Rules and Regulations. Notice of proposed rulemaking

39,715 words·~181 min read·/register/2008/02/01/08-474

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

BILLING CODE 3510-22-S 73 22 Friday, February 1, 2008 Proposed Rules DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2007-0341; Airspace Docket No. 07-AAL-19] Proposed Establishment of Class E Airspace; Kobuk, AK AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking. SUMMARY: This action proposes to establish Class E airspace at Kobuk, AK. Two Standard Instrument Approach Procedures (SIAPs) are being developed for the Kobuk Airport at Kobuk, AK. Additionally, a textual departure procedure

(DP)is being developed. Adoption of this proposal would result in establishment of Class E airspace upward from 700 feet (ft.) and 1,200 ft. above the surface at the Kobuk Airport, Kobuk, AK. DATES: Comments must be received on or before March 17, 2008. ADDRESSES: Send comments on the proposal to the Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue, SE., West Building Ground Floor, Room W12-140, Washington, DC 20590-0001. You must identify the docket number FAA-2007-0341/Airspace Docket No. 07-AAL-19, at the beginning of your comments. You may also submit comments on the Internet at *http://www.regulations.gov* . You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Office (telephone 1-800-647-5527) is on the plaza level of the Department of Transportation NASSIF Building at the above address. An informal docket may also be examined during normal business hours at the office of the Manager, Safety, Alaska Flight Service Operations, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513-7587. FOR FURTHER INFORMATION CONTACT: Gary Rolf, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513-7587; telephone number

(907)271-5898; fax:

(907)271-2850; e-mail: *gary.ctr.rolf@faa.gov* . Internet address: *http://www.alaska.faa.gov/at* . SUPPLEMENTARY INFORMATION: Comments Invited Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2007-0341/Airspace Docket No. 07-AAL-19.” The postcard will be date/time stamped and returned to the commenter. All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket. Availability of Notice of Proposed Rulemaking's (NPRM's) An electronic copy of this document may be downloaded through the Internet at *http://www.regulations.gov* . Recently published rulemaking documents can also be accessed through the FAA's Web page at *http://www.faa.gov* or the Superintendent of Documents' Web page at *http://www.access.gpo.gov/nara/index.html* . Additionally, any person may obtain a copy of this notice by submitting a request to the Federal Aviation Administration, Office of Air Traffic Airspace Management, ATA-400, 800 Independence Avenue, SW., Washington, DC 20591 or by calling

(202)267-8783. Communications must identify both docket numbers for this notice. Persons interested in being placed on a mailing list for future NPRM's should contact the FAA's Office of Rulemaking,

(202)267-9677, to request a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure. The Proposal The FAA is considering an amendment to the Code of Federal Regulations (14 CFR part 71), which would establish Class E airspace at the Kobuk Airport, in Kobuk, AK. The intended effect of this proposal is to establish Class E airspace upward from 700 ft. and 1,200 ft. above the surface to contain Instrument Flight Rules

(IFR)operations at Kobuk Airport, Kobuk, AK. The FAA Instrument Flight Procedures Production and Maintenance Branch has developed two SIAPs and a DP for the Kobuk Airport. The new approaches are

(1)the Area Navigation

(RNAV)Global Positioning System

(GPS)Runway

(RWY)09, Original

(Orig)and

(2)the RNAV

(GPS)RWY 27, Orig. Textual DP's are unnamed and are published in the front of the U.S. Terminal Procedures for Alaska. Class E controlled airspace extending upward from 700 ft. and 1,200 ft. above the surface in the Kobuk Airport area would be created by this action. The proposed airspace is sufficient in size to contain aircraft executing new instrument procedures at the Kobuk Airport, Kobuk, AK. The area would be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The Class E airspace areas designated as 700/1200 foot transition areas are published in paragraph 6005 in FAA Order 7400.9R, *Airspace Designations and Reporting Points* , signed August 15, 2007, and effective September 15, 2007, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document would be published subsequently in the Order. The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866;

(2)is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and

(3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle 1, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart 1, Section 40103, Sovereignty and use of airspace. Under that section, the FAA is charged with prescribing regulations to ensure the safe and efficient use of the navigable airspace. This regulation is within the scope of that authority because it proposes to create Class E airspace sufficient in size to contain aircraft executing instrument procedures at the Kobuk Airport, AK, and represents the FAA's continuing effort to safely and efficiently use the navigable airspace. List of Subjects in 14 CFR Part 71 Airspace, Incorporation by reference, Navigation (air). The Proposed Amendment In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows: PART 71—DESIGNATION OF CLASS A, CLASS B, CLASS C, CLASS D, AND CLASS E AIRSPACE AREAS; AIRWAYS; ROUTES; AND REPORTING POINTS 1. The authority citation for 14 CFR part 71 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389. § 71.1 [Amended] 2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation Administration Order 7400.9R, *Airspace Designations and Reporting Points* , signed August 15, 2007, and effective September 15, 2007, is to be amended as follows: Paragraph 6005 Class E airspace extending upward from 700 feet or more above the surface of the earth. AAL AK E5 Kobuk, AK [New] Kobuk, Kobuk Airport, AK (Lat. 66°54′44″ N., long. 156°53′50″ W.) That airspace extending upward from 700 feet above the surface within a 7.7-mile radius of the Kobuk Airport; and that airspace extending upward from 1,200 feet above the surface within a 73-mile radius of the Kobuk Airport. Issued in Anchorage, AK, on January 18, 2008. Anthony M. Wylie, Manager, Alaska Flight Services Information Area Group. [FR Doc. E8-1867 Filed 1-31-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2007-29008; Airspace Docket No. 07-AAL-11] Proposed Revision of Class E Airspace; New Stuyahok, AK AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking. SUMMARY: This action proposes to revise Class E airspace at New Stuyahok, AK. Two Standard Instrument Approach Procedures (SIAPs) are being developed for the New Stuyahok Airport at New Stuyahok, AK. Adoption of this proposal would result in revision of existing Class E airspace upward from 700 feet (ft.) and 1,200 ft. above the surface at the New Stuyahok Airport, New Stuyahok, AK. DATES: Comments must be received on or before March 17, 2008. ADDRESSES: Send comments on the proposal to the Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue, SE., West Building Ground Floor, Room W12-140, Washington, DC 20590-0001. You must identify the docket number FAA-2007-29008/Airspace Docket No. 07-AAL-11, at the beginning of your comments. You may also submit comments on the Internet at *http://www.regulations.gov* . You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Office (telephone 1-800-647-5527) is on the plaza level of the Department of Transportation NASSIF Building at the above address. An informal docket may also be examined during normal business hours at the office of the Manager, Safety, Alaska Flight Service Operations, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513-7587. FOR FURTHER INFORMATION CONTACT: Gary Rolf, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513-7587; telephone number

(907)271-5898; fax:

(907)271-2850; e-mail: *gary.ctr.rolf@faa.gov* . Internet address: *http://www.alaska.faa.gov/at* . SUPPLEMENTARY INFORMATION: Comments Invited Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2007-29008/Airspace Docket No. 07-AAL-11.” The postcard will be date/time stamped and returned to the commenter. All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket. Availability of Notice of Proposed Rulemaking's (NPRM's) An electronic copy of this document may be downloaded through the Internet at *http://www.regulations.gov* . Recently published rulemaking documents can also be accessed through the FAA's Web page at *http://www.faa.gov* or the Superintendent of Documents' Web page at *http://www.access.gpo.gov/nara/index.html* . Additionally, any person may obtain a copy of this notice by submitting a request to the Federal Aviation Administration, Office of Air Traffic Airspace Management, ATA-400, 800 Independence Avenue, SW., Washington, DC 20591 or by calling

(202)267-8783. Communications must identify both docket numbers for this notice. Persons interested in being placed on a mailing list for future NPRM's should contact the FAA's Office of Rulemaking,

(202)267-9677, to request a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure. The Proposal The FAA is considering an amendment to the Code of Federal Regulations (14 CFR part 71), which would revise the Class E airspace at the New Stuyahok Airport, in New Stuyahok, AK. The intended effect of this proposal is to revise Class E airspace upward from 700 ft. and 1,200 ft. above the surface to contain Instrument Flight Rules

(IFR)operations at the New Stuyahok Airport, New Stuyahok, AK. The FAA Instrument Flight Procedures Production and Maintenance Branch has developed two SIAPs for the New Stuyahok Airport. The new approaches are

(1)the Area Navigation

(RNAV)Global Positioning System

(GPS)Runway

(RWY)14, Original

(Orig)and

(2)the RNAV

(GPS)RWY 32, Orig. Class E controlled airspace extending upward from 700 ft. and 1,200 ft. above the surface, in the New Stuyahok Airport area would be revised by this action. The proposed airspace is sufficient in size to contain aircraft executing the instrument procedures at the New Stuyahok Airport, New Stuyahok, AK. The area would be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The Class E airspace areas designated as 700/1200 foot transition areas are published in paragraph 6005 in FAA Order 7400.9R, *Airspace Designations and Reporting Points* , signed August 15, 2007, and effective September 15, 2007, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document would be published subsequently in the Order. The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore —(1) is not a “significant regulatory action” under Executive Order 12866;

(2)is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and

(DP)are being developed for the Anvik Airport at Anvik, AK. Additionally, one SIAP is being amended. Adoption of this proposal would result in revision of existing Class E airspace upward from 700 feet (ft.) and 1,200 ft. above the surface at the Anvik Airport, Anvik, AK. DATES: Comments must be received on or before March 17, 2008. ADDRESSES: Send comments on the proposal to the Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue, SE., West Building Ground Floor, Room W12-140, Washington, DC 20590-0001. You must identify the docket number FAA-2007-0343/Airspace Docket No. 07-AAL-21, at the beginning of your comments. You may also submit comments on the Internet at *http://www.regulations.gov* . You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Office (telephone 1-800-647-5527) is on the plaza level of the Department of Transportation NASSIF Building at the above address. An informal docket may also be examined during normal business hours at the office of the Manager, Safety, Alaska Flight Service Operations, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513-7587. FOR FURTHER INFORMATION CONTACT: Gary Rolf, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513-7587; telephone number

(907)271-5898; fax:

(907)271-2850; e-mail: *gary.ctr.rolf@faa.gov* . Internet address: *http://www.alaska.faa.gov/at* . SUPPLEMENTARY INFORMATION: Comments Invited Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2007-0343/Airspace Docket No. 07-AAL-21.” The postcard will be date/time stamped and returned to the commenter. All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket. Availability of Notice of Proposed Rulemaking's (NPRM's) An electronic copy of this document may be downloaded through the Internet at *http://www.regulations.gov* . Recently published rulemaking documents can also be accessed through the FAA's Web page at *http://www.faa.gov* or the Superintendent of Document's Web page at *http://www.access.gpo.gov/nara/index.html* . Additionally, any person may obtain a copy of this notice by submitting a request to the Federal Aviation Administration, Office of Air Traffic Airspace Management, ATA-400, 800 Independence Avenue, SW., Washington, DC 20591 or by calling

(202)267-8783. Communications must identify both docket numbers for this notice. Persons interested in being placed on a mailing list for future NPRM's should contact the FAA's Office of Rulemaking,

(202)267-9677, to request a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure. The Proposal The FAA is considering an amendment to the Code of Federal Regulations (14 CFR Part 71), which would revise the Class E airspace at the Anvik Airport, in Anvik, AK. The intended effect of this proposal is to revise Class E airspace upward from 700 ft. and 1,200 ft. above the surface to contain Instrument Flight Rules

(IFR)operations at the Anvik Airport, Anvik, AK. The FAA Instrument Flight Procedures Production and Maintenance Branch has developed two SIAPs and a DP, and amended one SIAP for the Anvik Airport. The new approaches are

(1)the Area Navigation

(RNAV)Global Positioning System

(GPS)Runway

(RWY)17, Original

(Orig)and

(2)the RNAV

(GPS)RWY 35, 0rig. The amended approach is the Non-directional Beacon

(NDB)RWY 35, Amendment

(Amdt)1. Textual DP's are unnamed and are published in the front of the U.S. Terminal Procedures for Alaska. Class E controlled airspace extending upward from 700 ft. and 1,200 ft. above the surface in the Anvik Airport area would be revised by this action. The proposed airspace is sufficient in size to contain aircraft executing the instrument procedures at the Anvik Airport, Anvik, AK. The area would be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The Class E airspace areas designated as 700/1200 foot transition areas are published in paragraph 6005 in FAA Order 7400.9R, *Airspace Designations and Reporting Points* , signed August 15, 2007, and effective September 15, 2007, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document would be published subsequently in the Order. The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore —(1) is not a “significant regulatory action” under Executive Order 12866;

(2)is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and

(3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle 1, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart 1, Section 40103, Sovereignty and use of airspace. Under that section, the FAA is charged with prescribing regulations to ensure the safe and efficient use of the navigable airspace. This regulation is within the scope of that authority because it proposes to create Class E airspace sufficient in size to contain aircraft executing instrument procedures at the Anvik Airport, AK, and represents the FAA's continuing effort to safely and efficiently use the navigable airspace. List of Subjects in 14 CFR Part 71 Airspace, Incorporation by reference, Navigation (air). The Proposed Amendment In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows: PART 71—DESIGNATION OF CLASS A, CLASS B, CLASS C, CLASS D, AND CLASS E AIRSPACE AREAS; AIRWAYS; ROUTES; AND REPORTING POINTS 1. The authority citation for 14 CFR part 71 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389. § 71.1 [Amended] 2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation Administration Order 7400.9R, *Airspace Designations and Reporting Points* , signed August 15, 2007, and effective September 15, 2007, is to be amended as follows: Paragraph 6005 Class E airspace extending upward from 700 feet or more above the surface of the earth. AAL AK E5 Anvik, AK [Revised] Anvik, Anvik Airport, AK (Lat. 62°38′48″ N., long. 160°11′26″ W.) That airspace extending upward from 700 feet above the surface within an 8.0-mile radius of the Anvik Airport; and that airspace extending upward from 1,200 feet above the surface within a 73-mile radius of the Anvik Airport. Issued in Anchorage, AK, on January 18, 2008. Anthony M. Wylie, Manager, Alaska Flight Services Information Area Group. [FR Doc. E8-1845 Filed 1-31-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2007-0342; Airspace Docket No. 07-AAL-20] Proposed Revision of Class E Airspace; Bettles, AK AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking. SUMMARY: This action proposes to revise Class E airspace at Bettles, AK. Two Standard Instrument Approach Procedures (SIAPs) are being developed for the Bettles Airport at Bettles, AK. Additionally, two SIAPs and a textual departure procedure

(DP)are being amended. Adoption of this proposal would result in revision of existing Class E airspace upward from 700 feet (ft.) and 1,200 ft. above the surface at the Bettles Airport, Bettles, AK. DATES: Comments must be received on or before March 17, 2008. ADDRESSES: Send comments on the proposal to the Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue, SE., West Building Ground Floor, Room W12-140, Washington, DC 20590-0001. You must identify the docket number FAA-2007-0342/Airspace Docket No. 07-AAL-20, at the beginning of your comments. You may also submit comments on the Internet at *http://www.regulations.gov* . You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Office (telephone 1-800-647-5527) is on the plaza level of the Department of Transportation NASSIF Building at the above address. An informal docket may also be examined during normal business hours at the office of the Manager, Safety, Alaska Flight Service Operations, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513-7587. FOR FURTHER INFORMATION CONTACT: Gary Rolf, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513-7587; telephone number

(907)271-5898; fax:

(907)271-2850; e-mail: *gary.ctr.rolf@faa.gov* . Internet address: *http://www.alaska.faa.gov/at* . SUPPLEMENTARY INFORMATION: Comments Invited Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2007-0342/Airspace Docket No. 07-AAL-20.” The postcard will be date/time stamped and returned to the commenter. All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket. Availability of Notice of Proposed Rulemaking's (NPRM's) An electronic copy of this document may be downloaded through the Internet at *http://www.regulations.gov* . Recently published rulemaking documents can also be accessed through the FAA's Web page at *http://www.faa.gov* or the Superintendent of Document's Web page at *http://www.access.gpo.gov/nara/index.html* . Additionally, any person may obtain a copy of this notice by submitting a request to the Federal Aviation Administration, Office of Air Traffic Airspace Management, ATA-400, 800 Independence Avenue, SW., Washington, DC 20591 or by calling

(202)267-8783. Communications must identify both docket numbers for this notice. Persons interested in being placed on a mailing list for future NPRM's should contact the FAA's Office of Rulemaking,

(202)267-9677, to request a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure. The Proposal The FAA is considering an amendment to the Code of Federal Regulations (14 CFR Part 71), which would revise the Class E airspace at the Bettles Airport, in Bettles, AK. The intended effect of this proposal is to revise Class E airspace upward from 700 ft. and 1,200 ft. above the surface to contain Instrument Flight Rules

(IFR)operations at the Bettles Airport, Bettles, AK. The FAA Instrument Flight Procedures Production and Maintenance Branch has developed two SIAPs and amended two SIAPs along with a DP for the Bettles Airport. The new approaches are

(1)the Area Navigation

(RNAV)Global Positioning System

(GPS)Runway

(RWY)01, Original

(Orig)and

(2)the RNAV

(GPS)RWY 19, 0rig. The amended approaches are

(1)the Very High Frequency Omni-directional Range (VOR)/Distance Measuring Equipment

(DME)RWY 03, Amendment

(Amdt)5,

(2)the Localizer (LOC)/DME RWY 21, Amdt 1. Textual DP's are unnamed and are published in the front of the U.S. Terminal Procedures for Alaska. Class E controlled airspace extending upward from 700 ft. and 1,200 ft. above the surface in the Bettles Airport area would be revised by this action. The proposed airspace is sufficient in size to contain aircraft executing the instrument procedures at the Bettles Airport, Bettles, AK. The area would be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The Class E airspace areas designated as surface areas are published in paragraph 6002 of FAA Order 7400.9R, *Airspace Designations and Reporting Points* , signed August 15, 2007, and effective September 15, 2007, which is incorporated by reference in 14 CFR 71.1. The Class E airspace areas designated as 700/1200 foot transition areas are published in paragraph 6005 in FAA Order 7400.9R, *Airspace Designations and Reporting Points* , signed August 15, 2007, and effective September 15, 2007, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document would be published subsequently in the Order. The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore —(1) is not a “significant regulatory action” under Executive Order 12866;

(2)is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and

(3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle 1, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart 1, Section 40103, Sovereignty and use of airspace. Under that section, the FAA is charged with prescribing regulations to ensure the safe and efficient use of the navigable airspace. This regulation is within the scope of that authority because it proposes to create Class E airspace sufficient in size to contain aircraft executing instrument procedures at the Bettles Airport, AK, and represents the FAA's continuing effort to safely and efficiently use the navigable airspace. List of Subjects in 14 CFR Part 71 Airspace, Incorporation by reference, Navigation (air). The Proposed Amendment In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows: PART 71—DESIGNATION OF CLASS A, CLASS B, CLASS C, CLASS D, AND CLASS E AIRSPACE AREAS; AIRWAYS; ROUTES; AND REPORTING POINTS 1. The authority citation for 14 CFR part 71 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389. § 71.1 [Amended] 2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation Administration Order 7400.9R, *Airspace Designations and Reporting Points* , signed August 15, 2007, and effective September 15, 2007, is to be amended as follows: Paragraph 6002 Class E Airspace Designated as Surface Areas. AAL AK E2 Bettles, AK [Revised] Bettles, Bettles Airport, AK (Lat. 66°54′50″ N., long. 151°31′44″ W.) That airspace within a 5.7-mile radius of the Bettles Airport. This Class E airspace area is effective during the specific dates and times established in advance by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Airport/Facility Directory. Paragraph 6005 Class E airspace extending upward from 700 feet or more above the surface of the earth. AAL AK E5 Bettles, AK [Revised] Bettles, Bettles Airport, AK (Lat. 66°54′50″ N., long. 151°31′44″ W.) That airspace extending upward from 700 feet above the surface within an 8.2-mile radius of the Bettles Airport, and within 3.9 miles either side of the 212°(T), 232°(M) bearing from the Bettles Airport, extending from the 8.2-mile radius to 11.3 miles southwest of the Bettles Airport; and that airspace extending upward from 1,200 feet above the surface within a 72-mile radius of the Bettles Airport. Issued in Anchorage, AK, on January 18, 2008. Anthony M. Wylie, Manager, Alaska Flight Services Information Area Group. [FR Doc. E8-1842 Filed 1-31-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF HOMELAND SECURITY Bureau of Customs and Border Protection 19 CFR Parts 4, 12, 18, 101, 103, 113, 122, 123, 141, 143, 149 and 192 [USCBP-2007-0077] RIN 1651-AA70 Importer Security Filing and Additional Carrier Requirements AGENCY: Customs and Border Protection, Department of Homeland Security. ACTION: Notice of proposed rulemaking; extension of comment period. SUMMARY: This document provides an additional 15 days for interested persons to submit comments on the proposed rule to amend the Customs and Border Protection

(CBP)regulations to require both importers and carriers to submit additional information pertaining to cargo before the cargo is brought into the United States by vessel. The proposed rule was published in the **Federal Register** on January 2, 2008, and the comment period was scheduled to expire on March 3, 2008. DATES: Comments on the proposed rule must be received on or before March 18, 2008. ADDRESSES: You may submit comments, identified by *docket number* , by *one* of the following methods: • *Federal eRulemaking Portal: http://www.regulations.gov* . Follow the instructions for submitting comments via docket number USCBP-2007-0077. • *Mail:* Border Security Regulations Branch, Office of International Trade, Customs and Border Protection, 1300 Pennsylvania Ave., NW., (Mint Annex), Washington, DC 20229. *Instructions:* All submissions received must include the agency name and document number for this rulemaking. All comments received will be posted without change to *http://www.regulations.gov* , including any personal information provided. For detailed instructions on submitting comments and additional information on the rulemaking process, see the “Public Participation” heading of the SUPPLEMENTARY INFORMATION section of the proposed rule. *Docket:* For access to the docket to read the notice of proposed rulemaking, background documents, or comments received, go to *http://www.regulations.gov* . Submitted comments may also be inspected during regular business days between the hours of 9 a.m. and 4:30 p.m. at the Office of International Trade, Customs and Border Protection, 799 9th Street, NW., 5th Floor, Washington, DC. Arrangements to inspect submitted comments should be made in advance by calling Mr. Joseph Clark at

(202)572-8768. FOR FURTHER INFORMATION CONTACT: Richard Di Nucci, Office of Field Operations,

(202)344-2513. SUPPLEMENTARY INFORMATION: Background Notice of Proposed Rulemaking CBP published a notice of proposed rulemaking in the **Federal Register** (73 FR 90) on January 2, 2008, proposing to require both importers and carriers to submit additional information pertaining to cargo before the cargo is brought into the United States by vessel. Under the proposed rule, CBP must receive this information by way of a CBP-approved electronic data interchange system. The proposed regulations are specifically intended to fulfill the requirements of section 203 of the Security and Accountability for Every

(SAFE)Port Act of 2006 and section 343(a) of the Trade Act of 2002, as amended by the Maritime Transportation Security Act of 2002. The notice of proposed rulemaking invited the public to comment on the proposal. Comments on the proposed rule were requested on or before March 3, 2008. Extension of Comment Period In response to the proposed rule published in the **Federal Register** , CBP has received correspondence requesting an extension of the comment period. A decision has been made to grant an extension of 15 days. Comments are now due on or before March 18, 2008. Dated: January 29, 2008. Sandra L. Bell, Executive Director, Regulations & Rulings, Office of International Trade. [FR Doc. E8-1864 Filed 1-31-08; 8:45 am] BILLING CODE 9111-14-P DEPARTMENT OF JUSTICE 28 CFR Part 58 [Docket No: EOUST 102] RIN 1105-AB17 Application Procedures and Criteria for Approval of Nonprofit Budget and Credit Counseling Agencies by United States Trustees AGENCY: Executive Office for United States Trustees (“EOUST”), Justice. ACTION: Notice of proposed rulemaking. SUMMARY: This notice of proposed rulemaking (“rule”) sets forth proposed procedures and criteria United States Trustees shall use when determining whether applicants seeking to become and remain approved nonprofit budget and credit counseling agencies satisfy all prerequisites of the United States Code, as implemented under this rule. Under current law every individual debtor shall have received adequate counseling from an approved nonprofit budget and credit counseling agency within 180 days before the date of filing for bankruptcy relief. The current law enumerates mandatory prerequisites and minimum standards applicants seeking to become approved nonprofit budget and credit counseling agencies must meet. Under this rule, United States Trustees will approve applicants for inclusion on publicly available agency lists in one or more federal judicial districts, if an applicant establishes it meets all the requirements of the United States Code, as implemented under this rule. After obtaining such an approval, a nonprofit budget and credit counseling agency shall be authorized to provide credit counseling in a federal judicial district during the time the agency remains approved. DATES: Submit comments on or before April 1, 2008. ADDRESSES: Comments on the rule may be submitted via *www.regulations.gov,* by telefax to

(202)305-8536, or by postal mail to Executive Office for United States Trustees (“EOUST”), 20 Massachusetts Ave., NW., 8th Floor, Washington, DC 20530. To ensure proper handling of comments, please reference “Docket No. EOUST 102” on all written and electronic correspondence. FOR FURTHER INFORMATION CONTACT: Henry Hobbs, Acting Chief, Credit Counseling & Debtor Education Unit, at

(202)514-4100 (not a toll-free number). SUPPLEMENTARY INFORMATION: Posting of Public Comments Please note that all comments received are considered part of the public record and made available for public inspection online at *http://www.regulations.gov.* Such information includes personal identifying information (such as your name, address, etc.) voluntarily submitted by the commenter. If you want to submit personal identifying information (such as your name, address, etc.) as part of your comment, but do not want it to be posted online, you must include the phrase “PERSONAL IDENTIFYING INFORMATION” in the first paragraph of your comment. You must also locate all the personal identifying information you do not want posted online in the first paragraph of your comment and identify what information you want redacted. If you want to submit confidential business information as part of your comment but do not want it to be posted online, you must include the phrase “CONFIDENTIAL BUSINESS INFORMATION” in the first paragraph of your comment. You must also prominently identify confidential business information to be redacted within the comment. If a comment has so much confidential business information that it cannot be effectively redacted, all or part of that comment may not be posted on *http://www.regulations.gov.* Personal identifying information and confidential business information identified and located as set forth above will be placed in the agency's public docket file, but not posted online. If you wish to inspect the agency's public docket file in person by appointment, please see the FOR FURTHER INFORMATION CONTACT paragraph. Comments filed after the end of the comment period may be considered to the extent feasible. Discussion of Rule This rule implements those sections of Public Law No. 109-8, 119 Stat. 23, 37, 38 (April 20, 2005) codified at 11 U.S.C. 109(h)(1) and 111. Effective October 17, 2005, an individual may not be a debtor under title 11 of the United States Code unless during the 180-day period preceding the date of filing a bankruptcy petition, the individual receives adequate counseling from an approved nonprofit budget and credit counseling agency. 11 U.S.C. 109(h)(1) and 111. *See also* H.R. Rep. 109-31, pt. 1 at 2 (the Bankruptcy Code “requires debtors to receive credit counseling before they can be eligible for bankruptcy relief so that they will make an informed choice about bankruptcy, its alternatives, and consequences”). Section 111(b) of title 11, United States Code, governs the approval by United States Trustees of nonprofit budget and credit counseling agencies for inclusion under 11 U.S.C. 111(a)(1) on publicly available agency lists in one or more United States district courts. Section 111 of title 11 provides that, in applicable jurisdictions, a United States Trustee may approve an application to become an approved nonprofit budget and credit counseling agency only after the United States Trustee has thoroughly reviewed the applicant's

(a)qualifications, and

(b)services. 11 U.S.C. 111(b)(1). A United States Trustee has statutory authority to require an applicant to provide information with respect to such review. 11 U.S.C. 111(b)(1). After completing that thorough review, a United States Trustee may approve a nonprofit budget and credit counseling agency only if the agency establishes that it fully satisfies all requisite standards. 11 U.S.C. 111(b). Among other things, an applicant must establish it will

(a)provide qualified counselors,

(b)maintain adequate provision for safekeeping and payment of client funds,

(c)provide adequate counseling with respect to client credit problems, and

(d)deal responsibly and effectively with other matters relating to the quality, effectiveness, and financial security of the services it provides. 11 U.S.C. 111(c)(1). This proposed rule will implement those statutory requirements. By accomplishing that, the rule will help debtors obtain adequate counseling from competent credit counseling agencies, and help safeguard their funds. It also will provide an appropriate mechanism by which entities can apply for approval under section 111 of title 11 to become nonprofit budget and credit counseling agencies, and will enable such applicants to attempt to meet their burden of establishing they should be approved by United States Trustees under 11 U.S.C. 111. This rule, once final, will supersede the provisions that address credit counseling agencies in EOUST's Interim Final Rule published on July 5, 2006 (71 FR 38076) entitled *Application Procedures and Criteria for Approval of Nonprofit Budget and Credit Counseling Agencies and Approval of Providers of a Personal Financial Management Instructional Course by United States Trustees* (“Interim Final Rule”). The credit counseling provisions are currently codified at 28 CFR 58.15, 58.16, and 58.17. Due to the necessity of quickly establishing a regulation to govern the credit counseling application process, EOUST promulgated the Interim Final Rule rather than a notice of proposed rulemaking. Based upon experience administering the Interim Final Rule, and upon consideration of comments received regarding the Interim Final Rule, EOUST promulgates this rule as a notice of proposed rulemaking in an effort to maximize public input. EOUST will respond to the comments to the Interim Final Rule and this rule when it publishes the final rule. EOUST will also publish another notice of proposed rulemaking that addresses providers of a financial management instructional course with a RIN number of 1105-AB31. In an effort to make information more accessible and understandable, several changes to the Interim Final Rule are proposed in this rule, along with other changes to enhance consumer protections. Some of the more significant changes include the following:

(1)Adding identification procedures for clients when accessing Internet or telephone counseling sessions;

(2)establishing a limit for credit counseling fees to be presumed reasonable;

(3)preserving clients' rights under 11 U.S.C. 502(k);

(4)requiring agencies to provide additional counseling at no extra cost to clients when a debt repayment plan has been completed or terminated so that clients may file bankruptcy if they so choose;

(5)providing guidance on agencies' responsibilities to individuals with limited English proficiency; and

(6)requiring appropriate disclosures be made before providing services to clients, such as an agency's fee policy and the prohibition from receiving referral fees. Executive Order 12866 This rule has been drafted and reviewed in accordance with Executive Order 12866, “Regulatory Planning and Review” section 1(b), The Principles of Regulation. The Department has determined that this rule is a “significant regulatory action” and, accordingly, this rule has been reviewed by the Office of Management and Budget (“OMB”). The Department has also assessed both the costs and benefits of this rule as required by section 1(b)(6) and has made a reasoned determination that the benefits of this regulation justify its costs. The costs considered in this regulation include the required costs for the submission of an application. Costs considered also include the cost of establishing and maintaining the approved list in each federal judicial district. In an effort to minimize the burden on applicants, the application keeps the number of items on the application to a minimum. The costs to an applicant will be minimal. The anticipated costs are the photocopying and mailing of the requested records, along with the salaries of the employees who complete the applications. Based upon the available information, experience with the credit counseling industry, and informal communications with credit counseling agencies, it is anticipated that this cost should equal approximately $500 per application for agencies. This cost is not new; it is the same cost that credit counseling agencies incurred when applying under the Interim Final Rule. Public comments regarding the cost to applicants in completing the application are requested. Applicants that offer debt repayment plans must also obtain a surety bond in the amount of 2% of the agency's disbursements made during the previous 12 months from all trust accounts attributable to the federal judicial districts (or, if not feasible to determine, the states) in which the agency seeks approval from the United States Trustee or equal to the average daily balance maintained for the 6 months immediately prior to submission of the application in all trust accounts attributable to the federal judicial districts (or, if not feasible to determine, the states) in which the agency seeks approval from the United States Trustee. In addition, credit counseling agencies that offer debt repayment plans must obtain employee fidelity insurance in a face amount equal to 50% of the surety bond. Credit counseling agencies are entitled to receive a credit for any state bond or employee fidelity insurance already obtained. Although applicants may charge a fee for providing the credit counseling services in accordance with this rule, agencies must provide credit counseling without regard to a client's ability to pay the fee. Based upon the available information, current practice of many credit counseling agencies, experience with the credit counseling industry, and informal communications with credit counseling agencies, $50 is presumed to be a reasonable fee for credit counseling. The United States Government Accountability Office, after conducting a study on credit counseling, found that $50 was the typical rate charged by credit counseling agencies and that industry observers and consumer advocates considered this amount to be reasonable. Public comments as to the reasonableness of $50 for credit counseling are requested. The amount presumed to be reasonable for credit counseling fees will be reviewed periodically, but not less than every four years, and the amount presumed to be reasonable will be published by notice in the **Federal Register** and identified on EOUST's Web site. In addition, all applicants must waive the fee if the client demonstrates a lack of ability to pay the fee, which shall be presumed if the client's household current income is less than 150% of the income of the official poverty line as identified by the United States Department of Health and Human Services applicable to a household of the same size. The number of applicants that will ultimately apply is unknown, although EOUST believes that approximately 300 may ultimately apply to be approved credit counseling agencies. Currently, there are approximately 160 approved agencies. The annual hour burden on agencies is estimated to be 10 hours. This estimate is based on consultations with individuals in the credit counseling industry, and experience with applicants who completed the initial applications. Public comments regarding the annual hour burden on credit counseling agencies in completing the application are requested. The EOUST consulted with the Federal Trade Commission (“FTC”) and with the Internal Revenue Service (“IRS”) in drafting this rule and the EOUST does not believe the rule has an adverse effect upon either agency. The benefits of this rule include the development of standards that increase consumer protections, such as a limit on the presumption of reasonable fees, requirement that agencies provide adequate disclosures concerning agencies' policies, and the preservation of clients' rights under section 502(k). This rule also provides for greater supervision by the United States Trustee to ensure agencies employ proper procedures to safeguard client funds. These benefits justify its costs in complying with Congress' mandate that a list of approved agencies be established. Public Law No. 109-8, § 106(e)(1). Executive Order 13132 This rule will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. Paperwork Reduction Act The information collection requirements contained in this rule have been approved by OMB in accordance with the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 to 3520, and assigned OMB control number 1105-0084 for form EOUST-CC1, the *“Application for Approval as a Nonprofit Budget and Credit Counseling Agency.”* The Department notes that full notice and comment opportunities were provided to the general public through the Paperwork Reduction Act process, and that the applications and associated requirements were modified to take into account the concerns of those who commented in this process. Regulatory Flexibility Act In accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), the Director has reviewed this rule and by approving it certifies that it will not have a significant economic impact on a substantial number of small entities. This certification is based upon experience in administering the Interim Final Rule where the surety bond and insurance requirements are less than 1% of gross revenue and also less than 1% of total expenditures for the large majority of credit counseling agencies considered to be small businesses. Unfunded Mandates Reform Act of 1995 This rule does not require the preparation of an assessment statement in accordance with the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531. This rule does not include a federal mandate that may result in the annual expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of more than the annual threshold established by the Act ($100 million). Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995. Small Business Regulatory Enforcement Fairness Act of 1996 This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 801 *et seq.* This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, and innovation; or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets. Privacy Act Statement Section 111 of title 11, United States Code, authorizes the collection of this information. The primary use of this information is by the United States Trustee to approve nonprofit budget and credit counseling agencies. The United States Trustee will not share this information with any other entity unless authorized under the Privacy Act, 5 U.S.C. 552a *et seq.* EOUST has published a System of Records Notice that delineates the routine use exceptions authorizing disclosure of information. 71 FR 59818, 59827 (Oct. 11, 2006), JUSTICE/UST-005, Credit Counseling and Debtor Education Files and Associated Records. Public Law 104-134 (April 26, 1996) requires that any person doing business with the federal government furnish a Social Security Number or Tax Identification Number. This is an amendment to section 7701 of title 31, United States Code. Furnishing the Social Security Number, as well as other data, is voluntary, but failure to do so may delay or prevent action on the application. List of Subjects in 28 CFR Part 58 Administrative practice and procedure, Bankruptcy, Credit and debts. Accordingly, for the reasons set forth in the preamble, part 58 of chapter I of title 28 of the Code of Federal Regulations is proposed to be amended as follows: PART 58—[AMENDED] 1. The authority citation for part 58 is revised to read as follows: Authority: 5 U.S.C. 301, 552; 11 U.S.C. 109(h), 111, 521(b), 727(a)(11), 1141(d)(3); 1202; 1302;1328(g), 28 U.S.C. 509, 510, 586, 589b. 2. Add §§ 58.12, 58.13 and 58.14 to read as follows: § 58.12 Definitions.

(a)The following definitions apply to sections 58.12 through and including 58.24 of this part, as well as the applications and other materials agencies submit in an effort to establish they meet the requirements necessary to become an approved nonprofit budget and credit counseling agency.

(b)These terms shall have these meanings:

(1)The term “accreditation” means the accreditation that an accrediting organization bestows upon an agency because the accrediting organization has determined the agency meets or exceeds all the accrediting organization's standards;

(2)The term “accrediting organization” means either an entity that provides accreditation to agencies or provides certification to counselors, provided, however, that an accrediting organization shall:

(i)not be an agency or affiliate of any agency; and

(ii)be deemed acceptable by the United States Trustee;

(3)The term “adequate counseling” means the actual receipt by a client from an approved agency of all counseling services, and all other applicable services, rights, and protections specified in:

(i)11 U.S.C. 109(h)(1);

(ii)11 U.S.C. 111; and

(iii)this rule;

(4)The term “affiliate of an agency” includes:

(i)every entity that is an affiliate of the agency, as the term “affiliate” is defined in 11 U.S.C. 101(2), except that the word “agency” shall be substituted for the word “debtor” in 11 U.S.C. 101(2);

(ii)each of an agency's officers and each of an agency's directors; and

(iii)every relative of an agency's officers and every relative of an agency's directors;

(5)The term “agency” and the term “budget and credit counseling agency” shall each mean a nonprofit organization that is applying under this rule for United States Trustee approval to be included on a publicly available list in one or more United States district courts, as authorized by 11 U.S.C. 111(a)(1), and shall also mean, whenever appropriate, an approved agency;

(6)The term “application” means the application and related forms, including appendices, approved by the Office of Management and Budget as form EOUST-CC1, *Application for Approval as a Nonprofit Budget and Credit Counseling Agency* , as it shall be amended from time to time;

(7)The term “approved agency” means an agency currently approved by a United States Trustee under 11 U.S.C. 111 as an approved nonprofit budget and credit counseling agency eligible to be included on one or more lists maintained under 11 U.S.C. 111(a)(1);

(8)The term “approved list” means the list of agencies currently approved by a United States Trustee under 11 U.S.C. 111 as currently published on the United States Trustee Program's Internet site on the United States Department of Justice's Internet site;

(9)The term “audited financial statements” means financial reports audited by independent certified public accountants in accordance with generally accepted accounting principles as defined by the American Institute of Certified Public Accountants;

(10)The term “certificate” means the certificate identified in 11 U.S.C. 521(b)(1) that an approved agency shall provide to a client after the client completes counseling services;

(11)The term “client” means an individual who seeks, receives or has received counseling services from an approved agency;

(12)The term “counseling services” means all counseling required by 11 U.S.C. 109(h) and 111, and this rule including, without limitation, services that are typically of at least 60 minutes in duration and that shall at a minimum include:

(i)Performing on behalf of, and providing to, each client a written analysis of each client's current financial condition, which analysis shall include a budget analysis, consideration of all alternatives to resolve a client's credit problems, discussion of the factors that caused such financial condition, and identification of all methods by which the client can develop a plan to respond to the financial problems without incurring negative amortization of debt; and

(ii)Providing each client the opportunity to have the agency negotiate an alternative payment schedule with regard to each unsecured consumer debt under terms as set forth in 11 U.S.C. 502(k) or, if the client accepts this option and the agency is unable to provide this service, the agency shall refer the client to another approved agency in the appropriate federal judicial district that provides it;

(13)The term “counselor certification” means certification of a counselor by an accrediting organization because the accrediting organization has determined the counselor meets or exceeds all the accrediting organization's standards for counseling services or related areas, such as personal finance, budgeting, or credit or debt management;

(14)The term “criminal background check” means a report generated by the Federal Bureau of Investigation disclosing the entire criminal history record, if any, of the counselor for whom the criminal background check is sought. Whenever the Federal Bureau of Investigation does not have access to, or provides, less than the entire state criminal history record of the counselor, then the term “criminal background check” shall also include the entire state criminal history record, if any, of every state law enforcement agency where the counselor has resided for any part of the immediately preceding five years. If a criminal background check is not available from the Federal Bureau of Investigation and is not authorized by state law in the residential state of the employee, the agency shall instead obtain at least every 5 years a sworn statement from each counselor attesting to whether the counselor has been convicted of a felony, or a crime involving fraud, dishonesty, or false statements;

(15)The term “debt repayment plan” means any written document suggested, drafted, or reviewed by an approved agency that either proposes or implements any mechanism by which a client would make payments to any creditor or creditors if, during the time any such payments are being made, that creditor or those creditors would forbear from collecting or otherwise enforcing their claim or claims against the client; provided, however, that any such written document shall not constitute a debt repayment plan if the client would incur a negative amortization of debt under it;

(16)The term “Director” means the person designated or acting as the Director of the Executive Office for United States Trustees;

(17)The term “entity” shall have the meaning given that term in 11 U.S.C. 101(15);

(18)The term “fair share” means payments by a creditor to an approved agency for administering a debt repayment plan;

(19)The terms “fee” and “fee policy” each mean the aggregate of all fees, contributions, and payments an approved agency charges clients for providing counseling services; “fee policy” shall also mean the objective criteria the agency uses in determining whether to waive or reduce any fee, contribution, or payment;

(20)The term “final decision” means the decision issued by the Director that reviews the United States Trustee's decision either to deny an agency's application or to remove an agency from the approved list;

(21)The term “financial benefit” means any interest equated with money or its equivalent, including, but not limited to, stock, bonds, other investments, income, goods, services, or receivables;

(22)The term “governmental unit” shall have the meaning given that term in 11 U.S.C. 101(27);

(23)The term “independent contractor” means a person or entity who provides any good or service to an approved agency other than as an employee and as to whom the approved agency does not:

(i)Direct or control the means or methods of delivery of the service or goods being provided;

(ii)Make financial decisions concerning the business aspects of the goods or services being provided; and

(iii)Have any common employees;

(24)The term “languages offered” means every language other than English in which an approved agency provides counseling services;

(25)The term “legal advice” shall have the meaning given that term in 11 U.S.C. 110(e)(2);

(26)The term “limited English proficiency” means, alternatively:

(i)An inability to speak, read, write, or understand the English language; or

(ii)The use primarily of a language other than English in a person's daily affairs;

(27)The term “locator” means any entity that assists a prospective client find an approved agency or agencies for the purpose of receiving counseling services, unless such entity is the approved agency proposing to provide counseling services to the prospective client;

(28)The term “material change” means, alternatively, any change:

(i)In the name, structure, principal contact, management, staffing, physical location, counseling services, fee policy, or method of delivery of an approved agency; or

(ii)That renders inapplicable, inaccurate, incomplete, or misleading any statement an agency or approved agency previously made:

(A)In its application or related materials; or

(B)To the United States Trustee;

(29)The term “median family income” shall have the meaning given that term in 11 U.S.C. 101(39A);

(30)The term “method of delivery” means one or more of the 3 methods by which an approved agency can provide some component of counseling services to its clients, including:

(i)“in person” delivery, which applies when a client primarily receives counseling services at a physical location with a credit counselor physically present in that location, and with the credit counselor providing oral and/or written communication to the client at the facility;

(ii)“telephone” delivery, which applies when a client primarily receives counseling services by telephone; and

(iii)“Internet” delivery, which applies when a client primarily receives counseling services through an Internet website;

(31)The term “nonprofit” means, alternatively:

(i)An entity validly organized as a not-for-profit entity under applicable state or federal law, if that entity operates as a not-for-profit entity in full compliance with all applicable state and federal law; or

(ii)A qualifying governmental unit;

(32)The term “notice” in 28 CFR 58.24 means the written communication from the United States Trustee to an agency that its application to become an approved agency has been denied or to an approved agency that it is being removed from the approved list;

(33)The term “qualifying government unit” means any governmental unit that, were it not a governmental unit, would qualify for tax-exempt status under 26 U.S.C. 501(c)(3), or would qualify as a nonprofit entity under applicable state law;

(34)The term “referral fees” means money or any other valuable consideration paid or transferred between an approved agency and another entity in return for that entity, directly or indirectly, identifying, referring, securing, or in any other way encouraging any client or potential client to receive counseling services from the approved agency; provided, however, that “referral fees” shall not include fees paid to:

(i)The agency under a fair share agreement; or

(ii)Any locator;

(35)The term “relative” shall have the meaning given that term in 11 U.S.C. 101(45);

(36)The term “request for review” means the written communication from an agency to the Director seeking review of the United States Trustee's decision either to deny the agency's application or to remove the agency from the approved list;

(37)The term “state” means state, commonwealth, district, or territory of the United States;

(38)The term “tax waiver” means a document sufficient to permit the Internal Revenue Service to release directly to the United States Trustee information about an agency;

(39)The term “trust account” means an account with a federally insured depository institution that is separated and segregated from operating accounts, which an approved agency shall maintain in its fiduciary capacity for the purpose of receiving and holding client funds entrusted to the approved agency; and

(40)The term “United States Trustee” means, alternatively:

(i)The Executive Office for United States Trustees;

(ii)A United States Trustee appointed under 28 U.S.C. 581;

(iii)A person acting as a United States Trustee;

(iv)An employee of a United States Trustee; or

(v)Any other entity authorized by the Attorney General to act on behalf of the United States under this rule. § 58.13 Procedures all agencies shall follow when applying to become approved agencies.

(a)An agency applying to become an approved agency shall obtain an application, including appendices, from the United States Trustee.

(b)The agency shall complete the application, including its appendices, and attach the required supporting documents requested in the application.

(c)The agency shall submit the original of the completed application, including completed appendices and the required supporting documents, and one additional copy of those, to the United States Trustee at the address specified on the application form.

(d)The application shall be signed by an agency representative who is authorized under applicable law to sign on behalf of the applying agency.

(e)The signed application, completed appendices, and required supporting documents shall be accompanied by a writing, signed by the signatory of the application and executed on behalf of the signatory and the agency, certifying the application does not:

(1)Falsify, conceal, or cover up by any trick, scheme or device a material fact;

(2)Make any materially false, fictitious, or fraudulent statement or representation; or

(3)Make or use any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry.

(f)The United States Trustee shall not consider an application that:

(1)Is incomplete;

(2)Fails to include the completed appendices or all of the required supporting documents; or

(3)Is not accompanied by the certification identified in the preceding subsection.

(g)The United States Trustee shall not consider an application on behalf of an agency if:

(1)It is submitted by any entity other than the agency; or

(2)Either the application or the accompanying certification is executed by any entity other than an agency representative who is authorized under applicable law to sign on behalf of the agency.

(h)By the act of submitting an application, an agency consents to the release and disclosure of its name and contact information on the approved list should its application be approved. § 58.14 Automatic expiration of agencies' status as approved agencies.

(a)Except as provided in 28 CFR 58.15(c), if an approved agency was not an approved agency immediately prior to the date it last obtained approval to be an approved agency, such an approved agency shall cease to be an approved agency 6 months from the date on which it was approved unless the United States Trustee approves an additional 1-year period.

(b)Except as provided in 28 CFR 58.15(c), if an approved agency was an approved agency immediately prior to the date it last obtained approval to be an approved agency, such an agency shall cease to be an approved agency 1 year from the date on which it was last approved to be an approved agency unless the United States Trustee approves an additional 1-year period. 3. Sections 58.15 through 58.17 are revised to read as follows. § 58.15 Procedures all approved agencies shall follow when applying for approval to act as an approved agency for an additional 1-year period.

(a)To be considered for approval to act as an approved agency for an additional 1-year term, an approved agency shall reapply by complying with all the requirements specified for agencies under 11 U.S.C. 109(h)(1) and 111, and under this rule.

(b)Such an agency shall apply no later than 45 days prior to the expiration of its six-month probationary period or annual period in order to be considered for approval for an additional 1-year period, unless a written extension is granted by the United States Trustee.

(c)An approved agency that has complied with all prerequisites for applying to act as an approved agency for an additional 1-year period may continue to operate as an approved agency while its application is under review by the United States Trustee, so long as either the application for an additional 1-year period was timely submitted, or an agency receives a written extension from the United States Trustee. § 58.16 Renewal for an additional 1-year period. If an approved agency's application for an additional 1-year period is approved, such renewal period shall begin to run from the later of:

(a)The day after the expiration date of the immediately preceding approval period; or

(b)The actual date of approval of such renewal by the United States Trustee. § 58.17 Mandatory duty of approved agencies to notify United States Trustees of material changes.

(a)An approved agency shall immediately notify the United States Trustee in writing of any material change.

(b)An approved agency shall immediately notify the United States Trustee in writing of any failure by the approved agency to comply with any standard or requirement specified in 11 U.S.C. 109(h) or 111, this rule, or the terms under which the United States Trustee approved it to act as an approved agency.

(c)An approved agency shall immediately notify the United States Trustee in writing of any of the following events:

(1)Notification by the Internal Revenue Service or by a state or local taxing authority that the approved agency has been selected for audit or examination regarding its tax-exempt status, or any notification of a compliance check by the Internal Revenue Service or by a state or local taxing authority;

(2)Revocation or termination of the approved agency's tax-exempt status by any governmental unit or by any judicial officer;

(3)Cessation of business by the approved agency or by any office of the agency, or withdrawal from any federal judicial district(s) where the approved agency is approved;

(4)Any investigation of, or any administrative or judicial action brought against, the approved agency by any governmental unit;

(5)Termination or cancellation of any surety bond or fidelity insurance;

(6)Any administrative or judicial action brought by any entity that seeks recovery against a surety bond or fidelity insurance;

(7)Any action by a governmental unit or a court to suspend or revoke the approved agency's articles of incorporation, or any license held by the approved agency, or any authorization necessary to engage in business;

(8)A suspension, or action to suspend, any accreditation held by the approved agency, or any withdrawal by the approved agency of any application for accreditation, or any denial of any application of the approved agency for accreditation;

(9)A change in the approved agency's nonprofit status under any applicable law; and

(10)Any change in the banks or financial institutions used by the agency.

(d)An agency shall notify the United States Trustee in writing if any of the changes identified in paragraphs

(a)through

(c)of this section occur while its application to become an approved agency is pending before the United States Trustee.

(e)An approved agency whose name or other information appears incorrectly on the approved list shall immediately submit a written request to the United States Trustee asking that the information be corrected. 4. Sections 58.18 through 58.24 are added to read as follows: § 58.18 Mandatory duty of approved agencies to obtain prior permission from the United States Trustee before taking certain actions.

(a)By accepting the designation to act as an approved agency, an agency agrees to obtain approval from the United States Trustee, prior to making any of the following changes:

(1)Cancellation or change in amount of the surety bond or employee fidelity bond or insurance;

(2)The engagement of an independent contractor to provide counseling services or to have access to, possession of, or control over client funds;

(3)Any increase in the fees, contributions, or payments received from clients for counseling services or a change in the agency's fee policy;

(4)Expansion into additional federal judicial districts;

(5)Any changes to the method of delivery the approved agency employs to provide counseling services; or

(6)Any changes in the approved agency's counseling services.

(b)An agency applying to become an approved agency shall also obtain approval from the United States Trustee before taking any action specified in paragraph

(a)of this section. It shall do so by submitting an amended application. The agency's amended application shall be accompanied by a contemporaneously executed writing, signed by the signatory of the application, that makes the certifications specified in 28 CFR 58.13(e).

(c)An approved agency shall not transfer or assign its United States Trustee approval to act as an approved agency. § 58.19 Criteria agencies shall satisfy to become and remain approved agencies.

(a)To become an approved agency, an agency must affirmatively establish, to the satisfaction of the United States Trustee, that the agency at the time of approval:

(1)Satisfies every requirement of this rule; and

(2)Provides adequate counseling to its clients.

(b)To remain an approved agency, an approved agency shall affirmatively establish, to the satisfaction of the United States Trustee, that the approved agency:

(1)Has satisfied every requirement of this rule;

(2)Has provided adequate counseling to its clients; and

(3)Would continue to satisfy both paragraphs (b)(1) and

(2)of this section in the future. § 58.20 Minimum qualifications agencies shall meet to become and remain approved agencies. To meet the minimum qualifications set forth in 28 CFR 58.19, and in addition to the other requirements set forth in this rule, agencies and approved agencies shall comply with paragraphs

(a)through

(p)of this section on a continuing basis:

(a)*Compliance with all laws* . An agency shall comply with all applicable laws and regulations of the United States and each state in which the agency provides counseling services including, without limitation, all laws governing licensing and registration.

(b)*Prohibition on Legal Advice* . An agency shall not provide legal advice.

(c)*Structure and organization* . An agency shall:

(1)Be lawfully organized and operated as a nonprofit entity; and

(2)Have a board of directors the majority of which:

(i)are not relatives;

(ii)are not employed by such agency; and

(ii)will not directly or indirectly benefit financially from the outcome of the counseling services provided by such agency.

(d)*Ethical standards* . An agency shall:

(1)Not engage in any conduct or transaction, other than counseling services, that generates a direct or indirect financial benefit for any member of the board of directors or trustees, officer, supervisor, or any relative thereof;

(2)Ensure no member of the board of directors or trustees, officer, or supervisor receives any commissions, incentives, bonuses, or benefits (monetary or non-monetary) of any kind that are directly or indirectly based on the financial or legal decisions any client or potential client makes after requesting counseling services;

(3)Ensure no member of the board of directors or trustees, officer or supervisor is a relative of an employee of the United States Trustee, a trustee appointed under 11 U.S.C. 586(a)(1) or

(b)for any Federal judicial district where the agency is providing or is applying to provide counseling services, a federal judge in any Federal judicial district where the agency is providing or is applying to provide counseling services, a Federal court employee in any Federal judicial district where the agency is providing or is applying to provide counseling services, or a certified public accountant that audits the agency's trust account;

(4)Not enter into any referral agreement or receive any financial benefit that involves the agency paying to or receiving from any entity or person referral fees for the referral of clients to or by the agency, except payments:

(i)Under a fair share agreement; or

(ii)To any locator;

(5)Not enter into agreements involving counseling services that create a conflict of interest; and

(6)Not provide counseling services to a client with whom the agency has a lender-borrower relationship.

(e)*Use of credit counselors* . An agency shall have a credit counselor provide the counseling services to each of the agency's clients. The credit counselor shall interact with the client regarding the accuracy of the information obtained from the client and the alternatives available to the client for dealing with his or her current financial situation, including the plan developed to address such financial situation.

(f)*Credit counselor training, certification and experience* . An agency shall:

(1)Use only counselors who possess adequate experience providing credit counseling, which shall mean that each counselor either:

(i)Holds a counselor certification and who have complied with all continuing education requirements necessary to maintain their counselor certification; or

(ii)Has successfully completed a course of study and worked a minimum of 6 months in a related area such as personal finance, budgeting, or credit or debt management. A course of study shall include training in counseling skills, personal finance, budgeting, or credit or debt management. A counselor shall also receive annual continuing education in the areas of counseling skills, personal finance, budgeting, or credit or debt management;

(2)Demonstrate adequate experience, background, and quality in providing credit counseling, which shall mean that, at a minimum, the agency shall either:

(i)Have experience in providing credit counseling for the 2 years immediately preceding the relevant application date; or

(ii)For each office providing counseling services, employ at least one supervisor who has met the qualifications in paragraph (f)(2)(i) of this section for no less than 2 of the 5 years preceding the relevant application date; and

(3)If offering any component of counseling services by a telephone or Internet method of delivery, use only counselors who, in addition to all other requirements, demonstrate sufficient experience and proficiency in providing such counseling services by those methods of delivery, including proficiency in employing verification procedures to ensure the person receiving the counseling services is the client, and to determine whether the client has completely received counseling services.

(g)*No variation in services* . An agency shall ensure that the type and quality of services do not vary based on a client's decision whether to obtain a certificate in lieu of other options that may or may not be suggested by the agency.

(h)*Use of the telephone and the Internet to deliver a component of client services* . An agency shall:

(1)Not provide any client diminished counseling services because the client receives any portion of those counseling services by telephone or Internet;

(2)Confirm the identity of the client before receiving counseling services by telephone or Internet by:

(i)Obtaining one or more unique personal identifiers from the client and assigning an individual access code, user ID, or password at the time of enrollment; and

(ii)Requiring the client to provide the appropriate access code, user ID, or password, and also one or more of the unique personal identifiers during the course of delivery of the counseling services.

(i)*Services to hearing and hearing-impaired clients and potential clients* . An agency shall furnish toll-free telephone numbers for both hearing and hearing-impaired clients and potential clients whenever telephone communication is required. The agency shall provide telephone amplification, sign language services, or other communication methods for hearing-impaired clients or potential clients.

(j)*Language services to clients and potential clients* . An agency shall communicate, in writing and orally, with clients and potential clients in the languages of the major population groups served by the agency. The agency shall provide or arrange for bilingual personnel, interpreters, or the use of communication technology, as needed, in such languages. The agency shall inform any client or potential client with limited English proficiency of the languages offered in providing counseling services. Whenever an agency cannot provide counseling services to a client or a potential client due to a person's limited English proficiency, the agency shall employ its best efforts to expeditiously direct such person to one or more approved agencies that can provide counseling services in the language of the client or potential client's choice.

(k)*Services to clients and potential clients with special needs* . An agency that provides any portion of its counseling in person shall comply with all federal, state and local laws governing facility accessibility. An agency shall also provide or arrange for communication assistance for clients or potential clients with special needs who have difficulty making their service needs known.

(l)*Mandatory disclosures to clients and potential clients* . Prior to providing any information to or obtaining any information from a client or potential client, and prior to rendering any counseling service, an agency shall disclose:

(1)The agency's fee policy;

(2)The agency's policies enabling clients to obtain counseling services for free or at reduced rates based upon the client's lack of ability to pay;

(3)The agency's funding sources;

(4)The counselors' qualifications;

(5)The potential impacts on credit reports of all alternatives the agency may discuss with the client;

(6)The agency's policy prohibiting it from paying or receiving referral fees for the referral of clients to or by the agency, except:

(i)Under a fair share agreement; or

(ii)To any locator;

(7)The agency's obligation to provide a certificate to the client promptly upon the completion of counseling services;

(8)The client's right to negotiate an alternative payment schedule with regard to each unsecured consumer debt under terms as set forth in 11 U.S.C. 502(k);

(9)The fact that the agency might disclose client information to the United States Trustee in connection with the United States Trustee's oversight of the agency, or during the investigation of complaints, during on-site visits, or during quality of service reviews;

(10)The fact that the United States Trustee has reviewed only the agency's counseling services, and the fact that the United States Trustee has neither reviewed nor approved any other services the agency provides to clients; and

(11)The fact that a client will receive a certificate only if the client completes counseling services.

(m)*Complaint Procedures* . An agency shall employ complaint procedures that adequately respond to clients' concerns.

(n)*Background checks* . An agency shall:

(1)Conduct a criminal background check at least every 5 years for each person providing credit counseling, and

(2)Not employ anyone as a counselor who has been convicted of any felony, or any crime involving fraud, dishonesty, or false statements, unless the United States Trustee determines circumstances warrant a waiver of this prohibition against employment.

(o)*Agency records* . An agency shall prepare and retain records that enable the United States Trustee to evaluate whether the agency is providing adequate counseling and acting in compliance with all applicable laws and this rule. All records, including documents bearing original signatures, shall be maintained in either hard copy form or electronically in a format widely available commercially. Records that the agency shall prepare and retain for a minimum of two years, and permit review by the United States Trustee upon request, shall include:

(1)Upon the filing of an application for probationary approval, all information requested by the United States Trustee as an estimate, projected to the end of the probationary period, in the form requested by the United States Trustee;

(2)After probationary or annual approval, and for so long as the agency remains on the approved list, semi-annual reports of historical data (for the periods ending June 30 and December 31 of each year), of the type and in the form requested by the United States Trustee; these reports shall be submitted within 30 days of the end of the applicable periods specified in this paragraph;

(3)Annual audited financial statements, including the audited balance sheet, statement of income and retained earnings, and statement of changes in financial condition;

(4)Books, accounts, and records to provide a clear and readily understandable record of all business conducted by the agency, including without limitation, copies of all correspondence with or on behalf of the client, including the contract between the agency and the client and any amendments thereto;

(5)Records concerning the delivery of services to clients and potential clients with limited English proficiency and special needs, and to hearing-impaired clients and potential clients, including records:

(i)Of the number of such clients;

(ii)Of which languages are offered;

(iii)Detailing the agency's best efforts to provide services to such clients and potential clients; and

(iv)Supporting any justification if the agency did not provide services to such clients or potential clients;

(6)Records concerning the delivery of counseling services to clients for free or at reduced rates based upon the client's lack of ability to pay, including records of the number of such clients and the extent to which the agency voluntarily waived all or part of its fees under 28 CFR 58.21(c);

(7)Records of complaints and the agency's responses thereto;

(8)Records that enable the agency to verify the authenticity of certificates their clients file in bankruptcy cases; and

(9)Records that enable the agency to issue replacement certificates.

(p)*Additional minimum requirements* . An agency shall:

(1)Provide records to the United States Trustee upon request;

(2)Cooperate with the United States Trustee by allowing scheduled and unscheduled on-site visits, complaint investigations, or other reviews of the agency's qualifications to be an approved agency;

(3)Cooperate with the United States Trustee by promptly responding to questions or inquiries from the United States Trustee;

(4)Assist the United States Trustee in identifying and investigating suspected fraud and abuse by any party participating in the credit counseling or bankruptcy process;

(5)Not exclude any client or creditor from a debt repayment plan because the creditor declines to make a fair share contribution to the agency;

(6)Take no action that would limit, inhibit, or prevent a client from bringing an action or claim for damages against an agency under any applicable law, including but not limited to 11 U.S.C. 111(g)(2);

(7)Refer clients and prospective clients for counseling services only to agencies that have been approved by a United States Trustee to provide such services;

(8)Comply with the United States Trustee's directions on approved advertising, including without limitation those set forth in appendix A to the application;

(9)Not disclose or provide to a credit reporting agency any information concerning whether a client has received or sought instruction concerning credit counseling or personal financial management from an agency;

(10)Not expose the client to commercial advertising as part of or during the client's receipt of any counseling services, and never market or sell financial products or services during the counseling session; provided, however, this provision does not prohibit an agency from generally discussing all available financial products and services;

(11)Not sell information about any client or potential client to any third party without the client or potential client's prior written permission; and

(12)If the agency is tax-exempt, submit a completed and signed tax waiver permitting and directing the Internal Revenue Service to provide the United States Trustee with access to the Internal Revenue Service's files relating to the agency. § 58.21 Additional minimum requirements to become and remain approved agencies relating to fees.

(a)If a fee for, or relating to, credit counseling services is charged by an agency, such fee shall be reasonable:

(1)A fee of $50 or less for credit counseling services is presumed to be reasonable and an agency need not obtain prior approval of the United States Trustee to charge such a fee;

(2)A fee exceeding $50 for credit counseling services is not presumed to be reasonable and an agency must obtain prior approval from the United States Trustee to charge such a fee. The agency bears the burden of establishing that its proposed fee is reasonable. At a minimum, the agency must demonstrate that its cost for delivering such services justify the fee; and

(3)The United States Trustee shall review the amount of the fee set forth in paragraphs (a)(1) and

(2)of this section periodically, but not less than every 4 years, to determine the reasonableness of the fee. Fee amounts and any revisions thereto shall be determined by current costs, using a method of analysis consistent with widely accepted accounting principles and practices, and calculated in accordance with the provisions of federal law as applicable. Fee amounts and any revisions thereto shall be published in the **Federal Register** .

(b)An agency shall waive the fee whenever a client demonstrates a lack of ability to pay the fee. A client shall be deemed to have demonstrated a lack of ability to pay the fee if the client's household current income is less than 150% of the income of the official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) as identified in the Poverty Guidelines updated periodically in the **Federal Register** by the United States Department of Health and Human Services applicable to a family or household of the size involved in the fee decision.

(c)Notwithstanding the requirements of paragraph

(b)of this section, an agency may also waive fees based upon other considerations, including, but not limited to:

(1)The client's net worth;

(2)The percentage of the client's income from government assistance programs;

(3)Whether the client is receiving pro bono legal services in connection with a filed or anticipated bankruptcy case; or

(4)If the combined current monthly income, as defined in 11 U.S.C. 101(10A), of the client and his or her spouse, when multiplied times 12, is equal to or less than the amounts set forth in 11 U.S.C. 707(b)(7).

(d)An agency shall not link a client or potential client's purchase of counseling services to the purchase of any other service offered by the agency. § 58.22 Additional minimum requirements to become and remain approved agencies relating to certificates.

(a)An approved agency shall deliver a certificate only to the client who took and completed the counseling services, except that an approved agency shall instead deliver a certificate to the attorney of a client who took and completed counseling services if the client specifically requests that in writing.

(b)An approved agency shall attach to the certificate:

(1)The client's debt repayment plan (if any); and

(2)If the counselor determines a viable alternative to bankruptcy is available to the client to resolve his or her credit problems, the client's budget analysis.

(c)An approved agency shall deliver a certificate to a client no later than one business day after the client completed counseling services.

(d)If an approved agency provides other financial counseling in addition to counseling services, and such other financial counseling satisfies the requirements for counseling services specified in 11 U.S.C. 109(h) and 111, and this rule, a person completing such other financial counseling is a client and the approved agency shall deliver a certificate to the client no later than one business day after the client's request. The approved agency shall not charge the client any additional fee except any separate fee charged for the issuance of the certificate, in accordance with paragraph

(g)of this section.

(e)An approved agency shall issue certificates only in the form approved by the United States Trustee, and shall generate the form using the Certificate Generating System maintained by the United States Trustee.

(f)An approved agency shall have sufficient computer capabilities to issue certificates from the United States Trustee's Certificate Generating System.

(g)An approved agency shall not charge a separate fee for the issuance of a certificate or replacement certificate, unless:

(1)The approved agency has disclosed such fee in writing before any counseling services are provided and before any payment is made by the client;

(2)The approved agency obtains the written consent of the client before the client commences receiving counseling services; and

(3)Such fee is reasonable and otherwise complies with the waiver requirements of 28 CFR 58.21.

(h)An approved agency shall issue a certificate to each client who completes counseling services. Spouses receiving counseling services jointly shall each receive a certificate.

(i)An approved agency shall issue a replacement certificate to a client who requests one.

(j)An approved agency shall not file certificates with the court.

(k)Only an authorized officer, supervisor or employee of an approved agency shall issue a certificate, and an approved agency shall not transfer or delegate authority to issue certificates to any other entity.

(l)An approved agency shall implement internal controls sufficient to prevent unauthorized issuance of certificates.

(m)An approved agency shall ensure the signature affixed to a certificate is that of an officer, supervisor or employee authorized to issue the certificate, in accordance with paragraph

(k)of this section, which signature shall be either:

(1)An original signature; or

(2)In a format approved for electronic filing with the court (most typically in the form /s/ name of counselor); however, whenever a certificate is prepared for filing electronically with the court, a certificate with the counselor's original signature shall also be provided to the client.

(n)An approved agency shall affix to the certificate the exact name under which the approved agency is incorporated or organized.

(o)An approved agency shall identify on the certificate:

(1)The specific Federal judicial district requested by the client;

(2)Whether counseling services were provided in person, by telephone or via the Internet;

(3)The date on which counseling services were completed by the client; and

(4)The name of the counselor that provided the counseling services.

(p)An approved agency shall affix the client's full, accurate name to the certificate. If the counseling services are obtained by a client through a duly authorized representative, the certificate shall also set forth the name of the legal representative and legal capacity of that representative.

(q)If an individual enters into a debt repayment plan after completing credit counseling, upon the client's request after the completion or termination of the debt repayment plan, the approved agency shall:

(1)Provide such additional credit counseling as is necessary at such time to comply with the requirements specified in 11 U.S.C. 109(h) and 111, and this rule, including reviewing the client's current financial condition and counseling the client regarding the alternatives to resolve the client's credit problems;

(2)Deliver a certificate to the client no later than one business day after the client completed such additional counseling; and

(3)Not charge the client any additional fee except any separate fee charged for the issuance of the certificate, in accordance with paragraph

(g)of this section. § 58.23 Additional financial requirements and bonding and insurance requirements for agencies offering debt repayment plans. If an agency offers debt repayment plans, an agency shall possess adequate financial resources to provide continuing support services for budgeting plans over the life of any repayment plan, and provide for the safekeeping of client funds, which shall include:

(a)Depositing all client funds into a deposit account, held in trust, at a federally insured depository institution. Each such trust account shall be established in a fiduciary capacity and shall be in full compliance with federal law such that each client's funds shall be protected by federal deposit insurance up to the maximum amount allowable by federal law.

(b)Keeping and maintaining books, accounts, and records to provide a clear and readily understandable record of all business conducted by the agency, including without limitation, all of the following:

(1)Separate files for each client's account that include copies of all correspondence with or on behalf of the client, including:

(i)All agreements with all entities, including the contract between the agency and the client and any amendments thereto;

(ii)The analysis of the client's budget;

(iii)Correspondence between the agency and the client's creditors;

(iv)The notice given to creditors of any debt repayment plan; and

(v)All written statements of account provided to the client and subsidiary ledgers concerning any debt repayment plan;

(2)A trust account general ledger reflecting all deposits to and disbursements from all trust accounts, which shall be kept current at all times;

(3)A reconciliation of the trust accounts, prepared at least once a month; and

(4)An operating account general ledger reflecting all of the agency's financial transactions involving the agency's operating account, which shall be kept current at least on a monthly basis.

(c)Allowing an independent certified public accounting firm to audit the trust accounts annually in accordance with generally accepted accounting principles as defined by the American Institute of Certified Public Accountants and any Statement of Work prepared by the United States Trustee, which audit shall include:

(1)A report of all trust account activity including:

(i)The balance of each trust account at the beginning and end of the period;

(ii)The total of all receipts from clients and disbursements to creditors during the reporting period;

(iii)The total of all disbursements to the agency; and

(iv)The reconciliation of each trust account;

(2)A report of all exceptions ( *e.g.* , discrepancies, irregularities, and errors) found, regardless of materiality; and

(3)An evaluation of the agency's trust account internal controls and its computer operations to determine whether it provides a reasonable assurance that the trust funds are safeguarded against loss from unauthorized use or disposition.

(d)Obtaining a surety bond payable to the United States, as follows:

(1)Subject to the minimum amount of $5,000, the amount of such surety bond shall be the lesser of:

(i)2% of the agency's disbursements made during the previous 12 months from all trust accounts attributable to the federal judicial districts (or, if not feasible to determine, the states) in which the agency seeks approval from the United States Trustee; or

(ii)Equal to the average daily balance maintained for the 6 months immediately prior to submission of the application in all trust accounts attributable to the federal judicial districts (or, if not feasible to determine, the states) in which the agency seeks approval from the United States Trustee;

(2)The agency may receive an offset or credit against the surety bond amount determined under paragraph (d)(1) of this section if:

(i)The agency has previously obtained a surety bond, or similar cash, securities, insurance (other than employee fidelity insurance), or letter of credit in compliance with the licensing requirements of the state in which the agency seeks approval from the United States Trustee;

(ii)Such surety bond, or similar cash, securities, insurance (other than employee fidelity insurance), or letter of credit provides protection for the clients of the agency;

(iii)Such surety bond, or similar cash, securities, insurance (other than employee fidelity insurance), or letter of credit, is written in favor of the state or the appropriate state agency; and

(iv)The amount of the offset or credit shall be the lesser of:

(A)The principal amount of such surety bond, or similar cash, securities, insurance (other than employee fidelity insurance), or letter of credit; or

(B)The surety bond amount determined under paragraph (d)(1) of this section;

(3)If an agency has contracted with an independent contractor to administer any part of its debt repayment plans:

(i)Except as provided in paragraphs (d)(3)(ii) and

(iii)of this section, the independent contractor shall:

(A)Be an approved agency; or

(B)If the independent contractor is not an approved agency, then the independent contractor shall: ( *1* ) Be specifically covered under the agency's surety bond required under paragraph (d)(1) of this section; or ( *2* ) Have a surety bond that meets the requirements of paragraph (d)(1) of this section; and

(C)Agree in writing to allow the United States Trustee to audit the independent contractor's trust accounts for the debt repayment plans administered on behalf of the agency and to review the independent contractor's internal controls and administrative procedures;

(ii)If the independent contractor holds funds for transmission for 5 days or less, then the amount of the required surety bond under paragraph (d)(3)(i)(B) of this section shall be $500,000;

(iii)If the independent contractor performs only electronic fund transfers on the agency's behalf, then the independent contractor need not satisfy the requirements of paragraph (d)(3)(i) of this section during such time as the independent contractor is authorized by the National Automated Clearing House Association to participate in the Automated Clearing House system.

(e)Obtaining either adequate employee bonding or fidelity insurance, as follows:

(1)Subject to the minimum amount set forth below, the amount of such bonding or fidelity insurance shall be 50% of the surety bond amount calculated under paragraph (d)(1) of this section, prior to any offset or credit that the agency may receive under paragraph (d)(2) of this section; provided, however, that at a minimum, the employee bond or fidelity insurance must be $5,000;

(2)An agency may receive an offset or credit against the employee bond or fidelity insurance amount determined under paragraph (e)(1) of this section if:

(i)The agency has previously obtained an employee bond or fidelity insurance in compliance with the requirements of a state in which the agency seeks approval from the United States Trustee; and

(ii)The deductible does not exceed a reasonable amount considering the financial resources of the agency; and

(iii)The amount of the offset or credit shall be the lesser of:

(A)The principal amount of such employee bond or fidelity insurance; or

(B)The employee bond or fidelity insurance amount determined under paragraph (e)(1) of this section. § 58.24 Procedures for obtaining final agency action on United States Trustees' decisions to deny agencies' applications and to remove approved agencies from the approved list.

(a)The United States Trustee shall remove an approved agency from the approved list whenever an approved agency requests its removal in writing.

(b)The United States Trustee may issue a decision to remove an approved agency from the approved list, and thereby terminate the approved agency's authorization to provide counseling services, at any time.

(c)The United States Trustee may issue a decision to deny an agency's application or remove an agency from the approved list whenever the United States Trustee determines that the agency has failed to comply with the standards or requirements specified in 11 U.S.C.§ 109(h) or 111, this rule, or the terms under which the United States Trustee designated it to act as an approved agency, including but not limited to finding any of the following:

(1)The agency is not employing adequate procedures for safekeeping or paying client funds, which results in a loss to a client;

(2)The agency's surety bond has been canceled;

(3)Any entity has revoked the agency's nonprofit status, even if that revocation is subject to further administrative or judicial litigation, review or appeal;

(4)Any entity has suspended or revoked the agency's license to do business in any jurisdiction; or

(5)Any United States district court has removed the agency under 11 U.S.C. 111(e).

(d)If the Internal Revenue Service revokes an agency's tax exempt status, the United States Trustee shall promptly commence an investigation to determine whether any of the factors set forth in paragraphs (c)(1) through

(5)of this section exist.

(e)The United States Trustee shall provide to the agency in writing a notice of any decision either to:

(1)Deny the agency's application; or

(2)Remove the agency from the approved list.

(f)The notice shall state the reason(s) for the decision and shall reference any documents or communications relied upon in reaching the denial or removal decision. To the extent authorized by law, the United States Trustee shall provide to the agency copies of any such documents that were not supplied to the United States Trustee by the agency. The notice shall be sent to the agency by overnight courier, for delivery the next business day.

(g)Except as provided in paragraph

(i)of this section, the notice shall advise the agency that the denial or removal decision shall become final agency action, and unreviewable, unless the agency submits in writing a request for review by the Director no later than 20 calendar days from the date of the notice to the agency.

(h)Except as provided in paragraph

(i)of this section, the decision to deny an agency's application or remove an agency from the approved list shall take effect upon:

(1)The expiration of the agency's time to seek review from the Director, if the agency fails to timely seek review of a denial or removal decision; or

(2)The issuance by the Director of a final written decision, if the agency timely seeks such review.

(i)The United States Trustee may provide that a decision to remove an agency from the approved list is effective immediately and deny the agency the right to provide counseling services whenever the United States Trustee finds any of the factors set forth in paragraphs (c)(1) through

(5)of this section.

(j)An agency's request for review shall be in writing and shall fully describe why the agency disagrees with the denial or removal decision, and shall be accompanied by all documents and materials the agency wants the Director to consider in reviewing the denial or removal decision. The agency shall send the original and one copy of the request for review, including all accompanying documents and materials, to the Office of the Director by overnight courier, for delivery the next business day. In order to be timely, a request for review shall be received at the Office of the Director no later than 20 calendar days from the date of the notice to the agency.

(k)The United States Trustee shall have 30 calendar days from the date of the agency's request for review to submit to the Director a written response regarding the matters raised in the agency's request for review. The United States Trustee shall provide a copy of this response to the agency by overnight courier, for delivery the next business day.

(l)The Director may seek additional information from any party in the manner and to the extent the Director deems appropriate.

(m)In reviewing the decision to deny an agency's application or remove an agency from the approved list, the Director shall determine:

(1)Whether the denial or removal decision is supported by the record; and

(2)Whether the denial or removal decision constitutes an appropriate exercise of discretion.

(n)Except as provided in paragraph

(o)of this section, the Director shall issue a written final decision no later than 60 calendar days from the receipt of the agency's request for review, unless the agency agrees to a longer period of time or the Director extends the deadline. The Director's final decision on the agency's request for review shall constitute final agency action.

(o)Whenever the United States Trustee provides under paragraph

(i)of this section that a decision to remove an agency from the approved list is effective immediately, the Director shall issue a written decision no later than 15 calender days from the receipt of the agency's request for review, unless the agency agrees to a longer period of time, which decision shall:

(1)Be limited to deciding whether the determination that the removal decision should take effect immediately was supported by the record and an appropriate exercise of discretion;

(2)Constitute final agency action only on the issue of whether the removal decision should take effect immediately; and

(3)Not constitute final agency action on the ultimate issue of whether the agency should be removed from the approved list; after issuing the decision, the Director shall issue a written final decision by the deadline set forth in paragraph

(n)of this section.

(p)In reaching a decision under paragraphs

(n)and

(o)of this section, the Director may specify a person to act as a reviewing official. The reviewing official's duties shall be specified by the Director on a case-by-case basis, and may include reviewing the record, obtaining additional information from the participants, providing the Director with written recommendations, and such other duties as the Director shall prescribe in a particular case.

(q)An agency that files a request for review shall bear its own costs and expenses, including counsel fees.

(r)When a decision to remove an agency from the approved list takes effect, the agency shall:

(1)Immediately cease providing counseling services to clients and shall not agree to provide counseling services to prospective clients;

(2)No later than 3 business days after the date of removal, issue all certificates to all clients who completed counseling services prior to the agency's removal from the approved list; and

(3)No later than 3 business days after the date of removal, return all fees to clients and prospective clients who had paid for counseling services, but had not completely received them.

(s)An agency must exhaust all administrative remedies before seeking redress in any court of competent jurisdiction. Dated: January 18, 2008. Clifford J. White III, Director, Executive Office for United States Trustees. [FR Doc. E8-1451 Filed 1-31-08; 8:45 am] BILLING CODE 4410-40-P DEPARTMENT OF THE INTERIOR Minerals Management Service 30 CFR Part 256 [Docket ID: MMS-2007-OMM-0064] RIN 1010-AD44 Bonus or Royalty Credits for Relinquishing Certain Leases Offshore Florida AGENCY: Minerals Management Service (MMS), Interior. ACTION: Proposed rule. SUMMARY: The MMS proposes to amend its regulations for oil and gas leases on the Outer Continental Shelf to implement a mandate in the Gulf of Mexico Energy Security Act of 2006. This proposed rule would

(1)provide a credit to lessees who relinquish certain eligible leases in the Gulf of Mexico;

(2)define eligible leases as those within 125 miles of the Florida coast in the Eastern Planning Area and certain leases within 100 miles of the Florida coast in the Central Planning Area; and

(3)allow lessees to use the credits in lieu of monetary payment for either a lease bonus bid or royalty due on oil and gas production from most other leases in the Gulf of Mexico or to transfer the credits to other Gulf of Mexico lessees for their use. DATES: Submit comments by April 1, 2008. The MMS may not fully consider comments received after this date. Submit comments to the Office of Management and Budget on the information collection burden in this proposed rule by March 3, 2008. FOR FURTHER INFORMATION CONTACT: Marshall Rose, Chief, Economics Division, at

(703)787-1536. ADDRESSES: You may submit comments on the rulemaking by any of the following methods. Please use the Regulation Identifier Number

(RIN)1010-AD44 as an identifier in your message. See also Public Availability of Comments under Procedural Matters. • *Federal eRulemaking Portal: http://www.regulations.gov.* Select “Minerals Management Service” from the agency drop-down menu, then click “submit.” In the Docket ID column, select MMS-2007-OMM-0064 to submit public comments and to view supporting and related materials available for this rulemaking. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. All comments will be posted to the docket. • *Mail or hand-carry comments to the Department of the Interior; Minerals Management Service; Attention:* Regulations and Standards Branch (RSB); 381 Elden Street, MS-4024, Herndon, Virginia 20170-4817. Please reference “Bonus or Royalty Credits for Relinquishing Certain Leases Offshore Florida, 1010-AD44” in your comments and include your name and return address. • *Send comments on the information collection in this rule to:* Interior Desk Officer 1010-AD44, Office of Management and Budget; 202-395-6566 (fax); e-mail: *oira_docket@omb.eop.gov* . Please also send a copy to MMS. SUPPLEMENTARY INFORMATION: Background and Summary of the Proposed Rule Congress passed, and on December 20, 2006, the President signed, the Gulf of Mexico Energy Security Act of 2006 (GOMESA), Public Law No. 109-432. Section 104(c) of that statute authorizes the Secretary of the Interior (Secretary) to issue a bonus or royalty credit for the exchange of certain leases located offshore of the State of Florida. The statute defines leases eligible for the credit as those in existence on the enactment date of the GOMESA and located both within specified Outer Continental Shelf

(OCS)planning areas and distances from the Florida coastline. The statute sets the size of the credit as equal to the bonus and rental paid for the relinquished eligible lease, and limits its use to payments by lessees of bonuses and royalties for leases in the Gulf of Mexico

(GOM)not subject to revenue sharing under section 8(g) of the Outer Continental Shelf Lands Act (OCSLA) (43 U.S.C. 1337(g)). Finally, the statute mandates a regulatory process for notifying the Secretary of a lessee's decision to exchange a lease for a credit, issuing the credit, allocating the credit among multiple lease owners, and transferring the credit to other parties. To implement section 104(c), MMS proposes to add a new subpart N to 30 CFR part 256. Part 256 deals with OCS lease administration, including transfer and termination of a lease. After briefly reviewing the credit issuing process, the following discussion explains how MMS proposes to handle redemption of the credits. Issuing Credits Section 104, together with the definitions in section 102(1), (4), and (5), identifies the offshore area in which existing leases are located to be eligible to be exchanged for the credit. Therein, reference is made to parts of the Central Planning Area

(CPA)and the Eastern Planning Area, as designated in the Draft Proposed Program Outer Continental Shelf Oil and Gas Leasing Program 2007-2012, dated February 2006. However, the area does not include all of the CPA in the area eligible for the credits. The GOMESA limits the included part of the CPA to the portion of the CPA within 100 miles of the coastline of the State of Florida, and to the area that lies either within a particular area shown on a map that MMS published 10 years ago, or, east of a particular coordinate line on the Pensacola Official Protraction Diagram. The MMS previously delineated the area in which leases are eligible for the credit using Official Protraction Diagram

(OPD)designations. The OPD, in conjunction with the OCS block numbers, uniquely identifies each OCS block by a designated numbering system. The planning area boundaries that were in effect when MMS published the referenced maps coincided with the OPD boundaries. After recent changes MMS made in the boundary between its Eastern, Central, and Western Planning Areas for the GOM, the new planning area boundaries do not coincide with the pre-existing OPD boundaries. Thus, definitions added to §§ 256.5 and 256.90 propose to use OPD boundaries to define the western extent of the eligible area. The northern and eastern extent of the eligible area is the seaward boundary of the State of Florida. The GOMESA defines the southern extent of the eligible area by reference to the distance from the Florida coastline. Parts of three OPDs (Desoto Canyon, Destin Dome, and Pensacola) are both in the eligible part of the new CPA and within the requisite 100 miles of the Florida coastline. Other parts of these three OPDs, as well as other OPDs, are in the new Eastern planning area and within the requisite 125 miles of the Florida coastline. These areas contain a total of 79 still active leases as of the end of calendar year 2006. The GOMESA makes all of these leases that were in effect on December 20, 2006, the date of enactment of the GOMESA, eligible for this exchange program. The MMS seeks comments on whether this interpretation of eligibility for the credits based on location and lease status complies with the requirements specified in GOMESA. Section 256.91 proposes to grant credits equal to the original bonus paid for the relinquished lease plus the cumulative rental paid on that lease since issuance. Because the GOMESA explicitly values the credits as equal only to the sum of these two costs, no authority exists to include reimbursement for any other costs. Thus, MMS will not credit or value any exploration costs incurred in connection with eligible leases for purposes of issuing credits; nor will MMS include time value of money (interest) in calculating the amount of a credit. The MMS estimates the aggregate value of credits available under the statutory formula as slightly more than $60 million. The following table lists each lease identified under the proposed interpretation of GOMESA that is eligible for the credit and the amount of the credit. MMS seeks comments about whether any variations exist between the data in this table and the information held by the lease owners. Leases and Amounts Eligible for Bonus or Royalty Credit Lease No. Lease effective date Bid amount Rental paid to 12/31/2006 Total credit G06390 2/1/1984 $957,000 $86,400 $1,043,400 G06401 2/1/1984 1,103,450 51,265 1,154,715 G06402 2/1/1984 1,106,780 85,825 1,192,605 G06406 2/1/1984 1,607,800 69,120 1,676,920 G06407 2/1/1984 1,308,800 311,040 1,619,840 G06408 2/1/1984 1,106,430 103,105 1,209,535 G06409 2/1/1984 1,213,500 103,105 1,316,605 G06440 2/1/1984 918,500 82,032 1,000,532 G06464 3/1/1984 1,107,500 57,762 1,165,262 G06469 2/1/1984 1,613,500 75,038 1,688,538 G06470 2/1/1984 1,107,500 75,038 1,182,538 G06474 2/1/1984 1,610,800 75,038 1,685,838 G06475 2/1/1984 1,201,700 75,038 1,276,738 G06476 2/1/1984 1,107,500 75,038 1,182,538 G06477 2/1/1984 908,700 75,038 983,738 G08308 3/1/1987 2,877,000 77,866 2,954,866 G08309 3/1/1987 2,325,000 17,173 2,342,173 G08310 3/1/1987 1,165,000 17,173 1,182,173 G08333 2/1/1988 1,379,000 71,854 1,450,854 G08334 2/1/1988 1,379,000 71,854 1,450,854 G08346 2/1/1988 1,355,000 67,593 1,422,593 G08361 8/1/1986 1,837,000 59,107 1,896,107 G08362 8/1/1986 944,000 59,107 1,003,107 G08363 8/1/1986 3,276,000 59,107 3,335,107 G08364 8/1/1986 2,377,000 59,107 2,436,107 G08365 8/1/1986 1,857,000 59,107 1,916,107 G08366 8/1/1986 944,000 59,107 1,003,107 G08367 8/1/1986 1,363,000 59,107 1,422,107 G08368 8/1/1986 1,117,000 59,107 1,176,107 G10404 4/1/1990 157,000 52,100 209,100 G10405 4/1/1990 145,000 52,100 197,100 G10408 4/1/1990 149,000 52,100 201,100 G10409 4/1/1990 187,000 52,100 239,100 G10410 4/1/1990 209,000 52,100 261,100 G10413 11/1/1989 150,550 51,899 202,449 G10414 11/1/1989 150,550 51,899 202,449 G10415 4/1/1990 153,000 52,100 205,100 G10417 11/1/1989 306,200 64,811 371,011 G10426 6/1/1990 150,550 37,199 187,749 G10427 6/1/1990 150,550 37,199 187,749 G10428 11/1/1989 218,880 115,445 334,325 G10429 11/1/1989 155,300 41,827 197,127 G10430 6/1/1990 145,000 47,330 192,330 G10431 6/1/1990 938,500 41,649 980,149 G10432 6/1/1990 330,900 41,649 372,549 G10433 6/1/1990 900,600 41,649 942,249 G10434 6/1/1990 245,200 41,649 286,849 G10435 6/1/1990 376,500 41,649 418,149 G10436 11/1/1989 2,102,400 115,445 2,217,845 G10437 11/1/1989 910,080 115,445 1,025,525 G10438 11/1/1989 155,200 41,747 196,947 G10439 11/1/1989 167,200 76,387 243,587 G10440 11/1/1989 184,500 80,743 265,243 G10443 11/1/1989 560,600 80,743 641,343 G10446 10/1/1990 146,000 61,995 207,995 G10447 10/1/1990 146,000 61,995 207,995 G10448 10/1/1990 146,000 61,995 207,995 G10449 10/1/1990 153,000 61,995 214,995 G10450 10/1/1990 153,000 61,995 214,995 G10451 10/1/1990 145,000 61,995 206,995 G10452 10/1/1990 168,000 61,995 229,995 G10453 10/1/1990 153,000 61,995 214,995 G10454 10/1/1990 168,000 61,995 229,995 G10455 10/1/1990 148,500 41,922 190,422 G10456 10/1/1990 156,100 41,922 198,022 G10459 10/1/1990 181,500 41,922 223,422 G10460 10/1/1990 148,700 41,922 190,622 G10461 10/1/1990 159,200 41,922 201,122 G10462 10/1/1990 196,500 41,922 238,422 G10463 10/1/1990 151,700 41,922 193,622 G10464 10/1/1990 157,500 41,922 199,422 G10465 10/1/1990 147,300 41,922 189,222 G10466 10/1/1990 147,300 41,922 189,222 G10471 10/1/1990 163,500 41,922 205,422 G10472 10/1/1990 195,400 41,922 237,322 G10473 10/1/1990 192,600 41,922 234,522 G10477 10/1/1990 157,600 41,922 199,522 G10484 10/1/1990 145,000 61,995 206,995 G10485 10/1/1990 158,000 61,995 219,995 79 $55,458,120 4,944,064 60,402,184 The process proposed by § 256.92 for claiming a credit would begin when all parties holding record title interests in an eligible lease notify the Regional Supervisor for Leasing and Environment in the MMS GOM Regional Office of the decision to exchange the lease. Parties holding record title interest in an eligible lease are permitted up to 1 year from the effective date of the final rule to apply for these credits. After that date, MMS will no longer accept applications for the credits provided for in this rule. In addition to a request for a credit, the notification would include:

(1)The name of a contact for each record title holder;

(2)the percentage record title interest of each owner;

(3)a list of the bonus and rental payments made by, or on behalf of, all current owners of the lease; and

(4)the form (Form MMS-152, Relinquishment of Federal Oil and Gas Lease) necessary to execute relinquishment according to § 256.76. The MMS would confirm the percentage interest and payments claimed by the current owners and add any bonus bid or rental payments made by prior owners to determine the credit amount. Once the adjudication unit in the MMS GOM Region has approved the exchange, the MMS' Minerals Revenue Management

(MRM)office would post the credits in the appropriate company payor accounts of the record title interest owners. The credit would become available when MMS sends a written certification to the record title interest owners of an eligible lease that this lease has qualified for a credit of a specific amount. In the case of multiple record title interest owners of an eligible lease, § 256.93 proposes that MMS would allocate the credit to each record title interest owner based on its percentage of total ownership interest in the lease at the time the owners submit to MMS the request to exchange the lease. The MMS recognizes that the original lessee(s) would have made bonus payments. If the original lessee sells its record title interest in a lease, the financial terms of the sale will have compensated the original lessee, in some manner satisfactory to it, for the bonus payment it made for its record title interest. Thus, the current record title interest owners made the timely and legally binding investment to acquire and hold the right to explore for and produce the oil and gas that may underlie the seabed on that lease. Therefore, MMS would allocate current record title interest owners the credit usable to acquire an interest in another lease or to pay royalties on production from another lease. Moreover, if the terms of any particular operating rights assignment imply any right or interest in that credit on the part of the assignee, then the current record title holder and the assignee may resolve that issue between themselves. Redeeming Credits Section 256.94(a) proposes to authorize current record title interest owners to redeem these credits as either payment of bonus bids or royalties paid in value. The notice MMS sends certifying that a lease has qualified for a credit would include the amount of the credit and instructions on how to apply the credit, either to a bonus payment due on a successful bid for new leases or to royalties reported due on Form MMS 2014—Report of Sales and Royalty Remittance for other leases. Under section 104(c)(3) of the statute, the credit may not be used in lieu of payments due under a lease subject to the revenue distribution provisions of section 8(g) of the OCSLA (43 U.S.C. 1337(g)). Under section 8(g)(2), the Secretary pays 27 percent of bonuses, rents, royalties, and other moneys collected from leases lying within 3 nautical miles of the seaward boundary of a coastal state to that state (or 27 percent of the portion of such revenues corresponding to the portion of the lease that lies within 3 nautical miles of the state's seaward boundary). Proposed § 256.94(a) contains this restriction. Provisions in section 105 of the GOMESA create certain other revenue distribution requirements in addition to the 8(g) provisions. Since Congress certainly knew of, but did not include, these newer revenue distribution programs in this exclusion, this proposal allows a bonus or royalty credit to be used for payments due from leases subject to these newer revenue distribution provisions. Because using a credit to pay a bonus or royalty in lieu of payment in cash results in the United States receiving less money than if the bidder or lessee paid in cash, it necessarily follows that any distribution of royalty or bonus payments to a state or coastal political subdivision under GOMESA section 105 would result in a corresponding reduction from what it would have been had the entire payment been made in cash. However, MMS projects that the financial impact of section 105 on the coastal states during fiscal years 2007 through 2016 would be very limited. In that time period, under the definition of “qualified Outer Continental Shelf revenues” in GOMESA section 102(9), section 105's distribution requirements apply only to revenues derived from new leases issued after GOMESA's enactment in the portion of the 181 Area located in the Eastern Planning Area and to the 181 South Area. Production and royalty from such leases will not occur anytime soon. Further, MMS allocates the portion of qualified Outer Continental Shelf revenues paid to Gulf producing states between those states based on an inverse distance formula. Therefore, any financial impact on a particular state of a reduction in a particular bonus payment for a new lease in the subject areas because of use of a bonus credit should be very minimal. In fact, lessees who obtain credits will more likely apply them to royalties due under other existing leases with no revenue distribution to non-Federal recipients, or transfer them to other parties for that purpose, thus further reducing the financial impact to states and localities from this treatment of credit. The GOMESA limits the credit to monetary payments. The MMS makes explicit in proposed § 256.94(b) that the credit does not apply to royalty-in-kind

(RIK)deliveries. Section 102 of the statute defines the credit as follows: The term “bonus or royalty credit” means a legal instrument or other written documentation, or an entry in an account managed by the Secretary, that may be used in lieu of any other *monetary* [emphasis added] payment for—

(A)a bonus bid for a lease on the outer Continental Shelf; or

(B)a royalty due on oil or gas production from any lease located on the outer Continental Shelf. The RIK deliveries are not monetary payments. Since the lessee fulfills its royalty obligations by delivering a volume of oil and gas to MMS, the lessee pays no money when paying the RIK. Thus, a lessee cannot use a monetary credit in lieu of delivering RIK. Under current circumstances, exclusion of RIK would confine the application of a royalty credit under the proposed rule to about 30 percent of the roughly $4 billion in royalty generated annually by GOM producers. Recent royalty collections from 8(g) sources in the GOM total about 3 percent of all oil and gas royalties collected offshore in the GOM. Thus, annual royalties currently paid in cash, to which credits under this proposed rule may apply, total over $1 billion under leases on tracts in the GOM lying outside the “8(g) zone”—more than 16 times the total value of credits that could be issued under this rule, even if no credits were applied to bonus payments in future lease sales. Section 256.94(c) proposes to address credits that remain unused after 5 years from the date MMS issues the credits. The section would state that if any credit remains unused after 5 years from the date MMS issued the credit, the MMS reserves the right to apply the remaining credit to the credit holder's ongoing obligations at MMS's discretion. Section 256.95 proposes to allow current record title interest owners to transfer credits to other parties. The transferee of the credit could use the full face amount of the credit. (Any discount in a payment from the transferee to the transferor of the credit would be a matter solely between those two parties.) This attribute of the credit would largely mitigate any perceived limitation imposed by restricting use of the credit to future bonus or royalty in-value due. As indicated, the expected aggregate size of the credits created under section 104(c) constitutes only about 6 percent of the royalty in-value collected annually in the GOM. Thus, an ample market should exist for companies that wish to transfer rather than directly use credits they may receive. When MMS receives the necessary transfer information, MRM will adjust the financial accounts of the transferor and transferee accordingly. The credit becomes available when the MMS sends a written confirmation to the transferee. Rather than create a standard form that must be executed to effect a credit transfer, this rule proposes to rely on a “Letter of Agreement” signed by an authorized official of both the transferor and transferee companies to transfer a bonus or royalty credit. A more formal process does not appear warranted by the few companies involved, all of which have other Gulf of Mexico activities, and the size of the credits relative to authorized uses. The MMS seeks comments on whether a high volume of transfers would warrant a more formal credit transfer process like that used for lease assignments. To summarize, this proposed rule would offer credits equal to past bonus and rental payments made in connection with 79 offshore leases near Florida in exchange for relinquishment of these leases. The necessary restrictions that MMS proposes for the use of those credits would not compromise their value because the credits would have no expiration date, are transferable, and in aggregate are quite small in magnitude relative to the bonus or royalty-in-value payment obligations to which they can be applied. The credits may be used to meet future bonus or royalty-in-value payments for leases in the GOM outside the 8(g) zone. Procedural Matters Regulatory Planning and Review (Executive Order (E.O.) 12866) This proposed rule is not a significant rule as determined by the Office of Management and Budget

(OMB)and is not subject to review under E.O. 12866.

(1)This proposed rule would not have an annual effect of $100 million or more on the economy. It would not adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. The total value of the credit is defined by statute as bonuses and rental paid on the leases in the eligible area. The MMS records show 79 leases are eligible. Total bonuses and rentals paid in connection with these leases is about $60 million.

(2)This proposed rule would not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency because the credit is confined to leases in Federal offshore waters that lie outside the coastal jurisdiction of State and other local agencies.

(3)This proposed rule would not alter the budgetary effects of entitlements, grants, user fees or loan programs, or the rights or obligations of their recipients.

(4)This proposed rule would not raise novel legal or policy issues. The proposed rule would implement a statutory program that exchanges a credit against future obligations for the return of old, largely inactive leases in a sensitive area. Regulatory Flexibility Act The Department of the Interior certifies that this proposed rule would not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). This proposed rule applies to the lessees holding record title interests in the 79 offshore leases located near the coastline of the State of Florida. These lessees fall under the Small Business Administration's North American Industry Classification System (NAICS) code 211111, Crude Petroleum and Natural Gas Extraction. Under this NAICS code, companies with less than 500 employees are considered small businesses. Only one of the current record title owners of these 79 leases has less than 500 employees. Moreover, this rule provides a clear benefit to the lessees. It specifies a valuable credit and a simple process for claiming a benefit for relinquishing a lease which the owners have had trouble operating due to access limitations. This proposed rule would create a relatively small amount of total credits in exchange for certain leases through a relinquishment process that all OCS lessees are accustomed to using. The credits could be used to fulfill any of a relatively large pool of routine bonus or royalty in-value OCS obligations under leases located in the GOM. The credits also would be freely transferable or assignable, and would have no time limit on use. Thus, should a small entity obtain a credit through a transfer, it would be able to use the credit for routine obligations or it could exchange the credit for approximately equivalent value in a potentially large market of other users. The provisions of this proposed rule would not have a significant adverse economic effect on offshore lessees and operators, including those that are classified as small businesses. Your comments are important. The Small Business and Agriculture Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were established to receive comments from small businesses about Federal agency enforcement actions. The Ombudsman will annually evaluate the enforcement activities and rate each agency's responsiveness to small business. If you wish to comment on the actions of MMS, call 1-888-734-3247. You may comment to the Small Business Administration without fear of retaliation. Disciplinary action for retaliation by an MMS employee may include suspension or termination from employment with the DOI. Small Business Regulatory Enforcement Fairness Act This proposed rule is not a major rule under the Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 804(2)). This proposed rule: a. Would not have an annual effect on the economy of $100 million or more. This proposed rule would offer credits worth approximately $60 million for the exchange of 79 leases in a sensitive area. Not all companies may choose to relinquish their leases for the credit offered. Even if all the credits were redeemed in 1 year, it would not have an annual effect on the economy of $100 million. b. Would not cause a major increase in costs or prices for consumers, individual industries, Federal, State, local government agencies, or geographic regions. The credit represents only a transfer of previous payments back to lessees. The relatively small amount returned by these credits would have little effect on markets, agencies, or regions. c. Would not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. Productive activities have been restricted on the leases that would be returned, and the monetary credit received in exchange would be too small to have a perceptible effect. Unfunded Mandates Reform Act This proposed rule would not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The proposed rule would not have a significant or unique effect on State, local, or tribal governments or the private sector. A statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 *et seq.* ) is not required. Takings Implication Assessment (E.O. 12630) Under the criteria in E.O. 12630, this proposed rule does not have significant takings implications. The proposed rule is not a governmental action capable of interference with constitutionally protected property rights. A takings implication assessment is not required. Federalism (E.O. 13132) Under the criteria in E.O. 13132, this proposed rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. As noted above, the potential revenue sharing effects are excluded either explicitly or implicitly by virtue of the treatment of the expected credit redemptions. This proposed rule would not substantially and directly affect the relationship between the Federal and State governments. To the extent that State and local governments have a role in OCS activities, this proposed rule would not affect that role. A Federalism Assessment is not required. Civil Justice Reform (E.O. 12988) This rule complies with the requirements of E.O. 12988. Specifically, this rule:

(a)Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; and

(b)Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards. Consultation With Indian Tribes (E.O. 13175) Under the criteria in E.O. 13175, we have evaluated this proposed rule and determined that it has no potential effects on federally recognized Indian tribes. There are no Indian or tribal lands on the OCS. Paperwork Reduction Act

(PRA)of 1995 This proposed rule contains a collection of information that will be submitted to OMB for review and approval under § 3507(d) of the PRA. This proposed rule also refers to, but does not change, information collection burdens already covered and approved under OMB Control Number 1010-0006. As part of our continuing effort to reduce paperwork and respondent burdens, MMS invites the public and other Federal agencies to comment on any aspect of the reporting and recordkeeping burden. You may submit your comments on the information collection aspects of this rule directly to the Office of Management and Budget (OMB), Office of Information and Regulatory Affairs, OMB Attention: Desk Officer for the Department of the Interior via OMB e-mail: ( *OIRA_DOCKET@omb.eop.gov* ); or by fax

(202)395-6566; identify with 1010-AD44. Send a copy of your comments to the Regulations and Standards Branch (RSB), Attn: Comments; 381 Elden Street, MS-4024; Herndon, Virginia 20170-4817. Please reference “Bonus or Royalty Credits for Relinquishing Certain Leases Offshore Florida”—AD44 in your comments. You may obtain a copy of our submission to OMB for the new collection of information by contacting the Bureau's Information Collection Clearance Officer at

(202)208-7744. The PRA provides that an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB is required to make a decision concerning the collection of information contained in these proposed regulations between 30 to 60 days after publication of this document in the **Federal Register** . Therefore, a comment to OMB is best assured of having its full effect if OMB received it by March 3, 2008. This does not affect the deadline for the public to comment to MMS on the proposed regulations. The title of the information collection is “30 CFR Part 256, Bonus or Royalty Credits for Relinquishing Certain Leases Offshore Florida.” Respondents are those from the approximately 130 Federal oil and gas lessees who may earn or trade for the bonus or royalty credit. This rulemaking affects those companies that own record title interests in 79 leases. Responses to this collection are required to obtain benefits. The frequency of response is on occasion. The information collection

(IC)does not include questions of a sensitive nature. The IC involves requests for a bonus or royalty credit in exchange for relinquishing certain leases or the transfer of such credit to another entity. The MMS will use this information to track the possession and redemption of these special bonus or royalty credits. The OMB approved the collection of information required by the current 30 CFR part 256 regulations under OMB Control Number 1010-0006 (17,058 burden hours, expiration 5/31/2010). When the final regulations take effect, MMS will consolidate the information collection burden approved for this proposed rulemaking into the primary 30 CFR part 256 information collection under 1010-0006. The following table shows the two new paperwork burden estimates for this proposed rulemaking. We estimate a total of 45 burden hours, including the time for gathering the information and submitting the request to MMS for review. It should be noted that this rulemaking concerns only 79 current leases and will not affect future leases. Therefore, the associated information collection would be a one-time only burden should respondents holding eligible leases elect to take advantage of the bonus or royalty credits for relinquishing these leases. Citation 30 CFR part 256 subpart N Reporting & recordkeeping requirement Hour burden Average No. of annual responses Annual burden hours 92(a) Request a bonus or royalty credit and submit supporting documentation 1 30 30 92(a)(5) Submit a request to relinquish lease according to § 256.76 Burden currently approved under 1010-0006.* 95 Request approval to transfer bonus or credit to another party with supporting information 1 15 15 TOTAL BURDEN 45 45 * 240 hours for this requirement are already approved under 1010-0006. The MMS specifically solicits comments on the following questions:

(a)Is the proposed collection of information necessary for MMS to properly perform its functions, and will it be useful?

(b)Are the estimates of the burden hours of the proposed collection reasonable?

(c)Do you have any suggestions that would enhance the quality, clarity, or usefulness of the information to be collected?

(d)Is there a way to minimize the information collection burden on those who are to respond, including the use of appropriate automated electronic, mechanical, or other forms of information technology? In addition, the PRA requires agencies to estimate the total annual reporting and recordkeeping “non-hour cost” burden resulting from the collection of information. We have not identified any, and we solicit your comments on this item. For reporting and recordkeeping only, your response should split the cost estimate into two components:

(a)Total capital and start-up cost component and

(b)annual operation, maintenance, and purchase of services component. Your estimates should consider the costs to generate, maintain, and disclose or provide the information. You should describe the methods you use to estimate major cost factors, including system and technology acquisition, expected useful life of capital equipment, discount rate(s), and the period over which you incur costs. Capital and start-up costs include, among other items, computers and software you purchase to prepare for collecting information; monitoring, sampling, drilling, and testing equipment; and record storage facilities. Generally, your estimates should not include equipment or services purchased:

(1)Before October 1, 1995;

(2)To comply with requirements not associated with the information collection;

(3)For reasons other than to provide information or keep records for the Government; or

(4)As part of customary and usual business or private practices. National Environmental Policy Act

(NEPA)of 1969 We have analyzed this proposed rule in accordance with the criteria of the National Environmental Policy Act and the Department Manual at 516 DM. We determined this proposed rule does not constitute a major Federal action significantly affecting the quality of the human environment. This proposed rule deals with financial matters and has no direct effect on MMS decisions on environmental activities; hence, an environmental impact statement is not required. Pursuant to Department Manual 516 DM 2.3A (2), Section 1.10 of 516 DM 2, Appendix 1 excludes from documentation in an environmental assessment or impact statement “policies, directives, regulations and guidelines of an administrative, financial, legal, technical or procedural nature; or the environmental effects of which are too broad, speculative or conjectural to lend themselves to meaningful analysis and will be subject later to the NEPA process, either collectively or case-by-case.” Section 1.3 of the same appendix clarifies that royalties and audits are considered routine financial transactions that are subject to categorical exclusion from the NEPA process. No exception to the categorical exclusion applies. Data Quality Act In developing this rule we did not conduct or use a study, experiment, or survey requiring peer review under the Data Quality Act (Pub. L. 106-554). Effects on the Energy Supply (E.O. 13211) This rule is not a significant energy action under the definition in E.O. 13211. A Statement of Energy Effects is not required. Public Availability of Comments Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. Clarity of This Regulation We are required by E.O. 12866, E.O. 12988, and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must:

(a)Be logically organized;

(b)Use the active voice to address readers directly;

(c)Use clear language rather than jargon;

(d)Be divided into short sections and sentences; and

(e)Use lists and tables wherever possible. If you feel that we have not met these requirements, send us comments by one of the methods listed in the ADDRESSES section. To better help us revise the rule, your comments should be as specific as possible. For example, you should tell us the numbers of the sections or paragraphs that you find unclear, which sections or sentences are too long, the sections where you feel lists or tables would be useful, etc. List of Subjects in 30 CFR Part 256 Administrative practice and procedure, Continental shelf, Government contracts, Mineral royalties, Oil and gas exploration, Public lands—mineral resources, Reporting and recordkeeping requirements. Dated: January 16, 2008. C. Stephen Allred, Assistant Secretary—Land and Minerals Management. For the reasons stated in the preamble, the Minerals Management Service

(MMS)proposes to amend 30 CFR part 256 as follows: PART 256—LEASING OF SULPHUR OR OIL AND GAS IN THE OUTER CONTINENTIAL SHELF 1. The authority citation for part 256 is revised to read as follows: Authority: 31 U.S.C. 9701, 42 U.S.C. 6213, 43 U.S.C. 1334, P. L. No. 109-432. 2. Section 256.5 is amended by adding definitions for “Bonus or royalty credit,” “Central planning area,” “Coastline,” “Desoto Canyon OPD,” “Destin Dome OPD,” “Eastern planning area,” and “Pensacola OPD” to read as follows: § 256.5 Definitions.

(m)*Bonus or royalty credit* means a legal instrument or other written documentation, or an entry in an account managed by the Secretary that a bidder or lessee may use in lieu of any other monetary payment for—

(1)A bonus due for a lease on the outer Continental Shelf; or

(2)A royalty due on oil or gas production from any lease located on the outer Continental Shelf.

(n)*Central planning area* means the Central Gulf of Mexico Planning Area of the outer Continental Shelf, as designated in the document entitled “Draft Proposed Program Outer Continental Shelf Oil and Gas Leasing Program 2007-2012,” dated February 2006.

(o)*Coastline* means the line of ordinary low water along that portion of the coast in direct contact with the open sea and the line marking the seaward limit of inland waters.

(p)*Desoto Canyon OPD* means the official protraction diagram designated as Desoto Canyon which has a western edge located at the universal transverse mercator

(UTM)X coordinate 1,346,400 in the North American Datum of 1927 (NAD 27).

(q)*Destin Dome OPD* means the official protraction diagram designated as Destin Dome which has a western edge located at the universal transverse mercator

(UTM)X coordinate 1,393,920 in the NAD 27.

(r)*Eastern planning area* means the Eastern Gulf of Mexico Planning Area of the outer Continental Shelf, as designated in the document entitled “Draft Proposed Program Outer Continental Shelf Oil and Gas Leasing Program 2007-2012”, dated February 2006.

(s)*Pensacola OPD* means the official protraction diagram designated as Pensacola which has a western edge located at the universal transverse mercator

(UTM)X coordinate 1,393,920 in the NAD 27. 3. A new subpart N consisting of §§ 256.90 through 256.95 are added to read as follows: Subpart N—Bonus or Royalty Credits for Exchange of Certain Leases Sec. 256.90 Which leases may I exchange for a bonus or royalty credit? 256.91 How much bonus or royalty credit will MMS grant in exchange for a lease? 256.92 What must I do to obtain a bonus or royalty credit? 256.93 How is the bonus or royalty credit allocated among multiple lease owners? 256.94 How may I use the bonus or royalty credit? 256.95 How do I transfer a bonus or royalty credit to another person? § 256.90 Which leases may I exchange for a bonus or royalty credit? You may exchange a lease for a bonus or royalty credit if it:

(a)Was in effect on December 20, 2006, and

(b)Is located in:

(1)The Eastern planning area and within 125 miles of the coastline of the State of Florida, or

(2)The Central planning area and within the Desoto Canyon OPD, the Destin Dome OPD, or the Pensacola OPD and within 100 miles of the coastline of the State of Florida. § 256.91 How much bonus or royalty credit will MMS grant in exchange for a lease? The amount of the bonus or royalty credit for an exchanged lease equals the sum of:

(a)The amount of the bonus payment; and

(b)All rental paid for the lease as of the date the lessee submits the request to exchange the lease under § 256.92 to MMS. § 256.92 What must I do to obtain a bonus or royalty credit?

(a)To obtain the bonus or royalty credit, all of the record title interest owners in the lease must submit the following to the MMS Regional Supervisor for Leasing and Environment for the Gulf of Mexico on or before [INSERT THE DATE THAT IS 1 YEAR AFTER THE EFFECTIVE DATE OF THE FINAL RULE IN THE **Federal Register** ]:

(1)A written request to exchange the lease for the bonus or royalty credit, signed by all record title interest owners in the lease.

(2)The name and contact information for a person who will act as a contact for each record title interest owner.

(3)Documentation of each record title interest owner's percentage share in the lease.

(4)A list of all bonus and rental payments for that lease made by, or on behalf of, each of the current record title owners.

(5)A written relinquishment of the lease as described in § 256.76. Notwithstanding § 256.76, the relinquishment will become effective when the credit becomes effective under paragraph

(b)of this section.

(b)The credit becomes effective when MMS issues a certification to the record title interest owners that the lease has qualified for the credit. § 256.93 How is the bonus or royalty credit allocated among multiple lease owners? The MMS will allocate the bonus or royalty credit for an exchanged lease to the current record title interest owners in the same percentage share as each owner has in the lease as of the date of the request to exchange the lease. § 256.94 How may I use the bonus or royalty credit?

(a)You may use a credit issued under this part in lieu of a monetary payment due under any lease in the Gulf of Mexico not subject to the revenue distribution provisions of section 8(g)(2) of the OCSLA (43 U.S.C. 1337(g)(2)) for either:

(1)A bonus for acquisition of an interest in a new lease; or

(2)Royalty due on oil and gas production after [INSERT THE DATE THAT IS 30 DAYS AFTER THE PUBLICATION DATE OF THE FINAL RULE IN THE **Federal Register** ].

(b)You may not use a bonus or royalty credit in lieu of delivering oil or gas taken as royalty-in-kind.

(c)If you have any credit that remains unused after 5 years from the date MMS issued the credit, MMS reserves the right to apply the remaining credit to your ongoing obligations at its discretion. § 256.95 How do I transfer a bonus or royalty credit to another person?

(a)You may transfer your bonus or royalty credit to any other person by submitting to the MMS Adjudication Unit for the Gulf of Mexico two originally executed transfer letters of agreement.

(b)Authorized officers of all companies involved in transferring and receiving the credit must sign the transfer letters of agreement as indicated on the qualification card filed with MMS.

(c)A transfer letter of agreement must include:

(1)The effective date of the transfer,

(2)The OCS-G number for the lease that originally qualified for the credit,

(3)The amount of the credit being transferred,

(4)Company names punctuated exactly as filed on the qualification card at MMS, and

(5)A corporate seal, only if MMS used a corporate seal qualification process for your corporation.

(d)The transferee of a credit transferred under this section may use it in accordance with § 256.94 as soon as MMS sends a confirmation of the transfer to the transferee. [FR Doc. E8-1860 Filed 1-31-08; 8:45 am] BILLING CODE 4310-MR-P ARCHITECTURAL AND TRANSPORTATION BARRIERS COMPLIANCE BOARD 36 CFR Parts 1190 and 1191 RIN 3014-AA22 Emergency Transportable Housing Advisory Committee AGENCY: Architectural and Transportation Barriers Compliance Board. ACTION: Notice of meeting. SUMMARY: The Architectural and Transportation Barriers Compliance Board (Access Board) has established an advisory committee to make recommendations for possible revisions to the Americans with Disabilities Act

(ADA)and Architectural Barriers Act

(ABA)Accessibility Guidelines to include provisions for emergency transportable housing. This notice announces the dates, time, and location of the next in-person committee meeting and a committee conference call. DATES: The conference call is scheduled for February 14, 2008 from 10 a.m. to Noon (Eastern time); the in-person meeting is scheduled from 10 a.m. to 5 p.m. on March 27 and from 9 a.m. to 5 p.m. on March 28. ADDRESSES: Individuals can participate in the conference call on February 14, 2008 by dialing the teleconference number which will be posted on the Access Board's Web site ( *http://www.access-board.gov/eth/* ). The in-person meeting will be held at the Access Board's offices, 1331 F Street, NW., Suite 1000, Washington, DC. FOR FURTHER INFORMATION CONTACT: Marsha Mazz, Office of Technical and Information Services, Architectural and Transportation Barriers Compliance Board, 1331 F Street, NW., Suite 1000, Washington, DC 20004-1111. Telephone number

(202)272-0020 (Voice);

(202)272-0082 (TTY). These are not toll-free numbers. E-mail address: *mazz@access-board.gov.* SUPPLEMENTARY INFORMATION: On August 23, 2007, the Architectural and Transportation Barriers Compliance Board (Access Board) established an advisory committee to make recommendations for possible revisions to the Americans with Disabilities Act

(ADA)and Architectural Barriers Act

(ABA)Accessibility Guidelines to include provisions for emergency transportable housing (72 FR 48251; August 23, 2007). The committee will hold a conference call on February 14 from 10 a.m. to Noon (Eastern time) to discuss definitional issues. The agenda, instructions (including information on captioning), and dial-in telephone number for the conference call is available on the Access Board's Web site ( *http://www.access-board.gov/eth/* ). The conference call is open to the public and interested persons can dial in and communicate their views during a public comment period scheduled during the conference call. Participants may call in from any location of their choosing. The next in-person committee meeting will take place from 10 a.m. to 5 p.m. on March 27 and from 9 a.m. to 5 p.m. on March 28. It will focus on outstanding issues which have not yet been resolved. The preliminary meeting agenda, along with information about the committee, is available at the Access Board's Web site ( *http://www.access-board.gov/eth/* ). Committee meetings are open to the public and interested persons can attend the meetings and communicate their views. Members of the public will have opportunities to address the committee on issues of interest to them during public comment periods scheduled on each day of the meeting. The in-person meeting site is accessible to individuals with disabilities. Individuals who require sign language interpreters, real-time captioning, or materials in alternate formats should contact Marsha Mazz by March 6. Also, persons wishing to provide handouts or other written information to the committee are requested to provide them in an electronic format to Marsha Mazz preferably by e-mail so that alternate formats such as large print can be distributed to committee members. Persons attending the in-person meeting are requested to refrain from using perfume, cologne, and other fragrances for the comfort of other participants. Lawrence W. Roffee, Executive Director. [FR Doc. E8-1894 Filed 1-31-08; 8:45 am] BILLING CODE 8150-01-P POSTAL REGULATORY COMMISSION 39 CFR 3001 [Docket No. PI2008-2; Order No. 56] Administrative Practice and Procedure, Postal Service AGENCY: Postal Regulatory Commission. ACTION: Advance notice of proposed rulemaking and order. SUMMARY: This document notes that the Secretary of the Treasury, as required by recent postal reform legislation, has filed with the Commission a report and recommendations on accounting practices and principles that will govern the operation of the Competitive Products Fund. It briefly reviews the recommendations, poses several related questions, and invites public comment. Comments will assist the Commission in developing future regulations governing the Competitive Products Fund. DATES: Initial comments are due April 1, 2008; reply comments are due May 1, 2008. ADDRESSES: Submit comments electronically via the Commission's Filing Online system at *http://www.prc.gov* . FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 202-789-6820 and *stephen.sharfman@prc.gov* . SUPPLEMENTARY INFORMATION: *Regulatory History* , 72 FR 63662 (November 9, 2007). I. Introduction Section 401 of the Postal Accountability and Enhancement Act, Public Law 109-435 (PAEA), codified at 39 U.S.C. 2011(h), requires the Secretary of the Treasury (Treasury) in consultation with the Postal Service and an independent certified public accounting firm to develop recommendations for accounting practices and principles that will govern the operation of the Competitive Products Fund

(CPF)and the determination of an assumed Federal income tax to be imposed on competitive products income. Treasury submitted its report and recommendations to the Commission on December 19, 2007. 1 1 *See Report of the U.S. Department of the Treasury on Accounting Principles and Practices for the Operation of the United States Postal Service's Competitive Products Fund* , December 19, 2007 (Report). The Report may be accessed from the Commission's Web site, *http://www.prc.gov* . Section 2011(h)(2)(A) requires that interested persons, including the Postal Service, users of the mails, and an officer of the Commission, be given an opportunity to comment on the Report's recommendations in such manner as the Commission considers appropriate. To fulfill that obligation, the Commission is initiating this docket soliciting comments on both Treasury's recommendations, and specific questions posed by the Commission in response to the Report. Initial comments are due 60 days after publication of this notice in the **Federal Register** . Reply comments are due 90 days after publication of this notice in the **Federal Register** . After review of the comments, the Commission will commence a rulemaking proceeding to develop regulations to satisfy the requirements of section 2011(h)(2), including establishing the accounting practices and principles to govern the operation of the CPF and rules for determining the assumed Federal income tax on competitive products income. 2 Interested persons will have an opportunity to comment on the proposed regulations. 2 Pursuant to section 2011(h)(2)(B)(ii), the final regulations are to be issued within 12 months of the date Treasury submitted its recommendations, or such later date as agreed to by the Commission and the Postal Service. II. Statutory Framework for Competitive Products' Accounting Practices and Assumed Federal Income Tax The Report fulfills Treasury's obligation under section 2011(h), which provides as follows: (h)(1)(A) The Secretary of the Treasury, in consultation with the Postal Service and an independent, certified public accounting firm and other advisors as the Secretary considers appropriate, shall develop recommendations regarding—

(i)the accounting practices and principles that should be followed by the Postal Service with the objectives of—

(I)identifying and valuing the assets and liabilities of the Postal Service associated with providing competitive products, including the capital and operating costs incurred by the Postal Service in providing such competitive products; and

(II)subject to subsection (e)(5), preventing the subsidization of such products by market-dominant products; and

(ii)the substantive and procedural rules that should be followed in determining the assumed Federal income tax on competitive products income of the Postal Service for any year (within the meaning of section 3634).

(B)Not earlier than 6 months after the date of enactment of this section, and not later than 12 months after such date, the Secretary of the Treasury shall submit the recommendations under subparagraph

(A)to the Postal Regulatory Commission. 39 U.S.C. 2011(h)(1)(A)-(B). As relates to its task of developing recommendations pursuant to section 2011(h)(1), Treasury identifies five PAEA requirements applicable to competitive products: 1. The prohibition against subsidies by market dominant products (sections 3633(a)(1) and 2011(h)(1)(A)(II)); 2. The requirement that each competitive product cover its attributable costs (section 3633(a)(2)); 3. The requirement that competitive products collectively cover what the Postal Regulatory Commission determines to be an appropriate share of the Postal Service's institutional costs (section 3633(a)(3)); 4. The obligation to annually compute an assumed Federal income tax on competitive products income (section 3634(b)(1)); and 5. The total assets of the CPF shall be the greater of the assets related to the provision of competitive products calculated under section 2011(h) or the percentage of total Postal Service revenues and receipts from competitive products times the Postal Service's total assets (section 2011(e)(5)). Report at 31. III. Treasury Report To develop its recommendations, Treasury discusses both the Postal Service's current costing system and the cost accounting requirements for competitive products under the PAEA. Treasury explains that the Postal Service currently functions under an Activity Based Costing system (ABC system), which it describes as an economic costing system designed to “report

(1)the marginal cost of each class of product and

(2)the incremental cost of each class of product compared to all of the other classes of products serviced.” 3 3 *See id.* at 3. The marginal cost (or unit volume variable cost) of a product is the cost of producing an additional unit of output. Marginal cost includes only costs that vary with the level of output and does not account for any fixed costs. If a product's price exceeds its marginal cost at current levels of production, a positive contribution is made toward paying the common costs of production. Incremental or avoidable cost of a product is the total cost incurred as the result of the provision of all units of that product. Incremental cost incorporates all variable and fixed costs specific to a particular product. Thus, if each product covers its avoidable cost then no single product is being cross-subsidized. For a more complete discussion of the incremental cost test, see William J. Baumol, John C. Panzar and Robert D. Willig, *Contestable Markets and the Theory of Industry Structure,* 351-356, 1982. Treasury indicates that under the current costing system, average volume variable costs serve as a proxy for marginal costs and further that the Postal Service estimates incremental costs based on the ABC system. Finally, Treasury notes that costs not attributed to postal products or services are classified as institutional costs. Turning to the PAEA, Treasury's analysis of the statutory cost accounting requirements for competitive products begins with section 3633(a), which requires the Commission to promulgate regulations to: 1. Prohibit the subsidization of competitive products by market dominant products; 2. Ensure that each competitive product covers its attributable costs; and 3. Ensure that all competitive products shall collectively cover what the Commission determines to be an appropriate share of the institutional costs of the Postal Service. 4 4 In Order No. 43, the Commission adopted, *inter alia,* rules governing rates for competitive products pursuant to section 3633. PRC Order No. 43, October 29, 2007. Based on these requirements and other PAEA provisions, 5 Treasury concludes that “the only viable method to begin to address the PAEA requirements for competitive products is to establish a theoretical, regulatory reporting construct under which the [Postal Service] would ‘on paper only' analytically segregate and identify the revenue and costs associated with the competitive products * * *” *Id.* at 4. Regarding the costs, Treasury recommends that the Postal Service attribute costs consistent with the Commission's definition of competitive products. Treasury indicates, however, that more is required “to calculate a PAEA-compliant, corporate-like income statement or impute an assured income tax.” *Id.* To achieve these additional requirements, Treasury contends that the Postal Service's cost system will need to be modified “to provide for the additional assignment of competitive products' costs.” *Id.* 5 As noted above, the other statutory requirements concern the computation of an assumed Federal income tax (section 3634(b)) and the “greater of” test (section 2011(e)(5)). More specifically, Treasury suggests that, to satisfy the PAEA's five statutory requirements, the modified cost system should have the capability to: 1. Report the costs for competitive products at a more granular level than they are currently; 2. Demonstrate that each competitive product (as defined under the PAEA) covers its attributable costs by pricing each competitive product above its volume-variable or marginal costs; 3. Demonstrate that competitive products are not individually cross-subsidized by the market dominant products by showing that each competitive product's revenues exceed its incremental costs; 4. Ensure that the combined revenues of the competitive products cover an appropriate share of the Postal Service institutional costs; and 5. Enable computation of an assumed Federal income tax on the income of the theoretical Postal Service competitive enterprise. *Id.* at 4-5 (footnotes omitted). Based on its analysis of the applicable PAEA accounting and tax-related provisions regarding competitive products, Treasury offers nine recommendations. IV. Issues Regarding Certain Treasury Recommendations Treasury emphasizes that “[t]he accounting and income tax approaches described in [its Report] should serve as the starting points for such further discussions and decisions.” *Id.* at 1. The Report further points out that: Given the size and scope of the [Postal Service's] operations as well as the complexity involved in meeting the PAEA accounting and other requirements, Treasury believes that any necessary changes to the existing [Postal Service] costing and other systems should be made incrementally and notes that some may need to be implemented over the long term. *Id.* at 1-2. The Report acknowledges that the ultimate responsibility and authority for issuing regulations concerning the PAEA accounting practices and CPF income tax requirements rest with the Commission. *Id.* at 1. The Commission solicits comments from interested persons on any or all aspects of Treasury's Report. In addition, as set out below, the Commission has specific questions about certain Treasury recommendations and invites responses from interested persons to any or all of them. As noted above, initial and reply comments are due 60 days and 90 days, respectively, after publication of this notice in the **Federal Register** . A. Treasury Recommendation 2 Treasury's second recommendation concerns the development of a theoretical competitive enterprise: To enable a practical solution to be developed that could be validated by third parties, a theoretical or ‘on paper only' enterprise—[Postal Service] competitive—should be analytically created by assigning to it an appropriate share of all [Postal Service] costs. *Id.* at 7. This recommendation reflects Treasury's conclusion that, based on the five PAEA statutory requirements for competitive products: [T]he only viable method to begin to address the PAEA requirements for competitive products is to establish a theoretical, regulatory reporting construct under which the [Postal Service] would ‘on paper only' analytically segregate and identify the revenue and costs associated with the competitive products—that is, to treat competitive products as if they were sold by a separate, theoretical enterprise or corporation that shares economies of scale and scope with the market-dominant products. *Id.* at 4 (footnote omitted). Treasury recognizes, but rejects, an alternative approach based on creation of a “true stand-alone competitive products entity.” *Id.* at 7; *see also id.* at 6. Treasury rejects this alternative because, *inter alia,* the cost modeling would be costly and take years to develop without likelihood of any corresponding benefits. *Id.* 6 6 On January 16, 2008, the Federal Trade Commission

(FTC)released its report entitled *Accounting for Laws that Apply Differently to the United States Postal Service and Private Competitors* (FTC Report). Among other things, the FTC Report discusses corporatization of assets associated with production of competitive products. FTC Report at 93-98. Commenters may address matters raised by the FTC Report as relates to the issues raised by Treasury's Report, *e.g.* , establishing a stand-alone competitive products entity. 1. The Commission asks commenters to address Treasury's conclusion that a theoretical enterprise, rather than a stand-alone enterprise, should be constructed. Specifically, commenters are asked to comment on the assumptions, studies, and procedures that would be needed to establish the costs of a stand-alone competitive entity, the time and cost of implementing these studies, and the time and cost of achieving structural separation. 2. To what extent would economies of scale and scope be diminished if the Commission were to require the Postal Service to structurally separate its market dominant from its competitive lines of business? 3. Given the manner in which rates are established under the PAEA, *e.g.* , that market dominant products are subject to a price cap, would structural separation reduce the risk of competitive products being subsidized by market dominant products? 4. If it is decided that establishing a theoretical competitive enterprise is appropriate: a. What is the appropriate basis for assigning operating and/or capital costs to the theoretical competitive enterprise? b. Is there a reasonable basis for directly assigning some types or categories of costs to competitive products based on underlying technologies and/or operating procedures? If so, what specific costs should be assigned in this way? c. Would there be a need to assign other costs not directly assignable (namely, joint and/or fixed costs), and if so, how should such costs be assigned? d. Would worksharing affect the assignment of costs other than direct costs? If so, how? 5. What role, if any, should the concepts of profit centers and transfer pricing play? 6. Should any Universal Service Obligation costs be assigned to the competitive products category? If not, why not? If so, on what basis? B. Treasury Recommendation 3 Treasury's third recommendation concerns the cost system that should be used under the PAEA: The volume-variable or marginal product costs reported by the [Postal Service] cost system should be used—after the product definition modification required by PAEA—to ensure that the competitive products cover their attributable costs. The reported incremental costs should be used to ensure that cross-subsidization of the competitive products by the market-dominant products is not occurring. Report at 7. This recommendation “relates to the derivation of marginal and incremental costs” with regard to the Postal Service's costing approach. *Id.* Citing section 3631(b), which defines “costs attributable” to mean “the direct and indirect postal costs attributable to [competitive] product[s] through reliably identified causal relationships”, Treasury suggests that complying with this definition would not require the Postal Service's current cost system to be modified other than to reflect products classified by the Commission as competitive. *Id.* Treasury also assumes that such attributable costs would “form the appropriate basis for determining the marginal and incremental costs of the competitive products.” *Id.* 7 7 Attributable cost is a concept developed by the Commission. Basically, it is equal to the marginal cost of a product plus some specific fixed costs, if any, attributed only to the production of that particular product, *e.g.* , costs associated with Express Mail collection boxes and advertisements. In suggesting modifications to the cost system, Treasury interprets section 3633(a)(1) to mean that the incremental cost test should be applied to each individual competitive product. *Id.* at 3. In Order No. 26, the Commission addressed this statutory provision, endorsing the incremental cost test, but recognizing the need to employ its current test for cross-subsidies. PRC Order No. 26, August 15, 2007, paras. 3040-43. The Commission interpreted section 3633(a)(1) to mean that the test for cross-subsidies applies collectively to competitive products, not individually to each product. *See* 39 CFR 3015.7(a). 1. Are the Postal Service's current cost systems, after modification for new products, sufficient for allocating costs between competitive and market dominant products? If not, what changes should be made to the cost systems? 2. Should the incremental cost test be applied to individual competitive products or to competitive products as a whole? If the former, what is the basis for determining whether a competitive product that fails the incremental cost test is being subsidized by market dominant or other competitive products? C. Treasury Recommendation 5 The Treasury's fifth recommendation concerns the cost system that should be employed to assign costs between market dominant and competitive products: The current [Postal Service] cost accounting system should be modified so that all of the costs for [Postal Service's] two lines of business (Market-Dominant and Competitive) can be assigned using cost drivers that capture the causal relationship between the lines of business and their applicable business costs. The remaining unassigned costs should be treated as institutional costs and an appropriate percentage of these institutional costs, which should be defined by the PRC by regulation, should be covered by the theoretical competitive enterprise. Report at 9. This recommendation appears to reiterate the principle that attributable costs should be allocated between market dominant and competitive products based on causal relationships. In addition, it urges that an appropriate share of institutional costs should be covered by the theoretical competitive enterprise. Treasury notes that, pursuant to section 3633(a)(3), the Commission has initially set the “appropriate share of institutional costs” test at 5.5 percent. Treasury also notes that the requirement that competitive products receive an appropriate share of institutional costs is echoed by section 3622(b)(9), a ratemaking objective applicable to market dominant products (“to allocate the total institutional costs of the Postal Service appropriately between market-dominant and competitive products.”) 1. A significant amount of Postal Service costs are currently classified as institutional, based on the use of cost drivers for cost allocation in rate analyses with most non-volume variable costs being assigned as institutional. Should any additional types of drivers and/or different types of cost attribution approaches be considered in determining costs for the competitive and market dominant lines of business? 2. The Report suggests that in addition to attributing product-specific costs to competitive products, the Postal Service should also attribute what Treasury calls line of business costs that are common to competitive products. *Id.* at 9. This suggestion could be interpreted to mean either that competitive line of business costs are costs shared by all competitive products or costs that may be shared by more than one, but not necessarily all, competitive products. The Commission asks commenters to address the appropriate meaning of line of business costs, including the basis on which to distinguish between market dominant and competitive lines of business. 3. Does the Commission's determination of an “appropriate share of institutional costs” under section 3633(c)(3) also satisfy, at least implicitly, section 3622(b)(9)? If not, why not and on what basis should institutional costs be allocated between market dominant and competitive products? D. Treasury Recommendation 6 Treasury's sixth recommendation concerns revenue reporting requirements for the theoretical competitive enterprise: Subject to [Postal Service] system modifications to accommodate the new product definitions, the revenue numbers from the existing [Postal Service] financial systems should be used as a basis for both reporting the financial income and the taxable net income of the [Postal Service] Competitive theoretical enterprise. [ *Note:* The revenues used to determine the assumed federal income tax might have to be adjusted, as appropriate, to conform to tax code treatment.] *Id.* The PAEA provides that Postal Service revenues should be appropriately measured. *See* 39 U.S.C. 3652(e) and Report at 9. Treasury concludes that the current revenue tracking system employed by the Postal Service is appropriate and does not require changes “unless the reclassification of postal classes and subclasses to * * * competitive products warrants them.” *Id.* 1. Is the Postal Service's current revenue reporting system (modified to accommodate new product definitions) adequate for reporting the Postal Service's financial income and net taxable income? 2. If not, what modifications would be necessary? E. Treasury Recommendation 7 Treasury's seventh recommendation concerns the development of an income statement: A theoretical [Postal Service] Competitive enterprise income statement, or statement of operations along the lines of the 2007 statement of the operations shown in Figure 1, should be developed. The revenues should be derived from the current [Postal Service] revenue system and process as modified to reflect the new definitions of competitive products. The costs should be the outcome of applying Treasury's above-proposed cost accounting approaches. *Id.* For purposes of calculating the assumed Federal income tax of the competitive products, Treasury states that an income statement or statement of operations should be developed as further addressed in recommendation 8. 1. Is what Treasury suggests sufficient for purposes of calculating an assumed Federal income tax on competitive products? If not, what standard (or format) should apply? 2. Please explain why any proposed additional information would be beneficial, and discuss whether the benefit associated with a more detailed statement outweighs the burden of any additional costs imposed by creating a more detailed statement. F. Treasury Recommendation 8 Treasury's eighth recommendation concerns the calculation of an assumed Federal income tax: The [Postal Service] should calculate the competitive products' assumed federal income tax using a simplified approach, preferably using a published, regularly updated, tax rate. *Id.* at 22. As to the assumed Federal income tax on competitive products, section 3634(a) provides, in pertinent part, as follows:

(1)The term ‘assumed Federal income tax on competitive products income' means the net income tax that would be imposed by chapter 1 of the Internal Revenue Code of 1986 on the Postal Service's assumed taxable income from competitive products for the year; and

(2)the term ‘assumed taxable income from competitive products', with respect to a year, refers to the amount representing what would be the taxable income of a corporation under the Internal Revenue Code of 1986 for the year, if—

(A)the only activities of such corporation were the activities of the Postal Service allocable under section 2011(h) to competitive products; and

(B)the only assets held by such corporation were the assets of the Postal Service allocable under section 2011(h) to such activities. In section 2 of the Report, Treasury discusses the numerous considerations that influence the calculation of an assumed Federal income tax on competitive products income. *Id.* at 11-23. It identifies two general approaches, complex or simplified, that could be used for this purpose. *Id.* at 23-24. Treasury endorses the simplified approach, notwithstanding that it “would require some level of PAEA intent interpretation and scope determination by the appropriate governance bodies.” *Id.* at 24. 1. Should a simplified approach be used: a. For calculating an assumed Federal income tax? b. If so, what tax rate should be used and why? c. Should the tax rate be based on an analysis of Postal Service functions, markets, risks, and the performance by similar companies? d. If similar companies are considered relevant, then how does one determine similarity? 2. Would use of a simplified approach require any changes to the Postal Service's cost systems and/or accounting procedures not addressed in the Report? If so, please elaborate. 3. If a simplified approach should not be used, what approach should be used and why? Section 3 of the Report (at 25-29) addresses difficulties with identifying and valuing assets and liabilities of the CPF, noting, for example, that efforts to determine each asset's theoretical enterprise origin and usage could be a significant undertaking that, in any event, might yield less than satisfactory results. *Id.* at 26. Treasury suggests four potential methods to attempt to assign assets to the theoretical competitive enterprise. *Id.* at 26-27. It notes that one of its methods is similar to the approach in section 2011(e)(5)(B). *Id.* at 27. Treasury observes that the PAEA does not contain a similar test for assigning liabilities. *Id.* at 29. Recognizing the significant tax implications raised by the various methods, Treasury suggests that “[a] possible approach to simplifying the assumed tax calculation to maximize net income after taxes and still meet the PAEA ‘shall be the greater of' total assets CPF quantification test, is to use the theoretical [Postal Service] Competitive enterprise income before taxes and apply an appropriate, set effective tax rate.” *Id.* Lastly, Treasury indicates that the CPF should be subject to a reasonable level of management and reporting oversight and, further that the reporting should be subject to independent review to ensure that it is fairly stated in all material respects. *Id.* 1. Does the PAEA allow a simplified approach to assigning assets to the competitive products fund for financial disclosure purposes and/or calculating an assumed Federal income tax? 2. If a simplified approach is allowed, should it be used? 3. Section 3 of the Report notes that the PAEA does not define assets, but that the PAEA's requirement to pay principal or interest on obligations issued for the provision of competitive products in section 2011(e)(5) supports the conclusion that it is permissible to define assets as net assets. The Commission asks commenters to address whether or not this is a reasonable assumption. 4. Does the PAEA require an assignment of liabilities to the CPF? If so, on what basis should they be assigned? 5. Should a full set of financial statements, including income statement, balance sheet and statement of cash flow, be prepared for the CPF? 6. What level of oversight should apply to the CPF? 7. What accounting principles should apply to the CPF? 8. What level of independent review of the Postal Service's CPF accounting and financial statements is sufficient and necessary under the PAEA? 9. What type (public or private) of entity would be best suited to perform that independent review? 10. Is there any information, not required to be reported under the PAEA, which should be included in the reports required under section 2011(h)(2)(B)(i)(III)? V. Public Representative Section 505 of title 39 requires the designation of an officer of the Commission in all public proceedings to represent the interests of the general public. The Commission hereby designates Patricia A. Gallagher to serve as the Public Representative, representing the interests of the general public. Pursuant to this designation, she will direct the activities of Commission personnel assigned to assist her and, will, upon request, provide their names for the record. Neither Patricia A. Gallagher nor any of the assigned personnel will participate in or provide advice on any Commission decision in this proceeding. VI. Ordering Paragraphs *It is Ordered:* 1. As set forth in the body of this notice, Docket No. PI2008-2 is established for the purpose of receiving comments regarding Treasury's Report and recommendations as well as questions posed by the Commission in response to the Report. 2. Interested persons may submit comments no later than 60 days from the date of publication of this notice in the **Federal Register** . 3. Reply comments also may be filed no later than 90 days from the date of publication of this notice in the **Federal Register** . 4. Patricia A. Gallagher is designated as the Public Representative representing the interests of the general public in this proceeding. 5. The Secretary shall cause this notice to be published in the **Federal Register** . By the Commission. Dated: January 28, 2008. Steven W. Williams, Secretary. [FR Doc. E8-1893 Filed 1-31-08; 8:45 am] BILLING CODE 7710-FW-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 46 CFR Part 401 [Docket No. USCG-2007-0039] RIN 1625-AB23 2008 Rates for Pilotage on the Great Lakes AGENCY: Coast Guard, DHS. ACTION: Notice of proposed rulemaking. SUMMARY: The Coast Guard is proposing to update the rates for pilotage on the Great Lakes. Based on our review, we propose to adjust the pilotage rates an average of 8.17% for the 2008 shipping season to generate sufficient revenue to cover allowable expenses, target pilot compensation, and returns on investment. We also are proposing a clarification of the duty of pilots and pilot associations to cooperate with lawful authority. This rulemaking promotes the Coast Guard strategic goal of maritime safety. DATES: Comments and related material must reach the Docket Management Facility on or before March 3, 2008. ADDRESSES: You may submit comments identified by Coast Guard docket number USCG-2007-0039 to the Docket Management Facility at the U.S. Department of Transportation. To avoid duplication, please use only one of the following methods:

(1)*Online:* *http://www.regulations.gov.*

(2)*Mail:* Docket Management Facility (M-30), U.S. Department of Transportation, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590-0001.

(3)*Hand delivery:* Room W12-140 on the Ground Floor of the West Building, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The telephone number is 202-366-9329.

(4)*Fax:* 202-493-2251. FOR FURTHER INFORMATION CONTACT: For questions on this proposed rule, call Mr. Michael Sakaio, Program Analyst, Great Lakes Pilotage Branch, Commandant (CG-54122), U.S. Coast Guard, at 202-372-1538, by fax 202-372-1929, or by e-mail at *Michael.Sakaio@uscg.mil.* For questions on viewing or submitting material to the docket, call Renee V. Wright, Program Manager, Docket Operations, telephone 202-366-9826. SUPPLEMENTARY INFORMATION: Table of Contents I. Public Participation and Request for Comments A. Submitting Comments B. Viewing Comments and Documents C. Public Meeting D. Privacy Act II. Program History III. Purpose of the Proposed Rule A. Proposed Pilotage Rate Changes—Summarized B. Calculating the Rate Adjustment Step 1: Calculate total economic cost for the base period (cost per bridge hour by area for the base period). Step 2. Calculate the expense multiplier. Step 3. Calculate annual projection of target pilot compensation. Step 4: Increase the projected target pilot compensation in Step 3 by the expense multiplier in Step 2. Step 5: Adjust the result in Step 4, as required, for inflation or deflation, and calculate projected total economic cost. Step 6: Divide the result in Step 5 by projected bridge hours to determine total unit costs (adjusted cost per bridge hour by area). Step 7: Divide prospective unit costs in Step 6 by the base period unit costs in Step 1. Step 8: Adjust the base period rates by the percentage change in unit costs in Step 7. C. Amending 46 CFR 401.700 and 710 IV. Regulatory Evaluation A. Small Entities B. Assistance for Small Entities C. Collection of Information D. Federalism E. Unfunded Mandates Reform Act F. Taking of Private Property G. Civil Justice Reform H. Protection of Children I. Indian Tribal Governments J. Energy Effects K. Technical Standards L. Environment I. Public Participation and Request for Comments We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted, without change, to *http://www.regulations.gov* and will include any personal information you have provided. We have an agreement with the Department of Transportation

(DOT)to use the Docket Management Facility. Please see DOT's “Privacy Act” paragraph below. A. Submitting Comments If you submit a comment, please include the docket number for this rulemaking (USCG-2007-0039), indicate the specific section of this document to which each comment applies, and give the reason for each comment. We recommend that you include your name and a mailing address, an e-mail address, or a phone number in the body of your document so that we can contact you if we have questions regarding your submission. For example, we may ask you to resubmit your comment if we are not able to read your original submission. You may submit your comments and material by electronic means, mail, fax, or delivery to the Docket Management Facility at the address under ADDRESSES ; but please submit your comments and material by only one means. If you submit them by mail or delivery, submit them in an unbound format, no larger than 8 1/2 by 11 inches, suitable for copying and electronic filing. If you submit them by mail and would like to know that they reached the Facility, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period. We may change this proposed rule in view of them. B. Viewing Comments and Documents To view comments, as well as documents mentioned in this preamble as being available in the docket, go to *http://www.regulations.gov* at any time and click on “Search for Dockets,” and enter the docket number for this rulemaking (USCG-2007-0039) in the Docket ID box, and click enter. You may also visit the Docket Management Facility in Room W12-140 on the ground floor of the DOT West Building, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. C. Public Meeting We do not plan to hold a public meeting. But you may submit a request for one to the Docket Management Facility at the address under ADDRESSES explaining why one would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a later notice in the **Federal Register** . D. Privacy Act Anyone can search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review the Department of Transportation's Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477), or you may visit *http://DocketsInfo.dot.gov.* II. Program History This notice of proposed rulemaking

(NPRM)is issued pursuant to Coast Guard regulations in 46 CFR Chapter III, Parts 401-404. Those regulations implement the Great Lakes Pilotage Act of 1960, 46 U.S.C. Chapter 93, which requires foreign-flag vessels and U.S.-flag vessels in foreign trade to use federally registered Great Lakes pilots while transiting the St. Lawrence Seaway and the Great Lakes system, and which requires the Secretary of Homeland Security to “prescribe by regulation rates and charges for pilotage services, giving consideration to the public interest and the costs of providing the services.” 46 U.S.C. 9303(f). The U.S. waters of the Great Lakes and the St. Lawrence Seaway are divided into three pilotage Districts. Pilotage in each District is provided by an association certified by the Director of Great Lakes Pilotage to operate a pilotage pool. It is important to note that, while the Coast Guard sets rates, it does not control the actual compensation that pilots receive. This is determined by each of the three District associations, which use different compensation practices. District One, consisting of Areas 1 and 2, includes all U.S. waters of the St. Lawrence River and Lake Ontario. District Two, consisting of Areas 4 and 5, includes all U.S. waters of Lake Erie, the Detroit River, Lake St. Clair, and the St. Clair River. District Three, consisting of Areas 6, 7, and 8, includes all U.S. waters of the St. Mary's River, Sault Ste. Marie Locks, and Lakes Michigan, Huron, and Superior. Area 3 is the Welland Canal, which is serviced exclusively by the Canadian Great Lakes Pilotage Authority and, accordingly, is not included in the U.S. rate structure. Areas 1, 5, and 7 have been designated by Presidential Proclamation, pursuant to the Great Lakes Pilotage Act of 1960, to be waters in which pilots must at all times be fully engaged in the navigation of vessels in their charge. These waters were “designated” because they are difficult waters to navigate. Areas 2, 4, 6, and 8 have not been so designated because they are open bodies of water. Under the Great Lakes Pilotage Act of 1960, pilots assigned to vessels in these areas are only required to “be on board and available to direct the navigation of a vessel at the discretion of and subject to the customary authority of the master.” 46 U.S.C. 9302(a)(1)(A) and (B). The Coast Guard pilotage regulations require annual reviews of pilotage rates and the setting of new rates at least once every five years, or sooner, if annual reviews show a need. 46 CFR 404.1. To assist in calculating pilotage rates, the pilotage associations are required to submit to the Coast Guard annual financial statements prepared by certified public accounting firms. In addition, every fifth year, in connection with the mandatory rate adjustment, the Coast Guard contracts with an independent accounting firm to conduct a full audit of the accounts and records of the pilotage associations and prepare and submit financial reports relevant to the ratemaking process. In those years when a full ratemaking is conducted, the Coast Guard generates the pilotage rates using Appendix A to 46 CFR Part 404. Between the five-year full ratemaking intervals, the Coast Guard annually reviews the pilotage rates using Appendix C to Part 404, and adjusts rates when deemed appropriate. Terms and formulas used in Appendix A and Appendix C are defined in Appendix B to Part 404. The last full ratemaking using the Appendix A methodology was concluded on April 3, 2006 (71 FR 16501). Rates for the 2007 shipping season were adjusted based on an Appendix C review (interim rule, 72 FR 8115, Feb. 23, 2007; final rule, 72 FR 53158, Sep. 18, 2007). The present rulemaking proposes rate adjustments for the 2008 shipping season, based once again on an Appendix C review. III. Purpose of the Proposed Rule The pilotage regulations require that pilotage rates be reviewed annually. If the annual review shows that pilotage rates are within a reasonable range of the base target pilot compensation set in the previous ratemaking, no adjustment to the rates will be initiated. However, if the annual review indicates that an adjustment is necessary, then the Coast Guard will establish new pilotage rates pursuant to 46 CFR 404.10 and applying either Appendix A or Appendix C. A. Proposed Pilotage Rate Changes—Summarized The Appendix C ratemaking methodology is intended for use during the years between Appendix A full ratemaking reviews and adjustments. This section summarizes the rate changes proposed for 2008, and then discusses in detail how the proposed changes were calculated under Appendix C. We are proposing an average increase of 8.17 percent across all Districts over the last pilotage rate adjustment. Table 1 summarizes the rate increases proposed for each Area. Table 1.—2008 Area Rate Changes If pilotage service is required in: Then the percentage increases over the current rate is: Area 1 (Designated waters) 7.78 Area 2 (Undesignated waters) 8.41 Area 4 (Undesignated waters) 8.50 Area 5 (Designated waters) 7.98 Area 6 (Undesignated waters) 8.37 Area 7 (Designated waters) 7.83 Area 8 (Undesignated waters) 8.31 Rates for “Cancellation, delay or interruption in rendering services (§ 401.420)” and “Basic rates and charges for carrying a U.S. pilot beyond [the] normal change point, or for boarding at other than the normal boarding point (§ 401.428)” have been increased by 8.17 percent. These changes are the same in every Area. B. Calculating the Rate Adjustment The Appendix C ratemaking calculation involves eight steps: *Step 1:* Calculate the total economic costs for the base period ( *i.e.* pilot compensation expense plus all other recognized expenses plus the return element) and divide by the total bridge hours used in setting the base period rates; *Step 2:* Calculate the “expense multiplier,” the ratio of other expenses and the return element to pilot compensation for the base period; *Step 3:* Calculate an annual “projection of target pilot compensation” using the same procedures found in Step 2 of Appendix A; *Step 4:* Increase the projected pilot compensation in Step 3 by the expense multiplier in Step 2; *Step 5:* Adjust the result in Step 4, as required, for inflation or deflation; *Step 6:* Divide the result in Step 5 by projected bridge hours to determine total unit costs; *Step 7:* Divide prospective unit costs in Step 6 by the base period unit costs in Step 1; and *Step 8:* Adjust the base period rates by the percentage changes in unit cost in Step 7. The base data used to calculate each of the eight steps comes from the 2007 Appendix C review. The Coast Guard also used the most recent union contracts between the American Maritime Officers'

(AMO)union and vessel owners and operators on the Great Lakes to determine target pilot compensation. Bridge hour projections for the 2008 season have been obtained from historical data, pilots, and industry. Bridge hours are the number of hours a pilot is aboard a vessel providing pilotage service. All documents and records used in this rate calculation have been placed in the public docket for this rulemaking and are available for review at the addresses listed under ADDRESSES . Some values may not total exactly due to format rounding for presentation in charts and explanations in this section. The rounding does not affect the integrity or truncate the real value of all calculations in the ratemaking methodology described below. *Step 1:* Calculate the total economic cost for the base period. In this step, for each Area, we add the total cost of target pilot compensation, all other recognized expenses, and the return element (net income plus interest). We divide this sum by the total bridge hours for each Area. The result is the cost in each Area of providing pilotage service per bridge hour. Tables 2 through 4 summarize the Step 1 calculations: Table 2.—Total Economic Cost for Base Period, District One Area 1 St. Lawrence River Area 2 Lake Ontario Total District One Base operating expense $431,313 $436,283 $867,596 Base target pilot compensation +$1,368,253 +$825,760 +2,194,013 Base return element +$8,802 +$13,493 +$22,295 Subtotal =$1,808,368 =$1,275,536 =$3,083,904 Base bridge hours ÷5,661 ÷7,993 ÷13,654 Base cost per bridge hour =$319.44 =$159.58 =$225.86 Table 3.—Total Economic Cost for Base Period, District Two Area 4 Lake Erie Area Southeast Shoal to Port Huron, MI Total District Two Base operating expense $499,328 $737,052 $1,236,380 Base target pilot compensation +$825,760 +$1,596,295 +$2,422,055 Base return element +$26,280 +$30,711 +$56,991 Subtotal =$1,351,368 =$2,364,058 =$3,715,426 Base bridge hours ÷8,490 ÷6,395 ÷14,885 Base cost per bridge hour =$159.17 =$369.67 =$249.61 Table 4.—Total Economic Cost for Base Period, District Three Area 6 Lakes Huron and Michigan Area 7 St. Mary's River Area 8 Lake Superior Total District Three Base operating expense $810,612 $319,193 $511,262 $1,641,067 Base target pilot compensation +$1,651,520 +$912,168 +$1,156,064 +$3,719,752 Base return element +$33,776 +$9,872 +$15,812 +$59,460 Subtotal =$2,495,908 =$1,241,233 =$1,683,138 =$5,420,279 Base bridge hours ÷18,000 ÷3,863 ÷11,390 ÷33,253 Base cost per bridge hour =$138.66 =$321.50 =$147.77 =$163.00 *Step 2.* Calculate the expense multiplier. In this step, for each Area, we add the base operating expense and the base return element. Then we divide the sum by the base target pilot compensation to get the expense multiplier for each Area. The expense multiplier expresses, in percentage form, the relationship between all non-pilot compensation, all expenses, and pilot compensation for the base period. Tables 5 through 7 show the Step 2 calculations. Table 5.—Expense Multiplier, District One Area 1 St. Lawrence River Area 2 Lake Ontario Total District One Base operating expense $431,313 $436,283 $867,596 Base return element +$8,802 +$13,493 +$22,295 Subtotal =$440,115 =$449,776 =$889,891 Base target pilot compensation ÷$1,368,253 ÷$825,760 ÷$2,194,013 Expense multiplier =.32166 =.54468 =.40560 Table 6.—Expense Multiplier, District Two Area 4 Lake Erie Area 5 Southeast Shoal to Port Huron, MI Total District Two Base operating expense $499,328 $737,052 $1,236,380 Base return element +$26,280 +$30,711 +$56,991 Subtotal =$525,608 =$767,763 =$1,293,371 Base target pilot compensation ÷$825,760 ÷$1,596,295 ÷$2,422,055 Expense multiplier =.63651 =.48097 =.53400 Table 7.—Expense Multiplier, District Three Area 6 Lakes Huron and Michigan Area 7 St. Mary's River Area 8 Lake Superior Total District Three Base operating expense $810,612 $319,193 $511,262 $1,641,067 Base return element +$33,776 +$9,872 +$15,812 +$59,460 Subtotal =$844,388 =$329,065 =$527,074 =$1,701,247 Base target pilot compensation ÷$1,651,520 ÷$912,168 ÷$1,156,064 ÷$3,719,752 Expense multiplier =.51128 =.36075 =.45592 =.45716 *Step 3.* Calculate annual projection of target pilot compensation. In this step, which duplicates Step 2 from Appendix A, we determine the new target rate of compensation and the new number of pilots needed in each pilotage Area, in order to determine the new target pilot compensation for each Area. *a.* Determine new target rate of compensation. Target pilot compensation for pilots is based on the average annual compensation of first mates and masters on U.S. Great Lakes vessels. Compensation includes wages and benefits. For pilots in undesignated waters, we approximate the first mates' compensation, and in designated waters we approximate the masters' compensation (first mates' wages multiplied by 150% plus benefits). To determine first mates' and masters' average annual compensation, we use data from the most recent AMO union contracts with the U.S. companies engaged in Great Lakes shipping. Where different AMO union agreements apply to different companies, we apportion the compensation provided by each agreement according to the percentage of tonnage represented by companies under each agreement. Our research for the 2007 ratemaking showed six companies operating under contract with the AMO union. Three of the six operated under one set of agreements and the other three operated under modified agreements. Since the 2007 ratemaking, one of the six companies has gone out of business, and a second no longer operates under an AMO union contract. On August 16, 2007, the Coast Guard received two new sets of agreements that updated wage and benefit information for the four companies now operating under AMO union contracts. The agreements involved a 5% wage rate increase effective August 1, 2006 and a 3% increase effective August 1, 2007. Under one set of agreements (“Agreement A”), the daily wage rate increased from $226.96 to $245.46, while under the other set of agreements (“Agreement B”) the daily wage rate was raised from $279.55 to $302.33. To calculate monthly wages, we apply the new Agreement A and Agreement B monthly multiplier of 49.5 to the daily rate. The new monthly multiplier is decreased from the multiplier of 54 that was contained in the 2003 contracts. It represents 30.5 average working days per month, 16 vacation days, and 3 bonus days. To calculate average annual compensation, we multiply monthly figures by 9 months, the length of the Great Lakes shipping season. Table 8 shows new wage calculations based on Agreements A and B. Table 8.—Wages Monthly component Pilots on undesignated waters Pilots on designated waters (undesignated × 150%) AGREEMENT A: $245.46 daily rate × 49.5 days $12,150 $18,225 AGREEMENT A: Monthly total × 9 months = total wages 109,352 164,029 AGREEMENT B: $302.33 daily rate × 49.5 days 14,965 22,488 AGREEMENT B: Monthly total × 9 months = total wages 134,688 202,032 Benefits under Agreements A and B include a health contribution rate of $66.69 per man-day and a pension plan contribution rate of $33.35 per man-day under Agreement A, and $43.55 per man-day under Agreement B. The AMO 401K employer matching rate remained at 5% of the wage rate. A clerical contribution included in the 2003 contracts was eliminated. Per the AMO union, the multiplier used to calculate monthly benefits is 45.5 days. Table 9.—Benefits Monthly component Pilots on undesignated waters Pilots on designated waters AGREEMENT A: Employer contribution, 401(K) plan (Monthly Wages × 5%) $607.51 $911.27 Pension = $33.35 × 45.5 days $1,517.43 $1,517.43 Health = $66.69 × 45.5 days $3,034.40 $3,034.40 AGREEMENT B: Employer contribution, 401(K) plan (Monthly Wages × 5%) $748.27 $1,122.40 Pension = $43.55 × 45.5 days 1,981.53 1,981.53 Health = $66.69 × 45.5 days $3,034.40 $3,034.40 AGREEMENT A: Monthly total benefits =$5,159.33 =$5,463.09 AGREEMENT A: Monthly total benefits × 9 months =$46,434 =$49,168 AGREEMENT B: Monthly total benefits =$5,764.19 =$6,138.32 AGREEMENT B: Monthly total benefits × 9 months =$51,878 =$55,245 Table 10 totals the wages and benefits under each agreement. Table 10.—Total Wages and Benefits Under Each Agreement Pilots on undesignated waters Pilots on designated waters AGREEMENT A: Wages $109,352 $164,029 AGREEMENT A: Benefits +$46,434 +$49,168 AGREEMENT A: Total =$155,786 =$213,196 AGREEMENT B: Wages $134,688 $202,032 AGREEMENT B: Benefits +$51,878 +$55,245 AGREEMENT B: Total =$186,566 =$257,277 Table 11 shows that, for the four U.S. Great Lakes shipping companies currently operating under AMO union contracts, approximately 29% of their total deadweight tonnage belongs to companies operating under Agreement A, and approximately 71% belongs to companies operating under Agreement B. Table 11.—Deadweight Tonnage by AMO Union Agreement Company Agreement A Agreement B American Steamship Company 664,215 Mittal Steel USA, Inc. 96,544 HMC Ship Management 12,656 Key Lakes, Inc. 303,145 Total tonnage, each agreement 315,801 760,759 Percent tonnage, each agreement 315,801 ÷1,076,560 =29.3343% 760,759 ÷ 1,076,560 =70.6657% Table 12 applies the percentage of tonnage represented by each agreement to the wages and benefits provided by each agreement, to determine the projected target rate of compensation on a tonnage-weighted basis. Table 12.—Projected Target Rate of Compensation Undesignated waters Designated waters AGREEMENT A: Total wages and benefits × percent tonnage $155,786 × 29.3343% = $45,699 $213,196 × 29.3343% = $62,540 AGREEMENT B: Total wages and benefits × percent tonnage $186,566 × 70.6657% = $131,838 $257,277 × 70.6657% = $181,807 Total weighted average wages and benefits = projected target rate of compensation $45,699 + $131,838 = $177,537 $62,540 + $181,807 = $244,346 b. Determine number of pilots needed. Subject to adjustment by the Director of Great Lakes Pilotage to ensure uninterrupted service, we determine the number of pilots needed in each Area by dividing each Area's projected bridge hours, either by 1,000 (designated waters) or by 1,800 (undesignated waters). Bridge hours are the number of hours a pilot is aboard a vessel providing pilotage service. Projected bridge hours are based on the vessel traffic that pilots are expected to serve. Based on historical data and information provided by pilots and industry, the Coast Guard projects that traffic for the 2008 navigation season will remain the same as it did in 2007. Table 13 shows the projected bridge hours needed for each Area, and the total number of pilots needed after dividing those figures either by 1,000 or 1,800 and rounding up to the next whole pilot: Table 13.—Number of Pilots Needed Pilotage area Projected 2008 bridge hours Divided by 1,000 (designated waters) or 1,800 (undesignated waters) Pilots needed (total = 44) Area 1 5,661 1,000 6 Area 2 7,993 1,800 5 Area 4 8,490 1,800 5 Area 5 6,395 1,000 7 Area 6 18,000 1,800 10 Area 7 3,863 1,000 4 Area 8 11,390 1,800 7 c. Determine the projected target pilot compensation for each Area. The projection of new total target pilot compensation is determined separately for each pilotage Area by multiplying the number of pilots needed in each Area by the projected target rate of compensation for pilots working in that Area. Table 14 shows this calculation. Table 14.—Projected Target Pilot Compensation Pilotage area Pilots needed (total = 44) Multiplied by target rate of compensation Projected target pilot compensation Area 1 6 × $244,346 $1,466,077 Area 2 5 × $177,537 887,684 Total, District One 2,353,761 Area 4 5 × $177,537 887,684 Area 5 7 × $244,346 1,710,424 Total, District Two 2,598,108 Area 6 10 × $177,537 1,775,368 Area 7 4 × $244,346 977,385 Area 8 7 × $177,537 1,242,758 Total, District Three 3,995,511 *Step 4:* Increase the projected pilot compensation in Step 3 by the expense multiplier in Step 2. This step yields a projected increase in operating costs necessary to support the increased projected pilot compensation. Table 15 shows this calculation. Table 15.—Projected Pilot Compensation, Multiplied by the Expense Multiplier Equals Projected Operating Expense Pilotage area Projected target pilot compensation Multiplied by expense multiplier Projected operating expense Area 1 $1,466,077 × .32166 = $471,581 Area 2 887,684 × .54468 = $483,505 Total, District One 2,353,761 × .40560 = $954,685 Area 4 887,684 × .63651 = $565,024 Area 5 1,710,424 × .48097 = $822,655 Total, District Two 2,598,108 × .53400 = $1,387,383 Area 6 1,775,368 × .51128 = $907,709 Area 7 977,385 × .36075 = $352,592 Area 8 1,242,758 × .45592 = $566,600 Total, District Three 3,995,511 × .45716 = $1,826,593 Step 5: Adjust the result in Step 4, as required, for inflation or deflation, and calculate projected total economic cost. Based on data from the U.S. Department of Labor's Bureau of Labor Statistics, we have multiplied the results in Step 4 by a 1.024 inflation factor, reflecting an average inflation rate of 2.4% in “Midwest Economy—“Consumer Prices” between 2005 and 2006, the latest years for which data are available. Table 16 shows this calculation and the projected total economic cost. Table 16.—Projected Operating Expense, Adjusted for Inflation, and Added to Projected Target Pilot Compensation Equals Projected Total Economic Cost Pilotage area A. projected operating expense B. increase, multiplied by inflation factor (= A × 1.024) C. projected target pilot compensation D. projected total economic cost (= B+C) Area 1 $471,581 $482,899 $1,466,077 $1,948,977 Area 2 483,505 495,109 887,684 1,382,793 Total, District One 954,685 977,597 2,353,761 3,331,359 Area 4 565,024 578,584 887,684 1,466,268 Area 5 822,655 842,399 1,710,424 2,552,822 Total, District Two 1,387,383 1,420,680 2,598,108 4,018,788 Area 6 907,709 929,494 1,775,368 2,704,862 Area 7 352,592 361,054 977,385 1,338,439 Area 8 566,600 580,198 1,242,758 1,822,956 Total, District Three 1,826,593 1,870,432 3,995,511 5,865,942 Step 6: Divide the result in Step 5 by projected bridge hours to determine total unit costs. Table 17 shows this calculation. Table 17.—Prospective (Total) Unit Costs Pilotage area A. projected total economic cost B. projected 2008 bridge hours Prospective (total) unit costs (A divided by B) Area 1 $1,948,977 5,661 $344.28 Area 2 1,382,793 7,993 173.00 Total, District One 3,331,359 13,654 243.98 Area 4 1,466,268 8,490 172.71 Area 5 2,552,822 6,395 399.19 Total, District Two 4,018,788 14,885 269.99 Area 6 2,704,862 18,000 150.27 Area 7 1,338,439 3,863 346.48 Area 8 1,822,956 11,390 160.05 Total, District Three 5,865,942 33,253 176.40 Step 7: Divide prospective unit costs (total unit costs) in Step 6 by the base period unit costs in Step 1. Table 18 shows this calculation, which expresses the percentage change between the total unit costs and the base unit costs. The results, for each Area, are identical with the percentage increases listed in Table 1. Table 18.—Percentage Change, Prospective vs. Base Period Unit Costs Pilotage area A. prospective unit costs B. base period unit costs C. percentage change from base (A divided by B; result expressed as percentage) Area 1 $344.28 $319.44 7.78 Area 2 173.00 159.5 8.41 Total, District One 243.98 225.86 8.02 Area 4 172.71 159.17 8.50 Area 5 399.19 369.67 7.98 Total, District Two 269.99 249.61 8.16 Area 6 150.27 138.66 8.37 Area 7 346.48 321.31 7.83 Area 8 160.05 147.77 8.31 Total, District Three 176.40 163.00 8.22 *Step 8:* Adjust the base period rates by the percentage change in unit costs in Step 7. Table 19 shows this calculation. Table 19.—Base Period Rates Adjusted by Percentage Change in Unit Costs 1 Pilotage area A. base period rate B. percentage change in unit costs (multiplying factor) C. increase in base rate (A × B%) D. adjusted rate (A + C, rounded to nearest dollar) Area 1 7.78 (1.0778) Basic pilotage $13/km, $23/mi $1.01/km, $1.79/mi $14/km, $25/mi Each lock transited 288 22.41 310 Harbor movage 943 73.37 1,016 Minimum basic rate, St. Lawrence River 629 48.94 678 Maximum rate, through trip 2,761 214.81 2,976 Area 2 8.41 (1.0841) 6-hr. period 477 40.12 517 Docking or undocking 455 38.27 493 Area 4 8.50 (1.0850) 6 hr. period 641 54.49 695 Docking or undocking 494 41.99 536 Any point on Niagara River below Black Rock Lock 1,261 107.19 1,368 Area 5 between any point on or in: 7.98 (1.0798) Toledo or any point on Lake Erie W. of Southeast Shoal 1,004 80.12 1,084 Toledo or any point on Lake Erie W. of Southeast Shoal & Southeast Shoal 1,699 135.58 1,835 Toledo or any point on Lake Erie W. of Southeast Shoal & Detroit River 2,206 176.04 2,382 Toledo or any point on Lake Erie W. of Southeast Shoal & Detroit Pilot Boat 1,699 135.58 1,835 Port Huron Change Point & Southeast Shoal (when pilots are not changed at the Detroit Pilot Boat) 2,959 236.13 3,195 Port Huron Change Point & Toledo or any point on Lake Erie W. of Southeast Shoal (when pilots are not changed at the Detroit Pilot Boat) 3,428 273.55 3,702 Port Huron Change Point & Detroit River 2,223 177.40 2,400 Port Huron Change Point & Detroit Pilot Boat 1,729 137.97 1,867 Port Huron Change Point & St. Clair River 1,229 98.07 1,327 St. Clair River 1,004 80.12 1,084 St. Clair River & Southeast Shoal (when pilots are not changed at the Detroit Pilot Boat) 2,959 236.13 3,195 St. Clair River & Detroit River/Detroit Pilot Boat 2,223 177.40 2,400 Detroit, Windsor, or Detroit River 1,004 80.12 1,084 Detroit, Windsor, or Detroit River & Southeast Shoal 1,699 135.58 1,835 Detroit, Windsor, or Detroit River & Toledo or any point on Lake Erie W. of Southeast Shoal 2,206 176.04 2,382 Detroit, Windsor, or Detroit River & St. Clair River 2,223 177.40 2,400 Detroit Pilot Boat & Southeast Shoal 1,229 98.07 1,327 Detroit Pilot Boat & Toledo or any point on Lake Erie W. of Southeast Shoal 1,699 135.58 1,835 Detroit Pilot Boat & St. Clair River 2,223 177.40 2,400 Area 6 8.37 (1.0837) 6 hr. period 479 40.09 519 Docking or undocking 455 38.08 493 Area 7 between any point on or in: 7.83 (1.0783) Gros Cap & De Tour 1,718 134.52 1,853 Algoma Steel Corp. Wharf, Sault Ste. Marie, Ont. & De Tour 1,718 134.52 1,853 Algoma Steel Corp. Wharf, Sault Ste. Marie, Ont. & Gros Cap 647 50.66 698 Any point in Sault Ste. Marie, Ont., except the Algoma Steel Corp. Wharf & De Tour 1,440 112.75 1,553 Any point in Sault Ste. Marie, Ont., except the Algoma Steel Corp. Wharf & Gros Cap 647 50.66 698 Sault Ste. Marie, MI & De Tour 1,440 112.75 1,553 Sault Ste. Marie, MI & Gros Cap 647 50.66 698 Harbor movage 647 50.66 698 Area 8 8.31 (1.0831) 6 hr. period 464 38.56 503 Docking or undocking 441 36.65 478 1 Rates for “Cancellation, delay or interruption in rendering services ( § 401.420)” and “Basic Rates and charges for carrying a U.S. pilot beyond the normal change point, or for boarding at other than the normal boarding point (§ 401.428)” are not reflected in this table but have been increased by 8.17% across all areas. C. Amending 46 CFR 401.700 and 710 The Coast Guard also proposes to amend 46 CFR 401.700 and 401.710 to clarify the obligation imposed on Great Lakes registered pilots and authorized pilotage pools to fully and professionally cooperate in the course of performing their duties with U.S. and Canadian Coast Guard units and personnel, vessel traffic service personnel, and other lawful authority. This amendment is required because foreign trade vessels piloted by U.S. pilots on the St. Lawrence Seaway and Great Lakes system routinely cross and re-cross the international boundary between the U.S. and Canada. Frequently numerous crossings are made in a single voyage with both sovereigns exercising authority at various points of a transit. The post 9/11 period of heightened security makes it imperative to clearly state the obligation of U.S. Great Lakes pilots and their associations to immediately and professionally comply with any legal directions received, and requests for information, from both U.S. and Canadian law enforcement authority and with those administrative personnel responsible for ensuring the safety and security of the system. IV. Regulatory Evaluation Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735, October 4, 1993, requires a determination whether a regulatory action is “significant” and therefore subject to review by the Office of Management and Budget

(OMB)and subject to the requirements of the Executive Order. This rulemaking is not significant under Executive Order 12866 and will not be reviewed by OMB. The Coast Guard is required to conduct an annual review of pilotage rates on the Great Lakes and, if necessary, adjust these rates to align compensation levels between Great Lakes pilots and industry. (See the “Background” section for a detailed explanation of the legal authority and requirements for the Coast Guard to conduct an annual review and provide possible adjustments of pilotage rates on the Great Lakes.) Based on our review, we are proposing an adjustment to the pilotage rates for the 2008 shipping season to generate sufficient revenue to cover allowable expenses, target pilot compensation, and returns on investment. This proposed rule would implement an 8.17 percent average rate adjustment per area for the Great Lakes system over the rate adjustment found in the 2007 final rule. These adjustments to Great Lakes pilotage rates meet the requirements set forth in 46 CFR part 404 for similar compensation levels between Great Lakes pilots and industry. They also include adjustments for inflation and changes in association expenses to maintain these compensation levels. The increase in pilotage rates will be an additional cost for shippers to transit the Great Lakes system. This proposed rule would result in a distributional effect that transfers payments (income) from vessel owners and operators to the Great Lakes' pilot associations through Coast Guard regulated pilotage rates. The shippers affected by these rate adjustments are those owners and operators of domestic vessels operating on register (employed in the foreign trade) and owners and operators of foreign vessels on a route within the Great Lakes system. These owners and operators must have pilots or pilotage service as required by 46 U.S.C. 9302. There is no minimum tonnage limit or exemption for these vessels. However, the Coast Guard issued a policy position several years ago stating that the statute applies only to commercial vessels and not to recreational vessels. Owners and operators of other vessels that are not affected by this proposed rule, such as recreational boats and vessels only operating within the Great Lakes system, may elect to purchase pilotage services. However, this election is voluntary and does not affect the Coast Guard's calculation of the rate increase and is not a part of our estimated national cost to shippers. We reviewed a sample of pilot source forms, which are the forms used to record pilotage transactions on vessels, and discovered very few cases of U.S. Great Lakes vessels (i.e., domestic vessels without registry operating only in the Great Lakes) that purchased pilotage services. There was one case where the vessel operator purchased pilotage service in District One to presumably leave the Great Lakes system. We assume some vessel owners and operators may also choose to purchase pilotage services if their vessels are carrying hazardous substances or were navigating the Great Lakes system with inexperienced personnel. Based on information from the Coast Guard Office of Great Lakes Pilotage, we have determined that these vessels voluntarily chose to use pilots and, therefore, are exempt from pilotage requirements. We updated our estimates of affected vessels for the proposed rule by using recent vessel characteristics, documentation, and arrival data. We used 2005-2006 vessel arrival data from the National Vessel Movement Center

(NVMC)and the Coast Guard's Marine Inspection, Safety, and Law Enforcement (MISLE) system to estimate the average annual number of vessels affected by the rate adjustment to be 217 vessels that journey into the Great Lakes system. These vessels entered the Great Lakes by transiting through or in part of at least one of the three pilotage Districts before leaving the Great Lakes system. These vessels often make more than one distinct stop, docking, loading, and unloading at facilities in Great Lakes ports. Of the total trips for the 217 vessels, there were approximately 917 annual U.S. port arrivals before the vessels left the Great Lakes system, based on 2005-2006 vessel data from the NVMC and MISLE. We used district pilotage revenues from the independent accountant's reports of the Districts' financial statements to estimate the additional cost to shippers of the rate adjustments in this proposed rule. These revenues represent the direct and indirect pilotage costs that shippers must pay for pilotage services in order to transit their vessels in the Great Lakes. Table 1 shows historical pilotage revenues by District. Table 1.—District Revenues [$U.S.] Year District one District two District three Total 1998 2,127,577 3,202,374 4,026,802 9,356,753 1999 2,009,180 2,727,688 3,599,993 8,336,861 2000 1,890,779 2,947,798 4,036,354 8,874,931 2001 1,676,578 2,375,779 3,657,756 7,710,113 2002 1,686,655 2,089,348 3,460,560 7,236,563 *Source:* Annual independent accountant’s reports of the Districts to the Coast Guard's Office of Great Lake Pilotage. While the revenues have decreased over time, the Coast Guard adjusts pilotage rates to achieve a target pilot compensation similar to masters and first mates working on U.S. vessels engaged in the Great Lakes trade. Pilotage rates are set by the Coast Guard for revenues to equal the estimated costs of pilotage. Table 2 displays projected costs from the 2006 and 2007 final rules and the 2002 revenue from Table 1. Table 2.—Revenues and Costs Through the 2007 Rate Adjustment [$U.S.] 1 District District one District two District three Total 2 2002 District Revenues 1,686,655 2,089,348 3,460,560 7,236,563 2006 Total Projected Economic Cost 2,692,426 3,238,337 4,722,162 10,652,925 2007 Total Projected Economic Cost 3,083,904 3,715,426 5,420,279 12,219,609 1 For the calculation of the 2006 and 2007 projected economic costs, see the “Discussion of Rule” sections of the 2006 and 2007 final rules published in the Federal Register . 2 Some values may not total due to rounding. We estimate the additional cost of the rate adjustment in this proposed rule to be the difference between the total revenue needed to cover costs based on the 2007 rate adjustment and the total projected economic cost in this proposed rule. Table 3 compares projected economic costs in 2007 and costs of the proposed rule to industry by district. Table 3.—Rate Adjustment Factors and Additional Cost of This Proposed Rule [$U.S.] District District one District two District three Total 1 Total Projected Economic Cost in 2007 3,083,904 3,715,426 5,420,279 12,219,609 Proposed Rate Adjustment 2 1.0802 1.0816 1.0822 1.0817 Total Projected Economic Cost in 2008 3,331,359 4,018,788 5,865,942 13,216,089 Additional Revenue Required or Cost of this Rulemaking 3 247,455 303,362 445,663 996,480 1 Some values may not total due to rounding. 2 See steps 5(b) and 7 of the “Calculating the Rate Adjustment” section of this proposed rule for the “Proposed Rate Adjustment” and the “Total Projected Economic Cost in 2008”. 3 Additional revenue or cost of this rule = “Total Projected Economic Cost in 2008”—“Total Projected Economic Cost in 2007”. After applying the rate change in this proposed rule, the resulting difference between the adjusted economic cost in 2007 and the projected economic cost in 2008 is the annual cost to shippers from this proposed rule. This figure will be equivalent to the total additional payments that shippers will make for pilotage services from this proposed rule. The annual cost of the rate adjustment in this proposed rule to shippers is approximately $1.0 million (non-discounted). To calculate an exact cost per vessel is difficult because of the variation in vessel types, routes, port arrivals, commodity carriage, time of season, conditions during navigation, and preferences for the extent of pilotage services on designated and undesignated portions of the Great Lakes system. Some owners and operators will pay more and some will pay less depending on the distance and port arrivals of their vessels' trips. However, the annual cost reported above does capture all of the additional cost the shippers face as a result of the rate adjustment in this proposed rule. In addition to the annual reviews and possible partial rate adjustments, the Coast Guard is required to determine and, if necessary, perform a full adjustment of Great Lakes pilotage rates at a minimum of once every five years. Due to the frequency of the full rate adjustments, we estimated the total cost to shippers of the rate adjustments in this proposed rule over a five-year period instead of a ten-year period. The total five-year (2008-2012) present value cost estimate of this proposed rule to shippers is $4.4 million discounted at a seven percent discount rate and $4.7 million discounted at a three percent discount rate. For the calculation of the total five-year present value cost estimate, we chose not to discount first-year costs and instead began discounting in the second year, because we anticipate that industry would most likely begin to incur costs immediately upon publication of this proposed rule during the 2008 Great Lakes shipping season which is generally less than a calendar year. We also considered a middle-of-year discounting process to account for the payments occurring over the course of the year but the difference was small considering the overall cost of the proposed rule. A. Small Entities Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this proposed rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. We expect entities affected by the proposed rule would be classified under the North American Industry Classification System (NAICS) code subsector 483-Water Transportation, which includes one or all of the following 6-digit NAICS codes for freight transportation: 483111-Deep Sea Freight Transportation, 483113-Coastal and Great Lakes Freight Transportation, and 483211-Inland Water Freight Transportation. According to the Small Business Administration's definition, a U.S. company with these NAICS codes and employing less than 500 employees is considered a small entity. For the proposed rule, we reviewed recent company size and ownership data from 2005-2006 Coast Guard MISLE data and business revenue and size data provided by reference USA and Dunn and Bradstreet. We were able to gather revenue and size data or link the entities to large shipping conglomerates for 22 of the 24 affected entities in the United States. We found that large, mostly foreign-owned, shipping conglomerates or their subsidiaries owned or operated all vessels engaged in foreign trade on the Great Lakes. We assume that new industry entrants will be comparable in ownership and size to these shippers. There are three U.S. entities affected by the proposed rule that would receive the additional revenues from the rate adjustment. These are the three pilot associations that are the only entities providing pilotage services within the Great Lakes districts. Two of the associations operate as partnerships and one operates as a corporation. These associations are classified with the same NAICS industry classification and small entity size standards described above, but they have far fewer than 500 employees: approximately 65 total employees combined. However, they are not adversely impacted with the additional costs of the rate adjustments, but instead receive the additional revenue benefits for operating expenses and pilot compensation. Therefore, the Coast Guard has found that this proposed rule would not have a significant impact on a substantial number of U.S. small entities under 5 U.S.C. 605(b). If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this proposed rule would have a significant economic impact on it, please submit a comment to the Docket Management Facility at the address under ADDRESSES . In your comment, explain why you think it qualifies and how and to what degree this proposed rule would economically affect it. B. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding the proposed rule so that they could better evaluate its effects on them and participate in the rulemaking. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call Mike Sakaio, Great Lakes Pilotage Branch, (CG-54122), U.S. Coast Guard, telephone 202-372-1538 or send him e-mail at *Michael.Sakaio@uscg.mil* . Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). C. Collection of Information This proposed rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). This rule does not change the burden in the collection currently approved by the Office of Management and Budget

(OMB)under OMB Control Number 1625-0086, Great Lakes Pilotage Methodology. D. Federalism A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism because there are no similar State regulations, and the States do not have the authority to regulate and adjust rates for pilotage services in the Great Lakes system. E. Unfunded Mandates Reform Act The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule would not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble. F. Taking of Private Property This rule would not affect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. G. Civil Justice Reform This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. H. Protection of Children We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children. I. Indian Tribal Governments This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. J. Energy Effects We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211. K. Technical Standards The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies. This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards. L. Environment We have analyzed this rule under Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have made a preliminary determination that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, we believe that this rule should be categorically excluded, under figure 2-1, paragraph (34)(a), of the Instruction, from further environmental documentation. Paragraph 34(a) pertains to minor regulatory changes that are editorial or procedural in nature. This rule adjusts rates in accordance with applicable statutory and regulatory mandates. An “Environmental Analysis Check List” is available in the docket where indicated under the “Public Participation and Request for Comments” section of this preamble. Comments on this section will be considered before we make the final decision on whether this rule should be categorically excluded from further environmental review. List of Subjects in 46 CFR Part 401 Administrative practice and procedure, Great Lakes, Navigation (water), Penalties, Reporting and recordkeeping requirements, Seamen. For the reasons discussed in the preamble, the Coast Guard proposes to amend 46 CFR part 401 as follows: PART 401—GREAT LAKES PILOTAGE REGULATIONS 1. The authority citation for part 401 continues to read as follows: Authority: 46 U.S.C. 2104(a), 6101, 7701, 8105, 9303, 9304; Department of Homeland Security Delegation No. 0170.1 46 CFR 401.105 also issued under the authority of 44 U.S.C. 3507 2. In § 401.405, revise paragraphs

(a)and

(b)to read as follows: § 401.405 Basic rates and charges on the St. Lawrence River and Lake Ontario.

(a)Area 1 (Designated Waters): Service St. Lawrence River Basic Pilotage $14 per Kilometer or $25 per mile. 1 Each Lock Transited $310. 1 Harbor Movage $1,016. 1 1 The minimum basic rate for assignment of a pilot in the St. Lawrence River is $678, and the maximum basic rate for a through trip is $2,976.

(b)Area 2 (Undesignated Waters): Service Lake Ontario Six-Hour Period $517 Docking or Undocking 493 3. In § 401.407 revise paragraphs

(a)and

(b)to read as follows: § 401.407 Basic rates and charges on Lake Erie and the navigable waters from Southeast Shoal to Port Huron, MI.

(a)Area 4 (Undesignated Waters): Service Lake Erie (East of Southeast Shoal) Buffalo Six-Hour Period $695 $695 Docking or Undocking 536 536 Any Point on the Niagara River below the Black Rock Lock N/A $1,368

(b)Area 5 (Designated Waters): Any point on or in Southeast Shoal Toledo or any point on Lake Erie west of Southeast Shoal Detroit River Detroit Pilot Boat St. Clair River Toledo or any port on Lake Erie west of Southeast Shoal $1,835 $1,084 $2,382 $1,835 N/A Port Huron Change Point 1 3,195 3,702 2,400 1,867 $1,327 St. Clair River 1 3,195 N/A 2,400 2,400 1,084 Detroit or Windsor or the Detroit River 1,835 2,382 1,084 N/A 2,400 Detroit Pilot Boat 1,327 1,835 N/A N/A 2,400 1 When pilots are not changed at the Detroit Pilot Boat. 4. In § 401.410, revise paragraphs (a), (b), and

(c)to read as follows: § 401.410 Basic rates and charges on Lakes Huron, Michigan, and Superior, and the St Mary's River.

(a)Area 6 (Undesignated Waters): Service Lakes Huron and Michigan Six-Hour Period $519 Docking or Undocking 493

(b)Area 7 (Designated Waters): Area De Tour Gros Any Cap harbor Gros Cap $1,853 N/A N/A Algoma Steel Corporation Wharf at Sault Ste. Marie, Ontario 1,853 698 N/A Any point in Sault Ste. Marie, Ontario, except the Algoma Steel Corporation Wharf 1,553 $698 N/A Sault Ste. Marie, MI 1,553 698 N/A Harbor Movage N/A N/A $698

(c)Area 8 (Undesignated Waters): Service Lake Superior Six-Hour Period $503 Docking or Undocking 478 § 401.420 [Amended] 5. In § 401.420— a. In paragraph (a), remove the number “$86” and add, in its place, the number “$93”; and remove the number “$1,349” and add, in its place, the number “$1,459”. b. In paragraph (b), remove the number “$86” and add, in its place, the number “$93”; and remove the number “$1,349” and add, in its place, the number “$1,459”. c. In paragraph (c)(1), remove the number “$510” and add, in its place, the number “$552”; in paragraph (c)(3), remove the number “$86” and add, in its place, the number “$93”; and, also in paragraph (c)(3), remove the number “$1,349” and add, in its place, the number “$1,459”. § 401.428 [Amended] 6. In § 401.428, remove the number “$520” and add, in its place, the number “$562”. 7. Revise § 401.700 to read as follows: § 401.700 Operating requirements for U.S. registered pilots. Each U.S. registered pilot shall—

(a)Provide pilotage service when dispatched by his pool;

(b)Comply with the dispatching orders of the Director under § 401.720(b);

(c)Comply immediately and professionally, consistent with the safe navigation of the vessel, with all lawful requests and directions received from U.S. and Canadian Coast Guard units and personnel, vessel traffic service personnel, and other lawful authority; and

(d)A violation of any of these provisions may be punished in accordance with 46 CFR 401.500 and be grounds for the suspension or revocation of a pilots registration pursuant to 46 CFR 401 subpart F. 8. In § 401.710, revise paragraphs

(f)and

(g)and add paragraphs

(h)and

(i)to read as follows: § 401.710 Operating requirements for holders of Certificates of Authorization

(f)Comply with all accounting procedures and the reporting requirements in this chapter;

(g)Make available to the Commandant all of its financial and operating records;

(h)Comply immediately and professionally with all lawful requests and directions received from U.S. and Canadian Coast Guard units and personnel, vessel traffic service personnel, and other lawful authority; and

(i)A violation of any of these provisions may be punished in accordance with 46 CFR 401.500 and be grounds for the suspension or revocation of a pilot association's certificate of authorization to operate a pool pursuant to 46 CFR 401.335. Dated: January 29, 2008. Brian M. Salerno, Rear Admiral, U.S. Coast Guard, Assistant Commandant for Marine Safety, Security & Stewardship. [FR Doc. 08-474 Filed 1-30-08; 8:45am]

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