Motorcycle Only. 6M33 0.65 Motorcycle Only. 6M34 0.52 All. 6M34A 0.37 Motorcycle Only. 6M35 0.47 Motorcycle Only. 6M36 0.86 Motorcycle Only. 6M37 1.42 All. 6M38 0.38 All. 6M39 0.66 All. 6M44 0.95 Motorcycle Only. 7M01 0.59 All. 7M02 1.12 Motorcycle Only. 7M03 0.36 Motorcycle Only. 7M04 0.31 Motorcycle Only. 7M05 0.54 Motorcycle Only. 7M06 0.40 Motorcycle Only. 7M07 0.39 Motorcycle Only. 7M08 0.86 Motorcycle Only. 7M09 0.26 Motorcycle Only. 7M10 0.54 Motorcycle Only. 7M11 0.48 50″ or less in width. 7M12 0.94 50″ or less in width. 7M14 0.25 All. 7M15 1.20 All. 7M16 0.94 All. 7M17 1.73 All. 7M18 0.66 All. 7M22 0.53 50″ or less in width. 8M01 0.50 Motorcycle Only. 8M02 0.78 All. 8M03 1.46 All. 8M04 0.69 50″ or less in width. 8M10 0.67 50″ or less in width. 8M11 0.84 All. 8M11 0.00 8M11A 0.12 All. 8M13 0.96 50″ or less in width. 8M14 0.27 50″ or less in width. 8M15 0.32 50″ or less in width. 8M16 0.77 50″ or less in width. 8M17 1.28 50″ or less in width. 8M18 0.41 50″ or less in width. 8M19 1.27 50″ or less in width. 8M21 0.72 All. 8M22 0.48 All. 8M23 0.49 All. 8M24 2.71 50″ or less in width. 8M25 1.03 All. 8M26 1.01 All. 8M27 2.26 All. 8M27A 0.33 All. 8M28 1.08 50″ or less in width. 8M28A 0.10 50″ or less in width. 8M29 0.66 50″ or less in width. 8M30 0.49 50″ or less in width. 8M31 1.11 50″ or less in width. 8M32 0.64 All. 8M33 0.96 All. 8M34 0.06 All. 8M35 1.57 All. 8M36 0.96 All. 8M37 0.82 All. 8M37A 0.08 All. 8M37B 0.15 All. 8M38 0.54 All. 8M39 0.71 All. 8M39A 0.32 All. 8M40 0.34 All. 8M41 0.33 All. 8M42 0.98 50″ or less in width. 8M43 0.36 All. 8M44 0.30 All. 8M45 0.46 All. 8M46 0.61 All. 8M47 1.46 All. 8M47A 0.35 All. 8M48 0.49 All. 8M49 0.32 All. 8M50 0.83 All. 8M51 0.84 All. 8M52 1.39 All. 8M53 0.66 All. 8M54 0.82 All. 9M01 0.91 50″ or less in width. 9M02 0.39 Motorcycle Only. 9M03 0.56 50″ or less in width. 9M04 0.18 Motorcycle Only. 9M05 1.40 50″ or less in width. 9M06 0.39 50″ or less in width. 9M07 0.08 Motorcycle Only. 9M08 2.11 50″ or less in width. 9M08A 0.13 50″ or less in width. 9M09 0.84 50″ or less in width. 9M10 1.65 50″ or less in width. 9M11 0.65 Motorcycle Only. 9M12 0.38 Motorcycle Only. 9M13 0.48 All. 9M14 1.50 All. 9M14A 0.58 All. 9M15 0.81 Motorcycle Only. 9M16 1.22 50″ or less in width. 9M16A 0.57 50″ or less in width. 9M17 1.38 All. 9M18 0.05 All. 9M19 0.67 All. 9M20 1.39 All. 9M21 1.63 All. 9M22 0.76 All. 9M23 0.69 All. 9M24 0.85 All. 9M25 1.72 50″ or less in width. 9M25A 0.14 50″ or less in width. 9M26 0.90 50″ or less in width. 9M27 0.24 50″ or less in width. 9M32 0.60 All. 9M32A 0.37 All. 9M33 2.66 Motorcycle Only. 9M34 0.55 Motorcycle Only. 9M35 0.69 Motorcycle Only. 9M36 1.33 All. 9M37 1.68 All. 9M37A 0.43 All. 9M37B 0.25 All. 9M38 1.61 50″ or less in width. 9M39 1.13 All. 9M39A 0.69 All. 9M40 1.01 50″ or less in width. 9M41 0.67 Motorcycle Only. 9M41A 0.19 Motorcycle Only. 9M42 0.84 All. 9M42A 0.17 All. 9M42B 0.52 All. 9M43 0.26 All. 9M44 0.49 All. 9M45 0.61 Motorcycle Only. 9M46 0.95 All. 9M46A 0.49 All. 9M47 1.40 All. 9M47A 0.47 All. 9M48 1.26 All. 9M49 1.46 All. 9M50 0.30 All. 9M50A 0.17 All. 9M51 1.27 All. 9M52 0.63 All. 9M53 0.59 All. 9M53A 0.46 All. 9M54 0.45 All. 9M55 0.53 All. 9M56 0.73 All. 9M56A 0.38 All. 9M57 0.82 All. 9M57A 0.17 All. 9M58 0.34 All. 9M58A 0.63 All. 9M59 0.66 All. 9M59A 0.47 All. 9M59B 0.56 All. 9M59C 0.24 All. 9M59D 0.18 All. 9M59E 0.43 All. 9M60 0.42 All. 9M62 0.51 All. 10M01 0.45 Motorcycle Only. 10M02 1.25 50″ or less in width. 10M03 0.97 50″ or less in width. 10M04 1.70 50″ or less in width. 10M04A 0.27 50″ or less in width. 10M06 3.31 50″ or less in width. 10M07 2.24 50″ or less in width. 10M09 0.84 All. 10M11 1.36 All. 10M12 0.95 All. 10M13 0.20 All. 10M14 0.12 All. 10M15 0.54 All. 10M16 1.09 All. 10M19 1.26 All. 10M20 1.31 All. 10M20A 0.48 All. 10M20B 0.13 All. 10M21 1.24 All. 10M21A 0.28 All. 10M21B 0.91 All. 10M21C 0.13 All. 10M22 0.50 All. 10M23 2.06 All. 10M24 1.28 All. 10M25 1.78 All. 10M26 1.92 Motorcycle Only. 10M27 0.51 All. 10M28 1.38 All. 10M28A 1.01 All. 10M29 1.56 All. 10M30 0.83 All. 10M30A 0.24 All. 10M30B 0.27 All. 10M30C 0.09 All. 10M30D 0.18 All. 10M31 0.24 All. 10M32 1.26 50″ or less in width. 10M33 0.70 All. 10M34 1.51 All. 10M35 0.68 All. 10M36 1.15 All. 10M36A 0.17 All. 10M38 2.47 50″ or less in width. 10M39 0.17 All. 10M40 1.35 50″ or less in width. 10M42 1.44 All. 10M43 1.15 All. 10M44 0.45 All. 10M45 0.67 All. 10M46 0.71 All. 10M47 1.50 All. 11M02 1.72 All. 11M03 0.52 All. 11M04 0.76 All. 11M05 0.96 All. 11M06 0.42 All. 11M07 0.16 All. 11M08 1.16 Motorcycle Only. 11M08A 0.27 Motorcycle Only. 11M08B 0.09 Motorcycle Only. 11M09 1.07 All. 11M10 1.97 Motorcycle Only. 11M11 1.03 Motorcycle Only. 11M13 1.03 Motorcycle Only. 11M13A 0.35 Motorcycle Only. 11M13B 0.53 Motorcycle Only. 11M13C 0.06 Motorcycle Only. 11M13D 0.08 Motorcycle Only. 11M14 0.42 Motorcycle Only. 11M15 0.38 Motorcycle Only. 11M15A 0.25 Motorcycle Only. 11M16 0.65 Motorcycle Only. 11M17 0.96 Motorcycle Only. 11M18 0.23 Motorcycle Only. 11M18A 0.54 Motorcycle Only. 11M19 0.66 All. 11M20 1.37 All. 11M21 1.76 All. 11M21A 0.10 All. 11M21B 0.06 All. 11M22 0.40 50″ or less in width. 11M23 0.67 50″ or less in width. 11M24 0.39 All. 11M25 0.43 All. 11M30 0.58 All. 11M34 0.73 All. 11M35 0.71 All. 11M36 1.36 All. 11M37 2.15 All. 11M38 0.53 All. 11M39 0.55 All. 11M40 0.64 All. 11M41 1.29 All. 11M41A 0.35 All. 11M42 0.16 All. 12M02 1.23 All. 12M03 0.76 All. 12M04 0.41 All. 12M06 0.85 All. 12M07 0.44 All. 12M08 0.72 All. 12M09 3.08 All. 12M09A 0.84 All. 12M10 1.77 All. 12M11 1.77 All. 12M12 0.67 All. 12M13 0.40 All. 12M14 0.58 All. 12M15 0.23 All. 12M16 1.21 All. 12M17 0.16 All. 12M18 0.14 All. 12M19 0.68 All. 12M20 0.11 All. 12M21 0.23 All. 12M21A 0.05 All. 12M22 0.15 All. 12M23 0.91 All. 12M24 0.28 All. 12M25 1.44 50″ or less in width. 12M26 1.55 50″ or less in width. 12M27 0.91 50″ or less in width. 12M30 0.04 All. 13M01 1.07 All. 13M03 0.45 All. 13M04 0.49 All. 13M04A 0.16 All. 13M04B 0.11 All. 13M05 0.58 All. 13M06 1.41 All. 13M07 1.24 All. 13M08 1.39 All. 13M09 0.50 All. 13M09A 0.06 All. 13M10 12.04 All. 13M10A 0.04 All. 13M10B 0.13 All. 13M11 1.97 50″ or less in width. 13M11A 1.56 50″ or less in width. 13M12 1.50 All. 13M12A 0.25 All. 13M13 1.07 All. 13M14 1.33 All. 13M15 0.81 All. 13M16 0.54 All. 13M17 1.02 All. 13M18 0.65 All. 13M19 1.19 All. 13M20 0.22 All. 13M21 1.15 All. 13M21A 0.22 All. 13M21B 0.16 All. 13M22 1.12 All. 13M23 0.60 All. 13M24 0.64 All. 13M25 0.70 All. 13M26 0.59 All. 13M27 0.93 All. 13M28 0.45 All. 13M29 2.24 All. 13M30 0.43 Motorcycle Only. 13M31 2.33 All. 14M01 1.76 All. 14M01A 0.22 All. 14M01B 0.17 All. 14M01C 0.24 All. 14M02 1.24 All. 14M04 0.70 All. 14M05 0.72 All. 14M06 0.37 All. 14M07 0.49 All. 14M08 0.48 All. 14M09 1.41 All. 14M10 0.57 All. 14M11 2.28 All. 14M12 1.52 All. 15M01 1.46 50″ or less in width. 15M01A 0.16 50″ or less in width. 15M02 1.46 All. 15M02A 0.09 All. 15M02B 0.72 All. 15M02C 0.36 All. 15M03 0.29 All. 15M04 0.32 All. 15M05 2.18 All. 16M01 1.78 All. 16M03 0.77 All. 16M03A 0.12 All. 16M03B 0.27 All. 16M04 2.08 All. 16M04A 0.54 All. 17M01 0.28 50″ or less in width. 17M02 0.66 All. 17M03 0.51 All. 17M04 0.88 All. 17M05 3.87 All. 17M06 0.72 All. 17M06A 0.69 All. NFS Motorized Trail Additions in Vehicle Restricted Areas for Yearlong Use Route ID Length (miles) Permitted vehicle class 7M13 0.70 All. 8M20 0.19 All. 12M29 0.96 All. 3. *Motorized Open Area Addition* —The Plumas National Forest currently has 1 area designated open to wheeled motorized vehicle use. The Plumas National Forest proposes to designate 1 additional open area (36 acres). Motorized Open Area Additions for Yearlong Use Area name Acreage Permitted vehicle class 8PA2 36 50″ or less in width. The proposed action includes a Forest Plan Amendment to add 3 existing routes to the NFS motorized trails system in vehicle restricted areas. Maps and tables describing in detail both the PNF transportation system and the proposed action can found at: *http://www.fs.fed.us/r5/plumas/proj ects_and_plans/ ohv _route_designation/* . In addition, maps will be available for viewing at: Supervisor's Office, PO Box 11500, Quincy, California 95971. Beckwourth Ranger District, PO Box 7, Blairsden, California 96103. Mount Hough Ranger District, 39696 Highway 70, Quincy, California 95971. Feather River Ranger District, 875 Mitchell Avenue, Oroville, California 95965-4699. Responsible Official Alice B. Carlton, Forest Supervisor, PO Box 11500, Quincy, California 95971. Nature of Decision To Be Made The responsible official will decide whether to adopt and implement the proposed action, an alternative to the proposed action, or take no action to make changes to the existing Plumas National Forest Transportation System and prohibit cross country wheeled motorized vehicle travel by the public off the designated system. Once the decision is made, the Plumas National Forest will publish a Motor Vehicle Use Map
(MVUM)identifying the roads, trails and open areas that are designated for motor vehicle use by vehicle class. Scoping Process Public participation will be especially important at several points during the analysis. The Forest Service will be seeking information, comments, and assistance from the federal, state, and local agencies and other individuals or organizations who may be interested in or affected by the proposed action. The comment period on the proposed action will extend 60 days from the date the Notice of Intent is published in the **Federal Register** . The draft environmental impact statement is expected to be filed with the Environmental Protection Agency
(EPA)and to be available for public review by September, 2008. EPA will publish a notice of availability of the draft EIS in the **Federal Register** . The comment period on the draft EIS will extend 45 days from the date the EPA notice appears in the **Federal Register** . At that time, copies of the draft EIS will be distributed to interested and affected agencies, organizations, and members of the public for their review and comment. It is very important that those interested in the management of the Plumas National Forest participate at that time. The final EIS is scheduled to be completed in December, 2008. In the final EIS, the Forest Service is required to respond to comments received during the comment period that pertain to the environmental consequences discussed in the draft EIS and applicable laws, regulations, and policies considered in making the decision. Submission of comments is a prerequisite for eligibility to appeal under the 36 CFR part 215 regulations. Comment Requested This notice of intent initiates the scoping process which guides the development of the environmental impact statement. *Early Notice of Importance of Public Participation in Subsequent Environmental Review:* A draft environmental impact statement will be prepared for comment. The comment period on the draft environmental impact statement will be 45 days from the date the Environmental Protection Agency publishes the notice of availability in the **Federal Register** . The Forest Service believes, at this early stage, it is important to give reviewers notice of several court rulings related to public participation in the environmental review process. First, reviewers of draft environmental impact statements must structure their participation in the environmental review of the proposal so that it is meaningful and alerts an agency to the reviewer's position and contentions. *Vermont Yankee Nuclear Power Corp.* v. *NRDC* , 435 U.S. 519,553 (1978). Also, environmental objections that could be raised at the draft environmental impact statement stage but that are not raised until after completion of the final environmental impact statement may be waived or dismissed by the courts. *City of Angoon* v. *Hodel* , 803 F.2d 1016, 1022 (9th Cir. 1986) and *Wisconsin Heritages, Inc.* v. *Harris* , 490 F. Supp. 1334, 1338 (E.D. Wis. 1980). Because of these court rulings, it is very important that those interested in this proposed action participate by the close of the 45 day comment period so that comments and objections are made available to the Forest Service at a time when it can meaningfully consider them and respond to them in the final environmental impact statement. To assist the Forest Service in identifying and considering issues and concerns on the proposed action, comments on the draft environmental impact statement should be as specific as possible. It is also helpful if comments refer to specific pages or chapters of the draft environmental impact statement. Comments may also address the adequacy of the draft environmental impact statement or the merits of the alternatives formulated and discussed in the statement. Reviewers may wish to refer to the Council on Environmental Quality Regulations for implementing the procedural provisions of the National Environmental Policy Act at 40 CFR 1503.3 in addressing these points. Comments received, including the names and addresses of those who comment, will be considered part of the public record on this proposal and will be available for public inspection. (Authority: 40 CFR 1501.7 and 1508.22; Forest Service Handbook 1909.15, Section 21) Dated: December 18, 2007. Alice B. Carlton, Forest Supervisor. [FR Doc. 07-6259 Filed 1-02-08; 8:45 am]
Connectionstraces to 24
Traces to 24 documents
27 references not yet in our index
  • 9 CFR 3
  • 9 CFR 2
  • 7 CFR 3015
  • 7 USC 2131-2159
  • 7 CFR 2.22
  • 12 CFR 361
  • Pub. L. 106-102
  • 113 Stat. 1338
  • Pub. L. 105-277
  • 26 CFR 1
  • Pub. L. 109-280
  • 120 Stat. 780
  • Pub. L. 93-406
  • 17 CFR 240.15
  • 38 CFR 4
  • 44 USC 3501-3521
  • 5 USC 601-612
  • 50 CFR 622
  • 50 CFR 622.48(c)
  • 50 CFR 648
  • 36 CFR 212
  • 36 CFR 215
  • 435 U.S. 519
  • 803 F.2d 1016
  • 490 F. Supp. 1334
  • 40 CFR 1503.3
  • 40 CFR 1501.7
Citation graph
cites case law
Rules and Regulations
Proposed rule; withdrawal and reproposal
U.S.C.§ 2131
Fed. Reg.Notices
Fed. Reg.Notices
Fed. Reg.Notices
U.S.C.§ 3501
U.S.C.§ 1833e
U.S.C.§ 603
U.S.C.§ 605
Pub. L.Public Law 118-137
SCOTUS435 U.S. 519
F. App'x803 F.2d 1016
F. Supp.490 F. Supp. 1334
Cites 51 · showing 12Cited by 0 across 0 sources
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