Proposed Rules. Temporary rule

10,847 words·~49 min read·/register/2008/01/09/08-22

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

BILLING CODE 3510-22-S DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 679 [Docket No. 070213032-7032-01] RIN 0648-XE81 Fisheries of the Exclusive Economic Zone Off Alaska; Chiniak Gully Research Area for Vessels Using Trawl Gear AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Temporary rule. SUMMARY: NMFS is rescinding the trawl closure in the Chiniak Gully Research Area.

This action is necessary to allow vessels using trawl gear to participate in directed fishing for groundfish in the Chiniak Gully Research Area. DATES: Effective 1200 hrs, Alaska local time (A.l.t.), August 1, 2008, through 1200 hrs, A.l.t., September 20, 2008. FOR FURTHER INFORMATION CONTACT: Jennifer Hogan, 907-586-7228. SUPPLEMENTARY INFORMATION: NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska

(FMP)prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679. The Chiniak Gully Research Area is closed to vessels using trawl gear from August 1 to a date no later than September 20 under regulations at § 679.22(b)(6)(ii)(A). This closure is in support of a research project to evaluate the effects of commercial fishing on pollock distribution and abundance, as part of a comprehensive investigation of Stellar sea lion and commercial fishery interactions. The regulations at § 679.22(b)(6)(ii)(B) provide that the Regional Administrator, Alaska Region, NMFS, (Regional Administrator) shall rescind the trawl closure if relevant research activities will not be conducted. The Regional Administrator has determined that research activities will not be conducted in 2008 in the Chiniak Gully Research Area. Therefore, the Regional Administrator is rescinding the trawl closure of the Chiniak Gully Research Area. All other closures remain in full force and effect. Classification Pursuant to 5 U.S.C. 553 (b)(B), the Assistant Administrator for Fisheries, NOAA

(AA)finds good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment is unnecessary. Notice and comment is unnecessary because the rescission of the trawl closure is non-discretionary; pursuant to § 679.22(b)(6)(ii)(B), the Regional Administrator has no choice but to rescind the trawl closure once it is determined that research activities will not be conducted in the area. Pursuant to 5 U.S.C. 553(d)(1), this rule is not subject to the 30-day delay in effective date requirement of 5 U.S.C. 553(d) since the rule relieves a restriction. This action has been determined to be not significant for purposes of Executive Order 12866. Authority: 16 U.S.C. 1801 *et seq.* Dated: January 3, 2008. Emily H. Menashes, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service. [FR Doc. E8-172 Filed 1-8-08; 8:45 am] BILLING CODE 3510-22-S 73 6 Wednesday, January 9, 2008 Proposed Rules DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-0390; Directorate Identifier 2007-NM-260-AD] RIN 2120-AA64 Airworthiness Directives; Airbus Model A318, A319, A320, and A321 Airplanes AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: We propose to adopt a new airworthiness directive

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

(MCAI)originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: Several cases of cracks on the main landing gear

(MLG)door hinge fitting and MLG door actuator fitting on the keel beam were reported. Such failure could lead to the loss [of] the MLG door and could cause damage to the aircraft and/or hazard to persons or property on the ground. The proposed AD would require actions that are intended to address the unsafe condition described in the MCAI. DATES: We must receive comments on this proposed AD by February 8, 2008. ADDRESSES: You may send comments by any of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov.* Follow the instructions for submitting comments. • *Fax:*

(202)493-2251. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Hand Delivery:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-40, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Examining the AD Docket You may examine the AD docket on the Internet at *http://www.regulations.gov* ; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone

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

(425)227-2141; fax

(AD)mandates a onetime detailed visual inspection

(DVI)and special detailed inspection

(SDI)of the MLG door hinge fitting and actuator fitting. The inspections are for cracking, damage, correct installation, and correct adjustment. The corrective actions include correcting incorrect adjustments and installations, and contacting Airbus for instructions to repair damage and cracking. You may obtain further information by examining the MCAI in the AD docket. Relevant Service Information Airbus has issued Service Bulletins A320-53-1195, Revision 02, dated April 5, 2007, and A320-53-1196, Revision 01, dated November 29, 2006. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. FAA's Determination and Requirements of This Proposed AD This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design. Differences Between This AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have proposed different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a NOTE within the proposed AD. Costs of Compliance Based on the service information, we estimate that this proposed AD would affect about 641 products of U.S. registry. We also estimate that it would take about 28 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $80 per work-hour. Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be $1,435,840, or $2,240 per product. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **Airbus:** Docket No. FAA-2007-0390; Directorate Identifier 2007-NM-260-AD. Comments Due Date

(a)We must receive comments by February 8, 2008. Affected ADs

(b)None. Applicability

(c)This AD applies to Airbus Model A318, A319, A320, and A321 series airplanes, all certified models, certificated in any category, all serial numbers up to manufacturer's serial number

(MSN)2850 inclusive, except MSNs 0115, 0184, 0782, 1151, 1190, 2650, 2675, 2706, 2801, and 2837. Subject

(d)Air Transport Association

(ATA)of America Code 53: Fuselage. Reason

(e)The mandatory continuing airworthiness information

(MCAI)states: Several cases of cracks on the main landing gear

(AD)mandates a onetime detailed visual inspection

(DVI)and special detailed inspection

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

(1)At the latest of the times specified in paragraphs (f)(1)(i), (f)(1)(ii), and (f)(1)(iii) of this AD, perform detailed visual, high frequency eddy current (HFEC), and ultrasonic inspections (for cracking, damage, correct installation, and correct adjustment, as applicable) of the left hand

(LH)and right hand

(RH)MLG door actuator fitting on the keel beam, and do all applicable corrective actions before further flight. Where the service bulletin specifies the applicable corrective action is contacting Airbus, contact Airbus for repair instructions and repair before further flight. Do all actions required by this paragraph in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-53-1195, Revision 02, dated April 5, 2007.

(i)Within 6,000 flight cycles since first flight.

(ii)Within 1,500 flight cycles after the effective date of this AD.

(iii)Within 6,000 flight cycles from the latest MLG door actuator fitting replacement.

(2)At the later of the times specified in paragraphs (f)(2)(i) and (f)(2)(ii) of this AD, perform detailed visual and HFEC inspections (for cracking, damage, correct installation, and correct adjustment, as applicable) of the LH and RH MLG door hinge fitting on the keel beam, and do all applicable corrective actions before further flight. Where the service bulletin specifies the applicable corrective action is contacting Airbus, contact Airbus for repair instructions and repair before further flight. Do all actions required by this paragraph in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-53-1196, Revision 01, dated November 29, 2006.

(i)Within 4,500 flight cycles since first flight.

(ii)Within 1,500 flight cycles after the effective date of this AD.

(3)Actions done before the effective date of this AD in accordance with the applicable service bulletins listed in paragraphs (f)(3)(i), (f)(3)(ii), and (f)(3)(iii) of this AD are acceptable for compliance with the corresponding actions required by this AD.

(i)Airbus Service Bulletin A320-53-1195, dated June 23, 2006.

(ii)Airbus Service Bulletin A320-53-1195, Revision 01, dated November 29, 2006.

(iii)Airbus Service Bulletin A320-53-1196, dated June 23, 2006. FAA AD Differences Note: This AD differs from the MCAI and/or service information as follows: No differences. Other FAA AD Provisions

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

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

(425)227-2141; fax

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

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

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

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

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

(h)Refer to MCAI European Aviation Safety Agency

(EASA)Airworthiness Directive 2007-0161, dated June 11, 2007, Airbus Service Bulletin A320-53-1195, Revision 02, dated April 5, 2007, and Airbus Service Bulletin A-320-53-1196, Revision 01, dated November 29, 2006, for related information. Issued in Renton, Washington, on December 19, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E8-164 Filed 1-8-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-0391; Directorate Identifier 2007-NM-271-AD] RIN 2120-AA64 Airworthiness Directives; Airbus Model A318-100 and A319-100 Series Airplanes; A320-111 Airplanes; A320-200 Series Airplanes; and A321-100 and A321-200 Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to supersede an existing airworthiness directive

(AD)that applies to certain Airbus Model A318-100 and A319-100 series airplanes; A320-111 airplanes; A320-200 series airplanes; and A321-100 and A321-200 series airplanes. The existing AD currently requires a one-time inspection of the horizontal hinge pin of the 103VU electrical panel in the avionics compartment to determine if the hinge pin can move out of the hinge, and related investigative and corrective actions if necessary. This proposed AD would require installing a hinge pin stopper on the internal door of the 103VU electrical panel. This proposed AD results from a report indicating that electrical wire damage was found in the 103VU electrical panel due to contact between the hinge pin and the adjacent electrical wire harness. We are proposing this AD to prevent contact between the horizontal hinge pin and the adjacent electrical wire harness, which could result in damage to electrical wires, and consequent arcing and/or failure of associated systems. DATES: We must receive comments on this proposed AD by February 8, 2008. ADDRESSES: You may send comments by any of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov* . Follow the instructions for submitting comments. • *Fax:* 202-493-2251. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Hand Delivery:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. For service information identified in this AD, contact Airbus, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France. Examining the AD Docket You may examine the AD docket on the Internet at *http://www.regulations.gov* ; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Tim Dulin, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)227-2141; fax

(425)227-1149. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2007-0391; Directorate Identifier 2007-NM-271-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments. We will post all comments we receive, without change, to *http://www.regulations.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD. Discussion On January 26, 2006, we issued AD 2006-03-10, amendment 39-14474 (71 FR 6665, February 9, 2006), for certain Airbus Model A318-100 and A319-100 series airplanes; A320-111 airplanes; A320-200 series airplanes; and A321-100 and A321-200 series airplanes. That AD requires a one-time inspection of the horizontal hinge pin of the 103VU electrical panel in the avionics compartment to determine if the hinge pin can move out of the hinge, and related investigative and corrective actions if necessary. That AD resulted from a report indicating that electrical wire damage was found in the 103VU electrical panel due to contact between the hinge pin and the adjacent electrical wire harness. We issued that AD to prevent contact between the horizontal hinge pin and the adjacent electrical wire harness, which could result in damage to electrical wires, and consequent arcing and/or failure of associated systems. Actions Since Existing AD Was Issued Since we issued AD 2006-03-10, the European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has informed us that the inspections and applicable corrective actions specified in Airbus All Operators Telex 25A1440, dated February 15, 2005 (referred to in AD 2006-03-10 as the appropriate source of service information for the required actions), are not adequate to address the identified unsafe condition (i.e., contact between the horizontal hinge pin and the adjacent electrical wire harness, which could result in damage to electrical wires, and consequent arcing and/or failure of associated systems). Relevant Service Information Airbus has issued Service Bulletin A320-25-1535, dated April 27, 2007. The service bulletin describes procedures for installing a hinge pin stopper on the internal door of the 103VU electrical panel. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. The EASA mandated the service information and issued airworthiness directive 2007-0214, dated August 7, 2007, to ensure the continued airworthiness of these airplanes in the European Union. FAA's Determination and Requirements of the Proposed AD These airplanes are manufactured in France and are type certificated for operation in the United States under the provisions of section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and the applicable bilateral airworthiness agreement. As described in FAA Order 8100.14A, “Interim Procedures for Working with the European Community on Airworthiness Certification and Continued Airworthiness,” dated August 12, 2005, the EASA has kept the FAA informed of the situation described above. We have examined the EASA's findings, evaluated all pertinent information, and determined that AD action is necessary for airplanes of this type design that are certificated for operation in the United States. This proposed AD would supersede AD 2006-03-10. This proposed AD would require accomplishing the actions specified in the service bulletin described previously. Costs of Compliance This proposed AD would affect about 658 Airbus Model A318-100 and A319-100 series airplanes; A320-111 airplanes; A320-200 series airplanes; and A321-100 and A321-200 series airplanes of U.S. registry. The new proposed actions would take about 1 work hour per airplane, at an average labor rate of $80 per work hour. Required parts would cost about $20 per airplane. Based on these figures, the estimated cost of the new actions specified in this proposed AD for U.S. operators is $65,800, or $100 per airplane. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration

(FAA)amends § 39.13 by removing amendment 39-14474 (71 FR 6665, February 9, 2006) and adding the following new airworthiness directive (AD): **Airbus:** Docket No. FAA-2007-0391; Directorate Identifier 2007-NM-271-AD. Comments Due Date

(a)The FAA must receive comments on this AD action by February 8, 2008. Affected ADs

(b)This AD supersedes AD 2006-03-10. Applicability

(c)This AD applies to Airbus Model A318-111 and -112; A319-111, -112, -113, -114, -115, -131, -132, and -133; A320-111, -211, -212, -214, -231, -232, and -233; and A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes; certificated in any category; all manufactured serial numbers; except for those airplanes on which Airbus Modification 36115 has been done in production or Airbus Service Bulletin A320-25-1535, dated April 27, 2007, has been done in service. Unsafe Condition

(d)This AD results from a report indicating that electrical wire damage was found in the 103VU electrical panel due to contact between the hinge pin and the adjacent electrical wire harness. We are issuing this AD to prevent contact between the horizontal hinge pin and the adjacent electrical wire harness, which could result in damage to electrical wires, and consequent arcing and/or failure of associated systems. Compliance

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

(f)Within 18 months after the effective date of this AD, install a hinge pin stopper on the internal door of the 103VU electrical panel in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-25-1535, dated April 27, 2007. Alternative Methods of Compliance (AMOCs) (g)(1) The Manager, International Branch, ANM-116, FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.

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

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

(h)European Aviation Safety Agency airworthiness directive 2007-0214, dated August 7, 2007, also addresses the subject of this AD. Issued in Renton, Washington, on December 19, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E8-152 Filed 1-8-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF THE TREASURY Fiscal Service 31 CFR Part 210 RIN 1510-AB00 Federal Government Participation in the Automated Clearing House AGENCY: Financial Management Service, Fiscal Service, Treasury. ACTION: Notice of proposed rulemaking with request for comment. SUMMARY: We are proposing to amend our regulation which governs the use of the Automated Clearing House

(ACH)system by Federal agencies. That regulation adopts, with some exceptions, the ACH Rules developed by NACHA—The Electronic Payments Association (NACHA) as the rules governing the use of the ACH Network by Federal agencies. We are issuing this proposed rule to address changes that NACHA has made to the ACH Rules since the publication of NACHA's 2005 ACH Rules book. We are proposing to adopt, with one exception, all of the changes that NACHA has approved since the issuance of the 2005 ACH Rules book, as reflected in the 2007 ACH Rules book. In addition, the proposed rule would provide two exceptions to the deposit account requirement in the regulation. The regulation requires that an ACH credit entry representing a Federal payment other than a vendor payment be deposited into a deposit account at a financial institution in the name of the recipient. On April 21, 2005, Treasury waived this requirement in order to allow some or all of the amount to be reimbursed to a Federal employee for official travel credit card charges to be disbursed directly to the credit card issuing bank. The proposed rule would codify this waiver. The proposed rule would also provide an exception from the requirements in cases where a Federal payment is to be disbursed through a debit card, stored value card, prepaid card or similar payment card program established by the Financial Management Service (Service). DATES: Comments on the proposed rule must be received by March 10, 2008. ADDRESSES: You can download this proposed rule at the following Web site: *http://www.fms.treas.gov/ach* . You may also inspect and copy this proposed rule at: Treasury Department Library, Freedom of Information Act

(FOIA)Collection, Room 1428, Main Treasury Building, 1500 Pennsylvania Avenue, NW., Washington, DC 20220. Before visiting, you must call

(202)622-0990 for an appointment. In accordance with the U.S. government's eRulemaking Initiative, the Service publishes rulemaking information on *www.regulations.gov* . Regulations.gov offers the public the ability to comment on, search, and view publicly available rulemaking materials, including comments received on rules. Comments on this rule, identified by docket FISCAL-FMS-2007-2008, should only be submitted using the following methods: • Federal eRulemaking Portal: *www.regulations.gov.* Follow the instructions on the Web site for submitting comments. • Mail: Bill Brushwood, Financial Management Service, 401 14th Street, SW., Room 400A, Washington, DC 20227. • The fax and e-mail methods of submitting comments on rules to the Service have been retired. Instructions: All submissions received must include the agency name (“Financial Management Service”) and docket number FISCAL-FMS-2007-0008 for this rulemaking. In general, comments will be published on *Regulations.gov* without change, including any business or personal information provided. Comments received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not enclose any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure. FOR FURTHER INFORMATION CONTACT: Bill Brushwood, Financial Program Specialist, at

(202)874-1251 or *bill.brushwood@fms.treas.gov;* or Natalie H. Diana, Senior Counsel, at

(202)874-6680 or *natalie.diana@fms.treas.gov.* SUPPLEMENTARY INFORMATION: I. Background Title 31 CFR part 210 (Part 210) governs the use of the ACH Network by Federal agencies. The ACH Network is a nationwide electronic fund transfer

(EFT)system that provides for the inter-bank clearing of electronic credit and debit transactions and for the exchange of payment related information among participating financial institutions. Part 210 incorporates the ACH Rules adopted by NACHA, with certain exceptions. From time to time we amend part 210 in order to address changes that NACHA periodically makes to the ACH Rules or to revise the regulation as otherwise appropriate. We are proposing to amend part 210 to address changes that NACHA has made to the ACH Rules since the publication of the 2005 ACH Rules. We are publishing this proposed rule in order to indicate which amendments to the ACH Rules we are planning to accept and which amendments we are planning to reject. We are requesting comment on the proposed amendments. We are also proposing to amend part 210 to codify a waiver allowing for split disbursements of Federal employee travel payments. Currently, section 210.5 requires that an ACH credit entry representing a Federal payment to a payee (other than a vendor payment) be deposited into a deposit account at a financial institution in the name of the recipient. On August 5, 2005, the Office of Management and Budget

(OMB)revised Circular No. A-123 (Management's Responsibility for Internal Control). This revision became effective in fiscal year 2006 (October 1, 2005). OMB Circular No. A-123, Appendix B (Improving the Management of Government Charge Card Programs), sec. 4.4 requires, as a general matter, that Federal executive branch agencies implement split disbursement when reimbursing employees for official travel charges. This requirement applies when the individual cardholder is responsible for making payment to the charge card vendor, i.e., the travel card issuing bank. Split disbursement “is the process of dividing a travel voucher reimbursement between the charge card vendor and traveler.” OMB Circular No. A-123, Appendix B, sec. 4.4.1. Under split disbursement, the “balance owed to each is sent directly to the appropriate party.” Id. In April 2005, the Department of the Treasury, under the authority of 31 CFR 210.5(b)(3), waived the section 210.5 requirement that an ACH entry be deposited into a deposit account at a financial institution in the name of the recipient for purposes of permitting split disbursement. This was necessary in order to implement OMB's split disbursement policy since an account maintained by the travel card issuing bank in the name of an employee is not a deposit account at a financial institution within the meaning of section 210.5. We are proposing to amend section 210.5 to codify the terms of the split disbursement waiver into the rule. The waiver issued by the Department of the Treasury in april 2005 also waived the sister deposit account regulation codified at 31 CFR part 208 (Management of Federal Agency Disbursements). We will issue a separate Notice of Proposed Rulemaking in the **Federal Register** for the purpose of amending Part 208 to codify the terms of the split disbursement waiver into that rule as well. The government's disbursing officials disburse travel reimbursement payments, including split disbursements, in accordance with the terms of payment certification vouchers submitted by executive branch Federal agencies. *See* 31 U.S.C. 3325 (providing that disbursing officials shall “disburse money only as provided by a voucher certified” by a Federal executive agency) and 31 U.S.C. 3528 (setting forth certification voucher requirements). The proposed rule will permit disbursing officials to use the ACH system to disburse split disbursement payments to the travel card issuing bank's account for credit to the employee, as directed by Federal certifying agencies. As such, the primary purpose of the proposed rule is to facilitate the continued implementation of the OMB guidance mandating split disbursement. From a general cash management perspective, the Service supports split disbursement because it may benefit Federal agencies by reducing the number of travel card delinquencies. Split disbursement may also benefit Federal employee travelers by facilitating payment of their travel card liabilities (although employees remain responsible for having their accounts current). The proposed rule is not intended to, and would not, establish or amend substantive Federal regulations or policies pertaining to Federal employee travel or reimbursement for official travel expenses. Such regulations and policies are established by, among other authorities, the Federal Travel Regulation (FTR), 41 CFR parts 300-304. The FTR is within the purview of the General Services Administration (GSA). GSA issued GSA Bulletin FTR 05-08 on December 2, 2005, which advised Federal agencies of OMB Circular No. A-123 requirements, including the requirement for split disbursement. In addition to amending section 210.5 to allow for split disbursement, we are proposing to amend section 210.5 to provide that where a Federal payment is to be disbursed through a debit card, stored value card, prepaid card or similar payment card program established by the Service, the Federal payment may be deposited to an account at a financial institution designated a financial or fiscal agent, and the Service may specify the title, access terms and other provisions governing the account. The requirement that an account to which Federal payments are delivered be a deposit account in the name of the recipient is designed to ensure that a payment reaches the intended recipient. In some cases in which the Service directs its financial or fiscal agent banks to set up a card program to facilitate the delivery of Federal payments, the most effective approach may be to utilize an account in which each card holder's interest is recorded, but each individual's name is not included in the account title. In these programs, the Service can ensure that the beneficial interests of Federal payment recipients are protected because the Service controls the terms and conditions of the programs. The section 210.5 requirements serve little purpose in this context, and add to the complexity of operating these programs. We are therefore proposing to adopt an exception to section 210.5 which would provide the Service with greater flexibility in setting up payment card programs. II. Summary of Rule Changes Since we last addressed changes to the ACH Rules in 2005, NACHA has published two sets of changes to the ACH Rules. The first set of changes was published in NACHA's 2006 ACH Rules book and a subsequent set of changes was published in NACHA's 2007 ACH Rules book. We are proposing to adopt all of the changes set forth in the 2006 and 2007 ACH Rules books except those relating to the self-audit provisions of the ACH Rules, which we have previously determined not to incorporate in part 210. The rule changes that we are proposing to adopt consist primarily of modifications to the ACH Rules that have a minimal impact on participants in the ACH Network and that we believe will not significantly affect Federal agencies' use of the ACH Network. However, there are a few rule changes that could have a significant impact on the Federal government's use of the ACH Network. A. Changes to ACH Rules Published in 2006 ACH Rules Book The changes published in the 2006 ACH Rules book include a number of minor operational efficiency and return issues changes, and a more significant rules change related to the identification of business checks ineligible for conversion to ACH entries for Accounts Receivable

(ARC)entries and Point-of-Purchase

(POP)entries. The more significant rule change amended the ACH Rules to enable Receivers 1 to identify business checks that are not to be converted to ARC or POP entries. For ARC entries, the rule change allows a Receiver to notify the Originator 2 directly that the Receiver's checks are not to be converted, or to utilize checks that include an identifier within the Auxiliary On-Us Field within the MICR line. For POP entries, Receivers may opt out either by utilizing checks that include an identifier within the Auxiliary On-Us Field within the MICR line, or by refusing to sign the required written authorization. 1 In an ARC or POP transaction, the Receiver is the person or entity making the payment (i.e., the remitter or payor) by presenting the check that is converted to an ACH debit. 2 In an ARC or POP transaction, the Originator is the person or entity originating the debit entry to the account of the payor by accepting the payor's check and converting it to an ACH debit. Part 210 allows agencies to convert business checks at points-of-purchase and lockboxes by using the Corporate Credit or Debit

(CCD)entry format. However, the great majority of checks converted by agencies are consumer checks, and in 2004 we indicated that as we continued to implement check conversion we would not convert business checks at new over-the-counter or lockbox locations. NACHA's rule change provides a way for agencies to clearly identify, in an automated fashion, whether a business check is ineligible for conversion to an ARC or POP entry. 3 We believe the rule change solves a problem that the ACH rules previously presented for agencies: how to identify business checks that are ineligible for conversion that are received in collection streams. Because NACHA's rule change eliminates the need to address the conversion of business checks in part 210, we are proposing to delete those provisions from the regulation. The proposed rule change does not mean that we intend to begin converting all eligible business checks to ACH entries. Rather, the proposed rule change allows for greater flexibility in determining the most advantageous way for the government to handle business checks. Thus, we may continue to process business checks by using image presentment or presenting the original items, as appropriate, but we will also have the option of converting eligible business checks in situations where it is more efficient and cost-effective to do so. 3 In 2007, NACHA adopted a rule change to implement a new application for converting checks received at points-of-purchase and manned bill payment locations to ACH debit entries in a back-office environment (see discussion below). As with POP and ARC, Receivers may opt out of back-office conversion by utilizing checks that include an identifier within the Auxiliary On-Us Field within the MICR line. The minor rule changes published in the 2006 Rules book include: • Changes related to the Company Name Field definition for ARC entries; • A requirement for the Originating Depository Financial Institution

(ODFI)to enter into a contractual relationship with Third-Party Senders; • Removal of redundant language regarding use of encryption technology for Internet-initiated

(WEB)entries; • Inclusion of language with respect to an ODFI's liability for breach of specific Telephone-initiated

(TEL)warranties; • Addition of definitions for Automated Accounting Advice

(ADV)and Notification or Change

(COR)entries; • Minor modifications of definitions associated with various Return Reason codes; and • Consolidation of Dishonored Return Reason codes. We are proposing to adopt all the foregoing rule changes, which we believe improve the operation of the ACH Network and the clarity of the ACH Rules. B. Changes to ACH Rules Published in 2007 ACH Rules Book The rule changes published in NACHA's 2007 Rules book involve a number of changes that have a minimal impact on ACH Network participants, as well as three rule amendments with a significant impact either on the private sector or on Federal agencies. Those three amendments are: Changes to NACHA's voting and funding requirements; changes to the requirements for ARC entries and POP entries; and changes to implement a new application for converting checks received at points-of-purchase and manned bill payment locations to ACH debit entries in a back-office environment. Voting and Funding Requirements Effective January 1, 2007, NACHA amended the ACH Rules to provide for the assessment of new Network administration fees to cover the costs related to management of the ACH Network. These fees include a per-entry fee for each commercial, inter-bank or Federal Government entry transmitted or received by the participating Depository Financial Institution (DFI). The amount of the transaction fee will be established from time to time by the NACHA Board of Directors based on projected costs and volumes. For calendar year 2007, the per-entry fee is $.0001. In addition to providing for fees, NACHA also modified the procedures for the amendment of the ACH Rules to clarify the specific allocation of votes required for approval of an amendment by the voting membership. We support this rule change because of its importance in providing for the long term funding of NACHA's Network management activities, including risk management and the advancement of rules supporting the ability of entities to convert check payments received into ACH entries. The Service will pay these fees on behalf of agencies for which we disburse and collect payments. ARC and POP Entries NACHA has amended its check conversion rules to keep the rules in sync with Regulation E (12 CFR part 205) and its associated commentary, which the Federal Reserve revised by amendments effective January 1, 2007. NACHA's rule changes ensure that the ACH Rules are consistent with the mandatory changes required by Regulation E by making corresponding changes to the electronic check applications supported by the ACH Rules. Specifically, NACHA's amendment

(1)modifies the ACH Rules with respect to the notice requirement for ARC entries, and

(2)incorporates a notice obligation into the authorization requirements for POP Entries. This amendment also includes other minor revisions to the ACH Rules to clarify that

(1)an ARC source document may not be presented for payment unless the ARC entry is returned by the Receiving Depository Financial Institution (RDFI);

(2)ARC entries for which the Receiver opted out of check conversion constitute a valid reason for recredit to the Receiver and return by the RDFI; and

(3)a POP entry is considered to be unauthorized if the requirements for both written authorization and notice were not met. In addition, effective March 16, 2007, the requirement that ARC source documents be destroyed within 14 days of the settlement of the entry has been deleted. A new rule has been added to provide that Originators must use commercially reasonable methods to securely store all source documents until destruction, as well as all banking information relating to ARC entries. Finally, NACHA

(1)modified the ARC and POP rules governing requirements for MICR capture of source document information, and

(2)made corresponding modifications/additions to the audit requirements regarding MICR capture obligations for ARC and POP entries to ensure consistency of wording among various electronic check applications. The ACH rule changes incorporate Regulation E safe harbor language for the notice required to be provided to Receivers whose checks are converted using ARC entries. Under the newly revised ACH Rules, agencies would be required to use the following language, or language that is substantially similar, for their notices. “When you provide a check as payment, you authorize us either to use information from your check to make a one-time electronic fund transfer from your account or to process the payment as a check transaction.” Until January 1, 2010, the following, or substantially similar, additional language must also be included: “When we use information from your check to make an electronic fund transfer, funds may be withdrawn from your account as soon as the same day we receive your payment, and you will not receive your check back from your financial institution.” The new ACH Rule changes provide that an Originator may convert a check presented at a point-of-purchase, provided that a required notice is posted in a prominent and conspicuous location, and that a copy of the notice is provided to the Receiver at the time of the transaction. The notice and copy of the notice must include the following or substantially similar language: “When you provide a check as payment, your authorized us either to use the information from your check to make a one-time electronic fund transfer from your account or to process the payment as a check transaction.” Until January 1, 2010, the following or substantially similar additional language must be included in the notice: “When we use information from your check to make an electronic fund transfer, funds may be withdrawn from your account as soon as the same day you make your payment.” Agencies are currently required by part 210 to use specifically worded disclosures for POP and ARC check conversion. Those disclosures, which are set out in Appendices A, B, and C to part 210, are substantially similar to (but much longer than) the foregoing POP and ARC required notices. We are proposing to delete Appendices A, B, and C from part 210, which would mean that agencies could either continue to use the same disclosures they are currently using or, alternatively, begin using the shorter disclosures now required under the ACH Rules. Back Office Conversion Entries Effective March 16, 2007, NACHA established a new electronic check conversion application, Back Office Conversion

(BOC)entries, that will allow retailers and billers to accept checks at the point-of-purchase or at manned bill payment locations and convert the checks to ACH debits during back office processing. In order to use a check to originate a BOC entry, the Originator must post a notice in a prominent and conspicuous location that states: “When you provide a check as payment, you authorize us either to use the information from your check to make a one-time electronic fund transfer from your account or to process the payment as a check transaction. For inquiries, please call [retailer phone number].” Until January 1, 2010, the posted notice must also state: “When we use information from your check to make an electronic fund transfer, funds may be withdrawn from your account as soon as the same day you make your payment, and you will not receive your check back from your financial institution.” A copy of the notice, or language that is substantially similar, must be provided to the Receiver at the time of the transaction. In addition, the Originator must provide the Receiver the ability to opt out of the conversion of his check to an ACH debit entry. To opt out, the Receiver must notify the Originator at the time of purchase that a particular check does not authorize an ACH debit entry. We are proposing to adopt most of the ACH rule changes implementing the BOC application. In 2003, we amended part 210 to allow agencies to convert checks to ARC entries in certain circumstances that fall outside typical accounts receivable and point-of-purchase settings. Our rule enabled Federal agencies to convert checks in circumstances in which check conversion would not have been possible under NACHA's then-existing ARC and POP rules. For example, when Army pay officers travel to remote, off-base locations in order to cash checks for soldiers, pay officers cannot bring along the necessary equipment to scan and return voided checks, as is required by the ACH rules governing POP entries. Nor could these checks be converted to ARC entries under ACH rules, because a pay officer's acceptance of checks in these circumstances does not constitute an accounts receivable (lockbox) setting. To provide for the conversion of checks in a variety of circumstances falling outside typical accounts receivable and point-of-purchase settings, we adopted in part 210 a provision to allow agencies to convert checks delivered in person in circumstances in which an agency cannot contemporaneously image and return the check. Because the BOC application addresses the Government's need for flexibility in these situations, there is no longer a need to retain this provision in Part 210. Instead, agencies can now convert these checks using the BOC application. We therefore propose to adopt the rule changes implementing the BOC application, with the exception of the audit requirements associated with the BOC entry type as reflected within Appendix Eight (Rule Compliance Audit Requirements), Sections 8.2 and 8.3 of the ACH Rules. We are proposing not to adopt the audit requirements, consistent with our previous position exempting Federal agencies from the requirements of ACH Rules associated with enforcement of the ACH Rules (Appendix Eight and Appendix Eleven). Treasury needs to make the programming and operational changes necessary to implement the BOC application. Accordingly, we expect that for some period of time after the adoption of a final rule, it will be necessary to continue our existing process of converting items to ARC entries in circumstances other than typical lockbox and point-of-purchase settings. Rules With a Minor Impact on the ACH Network NACHA published in the 2007 Rules book the following amendments that have a minor impact on the ACH Network: • *Description of Corrected Data Within Contested Dishonored Return Reason Code R74* —Previously, the description of Return Reason Code R74 (Corrected Return), related to the correction of the Individual Identification Number/Identification Number Field within the Entry Detail Record, did not reflect all applicable SEC Codes that contain these fields. This amendment modified the description of Return Reason Code R74 within Appendix Five, Section 5.4 (Table of Return Reason Codes), as it relates to the Individual Identification Number/Identification Number, to add the following additional SEC Codes to be consistent with current industry practice; CBR, CTX, DNE, ENR, PBR, TEL, TRX, and WEB. • *Direct Financial Institution and Payment Association Definitions* —The Terms “Direct Financial Institution” and “Payment Association” were referenced within the procedures for amendment of the ACH Rules in Article Thirteen but not defined within the ACH Rules. This amendment added definitions for these terms to Article Fourteen (Definition of Terms) of the ACH Rules. • *Time Frame to Re-initiate Entries* —Previously, the ACH Rules defined under what conditions an ACH entry that is returned may be re-initiated, but did not prescribe any limitations on the time period within which such re-initation must occur. To preclude attempts to re-initiate extremely stale entries, NACHA amended the rules to establish the period of time after which returned entries cannot be re-initiated. Specifically, an entry may not be re-initiated more than 180 days after the settlement date of the original transaction. • *Available ACH Characters* —This amendment modified the definition of “alphameric” within Article Fourteen and the data specification requirements within Appendix One to clarify that lowercase alpha characters are permitted within ACH entries, except where explicitly noted otherwise. • *Name and Definition of Cash Concentration or Disbursement

(CCD)Standard Entry Class Code* —This amendment modified the name and description of the CCD format to clarify that CCD entries can be used more broadly than just for intra-corporate payments. The name of the CCD format was changed from “Cash Concentration or Disbursement” to “Corporate Credit or Debit” and the description was revised to indicate that this code may also be used for a transfer of funds from the account of one organization to the account of another organization. • *Formatting Requirements for TEL (Telephone-Initiated) and WEB (Internet-Initiated) Entries* —This amendment redefined the Individual Name Field within the Entry Detail Record of both TEL and WEB entries (and related returns) from Required to Mandatory to facilitate ACH Operators' use of various risk filters to monitor the field for possible fraudulent content. Operator edits within Appendix Three, as they relate to Return Reason Code R26 (Mandatory Field Error), were also modified to permit the return of any TEL or WEB entry within which this field contains all spaces or all zeros. • *Additional Addenda Code for Dishonored Return Reason Code R69* — This amendment added, under the description of Return Reason Code R69 (Field Errors), an additional criterion under which an entry containing incorrect information may be dishonored. This change enables an ODFI to dishonor a return if the original Effective Entry Date was incorrectly copied from the forward entry. We support the foregoing ACH Rules changes. The changes clarify certain ACH Rules that were previously unclear or ambiguous, and provide greater flexibility and operational efficiency for users of the ACH Network. We believe these changes are beneficial and propose to incorporate them into part 210. III. Section-by-Section Analysis In order to incorporate in part 210 the ACH rule changes that we are accepting, the only change necessary to the current regulation is to replace references to the 2005 Rules book with references to the 2007 ACH Rules book. No change to part 210 is necessary in order to exclude the amendments to the audit provisions, since part 210 already provides that the ACH audit requirements do not apply to Federal agency ACH transactions. Section 210.2(d) We are proposing to amend the definition of applicable ACH Rules at § 210.2(d) to reference the rules published in NACHA's 2007 Rules book rather than the rules published in NACHA's 2005 Rules book. Section 210.3(b) We are proposing to amend § 210.3(b) by replacing the references to the ACH Rules as published in the 2005 Rules book with references to the ACH Rules as published in the 2007 Rules book. Section 210.5 We are proposing to amend § 210.5(b) by adding a new paragraph (b)(3) to allow for the issuance of part or all of a Federal employee's travel reimbursement to the employee's travel card account at the card issuing bank. We are also proposing to add a new paragraph (b)(4), which would provide that where a Federal payment is to be disbursed through a debit card, stored value card, prepaid card or similar payment card program established by the Service, the Federal payment may be deposited to an account at a financial institution designated as a financial or fiscal agent. The Service may specify the account title, access terms, and other account provisions, and thereby protect the interest of payment recipients. This paragraph would apply in those cases when the Service directs its financial or fiscal agent bank to set up a card program. Section 210.6(g) We are proposing to revise current § 210.6(g) to reflect the revision of the ACH Rules governing POP entries. We believe that, as revised, the ACH Rules governing POP entries are appropriate in most respects for agencies. Unlike the ACH Rules, however, part 210 will continue to allow agencies to originate POP entries without a written authorization, as long as the notice required by the ACH Rules is posted and the Receiver is provided with a copy of the notice. This approach is consistent with the authorization requirements of Regulation E. Section 210.6(h) We are proposing to delete the text of current § 210.6(h). We believe that, as revised, the ACH Rules governing accounts receivable check conversion are appropriate for agencies, and therefore, a separate rule within part 210 is no longer necessary. We are proposing to revise the text of current § 210.6(i) and renumber it as § 210.6(h). The revision would clarify that in order to debit a Receiver's account for an insufficient funds service fee, the agency must have independent authority to collect fees for items returned due to insufficient funds. An agency that has such authority may originate an ACH debit entry to collect a one-time service fee in connection with an ARC, POP or BOC entry that is returned due to insufficient funds, provided that the agency discloses the service fee in the notices required for the ARC, POP or BOC entry. The required disclosure is unchanged, but has been relocated from Appendices A, B, and C, which we are proposing to remove from the regulation. IV. Procedural Requirements Request for Comment on Plain Language Executive Order 12866 requires each agency in the Executive branch to write regulations that are simple and easy to understand. We invite comment on how to make the proposed rule clearer. For example, you may wish to discuss:

(1)Whether we have organized the material to suit your needs;

(2)whether the requirements of the rules are clear; or

(3)whether there is something else we could do to make these rules easier to understand. Regulatory Planning and Review The proposed rule does not meet the criteria for a “significant regulatory action” as defined in Executive Order 12866. Therefore, the regulatory review procedures contained therein do not apply. Regulatory Flexibility Act Analysis It is hereby certified that the proposed rule will not have a significant economic impact on a substantial number of small entities. The proposed changes to the regulation related to ARC, POP, and BOC check conversion will not result in significant costs for individuals or financial institutions affected by the changes, including financial institutions that are small entities. New ACH fees will be borne by the government, and will not affect other parties sending or receiving Federal ACH transactions, including small entities. Accordingly, a regulatory flexibility analysis under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ) is not required. Unfunded Mandates Act of 1995 Section 202 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532 (Unfunded Mandates Act), requires that the agency prepare a budgetary impact statement before promulgating any rule likely to result in a Federal mandate 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 in any one year. If a budgetary impact statement is required, section 205 of the Unfunded Mandates Act also requires the agency to identify and consider a reasonable number of regulatory alternatives before promulgating the rule. We have determined that the proposed rule will not result in expenditures by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. Accordingly, we have not prepared a budgetary impact statement or specifically addressed any regulatory alternatives. List of Subjects in 31 CFR Part 210 Automated Clearing House, Electronic funds transfer, Financial institutions, Fraud, and Incorporation by reference. Words of Issuance For the reasons set out in the preamble, we propose to amend 31 CFR part 210 as follows: PART 210—FEDERAL GOVERNMENT PARTICIPATION IN THE AUTOMATED CLEARING HOUSE 1. The authority citation for part 210 continues to read as follows: Authority: 5 U.S.C. 5525; 12 U.S.C. 391; 31 U.S.C. 321, 3301, 3302, 3321, 3332, 3335, and 3720. 2. Revise § 210.2(d) to read as follows: § 210.2 Definitions.

(d)*Applicable ACH Rules* means the ACH Rules with an effective date on or before September 21, 2007, as published in Parts II, III and VI of the “2007 ACH Rules: A Complete Guide to Rules & Regulations Governing the ACH Network” except:

(1)ACH Rule 1.1 (limiting the applicability of the ACH Rules to members of an ACH association);

(2)ACH Rule 1.2.2 (governing claims for compensation);

(3)ACH Rules 1.2.4 and 2.2.1.12; Appendix Eight; and Appendix Eleven (governing the enforcement of the ACH Rules, including self-audit requirements);

(4)ACH Rules 2.2.1.10; 2.6; and 4.8 (governing the reclamation of benefit payments);

(5)ACH Rule 9.3 and Appendix Two (requiring that a credit entry be originated no more than two banking days before the settlement date of the entry—see definition “Effective Entry Date” in Appendix Two);

(6)ACH Rule 2.11.2.3 (requiring that originating depository financial institutions (ODFIs) establish exposure limits for Originators of Internet-initiated debit entries); and

(7)ACH Rule 2.13.3 (requiring reporting regarding unauthorized Telephone-initiated entries). 3. Revise § 210.3(b) to read as follows: § 210.3 Governing law.

(b)*Incorporation by reference—applicable ACH Rules.*

(1)This part incorporates by reference the applicable ACH Rules, including rule changes with an effective date on or before September 21, 2007, as published in parts II, III, and VI of the “2007 ACH Rules: A Complete Guide to Rules & Regulations Governing the ACH Network.” The Director of the Federal Register approves this incorporation by reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies of the “2007 ACH Rules” are available from NACHA—The Electronic Payments Association, 13450 Sunrise Valley Drive, Suite 100, Herndon, Virginia 20171. Copies also are available for public inspection at the Office of the Federal Register, 800 North Capital Street, NW., Suite 700, Washington, DC 20002; and the Financial Management Service, 401 14th Street, SW., Room 400A, Washington, DC 20227.

(2)Any amendment to the applicable ACH Rules that is approved by NACHA—The Electronic Payments Association after January 1, 2007 shall not apply to Government entries unless the Service expressly accepts such amendment by publishing notice of acceptance of the amendment to this part in the **Federal Register** . An amendment to the ACH Rules that is accepted by the Service shall apply to Government entries on the effective date of the rulemaking specified by the Service in the **Federal Register** notice expressly accepting such amendment. 4. Redesignate paragraph § 210.5(b)(3) as § 210.5(b)(5) and add new paragraphs (b)(3) and (b)(4) to read as follows: § 210.5 Account requirements for Federal payments.

(b)* * *

(3)Where an agency is issuing part or all of an employee's travel reimbursement payment to the official travel card issuing bank, as authorized or required by Office of Management and Budget guidance or the Federal Travel Regulation, the ACH credit entry representing the payment may be deposited to the account of the travel card issuing bank for credit to the employee's travel card account at the bank.

(4)Where a Federal payment is to be disbursed through a debit card, stored value card, prepaid card or similar payment card program established by the Service, the Federal payment may be deposited to an account at a financial institution designated by the Service as a financial or fiscal agent. The account title, access terms and other account provisions may be specified by the Service. 6. In § 210.6, revise paragraphs

(g)and

(h)to read as follows, and remove paragraph (i): § 210.6 Agencies.

(g)*Point-of-purchase debit entries.* An agency may originate a Point-of-Purchase

(POP)entry using a check drawn on a consumer or business account and presented at a point-of-purchase unless the Receiver opts out in accordance with the ACH Rules. The requirements of ACH Rules 2.1.2 and 3.12 shall be met for such an entry if the Receiver presents the check at a location where the agency has posted the notice required by the ACH Rules and has provided the Receiver with a copy of the notice.

(h)*Returned item service fee.* An agency that has authority to collect returned item service fees may do so by originating an ACH debit entry to collect a one-time service fee in connection with an ARC, POP or BOC entry that is returned due to insufficient funds. An entry originated pursuant to this paragraph shall meet the requirements of ACH Rules 2.1.2 and 3.5 if the agency includes the following statement in the required notice(s) to the Receiver: “If the electronic fund transfer cannot be completed because there are insufficient funds in your account, we may impose a one-time fee of $[____] against your account, which we will also collect by electronic fund transfer.” Appendices A, B and C [Removed] 7. Remove Appendices A, B and C from this part. Dated: December 27, 2007. Kenneth R. Papaj, Commissioner. [FR Doc. 08-22 Filed 1-8-08; 8:45 am]

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