Notices. Correction and extension of deadline date
131,683 words·~599 min read·
/register/2008/04/07/08-1094A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
BILLING CODE 6725-01-P FEDERAL RESERVE SYSTEM Change in Bank Control Notices; Acquisition of Shares of Bank or Bank Holding Companies The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board’s Regulation Y (12 CFR 225.41) to acquire a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)). The notices are available for immediate inspection at the Federal Reserve Bank indicated.
The notices also will be available for inspection at the office of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than April 22, 2008. **A. Federal Reserve Bank of Kansas City** (Todd Offenbacker, Assistant Vice President) 925 Grand Avenue, Kansas City, Missouri 64198-0001: *1. Robert I. Guenthner* , Newton, Kansas, and Ivan D.
Knudsen, Wichita, Kansas, as co-trustees of the V. Jerry Blue Master Trust; to acquire control of Republic Financial Corporation, and thereby indirectly acquire control of Southwest National Bank, both in Wichita, Kansas. **B. Federal Reserve Bank of Dallas** (W. Arthur Tribble, Vice President) 2200 North Pearl Street, Dallas, Texas 75201-2272: *1. Laura Lankford* , West, Texas; George B. Graves, Jr., and Sarah Lou Bracken, both of Waco, Texas; to acquire voting shares of West Bancshares, Inc., West, Texas, and thereby indirectly acquire voting shares of Pointwest Bank, West, Texas.
Board of Governors of the Federal Reserve System, April 2, 2008. Robert deV. Frierson, Deputy Secretary of the Board. [FR Doc. E8-7184 Filed 4-4-08; 8:45 am] BILLING CODE 6210-01-S FEDERAL RESERVE SYSTEM Formations of, Acquisitions by, and Mergers of Bank Holding Companies; Correction This notice corrects a notice (FR Doc. E8-6162) published on page 16015 of the issue for Wednesday, March 26, 2008. Under the Federal Reserve Bank of San Francisco heading, the entry for Wells Fargo & Company, San Francisco, California, is revised to read as follows: **A.
Federal Reserve Bank of San Francisco** (Tracy Basinger, Director, Regional and Community Bank Group) 101 Market Street, San Francisco, California 94105-1579: *1. Wells Fargo & Company* , San Francisco, California; to acquire 100 percent of the voting shares of The Jackson State Bank & Trust, Jackson, Wyoming; Shoshone First Bank, Cody, Wyoming; Sheridan State Bank, Sheridan, Wyoming; and First State Bank of Pinedale, Pinedale, Wyoming, and to acquire certain assets and assume certain liabilities of United Bancorporation of Wyoming, Inc., Jackson, Wyoming.
Comments on this application must be received by April 21, 2008. Board of Governors of the Federal Reserve System, April 2, 2008. Robert deV. Frierson, Deputy Secretary of the Board. [FR Doc. E8-7185 Filed 4-4-08 8:45 am] BILLING CODE 6210-01-S FEDERAL RESERVE SYSTEM Notice of Proposals to Engage in Permissible Nonbanking Activities or to Acquire Companies that are Engaged in Permissible Nonbanking Activities The companies listed in this notice have given notice under section 4 of the Bank Holding Company Act (12 U.S.C. 1843) (BHC Act) and Regulation Y (12 CFR Part 225) to engage *de novo* , or to acquire or control voting securities or assets of a company, including the companies listed below, that engages either directly or through a subsidiary or other company, in a nonbanking activity that is listed in § 225.28 of Regulation Y (12 CFR 225.28) or that the Board has determined by Order to be closely related to banking and permissible for bank holding companies.
Unless otherwise noted, these activities will be conducted throughout the United States. Each notice is available for inspection at the Federal Reserve Bank indicated. The notice also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the question whether the proposal complies with the standards of section 4 of the BHC Act. Additional information on all bank holding companies may be obtained from the National Information Center website at *www.ffiec.gov/nic/* .
Unless otherwise noted, comments regarding the applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than April 21, 2008. **A. Federal Reserve Bank of Atlanta** (David Tatum, Vice President) 1000 Peachtree Street, N.E., Atlanta, Georgia 30309: *1. Franklin Financial Network, Inc.* ; to acquire the assets and assume the liabilities of Banc Compliance Group, LLC, and thereby engage through its wholly-owned subsidiary, Banc Compliance Group, Inc., all of Franklin, Tennessee, in providing management consulting and counseling activities, pursuant to section 225.28(b)(9)(i)(A) of Regulation Y.
Board of Governors of the Federal Reserve System, April 1, 2008. Robert deV. Frierson, Deputy Secretary of the Board. [FR Doc. E8-7086 Filed 4-4-08; 8:45 am] BILLING CODE 6210-01-S DEPARTMENT OF HEALTH AND HUMAN SERVICES [Document Identifier: OS-0990-NEW] Agency Information Collection Request: 60-Day Public Comment Request AGENCY: Office of the Secretary, HHS. In compliance with the requirement of section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, the Office of the Secretary (OS), Department of Health and Human Services, is publishing the following summary of a proposed collection for public comment.
Interested persons are invited to send comments regarding this burden estimate or any other aspect of this collection of information, including any of the following subjects:
(1)The necessity and utility of the proposed information collection for the proper performance of the agency's functions;
(2)the accuracy of the estimated burden;
(3)ways to enhance the quality, utility, and clarity of the information to be collected; and
(4)the use of automated collection techniques or other forms of information technology to minimize the information collection burden. To obtain copies of the supporting statement and any related forms for the proposed paperwork collections referenced above, e-mail your request, including your address, phone number, OMB number, and OS document identifier, to *Sherette.funncoleman@hhs.gov,* or call the Reports Clearance Office at
(202)690-6162. Written comments and recommendations for the proposed information collections must be directed to the OS Paperwork Clearance Officer at the above e-mail address within 60 days. *Proposed Project:* Evaluation of the Afghanistan Health Initiative—OMB No. 0990-NEW-Office of the Assistant Secretary for Planning and Evaluation (ASPE). *Abstract:* The Offices of Global Health Affairs
(OGHA)and the Assistant Secretary for Planning and Evaluation (ASPE), within the U.S. Department of Health and Human Services (HHS), are requesting Office of Management and Budget
(OMB)approval for collection of information to evaluate two components of the *Afghanistan Health Initiative (AHI).* The Afghanistan Health Initiative is authorized by the Afghanistan Freedom Support Act of 2002 [Pub. L. 107-327 section 103(a)]. The *AHI's* goal is to improve maternal and child health and to reduce maternal and child mortality in Afghanistan, primarily through strengthening and updating the knowledge and skills of clinical service providers and managers at the Rabia Balkhi Hospital
(RBH)in Kabul. Under the *AHI,* HHS has funded separate cooperative agreements with International Medical Corps
(IMC)and CURE International (CURE). The evaluation includes two approaches for data collection:
(1)A set of qualitative interviews with four respondent groups (OB/GYN residents, attending physicians, midwives, and Rabia Balkhi Hospital management staff) and
(2)administering a subset of the clinical Standards Based Management
(SBM)assessment with two respondent groups (OB/GYN residents and midwives). Estimates of annualized reporting burden are as follows: Estimated Annualized Burden Table Forms Type of respondent Number of respondents Number of responses per respondent Average burden per response (in hours) Total burden hours Management Interview Guide Management Staff 21 1 30/60 11 Clinician Interview Guide Attending Physicians 8 1 30/60 4 Clinician Interview Guide 1st-4th Year Resident Physicians 11 1 30/60 6 Clinician Interview Guide Midwives 15 1 30/60 8 1st Year Resident, Standards-Based Management Assessment 1st Year Resident physician staff 31 1 1.5 47 2nd Year Resident, Standards-Based Management Assessment 2nd Year Resident physician staff 8 1 1.5 12 3rd Year Resident, Standards-Based Management Assessment 3rd Year Resident physician staff 9 1 1 9 4th Year Resident, Standards-Based Management Assessment 4th Year Resident physician staff 8 1 1.5 12 Midwife, Standards-Based Management Assessment Midwives 75 1 2 150 Total 259 Debbie Kramer, Office of the Secretary, Paperwork Reduction Act Reports Clearance Officer. [FR Doc. E8-7242 Filed 4-4-08; 8:45 am] BILLING CODE 4150-05-P DEPARTMENT OF HEALTH AND HUMAN SERVICES Administration for Children and Families Proposed Information Collection Activity; Comment Request Proposed Project: *Title:* Tracking of Participants in the Head Start Impact Study. *OMB No.:* 0970-0229. *Description:* The Administration for Children and Families
(ACF)within the Department of Health and Human Services
(HHS)will collect follow-up information from children and families in the Head Start Impact Study. In anticipation of conducting an 8th grade follow-up for the study, ACF will collect information necessary to identify respondents' current location and follow-up with respondents in the future. The Head Start Impact Study is a longitudinal study involving approximately 5,000 first time enrolled three- and four-year-old preschool children across 84 nationally representative grantee/delegate agencies. Participants have been randomly assigned to either a Head Start group or a control group. Data collection for the study began in fall of 2002 and has been extended through late spring 2008 to include the participants' 3rd grade year. ACF will continue to examine outcomes for the sample through the spring of the participant's 8th grade year. To maintain adequate sample size, telephone interviews will be conducted in order to update the respondent's location and contact information. This information will be collected from parents or guardians in the spring of 2009, 2010, and 2011. A small set of additional items will provide information on the parents' perception of the children's well-being. *Respondents:* Treatment and control group members in the Head Start Impact Study. Annual Burden Estimates Instrument Number of respondents Number of responses per respondent Average buden hours per response Total burden hours Tracking Interview 4,667 1 .25 1,167 Estimated Total Annual Burden Hours 1,167 In compliance with the requirements of section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, the Administration for Children and Families is soliciting public comment on the specific aspects of the information collection described above. Copies of the proposed collection of information can be obtained and comments may be forwarded by writing to the Administration for Children and Families, Office of Planning, Research and Evaluation, 370 L'Enfant Promenade, SW., Washington, DC 20447. Attn: ACF Reports Clearance Officer. E-mail address: *OPREInfoCollection@acf.hhs.gov* . All requests should be identified by the title of the information collection. The Department specifically requests comments on:
(a)Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility;
(b)the accuracy of the agency's estimate of the burden of the proposed collection of information;
(c)the quality, utility, and clarity of the information to be collected; and
(d)ways to minimize the burden of the collection of information on respondents. Consideration will be given to comments and suggestions submitted within 60 days of this publication. Dated: March 31, 2008. Brendan C. Kelly, OPRE Reports Clearance Officer. [FR Doc. E8-7138 Filed 4-4-08; 8:45 am] BILLING CODE 4184-01-M DEPARTMENT OF HEALTH AND HUMAN SERVICES Health Resources and Services Administration Organ Procurement and Transplantation Network AGENCY: Health Resources and Services Administration, HHS. ACTION: Correction and extension of deadline date. SUMMARY: The Health Resources Services Administration
(HRSA)published a notice in the **Federal Register** of March 3, 2008 (FR Doc. E8-3994), pages 11420-11421, requesting comments to assist in determining whether it should engage in rulemaking with respect to vascularized composite allografts, and also to announce a meeting for discussion and recommendations regarding that issue. The notice is to extend HRSA's deadline for receiving written comments to July 2, 2008, and to change the zip code of the address where the meeting will be held. *Correction:* In the **Federal Register** of March 3, 2008, in FR Doc. E8-3994, on page 11421, 1st column under the heading DATES : 1st line, change to read: Written comments must be received at HRSA by July 2, 2008. 10th line, change to read: The meeting will be held on Friday, April 4, 2008, from 10 a.m. to 4 p.m., at the Parklawn Building, 5600 Fishers Lane, Rockville, MD 20857. Dated: April 1, 2008. Alexandra Huttinger, Director, Division of Policy Review and Coordination. [FR Doc. E8-7174 Filed 4-4-08; 8:45 am] BILLING CODE 4165-15-P DEPARTMENT OF HEALTH AND HUMAN SERVICES National Institutes of Health National Heart, Lung, and Blood Institute; Notice of Closed Meeting Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), notice is hereby given of the following meeting. The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy. *Name of Committee:* National Heart, Lung, and Blood Institute Special Emphasis Panel, Research Project in Lung Assessment. *Date:* April 28, 2008. *Time:* 1 p.m. to 4 p.m. *Agenda:* To review and evaluate grant applications. *Place:* National Institutes of Health, 6701 Rockledge Drive, Bethesda, MD 20892 (Telephone Conference Call). *Contact Person:* Holly Patton, PhD, Scientific Review Administrator, Review Branch/DERA, National Heart, Lung, and Blood Institute, 6701 Rockledge Drive, Room 7188, Bethesda, MD 20892-7924, 301-435-0280, *pattonh@nhlbi.nih.gov.* (Catalogue of Federal Domestic Assistance Program Nos. 93.233, National Center for Sleep Disorders Research; 93.837, Heart and Vascular Diseases Research; 93.838, Lung Diseases Research; 93.839, Blood Diseases and Resources Research, National Institutes of Health, HHS) Dated: March 31, 2008. Jennifer Spaeth, Director, Office of Federal Advisory Committee Policy. [FR Doc. E8-7131 Filed 4-4-08; 8:45 am] BILLING CODE 4140-01-M DEPARTMENT OF HEALTH AND HUMAN SERVICES National Institutes of Health National Institute on Aging; Notice of Closed Meetings Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), notice is hereby given of the following meetings. The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy. *Name of Committee:* National Institute on Aging Special Emphasis Panel, Integrative Pathways to Health and Illness. *Date:* May 1, 2008. *Time:* 1 p.m. to 5 p.m. *Agenda:* To review and evaluate grant applications. *Place:* National Institutes on Aging, Gateway Building, 7201 Wisconsin Avenue, 2C212, Bethesda, MD 20892 (Telephone Conference Call). *Contact Person:* Jon E. Rolf, PhD, Scientific Review Administrator, Scientific Review Office, National Institute on Aging, Bethesda, MD 20814,
(301)402-7703, *rolfj@nia.nih.gov.* *Name of Committee:* National Institute on Aging Special Emphasis Panel, Cognitive Aging. *Date:* May 7, 2008. *Time:* 11 a.m. to 2 p.m. *Agenda:* To review and evaluate grant applications. *Place:* National Institutes of Health, Gateway Building, 7201 Wisconsin Avenue, 2C212, Bethesda, MD 20814 (Telephone Conference Call). *Contact Person:* Allcja L. Markowska, PhD, DSC, National Institute on Aging, 7201 Wisconsin Avenue, Suite 2C212, Bethesda, MD 20892, 301-496-9666, *markowsa@nia.nih.gov.* *Name of Committee:* National Institute on Aging Special Emphasis Panel, Social Relations, Health, and Aging. *Date:* May 16, 2008. *Time:* 1 p.m. to 4 p.m. *Agenda:* To review and evaluate grant applications. *Place:* National Institute on Aging, Gateway Building, 7201 Wisconsin Avenue, Suite 2C212, Bethesda, MD 20814 (Telephone Conference Call). *Contact Person:* Ramesh Vemuri, PhD, Scientific Review Office, National Institute on Aging, National Institutes of Health, 7201 Wisconsin Avenue, Suite 2C212, Bethesda, MD 20892, 301-402-7700, *rv23r@nih.gov.* (Catalogue of Federal Domestic Assistance Program Nos. 93.866, Aging Research, National Institutes of Health, HHS) Dated: March 31, 2008. Jennifer Spaeth, Director, Office of Federal Advisory Committee Policy. [FR Doc. E8-7129 Filed 4-4-08; 8:45 am] BILLING CODE 4140-01-M DEPARTMENT OF HEALTH AND HUMAN SERVICES National Institutes of Health National Institute of Nursing Research; Notice of Closed Meeting Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), notice is hereby given of the following meeting. The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy. *Name of Committee:* National Institute of Nursing Research Special Emphasis Panel, NINR Loan Repayment Program Review (L30/L40). *Date:* April 18, 2008. *Time:* 10 a.m. to 2 p.m. *Agenda:* To review and evaluate grant applications. *Place:* 6701 Democracy Blvd., Suite 710, Bethesda, MD 20892 (Telephone Conference Call). *Contact Person:* Yujing Liu, PhD, MD, Chief, Office of Review, Division of Extramural Activities, National Institute of Nursing Research, National Institutes of Health, 6701 Democracy Blvd., Ste. 710, Bethesda, MD 20892,
(301)451-5152, *yujing_liu@nih.gov* . This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle. Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person. (Catalogue of Federal Domestic Assistance Program No. 93.361, Nursing Research, National Institutes of Health, HHS) Dated: March 31, 2008. Jennifer Spaeth, Director, Office of Federal Advisory Committee Policy. [FR Doc. E8-7130 Filed 4-4-08; 8:45 am] BILLING CODE 4140-01-M DEPARTMENT OF HEALTH AND HUMAN SERVICES National Institutes of Health National Institute of Dental & Craniofacial Research; Notice of Closed Meetings Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), notice is hereby given of the following meetings. The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy. *Name of Committee:* National Institute of Dental and Craniofacial Research, Special Emphasis Panel Review Loan Repayment Applications. *Date:* April 30, 2008. *Time:* 2 p.m. to 4 p.m. *Agenda:* To review and evaluate grant applications. *Place:* National Institutes of Health, One Democracy Plaza, 6701 Democracy Boulevard, Bethesda, MD 20892 (Telephone Conference Call). *Contact Person:* Sooyoun (Sonia) Kim, MS, Scientific Review Officer, Scientific Review Branch, Division of Extramural Activities, NIDCR/NIH, 6701 Democracy Blvd., Rm. 675, Bethesda, MD 20892-4878,
(301)594-4827, *kims@email.nidr.nih.gov* . *Name of Committee:* National Institute of Dental and Craniofacial Research, Special Emphasis Panel Review RFA DE-08-009 R21s. *Date:* May 2, 2008. *Time:* 12 p.m. to 4 p.m. *Agenda:* To review and evaluate grant applications. *Place:* National Institutes of Health, Bethesda, MD 20892 (Telephone Conference Call). *Contact Person:* Jonathan Horsford, PhD, Scientific Review Officer, NIDCR, 45 Center Drive, 4AN-24E, Bethesda, MD 20892, 301-594-4859, *horsforj@mail.nih.gov* . (Catalogue of Federal Domestic Assistance Program Nos. 93.121, Oral Diseases and Disorders Research, National Institutes of Health, HHS) Dated: March 31, 2008. Jennifer Spaeth, Director, Office of Federal Advisory Committee Policy. [FR Doc. E8-7132 Filed 4-4-08; 8:45 am] BILLING CODE 4140-01-M DEPARTMENT OF HEALTH AND HUMAN SERVICES National Institutes of Health National Institute of Allergy and Infectious Diseases; Notice of Closed Meeting Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix 2), notice is hereby given of the following meeting. The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy. *Name of Committee:* National Institute of Allergy and Infectious Diseases Special Emphasis Panel; New Drug Discovery for Tuberculosis. *Date:* May 9, 2008. *Time:* 12 p.m. to 5 p.m. *Agenda:* To review and evaluate grant applications. *Place:* National Institutes of Health, 6700B Rockledge Drive, Bethesda, MD 20817 (Telephone Conference Call). *Contact Person:* Darren D. Sledjeski, PhD, Scientific Review Officer, NIH/NIAID/DHHS, Scientific Review Program, 6700B Rockledge Drive, MSC-7616, Room 3131, Bethesda, MD 20892-7616, 301-451-2638, *sledjeskid@niaid.nih.gov.* (Catalogue of Federal Domestic Assistance Program Nos. 93.855, Allergy, Immunology, and Transplantation Research; 93.856, Microbiology and Infectious Diseases Research, National Institutes of Health, HHS) Dated: March 31, 2008. Jennifer Spaeth, Director, Office of Federal Advisory Committee Policy. [FR Doc. E8-7133 Filed 4-4-08; 8:45 am] BILLING CODE 4140-01-M DEPARTMENT OF HEALTH AND HUMAN SERVICES Substance Abuse and Mental Health Services Administration Fiscal Year
(FY)2008 Funding Opportunity AGENCY: Substance Abuse and Mental Health Services Administration, HHS. ACTION: Notice of intent to award a Single Source Grant to the Education Development Resource Center, Inc., Newton, Massachusetts. SUMMARY: This notice is to inform the public that the Substance Abuse and Mental Health Services Administration (SAMHSA) intends to award approximately $996,000 (total costs) per year for up to two years to the Education Development Resource Center, Inc. Newton, Massachusetts. This is not a formal request for applications. Assistance will be provided only to the Education Development Resource Center, Inc. based on the receipt of a satisfactory application that is approved by an independent review group. *Funding Opportunity Title:* SM-08-014 *Catalog of Federal Domestic Assistance
(CFDA)Number:* 93.243 Authority: Section 520C of the Public Health Service Act, as amended. *Justification:* Through the Suicide Prevention Resource Center (SPRC), the Education Development Center supports the technical assistance and information needs of SAMHSA State/Tribal Youth Suicide Prevention and Campus Suicide Prevention grantees and State, Territorial, and Tribal suicide prevention coordinators and coalition members with customized assistance and technical resources. They accomplish this through planning conferences and training events, creating publications and Web content on suicide and suicide prevention for professionals, advocates, and consumers; identifying and disseminating best practices; facilitating informational exchanges and peer-to-peer mentoring using listservs and other technologies; and promoting suicide prevention as a component of mental health transformation. Funding for the SPRC and for this program supplement are components of the Garrett Lee Smith Memorial Act, most recently included in the 2008 Omnibus Appropriations Act. Congress authorized funding for only one Suicide Prevention Resource Center; therefore the program supplement must be awarded to the grantee that manages the SPRC, specifically to Education Development Center, Inc., Newton, Massachusetts. There are no other sources with the available resources and expertise to successfully complete the tasks of this proposal. Further, it would be both inefficient and wasteful to fund a second technical assistance provider for the same group of grantees. FOR FURTHER INFORMATION CONTACT: Shelly Hara, Substance Abuse and Mental Health Services Administration, 1 Choke Cherry Road, Room 8-1081, Rockville, MD 20857; telephone:
(240)276-2321; E-mail: *shelly.hara@samhsa.hhs.gov* . Toian Vaughn, SAMHSA Committee Management Officer. [FR Doc. E8-6997 Filed 4-4-08; 8:45 am] BILLING CODE 4162-20-P DEPARTMENT OF HOMELAND SECURITY National Communications System [Docket No. NCS-2008-0001] National Security Telecommunications Advisory Committee AGENCY: National Communications System, DHS. ACTION: Notice of Partially Closed Advisory Committee Meeting. SUMMARY: The President's National Security Telecommunications Advisory Committee (NSTAC) will meet in a partially closed session. DATES: Thursday, May 1, 2008, from 1:15 p.m. until 5 p.m. ADDRESSES: The meeting will take place at the U.S. Chamber of Commerce, 1615 H St., NW., Washington DC. If you desire meeting materials, contact Ms. Sue Daage at
(703)235-5526 or by e-mail at *sue.daage@dhs.gov.* Please submit your comments by May 8, 2008. Comments must be identified by NCS-2008-0001 and may be submitted by one of the following methods: • Federal eRulemaking Portal: *http://www.regulations.gov.* Follow the instructions for submitting comments. • E-mail: *NSTAC1@dhs.gov.* Include docket number in the subject line of the message. • Mail: Office of the Manager, National Communications System (N5), Department of Homeland Security, Washington, DC 20529. • Fax: 1-866-466-5370. *Instructions:* All submissions received must include the words “Department of Homeland Security” and NCS-2008-0001, the docket number for this action. Comments received will be posted without alteration at *http://www.regulations.gov,* including any personal information provided. *Docket:* For access to the docket to read background documents or comments received by the NSTAC, go to *http://www.regulations.gov.* FOR FURTHER INFORMATION CONTACT: Ms. Kiesha Gebreyes, Acting Chief, Customer Service Division at
(703)235-5525, email: *Kiesha.Gebreyes@dhs.gov* or write the Deputy Manager, National Communications System, Department of Homeland Security, CS&C/NCS/N5. SUPPLEMENTARY INFORMATION: The NSTAC advises the President on issues and problems related to implementing national security and emergency preparedness telecommunications policy. Notice of this meeting is given under the Federal Advisory Committee Act (FACA), Public Law 92-463, as amended (5 U.S.C. App. 1 *et seq.* ). At the upcoming meeting, between 1:15 p.m. and 2:30 p.m., the NSTAC will receive comments from government stakeholders, and discuss NSTAC work on legislation and regulation, research and development, and outreach. This portion of the meeting will be open to the public. Between 2:30 p.m. and 5 p.m., the NSTAC will receive briefings from the Department of Defense, the Acting Assistant to the President for Homeland Security and Counterterrorism, and the Department of Treasury. The NSTAC will discuss impacts of the global economy on communications, cyber security and network security. This portion of the meeting will be closed to the public. *Basis For Closure:* Briefings from the Department of Defense, the Acting Assistant to the President for Homeland Security and Counterterrorism, and the Department of Treasury, as well as discussions on cyber security and network security will likely involve sensitive infrastructure information concerning system threats and explicit physical/cyber vulnerabilities related to current communications capabilities. Public disclosure of such information would heighten awareness of potential vulnerabilities. Pursuant to Section 10(d) of the Federal Advisory Committee Act, Public Law 92-463, as amended (5 U.S.C. App. 1 *et seq.* ), the Department has determined that this discussion will concern matters which, if disclosed, would be likely to significantly frustrate the implementation of a proposed agency action. Accordingly, the relevant portion of this meeting will be closed to the public pursuant to the authority set forth in 5 U.S.C. 552b(c)(4). Lawrence Hale, Acting Director, National Communications System. [FR Doc. E8-7074 Filed 4-4-08; 8:45 am] BILLING CODE 4410-10-P DEPARTMENT OF THE INTERIOR Fish and Wildlife Service [FWS-R8-ES-2008-N0048; 80221-1113-0000-F5] Endangered Species Recovery Permit Applications AGENCY: Fish and Wildlife Service, Interior. ACTION: Notice of receipt of permit applications; request for comment. SUMMARY: We invite the public to comment on the following applications to conduct certain activities with endangered species. DATES: Comments on these permit applications must be received on or before May 7, 2008. ADDRESSES: Written data or comments should be submitted to the U.S. Fish and Wildlife Service, Endangered Species Program Manager, Region 8, 2800 Cottage Way, Room W-2606, Sacramento, CA 95825 (telephone: 916-414-6464; fax: 916-414-6486). Please refer to the respective permit number for each application when submitting comments. All comments received, including names and addresses, will become part of the official administrative record and may be made available to the public. FOR FURTHER INFORMATION CONTACT: Daniel Marquez, Fish and Wildlife Biologist, see ADDRESSES , (telephone: 760-431-9440; fax: 760-431-9624). SUPPLEMENTARY INFORMATION: The following applicants have applied for scientific research permits to conduct certain activities with endangered species pursuant to section 10(a)(1)(A) of the Endangered Species Act (16 U.S.C. 1531 *et seq.* ). The U.S. Fish and Wildlife Service (“we”) solicits review and comment from local, State, and Federal agencies, and the public on the following permit requests. Before including your address, phone number, e-mail 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. Permit No. TE-0540111 *Applicant:* John Green, Riverside, California. The applicant requests an amendment to take (harass by survey) the Yuma clapper rail ( *Rallus longirostris yumanensis* ) in conjunction with surveys in California, Nevada, and Arizona for the purpose of enhancing its survival. Permit No. TE-804203 *Applicant:* Stephen Myers, Victorville, California. The applicant requests an amendment to take (harass by survey) the Yuma clapper rail ( *Rallus longirostris yumanensis* ) in conjunction with surveys in California and Arizona, and take (harass by survey) the Southwestern willow flycatcher ( *Empidonax traillii extimus* ) in conjunction with surveys in Nevada, Arizona, New Mexico, Utah, and Colorado for the purpose of enhancing its survival. Permit No. TE-039640 *Applicant:* Kristopher Alberts, San Clemente, California. The applicant requests an amendment to take (harass by survey) the Southwestern willow flycatcher ( *Empidonax traillii extimus* ), and (nest monitor) the lease Bell's vireo ( *Vireo bellii pusillus* ) in conjunction with surveys and monitoring throughout the range of the species in California, Arizona, New Mexico, Nevada, Utah, Texas, and Colorado for the purpose of enhancing their survival. Permit No. TE-176209 *Applicant:* San Francisco International Airport, San Francisco, California. The applicant requests an amendment to take (survey, capture, mark, and recapture) the San Francisco garter snake ( *Thamnophis sirtalis* ) in conjunction with habitat enhancement and population monitoring in San Mateo County, California, for the purpose of enhancing its survival. Permit No. TE-135968 *Applicant:* Theresa C. Miller, San Diego, California. The applicant requests an amendment to take (capture, collect, and kill) the Conservancy fairy shrimp ( *Branchinecta conservatio* ), the longhorn fairy shrimp ( *Branchinecta longiantenna* ), the Riverside fairy shrimp ( *Streptocephalus wootoni* ), the San Diego fairy shrimp ( *Branchinecta sandiegonensis* ), and the vernal pool tadpole shrimp ( *Lepidurus packardi* ) in conjunction with surveys throughout the range of each species in California, for the purpose of enhancing their survival. We solicit public review and comment on each of these recovery permit applications. Comments and materials we receive will be available for public inspection, by appointment, during normal business hours at the address listed in the ADDRESSES section of this notice. Dated: April 1, 2008. Michael Fris, Acting Regional Director, Region 8, Sacramento, California. 1 [FR Doc. E8-7172 Filed 4-4-08; 8:45 am] BILLING CODE 4310-55-P DEPARTMENT OF THE INTERIOR Fish and Wildlife Service [FWS-R9-IA-2008-N0057, 96300-1671-0000-P5] Issuance of Permits AGENCY: Fish and Wildlife Service, Interior. ACTION: Notice of issuance of permits for marine mammals. SUMMARY: The following permits were issued. ADDRESSES: Documents and other information submitted with these applications are available for review, subject to the requirements of the Privacy Act and Freedom of Information Act, by any party who submits a written request for a copy of such documents to: U.S. Fish and Wildlife Service, Division of Management Authority, 4401 North Fairfax Drive, Room 212, Arlington, Virginia 22203; fax 703/358-2281. FOR FURTHER INFORMATION CONTACT: Division of Management Authority, telephone 703/358-2104. SUPPLEMENTARY INFORMATION: Notice is hereby given that on the dates below, as authorized by the provisions of the Marine Mammal Protection Act of 1972, as amended (16 U.S.C. 1361 *et seq.* ), the Fish and Wildlife Service issued the requested permits subject to certain conditions set forth therein. Marine Mammals Permit No. Applicant Receipt of application Federal Register notice Permit issuance date 172317 Henry Vilas Zoo 73 FR 2937; Jan. 16, 2008 Feb. 29, 2008. 160107 Detroit Zoological Society 72 FR 68176; Dec. 4, 2007 Feb. 29, 2008. 041309 USFWS Marine Mammals Management 72 FR 48292; August 23, 2007 March 7, 2008. 067925 USGS Alaska Science Center 72 FR 58320; October 15, 2007 March 7, 2008. Dated: March 7, 2008. Lisa J. Lierheimer, Senior Permit Biologist, Branch of Permits, Division of Management Authority. [FR Doc. E8-7188 Filed 4-4-08; 8:45 am] BILLING CODE 4310-55-P DEPARTMENT OF THE INTERIOR Fish and Wildlife Service [FWS-R9-IA-2008-N0056; 96300-1671-0000-P5] Denial of Permits for Marine Mammals AGENCY: Fish and Wildlife Service, Interior. ACTION: Notice of denial of permits for marine mammals. SUMMARY: The following permits were denied. ADDRESSES: Documents and other information submitted with these applications are available for review, subject to the requirements of the Privacy Act and Freedom of Information Act, by any party who submits a written request for a copy of such documents to: U.S. Fish and Wildlife Service, Division of Management Authority, 4401 North Fairfax Drive, Room 212, Arlington, Virginia 22203; fax 703/358-2281. FOR FURTHER INFORMATION CONTACT: Division of Management Authority, telephone 703/358-2104. SUPPLEMENTARY INFORMATION: Notice is hereby given that on the dates below, as authorized by the provisions of the Marine Mammal Protection Act of 1972, as amended (16 U.S.C. 1361 *et seq.* ), the Fish and Wildlife Service denied the requested permits. Marine Mammals Permit No. Applicant Receipt of application Federal Register notice Denial date 134178 Hubbs-Sea World Research 72 FR 33242; June 15, 2007 Feb. 28, 2008. 142439 Beyond Bears, Inc 72 FR 70339; Dec. 11, 2007 Feb. 19, 2008. Dated: March 7, 2008. Lisa J. Lierheimer, Senior Permit Biologist, Branch of Permits, Division of Management Authority. [FR Doc. E8-7214 Filed 4-4-08; 8:45 am] BILLING CODE 4310-55-P DEPARTMENT OF THE INTERIOR Fish and Wildlife Service Wind Turbine Guidelines Advisory Committee; Announcement of Public Meeting AGENCY: Fish and Wildlife Service, Interior. ACTION: Notice of public meeting. SUMMARY: We, the U.S. Fish and Wildlife Service (Service), will host the second meeting of the Wind Turbine Guidelines Advisory Committee (Committee), on April 23-24, 2008. The meeting is open to the public. The agenda will include the review and approval of Committee groundrules; reports from the Subcommittees on: Existing Guidelines, Guiding Principles, Legal, Landscape Habitat (Mapping), and Other Models/Uncertainty; and briefings from Service regional offices on wind/wildlife issues. DATES: The meeting will take place on April 23-24, 2008. On April 23, the meeting will be held from 8 a.m. to 5:30 p.m. On April 24, the meeting will be held from 8 a.m. to 3:15 p.m. Following the adjourning of the Committee on April 24th, an administrative training will be held for Committee members only. ADDRESSES: Holiday Inn Arlington, 4610 N. Fairfax Drive, Arlington, VA 22203. For more information, see “Meeting Location Information” under SUPPLEMENTARY INFORMATION . FOR FURTHER INFORMATION CONTACT: Rachel London, Division of Habitat and Resource Conservation, U.S. Fish and Wildlife Service, Department of the Interior,
(703)358-2161. SUPPLEMENTARY INFORMATION: Background On March 13, 2007, the Department of the Interior (Interior) published a notice of establishment of the Committee and call for nominations in the **Federal Register** (72 FR 11373). The Committee's purpose is to provide advice and recommendations to the Secretary of the Interior (Secretary) on developing effective measures to avoid or minimize impacts to wildlife and their habitats related to land-based wind energy facilities. The Committee is expected to exist for 2 years. Its continuation is subject to biennial renewal. The Committee will meet approximately four times per year. All Committee members serve without compensation. In accordance with the Federal Advisory Committee Act (5 U.S.C. App.), a copy of the Committee's charter has been filed with the Committee Management Secretariat, General Services Administration; Committee on Environment and Public Works, U.S. Senate; Committee on Natural Resources, U.S. House of Representatives; and the Library of Congress. The Secretary appointed 22 individuals to the Committee on October 24, 2007, representing the varied interests associated with wind energy development and its potential impacts to wildlife species and their habitats. The USFWS hosted a technical workshop on February 26-27, 2008, and held the first Committee meeting on February 28, 2008. The workshop and first meeting were open to the public. The public will have an opportunity to comment at all Committee meetings. Meeting Location Information Please note that the Holiday Inn is accessible to wheelchair users. If you require additional accommodations, please notify us by April 16, 2008. If you plan on attending the meeting, please register at *http://www.fws.gov/habitatconservation/windpower/wind_turbine_advisory_committee.html* by April 16, 2008. While this meeting is open to the public, seating is limited due to room capacity. We will give preference to registrants based on date and time of registration. There will be standing room available if seats are filled. Dated: April 2, 2008. Dave Stout, Wind Turbine Guidelines Advisory Committee Designated Federal Officer. [FR Doc. E8-7170 Filed 4-4-08; 8:45 am] BILLING CODE 4310-55-P DEPARTMENT OF THE INTERIOR Fish and Wildlife Service [FWS-R5-R-2008-N0062, 50130-1265-0000-S3] Nantucket National Wildlife Refuge, Nantucket County, MA AGENCY: Fish and Wildlife Service, Interior. ACTION: Notice of intent to prepare a comprehensive conservation plan and environmental assessment; request for comments. SUMMARY: We, the U.S. Fish and Wildlife Service (Service), intend to prepare a comprehensive conservation plan
(CCP)and an associated National Environmental Policy Act
(NEPA)document for Nantucket National Wildlife Refuge (NWR). We provide this notice in compliance with our planning policy to advise other agencies, Tribes, and the public of our intentions, and to obtain suggestions and information on the scope of issues to consider. We are also requesting public comments. DATES: To ensure consideration, we must receive your written comments by 30 days after the date of publication in the **Federal Register** . We will hold public meetings to begin the CCP planning process; see *Public Meetings* under SUPPLEMENTARY INFORMATION . We will announce opportunities for public input in local news media throughout the CCP planning process, and will announce upcoming public meetings in local news media and the refuge Web site. ADDRESSES: Send your comments or requests for more information by any of the following methods. *Electronic mail: northeastplanning@fws.gov* . Include “Nantucket NWR CCP/EA” in the subject line of the message. *U.S. Postal Service:* Eastern Massachusetts NWR Complex, 73 Weir Hill Road, Sudbury, Massachusetts 01776. *In-Person Drop-off, Viewing, or Pickup:* Call 978-443-4661 to make an appointment during regular business hours at 73 Weir Hill Road, Sudbury, Massachusetts. *Fax:* 978-443-2898 FOR FURTHER INFORMATION CONTACT: Libby Herland, Project Leader, at 978-443-4661, or Carl Melberg, Planning Team Leader, at 978-443-4661. SUPPLEMENTARY INFORMATION: Introduction With this notice, we initiate our process for developing a CCP for Nantucket NWR in Nantucket County, Massachusetts. We provide this notice in compliance with our planning policy to
(1)advise other Federal and State agencies and the public of our intention to conduct detailed planning on this refuge, and
(2)obtain suggestions and information on the scope of topics to consider in the environmental document and during development of the CCP. Background The CCP Process The National Wildlife Refuge System Improvement Act of 1997 (Improvement Act) (16 U.S.C. 668dd-668ee), which amended the National Wildlife Refuge System Administration Act of 1966, requires us to develop a CCP for each national wildlife refuge. The purpose for developing a CCP is to provide refuge managers with a 15-year plan for achieving refuge purposes and contributing toward the mission of the National Wildlife Refuge System (NWRS), consistent with sound principles of fish and wildlife management, conservation, legal mandates, and our policies. In addition to outlining broad management direction on conserving wildlife and their habitats, CCPs identify wildlife-dependent recreational opportunities available to the public, including opportunities for hunting, fishing, wildlife observation and photography, and environmental education and interpretation. We will review and update the CCP at least every 15 years in accordance with the Improvement Act and NEPA. We establish each unit of the NWRS for specific purposes. We use these purposes as the bases to develop and prioritize management goals and objectives for the refuge within the NWRS mission, and to determine how the public can use the refuge. The planning process is a way for us and the public to evaluate management goals and objectives for the best possible conservation approach to this important wildlife habitat, while providing for wildlife-dependent recreation opportunities that are compatible with the refuge's establishing purposes and the mission of the NWRS. Our CCP process provides opportunities for Tribal, State, and local governments; agencies; organizations; and the public to participate. At this time, we encourage the public to provide input in the form of issues, concerns, ideas, and suggestions for the future management of Nantucket NWR. We will conduct the environmental review of this environmental assessment in accordance with the requirements of NEPA, as amended (42 U.S.C. 4321 *et seq.* ); NEPA regulations (40 CFR parts 1500-1508); other appropriate Federal laws and regulations; and our policies and procedures for compliance with those laws and regulations. Nantucket National Wildlife Refuge Nantucket NWR was established in 1973 under the Act Authorizing the Transfer of Certain Real Property for Wildlife or other purposes from the U.S. Coast Guard. The refuge, which consists of 24 acres, is located at Great Point on Nantucket Island, Massachusetts. The refuge is composed of beach and dune habitat. These areas serve the habitat needs of seabirds, wading birds, shorebirds, and raptors. Scoping: Preliminary Issues, Concerns, and Opportunities We have identified preliminary issues, concerns, and opportunities that we may address in the CCP. We have briefly summarized these issues below. During public scoping, we may identify additional issues. We recognized a need to clarify and formalize our relationship with the Trustees of Reservations at Coskata-Coatue Wildlife Refuge, particularly on the issues of on-site management and fee collection and retention. Additionally, public use throughout the refuge will be reevaluated in relation to wildlife-dependent recreation and other mission compatible uses. Issues of concern are over-the-sand vehicle use and non-wildlife dependent beach use. We need to address the disposition of the U.S. Coast Guard lighthouse, which is an inholding on the refuge. We need to ensure protection of wildlife resources, including terns, plovers, and seals. Public Meetings We will involve the public through open houses, informational and technical meetings, and written comments. We will release mailings, news releases, and announcements to provide information about opportunities for public involvement in the planning process. You can obtain the schedule from the planning team leader or project leader (see ADDRESSES ). You may also submit comments anytime during the planning process by mail, electronic mail, or fax (see ADDRESSES ). There will be additional opportunities to provide public input once we have prepared a draft CCP. We anticipate that public meetings will be held on Nantucket Island. For specific information including dates, times, and locations, contact the project leader (see ADDRESSES ) or visit our Web site at *http://www.fws.gov/northeast/nantucket* . Public Availability of Comments Our practice is to make comments, including names, home addresses, home phone numbers, and electronic mail addresses of respondents available for public review. Individual respondents may request that we withhold their names and/or home addresses, etc., but if you wish us to consider withholding this information, you must state this prominently at the beginning of your comments. In addition, you must present a rationale for withholding this information. This rationale must demonstrate that disclosure would constitute a clearly unwarranted invasion of privacy. Unsupported assertions will not meet this burden. In the absence of exceptional, documentable circumstances, this information will be released. We will always make submissions from organizations or businesses, and from individuals identifying themselves as representatives of or officials of organizations or businesses, available for public inspection in their entirety. Dated: April 1, 2008. Wendi Weber, Acting Regional Director, Northeast Region, U.S. Fish and Wildlife Service, Hadley, Massachusetts. [FR Doc. E8-7165 Filed 4-4-08; 8:45 am] BILLING CODE 4310-55-P DEPARTMENT OF THE INTERIOR Fish and Wildlife Service [FWS-R9-IA-2008-N0058; 96300-1671-0000-P5] Receipt of Applications for Permit AGENCY: Fish and Wildlife Service, Interior. ACTION: Notice of receipt of applications for permit. SUMMARY: The public is invited to comment on the following applications to conduct certain activities with endangered species and/or marine mammals. DATES: Written data, comments or requests must be received by May 7, 2008. ADDRESSES: Documents and other information submitted with these applications are available for review, subject to the requirements of the Privacy Act and Freedom of Information Act, by any party who submits a written request for a copy of such documents within 30 days of the date of publication of this notice to: U.S. Fish and Wildlife Service, Division of Management Authority, 4401 North Fairfax Drive, Room 212, Arlington, Virginia 22203; fax 703/358-2281. FOR FURTHER INFORMATION CONTACT: Division of Management Authority, telephone 703/358-2104. SUPPLEMENTARY INFORMATION: Endangered Species The public is invited to comment on the following applications for a permit to conduct certain activities with endangered species. This notice is provided pursuant to Section 10(c) of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 *et seq.* ). Written data, comments, or requests for copies of these complete applications should be submitted to the Director (address above). Applicant: Iowa Primate Learning Sanctuary, Des Moines, IA, PRT-170354 The applicant requests a permit to re-export the skeletal remains and organs of one male pygmy chimpanzee ( *Pan paniscus* ) to Great Ape Research Institute in Japan c/o Hayashibara Biochemical Laboratories Inc, Okayama, Japan for the purpose of enhancement of the survival of the species through scientific research. Applicant: Jason K. Bruce, Wallace, CA, PRT-177261 The applicant requests a permit to import the sport-hunted trophy of one male bontebok ( *Damaliscus pygargus pygargus* ) culled from a captive herd maintained under the management program of the Republic of South Africa, for the purpose of enhancement of the survival of the species. Applicant: William R. Muns, Chico, TX, PRT-177280 The applicant requests a permit to import the sport-hunted trophy of one male bontebok ( *Damaliscus pygargus pygargus* ) culled from a captive herd maintained under the management program of the Republic of South Africa, for the purpose of enhancement of the survival of the species. Applicant: Joanne E. Witte, Stanwood, MI, PRT-176593 The applicant requests a permit to import the sport-hunted trophy of one male bontebok ( *Damaliscus pygargus pygargus* ) culled from a captive herd maintained under the management program of the Republic of South Africa, for the purpose of enhancement of the survival of the species. Applicant: Thad D. Young, Klamath Falls, OR, PRT-169056 The applicant requests a permit to import the sport-hunted trophy of one male bontebok ( *Damaliscus pygargus pygargus* ) culled from a captive herd maintained under the management program of the Republic of South Africa, for the purpose of enhancement of the survival of the species. Applicant: Jacob W. Avara, Houston, TX, PRT-165796 The applicant requests a permit to import the sport-hunted trophy of one male bontebok ( *Damaliscus pygargus pygargus* ) culled from a captive herd maintained under the management program of the Republic of South Africa, for the purpose of enhancement of the survival of the species. Applicant: Matthew Frantz, Houston, TX, PRT-165798 The applicant requests a permit to import the sport-hunted trophy of one male bontebok ( *Damaliscus pygargus pygargus* ) culled from a captive herd maintained under the management program of the Republic of South Africa, for the purpose of enhancement of the survival of the species. Applicant: Anne B. Avara, Houston, TX, PRT-165797 The applicant requests a permit to import the sport-hunted trophy of one male bontebok ( *Damaliscus pygargus pygargus* ) culled from a captive herd maintained under the management program of the Republic of South Africa, for the purpose of enhancement of the survival of the species. Applicant: Scott D. Duncan, Houston, TX, PRT-165795 The applicant requests a permit to import the sport-hunted trophy of one male bontebok ( *Damaliscus pygargus pygargus* ) culled from a captive herd maintained under the management program of the Republic of South Africa, for the purpose of enhancement of the survival of the species. Endangered Marine Mammals and Marine Mammals The public is invited to comment on the following applications for a permit to conduct certain activities with endangered marine mammals and/or marine mammals. The applications were submitted to satisfy requirements of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 *et seq.* ) and/or the Marine Mammal Protection Act of 1972, as amended (16 U.S.C. 1361 *et seq.* ), and the regulations governing endangered species (50 CFR Part 17) and/or marine mammals (50 CFR Part 18). Written data, comments, or requests for copies of the complete applications or requests for a public hearing on these applications should be submitted to the Director (address above). Anyone requesting a hearing should give specific reasons why a hearing would be appropriate. The holding of such a hearing is at the discretion of the Director. Applicant: U.S. Geological Survey—Western Ecological Research Center, Santa Cruz Field Station, Santa Cruz, CA, PRT-672624 The applicant requests renewal and amendment of the permit to take up to 850 southern sea otter ( *Enhydra lutris nereis* ) from the wild for the purpose of scientific research on the ecology of the species. This notification covers activities to be conducted by the applicant over a five-year period. Concurrent with the publication of this notice in the **Federal Register** , the Division of Management Authority is forwarding copies of the above applications to the Marine Mammal Commission and the Committee of Scientific Advisors for their review. Applicant: James R. Jones, Prince George, VA, PRT-177877 The applicant requests a permit to import a polar bear ( *Ursus maritimus* ) sport hunted from the Northern Beaufort Sea polar bear population in Canada for personal, noncommercial use. Applicant: Steven P. Neuberger, Kingman, AZ, PRT-177878 The applicant requests a permit to import a polar bear ( *Ursus maritimus* ) sport hunted from the Northern Beaufort Sea polar bear population in Canada for personal, noncommercial use. Applicant: Dwane D. Drury, Midland, TX, PRT-177879 The applicant requests a permit to import a polar bear ( *Ursus maritimus* ) sport hunted from the Northern Beaufort Sea polar bear population in Canada for personal, noncommercial use. Dated: March 7, 2008. Lisa J. Lierheimer, Senior Permit Biologist, Branch of Permits, Division of Management Authority. [FR Doc. E8-7219 Filed 4-4-08; 8:45 am] BILLING CODE 4310-55-P DEPARTMENT OF THE INTERIOR Fish and Wildlife Service [FWS-R9-IA-2008-N0066; 96300-1671-0000-P5] Receipt of Applications for Permit AGENCY: Fish and Wildlife Service, Interior. ACTION: Notice of receipt of applications for permit. SUMMARY: The public is invited to comment on the following applications to conduct certain activities with endangered species and marine mammals. DATES: Written data, comments or requests must be received by May 7, 2008. ADDRESSES: Documents and other information submitted with these applications are available for review, subject to the requirements of the Privacy Act and Freedom of Information Act, by any party who submits a written request for a copy of such documents within 30 days of the date of publication of this notice to: U.S. Fish and Wildlife Service, Division of Management Authority, 4401 North Fairfax Drive, Room 212, Arlington, Virginia 22203; fax 703/358-2281. FOR FURTHER INFORMATION CONTACT: Division of Management Authority, telephone 703/358-2104. SUPPLEMENTARY INFORMATION: Endangered Species The public is invited to comment on the following applications for a permit to conduct certain activities with endangered species. This notice is provided pursuant to Section 10(c) of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 *et seq.* ). Written data, comments, or requests for copies of these complete applications should be submitted to the Director (address above). Applicant: Museum of Zoology—University of Michigan, Ann Arbor, MI, PRT-178005 The applicant requests a permit to import biological samples from mantled howler monkey ( *Alouatta palliata* ) from Veracruz, Mexico for the purpose of enhancement of the species through scientific research. This notification covers activities conducted by the applicant over a five-year period. Applicant: Herbert Mueller, West Chester, OH, PRT-177995 The applicant requests a permit to import the sport-hunted trophy of one male bontebok ( *Damaliscus pygargus pygargus* ) culled from a captive herd maintained under the management program of the Republic of South Africa, for the purpose of enhancement of the survival of the species. Marine Mammals The public is invited to comment on the following application for a permit to conduct certain activities with marine mammals. The application was submitted to satisfy requirements of the Marine Mammal Protection Act of 1972, as amended (16 U.S.C. 1361 *et seq.* ), and the regulations governing marine mammals (50 CFR part 18). Written data, comments, or requests for copies of the complete application or requests for a public hearing on this application should be submitted to the Director (address above). Anyone requesting a hearing should give specific reasons why a hearing would be appropriate. The holding of such a hearing is at the discretion of the Director. Applicant: Randy S. Ulmer, Cave Creek, AZ, PRT-178988 The applicant requests a permit to import a polar bear ( *Ursus maritimus* ) sport hunted from the Lancaster Sound polar bear population in Canada for personal, noncommercial use. Dated: March 14, 2008. Lisa J. Lierheimer, Senior Permit Biologist, Branch of Permits, Division of Management Authority. [FR Doc. E8-7209 Filed 4-4-08; 8:45 am] BILLING CODE 4310-55-P DEPARTMENT OF THE INTERIOR Bureau of Indian Affairs Public Law 93-599 Transfer of Excess Property—Cherokee Nation, OK AGENCY: Bureau of Indian Affairs, Interior. ACTION: Notice of Land Transfer from the General Services Administration. SUMMARY: This notice informs the public that the General Services Administration (GSA), Greater Southwest Region, Fort Worth, Texas, has transferred approximately 790.70 acres, of excess property, more or less, in Sequoyah County, Oklahoma, to the Secretary of the Interior, to be held in trust for the benefit and use of the Cherokee Nation. FOR FURTHER INFORMATION CONTACT: Ben Burshia, Bureau of Indian Affairs, Division of Real Estate Services, Mail Stop-4639-MIB, 1849 C Street, NW., Washington, DC 20240, telephone
(202)208-7737. SUPPLEMENTARY INFORMATION: This notice is published in the exercise of authority delegated by the Secretary of the Interior to the Assistant Secretary—Indian Affairs by part 209 of the Departmental Manual. On March 4, 1998, pursuant to authority contained in the Federal Property and Administrative Services Act of 1949, as amended by Public Law 93-599, dated January 2, 1975 (88 Stat. 1954), the below described property was transferred by the Local GSA Regional
(7)Administrator of the General Services Administration, without compensation or reimbursement, to the Secretary of the Interior, to be held in trust for the benefit and use of the Cherokee Nation of Oklahoma. The description of the real property, known as the Robert S. Kerr Lock and Dam and Reservoir, (GSA Control No. 7-D-OK-561), is more particularly described as follows: Indian Meridian, Sequoyah County, Oklahoma A parcel of land located in Sections 21, 27, 28 and 33, Township 11 North, Range 23 East, of the Indian Meridian, in Sequoyah County, Oklahoma, more particularly described as: Beginning at the Section Corner common to Sections 20, 21, 28, and 29, Township 11 North, Range 23 East; Thence N 89°45′41″ E along the South line of said Section 21, a distance of 1654.37 feet, to Corps of Engineers Monument (C. of E. Mon.) 7-8; Thence N 13°45′51″ E a distance of 1367.13 feet, to C. of E. Mon. 6-7; Thence S 89°59′44″ E a distance of 662.09 feet to C. of E. Mon. 5-6; Thence S 00°14′29″ E a distance of 1323.70 feet, to C. of E. Mon. 8-5; Said monument being on the South line of Section 21; Thence N 89°45′41″ E along said line, a distance of 2151.71 feet, to C. of E. Mon. 3-4; Thence S 24°08′40″ W a distance of 1914.38 feet; Thence N 88°27′25″ W a distance of 771.75 feet; Thence N 27°36′48″ W a distance of 1800.00 feet; Thence S 89°53′12″ W a distance of 830.00 feet; Thence S 00°06′48″ E a distance of 1520.00 feet; Thence S 20°38′51″ E a distance of 1535.02 feet; Thence N 84°26′32″ E a distance of 1710.92 feet; Thence N 59°37′02″ E a distance of 1327.14 feet; Thence N 07°56′57″ E a distance of 228.68 feet; Thence N 62°39′01″ E a distance of 190.50 feet; Thence S 43°00′46″ E a distance of 173.50 feet, to a point on the East line of said Section 28, said line also being the West line of said Section 27; Thence N 52°15′59″ E a distance of 334.62 feet; Thence S 52°39′33″ E a distance of 294.34 feet; Thence S 22°16′40″ W a distance of 471.06 feet; Thence S 26°13′22″ W a distance of 404.66 feet; Thence S 36°11′52″ W a distance of 242.52 feet, to the West line of said Section 27, said line also being the East line of said Section 28; Thence S 33°37′32″ W a distance of 379.37 feet; Thence S 47°58′46″ W a distance of 1234.39 feet; Thence S 54°48′57″ W a distance of 1174.84 feet; Thence S 05°41′58″ W a distance of 663.65 feet; Thence S 42°22′50″ W a distance of 2046.21 feet; Thence S 78°00′52″ E a distance of 2109.25 feet; Thence S 15°06′48″ E a distance of 2770.00 feet; Thence S 89°44′13″ W a distance of 1660.00 feet; Thence S 00°10′38″ E a distance of 422.41 feet, to the south line of said Section 33; Thence S 89°51′01″ W along said line, a distance of 1676.13 feet; Thence N 12°43′20″ W a distance of 5409.62 feet, to the Section Corner common to Sections 28, 29, 32 and 33, Township 11 North, Range 23 East; Thence N 00°10′38″ W along the West line of said Section 28, a distance of 5274.35 feet, more or less to the Point of Beginning. The above described lands contain a total of 790.70 acres, more or less, which is transferred subject to compliance with the provisions of the National Environmental Policy Act of 1969, as amended, Section 106 of the National Historic Preservation Act of 1966, as amended, Executive Order 11593, Protection and Enhancement of the Cultural Environment, Executive Orders 11988 and 11990, Subject: Floodplain Management and Protection of Wetlands, and other appropriate guidelines, valid rights, reservations, rights-of-way, easements of record, regulations, laws, and Executive Orders pertaining to the future use of this property. This Notice does not affect title to the land described above, nor does it affect any valid existing easements for public roads and highways, public utilities, railroads and pipelines, and any other rights-of-way or reservations of record. Dated: March 28, 2008. Carl J. Artman, Assistant Secretary—Indian Affairs. [FR Doc. E8-7198 Filed 4-4-08; 8:45 am] BILLING CODE 4310-W7-P DEPARTMENT OF THE INTERIOR Bureau of Land Management [OR-930-08-5410-FR; OR 65263; HAG-08-0084)] Application for Conveyance of Federal Mineral Interests, Harney County, Oregon AGENCY: Bureau of Land Management (BLM). ACTION: Notice of Realty Action. SUMMARY: The surface owner of the land described in this notice, containing approximately 200 acres, has filed an application for the purchase of the federally-owned mineral interest. Publication of this notice temporarily segregates the mineral interest from appropriation under the public land laws, including the mining laws. DATES: Interested persons may submit written comments only to the Bureau of Land Management
(BLM)at the address stated below. Comments must be received no later than May 22, 2008. ADDRESSES: Bureau of Land Management, P.O. Box 2965, Portland, Oregon 97208. Detailed information concerning this action is available for review at the above address. FOR FURTHER INFORMATION CONTACT: Jenny Liang, Land Law Examiner, at the above address, or at
(503)808-6299. SUPPLEMENTARY INFORMATION: The surface owner of the following described land has filed an application pursuant to Section 209 of the Federal Land Policy and Management Act of 1976, 43 U.S.C. 1719(b), for the purchase and conveyance of the Federally-owned mineral interest in the following described land: Willamette Meridian T. 19 S., R. 25 E., Sec. 28, NE 1/4 SE 1/4 and S 1/2 S 1/2 . The area described contains 200 acres, more or less, in Harney County, Oregon. Effective immediately, BLM will process the pending application in accordance with the regulations stated in 43 CFR part 2720. Written comments concerning the application must be received no later than the date specified above in this notice for that purpose. The purpose for a purchase and conveyance is to allow consolidation of surface and subsurface minerals ownership where
(1)there are no known mineral values, or
(2)in those instances where the Federal mineral interest reservation interferes with or precludes appropriate non-mineral development and such development is a more beneficial use of the land than the mineral development. Upon publication of this notice in the **Federal Register** , the mineral interest described above will be segregated to the extent that they will not be subject to appropriation under the public land laws, including the mining laws. The segregative effect of the application shall terminate upon issuance of a patent or deed to such mineral interests; or upon final rejection of the application, or two years from the date of filing of the application whichever comes first. *Comments:* Comments, including names, street address, and other contact information of respondents will be available for public review. Before including your address, phone number, e-mail 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. All persons who wish to present comments, suggestions, or objections in connection with the pending application may do so by writing to Fred O'Ferrall, Chief, Branch of Lands and Mineral Resources, at the above mentioned address. No verbal, electronic or facsimile comments will be accepted. Authority: 43 CFR 2720.1-1 (b). Dated: March 27, 2008. Fred O'Ferrall, Chief, Branch of Lands and Mineral Resources. [FR Doc. E8-7161 Filed 4-4-08; 8:45 am] BILLING CODE 4310-33-P DEPARTMENT OF JUSTICE Antitrust Division Notice Pursuant to the National Cooperative Research and Production Act of 1993—Vehicle Infrastructure Integration Consortium Notice is hereby given that, on March 11, 2008, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301 et seq. (“the Act”), the Vehicle Infrastructure Integration Consortium (“VIIC”) has filed written notifications simultaneously with the Attorney General and the Federal Trade Commission disclosing changes in its membership. The notifications were filed for the purpose of extending the Act's provisions limiting the recovery of antitrust plaintiffs to actual damages under specified circumstances. Specifically, Mercedes-Benz Research & Technology North America, Inc., Palo Alto, CA has become a member and Chrysler, LLC, Auburn Hills, MI has succeeded DaimlerChrysler Corporation as a member. No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and VIIC intends to file additional written notification disclosing all changes in membership. On May 1, 2006, VIIC filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the **Federal Register** pursuant to Section 6(b) of the Act on June 2, 2006 (71 FR 32128). The last notification was filed with the Department on August 22, 2006. A notice was published in the **Federal Register** pursuant to Section 6(b) of the Act on September 27, 2006 (71 FR 56558). Patricia A. Brink, Deputy Director of Operations, Antitrust Division. [FR Doc. E8-7009 Filed 4-4-08; 8:45 am] BILLING CODE 4410-11-M DEPARTMENT OF JUSTICE Antitrust Division Notice Pursuant to the National Cooperative Research and Production Act of 1993—System of Systems Security (SOSSEC) Consortium Notice is hereby given that, on February 25, 2008, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301 *et seq.* (“the Act”), System of Systems Security (SOSSEC) Consortium has filed written notifications simultaneously with the Attorney General and the Federal Trade Commission disclosing
(1)the identities of the parties and
(2)the nature and objectives of the venture. The notifications were filed for the purpose of invoking the Act's provisions limiting the recovery of antitrust plaintiffs to actual damages under specified circumstances. Pursuant to Section 6(b) of the Act, the identities of the parties are: DDN, Incorporated, Danville, NH; MATRX, Morgantown, WV; CACI, Eatontown, NJ; MountainTop Technologies Inc., Johnstown, PA; Abacus Technology Corp., Chevy Chase, MD; Rutgers University, The Center for Information Management, Newark, NJ; (Individual) L. Robert Kimball, Ebensburg, PA; FirTH, Alexandria, VA; and Concurrent Technology Corp., Largo, FL. The general area of SOSSEC Consortium's planned activity is improving by an order of magnitude the nation's ability to detect, intervene, respond and recover to and from any and all threats on the homeland by integrating multiple existing and emerging Homeland Defense, Homeland Security and Force Protection projects and systems to markedly improve regional security, rapidly and efficiently; implementing practical strategies for core research, technology transition, system engineering and expansion and replication of regional capabilities to accelerate achievement of large scale interoperable security capabilities; also, growing SOSSEC to represent a community of interest, both public and private to foster best of breed concepts, technologies, techniques and procedures for long term national Homeland Defense, Homeland Security and Force Protection development. Patricia A. Brink, Deputy Director of Operations, Antitrust Division. [FR Doc. E8-7013 Filed 4-4-08; 8:45 am] BILLING CODE 4410-11-M DEPARTMENT OF JUSTICE Antitrust Division Notice Pursuant to the National Cooperative Research and Production Act of 1993—Air-Conditioning, Heating and Refrigeration Institute, Inc. Notice is hereby given that, on March 10, 2008, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301 *et seq.* (“the Act”), the Air-Conditioning, Heating and Refrigeration Institute, Inc. (“AHRI”) has filed written notifications simultaneously with the Attorney General and the Federal Trade Commission disclosing
(1)the name and principal place of business of the standards development organization and
(2)the nature and scope of its standards development activities. The notifications were filed for the purpose of invoking the Act's provisions limiting the recovery of antitrust plaintiffs to actual damages under specified circumstances. Pursuant to Section 6(b) of the Act, the name and principal place of business of the standards development organization is: Air-Conditioning, Heating and Refrigeration Institute, Inc., Arlington, VA. The nature and scope of AHRI's standards development activities are to develop, promulgate and publish voluntary consensus standards for air-conditioning and refrigeration products. AHRI standards establish rating criteria and procedures for measuring and certifying product performance. AHRI's standards ensure the rating of air-conditioning and refrigeration products on a uniform basis, so that buyers and users can properly compare products for specific applications. AHRI'S voluntary consensus standards are developed by AHRI members and other interested parties who wish to participate in AHRI's standards development process. Patricia A. Brink, Deputy Director of Operations, Antitrust Division. [FR Doc. E8-6999 Filed 4-4-08; 8:45 am] BILLING CODE 4410-11-M DEPARTMENT OF JUSTICE Antitrust Division Notice Pursuant to the National Cooperative Research and Production Act of 1993—ASTM International—Standards Notice is hereby given that, on December 11, 2007, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301 *et seq.* (“the Act”), ASTM International—Standards (“ASTM”) has filed written notifications simultaneously with the Attorney General and the Federal Trade Commission disclosing additions or changes to its standards development activities. The notifications were filed for the purpose of extending the Act's provisions limiting the recovery of antitrust plaintiffs to actual damages under specified circumstances. Specifically, ASTM has provided an updated list of current, ongoing ASTM standards activities originating between September 2007 and December 2007 designated as Work Items. A complete listing of ASTM Work Items, along with a brief description of each, is available at *http://www.astm.org* . On September 15, 2004, ASTM filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the **Federal Register** pursuant to Section 6(b) of the Act on November 10, 2004 (69 FR 65226). The last notification was filed with the Department on September 7, 2007. A notice was published in the **Federal Register** pursuant to Section 6(b) of the Act on November 7, 2007 (72 FR 62864). Patricia A. Brink, Deputy Director of Operations, Antitrust Division. [FR Doc. E8-7004 Filed 4-4-08; 8:45 am] BILLING CODE 4410-11-M DEPARTMENT OF JUSTICE Antitrust Division Notice Pursuant to the National Cooperative Research and Production Act of 1993—American Society of Mechanical Engineers Notice is hereby given that, on March 6, 2008, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301 et seq. (“the Act”), American Society of Mechanical Engineers (“ASME”) has filed written notifications simultaneously with the Attorney General and the Federal Trade Commission disclosing additions or changes to its standards development activities. The notifications were filed for the purpose of extending the Act's provisions limiting the recovery of antitrust plaintiffs to actual damages under specified circumstances. Specifically, since October 31, 2007, ASME has established one new standards-writing committee, published two new standards, and initiated five new standards activities within the general nature and scope of ASME's standards development activities, as specified in its original notification. More detail regarding these changes can be found at *http://www.asme.org* . On September 15, 2004, ASME filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the **Federal Register** pursuant to Section 6(b) of the Act on October 13, 2004 (69 FR 60895). The last notification was filed with the Department on October 31, 2007. A notice was published in the **Federal Register** pursuant to Section 6(b) of the Act on December 10, 2007 (72 FR 69709). Patricia A. Brink, Deputy Director of Operations, Antitrust Division. [FR Doc. E8-7012 Filed 4-4-08; 8:45 am] BILLING CODE 4410-11-M DEPARTMENT OF JUSTICE Antitrust Division Notice Pursuant to the National Cooperative Research and Production Act of 1993—ASTM International—Standards Notice is hereby given that, on February 29, 2008, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 5 4301 *et seq.* (“the Act”), ASTM International-Standards (“ASTN”) has filed written notifications simultaneously with the Attorney General and the Federal Trade Commission disclosing additions or changes to its standards development activities. The notifications were filed for the purpose of extending the Acts provisions limiting the recovery of antitrust plaintiffs to actual damages under specified circumstances. Specifically, ASTM has provided an updated list of current, ongoing ASTM standards activities originating between December 2007 and February 2008, designated as Work Items. A complete listing of ASTM Work Items, along with a brief description of each, is available at *http://www.astm.org* . On September 15, 2004, ASTM filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the **Federal Register** pursuant to Section 6(b) of the Act on November 10, 2004 (69 FR 65226). The last notification was filed with the Department on September 7, 2007. A notice was published in the **Federal Register** pursuant to Section 6(b) of the Act on November 7, 2007 (72 FR 62864). Patricia Brink, Deputy Director of Operations, Antitrust Division. [FR Doc. E8-6996 Filed 4-4-08; 8:45 am] BILLING CODE 4410-11-M DEPARTMENT OF JUSTICE Antitrust Division Notice Pursuant to the National Cooperative Research and Production Act of 1993—Cooperative Research Group on Clean Diesel V Notice is hereby given that, on February 27, 2008, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301 *et seq.* (“the Act”), Southwest Research Institute—Cooperative Research Group on Clean Diesel V (“Clean Diesel V”) has filed written notifications simultaneously with the Attorney General and the Federal Trade Commission disclosing changes in its membership. The notifications were filed for the purpose of extending the Act's provisions limiting the recovery of antitrust plaintiffs to actual damages under specified circumstances. Specifically, Borgwarner, Auburn Hills, MI; Corning, Inc., Corning, NY; Delphi, Troy, MI; Federal Mogul, Inc., Plymouth, MI; Ford Motor Company, Dearborn, MI; Guangxi Yuchai Machinery Co., Ltd., Guangxi, People's Republic of China; Honda R&D Co., Ltd., Tochigi Prefecture, Japan; Honeywell International Inc., Torrance, CA; Iveco Motorenforschung AG, Arbon, Switzerland; John Deere, Waterloo, IA; Umicore, Catoosa, OK; Volvo Powertrain Corp., Gotenborg, Sweden; Cummins Engine Co., Columbus, IN and Deutz, AG Cologne, Germany have been added as parties to this venture. No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and Clean Diesel V intends to file additional written notifications disclosing all changes in membership. On January 10, 2008, Clean Diesel V filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the **Federal Register** pursuant to Section 6(b) of the Act on February 25, 2008, (73 FR 10064). Patricia A. Brink, Deputy Director of Operations, Antitrust Division. [FR Doc. E8-7001 Filed 4-4-08; 8:45 am] BILLING CODE 4410-11-M DEPARTMENT OF JUSTICE Antitrust Division Notice Pursuant to the National Cooperative Research and Production Act of 1993—Cooperative Research Group on Development and Evaluation of a Gas Chromatograph Testing Protocol Notice is hereby given that, on March 6, 2008, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301 et seq. (“the Act”), Southwest Research Institute—Cooperative Research Group on Development and Evaluation of a Gas Chromatograph Testing Protocol (“GCTP”) has filed written notifications simultaneously with the Attorney General and the Federal Trade Commission disclosing
(1)the identities of the parties to the venture and
(2)the nature and objectives of the venture. The notifications were filed for the purpose of invoking the Act's provisions limiting the recovery of antitrust plaintiffs to actual damages under specified circumstances. Pursuant to Section 6(b) of the Act, the identities of the parties to the venture are: ABE Inc., Totalflow Products, Bartlesville, OK; Chevron Pipeline, Houston, TX; Operations Technology Development, Des Plains, IL; Questar Gas Company, Salt Lake City, UT; KeySpan Energy, Hicksville, NY; APGA Research Foundation, Mesa, AZ; Southern California Gas Company, Los Angeles, CA; NiCor Gas, Naperville, IL; Consolidated Edison Company of New York Inc., New York, NY; Pacific Gas & Electric Co., Walnut Creek, CA; and TransCanada Pipelines Ltd, Calgary, Alberta, Canada. The general area of GCTP's planned activity is to develop a performance test protocol for gas chromatographs (“GCs”) used by the natural gas industry. A test procedure will be created and evaluated through tests of multiple brands of GCs in controlled experiments. Findings will be provided to the American Petroleum Institute for use in developing a test protocol for general use. The general protocol will help users in the natural gas industry to define test conditions for their own performance evaluations. With this protocol, industry users can select reliable and appropriate GCs for their own applications. The protocol may also be used to support acceptance of units by custody transfer parties and regulatory agencies, such as BLM, MMS, PHMSA, or state regulatory bodies. Membership in this research group remains open, and the participants intend to file additional written notification disclosing all changes in membership or planned activities. Patricia A. Brink, Deputy Director of Operations, Antitrust Division. [FR Doc. E8-7007 Filed 4-4-08; 8:45 am] BILLING CODE 4410-11-M DEPARTMENT OF JUSTICE Antitrust Division Notice Pursuant to the National Cooperative Research and Production Act of 1993—Joint Venture Agreement Between Air Products and Chemicals, Inc. and Konarka Technologies, Inc., in Furtherance of NIST Cooperative Agreement (Proposal Number 00-00-7749) Notice is hereby given that, on March 5, 2008, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301 *et seq.* (“the Act”), Joint Venture Agreement Between Air Products and Chemicals, Inc. and Konarka Technologies, Inc., in Furtherance of NIST Cooperative Agreement (Proposal Number 00-00-7749) (“Joint Venture”) has filed written notifications simultaneously with the Attorney General and the Federal Trade Commission disclosing
(1)the identities of the parties to the venture and
(2)the nature and objectives of the venture. The notifications were filed for the purpose of invoking the Act's provisions limiting the recovery of antitrust plaintiffs to actual damages under specified circumstances. Pursuant to Section 6(b) of the Act, the identities of the parties to the venture are: Konarka Technologies, Inc., Lowell, MA and Air Products and Chemicals, Inc., Allentown, PA. The general area of the Joint Venture's planned activity is to produce and commercialize organic photovoltaic modules that are transparent to any pre-selected region of the visible spectrum. This unique feature enables the application of these colored, transparent, power producing modules in windows for commercial and residential buildings and greenhouses. The activities of this Joint Venture project will be partially funded by an award from the Advanced Technology Program, National Institute of Standards and Technology, U.S. Department of Commerce. Patricia A. Brink, Deputy Director of Operations, Antitrust Division. [FR Doc. E8-7006 Filed 4-4-08; 8:45 am] BILLING CODE 4410-11-P DEPARTMENT OF LABOR Office of the Secretary Submission for OMB Review: Comment Request March 28, 2008. The Department of Labor
(DOL)hereby announces the submission of the following public information collection request
(ICR)to the Office of Management and Budget
(OMB)for review and approval in accordance with the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35). A copy of this ICR, with applicable supporting documentation; including among other things a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained from the RegInfo.gov Web site at *http://www.reginfo.gov/public/do/PRAMain* or by contacting Darrin King on 202-693-4129 (this is not a toll-free number)/e-mail: *king.darrin@dol.gov.* Interested parties are encouraged to send comments to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for the Employee Benefits Security Administration (EBSA), Office of Management and Budget, Room 10235, Washington, DC 20503, Telephone: 202-395-7316/Fax: 202-395-6974 (these are not toll-free numbers), E-mail: *OIRA_submission@omb.eop.gov* within 30 days from the date of this publication in the **Federal Register** . In order to ensure the appropriate consideration, comments should reference the OMB Control Number (see below). The OMB is particularly interested in comments which: • Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; • Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; • Enhance the quality, utility, and clarity of the information to be collected; and • Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. *Agency:* Employee Benefits Security Administration. *Type of Review:* Extension without change of currently approved collection. *Title:* Suspension of Pension Benefits Regulation Pursuant to 29 CFR 2530.203-3. *OMB Number:* 1210-0048. *Affected Public:* Private Sector: Business or other for-profits. *Total Estimated Number of Respondents:* 47,614. *Total Estimated Annual Burden Hours:* 162,274. *Total Estimated Annual Costs Burden:* $107,263. *Description:* Section 203(a)(3)(B) of the Employee Retirement Security Act and regulations thereunder (see 29 CFR 2530.203-3) govern the circumstances under which pension plans may suspend pension benefit payments to retirees that return to work, or of participants who continue to work beyond normal retirement age. More specifically, in order for a plan to suspend benefits pursuant to the regulation, it must notify the affected retiree or participant during the first calendar month or payroll period in which the plan withholds payment that benefits are suspended. The notice must include the specific reasons for such suspension, a general description of the plan provisions authorizing the suspension, a copy of the relevant plan provisions, and a statement indicating where the applicable regulations may be found, i.e., 29 CFR 2530.203-3. In addition, the suspension notification must inform the retiree or participant of the plan's procedure for affording a review of the suspension of benefits. The requirement that retirees or participants be notified in the event of a suspension of benefits is intended to protect their non-forfeitable right to their normal retirement benefits. By informing retirees or participants of the reasons for the suspension, the authority for the suspension, and the plan's procedure for review of a suspension of benefits, participants are made aware of the status of their pension benefits and are able to raise with the plan facts or issues that may be relevant to determining whether a suspension of benefits is proper under the circumstances. For additional information, see related notice published at 72 FR 72767 on December 21, 2007. Darrin A. King, Acting Departmental Clearance Officer. [FR Doc. E8-7169 Filed 4-4-08; 8:45 am] BILLING CODE 4510-29-P DEPARTMENT OF LABOR Office of Job Corps; Advisory Committee on Job Corps; Meeting AGENCY: Office of Job Corps, Department of Labor. ACTION: Notice of Advisory Committee meeting. SUMMARY: On August 22, 2006, the Advisory Committee on Job Corps
(ACJC)was established in accordance with the provisions of the Workforce Investment Act and the Federal Advisory Committee Act. The Committee was established to advance Job Corps' new vision for student achievement aimed at 21st century high-growth employment. The Committee was established to advance Job Corps' new vision for student achievement aimed at 21st century high-growth employment. This Committee will also evaluate Job Corps program characteristics, including its purpose, goals, and effectiveness, efficiency, and performance measures in order to address the critical issues facing the provision of job training and education to the youth population that it serves. The Committee may provide other advice and recommendations with regard to identifying and overcoming problems, planning program or center development or strengthening relations between Job Corps and agencies, institutions, or groups engaged in related activities. DATES: The meeting will be held on April 21-22, 2008 from 1 p.m. to 4 p.m. on April 21 and from 8 a.m. to 2 p.m. on April 22. ADDRESSES: The Advisory Committee meeting will be held at the Sheraton St. Louis City Center Hotel & Suites, 400 South 14th Street, St. Louis, MO 63103; Telephone:
(314)231-5007. FOR FURTHER INFORMATION CONTACT: Crystal Woodard, Office of Job Corps, 202-693-3000 (this is not a toll-free number). SUPPLEMENTARY INFORMATION: On August 22, 2006 the Advisory Committee on Job Corps (71 FR 48949) was established in accordance with the provisions of the Workforce Investment Act, and the Federal Advisory Committee Act. The Committee was established to advance Job Corps' new vision for student achievement aimed at 21st century high-growth employment. This Committee will also evaluate Job Corps program characteristics, including its purpose, goals, and effectiveness, efficiency, and performance measures in order to address the critical issues facing the provision of job training and education to the youth population that it serves. The Committee may provide other advice and recommendations with regard to identifying and overcoming problems, planning program or center development or strengthening relations between Job Corps and agencies, institutions, or groups engaged in related activities. *Agenda:* The agenda for the meeting will be a status of the Committee's first report to the Secretary which is due April 2008, and a presentation of new issues. *Public Participation:* The meeting will be open to the public. Seating will be available to the public on a first-come first-served basis. Seats will be reserved for the media. Individuals with disabilities should contact the Job Corps official listed above, if special accommodations are needed. Signed at Washington, DC, this 1st day of April 2008. Esther R. Johnson, National Director, Office of Job Corps. [FR Doc. E8-7118 Filed 4-4-08; 8:45 am] BILLING CODE 4510-23-P DEPARTMENT OF LABOR Employment and Training Administration Employment and Training Administration Program Year
(PY)2008 Workforce Investment Act
(WIA)Allotments and Additional Funds From WIA Section 173(e) for Adult/Dislocated Worker Activities for Eligible States; PY 2008 Wagner-Peyser Act Final Allotments; PY 2008 Workforce Information Grants and FY 2008 Work Opportunity Tax Credit Allotments AGENCY: Employment and Training Administration, Labor. ACTION: Notice; correction. SUMMARY: The Department of Labor published a notice in the **Federal Register** on March 28, 2008, concerning the announcement of the WIA Allotments to States. The notice did not contain attachments. This correction notice contains the attachments. FOR FURTHER INFORMATION CONTACT: Mike Qualter at 202-693-3014 or Sherril Hurd at 202-693-3700. Correction In the **Federal Register** of March 28, 2008, in FR Doc. E8-6331, on page 16,723, the attachments (i.e., allotment tables), are missing. Attachment I U.S. Department of Labor Employment and Training Administration—WIA Youth Activities State Allotments [Comparison of PY 2008 vs PY 2007] State PY 2007 PY 2008 Difference Percent difference Total $940,500,000 $924,069,465 ($16,430,535) −1.75 Alabama 11,383,779 10,066,414 (1,317,365) −11.57 Alaska 3,397,074 3,401,753 4,679 0.14 Arizona 16,928,408 15,410,351 (1,518,057) −8.97 Arkansas 8,704,080 10,427,807 1,723,727 19.80 California 123,174,266 131,478,160 8,303,894 6.74 Colorado 11,606,195 10,263,091 (1,343,104) −11.57 Connecticut 7,654,637 7,422,406 (232,231) −3.03 Delaware 2,310,103 2,269,746 (40,357) −1.75 District of Columbia 3,587,417 3,430,967 (156,450) −4.36 Florida 29,009,688 25,652,600 (3,357,088) −11.57 Georgia 22,755,109 20,223,508 (2,531,601) −11.13 Hawaii 2,718,713 2,404,095 (314,618) −11.57 Idaho 2,590,227 2,290,478 (299,749) −11.57 Illinois 46,092,387 41,245,377 (4,847,010) −10.52 Indiana 21,588,482 20,463,638 (1,124,844) −5.21 Iowa 4,627,175 4,091,704 (535,471) −11.57 Kansas 6,909,843 6,155,030 (754,813) −10.92 Kentucky 15,149,541 14,567,756 (581,785) −3.84 Louisiana 19,559,318 17,295,855 (2,263,463) −11.57 Maine 3,195,344 3,280,785 85,441 2.67 Maryland 9,122,752 10,013,008 890,256 9.76 Massachusetts 17,850,460 21,466,585 3,616,125 20.26 Michigan 46,701,312 57,931,951 11,230,639 24.05 Minnesota 8,599,824 10,984,461 2,384,637 27.73 Mississippi 17,570,027 15,536,771 (2,033,256) −11.57 Missouri 18,585,896 19,654,610 1,068,714 5.75 Montana 2,310,103 2,269,746 (40,357) −1.75 Nebraska 2,877,968 2,544,921 (333,047) −11.57 Nevada 3,546,204 4,529,527 983,323 27.73 New Hampshire 2,310,103 2,269,746 (40,357) −1.75 New Jersey 17,825,428 16,249,272 (1,576,156) −8.84 New Mexico 6,094,542 5,389,263 (705,279) −11.57 New York 61,807,331 54,654,801 (7,152,530) −11.57 North Carolina 21,556,371 19,061,803 (2,494,568) −11.57 North Dakota 2,310,103 2,269,746 (40,357) −1.75 Ohio 43,472,973 48,535,694 5,062,721 11.65 Oklahoma 8,104,805 7,526,029 (578,776) −7.14 Oregon 14,503,894 13,022,777 (1,481,117) −10.21 Pennsylvania 35,296,474 32,746,691 (2,549,783) −7.22 Puerto Rico 35,817,722 36,693,982 876,260 2.45 Rhode Island 3,531,877 3,357,319 (174,558) −4.94 South Carolina 20,827,321 21,357,908 530,587 2.55 South Dakota 2,310,103 2,269,746 (40,357) −1.75 Tennessee 21,188,759 19,653,705 (1,535,054) −7.24 Texas 80,144,725 70,870,137 (9,274,588) −11.57 Utah 4,952,465 4,379,351 (573,114) −11.57 Vermont 2,310,103 2,269,746 (40,357) −1.75 Virginia 10,603,936 9,462,211 (1,141,725) −10.77 Washington 20,588,711 20,263,008 (325,703) −1.58 West Virginia 5,222,378 4,618,029 (604,349) −11.57 Wisconsin 10,844,691 11,934,438 1,089,747 10.05 Wyoming 2,310,103 2,269,746 (40,357) −1.75 State Total 924,041,250 907,898,249 (16,143,001) −1.75 American Samoa 134,122 131,813 (2,309) −1.72 Guam 1,091,714 1,072,924 (18,790) −1.72 Northern Marianas 403,989 397,036 (6,953) −1.72 Palau 76,932 75,000 (1,932) −2.51 Virgin Islands 644,493 633,401 (11,092) −1.72 Outlying Areas Total 2,351,250 2,310,174 (41,076) −1.75 Native Americans 14,107,500 13,861,042 (246,458) −1.75 Attachment II U.S. Department of Labor Employment and Training Administration—WIA Adult Activities State Allotments [Comparison of PY 2008 vs PY 2007] State PY 2007 * PY 2008 Difference Percent difference Total $851,760,360 $861,540,083 $9,779,723 1.15 Alabama 10,840,649 9,868,607 (972,042) −8.97 Alaska 3,146,739 3,247,854 101,115 3.21 Arizona 15,680,890 14,729,041 (951,849) −6.07 Arkansas 7,936,516 9,810,398 1,873,882 23.61 California 115,577,245 126,947,190 11,369,945 9.84 Colorado 10,180,681 9,267,816 (912,865) −8.97 Connecticut 6,562,932 6,553,866 (9,066) −0.14 Delaware 2,124,077 2,148,466 24,389 1.15 District of Columbia 2,998,821 2,983,848 (14,973) −0.50 Florida 28,602,326 26,037,659 (2,564,667) −8.97 Georgia 20,696,197 18,958,899 (1,737,298) −8.39 Hawaii 2,594,397 2,361,767 (232,630) −8.97 Idaho 2,173,134 2,148,466 (24,668) −1.14 Illinois 41,551,416 38,269,186 (3,282,230) −7.90 Indiana 18,633,310 18,165,758 (467,552) −2.51 Iowa 3,303,022 3,006,852 (296,170) −8.97 Kansas 5,740,344 5,225,628 (514,716) −8.97 Kentucky 15,671,741 15,059,258 (612,483) −3.91 Louisiana 18,488,883 16,831,051 (1,657,832) −8.97 Maine 2,929,076 3,100,278 171,202 5.84 Maryland 8,395,178 9,494,842 1,099,664 13.10 Massachusetts 15,571,808 19,481,186 3,909,378 25.11 Michigan 42,323,775 54,246,181 11,922,406 28.17 Minnesota 7,156,879 9,410,768 2,253,889 31.49 Mississippi 15,912,960 14,486,102 (1,426,858) −8.97 Missouri 16,728,626 18,196,254 1,467,628 8.77 Montana 2,126,574 2,148,466 21,892 1.03 Nebraska 2,124,077 2,148,466 24,389 1.15 Nevada 3,453,857 4,541,567 1,087,710 31.49 New Hampshire 2,124,077 2,148,466 24,389 1.15 New Jersey 17,381,878 16,435,003 (946,875) −5.45 New Mexico 5,650,332 5,143,687 (506,645) −8.97 New York 59,076,349 53,779,185 (5,297,164) −8.97 North Carolina 19,569,847 17,815,089 (1,754,758) −8.97 North Dakota 2,124,077 2,148,466 24,389 1.15 Ohio 39,222,543 45,226,257 6,003,714 15.31 Oklahoma 7,461,542 7,058,963 (402,579) −5.40 Oregon 13,250,724 12,236,847 (1,013,877) −7.65 Pennsylvania 31,360,952 29,938,257 (1,422,695) −4.54 Puerto Rico 36,464,382 38,358,961 1,894,579 5.20 Rhode Island 2,860,276 2,820,312 (39,964) −1.40 South Carolina 19,055,065 20,145,575 1,090,510 5.72 South Dakota 2,124,077 2,148,466 24,389 1.15 Tennessee 19,884,566 19,041,647 (842,919) −4.24 Texas 72,960,506 66,418,400 (6,542,106) −8.97 Utah 3,819,921 3,477,402 (342,519) −8.97 Vermont 2,124,077 2,148,466 24,389 1.15 Virginia 9,304,228 8,520,288 (783,940) −8.43 Washington 18,477,618 18,747,476 269,858 1.46 West Virginia 5,031,038 4,579,923 (451,115) −8.97 Wisconsin 8,952,677 10,024,911 1,072,234 11.98 Wyoming 2,124,077 2,148,466 24,389 1.15 State Total 849,630,959 859,386,233 9,755,274 1.15 American Samoa 118,412 122,595 4,183 3.53 Guam 963,837 997,885 34,048 3.53 Northern Marianas 356,667 369,268 12,601 3.53 Palau 79,537 75,000 (4,537) −5.70 Virgin Islands 610,948 589,102 (21,846) −3.58 Outlying Areas Total 2,129,401 2,153,850 24,449 1.15 * Incl 1.747% rescission in FY08 Approp. Attachment III U.S. Department of Labor Employment and Training Administration—WIA Dislocated Worker Activities State Allotments Comparison of PY 2008 vs PY 2007 State Approp PY 2007 * PY 2008 Difference Percent difference Total $1,453,384,800 $1,464,707,055 $11,322,255 0.78 Alabama 9,546,799 9,164,775 (382,024) −4.00 Alaska 6,068,367 6,262,335 193,968 3.20 Arizona 13,050,015 11,442,222 (1,607,793) −12.32 Arkansas 9,388,350 13,518,488 4,130,138 43.99 California 135,886,106 168,253,920 32,367,814 23.82 Colorado 12,459,990 11,038,608 (1,421,382) −11.41 Connecticut 9,438,539 8,981,716 (456,823) −4.84 Delaware 1,821,204 1,857,536 36,332 1.99 District of Columbia 3,718,908 4,969,649 1,250,741 33.63 Florida 29,747,065 31,390,061 1,642,996 5.52 Georgia 32,397,883 23,975,835 (8,422,048) −26.00 Hawaii 1,839,672 1,543,697 (295,975) −16.09 Idaho 2,267,214 2,015,620 (251,594) −11.10 Illinois 54,922,885 46,802,246 (8,120,639) −14.79 Indiana 28,443,127 23,517,230 (4,925,897) −17.32 Iowa 7,229,451 5,897,698 (1,331,753) −18.42 Kansas 8,488,316 6,724,398 (1,763,918) −20.78 Kentucky 27,501,508 27,195,336 (306,172) −1.11 Louisiana 22,744,009 9,714,609 (13,029,400) −57.29 Maine 3,784,926 3,640,936 (143,990) −3.80 Maryland 12,964,681 12,572,045 (392,636) −3.03 Massachusetts 24,280,081 28,504,646 4,224,565 17.40 Michigan 91,027,451 130,811,617 39,784,166 43.71 Minnesota 11,410,292 12,968,820 1,558,528 13.66 Mississippi 33,769,326 27,431,802 (6,337,524) −18.77 Missouri 21,433,310 25,404,238 3,970,928 18.53 Montana 1,876,125 1,584,735 (291,390) −15.53 Nebraska 3,698,759 3,186,136 (512,623) −13.86 Nevada 4,460,932 5,820,504 1,359,572 30.48 New Hampshire 2,393,582 2,745,638 352,056 14.71 New Jersey 30,200,520 23,874,619 (6,325,901) −20.95 New Mexico 4,806,924 3,650,372 (1,156,552) −24.06 New York 68,170,151 50,790,224 (17,379,927) −25.49 North Carolina 27,031,028 33,828,640 6,797,612 25.15 North Dakota 1,089,819 1,171,809 81,990 7.52 Ohio 63,093,747 79,971,002 16,877,255 26.75 Oklahoma 7,325,070 7,326,043 973 0.01 Oregon 20,963,644 20,499,936 (463,708) −2.21 Pennsylvania 37,439,922 32,959,310 (4,480,612) −11.97 Puerto Rico 55,846,372 69,218,517 13,372,145 23.94 Rhode Island 5,063,273 4,600,258 (463,015) −9.14 South Carolina 37,257,851 37,862,826 604,975 1.62 South Dakota 1,511,389 1,459,759 (51,630) −3.42 Tennessee 28,695,379 18,786,071 (9,909,308) −34.53 Texas 92,723,152 57,630,386 (35,092,766) −37.85 Utah 3,947,291 3,106,955 (840,336) −21.29 Vermont 1,117,388 1,469,673 352,285 31.53 Virginia 11,505,728 12,727,010 1,221,282 10.61 Washington 26,339,385 22,166,920 (4,172,465) −15.84 West Virginia 5,052,811 5,214,464 161,653 3.20 Wisconsin 16,944,868 25,748,373 8,803,505 51.95 Wyoming 811,855 839,299 27,444 3.38 State Total 1,174,996,440 1,183,839,562 8,843,122 0.75 American Samoa 201,936 208,423 6,487 3.21 Guam 1,643,711 1,696,508 52,797 3.21 Northern Marianas 608,255 627,794 19,539 3.21 Palau 135,642 127,508 (8,134) −6.00 Virgin Islands 1,041,901 1,001,535 (40,366) −3.87 Outlying Areas Total 3,631,445 3,661,768 30,323 0.84 National Reserve 274,756,915 277,205,725 2,448,810 0.89 * Incl 1.747% rescission in FY08. Attachment IV U.S. Department of Labor Employment and Training Administration—Additional PY 2008 Funding From Dislocated Worker National Emergency Reserve for Adult/Dislocated Worker Activities for Eligible States State WIA calculation JTPA calculation JTPA less WIA Quotient (percent) Eligible* States Additional $ * Total $859,386,233 $859,256,225 ($130,008) 2 $1,777,266 Alabama 9,868,607 9,867,114 (1,493) 99.9849 Alaska 3,247,854 3,237,531 (10,323) 99.6822 Arizona 14,729,041 14,682,225 (46,816) 99.6822 Arkansas 9,810,398 9,779,216 (31,182) 99.6822 California 126,947,190 126,543,692 (403,498) 99.6822 Colorado 9,267,816 9,266,414 (1,402) 99.9849 Connecticut 6,553,866 6,533,035 (20,831) 99.6822 Delaware 2,148,466 2,148,141
(325)99.9849 DC 2,983,848 2,974,364 (9,484) 99.6822 Florida 26,037,659 26,033,720 (3,939) 99.9849 Georgia 18,958,899 18,898,639 (60,260) 99.6822 Hawaii 2,361,767 2,361,409
(358)99.9848 Idaho 2,148,466 2,148,141
(325)99.9849 Illinois 38,269,186 38,147,548 (121,638) 99.6822 Indiana 18,165,758 18,108,019 (57,739) 99.6822 Iowa 3,006,852 3,006,397
(455)99.9849 Kansas 5,225,628 5,224,838
(790)99.9849 Kentucky 15,059,258 15,011,392 (47,866) 99.6821 Louisiana 16,831,051 16,828,505 (2,546) 99.9849 Maine 3,100,278 3,090,424 (9,854) 99.6822 Maryland 9,494,842 9,464,663 (30,179) 99.6822 Massachusetts 19,481,186 19,419,266 (61,920) 99.6822 Michigan 54,246,181 54,073,761 (172,420) 99.6822 Minnesota 9,410,768 11,073,270 1,662,502 117.6660 1 1,662,502 Mississippi 14,486,102 14,483,911 (2,191) 99.9849 Missouri 18,196,254 18,138,418 (57,836) 99.6822 Montana 2,148,466 2,148,141
(325)99.9849 Nebraska 2,148,466 2,148,141
(325)99.9849 Nevada 4,541,567 4,656,331 114,764 102.5270 1 114,764 New Hampshire 2,148,466 2,148,141
(325)99.9849 New Jersey 16,435,003 16,382,765 (52,238) 99.6822 New Mexico 5,143,687 5,142,909
(778)99.9849 New York 53,779,185 53,771,049 (8,136) 99.9849 North Carolina 17,815,089 17,812,394 (2,695) 99.9849 North Dakota 2,148,466 2,148,141
(325)99.9849 Ohio 45,226,257 45,082,507 (143,750) 99.6822 Oklahoma 7,058,963 7,036,526 (22,437) 99.6821 Oregon 12,236,847 12,197,952 (38,895) 99.6821 Pennsylvania 29,938,257 29,843,099 (95,158) 99.6822 Puerto Rico 38,358,961 38,237,038 (121,923) 99.6822 Rhode Island 2,820,312 2,811,348 (8,964) 99.6822 South Carolina 20,145,575 20,081,543 (64,032) 99.6822 South Dakota 2,148,466 2,148,141
(325)99.9849 Tennessee 19,041,647 18,981,124 (60,523) 99.6822 Texas 66,418,400 66,408,352 (10,048) 99.9849 Utah 3,477,402 3,476,876
(526)99.9849 Vermont 2,148,466 2,148,141
(325)99.9849 Virginia 8,520,288 8,493,206 (27,082) 99.6821 Washington 18,747,476 18,687,888 (59,588) 99.6822 West Virginia 4,579,923 4,579,231
(692)99.9849 Wisconsin 10,024,911 9,993,047 (31,864) 99.6822 Wyoming 2,148,466 2,148,141
(325)99.9849 * Per WIA Sec. 173(e): Up to $15 million from Dislocated Workers Emergency reserve is to be made available to not more than 8 States with the largest ratio of JTPA formula amount to WIA formula amount. Attachment V U.S. Department of Labor Employment and Training Administration—Employment Service (Wagner-Peyser) [PY 2008 final vs PY 2007 final allotments] State Final FY 2007* Final FY 2008 $ Difference Percent difference Total $715,883,000 $703,376,524 ($12,506,476) −1.75 Alabama 9,347,342 9,274,795 (72,547) −0.78 Alaska 7,586,322 7,646,039 59,717 0.79 Arizona 12,092,949 12,160,434 67,485 0.56 Arkansas 6,053,152 6,097,500 44,348 0.73 California 79,764,170 80,393,798 629,628 0.79 Colorado 10,939,634 10,962,418 22,784 0.21 Connecticut 7,682,875 7,829,751 146,876 1.91 Delaware 1,949,309 1,964,653 15,344 0.79 District of Columbia 2,705,590 2,666,470 (39,120) −1.45 Florida 34,464,846 36,484,397 2,019,551 5.86 Georgia 19,969,831 20,131,714 161,883 0.81 Hawaii 2,596,357 2,567,092 (29,265) −1.13 Idaho 6,320,756 6,370,511 49,755 0.79 Illinois 29,073,531 29,255,214 181,683 0.62 Indiana 14,184,742 14,185,321 579 0.00 Iowa 6,831,619 6,822,494 (9,125) −0.13 Kansas 6,314,960 6,313,418 (1,542) −0.02 Kentucky 9,278,193 9,330,822 52,629 0.57 Louisiana 9,840,106 9,697,828 (142,278) −1.45 Maine 3,758,893 3,788,482 29,589 0.79 Maryland 12,082,222 12,124,203 41,981 0.35 Massachusetts 14,647,014 14,704,420 57,406 0.39 Michigan 24,900,399 25,087,225 186,826 0.75 Minnesota 12,035,648 12,340,429 304,781 2.53 Mississippi 6,795,067 6,745,907 (49,160) −0.72 Missouri 13,234,925 13,316,098 81,173 0.61 Montana 5,165,354 5,206,014 40,660 0.79 Nebraska 6,207,741 6,256,606 48,865 0.79 Nevada 5,202,012 5,753,058 551,046 10.59 New Hampshire 2,875,081 2,925,586 50,505 1.76 New Jersey 19,147,730 19,156,383 8,653 0.05 New Mexico 5,796,435 5,842,063 45,628 0.79 New York 41,502,859 41,433,656 (69,203) −0.17 North Carolina 19,033,933 19,216,352 182,419 0.96 North Dakota 5,259,876 5,301,280 41,404 0.79 Ohio 26,623,377 26,981,411 358,034 1.34 Oklahoma 7,206,821 7,243,494 36,673 0.51 Oregon 8,872,270 8,868,797 (3,473) −0.04 Pennsylvania 27,240,395 27,184,396 (55,999) −0.21 Puerto Rico 8,635,065 8,668,212 33,147 0.38 Rhode Island 2,546,416 2,550,164 3,748 0.15 South Carolina 10,158,224 10,173,257 15,033 0.15 South Dakota 4,861,334 4,899,601 38,267 0.79 Tennessee 13,096,271 13,124,545 28,274 0.22 Texas 49,560,678 49,518,743 (41,935) −0.08 Utah 8,148,564 8,030,744 (117,820) −1.45 Vermont 2,277,326 2,295,252 17,926 0.79 Virginia 15,084,682 15,191,777 107,095 0.71 Washington 14,784,734 14,814,472 29,738 0.20 West Virginia 5,564,277 5,608,077 43,800 0.79 Wisconsin 13,108,238 13,355,215 246,977 1.88 Wyoming 3,771,659 3,801,348 29,689 0.79 State Total 696,181,804 701,661,936 5,480,132 0.79 Guam 326,555 329,126 2,571 0.79 Virgin Islands 1,374,641 1,385,462 10,821 0.79 Outlying Areas Total 1,701,196 1,714,588 13,392 0.79 Postage Reserve 18,000,000 0 (18,000,000) −100.00 * Does not reflect postage conversion funds distribution to States. Attachment VI U.S. Department of Labor Employment and Training Administration—Workforce Information Grants to States [PY 2008 vs PY 2007 allotments] State PY 2007 * PY 2008 Difference Percent difference Total $31,680,000 $31,863,448 $183,448 0.58 Alabama 497,844 517,479 19,635 3.94 Alaska 276,788 286,532 9,744 3.52 Arizona 588,028 616,560 28,532 4.85 Arkansas 402,754 413,079 10,325 2.56 California 2,377,436 2,478,254 100,818 4.24 Colorado 549,657 573,969 24,312 4.42 Connecticut 456,335 473,938 17,603 3.86 Delaware 288,928 298,422 9,494 3.29 District of Columbia 270,584 283,018 ,12,434 4.60 Florida 1,305,486 1,374,721 69,235 5.30 Georgia 798,817 838,696 39,879 4.99 Hawaii 313,441 323,871 10,430 3.33 Idaho 326,403 337,015 10,612 3.25 Illinois 1,022,617 1,069,456 46,839 4.58 Indiana 627,413 644,569 17,156 2.73 Iowa 437,464 448,792 11,328 2.59 Kansas 413,513 425,973 12,460 3.01 Kentucky 479,042 497,690 18,648 3.89 Louisiana 464,464 490,060 25,596 5.51 Maine 321,718 331,693 9,975 3.10 Maryland 595,123 615,226 20,103 3.38 Massachusetts 641,320 664,696 23,376 3.64 Michigan 851,816 867,507 15,691 1.84 Minnesota 590,980 607,538 16,558 2.80 Mississippi 394,758 406,084 11,326 2.87 Missouri 602,038 620,388 18,350 3.05 Montana 295,622 305,158 9,536 3.23 Nebraska 354,185 364,663 10,478 2.96 Nevada 387,101 408,405 21,304 5.50 New Hampshire 324,226 335,465 11,239 3.47 New Jersey 775,725 798,971 23,246 3.00 New Mexico 350,006 359,736 9,730 2.78 New York 1,381,028 1,410,985 29,957 2.17 North Carolina 765,938 801,477 35,539 4.64 North Dakota 279,041 288,534 9,493 3.40 Ohio 949,774 980,145 30,371 3.20 Oklahoma 447,271 457,593 10,322 2.31 Oregon 462,032 480,629 18,597 4.03 Pennsylvania 995,426 1,019,875 24,449 2.46 PuertoRico 405,531 416,785 11,254 2.78 Rhode Island 304,861 314,993 10,132 3.32 South Carolina 490,073 508,915 18,842 3.84 South Dakota 287,507 297,541 10,034 3.49 Tennessee 591,810 617,264 25,454 4.30 Texas 1,611,388 1,667,706 56,318 3.49 Utah 392,287 408,862 16,575 4.23 Vermont 278,919 288,250 9,331 3.35 Virginia 716,429 742,865 26,436 3.69 Washington 637,419 659,818 22,399 3.51 West Virginia 333,335 344,123 10,788 3.24 Wisconsin 605,539 623,722 18,183 3.00 Wyoming 270,213 279,270 9,057 3.35 State Total 30,587,453 31,686,976 1,099,523 3.59 Guam 91,238 92,716 1,478 1.62 Virgin Islands 82,589 83,756 1,167 1.41 Outlying Areas Total 173,827 176,472 2,645 1.52 Postage Reserve 918,720 0 (918,720) −100.00 * Does not reflect postage conversion funds distribution to States. Attachment VII U.S. Department of Labor Employment and Training Administration—Work Opportunity Tax Credits [FY 2008 vs FY 2007 State allotments] State FY 2007 * FY 2008 Difference Percent difference Total $17,677,000 $17,368,183 ($308,817) −1.7 Alabama 262,894 252,718 (10,176) −3.9 Alaska 64,000 66,000 2,000 3.1 Arizona 268,926 258,517 (10,409) −3.9 Arkansas 241,801 242,829 1,028 0.4 California 1,857,628 1,897,525 39,897 2.1 Colorado 205,336 218,526 13,190 6.4 Connecticut 200,861 193,086 (7,775) −3.9 Delaware 64,000 66,000 2,000 3.1 District of Columbia 64,000 66,000 2,000 3.1 Florida 699,871 672,782 (27,089) −3.9 Georgia 402,205 386,637 (15,568) −3.9 Hawaii 64,000 66,000 2,000 3.1 Idaho 64,000 66,000 2,000 3.1 Illinois 828,265 796,206 (32,059) −3.9 Indiana 543,327 522,297 (21,030) −3.9 Iowa 199,861 232,924 33,063 16.5 Kansas 155,335 152,605 (2,730) −1.8 Kentucky 282,557 271,620 (10,937) −3.9 Louisiana 353,685 395,674 41,989 11.9 Maine 64,000 77,713 13,713 21.4 Maryland 328,353 315,644 (12,709) −3.9 Massachusetts 295,577 318,416 22,839 7.7 Michigan 694,320 667,446 (26,874) −3.9 Minnesota 275,972 265,290 (10,682) −3.9 Mississippi 179,281 172,342 (6,939) −3.9 Missouri 441,940 503,453 61,513 13.9 Montana 64,000 66,000 2,000 3.1 Nebraska 128,798 140,605 11,807 9.2 Nevada 100,318 96,435 (3,883) −3.9 New Hampshire 64,000 66,000 2,000 3.1 New Jersey 494,734 475,585 (19,149) −3.9 New Mexico 137,307 155,598 18,291 13.3 New York 925,004 972,546 47,542 5.1 North Carolina 476,067 519,855 43,788 9.2 North Dakota 64,000 66,000 2,000 3.1 Ohio 869,949 836,277 (33,672) −3.9 Oklahoma 161,473 163,048 1,575 1.0 Oregon 178,184 171,287 (6,897) −3.9 Pennsylvania 691,697 664,924 (26,773) −3.9 Puerto Rico 101,935 97,989 (3,946) −3.9 Rhode Island 70,135 67,420 (2,715) −3.9 South Carolina 180,748 173,752 (6,996) −3.9 South Dakota 64,000 66,000 2,000 3.1 Tennessee 767,120 737,428 (29,692) −3.9 Texas 1,177,538 1,276,601 99,063 8.4 Utah 104,280 126,624 22,344 21.4 Vermont 64,000 66,000 2,000 3.1 Virginia 368,347 354,090 (14,257) −3.9 Washington 320,913 389,674 68,761 21.4 West Virginia 137,684 132,355 (5,329) −3.9 Wisconsin 266,141 255,840 (10,301) −3.9 Wyoming 64,000 66,000 2,000 3.1 State Total 17,144,367 17,348,183 203,816 1.2 Virgin Islands 20,000 20,000 0 0.0 Postage Reserve 512,633 0 (512,633) −100.0 * Does not reflect postage conversion funds distribution to States. Dated: April 1, 2008. Brent R. Orrell, Acting Assistant Secretary. [FR Doc. E8-7125 Filed 4-4-08; 8:45 am] BILLING CODE 4510-FN-P NUCLEAR REGULATORY COMMISSION Agency Information Collection Activities: Proposed Collection; Comment Request (DRAFT) AGENCY: U.S. Nuclear Regulatory Commission (NRC). ACTION: Notice of pending NRC action to submit an information collection request to the Office of Management and Budget
(OMB)and solicitation of public comment. SUMMARY: The NRC is preparing a submittal to OMB for review of continued approval of information collections under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). Information pertaining to the requirement to be submitted: 1. *The title of the information collection:* Grant and Cooperative Agreement Provisions. 2. *Current OMB approval number:* 3150-0107. 3. *How often the collection is required:* Most reports are submitted on occasion. Recipients must also submit technical performance reports twice yearly. 4. *Who is required or asked to report:* Grantees and Cooperators. 5. *The number of annual respondents:* 140. 6. *The number of hours needed annually to complete the requirement or request:* 4,613 hours. 7. *Abstract:* The Division of Contracts
(DC)is responsible for the awarding of grants and cooperative agreements for the NRC. The DC collects information from grantees and cooperators in order to administer these programs. The DC uses provisions (required to obtain or retain a benefit in its awards and cooperative agreements) to ensure: Adherence to Public Laws, that the Government's rights are protected, that work proceeds on schedule, and that disputes between the Government and the recipient are settled. Submit, by June 6, 2008, comments that address the following questions: 1. Is the proposed collection of information necessary for the NRC to properly perform its functions? Does the information have practical utility? 2. Is the burden estimate accurate? 3. Is there a way to enhance the quality, utility, and clarity of the information to be collected? 4. How can the burden of the information collection be minimized, including the use of automated collection techniques or other forms of information technology? A copy of the draft supporting statement may be viewed free of charge at the NRC Public Document Room, One White Flint North, 11555 Rockville Pike, Room O-1 F21, Rockville, MD 20852. OMB clearance requests are available at the NRC worldwide Web site: *http://www.nrc.gov/public-involve/doc-comment/omb/index.html.* The document will be available on the NRC home page site for 60 days after the signature date of this notice. Comments and questions about the information collection requirements may be directed to the NRC Clearance Officer, Margaret A. Janney (T-5 F52), U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, by telephone at 301-415-7245, or by Internet electronic mail to *INFOCOLLECTS@NRC.GOV.* Dated at Rockville, Maryland, this 1st day of April, 2008. For the Nuclear Regulatory Commission. Gregory Trussell, Acting NRC Clearance Officer, Office of Information Services. [FR Doc. E8-7192 Filed 4-4-08; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION Agency Information Collection Activities: Submission for the Office of Management and Budget
(OMB)Review; Comment Request AGENCY: U.S. Nuclear Regulatory Commission (NRC). ACTION: Notice of the OMB review of information collection and solicitation of public comment. SUMMARY: The NRC has recently submitted to OMB for review the following proposal for the collection of information under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). The NRC hereby informs potential respondents that an agency may not conduct or sponsor, and that a person is not required to respond to, a collection of information unless it displays a current valid OMB control number. 1. *Type of submission, new, revision, or extension:* Revision. 2. *The title of the information collection:* 10 CFR Part 36—Licenses and Radiation Safety Requirements for Irradiators. 3. *The form number if applicable:* Not applicable. 4. *How often the collection is required:* On occasion. It is estimated that there are approximately two NRC and eight Agreement State reports submitted annually. 5. *Who will be required or asked to report:* Irradiator licensees licensed by NRC or an Agreement State. 6. *An estimate of the number of responses:* 85 (10 for reporting (2 NRC licensees and 8 Agreement States) 75 for recordkeeping (15 NRC licensees and 60 Agreement States)). 7. *The estimated number of annual respondents:* 75 (15 NRC licensees and 60 Agreement State licensees). 8. *An estimate of the number of hours needed annually to complete the requirement or request:* 35,008 (6,988 hours for NRC licensees [6,878 recordkeeping + 110 reporting] and 28,020 hours for Agreement State licensees [27,510 recordkeeping + 510 reporting]), or 467 hours per licensee. 9. *An indication of whether Section 3507(d), Public Law 104-13 applies:* Not applicable. 10. *Abstract:* 10 CFR Part 36 contains requirements for the issuance of a license authorizing the use of sealed sources containing radioactive materials in irradiators used to irradiate objects or materials for a variety of purposes in research, industry, and other fields. The subparts cover specific requirements for obtaining a license or license exemption, design and performance criteria for irradiators; and radiation safety requirements for operating irradiators, including requirements for operator training, written operating and emergency procedures, personnel monitoring, radiation surveys, inspection, and maintenance. Part 36 also contains the recordkeeping and reporting requirements that are necessary to ensure that the irradiator is being safely operated so that it poses no danger to the health and safety of the general public and the irradiator employees. A copy of the final supporting statement may be viewed free of charge at the NRC Public Document Room, One White Flint North, 11555 Rockville Pike, Room O-1 F23, Rockville, Maryland 20852. OMB clearance requests are available at the NRC worldwide web site: *http://www.nrc.gov/public-involve/doc-comment/omb/index.html.* The document will be available on the NRC home page site for 60 days after the signature date of this notice. Comments and questions should be directed to the OMB reviewer listed below by May 7, 2008. Comments received after this date will be considered if it is practical to do so, but assurance of consideration cannot be given to comments received after this date. Nathan J. Frey, Office of Information and Regulatory Affairs (3150-0158), NEOB-10202, Office of Management and Budget, Washington, DC 20503. Comments can also be e-mailed to *Nathan_J._Frey@omb.eop.gov* or submitted by telephone at
(202)395-3087. The NRC Clearance Officer is Margaret A. Janney, 301-415-7245. Dated at Rockville, Maryland, this 31st day of March, 2008. For the Nuclear Regulatory Commission. Tremaine U. Donnell, Acting NRC Clearance Officer, Office of Information Services. [FR Doc. E8-7195 Filed 4-4-08; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION [Docket No.: 40-8943] Notice of License Amendment Request of Crow Butte Resources, Inc., Crawford, NE, and Opportunity To Request a Hearing AGENCY: Nuclear Regulatory Commission. ACTION: Notice of license amendment, and opportunity to request a hearing. DATES: A request for a hearing must be filed by June 6, 2008. FOR FURTHER INFORMATION CONTACT: Stephen J. Cohen, Project Manager, Uranium Recovery Licensing Branch, Division of Waste Management and Environmental Protection, Office of Federal and State and Environmental Management Programs, U.S. Nuclear Regulatory Commission, Washington, DC, 20555. Telephone:
(301)415-7182; fax number:
(301)415-5369; e-mail: *sjc7@nrc.gov.* SUPPLEMENTARY INFORMATION: I. Introduction The U.S. Nuclear Regulatory Commission
(NRC)has received, by letter dated November 27, 2007, a license amendment application from Crow Butte Resources, Inc. (CBR), requesting renewal of its source material license for its in situ leach
(ISL)uranium recovery facility located in Crawford, Nebraska. License No. SUA-1534 authorizes the licensee to operate an ISL uranium recovery facility to produce yellowcake. Specifically, the amendment requests that NRC renew CBR's current license for a standard 10-year period. An NRC administrative review, documented in a letter to CBR dated March 28, 2008, found the application acceptable to begin a technical review. If the NRC approves the amendment, the approval will be documented in an amendment to NRC License No.: SUA-1534. However, before approving the proposed amendment, the NRC will need to make the findings required by the Atomic Energy Act of 1954, as amended (the Act), and NRC's regulations. These findings will be documented in a Safety Evaluation Report and an Environmental Assessment. II. Opportunity to Request a Hearing The NRC hereby provides notice that this is a proceeding on an application for a license amendment regarding renewal of Source Materials License No.: SUA-1534 issued to Crow Butte Resources for its ISL uranium recovery facility in Crawford, NE. Any person whose interest may be affected by this proceeding, and who desires to participate as a party, must file a request for a hearing and a specification of the contentions which the person seeks to have litigated in the hearing, in accordance with the NRC E-Filing rule, which the NRC promulgated in August, 2007, 72 FR 49139 (August 28, 2007). The E-Filing rule requires participants to submit and serve documents over the internet or in some cases to mail copies on electronic storage media. Participants may not submit paper copies of their filings unless they seek a waiver in accordance with the procedures described below. To comply with the procedural requirements of E-Filing, at least five
(5)days prior to the filing deadline, the petitioner/requestor must contact the Office of the Secretary by e-mail at *HEARINGDOCKET@NRC.GOV* , or by calling
(301)415-1677, to request
(1)a digital Identification
(ID)certificate, which allows the participant (or its counsel or representative) to digitally sign documents and access the E-Submittal server for any proceeding in which it is participating; and/or
(2)creation of an electronic docket for the proceeding (even in instances in which the petitioner/requestor (or its counsel or representative) already holds an NRC-issued digital ID certificate). Each petitioner/requestor will need to download the Workplace Forms Viewer TM to access the Electronic Information Exchange (EIE), a component of the E-Filing system. The Workplace Forms Viewer TM is free and is available at *http://www.nrc.gov/site-help/e-submittals/install-viewer.html.* Information about applying for a digital ID certificate is available on NRC's public website at *http://www.nrc.gov/site-help/e-submittals/apply-certificates.html.* Once a petitioner/requestor has obtained a digital ID certificate, had a docket created, and downloaded the EIE viewer, it can then submit a request for hearing or petition for leave to intervene. Submissions should be in Portable Document Format
(PDF)in accordance with NRC guidance available on the NRC public website at *http://www.nrc.gov/site-help/e-submittals.html* . A filing is considered complete at the time the filer submits its documents through EIE. To be timely, an electronic filing must be submitted to the EIE system no later than 11:59 p.m. Eastern Time on the due date. Upon receipt of a transmission, the E-Filing system time-stamps the document and sends the submitter an e-mail notice confirming receipt of the document. The EIE system also distributes an e-mail notice that provides access to the document to the NRC Office of the General Counsel and any others who have advised the Office of the Secretary that they wish to participate in the proceeding, so that the filer need not serve the documents on those participants separately. Therefore, applicants and other participants (or their counsel or representative) must apply for and receive a digital ID certificate before a hearing request/petition to intervene is filed so that they can obtain access to the document via the E-Filing system. A person filing electronically may seek assistance through the “Contact Us” link located on the NRC website at *http://www.nrc.gov/site-help/e-submittals.html* or by calling the NRC technical help line, which is available between 8:30 a.m. and 4:15 p.m., Eastern Time, Monday through Friday. The help line number is
(800)397-4209 or locally,
(301)415-4737. Participants who believe that they have a good cause for not submitting documents electronically must file a motion, in accordance with 10 CFR 2.302(g), with their initial paper filing requesting authorization to continue to submit documents in paper format. Such filings must be submitted by:
(1)First class mail addressed to the Office of the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemaking and Adjudications Staff; or
(2)courier, express mail, or expedited delivery service to the Office of the Secretary, Sixteenth Floor, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852, Attention: Rulemaking and Adjudications Staff. Participants filing a document in this manner are responsible for serving the document on all other participants. Filing is considered complete by first-class mail as of the time of deposit in the mail, or by courier, express mail, or expedited delivery service upon depositing the document with the provider of the service. Non-timely requests and/or petitions and contentions will not be entertained absent a determination by the Commission, the presiding officer, or the Atomic Safety and Licensing Board that the petition and/or request should be granted and/or the contentions should be admitted based on a balancing of the factors specified in 10 CFR 2.309(c)(1)(i)-(viii). To be timely, filings must be submitted no later than 11:59 p.m. Eastern Time on the due date. Documents submitted in adjudicatory proceedings will appear in NRC's electronic hearing docket which is available to the public at *http://ehd.nrc.gov/EHD_Proceeding/home.asp* , unless excluded pursuant to an order of the Commission, an Atomic Safety and Licensing Board, or a Presiding Officer. Participants are requested not to include social security numbers in their filings. With respect to copyrighted works, except for limited excerpts that serve the purpose of the adjudicatory filings and would constitute a Fair Use application, participants are requested not to include copyrighted materials in their submission. The formal requirements for documents contained in 10 CFR 2.304(c)-(e) must be met. If the NRC grants an electronic document exemption in accordance with 10 CFR 2.302(g)(3)), then the requirements for paper documents, set forth in 10 CFR 2.304(b) must be met. In accordance with 10 CFR 2.309(b), a request for a hearing must be filed by June 6, 2008. In addition to meeting other applicable requirements of 10 CFR 2.309, the general requirements involving a request for a hearing filed by a person other than an applicant must state: 1. The name, address, and telephone number of the requester; 2. The nature of the requester's right under the Act to be made a party to the proceeding; 3. The nature and extent of the requester's property, financial or other interest in the proceeding; 4. The possible effect of any decision or order that may be issued in the proceeding on the requester's interest; and 5. The circumstances establishing that the request for a hearing is timely in accordance with 10 CFR 2.309(b). In accordance with 10 CFR 2.309(f)(1), a request for hearing or petitions for leave to intervene must set forth with particularity the contentions sought to be raised. For each contention, the request or petition must: 1. Provide a specific statement of the issue of law or fact to be raised or controverted; 2. Provide a brief explanation of the basis for the contention; 3. Demonstrate that the issue raised in the contention is within the scope of the proceeding; 4. Demonstrate that the issue raised in the contention is material to the findings that the NRC must make to support the action that is involved in the proceeding; 5. Provide a concise statement of the alleged facts or expert opinions which support the requester's/petitioner's position on the issue and on which the requester/petitioner intends to rely to support its position on the issue; and 6. Provide sufficient information to show that a genuine dispute exists with the applicant on a material issue of law or fact. This information must include references to specific portions of the application (including the applicant's environmental report and safety report) that the requester/petitioner disputes and the supporting reasons for each dispute, or, if the requester/petitioner believes the application fails to contain information on a relevant matter as required by law, the identification of each failure and the supporting reasons for the requester's/petitioner's belief. In addition, in accordance with 10 CFR 2.309(f)(2), contentions must be based on documents or other information available at the time the petition is to be filed, such as the application, supporting safety analysis report, environmental report or other supporting document filed by an applicant or licensee, or otherwise available to the petitioner. On issues arising under the National Environmental Policy Act, the requester/petitioner shall file contentions based on the applicant's environmental report. The requester/petitioner may amend those contentions or file new contentions if there are data or conclusions in the NRC draft, or final environmental impact statement, environmental assessment, or any supplements relating thereto, that differ significantly from the data or conclusions in the applicant's documents. Otherwise, contentions may be amended or new contentions filed after the initial filing only with leave of the presiding officer. Each contention shall be given a separate numeric or alpha designation within one of the following groups: 1. Technical—primarily concerns issues relating to matters discussed or referenced in the Safety Evaluation Report for the proposed action. 2. Environmental—primarily concerns issues relating to matters discussed or referenced in the Environmental Report for the proposed action. 3. Miscellaneous—does not fall into one of the categories outlined above. If the requester/petitioner believes a contention raises issues that cannot be classified as primarily falling into one of these categories, the requester/petitioner must set forth the contention and supporting bases, in full, separately for each category into which the requester/petitioner asserts the contention belongs with a separate designation for that category. Requesters/petitioners should, when possible, consult with each other in preparing contentions and combine similar subject matter concerns into a joint contention, for which one of the co-sponsoring requesters/petitioners is designated the lead representative. Further, in accordance with 10 CFR 2.309(f)(3), any requester/petitioner that wishes to adopt a contention proposed by another requester/petitioner must do so, in accordance with the E-Filing rule, within ten days of the date the contention is filed, and designate a representative who shall have the authority to act for the requester/petitioner. In accordance with 10 CFR 2.309(g), a request for hearing and/or petition for leave to intervene may also address the selection of the hearing procedures, taking into account the provisions of 10 CFR 2.310. III. Further Information Documents related to this action, including the application for amendment and supporting documentation, are available electronically at the NRC's Electronic Reading Room at *http://www.nrc.gov/reading-rm/adams.html.* From this site, you can access the NRC's Agencywide Document Access and Management System (ADAMS), which provides text and image files of NRC's public documents. The ADAMS accession numbers for the documents related to this notice are: Request for License Renewal Transmittal Letter (ML073470645), License Renewal Application (combined technical and environmental reports), Part 1 (ML073480266), License Renewal Application (combined technical and environmental reports), Part 2 (ML073480267), and the acceptance review letter dated March 28, 2008 (ML080720341). If you do not have access to ADAMS or if there are problems in accessing the documents located in ADAMS, contact the NRC Public Document Room
(PDR)Reference staff at 1-800-397-4209, 301-415-4737 or by email to *pdr@nrc.gov.* These documents may also be viewed electronically on the public computers located at the NRC's Public Document Room (PDR), O 1 F21, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852. The PDR reproduction contractor will copy documents for a fee. Dated at Rockville, MD, this 31st day of March, 2008. For the Nuclear Regulatory Commission. William vonTill, Branch Chief, Uranium Recovery Licensing Branch, Division of Waste Management and Environmental Protection, Office of Federal and State Materials and Environmental Management Programs. [FR Doc. E8-7175 Filed 4-4-08; 8:45 am] BILLING CODE 7590-01-P OFFICE OF PERSONNEL MANAGEMENT Excepted Service AGENCY: U.S. Office of Personnel Management (OPM). ACTION: Notice. SUMMARY: This gives notice of OPM decisions granting authority to make appointments under Schedules A, B, and C in the excepted service as required by 5 CFR 6.6 and 213.103. FOR FURTHER INFORMATION CONTACT: C. Penn, Group Manager, Executive Resources Services Group, Center for Human Resources, Division for Human Capital Leadership and Merit System Accountability, 202-606-2246. SUPPLEMENTARY INFORMATION: Appearing in the listing below are the individual authorities established under Schedules A, B, and C between February 1, 2008, and February 29, 2008. Future notices will be published on the fourth Tuesday of each month, or as soon as possible thereafter. A consolidated listing of all authorities as of June 30 is published each year. Schedule A No Schedule A appointments were approved for February 2008. Schedule B No Schedule B appointments were approved for February 2008. Schedule C The following Schedule C appointments were approved during February 2008. Section 213.3303 Executive Office of the President Office of National Drug Control Policy QQGS80005 Confidential Assistant to the Director. Effective February 27, 2008. QQGS80007 Confidential Assistant to the Deputy Chief of Staff. Effective February 28, 2008. Office of Management and Budget BOGS70018 Legislative Analyst to the Associate Director for Legislative Affairs. Effective February 13, 2008. BOGS80006 Press Secretary to the Associate Director for Communications. Effective February 29, 2008. Section 213.3304 Department of State DSGS60980 Staff Assistant to the Under Secretary for Arms Control and Security Affairs. Effective February 05, 2008. DSGS61225 Legislative Management Officer to the Assistant Secretary for Legislative and Intergovernmental Affairs. Effective February 05, 2008. DSGS61269 Protocol Officer (Ceremonials) to the Chief of Protocol. Effective February 12, 2008. DSGS61290 Deputy Assistant Secretary to the Assistant Secretary for Economic and Business Affairs. Effective February 12, 2008. DSGS61291 Staff Assistant to the Chief Financial Officer. Effective February 12, 2008. DSGS61060 Protocol Assistant to the Deputy Chief of Protocol. Effective February 26, 2008. Section 213.3305 Department of the Treasury DYGS00440 Public Affairs Specialist to the Assistant Secretary (Public Affairs) and Director of Policy Planning. Effective February 08, 2008. DYGS00503 Senior Advisor to the Director of the Mint. Effective February 08, 2008. DYGS00464 Special Assistant to the Assistant Secretary (Deputy Under Secretary) for Legislative Affairs. Effective February 29, 2008. Section 213.3306 Department of Defense DDGS17122 Public Affairs Specialist to the Office of Assistant Secretary of Defense (Public Affairs). Effective February 06, 2008. DDGS17134 Special Assistant to the Assistant Secretary of Defense (Legislative Affairs). Effective February 13, 2008. DDGS17131 Special Assistant to the Assistant Secretary of Defense (Special Operations/Low Intensity Conflict and Interdependent Capabilities). Effective February 26, 2008. DDGS17126 Special Assistant to the Assistant Secretary of Defense (Legislative Affairs). Effective February 29, 2008. Section 213.3307 Department of the Army DWGS60087 Personal and Confidential Assistant to the Deputy Under Secretary of the Army. Effective February 19, 2008. DWGS00091 Program Analyst (Business Transformation Initiatives) to the Special Assistant to the Secretary of Army for Business Transformation Initiatives. Effective February 26, 2008. DWGS00093 Special Assistant to the Assistant Secretary of the Army (Installations and Environment). Effective February 26, 2008. Section 213.3308 Department of the Navy DNGS08060 Confidential Assistant to the Secretary of the Navy. Effective February 06, 2008. Section 213.3309 Department of the Air Force DFGS00010 Secretary to the Assistant Secretary (Financial Management and Comptroller). Effective February 26, 2008. Section 213.3310 Department of Justice DJGS00160 Confidential Assistant to the Assistant Attorney General (Legislative Affairs). Effective February 04, 2008. DJGS00159 Senior Counsel to the Assistant Attorney General (Legal Policy). Effective February 26, 2008. Section 213.3311 Department of Homeland Security DMGS00746 Staff Assistant to the White House Liaison. Effective February 20, 2008. DMGS00606 Component Liaison Officer to the Executive Director for Operations and Administration. Effective February 26, 2008. DMGS00689 Advance Representative to the Director of Scheduling and Advance. Effective February 26, 2008. DMGS00516 Confidential Assistant to the Executive Director for Operations and Administration. Effective February 29, 2008. DMGS00745 Confidential Assistant to the Deputy Assistant Secretary to the Deputy Assistant Secretary for Public Affairs. Effective February 29, 2008. Section 213.3312 Department of the Interior DIGS01115 Associate Director—External and Intergovernmental Affairs to the Director, External and Intergovernmental Affairs. Effective February 21, 2008. DIGS01114 Chief of Staff to the Assistant Secretary for Fish and Wildlife and Parks. Effective February 29, 2008. Section 213.3313 Department of Agriculture DAGS00931 Confidential Assistant to the Deputy Under Secretary, Research, Education and Economics. Effective February 08, 2008. DAGS00932 Special Assistant to the Administrator, Rural Housing Service. Effective February 28, 2008. DAGS00933 Confidential Assistant to the Chief of Staff. Effective February 29, 2008. Section 213.3314 Department of Commerce DCGS00541 Special Assistant to the Deputy Assistant Secretary for Domestic Operations. Effective February 04, 2008. DCGS00290 Special Assistant to the Senior Advisor. Effective February 19, 2008. DCGS00162 Senior Advisor to the Assistant Secretary for Market Access and Compliance. Effective February 29, 2008. Section 213.3315 Department of Labor DLGS00171 Special Assistant to the Director of Scheduling. Effective February 05, 2008. DLGS60117 Special Assistant to the Wage and Hour Administrator. Effective February 05, 2008. DLGS60198 Special Assistant to the Assistant Secretary for Administration and Management. Effective February 15, 2008. DLGS60122 Senior Advisor to the Wage and Hour Administrator. Effective February 20, 2008. DLGS60161 Attorney Advisor to the Solicitor of Labor. Effective February 20, 2008. DLGS60138 Chief of Staff to the Assistant Secretary for Mine Safety and Health. Effective February 27, 2008. DLGS60219 Staff Assistant to the Director, 21st Century Office and Deputy Assistant Secretary for Intergovernmental Affairs. Effective February 27, 2008. DLGS60217 Senior Legislative Officer to the Assistant Secretary for Congressional and Intergovernmental Affairs. Effective February 29, 2008. DLGS60272 Special Assistant to the Deputy Chief of Staff. Effective February 29, 2008. Section 213.3316 Department of Health and Human Services DHGS60065 Confidential Assistant to the Chief of Staff. Effective February 05, 2008. DHGS60539 Special Assistant to the General Counsel. Effective February 13, 2008. DHGS60066 Confidential Assistant to the Chief of Staff. Effective February 19, 2008. Section 213.3317 Department of Education DBGS00663 Special Assistant to the Deputy Assistant Secretary for Media Relations and Strategic Communications. Effective February 13, 2008. DBGS00421 Confidential Assistant to the Special Assistant. Effective February 14, 2008. DBGS00436 Special Assistant to the Deputy Assistant Secretary for Media Relations and Strategic Communications. Effective February 14, 2008. DBGS00586 Special Assistant to the Deputy Assistant Secretary for Media Relations and Strategic Communications. Effective February 14, 2008. DBGS00664 Chief of Staff to the Assistant Secretary for Vocational and Adult Education. Effective February 15, 2008. DBGS00249 Special Assistant to the Assistant Secretary for Postsecondary Education. Effective February 19, 2008. DBGS00614 Confidential Assistant to the Assistant Secretary, Office of Communications and Outreach. Effective February 20, 2008. DBGS00368 Confidential Assistant to the Special Assistant. Effective February 22, 2008. DBGS00184 Confidential Assistant to the Chief of Staff. Effective February 28, 2008. DBGS00604 Deputy Director, Office of International Affairs to the Director, International Affairs Office. Effective February 28, 2008. DBGS00662 Deputy Assistant Secretary to the Assistant Secretary, Office of Communications and Outreach. Effective February 28, 2008. DBGS00222 Confidential Assistant to the Director, Scheduling and Advance Staff. Effective February 29, 2008. Section 213.3325 United States Tax Court JCGS60070 Trial Clerk to the Chief Judge. Effective February 11, 2008. JCGS60055 Secretary (Confidential Assistant) to the Chief Judge. Effective February 29, 2008. Section 213.3331 Department of Energy DEGS00637 Assistant Press Secretary to the Director, Public Affairs. Effective February 01, 2008. DEGS00638 Public Affairs Specialist to the Director of Congressional Intergovernmental and Public Affairs. Effective February 05, 2008. DEGS00639 Case Analyst to the Director, Investment Security. Effective February 27, 2008. DEGS00640 Trip Coordinator to the Director, Office of Scheduling and Advance. Effective February 28, 2008. Section 213.3332 Small Business Administration SBGS00649 Senior Advisor to the Associate Administrator for Capital Access. Effective February 05, 2008. SBGS00652 Congressional Liaison to the Assistant Administrator for Congressional and Legislative Affairs. Effective February 05, 2008. SBGS00190 Deputy Chief of Staff to the Chief of Staff. Effective February 12, 2008. SBGS00650 Senior Advisor to the Deputy Administrator. Effective February 12, 2008. SBGS00653 Deputy General Counsel to the General Counsel. Effective February 22, 2008. Section 213.3360 Consumer Product Safety Commission PSGS60064 Special Assistant (Legal) to a Commissioner. Effective February 15, 2008. PSGS72150 Staff Assistant to a Commissioner. Effective February 15, 2008. Section 213.3384 Department of Housing and Urban Development DUGS60179 Advance Coordinator to the Director of Executive Scheduling. Effective February 07, 2008. DUGS60249 Congressional Relations Assistant to the Assistant Secretary for Congressional and Intergovernmental Relations. Effective February 07, 2008. DUGS60522 Deputy Assistant Secretary for Grant Programs to the Assistant Secretary for Community Planning and Development. Effective February 08, 2008. Section 213.3393 Pension Benefit Guaranty Corporation BGSL00096 Chief of Staff to the Interim Director. Effective February 05, 2008. Section 213.3394 Department of Transportation DTGS60258 Associate Director for Governmental Affairs to the Assistant Secretary for Governmental Affairs. Effective February 05, 2008. DTGS60192 Special Assistant to the Assistant to the Secretary and Director of Public Affairs. Effective February 12, 2008. DTGS60197 Confidential Assistant to the Chief of Staff. Effective February 12, 2008. DTOT00240 Deputy Assistant Administrator for Communications to the Assistant Administrator for Communications. Effective February 13, 2008. DTGS60129 Counselor to the General Counsel. Effective February 29, 2008. Authority: 5 U.S.C. 3301 and 3302; E.O. 10577, 3 CFR 1954-1958 Comp., p. 218. U.S. Office of Personnel Management. Howard C. Weizmann, Deputy Director. [FR Doc. E8-7157 Filed 4-4-08; 8:45 am] BILLING CODE 6325-39-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57589; File No. SR-Amex-2008-09] Self-Regulatory Organizations; American Stock Exchange LLC; Order Approving Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Relating to Options Linkage Fees April 1, 2008. I. Introduction On February 8, 2008, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”), 1 and Rule 19b-4 thereunder, 2 a proposed rule change relating to fees for trades executed through the intermarket options linkage (the “Options Linkage”). On February 19, 2008, Amex submitted Amendment No. 1 to the proposed rule change. The proposed rule change was published for comment in the **Federal Register** on February 28, 2008. 3 The Commission received no comments on the proposal. This order approves the proposed rule change, as amended. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 57373 (February 22, 2008), 73 FR 10835 (“Notice”). II. Description of the Proposal The Exchange proposes to clarify the application of options transaction fees for trades executed through the Options Linkage on the Exchange. Currently, the Amex Options Fee Schedule (the “Options Fee Schedule”) provides that, under the Linkage Fee Pilot Program that is effective through July 31, 2008, the fees applicable to specialists, registered options traders, and market maker apply to members of other options exchanges (“Non-Member Market Makers”) executing Linkage transactions except for Satisfaction Orders. As a result, the fees for Principal Orders (“P Orders”) and Principal Acting As Agent Orders (“P/A Orders”) (collectively, “Linkage Orders”) submitted through the Options Linkage are:
(i)$0.10 per contract side options transaction fee for equity options, exchange traded fund share (“ETF”) options, QQQQ options and trust issued receipt options;
(ii)$0.21 per contract side options transaction fee for index options (including MNX and NDX options);
(iii)$0.05 per contract side options comparison fee;
(iv)$0.05 per contract side options floor brokerage fee; and
(v)an options licensing fee for certain ETF and index option products ranging from $0.15 per contract side to $0.05 per contract side depending on the particular ETF or index option. 4 4 *See* Options Fee Schedule section of the Amex Price List available at *http://www.amex.com. See also* Securities Exchange Act Release No. 56102 (July 19, 2007), 72 FR 40908 (July 25, 2007) (SR-Amex-2007-64). The Options Fee Schedule also provides that broker-dealer orders that are automatically executed on the Exchange are subject to Broker-Dealer Auto-Ex Fees (“BD Auto-Ex Fee”) that include:
(i)$0.50 per contract side options transaction fee for equity options, ETF options, QQQQ options and trust issued receipt options;
(ii)$0.05 per contract side options comparison fee; and
(iii)$0.05 per contract side options floor brokerage fee. 5 Broker-dealer orders that are subject to the BD Auto-Ex Fee include specialist orders, registered options trader orders, Non-Member Market Maker orders, and orders for the account of registered broker-dealers. The Exchange charges this fee to member firms through customary monthly billing. The BD Auto-Ex Fee was implemented prior to the introduction and roll-out of the Options Linkage which commenced on January 31, 2003 in two phases. The entire roll-out of the Options Linkage was completed by July 2003. 5 *See* Securities Exchange Act Release No. 47216 (January 17, 2003), 68 FR 5059 (January 31, 2003) (SR-Amex-2002-114). The Exchange in this proposal seeks to clarify the Options Fee Schedule to make clear that automatically executed Linkage Orders will be charged the BD Auto Ex Fee that includes:
(i)$0.50 per contract side options transaction fee;
(ii)$0.05 per contract side options comparison fee; and
(iii)$0.05 per contract side options floor brokerage fee. Accordingly, the total transaction fee for such orders would be $0.60 per contract side. In contrast to the initial period of time when the Options Linkage was introduced, most Linkage Orders on the Exchange are automatically executed via the ANTE platform. In the Notice, the Exchange acknowledged that the current Options Fee Schedule does not clearly reflect the fact that for automatically executed Linkage Orders, the BD Auto-Ex Fee would apply. III. Discussion and Commission Findings The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 6 In particular, the Commission finds that the proposal is consistent with Section 6(b)(4) of the Act, 7 which requires that an exchange have rules that provide for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. 6 In approving this proposed rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 7 15 U.S.C. 78f(b)(4). Under the current Options Fee Schedule, only non-Linkage Orders on the behalf of broker-dealers automatically executed orders in ANTE are subject to the BD Auto-Ex Fee; Linkage Orders that are automatically executed orders in ANTE are not subject to the BD Auto-Ex Fee. The Exchange proposed to clarify that all automatically executed orders in ANTE, whether Linkage Orders or non-Linkage Orders on the behalf of broker-dealers, are subject to the BD Auto-Ex Fee set forth in the Options Fee Schedule. Accordingly, the Commission believes that the Exchange's proposed Options Fee Schedule clearly sets forth the fees imposed on Linkage Orders. The Commission notes that the Exchange acknowledges that prior versions of its Options Fee Schedule did not represent that the $.60 per side BD Auto-Ex Fee was applied to electronically executed Linkage Orders. Because the Exchange may have assessed the BD Auto-Ex Fee on Linkage Orders prior to this approval and, therefore, without authority, any parties assessed the BD Auto-Ex Fee for Linkage Orders prior to the approval of this proposed rule change may seek reimbursement. In addition, the Commission notes that the Options Linkage fees are assessed pursuant to a pilot scheduled to end on July 31, 2008 and that the Commission is continuing to evaluate whether such fees are appropriate. IV. Conclusion *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 8 that the proposed rule change (SR-Amex-2008-09) is hereby approved. 8 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E8-7121 Filed 4-4-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57594; File No. SR-BSE-2008-17] Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Quarterly Options Series Pilot Program To Permit the Listing of Additional Series April 1, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on March 28, 2008, the Boston Stock Exchange, Inc. (“Exchange” or “BSE”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The Exchange has designated this proposal as non-controversial under Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Supplementary Material .04 to Section 6 of Chapter IV of the Rules of the Boston Options Exchange (“BOX”) to permit the Exchange to list strike prices for Quarterly Options Series (“QOS”) in exchange traded fund (“Fund Share”) options that fall within a percentage range (30%) above and below the price of the underlying Fund Share. Additionally, upon demonstrated customer interest, the Exchange also will be permitted to open additional strike prices of QOS in Fund Share options that are more than 30% above or below the current price of the Fund Share. Market makers trading for their own account will not be considered when determining customer interest under this provision. In addition to the initial listed series, the Exchange may list up to sixty
(60)additional series per expiration month for each QOS in Fund Share options. Further, the proposal includes a delisting program to be undertaken by the Exchange in connection with QOS in Fund Share options. The text of the proposed rule change is available on the Exchange's Web site ( *http://www.bostonstock.com* ), at the Exchange's principal office, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Supplemental Material .04 to Section 6 of Chapter IV of the BOX Rules to permit the Exchange to open additional series for QOS in Fund Share options that fall within thirty percent (30%) above and below the price of the underlying Fund Share. Additionally, upon demonstrated customer interest, the Exchange also will be permitted to open additional strike prices of QOS in Fund Share options that are more than 30% above or below the current price of the underlying Fund Share. Market makers trading for their own account will not be considered when determining customer interest under this provision. The Exchange will be permitted to list up to sixty
(60)additional series per expiration month for each QOS in Fund Share options. On July 17, 2007, the Exchange filed with the Commission a pilot program proposal to permit the listing and trading of QOS in options on indexes or options on Fund Shares that satisfy the applicable listing criteria under BOX rules. 5 QOS trade based on calendar quarters that end in March, June, September, and December. The Exchange lists QOS that expire at the end of the next consecutive four calendar quarters, as well as the fourth quarter of the next calendar year. For example, if BOX were trading QOS in the iShares Russell 2000 Index Fund (“IWM”) in the month of April 2008, the Exchange would list series that expire at the end of the second quarter of 2008 (June), third quarter of 2008 (September), fourth quarter of 2008 (December), first quarter of 2009 (March), and fourth quarter of 2009 (December). 5 *See* Securities Exchange Act Release No. 56086 (July 17, 2007), 72 FR 40182 (July 23, 2007) (SR-BSE-2007-36) (“Pilot Program Release”). Under the pilot program, the Exchange may list QOS in up to five currently listed option classes that are either options on Fund Shares or indexes. The Exchange also is permitted to list QOS in any options class that is selected by other securities exchanges that employ a similar pilot program under their respective rules. *Currently, the Exchange list QOS in five Fund Share options:*
(1)Nasdaq-100 Index Tracking Stock (“QQQQ”);
(2)IWM;
(3)DIAMONDS Trust, Series 1 (“DIA”);
(4)Standard and Poor's Depositary Receipts/SPDRs (“SPY”); and
(5)Energy Select SPDR (“XLE”). The average daily trading volume and total volume for QOS in IWM options significantly exceeds the volumes for QOS of some other Fund Share options that are listed and traded on the Exchange. The chart below provides trading volume figures for the fourth quarter in 2007, demonstrating that QOS in IWM options are one of the most popular and heavily traded QOS on the Exchange. QOS October 2007 ADV Total vol November 2007 ADV Total vol December 2007 ADV Total vol IWM 1,690 38,891 1,597 33,540 3,230 64,612 QQQQ 1,883 43,329 2,353 49,414 3,432 68,642 SPY 699 16,086 1,349 28,335 2,087 41,756 DIA 180 4,150 325 6,830 502 10,049 XLE 188 4,329 927 19,483 261 5,237 Recently, certain options exchanges (“Options Exchanges”) have received requests from their members and participants to add additional strike prices for QOS in IWM options that would be outside of the price range for setting strikes as provided for under Supplemental Material .04 to Section 6 of Chapter IV of the BOX Rules (hereinafter “+/−$5 range”). 6 These members and participants have advised the Options Exchanges that they are buying and selling QOS in IWM options to trade volatility. In order to adequately replicate the desired volatility exposure, these members and participants need to trade several IWM option series, many having strike prices that fall outside of the +/−$5 range currently allowed under the QOS rules. 6 *See* Securities Exchange Act Release No. 57410 (March 3, 2008), 73 FR 12483 (March 7, 2008) (SR-CBOE-2007-96). *See also* Securities Exchange Act Release No. 57425 (March 4, 2008) 73 FR 12783 (March 10, 2008) (SR-ISE-2008-19). Supplemental Material .04 to Section 6 of Chapter IV provides that the Exchange shall list strike prices for a QOS that are within $5 from the closing price of the underlying on the preceding day. In addition, other members and participants have advised the Options Exchanges that their investment strategies involve trading options tied to a particular option “delta,” 7 rather than a particular level of the underlying security or index. At issue is the fact that delta depends on both the relative difference between the level of the underlying security or index and the option strike price, and time to expiration. For example, with IWM trading at $85 per share, the strike price corresponding to a “25-delta” IWM call ( *i.e.* , a call option with a delta of 25) with one month to expiration would be 89. However, the strike price corresponding to a “25-delta” IWM call with 3 months to expiration would be 93, and the strike price of a “25-delta” call with 1 year to expiration would be 106. In short, the Exchange has been advised that the +/−$5 range for QOS in IWM options is insufficient to satisfy customer demand. 7 “Delta” is a measure of how an option price will change in response to a $1 price change in the underlying security or index. For example, an ABC option with a delta of “50” can be expected to change by $0.50 in response to a $1 change in the price of ABC. In order to meet customer demand, the Exchange proposes to amend Supplemental Material .04 to Section 6 of Chapter IV of the BOX Rules, which governs the Quarterly Option Series Pilot Program. Specifically, the Exchange proposes to allow the Exchange to open additional strike prices of QOS in Fund Share options that are within thirty percent (30%) above or below the closing price of the underlying Fund Share on the preceding business day. The Exchange also will be permitted to open additional strike prices of QOS in Fund Share options that are more than 30% above or below the current price of the underlying Fund Share, provided that demonstrated customer interest exists for such series, as expressed by institutional, corporate or individual customers or their brokers. Market makers trading for their own account will not be considered when determining customer interest under this proposed provision. The Exchange will be permitted to list up to sixty
(60)additional series per expiration month for each QOS in Fund Share options. The Exchange is also proposing to add new paragraph
(g)to Supplemental Material .04 to Section 6 of Chapter IV of the BOX Rules, which sets forth a delisting policy. Specifically, with respect to QOS in Fund Share options, the Exchange will, on a monthly basis, review series that are outside a range of five strikes above and five strikes below the current price of the underlying Fund Share, and delist series with no open interest in both the put and the call series having a strike price:
(i)Higher than the highest strike price with open interest in the put and/or call series for a given expiration month; or
(ii)lower than the lowest strike price with open interest in the put and/or call series for a given expiration month. To illustrate how the proposed delisting program would work, assume IWM closed at $70 on the day the Exchange conducts the monthly review of QOS in Fund Share options. Series having strike prices above $75 and below $65 would be reviewed by the Exchange for possible delisting. Assume that the Exchange lists the following QOS in IWM options that expire in June 2008: Calls—June 08 Exp Strike Open Interest? Puts—June 08 Exp Strike Open Interest? 62 No 62 No 63 No 63 Yes 64 Yes 64 Yes * * * * 76 Yes 76 Yes 77 Yes 77 Yes 78 Yes 78 Yes 79 Yes 79 Yes 80 Yes 80 Yes 81 Yes 81 Yes 82 Yes 82 Yes 83 No 83 No 84 No 84 No 85 No 85 Yes 86 Yes 86 No 87 Yes 87 Yes 88 Yes 88 Yes 89 Yes 89 No 90 Yes 90 No 91 No 91 No 92 No 92 No 93 No 93 No The Exchange would de-list the first series listed above, as well as the last three: $62, $91, $92, and $93. The Exchange would not delist the $83 and $84 series because there are series having open interest with strike prices higher than these two series. In addition, the Exchange would not delist the $63 call series because there is open interest in the $63 put series. Notwithstanding the proposed delisting policy, customer requests to add strikes and/or maintain strikes in QOS in Fund Share options in series eligible for delisting shall be granted. Further, in connection with the proposed delisting policy, if the Exchange identifies series for delisting, the Exchange shall notify other options exchanges with similar delisting policies regarding eligible series for listing, and shall work with such other exchanges to develop a uniform list of series to be delisted, so as to ensure uniform series delisting of multiple listed QOS in Fund Share options. It is expected that the proposed delisting policy for QOS in Fund Share options would be adopted by other options exchanges that have adopted the QOS Pilot Program. BOX represents that it has the necessary systems capacity to support new options series that will result from this proposal. Further, as proposed, the Exchange notes that this rule change would become part of the pilot program and, going forward, would be considered by the Commission when the Exchange seeks to renew or make permanent the pilot program in the future. 2. Statutory Basis The Exchange believes the rule proposal is consistent with the Act and the rules and regulations there under applicable to a national securities exchange and, in particular, the requirements of Section 6(b) of the Act. 8 Specifically, the Exchange believes that the proposed rule change is consistent with the requirements under Section 6(b)(5) of the Act 9 that the rules of an exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts and, in general, to protect investors and the public interest. In order to meet customer demand, the Exchange proposes to amend Supplemental Material .04 to Section 6 of Chapter IV of the BOX Rules, which governs the Quarterly Option Series Pilot Program. The additional new series can be added without presenting capacity problems, and the Exchange has proposed a delisting policy with respect to QOS in Fund Share options. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action *The Exchange has designated the proposed rule change as one that:*
(1)Does not significantly affect the protection of investors or the public interest;
(2)does not impose any significant burden on competition; and
(3)does not become operative for 30 days from the date of filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. Therefore, the foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and subparagraph (f)(6) of Rule 19b-4 thereunder. 11 The Exchange has asked the Commission to waive the 30-day operative delay to permit the Exchange to immediately compete with the other options exchanges that have similarly amended their quarterly options series pilot programs. 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires a self-regulatory organization to provide the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has fulfilled this requirement. The Commission notes that this proposal is substantially similar to a proposed rule change submitted by the Chicago Board Options Exchange, which was approved by the Commission following publication for notice and comment, and does not raise any new regulatory issues. 12 Waiving the 30-day operative delay will promote, without undue delay, further competition in the options market. 13 For these reasons, the Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest and designates the proposal operative upon filing. 12 *See* Securities Exchange Act Release No. 57410, *supra* note 6. *See also* Securities Exchange Act Release No. 57425, *supra* note 6. 13 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). The Commission notes that this rule change will become part of the pilot program and, going forward, its effects will be considered by the Commission in the event that the Exchange seeks to renew or make permanent the pilot program. 14 Thus, in the Exchange's future reports on the Pilot Program, the Exchange should include analysis of
(1)the impact of the additional series on the Exchange's market and quote capacity, and
(2)the implementation and effects of the delisting policy, including the number of series eligible for delisting during the period covered by the report, the number of series actually delisted during that period (pursuant to the delisting policy or otherwise), and documentation of any customer requests to maintain QOS strikes that were otherwise eligible for delisting. 14 As set forth in the Pilot Program Release, if the Exchange were to propose an extension, expansion, or permanent approval of the Pilot Program, the Exchange must submit, along with any filing proposing such amendments to the program, a report that provides an analysis of the Pilot Program covering the entire period during which the Pilot Program was in effect. *See* Pilot Program Release, *supra* note 5. The Pilot Program Release requires the Exchange to include in its report, at a minimum:
(1)data and written analysis on the open interest and trading volume in the classes for which QOS were opened;
(2)an assessment of the appropriateness of the option classes selected for the Pilot Program;
(3)an assessment of the impact of the Pilot Program on the capacity of the Exchange, OPRA, and market data vendors (to the extent data from market data vendors is available);
(4)any capacity problems or other problems that arose during the operation of the Pilot Program and how the Exchange addressed such problems;
(5)any complaints that the Exchange received during the operation of the Pilot Program and how the Exchange addressed them; and
(6)any additional information that would assist in assessing the operation of the Pilot Program. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate the rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File No. SR-BSE-2008-17 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-BSE-2008-17. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-BSE-2008-17 and should be submitted on or before April 28, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 15 15 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E8-7116 Filed 4-4-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57598; File No. SR-BSE-2008-19] Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Position and Exercise Limits on the Boston Options Exchange Facility April 1, 2008. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on March 18, 2008, the Boston Stock Exchange, Inc. (“Exchange” or “BSE”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The Exchange has designated this proposal as non-controversial under section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the rules of the Boston Options Exchange (“BOX”) to increase the position and exercise limits applicable to options on the DIAMONDS Trust, Series 1 (“DIA”). The text of the rule proposal is available on the Exchange's Web site ( *http://www.bostonstock.com* ), at the offices of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is proposing to amend the BOX rules pertaining to position and exercise limits for options on DIA. The Exchange proposes to increase position and exercise limits for options on DIA to 300,000 contracts on the same side of the market. The Commission previously approved a similar proposal of the Chicago Board Options Exchange (“CBOE”). 5 5 *See* Securities Exchange Act Release No. 47346 (February 11, 2003) 68 FR 8316 (February 20, 2003) (SR-CBOE-2002-26) (approving an increase in the position limits and exercise limits to 300,000 for DIA options). The Commission stated that “given the surveillance capabilities of the [CBOE] and the depth and liquidity in both the DIA options and the underlying cash market in DIAs, the Commission believes it is permissible to significantly raise position and exercise limits for DIA options without risk of disruption to the options or underlying cash markets.” The Commission also stated that “financial and reporting requirements * * * should allow [CBOE] to detect and deter trading abuses arising from the increased position and exercise limits, and will also allow [CBOE] to monitor large positions in order to identify instances of potential risk and to assess additional margin and/or capital charges, if deemed necessary.” The Exchange also recently made permanent its increased position and exercise limits for certain equity options on BOX, which were in effect on a pilot basis. 6 The Exchange stipulated, as part of its proposal for such permanent approval, that “its surveillance procedures and reporting procedures, in conjunction with the financial requirements and risk management review procedures already in place at the clearing firms and the Options Clearing Corporation, [would] serve to adequately address any concerns the Commission may have with respect to account(s) engaging in any manipulative schemes or assuming too high a level of risk exposure.” 7 These representations also apply to the current proposal to increase the position and exercise limits for options on DIA. The Exchange now seeks to increase the position and exercise limits for options on DIA on BOX to the level that such limits are in effect on CBOE (300,000 contracts on the same side of the market). 6 *See* Securities Exchange Act Release No. 57414 (March 3, 2008) 73 FR 12481 (March 7, 2008) (SR-BSE-2008-12). 7 *Id.* The Exchange asserts that the justifications behind the Commission's approval of CBOE's proposal should support the same increased position and exercise limits on options on DIA on BOX. Specifically, the Exchange believes that the “structure of the DIA options and the considerable liquidity of both the underlying cash and options market for DIA options lessen the opportunity for manipulation of this product and disruption in the underlying market that a lower position limit may protect against.” 8 The Exchange believes that the reporting requirements imposed under the BOX rules will help protect against potential manipulation. 9 Additionally, the Exchange believes that such an increase in position and exercise limits on options on DIA on BOX is also required for competitive purposes as well as for purposes of consistency and uniformity among the competing options exchanges. This, taken in conjunction with the permanent establishment of other increased position and exercise limits for certain equity options on BOX, 10 supports the Exchange's proposal related to such increased position and exercise limits applicable to DIA. 8 *See* Securities Exchange Act Release No. 47346, *supra* note 5. 9 *See* BOX Rules, Ch. III, Sec. 10. 10 *See, e.g.,* Securities Exchange Act Release No. 57414, *supra* note 6. 2. Statutory Basis The Exchange believes that the proposal is consistent with the requirements of section 6(b) of the Act 11 in general, and section 6(b)(5) of the Act 12 in particular, in that it is designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. Specifically, the Exchange believes that the structure of the DIA options and the considerable liquidity of the market for DIA options diminishes the opportunity for manipulation of this product and disruption in the underlying market that a lower position limit may protect against. 11 15 U.S.C. 78f(b). 12 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has designated the proposed rule change as one that:
(1)Does not significantly affect the protection of investors or the public interest;
(2)does not impose any significant burden on competition; and
(3)does not become operative for 30 days from the date of filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. Therefore, the foregoing rule change has become effective pursuant to section 19(b)(3)(A) of the Act 13 and subparagraph (f)(6) of Rule 19b-4 thereunder. 14 The Exchange notes that the proposed rule change is based on a similar proposal previously approved by the Commission, 15 and does not raise any novel issues. Additionally, the Exchange asserts that the proposed rule change is necessary to eliminate any confusion among members of multiple exchanges regarding position and exercise limits applicable to options on DIA and for purposes of maintaining a fair and orderly market. 13 15 U.S.C. 78s(b)(3)(A). 14 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires a self-regulatory organization to provide the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has fulfilled this requirement. 15 *See* Securities Exchange Act Release No. 47346, *supra* note 5. The Exchange has asked the Commission to waive the operative delay to permit the proposed rule change to become operative prior to the 30th day after filing. The Exchange states that waiving the operative delay will allow the proposed increase in the position and exercise limits applicable to options on DIA on BOX to be put into effect immediately, which will align BOX's DIA limits with the DIA limits applicable to members of other options exchange(s), thereby promoting conformity and uniformity in the rules of the several options exchanges. The Commission believes that waiving the 30-day operative delay of the Exchange's proposal is consistent with the protection of investors and the public interest. 16 Therefore, the Commission designates the proposal to be operative upon filing. 16 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate the rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File No. SR-BSE-2008-19 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-BSE-2008-19. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-BSE-2008-19 and should be submitted on or before April 28, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 17 17 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E8-7189 Filed 4-4-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57593; File No. SR-CBOE-2008-38] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Fees for the CBOE Stock Exchange April 1, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on March 31, 2008, the Chicago Board Options Exchange, Incorporated (“Exchange” or “CBOE”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. The Exchange has designated this proposal as one establishing a due, fee, or other charge imposed by the Exchange under Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(2) thereunder, 4 which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to modify its fees applicable to the CBOE Stock Exchange (“CBSX”). The text of the proposed rule change is available on the Exchange's Web site ( *http://www.cboe.org/legal* ), at the Exchange's principal office, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The CBSX fee schedule lists the fees applicable to trading on CBSX. The CBOE Complex Order Auction system (“COA”) and Complex Order Book (“COB”), governed by CBOE Rule 6.53C, facilitate the handling and execution of complex orders by allowing for complex orders to rest in the system and allowing for inbound complex orders to trigger an auction where auction participants may submit complex order responses to trade with the order that is being auctioned. Until recently, Rule 6.53C applied only to complex orders containing only options components. In recent months, CBOE implemented an enhancement to the Rule 6.53C COA/COB system to facilitate the execution of complex orders containing a stock component ( *e.g.,* a buy-write order). 5 As detailed in that filing, the stock component of a stock-option complex order handled by the system is executed on CBSX. The present filing seeks to adopt special charges for the stock executions that result from stock-option orders trading pursuant to Rule 6.53C. 5 See Securities Exchange Act Release No. 56903 (December 5, 2007), 72 FR 70356 (December 11, 2007) (SR-CBOE-2007-68). The CBSX transaction fees for these orders will be based on whether the stock-option order that initiated an execution pursuant to Rule 6.53C ultimately trades against another stock-option order or against unrelated orders in the respective markets (CBOE and CBSX). By way of example, a buy-write order auctioned by the system may trigger responses to trade against the entire buy-write order as a package—this is a stock-option order trading against another stock-option order. On the other hand, a buy-write order processed by the system could also ultimately be filled by:
(i)The option component (an order to sell a call) trading against a straight order to buy that call resting in the CBOE Hybrid book, and
(ii)the stock component (an order to buy stock) trading against a straight sell order in the CBSX book. A stock trade on CBSX consisting of the stock component of two stock-option orders trading against each other pursuant to Rule 6.53C shall be charged as follows: the order that triggered a COA or that triggered a trade with a resting COB order shall be charged $0.0005 per share subject to a $1.00 minimum charge and a $25.00 maximum charge. The order that responded to the auction or that was resting in the COB prior to the trade shall not be charged and shall not receive a rebate. A stock trade on CBSX consisting of the stock component of a stock-option order handled pursuant to Rule 6.53C trading against a resting stock order on the CBSX book shall be charged as follows: the resting order is considered a Maker of liquidity and receives the applicable Maker rebate pursuant to the CBSX fee schedule, and the non-resting stock order is charged the standard Taker rate pursuant to the CBSX fee schedule. The changes take effect on Tuesday, April 1, 2008. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act 6 in general, and furthers the objectives of Section 6(b)(4) of the Act 7 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among Exchange members and other persons using its facilities. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change establishes or changes a due, fee, or other charge imposed by the Exchange, it has become effective upon filing pursuant to Section 19(b)(3)(A) of the Act 8 and Rule 19b-4(f)(2) thereunder. 9 At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 8 15 U.S.C. 78s(b)(3)(A). 9 17 CFR 19b-4(f)(2). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File No. SR-CBOE-2008-38 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-CBOE-2008-38. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commissions Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2008-38 and should be submitted on or before April 28, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 10 10 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E8-7115 Filed 4-4-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57596; File No. SR-FICC-2007-11] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule To Modify the Fee Structure of the Government Securities Division Rules Regarding GCF Repo Transactions and the Fee Structure of the Mortgage-Backed Securities Division Rule Regarding Trade-for-Trade and Settlement Balance Order Processing Fees April 1, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 notice is hereby given that on December 31, 2007, the Fixed Income Clearing Corporation (“FICC”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change described in Items I, II, and III below, which items have been prepared primarily by FICC. FICC filed the proposal pursuant to Section 19(b)(3)(A)(ii) of the Act 2 and Rule 19b-4(f)(2) 3 thereunder so that the proposal was effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the rule change from interested parties. 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78s(b)(3)(A)(ii). 3 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The purpose of the rule change is to modify the fee structure of the Government Securities Division (“GSD”) rules regarding GCF Repo Transactions and the fee structure of the Mortgage-Backed Securities Division (“MBSD”) rules regarding Trade-for-Trade and Settlement Balance Order (“SBO”) processing fees. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FICC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FICC has prepared summaries, set forth in sections (A), (B), and
(C)below, of the most significant aspects of these statements. 4 4 The Commission has modified the text of the summaries prepared by FICC.
(A)Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change Currently, the GSD fee schedule indicates the charge for all requests to modify or cancel a side of a trade or repo transaction, including CGF Repo Transactions, is 25 cents per request. To reflect current practice, FICC is proposing to change the charge for requests to modify or cancel a side of a GCF Repo Transaction to 5 cents per request. FICC is also proposing to reduce the MBSD trade processing fee charged to dealers engaging in both Trade-for-Trade and SBO processing to align the fees with the actual costs to deliver the services. FICC is proposing to reduce the fee for Trade-for-Trade Trade Creates from $2.25 to $0.50. The fees for SBO Trade Creates are categorized by volume of Trade Creates and are based on the par value per million per month (“MM”). FICC is proposing to reduce the fee for SBO Trade Creates as follows:
(i)Between 1-2,500 Trade Creates, from $1,68/MM to $1.58/MM;
(ii)between 2,501-5,000 Trade Creates, from $1.56/MM to $1.46/MM;
(iii)between 5,001-7,500 Trade Creates, from $1.43/MM to $1.33/MM;
(iv)between 7,501-10,000 Trade Creates, from $1.35/MM to $1.25/MM;
(v)between 10,001-12,500 Trade Creates, from $1.22/MM to $1.12/MM; and
(vi)12,501 and over Trade Creates, from $1.09/MM to $0.99/MM. The proposed rule change is consistent with Section 17A of the Act, 5 as amended, because it reduces a FICC fee and thereby provides for the equitable allocation of fees among its participants. 5 15 U.S.C. 78q-1.
(B)Self-Regulatory Organization's Statement on Burden on Competition FICC does not believe that the proposed rule change will have any impact or impose any burden on competition.
(C)Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments relating to the proposed rule change have not yet been solicited or received. FICC will notify the Commission of any written comments received by FICC. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has become effective upon filing pursuant to Section 19(b)(3)(A)(ii) of the Act 6 and Rule 19b-4(f)(2) 7 thereunder because the proposed rule change changes a fee imposed by FICC applicable only to members or participants. At any time within sixty days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 6 15 U.S.C. 78s(b)(3)(A)(ii). 7 17 CFR 240.19b-4(f)(2). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ) or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-FICC-2007-11 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-FICC-2007-11. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Section, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filings also will be available for inspection and copying at the principal office of FICC and on FICC's Web site at *http://www.dtcc.com/downloads/legal/rule_filings/2007/ficc/2007-11.pdf* . All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-FICC-2007-11 and should be submitted on or before April 28, 2008. For the Commission by the Division of Trading and Markets, pursuant to delegated authority. 8 Florence E. Harmon, Deputy Secretary. 8 17 CFR 200.30-3(a)(12). [FR Doc. E8-7119 Filed 4-4-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57592; File No. SR-NYSE-2008-23] Self-Regulatory Organizations; New York Stock Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to NYSE Rule 104.10 To Extend the Duration of the Pilot Program Applicable to Conditional Transactions in All Securities to June 30, 2008 April 1, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on March 27, 2008, the New York Stock Exchange, LLC (“NYSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the NYSE. The NYSE has designated the proposed rule change as a “non-controversial” rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The NYSE is proposing to amend NYSE Rule 104.10 to extend the duration of the pilot program applicable to Conditional Transactions as defined in Rule 104.10(6)(i) in all securities to June 30, 2008. The text of the proposed rule change is available at NYSE, at *http://www.nyse.com,* and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the NYSE included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The NYSE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The NYSE is proposing to amend NYSE Rule 104.10 to extend the duration of the pilot program applicable to Conditional Transactions as defined in Rule 104.10(6)(i) in all securities for an additional three months until June 30, 2008. On October 26, 2007, the Commission approved the ability of NYSE specialists to effect Conditional Transactions pursuant to NYSE Rule 104.10(6) in all securities traded on the NYSE to operate as a pilot through March 31, 2008 (the “Conditional Transaction Pilot”). 5 5 *See* Securities Exchange Act Release No. 56711 (October 26, 2007), 72 FR 62504 (November 5, 2007) (SR-NYSE-2007-83).
(a)*Current Conditional Transaction Pilot* Conditional Transactions are specialists' transactions that establish or increase a position and reach across the market to trade as the contra-side to the Exchange published bid or offer. Under the current Conditional Transaction Pilot, NYSE specialists are allowed to effect Conditional Transactions in all securities traded on the NYSE until March 31, 2008. When a specialist effects a Conditional Transaction he or she has obligations to re-enter the market on the opposite side from which the specialist effected his or her Conditional Transaction pursuant to the rule. Specifically, pursuant to NYSE Rule 104.10(6)(ii) “appropriate” re-entry means “re-entry on the opposite side of the market at or before the price participation point or the ‘PPP.’ ” 6 Depending on the type of Conditional Transaction, a specialist's obligation to re-enter may be immediate or subject to the same re-entry conditions of Non-Conditional Transactions. 7 Conditional Transactions are subject to a specialist's overall negative obligation. 8 6 NYSE Rule 104.10(6)(iii)(a) provides that the PPP identifies the price at or before which a specialist is expected to re-enter the market after effecting a Conditional Transaction. PPPs are only minimum guidelines and compliance with them does not guarantee that a specialist is meeting its obligations. The Exchange issued guidance regarding PPPs in January 2007. See NYSE Member Education Bulletin 2007-1 (January 18, 2007). 7 NYSE Rule 104.10(6)(iii)(c) provides that immediate re-entry is required after the following Conditional Transactions: As a condition of operating the Conditional Transaction Pilot, the Exchange committed to providing the Commission with data related to specialist executions of Conditional Transactions. The data includes the daily Consolidated Tape volume in shares, daily number of trades; daily high-low volatility in basis points and daily close price in dollars.
(I)A purchase that
(1)reaches across the market to trade with an Exchange published offer that is above the last differently priced trade on the Exchange and above the last differently priced published offer on the Exchange,
(2)is 10,000 shares or more or has a market value of $200,000 or more, and
(3)exceeds 50% of the published offer size.
(II)A sale that
(1)reaches across the market to trade with an Exchange published bid that is below the last differently priced trade on the Exchange and below the last differently priced published bid on the Exchange,
(2)is 10,000 shares or more or has a market value of $200,000 or more, and
(3)exceeds 50% of the published bid size. (Emphasis added.) Moreover, pursuant to current NYSE Rule 104.10(6)(iv) Conditional Transactions that involve
(a)a specialist's purchase from the Exchange published offer that is priced above the last differently-priced trade on the Exchange or above the last differently-priced published offer on the Exchange and
(b)a specialist's sale to the Exchange published bid that is priced below the last differently-priced trade on the Exchange or below the last differently-priced published bid on the Exchange are subject to the re-entry requirements for Non-Conditional Transactions pursuant to Rule 104.10(5)(i)(a)(II)(c), which provides: Re-entry Obligation Following Non-Conditional Transactions—The specialist's obligation to maintain a fair and orderly market may require re-entry on the opposite side of the market trend after effecting one or more Non-Conditional Transactions. Such re-entry transactions should be commensurate with the size of the Non-Conditional Transactions and the immediate and anticipated needs of the market. 8 The negative obligation, which is part of NYSE Rule 104, requires that specialists restrict their dealings so far as practicable to those reasonably necessary to permit the specialists to maintain a fair and orderly market. Specifically, NYSE Rule 104(a) provides: No specialist shall effect on the Exchange purchases or sales of any security in which such specialist is registered, for any account in which he, his member organization or any other member, allied member, or approved person, (unless an exemption with respect to such approved person is in effect pursuant to Rule 98) in such organization or officer or employee thereof is directly or indirectly interested, unless such dealings are reasonably necessary to permit such specialist to maintain a fair and orderly market, or to act as an odd-lot dealer in such security. The Exchange continues to calculate the specialist's profit on round-trip Hit Bid and Take Offer (“HB/TO”) executions. This is accomplished by measuring the specialist's profit on HB/TO activity by taking the round-trip trading profits for all HB/TO trades where the specialist executes an offsetting trade within 30 seconds. In cases where the volume of the offsetting execution is less than the size of the HB/TO execution, the calculation will only include profits realized within the 30-second window. The Exchange continues to calculate the quote-based specialist re-entry ratio. Each re-entry price level is categorized and reported separately. In addition, the Exchange continues to provide the Commission with data related to the average realized spread on specialist HB/TO executions. These calculations are done using the same formula as SEC Rule 605. Specifically, the average realized spread is a share-weighted average of realized spreads. For specialist buys, it is double the amount of difference between the execution price and the midpoint of the consolidated best bid and offer five minutes after the time of HB/TO execution. For specialist sells, it is double the amount of difference between the midpoint of the consolidated best bid and offer five minutes after the time of HB/TO execution and the execution price. The Exchange has provided the Commission's Division of Trading and Markets and the Office of Economic Analysis with statistics related to market quality, specialist trading activity, and sample statistics for the months of November and December 2007. The Exchange represents it will provide the relevant statistics for January and February 2008 no later than March 28, 2008. Commencing with the relevant statistics for the month of March 2008, the Exchange represents that it will provide all the aforementioned information to the Commission on or before the 15th of the calendar month directly following the data month. The Exchange represents it will maintain average measures for each stock-day during a particular month in order to provide such information to the Commission upon request. Furthermore, NYSE Regulation, Inc. (“NYSER”) believes that it has appropriate surveillance procedures in place to surveil for compliance with the negative obligations of specialists. NYSER monitors, using a pattern and practice and/or outlier approach, specialist activity that appears to cause or exacerbate excessive price movement in the market (since such transactions would appear to be in violation of a specialist's negative obligation). In this connection, NYSER continues to surveil for specialist compliance with the PPP re-entry requirements, and based on its reviews of surveillance data to date, has not identified significant compliance issues. The Division of Market Surveillance of NYSER also monitors specialist trading to cushion such price movements.
(b)*Conclusion* The Exchange believes that an extension of the current Conditional Transaction Pilot program will continue to provide NYSE specialists with the flexibility to compete and to efficiently and systematically trade and quote in their securities as well as equip them to fluidly manage their risk. In view of the above, the NYSE believes it is appropriate to extend the operation of the Conditional Transaction Pilot program for an additional three months until June 30, 2008. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirement under Section 6(b)(5) 9 of the Act that an Exchange have rules that are designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The proposed rule change also is designed to support the principles of Section 11A(a)(1) 10 in that it seeks to assure economically efficient execution of securities transactions. The Exchange believes that extending the operation of the Conditional Transaction Pilot will provide specialists with the required flexibility to compete, thus adding value to the Exchange market by encouraging specialists to continue to commit capital. Ultimately, the Exchange believes that the Conditional Transaction Pilot benefits the marketplace by allowing specialists to manage their risk and, therefore, gives them the ability to increase the liquidity they provide at prices outside the best bid and offer, as well as to meet their obligation to bridge temporary gaps in supply and demand, thereby dampening volatility. 9 15 U.S.C. 78f(b)(5). 10 15 U.S.C. 78k-1(a)(1). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action *Because the foregoing proposed rule change:*
(1)Does not significantly affect the protection of investors or the public interest;
(2)does not impose any significant burden on competition; and
(3)by its terms does not become operative for 30 days after the date of this filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) 11 of the Act and Rule 19b-4(f)(6) thereunder. 12 11 15 U.S.C. 78s(b)(3)(A). 12 17 CFR 240.19b-4(f)(6). A proposed rule change filed under Rule 19b-4(f)(6) normally may not become operative prior to 30 days after the date of filing. However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The NYSE requests that the Commission waive the 5-day pre-filing notice requirement and the 30-day operative delay, as specified in Rule 19b-4(f)(6)(iii), 13 which would make the rule change effective and operative upon filing. The Commission believes that waiving the 5-day pre-filing notice and the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver would allow the Conditional Transaction Pilot to continue without interruption through June 30, 2008 and provide the Exchange and the Commission additional time to evaluate the pilot. 14 Accordingly, the Commission designates that the proposed rule change effective and operative upon filing with the Commission. 13 17 CFR 240.19b-4(f)(6)(iii). 14 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-NYSE-2008-23 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSE-2008-23. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the NYSE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSE-2008-23 and should be submitted on or before April 28, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 15 15 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E8-7114 Filed 4-4-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57591; File No. SR-NYSE-2008-21] Self-Regulatory Organizations; New York Stock Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Exchange Rule 103A (Specialist Stock Reallocation and Member Education and Performance) and Exchange Rule 103B (Specialist Stock Allocation) April 1, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on March 26, 2008, the New York Stock Exchange, LLC (“NYSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The Exchange has designated the proposed rule change as “non-controversial” under Section 19(b)(3)(A)(iii) 3 of the Act and Rule 19b-4(f)(6) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to extend to June 30, 2008, the moratorium on the administration of the Specialist Performance Evaluation Questionnaire (“SPEQ”) pursuant to Exchange Rule 103A and the use of the SPEQ pursuant to Exchange Rule 103B (“Moratorium”), which was implemented on June 8, 2007. In addition, the Exchange proposes to continue to suspend the use of SuperDot turnaround for orders received and the use of responses to administrative messages as objective measures in the assessment of specialist performance during the Moratorium. The Exchange further proposes that the SPEQ and Order Reports/Administrative Responses continue to be removed from the criteria used to commence a specialist performance improvement action during the Moratorium. The text of the proposed rule changes is available on the Exchange's Web site ( *http://www.nyse.com* ), at the Exchange's Office of the Secretary, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. NYSE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to extend to June 30, 2008, the Moratorium on the administration of the SPEQ pursuant to Exchange Rule 103A and the use of the SPEQ pursuant to Exchange Rule 103B. The Moratorium was implemented on June 8, 2007 and extended through March 31, 2008. 5 5 *See* Securities Exchange Act Release Nos. 55852 (June 4, 2007), 72 FR 31868 (June 8, 2007) (NYSE-2007-47) (“Original Request”) and 57184 (January 22, 2008), 73 FR 5254 (January 29, 2008) (NYSE-2008-02). In addition, the Exchange proposes that the use of SuperDot turnaround for orders received and responses to administrative messages continue to be removed from the objective measures used in the assessment of specialist performance pursuant to Exchange Rule 103B or as criteria used to commence specialist performance improvement action pursuant to Exchange Rule 103A during the Moratorium. SPEQ Prior to June 2007, pursuant to Exchange Rule 103A, on a quarterly basis, the Exchange distributed a twenty question survey known as the SPEQ to eligible Floor brokers 6 to evaluate specialist performance during the quarter immediately prior to the distribution of the SPEQ. Initially, this subjective feedback provided critical information to assist the Exchange in maintaining the quality of the NYSE market. 6 The Exchange believed that conscientious participation in the SPEQ process was a critical element in the Exchange's program for evaluating the overall performance of its specialists. All eligible Floor brokers are required to participate in the process and evaluate from one to three specialist units each quarter. Floor brokers were selected to participate in the SPEQ process based on broker badge data submitted in accordance with audit trail requirements. Brokers who intentionally failed or refused to participate in the SPEQ process were potentially subject to disciplinary action, including the imposition of a summary fine pursuant to Exchange Rule 476A. However, the Exchange believed that the SPEQ no longer adequately allowed a Floor broker to assess the electronic interaction between the specialist and the Floor broker. The Hybrid Market provided Floor brokers and specialists with electronic trading tools that have resulted in less personal and verbal contact between Floor brokers and specialists. Currently, the majority of transactions executed on the Exchange are done through electronic executions. In addition, the dramatic increase in transparency with respect to the Display Book through, among other things, Exchange initiatives like NYSE OPENBOOK TM 7 (“OPENBOOK”) has decreased the need for the Floor broker to obtain market information verbally from the specialist. This increased transparency gives all market participants, both on and off the Floor, a greater ability to see and react to market changes. 7 OPENBOOK Online Database is an Exchange online service that allows subscribers to view the contents of the specialist book for any stock at any given point in the day, or over a period of time. Results are returned in an Excel spreadsheet. OPENBOOK Online Database is a historical database with data stored online for a 12-month period. The questions on the SPEQ did not take into account the operation of the electronic tools available in the Hybrid Market. The SPEQ did not provide Floor brokers with a means to evaluate specialist performance under the current market model. As a result of the more electronic interaction between Floor brokers and specialists, Floor brokers were unable to assess specialist performance using the current SPEQ. The questions posed to the Floor brokers on the SPEQ required Floor brokers to opine on the specialists' ability to offer single price executions and specialists' ability to provide notification to Floor brokers of market changes in particular stocks. In the current more electronic market, specialists are unable to offer single price executions and the relative speed of executions makes it virtually impossible for specialist to notify brokers of changes in a particular security. Given the above, the SPEQ no longer served as a meaningful measure of specialist performance. Objective Measures The Exchange further requests that during the extension of the Moratorium, allocations of newly listed securities on the Exchange continue to be based on the objective measures identified in Exchange Rule 103B, 8 with the exception of SuperDot turnaround for orders received and response to administrative messages. 8 Pursuant to Exchange Rule 103B, specialist dealer performance is measured in terms of participation (TTV); stabilization; capital utilization, which is the degree to which the specialist unit uses its own capital in relation to the total dollar value of trading in the unit's stocks; and near neighbor analysis, which is a measure of specialist performance and market quality comparing performance in a stock to performance of stocks that have similar market characteristics. Additional objective measures pursuant to Exchange Rule 103B are those measures included in Exchange Rule 103A which are:
(a)*Timeliness* of regular openings;
(b)promptness in seeking Floor official approval of a non-regulatory delayed opening;
(c)timeliness of DOT turnaround; and
(d)response to administrative messages. As explained in the Original Request and in the previously requested extension, SuperDot turnaround for orders received and response to administrative messages no longer provide meaningful objective standards to evaluate specialist performance in the Hybrid Market. Specifically, in the more electronic Hybrid Market, orders received by Exchange systems that are marketable upon entry are eligible to be immediately and automatically executed by Exchange systems. As such, SuperDot turnaround no longer provided a meaningful objective measure of a specialist's performance. Furthermore, in the current more electronic market, the Exchange systems automatically respond to the majority of the administrative messages. Today, there are two administrative messages that require a manual response from specialists. These are messages that require the specialist to provide status information on market orders and stop orders. With regard to requests for the status of stop orders, the specialists are no longer capable of providing this information. In December 2006, following Commission approval, 9 the Exchange changed its stop order handling process. Stop orders are no longer visible to the part of the NYSE Display Book® that the specialist “sees.” When a transaction on the Exchange results in the election of a stop order that had been received prior to such transaction, the elected stop order is sent as a market order 10 to the Display Book and the specialist's system employing algorithms, where it is handled in the same way as any other market order. The specialist, therefore, is unable to provide any information regarding the status of stop orders. 9 *See* Securities Exchange Act Release No. 54820 (November 27, 2006), 71 FR 70824 (December 6, 2006) (SR-NYSE-2006-65). 10 As used herein, the term “market order” refers to market orders that are not designated as “auction market orders.” Market orders are eligible to receive immediate and automatic execution on the Exchange. The immediate and automatic execution of market orders eliminates the need for the specialists to respond to the administrative request for the status of market orders. In practice, a customer that submits a market order will likely receive a report of execution before the administrative message requesting the status of the market order has been printed and read by the specialist. This change has had a minimal impact on Exchange customers. In the past few years, the average number of administrative messages received on a daily basis has steadily declined. The Exchange believes that immediate and automatic execution of orders will virtually eliminate administrative messages that require a manual response from a specialist. As a result, a specialist's ability to respond to administrative messages no longer provides a meaningful measure of specialists' performance during the Moratorium. Given the above, the Exchange seeks to continue suspension of the use of both measures as criteria used to assess specialists' performance during the extension of the Moratorium. Performance Improvement Actions Similarly, during the extension of the Moratorium, the Exchange seeks to continue suspending the use of the SPEQ and Order Reports/Administrative Reports as criteria for the implementation of a performance improvement action pursuant to Exchange Rule 103A. Exchange Rule 103A(b) provides that: The Market Performance Committee shall initiate a Performance Improvement Action (except in highly unusual or extenuating circumstances, involving factors beyond the control of a particular specialist unit, as determined by formal vote of the Committee) in any case where a specialist unit's performance falls below such standards as are specified in the Supplementary Material to this rule. The objective of a Performance Improvement Action shall be to improve a specialist unit's performance where the unit has exhibited one or more significant weaknesses, or has exhibited an overall pattern of weak performance that indicates the need for general improvement. Prior to June 2007, the SPEQ and Order Reports/Administrative Reports were two criteria included in the standards specified in Exchange Rule 103A Supplementary Material. Given that SPEQ and Order Reports/Administrative Reports no longer provided significant objective measures of specialists' performance in the Hybrid Market, the Exchange sought to suspend the use of both measures as criteria for the implementation of a performance improvement action during the Moratorium. Through this filing, the Exchange seeks to continue this suspension for the duration of the Moratorium. Creation of a New Process The Exchange intends to establish a quantifiable measure in order to determine a specialist firm's eligibility to participate in the new Allocation Process. The Exchange intends to formally submit a proposal to the Commission to amend Exchange rules that govern the allocation of securities to specialist firms and other related rules by the end of April 2008. The Exchange believes that the use of a single objective measure to determine specialist firm eligibility for allocation will create a more efficient process that is consistent with the Exchange's current more electronic trading environment. Conclusion The Exchange therefore requests to extend the Moratorium on the administration of the SPEQ pursuant to Exchange Rule 103A and the use of the SPEQ pursuant to Exchange Rule 103B until June 30, 2008. In addition, the Exchange proposes to continue to suspend the use of SuperDot turnaround for orders received and the use of responses to administrative messages as objective measures in the assessment of specialist performance during the Moratorium. The Exchange further proposes that the SPEQ and Order Reports/Administrative Responses continue to be removed from the criteria used to commence a specialist performance improvement action during the Moratorium. 2. Statutory Basis The Exchange believes that the basis under the Act for this proposed rule change is the requirement under Section 6(b)(5) 11 that an Exchange have rules that are designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The proposed rule change also is designed to support the principles of Section 11A(a)(1) 12 in that it seeks to assure economically efficient execution of securities transactions, make it practicable for brokers to execute investors' orders in the best market and provide an opportunity for investors' orders to be executed without the participation of a dealer. Due to the Exchange's transition to a more electronic market, the current SPEQ, SuperDot turnaround for orders received and response to administrative messages no longer provide meaningful objective standards to evaluate specialist performance in the Hybrid Market. The Exchange requests this continued extension of the Moratorium to determine whether elimination of the SPEQ as well as SuperDot turnaround for orders received and response to administrative messages as objective measures would remove an impediment to a free and open electronic market which would result in the more economically efficient execution of securities transactions. Given the current trend to a more electronically-based market, the Exchange believes that the use of more objective and detailed measures will promote healthy competition between specialist firms and ultimately result in better market-making for Exchange customers. 11 15 U.S.C. 78f(b)(5). 12 15 U.S.C. 78k-1(a)(1). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action *Because the proposed rule change does not:*
(i)Significantly affect the protection of investors or the public interest;
(ii)impose any significant burden on competition; and
(iii)become operative for 30 days after the date of filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 13 and subparagraph (f)(6) of Rule 19b-4 thereunder. 14 13 15 U.S.C. 78s(b)(3)(A). 14 17 CFR 240.19b-4(f)(6). A proposed rule change filed under 19b-4(f)(6) normally may not become operative prior to 30 days after the date of filing. 15 However, Rule 19b-4(f)(6)(iii) 16 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the five-day prefiling requirement and the 30-day pre-operative delay and designate the proposed rule change to become operative upon filing. 15 17 CFR 240.19b-4(f)(6)(iii). 16 *Id.* The Commission believes that waiving the five-day prefiling requirement and the 30-day operative delay is consistent with the protection of investors and the public interest because it would allow the Exchange to extend the Moratorium. The Commission notes that the Exchange expects to file a proposed rule change under Section 19(b) of the Act 17 by the end of April 2008, which would amend Exchange rules that govern the allocation of securities to specialist firms and other related rules. The Commission designates the proposal to become effective and operative upon filing. 18 17 15 U.S.C. 78s(b). 18 For purposes only of waiving the 30-day operative delay, the Commission has considered the impact of the proposed rule on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in the furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-NYSE-2008-21 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSE-2008-21. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of NYSE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSE-2008-21 and should be submitted on or before April 28, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 19 Florence E. Harmon, Deputy Secretary. 19 17 CFR 200.30-3(a)(12). [FR Doc. E8-7122 Filed 4-4-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57585; File No. SR-NYSEArca-2008-36] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Certain Transaction Fees and To Establish a New Fee, the Market Maker Post Liquidity Incentive Credit March 31, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on March 28, 2008, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared substantially by the Exchange. NYSE Arca has designated this proposal as one establishing or changing a due, fee, or other charge imposed by the Exchange under Section 19(b)(3)(A), 3 and Rule 19b-4(f)(2) thereunder, 4 which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NYSE Arca proposes to amend its Schedule of Fees and Charges for Exchange Services (“Schedule”) in order to revise certain Transaction Fees and establish a new fee, the Market Maker Post Liquidity Incentive Credit. The text of the proposed rule change is available on the Exchange's Web site ( *http://www.nysearca.com* ), at NYSE Arca's principal office, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NYSE Arca included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposal. The text of these statements may be examined at the places specified in Item IV below. NYSE Arca has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this filing is to amend the existing Schedule in order to:
(i)Make changes to Transaction Fees assessed on certain executions in issues that trade as part of the Penny Pilot, 5 and
(ii)introduce a new fee to be called the Market Maker Post Liquidity Incentive Credit (“Incentive Credit”). The Exchange plans to implement these fees on April 1, 2008. A description of each proposed change is explained below. 5 The Exchange may trade option contracts in one cent increments in certain approved issues as part of the Penny Pilot, through March 27, 2009. *See* Securities Exchange Act Release No. 56568 (September 27, 2007), 72 FR 56422 (October 3, 2007) (approval order for SR-NYSEArca-2007-88). Transaction Fees NYSE Arca offers market participants a Post/Take pricing model for electronically executed transactions in issues that are included in the Penny Pilot. Under the present rate schedule, all electronic orders that “take” liquidity from the Consolidated Book (incoming electronic quotes and orders that are executed upon receipt) are charged a fee of $0.50 per contract. As part of its ongoing effort to provide competitive rates, the Exchange now proposes to offer reduced pricing for certain Post/Take transactions in issues that are included in the Penny Pilot. Specifically the Exchange will lower the Take Liquidity rate from $0.50 to $0.45 per contract for all market participants. Market Maker Post Liquidity Incentive Credit NYSE Arca proposes to add a new fee credit, which will be available to Market Makers and Lead Market Makers (“LMMs”) who reach a certain level of monthly contact volume in Penny Pilot Issues. Market Makers and LMMs that achieve specific posting volume thresholds for quotes and orders in Penny Pilot issues will receive additional credits as follows: Post liquidity incentive thresholds Credit > 1,000,000 posting contracts/month $.01/contract. > 5,000,000 posting contracts/month $.05/contract. The incentive credit is incremental and will apply to the posting volumes executed within each tier, and this credit is earned in addition to the standard Post Liquidity fee credit. For example, if a Market Maker trades 6,000,000 contracts in one month, the Post Liquidity fee credit would be $0.30 for the first 1 million contracts, for contracts 1,000,001 to 5,000,000 the credit would be $0.30 plus a one-cent incentive credit for a marginal credit rate of $0.31, and for contracts 5,000,001 to 6,000,000, the credit would be $0.30 plus a five-cent incentive credit for a marginal credit rate of $0.35. The Incentive Credit will be calculated on a monthly basis, and will be reflected on OTP Holders' bills on a quarterly basis. By offering the Market Maker Post Liquidity Incentive Credit, NYSE Arca hopes to attract additional Market Makers and LMM quotes and orders to the Exchange, which in turn should lead to tighter spreads and deeper liquidity, which will benefit all market participants. 2. Statutory Basis The Exchange believes that the proposal is consistent with Section 6(b) of the Act, 6 in general, and furthers the objectives of Section 6(b)(4) of the Act, 7 in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among its members. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments on the proposed rule change were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule change establishes or changes a due, fee, or other charge imposed by the Exchange, it has become effective pursuant to Section 19(b)(3)(A) of the Act 8 and subparagraph (f)(2) of Rule 19b-4 9 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 8 15 U.S.C. 78s(b)(3)(A). 9 17 CFR 240.19b-4(f)(2). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-NYSEArca-2008-36 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington DC 20549-1090. All submissions should refer to File Number SR-NYSEArca-2008-36. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR-NYSEArca-2008-36 and should be submitted on or before April 28, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 10 10 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E8-7112 Filed 4-4-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57588; File No. SR-NYSEArca-2008-37] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1, Amending the Linkage Fees Portion of the Schedule of Fees and Charges for Exchange Services March 31, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on March 28, 2008, NYSE Arca, Inc. (“NYSE Arca” or the “Exchange”) filed with the Securities and Exchange Commission (the “Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. On March 31, 2008, the Exchange filed Amendment No. 1 to the proposed rule change. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NYSE Arca is proposing to amend the Linkage Fees portion of the Schedule of Fees and Charges for Exchange Services (“Schedule”). The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, and *http://www.nyse.com* . II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this filing is to amend the existing Schedule in order to revise the Linkage Fees portion of the Schedule, so as to conform with fee changes the Exchange has proposed for certain Broker Dealer executions. The Exchange plans to implement the revised Broker Dealer fees on April 1, 2008. Executions on NYSE Arca resulting from orders sent via the Intermarket Option Linkage (“Linkage Orders”) are subject to the same billing treatment as other Broker Dealer orders. 3 Presently, the Exchange charges $0.50 for all electronically executed Linkage Orders. The Exchange assesses this rate for Linkage Order executions in all issues, including those that trade as part of the Penny Pilot. 4 3 As stated in the proposal to establish a pilot program for Linkage Fees: “[i]n connection with the launch of the options intermarket linkage, the Exchange seeks to include in its Schedule of Fees and Charges For Exchange Services a provision that applies to linkage fees stating that executions resulting from Linkage Orders will be subject to the same billing treatment as other broker-dealer executions.” *See* Securities Exchange Act Release No. 47560 (March 21, 2003), 68 FR 15257 (March 28, 2003) (SR-PCX-2003-08). *See also* Securities Exchange Act Release Nos. 47786 (May 2, 2003), 68 FR 24779 (May 8, 2003) (order approving SR-PCX-2003-08) and 56133 (July 25, 2007), 72 FR 42210 (August 1, 2007) (SR-NYSEArca-2007-66) (order approving extension of Linkage Fee pilot program through July 31, 2008). 4 The Exchange may trade option contracts in one-cent increments in certain approved issues as part of the Penny Pilot through March 27, 2009. *See* Securities Exchange Act Release No. 56568 (September 27, 2007), 72 FR 56422 (October 3, 2007) (SR-NYSEArca-2007-88). Options that overlay issues that trade as part of the Penny Pilot are subject to a Post/Take pricing model. 5 On March 28, 2008, NYSE Arca filed with the Commission a proposal that lowers the “Take Liquidity” fee for electronically executed Broker Dealer orders in issues that trade as part of the Penny Pilot from $0.50 to $0.45. 6 Linkage Orders that are executed in Penny Pilot issues are assessed the same rate as other Broker Dealer orders that take liquidity, because Linkage Orders “take” liquidity that is resting in the NYSE Arca Consolidated Book as opposed to “posting” liquidity. In conjunction with the change to the Take Liquidity fee that the Exchange has previously proposed, NYSE Arca is now proposing to create a new fee for electronically executed Linkage Orders in Penny Pilot issues. Such orders that were previously charged a $0.50 fee will now be assessed a reduced fee of $0.45. Linkage Fees for non-Penny Pilot issues remain the same. This change will keep Linkage Fees consistent with other fees charged for Broker Dealer executions. 5 A detailed description of the Post/Take pricing model is shown in the Trade Related Charges section of the Schedule. 6 *See* SR-NYSEArca-2008-36. Fee changes made pursuant to SR-NYSEArca-2008-36, which was effective upon filing, are reflected in the Schedule. The Exchange plans to implement this new, lower Linkage Fee in conjunction with the implementation of the revised Take Liquidity fee on April 1, 2008, pending Commission approval. 2. Statutory Basis The Exchange believes that the proposal is consistent with Section 6(b) of the Act, 7 in general, and Section 6(b)(4), 8 in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities for the purpose of executing Linkage Orders that are routed to the Exchange from other market centers. 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments on the proposed rule change were neither solicited nor received. III. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.go* v. Please include File Number SR-NYSEArca-2008-37 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSEArca-2008-37. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEArca-2008-37 and should be submitted on or before April 28, 2008. IV. Commission's Findings and Order Granting Accelerated Approval of Proposed Rule Change After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange 9 and, in particular, with the requirements of Section 6(b) of the Act. 10 In particular, the Commission finds that the Exchange's proposal is consistent with Section 6(b)(4) of the Act, 11 which requires that the rules of the Exchange provide for the equitable allocation or reasonable dues, fees, and other charges among its members and other persons using its facilities. The Commission notes that proposal conforms Linkage Fees with those fees charged on other Broker Dealer executions. 9 In approving this rule, the Commission notes that it has considered its impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(4). The Commission finds good cause, pursuant to Section 19(b)(2)(B) of the Act, 12 for approving the proposed rule change prior to the 30th day after the date of publication of the notice of the filing thereof in the **Federal Register** . An accelerated approval will not only permit the Exchange to comply with the terms of the Linkage Fee pilot program 13 but will also allow the Exchange to immediately implement a lower fee for market participants executing Linkage Orders on NYSE Arca. 12 15 U.S.C. 78s(b)(2)(B). 13 *See* note 3 *supra* . V. Conclusion *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act 14 that the proposed rule change (SR-NYSEArca-2008-37), as modified by Amendment No. 1, is hereby approved on an accelerated basis. 14 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 15 Florence E. Harmon, Deputy Secretary. 15 17 CFR 200.30-3(a)(12). [FR Doc. E8-7113 Filed 4-4-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57584; File No. SR-OCC-2007-16] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating to Late Exercises March 31, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 notice is hereby given that on December 7, 2007, The Options Clearing Corporation (“OCC”) filed with the Securities and Exchange Commission the proposed rule change as described in Items I, II and III below, which Items have been prepared primarily by OCC. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change The proposed rule change would amend OCC's rules relating to the submission of late items and the fees associated with filing exercise notices after the start of critical processing. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, OCC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. OCC has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The purpose of this rule filing is to amend OCC's
(1)Rule 801 to modify the fee applied to exercise notices that are accepted by OCC after the start of critical processing,
(2)Rule 805 to make conforming changes to the filing fees applied to the submission of supplementary exercise notices tendered after critical processing, and
(3)Rule 205 to clarify the unusual or unforeseen circumstances when OCC may extend the cut-off time for submitting instructions to OCC. 1. Background Rule 801 addresses the exercise of options other than at expiration. Subject to specified exceptions and conditions, Rule 801(d) grants certain individuals 2 the discretion to permit a clearing member to file, revoke, or modify any exercise notice after the prescribed deadline for the purpose of correcting a bona fide error. However, the requesting clearing member is liable to OCC for a late filing fee in escalating increments and time segments. Currently, these fees are: 2 Those individuals are OCC's Chairman, Management Vice Chairman, President, or a designee of such officer.
(i)A fee of $5,000 for any request accepted between the prescribed deadline and the start of critical processing (provided that the request does not materially affect such start time) 3 and 3 The current deadline for submitting exercise notices is 7:00 p.m. CT.
(ii)a filing fee of $20,000 per line item listed on any exercise notice accepted for filing after the start of critical processing, with 50% of the fee to be distributed to the assigned clearing member or on a pro rata basis if more than one clearing member is assigned. 4 4 OCC will accept exercises until as late as 6:30 a.m. However, OCC will not accept a request to revoke or modify an exercise after the start of critical processing. Clearing members with short positions that have been assigned a late exercise are to receive notification thereof by 8 a.m. CT. 2. Discussion At the March 2007 OCC Roundtable meeting, 5 a clearing member raised the issue of processing late exercises other than at expiration. The firm questioned the fairness of this process to option writers, noting that unexpectedly receiving additional assignments in the morning financially impacted the firm because its practice is to promptly review assignments from nightly processing and to hedge those obligations before the U.S. markets open. Expressing the view that late exercises permit a clearing member to shift liability for its own operational errors to another, the firm proposed that late exercises be eliminated to remedy this inequity and to cause clearing members to improve back office operations. After discussion, the Roundtable participants agreed to review the matter within their respective organizations and to revisit the topic at their next meeting. 5 OCC's Roundtable is an OCC-sponsored advisory group comprised of representatives from OCC's participant exchanges, OCC, a cross-section of OCC clearing members, and industry service bureaus. The Roundtable considers operational improvements that may be made to increase efficiencies and lower costs in the options industry. In connection with its consideration of the matter, OCC reviewed the purpose served by permitting such exercises and recent processing of late exercise requests. Late exercises have long been allowed under OCC's rules to prevent clearing members from suffering severe economic losses due to bona fide operational errors. OCC determined that only a few late exercise requests were received during the period January 2006, through March 2007. 6 Specifically, there were five requests for late exercises from five different firms relating to 14 line items with values ranging from $124,000 to $270,000. All requests were received after the start of critical processing, requiring OCC to run supplemental exercise procedures after nightly processing had been completed. Such processing was initiated following the 6:30 a.m.
(CT)cut-off time for late exercise requests, 7 and all assigned firms were notified before the 8 a.m.
(CT)deadline. As specified in Rule 801(d), fifty percent of the $20,000 per line item filing fee was distributed to assigned clearing members. 6 From April 2007 to October 2007 there were no requests to submit a late exercise although in each of June and September 2007, OCC received [0]an inquiry regarding a possible submission. However, the clearing members involved elected not to formally file such a request. 7 Systemic and operational constraints preclude OCC from processing late exercise requests at an earlier time. Although no late exercise requests were received between the deadline for submitting exercises and the start of critical processing during the above-referenced review period, OCC also determined that, upon request, its operations staff would extend the deadline by a reasonable period in the event an exchange, clearing member, or OCC experienced system or operational problems that prevented one or more clearing members from submitting exercises on a timely basis. 8 The payment of the applicable filing fee in such instances was not required nor has it typically been required for requests received before the start of critical processing. 8 Subject to OCC's need to start critical processing, the deadline for submitting exercise notices may be extended if “unforeseen conditions” prevent their submission by a clearing member (OCC Rule 205). OCC has concluded that its authority to extend such deadlines should more explicitly reference systemic or operational problems or other unforeseen conditions experienced by additional industry participants that may impact the timely submission of exercise notices. After carefully weighing the purpose and recent uses of the late exercise rule versus the fairness issue, OCC determined that it would be appropriate to retain the late exercise rule with certain modifications. Accordingly, OCC proposes to raise the filing fee for late exercise requests submitted post-critical processing from $20,000 to $75,000 per line item. 9 This change is intended to provide an incentive for firms to improve back office processing by increasing the cost of filing late exercise requests after the start of critical processing as well as to provide greater compensation to clearing members receiving “late assignments” while at the same time preserving the ability of firms to correct bona fide operational errors. To reflect current operating procedures, OCC proposes to eliminate the $5,000 filing fee for late exercise requests filed prior to the start of critical processing. For consistency, OCC also proposes to modify the fees applicable to the submission of supplementary exercise notices at expiration as set forth in Rule 805. 10 Accordingly, OCC will amend Rule 805's filing fees to conform them to the changes being made in Rule 801. 9 OCC's management's proposal was presented at the June 2007 Roundtable meeting. The Roundtable determined that OCC's management should decide whether to recommend the proposal to OCC's Board of Directors. 10 It has been at least five years since a supplementary exercise notice has been submitted for processing. OCC states that the proposed change is consistent with Section 17A of the Act 11 because it promotes the prompt and accurate clearance and settlement of securities transactions by providing an incentive for clearing members to improve back office processing with respect to determining positions for which an exercise notice is to be submitted, while preserving their ability to correct bona fide operational errors. In addition, the proposed rule change is not inconsistent with the existing rules of OCC, including any other rules proposed to be amended. 11 15 U.S.C. 78q-1. B. Self-Regulatory Organization's Statement on Burden on Competition OCC does not believe that the proposed rule change will impose any burden on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others OCC has not solicited or received written comments with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within thirty-five days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)as the Commission may designate up to ninety days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or
(ii)as to which the self-regulatory organization consents, the Commission will:
(A)By order approve such proposed rule change or
(B)institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-OCC-2007-16 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-OCC-2007-16. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( * http://www.sec.gov/ rules/sro.shtml * ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at OCC's principal office and on OCC's web site ( *http://www.theocc.com/publications/rules/proposed_changes/ proposed_changes.jsp* ). All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR-OCC-2007-16 and should be submitted on or before April 28, 2008. For the Commission by the Division of Trading and Markets pursuant to delegated authority. 12 12 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E8-7120 Filed 4-4-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57597; File No. SR-Phlx-2008-24] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Position and Exercise Limits on IWM Options April 1, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on March 28, 2008, the Philadelphia Stock Exchange, Inc. (“Exchange” or “Phlx”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The Exchange has designated this proposal as non-controversial under Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Phlx Rule 1001, Position Limits, to establish increased position limits of 500,000 for options (“IMW Options”) on the exchange-traded fund (“ETF”) overlying the iShares Russell 2000 Index (“IWM”). The text of the rule proposal is available on the Exchange's Web site ( *http://www.phlx.com* ), at the offices of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to establish in Phlx Rule 1001 increased position limits of 500,000 contracts for IWM Options, which should encourage a more liquid and competitive market environment to the benefit of customers interested in the product. About a year ago, the IWM Options position limit was increased to 500,000 contracts pursuant to a CBOE and ISE pilot program (the “IWM Pilot”). 5 The Commission recently permanently approved this position limit pilot. 6 The Exchange now seeks to similarly increase its position limit on IWM Options to 500,000 contracts. 7 5 The proposal that established the IWM Pilot was designated to be effective and operative upon filing. *See* , *e.g.* , Securities Exchange Act Release Nos. 55176 (January 25, 2007), 72 FR 4741 (February 1, 2007) (SR-CBOE-2007-08) and 55175 (January 25, 2007), 72 FR 4753 (February 1, 2007) (SR-ISE-2007-07). The IWM Pilot was extended through March 1, 2008. *See* Securities Exchange Act Release Nos. 57141 (January 14, 2008), 73 FR 3496 (January 18, 2008) (SR-CBOE-2007-147) and 57144 (January 14, 2008), 73 FR 3785 (January 22, 2008) (SR-ISE-2008-03). The Exchange did not participate in the pilot program. 6 *See* Securities Exchange Act Release No. 57352 (February 19, 2008), 73 FR 10076 (February 25, 2008) (SR-CBOE-2008-07). Other options exchanges similarly have a 500,000 contract IWM Options position limit. *See* Securities Exchange Act Release Nos. 57415 (March 3, 2008), 73 FR 12479 (March 7, 2008) (SR-Amex-2008-16); 57414 (March 3, 2008), 73 FR 12481 (March 7, 2008) (SR-BSE-2008-12); 57416 (March 3, 2008), 73 FR 12489 (March 7, 2008) (SR-ISE-2008-20); and 57417 (March 3, 2008), 73 FR 12788 (March 10, 2008) (SR-NYSEArca-2008-26). Position limit increases for other option products have also been approved recently. *See* Securities Exchange Release No. 57418 (March 3, 2008), 73 FR 12493 (March 7, 2008) (SR-Phlx-2008-14) (QQQQs position limit). 7 Phlx Rule 1002, which the Exchange does not propose to amend, establishes exercise limits for equity options at the same levels as the applicable position limits. Phlx Rule 1002 states in part that “no member or member organization shall exercise, for any account in which such member or member organization has an interest or for the account of any partner, officer, director or employee thereof or for the account of any customer, a long position in any option contract of a class of options dealt in on the Exchange * * * if as a result thereof such member or member organization, or partner, officer, director or employee thereof or customer, acting alone or in concert with others, directly or indirectly, has or will have exercised within any five
(5)consecutive business days aggregate long positions in that class (put or call) as set forth as the position limit in Rule 1001 * * * ” Although position limits have lately enjoyed permanent expansion, there has been a steadfast and significant increase over the last decade in the overall volume of exchange-traded options. Part of this volume is attributable to a corresponding increase in the number of overall market participants. This growth in market participation has in turn brought about additional depth and increased liquidity in exchange-traded options. As the anniversary of listed options trading approaches its 35th year, the Exchange believes that the existing surveillance procedures and reporting requirements at the Exchange, at other options exchanges, and at the several clearing firms are capable of properly identifying unusual and/or illegal trading activity. These procedures include daily monitoring of market movements via automated surveillance techniques to identify unusual activities in both options and underlying stocks and ETFs. The current financial requirements imposed by the Exchange and by the Commission should address any concerns that a member or its customer may try to maintain an inordinately large unhedged position in an equity option. As an example, the Exchange requires that each member or member organization that maintains a position on the same side of the market in excess of 10,000 contracts in a class of options for its own account or for the account of a customer report certain information. This data would include, but not be limited to, whether such position is hedged and if so, documentation as to how the position is hedged. 8 8 Exchange market-makers may be exempt from this reporting requirement to the extent that market-maker information can be accessed through the Exchange's market surveillance systems. *See* Phlx Rule 1003. The rule also contains general reporting requirements for customer accounts that maintain a position in excess of 200 contracts. The Exchange believes that its surveillance procedures and reporting procedures, in conjunction with the financial requirements and risk management review procedures already in place at the clearing firms and the Options Clearing Corporation, should serve to adequately address any concerns the Commission may have respecting account(s) engaging in manipulative schemes or assuming too high a level of risk exposure. Accordingly, the Exchange believes that its surveillance and financial requirements are adequate to effectively monitor the proposed increase in position limits for IWM Options on a going forward basis. The Exchange expects continued options volume growth as opportunities for investors to participate in options markets increase and evolve. The Exchange believes that establishing the proposed expanded position limits for IWM Options, as currently available to other options exchanges, should allow market participants to more effectively achieve their investment and hedging objectives. 2. Statutory Basis The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act 9 in general, and Section 6(b)(5) of the Act 10 in particular, in that it is designed to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities; to remove impediments to and perfect the mechanism of a free and open market and a national market system; and, in general, to protect investors and the public interest. The proposed rule change would enable the Exchange to have the same position limits for IWM Options that are already available to other options exchanges. 11 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). 11 *See supra* note 6. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has designated the proposed rule change as one that:
(1)Does not significantly affect the protection of investors or the public interest;
(2)does not impose any significant burden on competition; and
(3)does not become operative for 30 days from the date of filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. Therefore, the foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 12 and subparagraph (f)(6) of Rule 19b-4 thereunder. 13 The Exchange notes that the proposed rule change is based on a similar proposal recently approved by the Commission, 14 and does not raise any novel issues. 12 15 U.S.C. 78s(b)(3)(A). 13 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires a self-regulatory organization to provide the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has fulfilled this requirement. 14 *See* Securities Exchange Act Release No. 57352, *supra* note 6. The Exchange has asked the Commission to waive the operative delay to permit the proposed rule change to become operative prior to the 30th day after filing. The Exchange states that waiving the operative delay will allow the proposed increase in the position and exercise limits applicable to options on IWM on Phlx to be put into effect immediately, which will align Phlx's IWM limits with the IWM limits applicable to members of other options exchanges, thereby promoting conformity and uniformity in the rules of the several options exchanges. The Commission believes that waiving the 30-day operative delay of the Exchange's proposal is consistent with the protection of investors and the public interest. 15 Therefore, the Commission designates the proposal to be operative upon filing. 15 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate the rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File No. SR-Phlx-2008-24 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Phlx-2008-24. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commissions Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Phlx-2008-24 and should be submitted on or before April 28, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 16 Florence E. Harmon, Deputy Secretary. 16 17 CFR 200.30-3(a)(12). [FR Doc. E8-7145 Filed 4-4-08; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-57599; File No. SR-NASDAQ-2008-027] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Establish Fees for Trading on The NASDAQ Options Market April 1, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on March 27, 2008, The NASDAQ Stock Market LLC (“Nasdaq”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II and III below, which Items have been prepared substantially by Nasdaq. Nasdaq has designated this proposal as one establishing or changing a member due, fee, or other charge imposed by Nasdaq under Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b-4(f)(2) thereunder, 4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to establish pricing for trading standardized equity and index options on The NASDAQ Options Market (“NOM”), Nasdaq's facility for the trading of standardized equity and index options. Nasdaq will implement this rule change on March 31, 2008, the expected launch date for NOM. The text of the proposed rule change is available at *http://www.complinet.com/nasdaq* , the principal offices of the Exchange, and the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Nasdaq is introducing fees and credits for the execution of options contracts within NOM. The fees are based on the pricing model currently in place for the trading of equities via the Nasdaq Market Center, with variations to reflect Nasdaq's understanding of the different competitive conditions in the markets that trade options. Specifically, Nasdaq will assess fees for the execution of options contracts based upon which member provides liquidity to the market and which member takes liquidity from the market. This model seeks to attract liquidity to NOM by providing credits to members that provide liquidity, and to assess a fee to the member whose order executes against an order that has provided liquidity. An order that provides liquidity is any order that is entered into NOM and is placed on the NOM book for potential execution. An order that takes liquidity is one that is entered into NOM and that executes against an order resting on the NOM book. In the case of the NOM Closing Cross, all orders entered during the continuous market or entered as Imbalance Only orders will be considered liquidity providers and all On Close orders will be considered liquidity takers. For all executions except the NOM Opening Cross, the fee for liquidity takers will be $0.45 per executed contract and the rebate for liquidity providers will be $0.30 per executed contract. For orders executed in the NOM Opening Cross, the fee will be $0.05 per contract for each side of the transaction. Executions in the Opening Cross are not susceptible to the liquidity provider and taker analysis described above because NOM will not place orders on its book prior to the opening of the market. Instead, NOM will place orders on the book just prior to and in anticipation of the execution of the NOM Opening Cross. In light of this difference, Nasdaq has concluded that charging all members equally for the execution of their orders in the NOM Opening Cross is the fairest way to allocate fees. Nasdaq will assess a routing fee for orders that are executed at another options market based upon the cost to Nasdaq of executing such orders at those markets. In order to reflect Nasdaq's cost of execution at away markets, the proposed fees are separated by type of option (penny pilot, equity/non-penny pilot, ETF or HLDS/non-penny pilot, and Index) and vary depending upon whether the order is being routed for a customer, a member firm, or a registered market maker. In addition, Nasdaq will pass-through surcharges that are assessed by other markets for the execution of specific options orders on specific underlying instruments. These options are separated into three tiers by level of surcharge and the options included in each tier are listed in an Options Trader Alert and also posted on the NasdaqTrader.com website. 5 A copy of the posted fee schedule is attached as Exhibit 2 to Nasdaq's rule filing. Nasdaq believes that these routing fees and surcharges are competitive, fair and reasonable, and non-discriminatory in that they approximate the cost to Nasdaq of executing routed orders at an away market. As with all fees, Nasdaq may adjust these routing fees in response to competitive conditions by filing a new proposed rule change. 5 *See* Options Trader Alert 2008-001 (March 12, 2008) (announcing SEC approval of The NASDAQ Options Market rule proposal), at *http://www.nasdaqtrader.com/TraderNews. aspx?id=OTA2008-001; http://www.nasdaqtrader.com/Trader.aspx? id=PriceListTrading2#nq_optionsex* . 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act, 6 in general, and with Section 6(b)(4) of the Act, 7 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system which Nasdaq operates or controls. 6 15 U.S.C. 78f. 7 15 U.S.C. 78f(b)(4). Upon launch, Nasdaq will be the seventh options market in the national market system. Joining Nasdaq and electing to trade options is entirely voluntary. Under these circumstances, Nasdaq's fees must be competitive and low in order for Nasdaq to attract order flow, execute orders, and grow as a market. The Commission has already determined that Nasdaq's pricing model for executions—charging the liquidity taker and crediting the liquidity provider—is consistent with the Exchange Act. As such, Nasdaq believes that its fees are fair and reasonable and consistent with the Exchange Act. B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. To the contrary, Nasdaq states that it designed its fees to compete effectively for the execution and routing of options contracts and to reduce the overall cost to investors of options trading. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has been designated as a fee change pursuant to Section 19(b)(3)(A)(ii) of the Act 8 and Rule 19b-4(f)(2) 9 thereunder, because it establishes or changes a due, fee, or other charge imposed on members by Nasdaq. Accordingly, the proposal is effective upon filing with the Commission. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 8 15 U.S.C. 78s(b)(3)(A)(ii). 9 17 CFR 240.19b-4(f)(2). Nasdaq expects to launch NOM on March 31, 2008. To lighten the administrative burden on firms, Nasdaq will not send firms a monthly bill for March based on just one day of trading. Rather, Nasdaq will add the fees incurred on March 31, 2008, to the invoices that firms will receive for the full month of options trading for April. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NASDAQ-2008-027 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NASDAQ-2008-027. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make publicly available. All submissions should refer to File Number SR-NASDAQ-2008-027 and should be submitted on or before April 28, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 10 Florence E. Harmon, Deputy Secretary. 10 17 CFR 200.30-3(a)(12). [FR Doc. E8-7190 Filed 4-4-08; 8:45 am] BILLING CODE 8011-01-P DEPARTMENT OF STATE [Public Notice: 6162] HR/REE—Office of Recruitment, Examination, and Employment; 60-Day Notice of Proposed Information Collection: DS-3091, Thomas R. Pickering Foreign Affairs Fellowship Program, OMB #1405-0143 ACTION: Notice of request for public comments. SUMMARY: The Department of State is seeking Office of Management and Budget
(OMB)approval for the information collection described below. The purpose of this notice is to allow 60 days for public comment in the **Federal Register** preceding submission to OMB. This process is conducted in accordance with the Paperwork Reduction Act of 1995. The following summarizes the information collection proposal to be submitted to OMB: *Title of Information Collection:* Thomas R. Pickering Foreign Affairs Fellowship Program. *OMB Control Number:* 1405-0143. *Type of Request:* Revision of a Currently Approved Collection. *Originating Office:* HR/REE. *Form Number:* DS-3091. *Respondents:* U.S. Citizens: University Graduate and Undergraduate Students. *Estimated Number of Respondents:* 500. *Estimated Number of Responses:* 500. *Average Hours per Response:* 5. *Total Estimated Burden:* 2,500. *Frequency:* Annual. *Obligation to Respond:* Required to Obtain a Benefit. DATES: The Department will accept comments for up to 60 days from June 6, 2008. ADDRESSES: You may submit comments by the following methods: • E-mail: *HowardSD2@state.gov.* • Mail: Department of State, Pickering Program Office, 2401 E Street, NW., SA-1, RmH518, Washington, DC 20522. • Fax: 202-261-8841 Attn: Pickering Program. • Persons with access to the internet may also view this notice and provide comments by going to the regulations.gov Web site at: *http://www.regulations.gov/index.cfm* . FOR FURTHER INFORMATION CONTACT: Direct requests for additional information regarding the collection listed in this notice, including requests of the proposed information collection and supporting documents, to Stedman Howard, Department of State, 2401 E Street, NW., 5H, Washington, DC 20522, who may be reached on 202-261-8950. SUPPLEMENTARY INFORMATION: We are soliciting public comments to permit the Department of State to: • Evaluate whether the proposed information collection is necessary for the proper performance of the functions of the agency. • Evaluate the accuracy of the agency's estimate of the burden of the proposed collection, including the validity of the methodology and assumptions used. • Enhance the quality, utility, and clarity of the information to be collected. • Minimize the reporting burden on those who are to respond, including through the use of automated collection techniques or other forms of technology. *Abstract:* The Department of State collects this information to identify qualified candidates for the Thomas R. Pickering Foreign Affairs Program. *Methodology:* Applications are accepted online. Dated: March 24, 2008. Ruben Torres, U.S. Department of State. [FR Doc. E8-7232 Filed 4-4-08; 8:45 am] BILLING CODE 4710-15-P DEPARTMENT OF STATE [Public Notice: 6167] 30-Day Notice of Proposed Information Collection: Certificate of Eligibility for Exchange Visitor (J-1) Status; Form DS-2019, OMB No. 1405-0119 ACTION: Notice of request for public comment and submission to OMB of proposed collection of information. SUMMARY: The Department of State has submitted the following information collection request to the Office of Management and Budget
(OMB)for approval in accordance with the Paperwork Reduction Act of 1995. • *Title of Information Collection:* Certificate of Eligibility for Exchange Visitor (J-1) Status. • *OMB Control Number:* 1405-0119. • *Type of Request:* Revision of a Currently Approved Collection. • *Originating Office:* Office of Exchange Coordination & Designation, ECA/EC. • *Form Number:* Form DS-2019. • *Respondents:* U.S. Department of State Designated Sponsors. • *Estimated Number of Respondents:* 1460. • *Estimated Number of Responses:* 350,000 annually. • *Average Hours per Response:* 45 minutes. • *Total Estimated Burden:* 262,500 hours. • *Frequency:* On occasion. • *Obligation to Respond:* Required to Obtain or Retain a Benefit. DATES: Submit comments to the Office of Management and Budget
(OMB)for up to 30 days from April 7, 2008. ADDRESSES: Direct comments and questions to Katherine Astrich, the Department of State Desk Officer in the Office of Information and Regulatory Affairs at the Office of Management and Budget (OMB), who may be reached at 202-395-4718. You may submit comments by any of the following methods: • E-mail: *kastrich@omb.eop.gov.* You must include the DS form number, information collection title, and OMB control number in the subject line of your message. • Mail (paper, disk, or CD-ROM submissions): Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW., Washington, DC 20503. • Fax: 202-395-6974. FOR FURTHER INFORMATION CONTACT: You may obtain copies of the proposed information collection and supporting documents from Stanley S. Colvin, Director, Office of Exchange Coordination and Designation, U.S. Department of State, SA-44, 301 4th Street, SW., Room 734, Washington, DC 20547; or email at *jexchanges@state.gov.* SUPPLEMENTARY INFORMATION: We are soliciting public comments to permit the Department to: • Evaluate whether the proposed information collection is necessary to properly perform our functions. • Evaluate the accuracy of our estimate of the burden of the proposed collection, including the validity of the methodology and assumptions used. • Enhance the quality, utility, and clarity of the information to be collected. • Minimize the reporting burden on those who are to respond. Abstract of Proposed Collection The collection is the continuation of information collected and needed by the Bureau of Educational and Cultural Affairs in administering the Exchange Visitor Program (J-Visa) under the provisions of the Mutual Educational and Cultural Exchange Act, as amended. The form has been revised to update the duration of program participation and the addition of a new category of Intern for which regulations are in place. Methodology Access to Form DS-2019 is made available to Department designated sponsors electronically via the Student and Exchange Visitor Information System (SEVIS). Dated: March 25, 2008. Stanley S. Colvin, Director, Office of Exchange Coordination & Designation, Bureau of Educational and Cultural Affairs, Department of State. [FR Doc. E8-7236 Filed 4-4-08; 8:45 am] BILLING CODE 4710-05-P DEPARTMENT OF STATE [Public Notice 6166] Culturally Significant Objects Imported for Exhibition Determinations: “The Horse” SUMMARY: Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681, *et seq.* ; 22 U.S.C. 6501 note, *et seq.* ), Delegation of Authority No. 234 of October 1, 1999, Delegation of Authority No. 236 of October 19, 1999, as amended, and Delegation of Authority No. 257 of April 15, 2003 [68 FR 19875], I hereby determine that the objects to be included in the exhibition “The Horse”, imported from abroad for temporary exhibition within the United States, are of cultural significance. The objects are imported pursuant to loan agreements with the foreign owners or custodians. I also determine that the exhibition or display of the exhibit objects at the American Museum of Natural History, New York, New York, from on or about May 17, 2008, until on or about January 4, 2009; at the Field Museum, Chicago, Illinois, from on or about February 11, 2011, until on or about July 4, 2011; at the San Diego Natural History Museum, San Diego, California, from on or about April 1, 2012, until on or about September 30, 2012; and at possible additional exhibitions or venues yet to be determined, is in the national interest. Public Notice of these Determinations is ordered to be published in the **Federal Register** . FOR FURTHER INFORMATION CONTACT: For further information, including a list of the exhibit objects, contact Richard Lahne, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone: 202/453-8058). The address is U.S. Department of State, SA-44, 301 4th Street, SW., Room 700, Washington, DC 20547-0001. Dated: March 31, 2008. C. Miller Crouch, Principal Deputy Assistant Secretary for Educational and Cultural Affairs, Department of State. [FR Doc. E8-7229 Filed 4-4-08; 8:45 am] BILLING CODE 4710-05-P DEPARTMENT OF STATE [Public Notice 6112] Shipping Coordinating Committee; Notice of Meetings Three subcommittees of the Shipping Coordinating Committee
(SHC)will be holding public meetings in April 2008. Members of the public may attend these meetings up to the seating capacity of the rooms. Details for each meeting are provided in this notice. I. Ship Design and Equipment The SHC's Subcommittee on Ship Design and Equipment will conduct an open meeting at 9:30 a.m. on Friday, April 25, 2008, in Room 6103 of the United States Coast Guard
(USCG)Headquarters Building, 2100 2nd Street, SW., Washington, DC, 20593. The primary purpose of the meeting is to present the outcome of the 51st Session of the International Maritime Organization
(IMO)Sub-Committee on Ship Design and Equipment
(DE)which was held February 18-22, 2008 in Bonn, Germany. For a list of the issues discussed at DE 51, see Shipping Coordinating Committee; Notice of Meetings, 73 FR 1394 (January 8, 2008). Preparations for the 52nd Session of DE will also be discussed. DE 52 is scheduled to be held at the IMO Headquarters in London, United Kingdom from March 16 to March 20, 2009. Copies of documents associated with DE 51 will be available at the April 25th SHC meeting. To request further copies of documents please write to the address provided below. Interested persons may also seek information by writing to Mr. Wayne Lundy, Commandant (CG-5213), USCG Headquarters, 2100 Second Street, SW., Room 1300, Washington, DC 20593-0001 or by calling
(202)372-1379. II. Safety of Life at Sea; IMO Maritime Safety Committee The SHC's Subcommittee on Safety of Life at Sea will conduct an open meeting at 9:30 a.m. on Wednesday, April 30, 2008 in Room 2415, at USCG Headquarters, 2100 2nd Street, SW., Washington, DC, 20593. The purpose of this meeting will be to finalize preparations for the 84th Session of the IMO Maritime Safety Committee
(MSC)which is scheduled for May 7 to May 16, 2008 in London, United Kingdom. At the April 30th SHC meeting, papers received and the draft U.S. positions for MSC 84 will be discussed. MSC 84 agenda items include: —Adoption of amendments to mandatory instruments; —Measures to enhance maritime security; —Goal-based new ship construction standards; —Long range identification and tracking
(LRIT)related matters; — General cargo ship safety; —Role of the human element; —Formal safety assessment; — Piracy and armed robbery against ships; and —Reports of six IMO Sub-committees: Dangerous Goods, Solid Cargoes and Containers (DSC); Training and Watchkeeping (STW); Fire Protection (FP); Ship Design and Equipment (DE); Bulk Liquids and Gases (BLG); and Safety of Navigation (NAV). Interested persons may seek additional information by writing to LCDR Jason Smith, Commandant (CG-5212), USCG Headquarters, 2100 Second Street, SW., Room 1218, Washington, DC 20593-0001 or by calling
(202)372-1376. III. Stability, Load Lines and Fishing Vessel Safety The SHC's Subcommittee on Stability, Load Lines and Fishing Vessel Safety will conduct an open meeting at 1:30 p.m. on Wednesday, April 30, 2008, in Room 6103 of the USCG Headquarters Building, 2100 2nd Street, SW., Washington, DC, 20593. The primary purpose of the meeting is to prepare for the 51st Session of the IMO Sub-Committee on Stability and Load Lines and Fishing Vessels Safety
(SLF)to be held at IMO Headquarters in London, United Kingdom from July 14 to July 18, 2008. The primary matters to be considered include: —Development of explanatory notes for harmonized SOLAS Chapter II-1; —Revision of the Intact Stability Code; —Safety of small fishing vessels; —Development of options to improve effect on ship design and safety of the International Convention on Tonnage Measurement, 1969; —Review of guidelines for uniform operating limitations on high-speed craft; —Time-dependent survivability of passenger ships in damaged condition; —Guidance on the impact of open watertight doors on existing and new ship survivability; — Stability and seakeeping characteristics of damaged passenger ships in a seaway when returning to port by own power or under tow; —Guidelines for drainage systems on ro-ro decks; and —Damage stability verification of tank vessels and bulk carriers. Interested persons may seek additional information by writing to Mr. Paul Cojeen, Commandant (CG-5212), USCG Headquarters, 2100 Second Street, SW., Room 1308, Washington, DC 20593-0001 or by calling
(202)372-1372. Dated: April 1, 2008. Mark Skolnicki, Executive Secretary, Shipping Coordinating Committee, Department of State. [FR Doc. E8-7216 Filed 4-4-08; 8:45 am] BILLING CODE 4710-09-P DEPARTMENT OF STATE [Public Notice 6111] Renewal of the Charter of the United States International Telecommunication Advisory Committee SUMMARY: The Charter of the United States International Telecommunication Advisory Committee
(ITAC)has been renewed for an additional two years. ITAC was established pursuant to the Federal Advisory Committee Act under the general authority of the Secretary of State and the Department of State as set forth in Title 22, sections 2656 and 2707, of the United States Code. The purpose of the ITAC is to advise the Department of State with respect to, and provide strategic planning recommendations on, telecommunication and information policy matters related to the United States' participation in the work of the International Telecommunication Union, the Permanent Consultative Committees of the Organization of American States Inter-American Telecommunication Commission, the Organization for Economic Cooperation and Development, and other international bodies addressing telecommunications. ITAC provides advice on matters of U.S. policy and preparation of positions for meetings of international and regional organizations pertaining to telecommunication and information issues. FOR ADDITIONAL INFORMATION CONTACT: Julian Minard in the Office of Multilateral Affairs, International Communications and Information Policy, Bureau of Economic, Energy and Business Affairs, at
(202)647-3234 or at *minardje@state.gov.* The ITAC Web site is located at *http://www.state.gov/e/eeb/adcom/c668.htm.* Dated: March 27, 2008. James G. Ennis, Director, Advanced Network Technologies, International Communications and Information Policy, Department of State. [FR Doc. E8-7196 Filed 4-4-08; 8:45 am] BILLING CODE 4710-07-P DEPARTMENT OF TRANSPORTATION Federal Highway Administration Cancellation of Environmental Impact Statement: Clatsop County, OR AGENCY: Federal Highway Administration (FHWA), Oregon DOT. ACTION: Cancellation of Astoria Bypass EIS. SUMMARY: On September 28, 1994, the Federal Highway Administration
(FHWA)issued a Notice of Intent, in the **Federal Register** , to advise agencies and the public that an Environmental Impact Statement
(EIS)would be prepared for a proposed Astoria Bypass in Clatsop County, Oregon. The project proposed to realign approximately 6 miles of U.S. 30, the Lower Columbia River Highway, from the John Day River Bridge, over new alignment through the Clatsop State Forest, to connect with OR 202, the Nehalem Highway, at Williamsport Road, and then joint U.S. 101 on the west side of Astoria near the north end of the Youngs Bay Bridge. The project is now cancelled; therefore, no further project activities will occur. FOR FURTHER INFORMATION CONTACT: Ms. Michelle Eraut, Environmental Program Manager, Federal Highway Administration, 530 Center Street, NE., Suite 100, Salem, Oregon 97301; telephone 503-587-4716. Authority: 23 U.S.C. 315. Issued on: March 31, 2008. Michelle Eraut, Environmental Program Manager, Salem, Oregon. [FR Doc. E8-7168 Filed 4-4-08; 8:45 am] BILLING CODE 4910-22-P DEPARTMENT OF TRANSPORTATION Federal Highway Administration Environment Impact Statements: Counties of Jefferson, St. Clair, and Mobile, AL AGENCY: Federal Highway Administration (FHWA), DOT. ACTION: Rescind Notice of Intent. SUMMARY: The FHWA is issuing this notice to advise the public that two Notices of Intent are being rescinded; the first published on August 2, 2006, to prepare an Environmental Impact Statement
(EIS)for a proposed highway project in Jefferson and St. Clair Counties, Alabama is being rescinded; and the second published on July 27, 1995, to prepare an EIS for a proposed highway project in Mobile County, Alabama is being rescinded. FOR FURTHER INFORMATION CONTACT: Mr. Mark D. Bartlett, Division Administrator, Federal Highway Administration, Alabama Division Office, 500 Eastern Blvd., Suite 200, Montgomery, AL 36117-2018, Telephone:
(334)223-7370. SUPPLEMENTARY INFORMATION: The FHWA is rescinding the notice of intent to prepare an EIS for Federal-aid Project STPAA-PE00(6). The proposed project would have involved an extension of the Birmingham Northern Beltline from Interstate 59 in Trussville, Jefferson County, to Interstate 20 in the vicinity of Leeds, St. Clair County, Alabama, for a distance of about 10 miles. The project is being rescinded since the Alabama Department of Transportation has decided not to pursue this project at this time. When this project is reinitiated, additional alignments may be considered. The FHWA is rescinding the notice of intent to prepare an EIS on a proposal to construct a multi-lane roadway from the intersection of Schillinger Road and Lott Road to U.S. Highway 45 in Mobile, Alabama. The project is being rescinded since the Alabama Department of Transportation has decided not to pursue this project at this time. (Catalog of Federal Domestic Assistance Program Number 20.205, Highway Planning and Construction. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this program.) Dated: March 31, 2008. Mark D. Bartlett, Division Administrator, Montgomery. [FR Doc. E8-7156 Filed 4-4-08; 8:45 am] BILLING CODE 4910-22-P DEPARTMENT OF TRANSPORTATION Pipeline and Hazardous Materials Safety Administration, Office of Hazardous Materials Safety Notice of Application for Special Permits AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT. ACTION: List of Applications for Special Permits. SUMMARY: In accordance with the procedures governing the application for, and the processing of, special permits from the Department of Transportation's Hazardous Material Regulations (49 CFR part 107, subpart B), notice is hereby given that the Office of Hazardous Materials Safety has received the application described herein. Each mode of transportation for which a particular special permit is requested is indicated by a number in the “Nature of Application” portion of the table below as follows: I—Motor vehicle, 2—Rail freight, 3—Cargo vessel, 4—Cargo aircraft only, 5—Passenger-carrying aircraft. DATES: Comments must be received on or before May 7, 2008. *Address Comments to:* Record Center, Pipeline and Hazardous Materials Safety, Administration, U.S. Department of Transportation, Washington, DC 20590. Comments should refer to the application number and be submitted in triplicate. If confirmation of receipt of comments is desired, include a self-addressed stamped postcard showing the special permit number. FOR FURTHER INFORMATION CONTACT: Copies of the applications are available for inspection in the Records Center, East Building, PHH-30, 1200 New Jersey Avenue, SE., Washington, DC or at *http://dms.dot.gov* . This notice of receipt of applications for special permit is published in accordance with Part 107 of the Federal hazardous materials transportation law (49 U.S.C. 5117(b); 49 CFR 1.53(b)). Issued in Washington, DC, on March 31, 2008. Delmer F. Billings, Director, Office of Hazardous Materials, Special Permits and Approvals. New Special Permits Application No. Docket No. Applicant Regulation(s) affected Nature of special permits thereof 14649-N PHMSA-08-0037 Olin Corporation, Winchester Division, East Alton, IL 49 CFR 173.62(b), 172.101 column (8C), 173.60(b)(8), 172.300 and 172.400 To authorize the transportation in commerce of certain Division 1.4 ammunition in bulk packaging by motor vehicle for the purpose of relocating a military packing operation. (mode 1) 14650-N PHMSA-08-0036 Air Transport International, L.L.C. Little Rock, AR 49 CFR 172.101 171.11; 172.204 (c)(3); 173.27; 175.30(a)(1) To authorize the transportation in commerce of certain Division 1.1, 1.2, 1.3 and 1.4 explosives which are forbidden or exceed quantities presently authorized. (mode 4). 14651-N PHMSA-08-0039 Air Products and Chemicals, Inc. Allentown, PA 49 CFR 173.40 To authorize the transportation in commerce of certain manifolded DOT specification 3A and 3AA cylinders containing materials toxic by inhalation in Hazard Zone B. (mode 1). 14652-N PHMSA-08-0043 Magnum Mud Equipment Co., Inc. Houma, LA 49 CFR 171.14(d)(4) To authorize the transportation in commerce of certain Class 3 (flammable liquid) hazardous materials in IM101 portable tanks beyond the January 1, 2010 date currently authorized. (mode 1). 14656-N PurePak Technology Corporation, Chandler, AZ 49 CFR 173.158(f)(3) To authorize the transportation in commerce of nitric acid up to 70% concentration in an alternative packaging configuration. (modes 1, 2, 3). 14657-N PHMSA-08-0058 University of Missouri Research Reactor, Columbia, MO 49 CFR 173.416(c) To authorize the transportation in commerce of certain radioactive materials in DOT 6M containers beyond October 1, 2008. (mode 1) 14658-N PHMSA-08-0057 Union Carbide Corporation, Midland, MI 49 CFR 172.200, 172.300, 172.400, 172.500 To authorize the transportation of combustible liquid in certain DOT 51 and UN31 A containers with a capacity of 120 gallons not subject to the requirements for shipping papers, marking, labeling and placarding. (modes 1, 2, 3). 14659-N PHMSA-08-0056 ESM Group Inc., Amherst, NY 49 CFR 173.242(b) and
(c)To authorize the transportation in commerce of calcium carbide (UN 1402), Division 4.1, PG I in non-DOT specification bulk containers by motor vehicle. (modes 1, 2). 14660-N PHMSA-08-0055 Determan Brownie, Inc., Minneapolis, MN 49 CFR 172.200; 173.242(b); 173.243(b) To authorize the transportation in commerce of residual amounts of Class 3 hazardous materials in non-DOT specification packaging (meter provers). (mode 1). 14661-N FIBA Technologies, Inc., Millbury, MA 49 CFR 180.209(a); 180.209(b) To authorize the ultrasonic testing of DOT-3A, DOT-3AA 3AX, 3AAX and 3T specification cylinders for use in transporting Division 2.1, 2.2 or 2.3 material. (modes 1, 2, 3). 14663-N PHMSA-08-0054 Department of Energy, Washington, DC 49 CFR 173.416( c) To authorize the transportation in commerce of certain radioactive materials in DOT 6M containers beyond October 1, 2008. (mode 1). 14664-N PHMSA-08-0063 Century Arms, Inc., Fairfax, VT 49 CFR To authorize the transportation in commerce of certain Division 1.4 explosives as Consumer commodity, ORM-D. (modes 1, 2, 4, 5). 14668-N PHMSA-08-0064 Lincoln Composites, Lincoln, NE 49 CFR 173.302a To authorize the manufacture, marking, sale and use of non-DOT specification fully wrapped fiber reinforced composite gas cylinders with a non-load sharing plastic liner that meets the ISO 11119-3 standard except for the design water capacity and service pressure. (modes 1, 2, 3, 4, 5). [FR Doc. E8-7136 Filed 4-4-08; 8:45 am] BILLING CODE 4909-60-M DEPARTMENT OF THE TREASURY Internal Revenue Service Proposed Collection; Comment Request for Form 3115 AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice and request for comments. SUMMARY: The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13(44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Form 3115, Application for Change in Accounting Method. DATES: Written comments should be received on or before June 6, 2008 to be assured of consideration. ADDRESSES: Direct all written comments to Glenn Kirkland, Internal Revenue Service, room 6129, 1111 Constitution Avenue NW., Washington, DC 20224. FOR FURTHER INFORMATION CONTACT: Requests for additional information or copies of the form and instructions should be directed to Allan Hopkins, at
(202)622-6665, or at Internal Revenue Service, room 6129, 1111 Constitution Avenue NW., Washington, DC 20224, or through the internet, at *Allan.M.Hopkins@irs.gov* . SUPPLEMENTARY INFORMATION: *Title:* Application for Change in Accounting Method. *OMB Number:* 1545-0152. *Form Number:* 3115. *Abstract:* Form 3115 is used by taxpayers who wish to change their method of computing their taxable income. The form is used by the IRS to determine if electing taxpayers have met the requirements and are able to change to the method requested. *Current Actions:* There are no changes being made to the form at this time. *Type of Review:* Extension of a currently approved collection. *Affected Public:* Business or other for-profit organizations, individuals, not-for-profit organizations, and farms. *Estimated Number of Respondents:* 25,000. *Estimated Time per Respondent:* 37 hrs., 2 min. *Estimated Total Annual Burden Hours:* 925,900. The following paragraph applies to all of the collections of information covered by this notice: An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103. *Request For Comments:* Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval. All comments will become a matter of public record. Comments are invited on:
(a)Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility;
(b)the accuracy of the agency's estimate of the burden of the collection of information;
(c)ways to enhance the quality, utility, and clarity of the information to be collected;
(d)ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e)estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information. Approved: March 26, 2008. Allan Hopkins, IRS Reports Clearance Officer. [FR Doc. E8-7227 Filed 4-4-08; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF THE TREASURY Internal Revenue Service Proposed Collection; Comment Request for Form 843 AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice and request for comments. SUMMARY: The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Form 843, Claim for Refund and Request for Abatement. DATES: Written comments should be received on or before June 6, 2008 to be assured of consideration. ADDRESSES: Direct all written comments to Glenn P. Kirkland, Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224. FOR FURTHER INFORMATION CONTACT: Requests for additional information or copies of the form and instructions should be directed to Allan Hopkins, at
(202)622-6665, or at Internal Revenue Service, room 6125, 1111 Constitution Avenue, NW., Washington, DC 20224, or through the internet at *Allan.M.Hopkins@irs.gov.* SUPPLEMENTARY INFORMATION: *Title:* Claim for Refund and Request for Abatement. *OMB Number:* 1545-0024. *Form Number:* 843. *Abstract:* Internal Revenue Code section 6402, 6404, and sections 301.6402-2, 301.6404-1, and 301.6404-3 of the regulations allow for refunds of taxes (except income taxes) or refund, abatement, or credit of interest, penalties, and additions to tax in the event of errors or certain actions by the IRS. Form 843 is used by taxpayers to claim these refunds, credits, or abatements. *Current Actions:* There are no changes being made to the form at this time. We did, however, recount the line items for accuracy. The result is a net decrease of 5 line items. *Type of Review:* Extension of a currently approved collection. *Affected Public:* Business or other for-profit organizations, individuals or households, not-for-profit institutions, farms, and state, local or tribal governments. *Estimated Number of Responses:* 545,500. *Estimated Time per Respondent:* 1 hr., 34 min. *Estimated Total Annual Burden Hours:* 850,980. The following paragraph applies to all of the collections of information covered by this notice: An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103. *Request For Comments:* Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval. All comments will become a matter of public record. Comments are invited on:
(a)Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility;
(b)the accuracy of the agency's estimate of the burden of the collection of information;
(c)ways to enhance the quality, utility, and clarity of the information to be collected;
(d)ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e)estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information. Approved: March 26, 2008. Allan Hopkins, IRS Reports Clearance Officer. [FR Doc. E8-7228 Filed 4-4-08; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF VETERANS AFFAIRS [OMB Control No. 2900-0129] Agency Information Collection (Supplemental Disability Report) Activities Under OMB Review AGENCY: Veterans Benefits Administration, Department of Veterans Affairs. ACTION: Notice. SUMMARY: In compliance with the Paperwork Reduction Act
(PRA)of 1995 (44 U.S.C. 3501-3521), this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget
(OMB)for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden; it includes the actual data collection instrument. DATES: Comments must be submitted on or before May 7, 2008. ADDRESSES: Submit written comments on the collection of information through *http://www.Regulations.gov* ; or to VA's OMB Desk Officer, OMB Human Resources and Housing Branch, New Executive Office Building, Room 10235, Washington, DC 20503,
(202)395-7316. Please refer to “OMB Control No. 2900-0129” in any correspondence. FOR FURTHER INFORMATION CONTACT: Denise McLamb, Records Management Service (005R1B), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420,
(202)461-7485, fax
(202)273-0443 or e-mail *denise.mclamb@mail.va.gov* . Please refer to “OMB Control No. 2900-0129.” SUPPLEMENTARY INFORMATION: *Title:* Supplemental Disability Report, VA Form Letter 29-30a. *OMB Control Number:* 2900-0129. *Type of Review:* Extension of a currently approved collection. *Abstract:* VA Form Letter 29-30a is used by the insured to provide additional information required to process a claim for disability insurance benefits. 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 **Federal Register** Notice with a 60-day comment period soliciting comments on this collection of information was published on January 22, 2008 at page 3807. *Affected Public:* Individuals or households. *Estimated Annual Burden:* 548 hours. *Estimated Average Burden per Respondent:* 5 minutes. *Frequency of Response:* On occasion. *Estimated Number of Respondents:* 6,570. Dated: March 28, 2008. By direction of the Secretary. Denise McLamb, Program Analyst, Records Management Service. [FR Doc. E8-7128 Filed 4-4-08; 8:45 am] BILLING CODE 8320-01-P DEPARTMENT OF VETERANS AFFAIRS [OMB Control No. 2900-0270] Agency Information Collection (Financial Counseling Statement) Activities Under OMB Review AGENCY: Veterans Benefits Administration, Department of Veterans Affairs. ACTION: Notice. SUMMARY: In compliance with the Paperwork Reduction Act
(PRA)of 1995 (44 U.S.C. 3501-3521), this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget
(OMB)for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden; it includes the actual data collection instrument. DATES: Comments must be submitted on or before May 7, 2008. ADDRESSES: Submit written comments on the collection of information through *http://www.Regulations.gov* or to VA's OMB Desk Officer, OMB Human Resources and Housing Branch, New Executive Office Building, Room 10235, Washington, DC 20503
(202)395-7316. Please refer to “OMB Control No. 2900-0270” in any correspondence. FOR FURTHER INFORMATION CONTACT: Denise McLamb, Records Management Service (005R1B), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420,
(202)461-7485, FAX
(202)273-0443 or e-mail *denise.mclamb@mail.va.gov.* Please refer to “OMB Control No. 2900-0270.” SUPPLEMENTARY INFORMATION: *Title:* Financial Counseling Statement, VA Form 26-8844. *OMB Control Number:* 2900-0270. *Type of Review:* Extension of a currently approved collection. *Abstract:* VA personnel and veteran-borrower complete VA Form 26-8844 during financial counseling service to record net income, total expenditure, net worth, and to suggest areas where expenses can be reduced or income increased. Financial counseling service is provided to assist veteran-borrowers in retaining their homes during periods of temporary financial difficulty. The data collected is used to help borrowers who are seriously delinquent on guaranteed or insured VA home loans to budget and establish a repayment schedule for the loan. 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 **Federal Register** Notice with a 60-day comment period soliciting comments on this collection of information was published on January 22, 2008, at pages 3806-3807. *Affected Public:* Individuals or households. *Estimated Annual Burden:* 3,750 hours. *Estimated Average Burden per Respondent:* 45 minutes. *Frequency of Response:* On occasion. *Estimated Number of Respondents:* 5,000. Dated: March 28, 2008. By direction of the Secretary. Denise McLamb, Program Analyst, Records Management Service. [FR Doc. E8-7140 Filed 4-4-08; 8:45 am] BILLING CODE 8320-01-P DEPARTMENT OF VETERANS AFFAIRS [OMB Control No. 2900-0047] Agency Information Collection (Financial Statement) Activities Under OMB Review AGENCY: Veterans Benefits Administration, Department of Veterans Affairs. ACTION: Notice. SUMMARY: In compliance with the Paperwork Reduction Act
(PRA)of 1995 (44 U.S.C. 3501-3521), this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget
(OMB)for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden; it includes the actual data collection instrument. DATES: Comments must be submitted on or before May 7, 2008. ADDRESSES: Submit written comments on the collection of information through *http://www.Regulations.gov* or to VA's OMB Desk Officer, OMB Human Resources and Housing Branch, New Executive Office Building, Room 10235, Washington, DC 20503,
(202)395-7316. Please refer to “OMB Control No. 2900-0047” in any correspondence. FOR FURTHER INFORMATION CONTACT: Denise McLamb, Records Management Service (005R1B), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420,
(202)461-7485, FAX
(202)273-0443 or e-mail *denise.mclamb@mail.va.gov.* Please refer to “OMB Control No. 2900-0047.” SUPPLEMENTARY INFORMATION: *Title:* Financial Statement, VA Form 26-6807. *OMB Control Number:* 2900-0047. *Type of Review:* Extension of a currently approved collection. *Abstract:* The data collected on VA Form 26-6807 is used to determine release of liability and substitution of entitlement cases. VA may release original veteran obligors from personal liability arising from the original guaranty of their home loan, or the making of a direct loan, provided the purchasers/assumers meet the creditworthiness requirements. The data is also used to determine a borrower's financial condition in connection with efforts to reinstate a seriously defaulted guaranteed, insured, or portfolio loan, and to determine homeowners eligibility for aid under the Homeowners Assistance Program, which provides assistance by reducing losses incident to the disposal of homes when military installations at which the homeowners were employed or serving are ordered closed. 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 **Federal Register** Notice with a 60-day comment period soliciting comments on this collection of information was published on January 22, 2008, at page 3806. *Affected Public:* Individuals or households. *Estimated Annual Burden:* 6,000 hours. *Estimated Average Burden per Respondent:* 45 minutes. *Frequency of Response:* On occasion. *Estimated Number of Respondents:* 8,000. Dated: March 28, 2008. By direction of the Secretary. Denise McLamb, Program Analyst, Records Management Service. [FR Doc. E8-7141 Filed 4-4-08; 8:45 am] BILLING CODE 8320-01-P 73 67 Monday, April 7, 2008 Proposed Rules Part II Department of Energy Office of Energy Efficiency and Renewable Energy 10 CFR Part 431 Energy Conservation Program for Commercial and Industrial Equipment: Packaged Terminal Air Conditioner and Packaged Terminal Heat Pump Energy Conservation Standards; Proposed Rule DEPARTMENT OF ENERGY Office of Energy Efficiency and Renewable Energy 10 CFR Part 431 [Docket No. EERE-2007-BT-STD-0012] RIN 1904-AB44 Energy Conservation Program for Commercial and Industrial Equipment: Packaged Terminal Air Conditioner and Packaged Terminal Heat Pump Energy Conservation Standards AGENCY: Office of Energy Efficiency and Renewable Energy, Department of Energy. ACTION: Notice of proposed rulemaking and public meeting. SUMMARY: The Energy Policy and Conservation Act
(EPCA)prescribes energy conservation standards for various consumer products and commercial and industrial equipment, and requires the Department of Energy
(DOE)to administer an energy conservation program for these products. In this notice, DOE is proposing amended energy conservation standards for packaged terminal air conditioners (PTACs) and packaged terminal heat pumps (PTHPs) and is announcing a public meeting. DATES: DOE will hold a public meeting on May 1, 2008, from 9 a.m. to 4 p.m., in Washington, DC. DOE must receive requests to speak at the public meeting before 4 p.m., April 21, 2008. DOE must receive a signed original and an electronic copy of statements to be given at the public meeting before 4 p.m., April 21, 2008. DOE will accept comments, data, and information regarding the notice of proposed rulemaking
(NOPR)before and after the public meeting, but no later than June 6, 2008. See section VII, “Public Participation,” of this NOPR for details. ADDRESSES: The public meeting will be held at the U.S. Department of Energy, Forrestal Building, Room 1E-245, 1000 Independence Avenue, SW., Washington, DC. Please note that foreign nationals visiting DOE Headquarters are subject to advance security screening procedures, requiring a 30-day advance notice. If you are a foreign national and wish to participate in the public meeting, please inform DOE as soon as possible by contacting Ms. Brenda Edwards at
(202)586-2945 so that the necessary procedures can be completed. You may submit comments identified by docket number EERE-2007-BT-STD-0012 and/or Regulation Identifier Number
(RIN)1904-AB44 using any of the following methods: • *Federal eRulemaking Portal: http://www.regulations.gov* . Follow the instructions for submitting comments. • *E-mail: ptac_hp@ee.doe.gov* . Include EERE-2007-BT-STD-0012 and/or RIN 1904-AB44 in the subject line of your message. • *Postal Mail:* Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, Mailstop EE-2J, 1000 Independence Avenue, SW., Washington, DC 20585-0121. Telephone:
(202)586-2945. Please submit one signed paper original. • *Hand Delivery/Courier:* Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, 950 L'Enfant Plaza, 6th Floor, Washington, DC 20024. Please submit one signed original paper copy. *Instructions:* All submissions received must include the agency name and docket number or RIN for this rulemaking. For detailed instructions on submitting comments and additional information on the rulemaking process, see section VII, “Public Participation,” of this document. *Docket:* For access to the docket to read background documents or comments received, visit the U.S. Department of Energy, Forrestal Building, Resource Room of the Building Technologies Program, 950 L'Enfant Plaza, SW., 6th Floor, Washington, DC 20024,
(202)586-2945, between 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. Please call Ms. Brenda Edwards at the above telephone number for additional information regarding visiting the Resource Room. FOR FURTHER INFORMATION CONTACT: Wes Anderson, Project Manager, Energy Conservation Standards for Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps, U.S. Department of Energy, Energy Efficiency and Renewable Energy, Building Technologies Program, EE-2J, 1000 Independence Avenue, SW., Washington, DC 20585-0121,
(202)586-7335. E-mail: *Wes.Anderson@ee.doe.gov* . Francine Pinto, Esq., or Eric Stas, Esq., U.S. Department of Energy, Office of General Counsel, GC-72, 1000 Independence Avenue, SW., Washington, DC 20585-0121,
(202)586-9507. E-mail: *Francine.Pinto@hq.doe.gov* or *Eric.Stas@hq.doe.gov* . SUPPLEMENTARY INFORMATION: I. Summary of the Proposed Rule II. Introduction A. Overview B. Authority C. Background 1. Current Standards 2. History of Standards Rulemaking for Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps III. General Discussion A. Test Procedures B. Technological Feasibility 1. General 2. Maximum Technologically Feasible Levels C. Energy Savings 1. Determination of Savings 2. Significance of Savings D. Economic Justification 1. Economic Impact on Manufacturers and Commercial Customers 2. Life-Cycle Costs 3. Energy Savings 4. Lessening of Utility or Performance of Equipment 5. Impact of Any Lessening of Competition 6. Need of the Nation to Conserve Energy 7. Other Factors IV. Methodology and Analyses A. Market and Technology Assessment 1. Definitions of a PTAC and a PTHP 2. Equipment Classes 3. Market Assessment a. Trade Association b. Manufacturers c. Shipments 4. Technology Assessment B. Screening Analysis C. Engineering Analysis 1. Approach 2. Equipment Classes Analyzed 3. Cost Model 4. Baseline Equipment 5. Alternative Refrigerant Analysis a. R-22 b. R-410A c. R-410A Compressor Availability d. R-410A Manufacturing Production Cost 6. Cost-Efficiency Results 7. Mapping Energy Efficiency Ratio to Coefficient of Performance D. Markups to Determine Equipment Price E. Energy Use Characterization 1. Building Type 2. Simulation Approach F. Life-Cycle Cost and Payback Period Analyses 1. Approach 2. Life-Cycle Cost Inputs a. Equipment Prices b. Installation Costs c. Annual Energy Use d. Electricity Prices e. Maintenance Costs f. Repair Costs g. Equipment Lifetime h. Discount Rate 3. Payback Period G. National Impact Analysis—National Energy Savings and Net Present Value Analysis 1. Approach 2. Shipments Analysis 3. Base Case and Standards Case Forecasted Distribution of Efficiencies 4. National Energy Savings and Net Present Value H. Life-Cycle Cost Sub-Group Analysis I. Manufacturer Impact Analysis 1. Overview a. Phase 1, Industry Profile b. Phase 2, Industry Cash Flow Analysis c. Phase 3, Sub-Group Impact Analysis 2. Government Regulatory Impact Model Analysis 3. Manufacturer Interviews a. Issues b. Government Regulatory Impact Model Scenarios and Key Inputs i. Base Case Shipments Forecast ii. Standards Case Shipments Forecast iii. R-410A Base Case and Amended Energy Conservation Standards Markup Scenarios iv. Equipment and Capital Conversion Costs J. Employment Impact Analysis K. Utility Impact Analysis L. Environmental Analysis M. Discussion of Other Issues 1. Effective Date of the Proposed Amended Energy Conservation Standards 2. ASHRAE/IESNA Standard 90.1-1999 Labeling Requirement V. Analytical Results A. Trial Standard Levels B. Economic Justification and Energy Savings 1. Economic Impacts on Commercial Customers a. Life-Cycle Cost and Payback Period b. Life-Cycle Cost Sub-Group Analysis 2. Economic Impacts on Manufacturers a. Industry Cash Flow Analysis Results i. Standard Size PTACs and PTHPs ii. Non-Standard Size PTACs and PTHPs b. Cumulative Regulatory Burden c. Impacts on Employment d. Impacts on Manufacturing Capacity e. Impacts on Subgroups of Manufacturers 3. National Impact Analysis a. Amount and Significance of Energy Savings b. Net Present Value c. Impacts on Employment 4. Impact on Utility or Performance of Equipment 5. Impact of Any Lessening of Competition 6. Need of the Nation to Conserve Energy 7. Other Factors C. Proposed Standard 1. Overview 2. Conclusion VI. Procedural Issues and Regulatory Review A. Review Under Executive Order 12866 B. Review Under the Regulatory Flexibility Act/Initial Regulatory Flexibility Analysis 1. Reasons for the proposed rule 2. Objectives of, and legal basis for, the proposed rule 3. Description and estimated number of small entities regulated 4. Description and estimate of compliance requirements 5. Duplication, overlap, and conflict with other rules and regulations 6. Significant alternatives to the rule C. Review Under the Paperwork Reduction Act D. Review Under the National Environmental Policy Act E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act of 1999 I. Review Under Executive Order 12630 J. Review Under the Treasury and General Government Appropriations Act of 2001 K. Review Under Executive Order 13211 L. Review Under the Information Quality Bulletin for Peer Review VII. Public Participation A. Attendance at Public Meeting B. Procedure for Submitting Requests to Speak C. Conduct of Public Meeting D. Submission of Comments E. Issues on Which DOE Seeks Comment VIII. Approval of the Office of the Secretary I. Summary of the Proposed Rule The Energy Policy and Conservation Act (EPCA), as amended, provides the Department of Energy
(DOE)the authority to establish energy conservation standards for certain commercial equipment covered by the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) and the Illuminating Engineering Society of North America (IESNA) Standard 90.1, including packaged terminal air conditioners (PTACs) and packaged terminal heat pumps (PTHPs), the subject of this proceeding. (42 U.S.C. 6313(a)(6)(A)) Section 342(a)(6)(A) provides that DOE may prescribe a standard more stringent than the level in ASHRAE/IESNA Standard 90.1, after ASHRAE amends the energy conservation standards found in ASHRAE/IESNA Standard 90.1, if DOE can demonstrate “by clear and convincing evidence,” that such a more stringent standard “would result in significant additional conservation of energy and is technologically feasible and economically justified.” (42 U.S.C. 6313(a)(6)(A)(II) In accordance with these criteria discussed in this notice, DOE proposes to amend the energy conservation standards for PTACs and PTHPs by raising the efficiency levels for this equipment to the levels shown in Table I.1, above the efficiency levels specified by ASHRAE/IESNA Standard 90.1-1999. The proposed standards would apply to all covered PTACs and PTHPs manufactured on or after the date four years after publication of the final rule in the **Federal Register** . (42 U.S.C. 6313(a)(6)(D)) The proposed standards for PTACs and PTHPs represent an improvement in energy efficiency of 12 to 33 percent compared to the efficiency levels specified by ASHRAE/IESNA Standard 90.1-1999, depending on the equipment class. Table I.1.—Proposed Energy Conservation Standards for PTACs and PTHPs Equipment class Equipment Category Cooling capacity Proposed energy conservation standards* PTAC Standard Size** <7,000 Btu/h EER = 11.4 ≥7,000 Btu/h and ≤15,000 Btu/h EER = 13.0−(0.233 × Cap †† ) >15,000 Btu/h EER = 9.5 Non-Standard Size † <7,000 Btu/h EER = 10.2 ≥7,000 Btu/h and ≤15,000 Btu/h EER = 11.7−(0.213 × Cap †† ) >15,000 Btu/h EER = 8.5 PTHP Standard Size** <7,000 Btu/h EER = 11.8 COP = 3.3 ≥7,000 Btu/h and ≤15,000 Btu/h EER = 13.4−(0.233 × Cap †† ) COP = 3.7−(0.053 × Cap †† ) >15,000 Btu/h EER = 9.9 COP = 2.9 Non-Standard Size † <7,000 Btu/h EER = 10.8 COP = 3.0 ≥7,000 Btu/h and ≤15,000 Btu/h EER = 12.3−(0.213 × Cap †† ) COP = 3.1−(0.026 × Cap †† ) >15,000 Btu/h EER = 9.1 COP = 2.8 * For equipment rated according to the DOE test procedure (ARI Standard 310/380-2004), all energy efficiency ratio
(EER)values must be rated at 95°F outdoor dry-bulb temperature for air-cooled equipment and evaporatively-cooled equipment and at 85°F entering water temperature for water cooled equipment. All coefficient of performance
(COP)values must be rated at 47°F outdoor dry-bulb temperature for air-cooled equipment, and at 70°F entering water temperature for water-source heat pumps. ** Standard size refers to PTAC or PTHP equipment with wall sleeve dimensions greater than or equal to 16 inches high, or greater than or equal to 42 inches wide. † Non-standard size refers to PTAC or PTHP equipment with wall sleeve dimensions less than 16 inches high and less than 42 inches wide. †† Cap means cooling capacity in thousand British thermal units per hour (Btu/h) at 95°F outdoor dry-bulb temperature. DOE's analyses indicate that the proposed energy conservation standards, trial standard level
(TSL)4 for PTAC and PTHP equipment (See section V.A for a discussion of the TSLs), would save a significant amount of energy—an estimated 0.019 quadrillion British thermal units (Btu), or quads, of cumulative energy over 30 years (2012-2042). The economic impacts on the nation (i.e., national net present value) and the commercial customer (i.e., the average life-cycle cost
(LCC)savings) are positive. The national net present value
(NPV)of TSL 4 is $17 million using a 7 percent discount rate and $61 million using a 3 percent discount rate, cumulative from 2012 to 2062 in 2006$. This is the estimated total value of future savings minus the estimated increased equipment costs, discounted to 2008. The benefits and costs of the standard can also be expressed in terms of annualized 2006$ values over the forecast period 2012 through 2062. Using a 7 percent discount rate for the annualized cost analysis, the cost of the standard is $3.4 million per year in increased equipment and installation costs while the annualized benefits are $5.0 million per year in reduced equipment operating costs. Using a 3 percent discount rate, the annualized cost of the standard is $2.9 million per year while the annualized benefits of today's standard are $5.6 million per year. See section V.B.3 for additional details. Using a real corporate discount rate of 5 percent, DOE estimated the industry's NPV
(INPV)for manufacturers of PTACs and PTHPs to be $332 million in 2006$. The impact of the proposed standards on INPV of manufacturers of standard size PTACs and PTHPs is estimated to be between an 18 percent loss and a 2 percent loss (−$56 million to −$5 million). The non-standard size PTAC and PTHP industry is estimated to lose between 44 percent and 34 percent of its NPV (−$12 million to −$9 million) as a result of the proposed standards. Additionally, based on DOE's interviews with manufacturers of PTACs and PTHPs, DOE expects minimal plant closings or loss of employment as a result of the proposed standards. DOE's analyses indicate that the proposed standard, TSL 4, has energy savings and environmental benefits. All of the energy saved is electricity, and DOE expects the energy savings from the proposed standards to eliminate the need for approximately 81 megawatts
(MW)of generating capacity by 2042. These results reflect DOE's use of energy price projections from the U.S. Energy Information Administration (EIA)'s Annual Energy Outlook 2007 (AEO2007). 1 The proposed standard has environmental benefits leading to reductions in greenhouse gas emissions (i.e., cumulative (undiscounted) emission reductions) of 2.7 million tons
(Mt)of carbon dioxide
(CO2)from 2012 to 2042. Additionally, the standard would likely result in 0.16 thousand tons
(kt)of nitrogen oxides
(NOX)emissions reductions or generate a similar amount of NOX emissions allowance credits in areas where such emissions are subject to emissions caps. 1 DOE intends to use EIA's Annual Energy Outlook 2008 (AEO2008) to generate the results for the final rule. In addition, DOE will use 2007$ to reflect all dollar values in the final rule. In view of its analyses, DOE believes that the proposed standard, TSL 4, represents the maximum improvement in energy efficiency of PTAC and PTHP equipment that is technologically feasible and economically justified. DOE found that the benefits to the Nation (energy savings, customer average LCC savings, national NPV increase, and emission reductions) of the proposed standards outweigh the burdens (loss of INPV and LCC increases for some customers). When DOE considered higher energy efficiency levels as TSLs, it found that the burdens (loss of manufacturer NPV and LCC increase for some customers) of the higher efficiency levels outweighed the benefits (energy savings, LCC savings for some customers, national NPV increase, and emission reductions) of those higher levels. DOE recognizes that manufacturers of PTAC and PTHP equipment are also facing a mandated refrigerant phase-out on January 1, 2010. R-22, the only refrigerant currently used by PTACs and PTHPs, is an HCFC refrigerant and subject to the phase-out requirement. Phase-out of this refrigerant could have a significant impact on the manufacturing, performance, and cost of PTAC and PTHP equipment. DOE further discusses and estimated the impacts of the refrigerant phase-out on PTAC and PTHP equipment and on the manufacturers of this equipment in today's notice. II. Introduction A. Overview The proposed standard will save a significant amount of energy and, as a result of less energy being produced, result in a cleaner environment. In the 30-year period after the amended standard becomes effective, the nation will save 0.019 quads of primary energy. These energy savings also will result in significantly reduced emissions of air pollutants and greenhouse gases associated with electricity production, by avoiding the emission of 2.7 Mt of CO <sup>2</sup> and 0.16 kt of NO <sup>X</sup> . In addition, once the standard is implemented in 2012, DOE expects to eliminate the need for the construction of approximately 81 MW of new power plants by 2042. In total, DOE estimates the net present value to the Nation of this standard to be $17 million from 2012 to 2062 in 2006$. Finally, commercial customers will see benefits from the proposed standard. Although DOE expects the price of the high efficiency PTAC and PTHP equipment to be approximately 2 percent higher than the average price of this equipment today, the energy efficiency gains will result in lower energy costs. Based on this calculation, DOE estimates that the mean payback period for the high efficiency PTACs will be approximately 11.2 years and the mean payback period for the high efficiency PTHPs will be approximately 4.4 years. When these savings are summed over the lifetime of the high efficiency equipment, customers of PTACs will save $4, on average, and customers of PTHPs will save $35, on average, compared to their expenditures on today's baseline PTACs and PTHPs. B. Authority Part A-1 of Title III of EPCA addresses the energy efficiency of certain types of commercial and industrial equipment. 2 (42 U.S.C. 6311-6317) It contains specific mandatory energy conservation standards for commercial PTACs and PTHPs. (42 U.S.C. 6313(a)(3)) The Energy Policy Act of 1992 (EPACT), Public Law 102-486, also amended EPCA with respect to PTACs and PTHPs, providing definitions in section 122(a), test procedures in section 122(b), labeling provisions in section 122(c), and the authority to require information and reports from manufacturers in section 122(e). 3 DOE publishes today's notice of proposed rulemaking
(NOPR)pursuant to Part A-1. The PTAC and PTHP test procedures appear at Title 10 Code of Federal Regulations
(CFR)section 431.96. 2 This part was originally titled Part C., However, it was redesignated Part A-1 after Part B of Title III of EPCA was repealed by Public Law 109-58. 3 These requirements are codified in Part C of Title III of EPCA, now Part A-1, as amended, 42 U.S.C. 6311-6316, and Title 10 of the Code of Federal Regulations, Part 431 (10 CFR Part 431) at 10 CFR 431.92, 431.96, 431.97, and subparts U and V. EPCA established Federal energy conservation standards that generally correspond to the levels in ASHRAE/IESNA Standard 90.1, as in effect on October 24, 1992 (ASHRAE/IESNA Standard 90.1-1989), for each type of covered equipment listed in section 342(a) of EPCA, including PTACs and PTHPs. (42 U.S.C. 6313(a)) For each type of equipment, EPCA directed that if ASHRAE/IESNA Standard 90.1 is amended, DOE must adopt an amended standard at the new level in ASHRAE/IESNA Standard 90.1, unless clear and convincing evidence supports a determination that adoption of a more stringent level as a national standard would produce significant additional energy savings and be technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)(II). EPCA also provides that in deciding whether such a more stringent standard is economically justified, DOE must, after receiving comments on the proposed standard, determine whether the benefits of the standard exceed its burdens by considering, to the greatest extent practicable, the following seven factors:
(1)The economic impact of the standard on manufacturers and consumers of the products subject to the standard;
(2)The savings in operating costs throughout the estimated average life of the product in the type (or class) compared to any increase in the price of, or in the initial charges for, or maintenance expenses of the products which are likely to result from the imposition of the standard;
(3)The total projected amount of energy savings likely to result directly from the imposition of the standard;
(4)Any lessening of the utility or the performance of the products likely to result from the imposition of the standard;
(5)The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the imposition of the standard;
(6)The need for national energy conservation; and
(7)Other factors the Secretary considers relevant. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)-(ii)). Furthermore, EPCA contains what is commonly known as an “anti-backsliding” provision. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(1)) This provision mandates that the Secretary not prescribe any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of covered equipment. It is a fundamental principle in EPCA's statutory scheme that DOE cannot amend standards downward; that is, weaken standards, from those that have been published as a final rule. *Natural Resources Defense Council* v. *Abraham* , 355 F.3d 179 (2nd Cir. 2004). Additionally, the Secretary may not prescribe an amended standard if interested persons have established by a preponderance of the evidence that the amended standard is “likely to result in the unavailability in the United States of any product type (or class)” with performance characteristics, features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States at the time of the Secretary's finding. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(4)) Federal energy efficiency requirements for commercial equipment generally supersede State laws or regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6316(a) and (b)) DOE can, however, grant waivers of preemption for particular State laws or regulations, in accordance with the procedures and other provisions of section 327(d) of EPCA. (42 U.S.C. 6297(d) and 6316(b)(2)(D)) C. Background 1. Current Standards The current energy conservation standards in EPCA for PTACs and PTHPs apply to all equipment manufactured on or after January 1, 1994, (42 U.S.C. 6313(a)(3)) and correspond to the minimum efficiency levels in ASHRAE/IESNA Standard 90.1-1989. These levels consist of the EER for the cooling mode and the COP for the heating mode. The EER means “the ratio of the produced cooling effect of an air conditioner or heat pump to its net work input, expressed in Btu/watt-hour.” 10 CFR 431.92. The COP means “the ratio of produced cooling effect of an air conditioner or heat pump (or its produced heating effect, depending on model operation) to its net work input, when both the cooling (or heating) effect and the net work input are expressed in identical units of measurement.” 10 CFR 431.92. Table II.1 depicts the Federal energy conservation standards for PTACs and PTHPs found in 10 CFR 431.97. Table II.1.—Existing Federal Energy Conservation Standards for PTACs and PTHPs Equipment class Equipment Cooling capacity Existing federal energy conservation standards* PTAC < 7,000 Btu/h EER = 8.88 ≥ 7,000 Btu/h and ≤ 15,000 Btu/h EER = 10.0 − (0.16 × Cap**) > 15,000 Btu/h EER = 7.6 PTHP < 7,000 Btu/h EER = 8.88 COP = 2.7 ≥ 7,000 Btu/h and ≤ 15,000 Btu/h EER = 10.0−(0.16 × Cap**) COP = 1.3 + (0.16 × EER) > 15,000 Btu/h EER = 7.6 COP = 2.5 * For equipment rated according to the Air-Conditioning and Refrigeration Institute
(ARI)standards, all EER values must be rated at 95 °F outdoor dry-bulb temperature for air-cooled products and evaporatively-cooled products and at 85 °F entering water temperature for water cooled products. All COP values must be rated at 47 °F outdoor dry-bulb temperature for air-cooled products, and at 70 °F entering water temperature for water-source heat pumps. ** Cap means cooling capacity in kBtu/h at 95 °F outdoor dry-bulb temperature. 2. History of Standards Rulemaking for Packaged Terminal Air Conditioners and Packaged Terminal Heat Pumps On October 29, 1999, ASHRAE's Board of Directors approved ASHRAE/IESNA Standard 90.1-1999 (ASHRAE/IESNA Standard 90.1-1999), which addressed efficiency standard levels for 34 categories of commercial heating, ventilating and air-conditioning
(HVAC)and water heating equipment covered by EPCA, including PTACs and PTHPs. In amending the ASHRAE/IESNA Standard 90.1-1989 levels for PTACs and PTHPs, ASHRAE acknowledged the physical size constraints between the varying sleeve sizes on the market. Specifically, the wall sleeve dimensions of the PTAC and PTHP affect the energy efficiency of the equipment. Consequently, ASHRAE/IESNA Standard 90.1-1999 used the equipment classes defined by EPCA, which are distinguished by equipment (i.e., air conditioner or heat pump) and cooling capacity, and further separated these equipment classes by wall sleeve dimensions as further discussed in section IV.C.2. Table II.2 shows the efficiency levels in ASHRAE/IESNA Standard 90.1-1999 for PTACs and PTHPs. Table II.2.—ASHRAE/IESNA Standard 90.1-1999 Energy Efficiency Levels for PTACs and PTHPs Equipment class Equipment Category Cooling capacity ASHRAE/IESNA standard 90.1-1999 efficiency levels* PTAC Standard Size** < 7,000 Btu/h EER = 11.0 ≥ 7,000 Btu/h and ≤ 15,000 Btu/h EER = 12.5−(0.213 × Cap †† ) > 15,000 Btu/h EER = 9.3 Non-Standard Size † < 7,000 Btu/h EER = 9.4 ≥ 7,000 Btu/h and ≤ 15,000 Btu/h EER = 10.9−(0.213 × Cap †† ) > 15,000 Btu/h EER = 7.7 PTHP Standard Size** < 7,000 Btu/h EER = 10.8 COP = 3.0 ≥ 7,000 Btu/h and ≤ 15,000 Btu/h EER = 12.3−(0.213 × Cap †† ) COP = 3.2−(0.026 × Cap †† ) > 15,000 Btu/h EER = 9.1 COP = 2.8 Non-Standard Size † < 7,000 Btu/h EER = 9.3 COP = 2.7 ≥ 7,000 Btu/h and ≤ 15,000 Btu/h EER = 10.8−(0.213 × Cap †† ) COP = 2.9−(0.026 × Cap †† ) >15,000 Btu/h EER = 7.6 COP = 2.5 * For equipment rated according to ARI standards, all EER values must be rated at 95°F outdoor dry-bulb temperature for air-cooled products and evaporatively-cooled products and at 85°F entering water temperature for water cooled products. All COP values must be rated at 47°F outdoor dry-bulb temperature for air-cooled products, and at 70°F entering water temperature for water-source heat pumps. ** Standard size refers to PTAC or PTHP equipment with wall sleeve dimensions greater than or equal to 16 inches high, or greater than or equal to 42 inches wide. † Non-standard size refers to PTAC or PTHP equipment with wall sleeve dimensions less than 16 inches high and less than 42 inches wide. ASHRAE/IESNA Standard 90.1-1999 also includes a factory labeling requirement for non-standard size PTAC and PTHP equipment as follows: “MANUFACTURED FOR REPLACEMENT APPLICATIONS ONLY; NOT TO BE INSTALLED IN NEW CONSTRUCTION PROJECTS.” †† Cap means cooling capacity in kBtu/h at 95°F outdoor dry-bulb temperature. Following the publication of ASHRAE/IESNA Standard 90.1-1999, DOE performed a screening analysis that covered 24 of the 34 categories of equipment addressed in ASHRAE/IESNA Standard 90.1-1999, to determine if more stringent levels would result in significant additional energy conservation of energy, be technologically feasible and economically justified. For each of these types of equipment, the screening analysis examined a range of efficiency levels that included the levels specified in EPCA and ASHRAE/IESNA Standard 90.1-1999, as well as the maximum technologically feasible efficiency levels. The report “Screening Analysis for EPACT-Covered Commercial [Heating, Ventilating and Air-Conditioning] HVAC and Water-Heating Equipment” (commonly referred to as the 2000 Screening Analysis) 4 summarizes this analysis, and estimates the annual national energy consumption and the potential for energy savings that would result if the covered equipment were to meet efficiency levels higher than those specified in ASHRAE/IESNA Standard 90.1-1999. The baselines for the comparison were the corresponding levels specified in ASHRAE/IESNA Standard 90.1-1999 and EPCA. 4 U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy. “Energy Conservation Program for Consumer Products: Screening Analysis for EPACT-Covered Commercial HVAC and Water-Heating Equipment Screening Analysis.” April 2000. On January 12, 2001, DOE published a final rule for commercial HVAC and water heating equipment, which concluded that the 2000 Screening Analysis indicated at least a reasonable possibility of finding “clear and convincing evidence” that more stringent standards “would be technologically feasible and economically justified and would result in significant additional conservation of energy” for PTACs and PTHPs. 66 FR 3336, 3349. Under EPCA, these are the criteria for DOE adoption of standards more stringent than those in ASHRAE/IESNA Standard 90.1. (42 U.S.C. 6313(a)(6)(A)(ii)(II)) In addition, on March 13, 2006, DOE issued a Notice of Availability
(NOA)announcing the availability of a technical support document
(TSD)DOE was using in re-assessing whether to adopt, as uniform national standards, energy conservation standards contained in amendments to the ASHRAE/IESNA Standard 90.1-1999 for certain types of commercial equipment. 71 FR 12634. In the NOA, DOE revised the energy savings analysis from the 2000 Screening Analysis and summarized the assumptions and results in the NOA TSD. *Id.* DOE also stated that, even though the revised analysis reduced the potential energy savings that might result from more stringent standards than the efficiency levels specified in ASHRAE/IESNA Standard 90.1-1999 for PTACs and PTHPs, DOE believed that there was a possibility that clear and convincing evidence exists that more stringent standards are warranted. Therefore, DOE stated in the NOA that it was inclined to seek more stringent standard levels than the efficiency levels in ASHRAE/IESNA Standard 90.1-1999 for PTACs and PTHPs through a separate rulemaking. 71 FR 12639. Lastly, on March 7, 2007, DOE issued a final rule reaffirming DOE's inclination in the March 2006 NOA and stating DOE's decision to explore more stringent efficiency levels than in ASHRAE/IESNA Standard 90.1-1999 for PTACs and PTHPs through a separate rulemaking. 72 FR 10038, 10044. In January 2008, ASHRAE published ASHRAE/IESNA Standard 90.1-2007, which reaffirmed the definitions and efficiency levels for PTACs and PTHPs in ASHRAE/IESNA Standard 90.1-1999. Since the definitions and efficiency levels for PTACs and PTHPs are the same in the two versions of ASHRAE/IESNA Standard 90.1, DOE is only referencing the ASHRAE/IESNA Standard 90.1-1999 version throughout today's notice even though DOE reviewed both versions. III. General Discussion A. Test Procedures Section 343(a) of EPCA authorizes the Secretary to amend the test procedures for PTACs and PTHPs to the latest version generally accepted by industry or the rating procedures developed by the Air-Conditioning and Refrigeration Institute
(ARI)5 , as referenced by ASHRAE/IESNA Standard 90.1, unless the Secretary determines by clear and convincing evidence the latest version of the industry test procedure does not meet the requirements for test procedures described in paragraphs
(2)and
(3)of that section. (42 U.S.C. 6314(a)(4)) 5 The Air-Conditioning and Refrigeration Institute
(ARI)and the Gas Appliance Manufacturers Association
(GAMA)announced on December 17, 2007, that their members voted to approve the merger of the two trade associations to represent the interests of cooling, heating, and commercial refrigeration equipment manufacturers. The merged association became AHRI on Jan. 1, 2008. DOE published a final rule on October 21, 2004, that amends its test procedure for PTACs and PTHPs to incorporate by reference the most recent amendments to the industry test procedure for PTACs and PTHPs, ARI Standard 310/380-2004. 69 FR 61962 (October 21, 2004). DOE does not believe further modifications to this test procedure are necessary at this time because no further amendments have been made to the industry test procedure for PTACs and PTHPs. B. Technological Feasibility 1. General DOE considers design options technologically feasible if the industry is already using them or if research has progressed to development of a working prototype. DOE defines technological feasibility as: “Technologies incorporated in commercially available products or in working prototypes will be considered technologically feasible.” 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(i). In each energy conservation standards rulemaking, DOE conducts a screening analysis based on information gathered on all current technology options and prototype designs that could improve the efficiency of the equipment that is the subject of the rulemaking. In consultation with interested parties, DOE develops a list of design options for consideration in the rulemaking. All technologically feasible design options are candidates in this initial assessment. DOE eliminates from consideration, early in the process, any design option that is not practicable to manufacture, install, or service; that will have adverse impacts on equipment utility or availability; or for which there are adverse impacts on health or safety. 10 CFR 430, subpart C, appendix A, section 4(a)(4). In addition, for the types of equipment identified in section 342(a) of EPCA, 42 U.S.C. 6313(a), which includes PTACs and PTHPs, DOE eliminates from consideration any design option whose technological feasibility is not supported by clear and convincing evidence. The design options DOE considered as part of this rulemaking all have the potential to improve EER or COP. DOE considered any design option for PTACs and PTHPs to be technologically feasible if it is used in equipment the PTAC and PTHP industry distributes in commerce or is in a working prototype. 2. Maximum Technologically Feasible Levels In developing today's proposed standards, DOE has determined the maximum improvement in energy efficiency that is technologically feasible (“max tech”) for PTACs and PTHPs. EPCA requires that DOE adopt amended energy conservation standards for equipment covered by ASHRAE/IESNA Standard 90.1 that achieves the maximum improvement in energy efficiency that is technologically feasible and economically justified, or to identify the “max tech” efficiency levels. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A)) Therefore, in reviewing the amended ASHRAE/IESNA Standard 90.1 efficiency standards for PTACs and PTHPs, DOE identified the “max tech” levels as part of the engineering analysis (Chapter 5 of the TSD). At the present time, those levels are the levels set forth in TSL 7. For the representative cooling capacities within a given equipment class, PTACs and PTHPs utilizing R-22 with these efficiency levels already are being offered for sale and there is no equipment at higher efficiency levels that are currently available. Table III.1 lists the “max tech” levels that DOE identified for this rulemaking. Table III.1.—“Max Tech” Efficiency Levels (≥7,000 Btu/h and ≤ 15,000 Btu/h Equipment Classes) * Equipment type Equipment class Cooling capacity (Btu/h) “Max tech” efficiency level ** PTAC Standard Size † 9,000 12.0 EER 12,000 11.5 EER Non-standard Size †† 11,000 11.2 EER PTHP Standard Size † 9,000 12.0 EER 3.5 COP 12,000 11.7 EER 3.3 COP Non-standard Size †† 11,000 11.4 EER 2.9 COP * As discussed in section IV.C.2 of today's notice, DOE is presenting the results for two cooling capacities of standard size PTACs and PTHPs, 9,000 Btu/h and 12,000 Btu/h, which fall within the equipment classes of PTACs and PTHPs with cooling capacities ≥7,000 Btu/h and ≤15,000 Btu/h. ** For equipment rated according to the DOE test procedure, all EER values would be rated at 95°F outdoor dry-bulb temperature for air-cooled products and evaporatively-cooled products and at 85°F entering water temperature for water cooled products. All COP values must be rated at 47°F outdoor dry-bulb temperature for air-cooled products, and at 70°F entering water temperature for water-source heat pumps. † Standard size refers to PTAC or PTHP equipment with wall sleeve dimensions greater than or equal to 16 inches high, or greater than or equal to 42 inches wide. †† Non-standard size refers to PTAC or PTHP equipment with wall sleeve dimensions less than 16 inches high and less than 42 inches wide. C. Energy Savings 1. Determination of Savings DOE used the national energy savings
(NES)Microsoft Excel spreadsheet to estimate energy savings that could result from amended energy conservation standards for PTACs and PTHPs. The spreadsheet forecasts energy savings over the period of analysis for TSLs relative to the base case. DOE quantified the energy savings attributable to an energy conservation standard as the difference in energy consumption between the trial standards case and the base case. The base case represents the forecast of energy consumption in the absence of amended mandatory energy conservation standards beyond the levels in ASHRAE/IESNA Standard 90.1-1999. Section IV.G of this Notice and Chapter 11 of the TSD describes the NES spreadsheet model. The NES spreadsheet model calculates the energy savings in both site energy (in kilowatt-hours (kWh)) or source energy (in British thermal units (Btu)). Site energy is the energy directly consumed at building sites by PTACs and PTHPs. DOE expresses national energy savings in terms of source energy savings (i.e., savings in energy used to generate and transmit the energy consumed at the site). Chapter 11 of the TSD contains a table of factors used to convert site energy consumption in kWh to source energy consumption in Btu. DOE derived these conversion factors, which change over time, from EIA's AEO2007. 2. Significance of Savings Section 342(a)(6)(A)(ii)(II) of EPCA allows DOE to adopt a more stringent standard for PTACs and PTHPs than the amended level in ASHRAE/IESNA Standard 90.1, if clear and convincing evidence supports a determination that the more stringent standard would result in “significant” additional energy savings. (42 U.S.C. 6313(a)(6)(A)(ii)(II)) While EPCA does not define the term “significant,” a U.S. Court of Appeals, in *Natural Resources Defense Council* v. *Herrington* , 768 F.2d 1355, 1373 (D.C. Cir. 1985), indicated that Congress intended “significant” energy savings in section 325 of EPCA to mean savings that are not “genuinely trivial.” For all the TSLs considered in this rulemaking, DOE's estimates of energy savings provide clear and convincing evidence that the additional energy savings to be achieved from exceeding the corresponding efficiency level[s] in ASHRAE/IESNA Standard 90.1-1999 are nontrivial, and therefore DOE considers them “significant” as required by section 342 of EPCA. (42 U.S.C. 6313 (a)(6)(A)(ii)(II)) D. Economic Justification As noted earlier, EPCA provides seven factors for DOE to evaluate in determining whether an energy conservation standard for PTAC and PTHP is economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)-(ii)) The following discussion explains how DOE has addressed each factor in this rulemaking. 1. Economic Impact on Manufacturers and Commercial Customers DOE has established procedures, interpretations, and policies to guide DOE in considering new or amended appliance energy conservation standards. DOE investigates the impacts of amended energy conservation standards of PTACs and PTHPs on manufacturers through the manufacturer impact analysis
(MIA)(see Chapter 13 of the TSD). First, DOE uses an annual cash flow approach in determining the quantitative impacts of a new or amended energy conservation standard on manufacturers. This includes both a short- and long-term assessment based on the cost and capital requirements during the period between the announcement of a regulation and the time when the regulation comes into effect. Impacts analyzed include INPV, cash flows by year, changes in revenue and income, and other measures of impact, as appropriate. Second, DOE analyzes and reports the impacts on different types of manufacturers, paying particular attention to impacts on small manufacturers. Third, DOE considers the impact of standards on domestic manufacturer employment, manufacturing capacity, plant closures, and loss of capital investment. Finally, DOE takes into account cumulative impacts of different DOE regulations on manufacturers. For customers, DOE measures the economic impact as the change in installed cost and life-cycle operating costs, i.e., the LCC. Chapter 8 of the TSD presents the LCC of the equipment at each efficiency level examined. LCC, described below, is one of the seven factors EPCA requires DOE to consider in determining the economic justification for a new or amended standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(II)) 2. Life-Cycle Costs The LCC is the sum of the purchase price, including the installation and operating expense (including operating energy consumption, maintenance, and repair expenditures) discounted over the lifetime of the equipment. To determine the purchase price including installation, DOE estimated the markups that are added to the manufacturer selling price
(MSP)by distributors and contractors, and estimated installation costs from an analysis of PTAC and PTHP installation cost estimates for each of the equipment classes. DOE determined that maintenance cost is not dependent on PTAC and PTHP efficiency and that repair cost increases with MSP. In estimating operating energy costs, DOE used the average commercial electricity price in each State, using EIA data from 2006. 6 DOE modified the 2006 average commercial electricity prices to reflect the average electricity prices for each of four types of businesses examined in this analysis. The LCC savings analysis compares the LCCs of equipment designed to meet possible proposed energy conservation standards with the LCC of the equipment likely to be installed in the absence of amended energy conservation standards. The LCC analysis also defines a range of energy price forecasts for electricity used in the economic analyses. 6 The EIA data for 2006 is the latest data set published by EIA on commercial electricity prices by State. For each PTAC and PTHP equipment class, DOE calculated both the LCC and LCC savings at various efficiency levels. The LCC analysis estimated the LCC for representative equipment used in four types of buildings, two of which were hotels/motels and health care facilities that are representative of the segment of U.S. commercial building stock that uses PTACs and PTHPs. To account for uncertainty and variability in specific inputs, such as equipment lifetime and discount rate, DOE used a distribution of values with probabilities attached to each value. For each of the four types of commercial buildings, DOE sampled the value of these inputs from the probability distributions. As a result, the analysis produced a range of LCCs. A distinct advantage of this approach is that DOE can identify the percentage of customers achieving LCC savings or attaining certain payback values due to an increased energy conservation standard, in addition to identifying the average LCC savings or average payback period for that standard. DOE gives the LCC savings as a distribution, with a mean value and a range. DOE's analysis assumes that the customer purchases the PTAC and PTHP in 2012. Chapter 8 of the TSD contains the details of the LCC calculations. 3. Energy Savings While significant additional energy conservation is a separate statutory requirement for imposing a more stringent energy conservation standard than the level in ASHRAE/IESNA Standard 90.1, EPCA requires that DOE consider the total projected energy savings expected to result directly from the standard when determining the economic justification for a standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(III)) DOE used the NES spreadsheet results in its consideration of total projected savings. Section V.B.3 discusses the savings figures. 4. Lessening of Utility or Performance of Equipment In establishing equipment classes, and in evaluating design options and the impact of proposed standards, DOE has attempted to avoid proposing amended standards for PTACs and PTHPs that would lessen the utility or performance of such equipment. (See 42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(IV)) The design options considered in the engineering analysis of this rulemaking do not involve changes in equipment design or unusual installation requirements that could reduce the utility or performance of PTACs and PTHPs. In addition, DOE is also considering manufacturers' concerns that one-third of the non-standard size market subject to the more stringent standards under ASHRAE/IESNA Standard 90.1-1999 would not be able to meet the efficiency levels specified by ASHRAE/IESNA Standard 90.1-1999 for standard size equipment due to the physical size constraints of the wall sleeve as further discussed in section IV.A.2. 5. Impact of Any Lessening of Competition EPCA directs that DOE consider any lessening of competition that is likely to result from proposed standards. The Attorney General considers the impact, if any, of any lessening of competition likely to result from imposition of a proposed standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(V)) DOE has transmitted a copy of this NOPR to the Attorney General soliciting written views on this issue. 6. Need of the Nation To Conserve Energy The non-monetary benefits of the proposed standards are likely to be reflected in improvements to the security and reliability of the Nation's energy system-namely, reductions in the overall demand for energy will result in a reduction in the Nation's reliance on foreign sources of energy and increased reliability of the Nation's electricity system. DOE conducts a utility impact analysis to show the reduction in installed generation capacity. The proposed standards are also likely to result in improvements to the environment. In quantifying these improvements, DOE has defined a range of primary energy conversion factors and associated emission reductions based on the generation displaced by energy conservation standards. DOE reports the environmental effects from each TSL in the environmental assessment, Chapter 16 of the TSD. (42 U.S.C. 6313(a); 42 U.S.C. 6295(o)(2)(B)(i)(VI)) 7. Other Factors EPCA allows the Secretary of Energy, in determining whether a proposed standard is economically justified, to consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(VII)) DOE considered the impacts of setting different amended energy conservation standards for PTACs and PTHPs (i.e., the amended standard level for a given PTAC cooling capacity would be different from the amended standard level for a give PTHP with the same cooling capacity). DOE also considered the effects of potential equipment switching within the PTAC and PTHP market (e.g., switching from PTHPs to PTACs, which include a less-efficient heating system). In addition, DOE also considered the uncertainty associated with the market due to the impending refrigerant phase-out in 2010, including equipment availability, compressor availability, and the available efficiencies of R-410A PTACs and PTHPs. Lastly, DOE considered the uniqueness of the non-standard size of this equipment and any differential impacts that might result on this industry from amended energy conservation standards. The non-standard size market is further discussed in section IV and the impacts on the non-standard size industry from amended energy conservation standards are estimated in section V. IV. Methodology and Analyses This section addresses the analyses DOE has performed for this rulemaking. A separate sub-section addresses each analysis. DOE used a spreadsheet to calculate the LCC and payback periods
(PBPs)of potential amended energy conservation standards. Another spreadsheet was used to provide shipments forecasts and then calculates national energy savings and net present value impacts of potential amended energy conservation standards. DOE also assessed manufacturer impacts, largely through use of the Government Regulatory Impact Model (GRIM). DOE also estimated the impacts of proposed PTAC and PTHP energy conservation standards on electric utilities and the environment using a version of EIA's National Energy Modeling System (NEMS). The NEMS model simulates the U.S. energy economy and has been developed over several years by the EIA primarily for preparing the *AEO* . The NEMS produces a widely known baseline forecast for the United States through 2030 that is available in the public domain. The version of NEMS used for the proposed energy conservation standards analysis is called NEMS-BT , and is based on the AEO2007 version with minor modifications. The NEMS-BT offers a sophisticated picture of the effect of standards, since it can measure the interactions between the various energy supply and demand sectors and the economy as a whole. A. Market and Technology Assessment When beginning an energy conservation standards rulemaking, DOE develops information that provides an overall picture of the market for the equipment concerned, including the purpose of the equipment, the industry structure, and market characteristics. This activity includes both quantitative and qualitative assessments based primarily on publicly available information. The subjects addressed in the market and technology assessment for this rulemaking (see Chapter 3 of the TSD) include equipment classes, manufacturers, quantities, and types of equipment sold and offered for sale, retail market trends, and regulatory and non-regulatory programs. 1. Definitions of a PTAC and a PTHP Section 340 of EPCA defines a “packaged terminal air conditioner” as “a wall sleeve and a separate unencased combination of heating and cooling assemblies specified by the builder and intended for mounting through the wall. It includes a prime source of refrigeration, separable outdoor louvers, forced ventilation, and heating availability by builder's choice of hot water, steam, or electricity.” (42 U.S.C. 6311(10)(A)) EPCA defines a “packaged terminal heat pump” as “a packaged terminal air conditioner that utilizes reverse cycle refrigeration as its prime heat source and should have supplementary heat source available to builders with the choice of hot water, steam, or electric resistant heat.” (42 U.S.C. 6311(10)(B)) DOE codified these definitions in 10 CFR 431.92 in a final rule issued October 21, 2004. 69 FR 61970. 2. Equipment Classes When evaluating and establishing energy conservation standards, DOE generally divides covered equipment into equipment classes by the type of energy used or by capacity or other performance-related features that affect efficiency. Different energy conservation standards may apply to different equipment classes. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q)) PTACs and PTHPs can be divided into various equipment classes categorized by physical characteristics that affect equipment efficiency. Key characteristics affecting the energy efficiency of the PTAC or PTHP are whether the equipment has reverse cycle heating (i.e., air conditioner or heat pump), the cooling capacity, and the physical dimensions of the unit. The existing Federal energy conservation standards for PTACs and PTHPs correspond to the efficiency levels in ASHRAE/IESNA Standard 90.1-1989, as shown in Tables 1 and 2 of 10 CFR Part 431.97, dividing PTACs and PTHPs into six equipment classes. These equipment classes are differentiated by whether the equipment has supplemental heating or reverse cycle heating (i.e., air conditioner or heat pump) and by cooling capacity in Btu/h. When installed, PTACs and PTHPs are fitted into a wall sleeve. There is a wide variety of wall sleeve sizes found in different buildings. These wall sleeves are market driven (i.e., the applications or facilities where the PTACs or PTHPs are installed is what determines the “market standard” wall sleeve dimension) and require manufacturers to offer various PTACs and PTHPs that can fit into various wall sleeve dimensions. For new units, the industry has standardized the wall sleeve dimension for PTACs and PTHPs in buildings over the past 20 years to be 16 inches high by 42 inches wide. Therefore, units that have a wall sleeve dimension of 16 inches high by 42 inches wide are considered “standard size” equipment and all other units are considered “non-standard size” equipment. In contrast, the industry does not have a common wall sleeve dimension that is typical for all older existing facilities. These facilities, such as high-rise buildings found in large cities, typically use non-standard size equipment. In these installations, altering the existing wall sleeve opening to accommodate the more efficient, standard size equipment could include extensive structural changes to the building, could be very costly, and is therefore, rarely done. When ASHRAE amended the efficiency levels for PTACs and PTHPs in 1999, it acknowledged the physical size constraints among various sleeve sizes on the market. Consequently, ASHRAE/IESNA Standard 90.1-1999 used the equipment classes defined by EPCA, which are distinguished by whether the product has reverse cycle heating (i.e., air conditioner or heat pump) and cooling capacity in Btu/h, and further separated these equipment classes by wall sleeve dimensions. ASHRAE/IESNA Standard 90.1-1999 refers to wall sleeve dimensions in two categories: “New Construction” and “Replacement.” ASHRAE/IESNA Standard 90.1-1999 does not describe “New Construction,” but Table 6.21D, footnote b of ASHRAE/IESNA Standard 90.1-1999 states that “replacement” efficiencies apply only to units:
(1)“Factory labeled as follows: Manufactured for Replacement Applications Only; Not to be Installed in New Construction Projects”; and
(2)“with existing wall sleeves less than 16 inches high and less than 42 inches wide.” DOE understands that the “New Construction” category under ASHRAE/IESNA Standard 90.1-1999 is residual, and covers all other PTAC and PTHPs. Hence, this category consists of equipment with wall sleeve dimensions greater than or equal to 16 inches high and greater than or equal to 42 inches wide, or lacking the requisite label. In addition, when ASHRAE approved ASHRAE/IESNA Standard 90.1-1999, not only did it include delineations by wall sleeve dimensions, but it also associated these delineations with specified efficiency levels. The efficiency levels associated with non-standard equipment, or “Replacement” equipment, are significantly less stringent than those associated with standard size equipment, or “New Construction” equipment. ARI recently submitted a continuous maintenance proposal on PTAC and PTHP equipment to the ASHRAE/IESNA Standard 90.1 committee, which in part suggests alterations to the delineations within ASHRAE/IESNA Standard 90.1-1999 for standard and non-standard size equipment. 7 ARI believes ASHRAE misclassified approximately one-third of the non-standard size market when it adopted ASHRAE/IESNA Standard 90.1-1999. ARI believes the one third of the non-standard size market subject to the more stringent standards under ASHRAE/IESNA Standard 90.1-1999 are not capable of meeting the efficiency levels specified by ASHRAE/IESNA Standard 90.1-1999 for standard size equipment due to the physical size constraints of the wall sleeve. For example, a PTAC or PTHP unit with wall sleeve dimensions of 16.5 inches high and 27 inches wide would be classified as standard size equipment under ASHRAE's delineations and would be required to meet the higher efficiency levels specified by ASHRAE/IESNA Standard 90.1-1999. However, since this unit does not have the industry standard wall sleeve dimension of 16 inches high by 42 inches wide, ARI believes these units are solely non-standard units that are used in very old buildings and should therefore be considered as replacement units. Due to the space limitations typically associated with non-standard size PTACs and PTHPs, manufacturers have few options to increase energy efficiency. As noted above, many of the existing buildings cannot be retrofitted to accommodate larger wall sleeves associated with more efficient standard-size units. 7 Air-Conditioning and Refrigeration Institute. Continuous Maintenance Proposal on Package Terminal Equipment. October 5, 2007. In response to this apparent misclassification within ASHRAE/IESNA Standard 90.1-1999, ARI proposed a continuous maintenance proposal to ASHRAE that includes a new definition for non-standard size PTACs and PTHPs in place of the “replacement” delineation in ASHRAE/IESNA Standard 90.1-1999. The new definition of non-standard size PTACs and PTHPs reads: *“equipment with existing sleeves having an external wall opening of less than 16 in. high or less than 42 in. wide, and having a cross-sectional area less than 670 in* 2 .” Effectively, this new definition of non-standard equipment would allow approximately five percent of the total PTAC and PTHP market to qualify for the less stringent, non-standard efficiency levels. DOE recognizes ARI's concerns regarding non-standard size equipment and the possible misclassification under the delineations established by ASHRAE/IESNA Standard 90.1-1999. When ASHRAE approved ASHRAE/IESNA Standard 90.1-1999, not only did it include delineations by wall sleeve dimensions, but it also associated these delineations with specified efficiency levels. The efficiency levels associated with non-standard equipment, or “Replacement” equipment, are significantly less stringent than those associated with standard size equipment, or “New Construction” equipment. DOE reviewed the ARI shipment data and found approximately 15 percent of the total market (i.e., approximately 67,000 units shipped annually) are non-standard size equipment. Under ASHRAE/IESNA Standard 90.1-1999, approximately 5 percent of the total non-standard size equipment market would be required to meet the more stringent standards established for standard size equipment. If DOE were to adopt equipment classes consistent with those delineations in ASHRAE/IESNA Standard 90.1-1999, manufacturers could be forced to cease production of those equipment lines, which are potentially misclassified and could not meet the more stringent standards. Under the ARI continuous maintenance proposal to ASHRAE, all of the non-standard size equipment would be subject to the less stringent standards. Since ARI's proposed definitions would effectively reclassify some equipment under ASHRAE/IESNA 90.1-1999's delineations as non-standard size equipment, DOE believes ASHRAE must adopt ARI's continuous maintenance proposal before DOE can officially use this definition as the basis for DOE's standard. (42 U.S.C. 6313(a)(6)(A)(ii)) DOE understands that the ARI continuous maintenance proposal on PTACs and PTHPs has been approved by ASHRAE as Addendum t to ASHRAE/IESNA Standard 90.1-2007 and will be the subject of public review. If ASHRAE is able to adopt Addendum t to ASHRAE/IESNA Standard 90.1-2007 prior to September 2008, when DOE must issue a final rule on this rulemaking, DOE proposes to incorporate that version of the ASHRAE standard, including the modified definition in its final rule. At this time, DOE seeks stakeholder comment on Addendum t to ASHRAE/IESNA Standard 90.1-2007 (i.e., ARI's continuous maintenance proposal to ASHRAE). Specifically, Addendum t to ASHRAE/IESNA Standard 90.1-2007 incorporates the following revised definition for non-standard size equipment: “ *equipment with existing sleeves having an external wall opening of less than 16 in. high or less than 42 in. wide, and having a cross-sectional area less than 670 in* 2 .” If ASHRAE were to approve Addendum t to ASHRAE/IESNA Standard 90.1-2007 prior to September 2008, DOE proposes to adopt equipment classes in the final rule for PTACs and PTHPs as shown in Table IV.1. Table IV.1.—Equipment Classes for PTACs and PTHPs if ASHRAE Adopts Addendum T to ASHRE/IESNA Standard 90.1-2007 Equipment Class Equipment Category Cooling capacity PTAC Standard Size* < 7,000 Btu/h ≥ 7,000 Btu/h and ≤ 15,000 Btu/h > 15,000 Btu/h Non-Standard Size** < 7,000 Btu/h ≥ 7,000 Btu/h and ≤ 15,000 Btu/h > 15,000 Btu/h PTHP Standard Size* < 7,000 Btu/h ≥ 7,000 Btu/h and ≤ 15,000 Btu/h > 15,000 Btu/h Non-Standard Size** < 7,000 Btu/h ≥ 7,000 Btu/h and ≤ 15,000 Btu/h > 15,000 Btu/h * Standard size refers to PTAC or PTHP equipment with wall sleeve dimensions having an external wall opening of greater than or equal to 16 inches high or greater than or equal to 42 inches wide, and having a cross-sectional area greater than or equal to 670 inches squared. ** Non-standard size refers to PTAC or PTHP equipment with existing wall sleeve dimensions having an external wall opening of less than 16 inches high or less than 42 inches wide, and having a cross-sectional area less than 670 inches squared. DOE would add the definitions of standard size and non-standard size as defined in the footnotes of Table IV.1 under 10 CFR 431.2. This is identified as Issue 1 under “Issues to Which DOE Seeks Comment” in section VII.E of today's proposed rule. In the absence of final action by ASHRAE on the addendum, DOE would subdivide EPCA's existing classes for this equipment by wall sleeve dimensions, consistent with ASHRAE/IENSNA Standard 90.1-1999. Specifically, DOE would adopt equipment classes in the final rule for PTACs and PTHPs as shown in Table IV.2. Table IV.2.—Equipment Classes for PTACs and PTHPs if ASHRAE Does Not Adopt Addendum T to ASHRE/IESNA Standard 90.1-2007 Equipment class Equipment Category Cooling capacity PTAC Standard Size* < 7,000 Btu/h ≥ 7,000 Btu/h and ≤ 15,000 Btu/h > 15,000 Btu/h Non-Standard Size** < 7,000 Btu/h ≥ 7,000 Btu/h and ≤ 15,000 Btu/h > 15,000 Btu/h PTHP Standard Size* < 7,000 Btu/h ≥ 7,000 Btu/h and ≤ 15,000 Btu/h > 15,000 Btu/h Non-Standard Size** < 7,000 Btu/h ≥ 7,000 Btu/h and ≤ 15,000 Btu/h > 15,000 Btu/h * Standard size refers to PTAC or PTHP equipment with wall sleeve dimensions greater than or equal to 16 inches high, or greater than or equal to 42 inches wide. ** Non-standard size refers to PTAC or PTHP equipment with wall sleeve dimensions less than 16 inches high and less than 42 inches wide. DOE would add the definitions of standard size and non-standard size as defined in the footnotes of Table IV.2 under section 10 CFR 431.2. For the purposes of today's notice, DOE has based the proposed standards and the proposed definitions of non-standard and standard size PTACs and PTHPs as shown in the rule language of today's notice on the delineations in ASHRAE/IESNA Standard 90.1-1999. However as stated above, if ASHRAE adopts Addendum t to ASHRAE/IESNA Standard 90.1-2007 prior to September 2008, DOE proposes to incorporate the modified definitions from the Addendum in the final rule. (42 U.S.C. 6313(a)(6)(A)(ii)) If Addendum t is not available for DOE to include in the final rule, DOE's ability to do so at a later date will be constrained by the anti-backsliding provision. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(1)) 3. Market Assessment The subjects addressed in this market assessment for this rulemaking include trade associations, manufacturers, and the quantities and types of equipment sold and offered for sale. The information DOE gathered serves as resource material throughout the rulemaking. Chapter 3 of the TSD provides additional detail on the market assessment. a. Trade Association The Air-Conditioning, Heating, and Refrigeration Institute (AHRI), formerly and throughout this notice referred to as ARI, is the trade association representing PTAC and PTHP manufacturers. ARI and the Gas Appliance Manufacturers Association
(GAMA)announced on December 17, 2007, that their members voted to approve the merger of the two trade associations to represent the interests of cooling, heating, and commercial refrigeration equipment manufacturers. The merged association became AHRI on Jan. 1, 2008. ARI develops and publishes technical standards for residential and commercial equipment using rating criteria and procedures for measuring and certifying equipment performance. The DOE test procedure is an ARI standard. ARI has developed a certification program that the majority of the manufacturers in the PTAC and PTHP industry have used to certify their equipment. Manufacturers certify their own equipment by providing ARI with test data. Through the ARI certification program, ARI evaluates the test data and determines if the equipment conforms to ARI 310/380-2004. 8 Once ARI has determined that the equipment has met all the requirements under ARI 310/380-2004 standards and certification program, it is added to a directory of certified equipment. DOE used ARI's certification data, as summarized by the 2006 ARI directory of certified PTACs and PTHPs, in the engineering analysis. 8 DOE has incorporated by reference ARI Standard 310/380-2004 as the DOE test procedure at 10 CFR 431.97. b. Manufacturers DOE identified five large manufacturers of standard size PTAC and PTHP that hold approximately 90 percent of the market in terms of shipments. These five manufacturers include: General Electric
(GE)Company, Carrier Corporation, Amana, 9 Trane, 10 and McQuay International. Three major manufacturers including McQuay International, RetroAire, and Fedders Islandaire, Inc. share the non-standard size PTAC and PTHP market. All of the major manufacturers certify their equipment with ARI and are included in the ARI directory of certified products. 9 Amana is a trademark of Maytag Corporation and is used under license to Goodman Global, Inc. 10 Trane is a trademark and business of American Standard companies. The standard size PTAC and PTHP market differs from the non-standard size PTAC and PTHP industry in that many of the manufacturers are domestically owned with manufacturing facilities located outside of the United States. Currently there is only one major manufacturer of standard size PTAC and PTHP equipment manufacturing equipment in the United States. In addition, there has been a recent trend in the PTAC and PTHP standard size market for foreign owned companies to enter and sell equipment in the United States. Almost all of the manufacturers of non-standard size PTACs and PTHPs are domestically owned with manufacturing facilities located inside of the United States. The non-standard manufacturers tend to specialize in equipment solely for replacement applications. In addition, non-standard size manufacturers produce PTAC and PTHP equipment on a made-to-order basis. Unlike standard size manufacturers, there has not been an influx of foreign owned companies to sell non-standard size PTAC and PTHP equipment in the United States. In addition, DOE takes into consideration the impact of amended energy conservation standards on small businesses. At this time, DOE has identified several small business in both the standard size and non-standard size PTAC and PTHP industry that fall under the Small Business Administration (SBA)'s definition as having 750 employees or fewer. DOE studies the potential impacts on these small businesses in detail during the MIA (section IV.I of today's notice and Chapter 13 of the TSD). c. Shipments DOE reviewed data collected by the U.S. Census Bureau and ARI to evaluate the annual PTAC and PTHP equipment shipment trends and the value of these shipments. The historical shipments data shown in Tables IV.3 provide a picture of the market for PTAC and PTHP equipment. The historical shipments for PTACs and PTHPs are based on data provided by ARI for the years 1997-2005. Table IV.3.—2006 Total PTAC and PTHP Industry Estimated Shipment Data from ARI (Standard and Non-Standard) Year Total (thousands of units) 2005 484 2004 446 2003 399 2002 389 2001 388 2000 402 1999 453 1998 471 1997 434 Using currently available data, ARI estimated that 85 percent of the shipments for PTACs and PTHPs are standard size units, while 15 percent are non-standard size units. In addition, ARI identified the two cooling capacities for standard size PTACs and PTHPs with the highest number of shipments, which are 9,000 Btu/h and 12,000 Btu/h. 4. Technology Assessment In the technology assessment, DOE identified technologies and design options that could improve the efficiency of PTACs and PTHPs. This assessment provides the technical background and structure on which DOE bases its screening and engineering analyses. For PTACs and PTHPs, DOE based its list of technologically feasible design options on input from manufacturers, industry experts, component suppliers, trade publications, and technical papers. In surveying PTAC and PTHP technology options, DOE considered a wide assortment of equipment literature, information derived from the teardown analysis, information derived from the stakeholder interviews, and the previous DOE energy conservation standards rulemaking for air-conditioning rulemaking analyses. The following technology options were identified as potential means to improve PTAC and PTHP performance: • Scroll compressors • Variable-speed compressors • Higher efficiency compressors • Complex control boards • Higher efficiency fan motors • Microchannel heat exchangers • Increase heat exchanger area • Material treatment of heat exchanger • Recircuiting heat exchanger coils • Improved air flow and fan design • Heat pipes • Corrosion protection B. Screening Analysis The purpose of the screening analysis is to evaluate the technologies that improve equipment efficiency to determine which technologies to consider further and which to screen out. DOE consulted with a range of parties, including industry, technical experts, and others to develop a list of technologies for consideration. DOE then applied the following four screening criteria to determine which technologies are unsuitable for further consideration in the rulemaking (10 CFR Part 430, Subpart C, Appendix A at 4(a)(4) and 5(b)):
(1)Technological feasibility. Technologies incorporated in commercial equipment or in working prototypes will be considered technologically feasible.
(2)Practicability to manufacture, install, and service. If mass production of a technology in commercial equipment and reliable installation and servicing of the technology could be achieved on the scale necessary to serve the relevant market at the time of the effective date of the standard, then that technology will be considered practicable to manufacture, install, and service.
(3)Adverse impacts on equipment utility or equipment availability. If a technology is determined to have significant adverse impact on the utility of the equipment to significant subgroups of customers, or result in the unavailability of any covered equipment type with performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as equipment generally available in the United States at the time, it will not be considered further.
(4)Adverse impacts on health or safety. If it is determined that a technology will have significant adverse impacts on health or safety, it will not be considered further. DOE eliminated three technologies because they have no effect on, or do not increase EER or COP as measured by the test procedure since the test procedure measures steady-state energy efficiency. However, these features (i.e., variable speed compressors, complex control boards, and corrosion protection) can reduce the energy consumption of the PTAC or PTHP in actual applications, since they affect the cyclic operation of the equipment. They do not affect the measure of efficiency (i.e., EER and COP) since both are steady-state measures, not cyclic measures. DOE also eliminated six of the technologies it identified in the market and technology assessment. The specific technologies that were eliminated based on the four screening criteria outlined above are:
(1)Scroll compressors,
(2)higher efficiency fan motors,
(3)microchannel heat exchangers,
(4)material treatment of heat exchangers,
(5)improved airflow and fan design, and
(6)heat pipes. DOE screened out scroll compressors because they are not currently practical to manufacturer in the sizes necessary for use in PTACs and PTHPs. DOE screened out higher efficiency fan motors, improved airflow and fan design because further gains in PSC fan motor technology or changing the type of fan design would affect the size of the motor or fan. Because PTACs and PTHPs are space-constrained equipment, it is unlikely that manufacturers would be able to redesign the motor or fans that would be practical to manufacture, install, and service on a scale necessary to serve the relevant market at the time of the effective date of the standard. DOE screened out microchannel heat exchangers because they are still in the research stage for PTAC and PTHP equipment and would not be practicable to manufacture, install, or service on a scale necessary to serve the relevant market at the time of the effective date of the standard. DOE screened out material treatment of heat exchangers because it is currently patented and only used by one PTAC and PTHP manufacturer; thus, it would not be practical to manufacture on broad scale for the entire industry. Lastly, DOE screened out heat pipes because they are still in the research stage and their energy savings potential has not been fully established. Based on equipment literature, teardown analysis, and manufacturer interviews, DOE has identified higher efficiency compressors, 11 increasing the heat exchanger area, and recircuiting the heat exchanger coils as the most common ways by which manufacturers improve the energy efficiency of their PTACs and PTHPs as measured by the test procedure and that are not excluded by the four criteria in Appendix A to Subpart B of 10 CFR Part 430 listed above. See Chapter 3 of the TSD for additional detail on the technology assessment and technologies analyzed. 11 Currently, all PTAC and PTHP manufacturers incorporate rotary compressors into their equipment designs. DOE is referring to rotary compressors throughout today's notice unless specifically noted. There are PTACs and PTHPs utilizing R-22 in the market at various efficiency levels incorporating the three design options analyzed in today's notice. DOE believes this constitutes clear and convincing evidence that all of the efficiency levels discussed in today's notice is technologically feasible. However, DOE recognizes the uncertainty associated with the conversion to R-410A refrigerant and will take this into further consideration when weighing the benefits and burdens for each TSL. For more details on how DOE developed the technology options and the process for screening these options, refer to the market and technology assessment (see Chapter 3 of the TSD) and the screening analysis (see Chapter 4 of the TSD). C. Engineering Analysis The purpose of the engineering analysis is to establish the relationship between the cost and efficiency of PTACs and PTHPs, to show the manufacturing costs of achieving increased efficiency. For each equipment class, this analysis estimates the baseline manufacturer cost, as well as the incremental cost for equipment at efficiency levels above the baseline. In determining the performance and the costs of more efficient equipment, DOE considers technologies and design option combinations not eliminated in the screening analysis. The output of the engineering analysis is a set of cost-efficiency relationships or cost-efficiency curves that are used in further analyses (e.g., the LCC and PBP analyses and the national impact analysis (NIA)). DOE typically structures its engineering analysis around one of three methodologies:
(1)The design-option approach, which calculates the incremental costs of adding specific design options to a baseline model;
(2)the efficiency-level approach, which calculates the relative costs of achieving increases in energy efficiency levels, without regard to the particular design options used to achieve such increases; and
(3)the reverse-engineering or cost-assessment approach, which involves “bottom-up” manufacturing cost assessments for achieving various levels of increased efficiency, based on detailed data derived from equipment tear-downs, as to costs for parts, material, labor, shipping/packaging, and investment for models that operate at particular efficiency levels. 1. Approach For PTACs and PTHPs, each energy efficiency level is expressed as an EER, which is a function of cooling capacity. For each class analyzed, DOE used representative cooling capacities corresponding to the cooling capacities with the highest equipment shipments within a given equipment class. For the purposes of conducting the analyses, DOE believes that the results from the representative cooling capacities can be extrapolated to the entire range of cooling capacities for each equipment class. DOE's approach for extending the results to the omitted cooling capacities is discussed further in section V.1 of this NOPR. DOE seeks comment on this approach to extend the engineering analysis to cooling capacities for which complete analysis was not performed. This is identified as Issue 2 under “Issues to Which DOE Seeks Comment” in section VII.E of today's proposed rule. For this analysis, DOE used a design option approach, which involved consultation with outside experts, review of publicly available cost and performance information, and modeling of equipment cost. The design options DOE considered in the Engineering Analysis include higher efficiency compressors, increasing the heat exchanger area, and recircuiting the heat exchanger coils. The design option analysis provides transparency of assumptions and results and the ability to perform independent analyses for verification. The methodology used to perform design-option analysis and derive the cost-efficiency relationship is described in detail in Chapter 5 of the TSD. 2. Equipment Classes Analyzed For the engineering analysis, DOE reviewed all twelve equipment classes covered by this rulemaking. Since the wall sleeve dimensions effect the energy efficiency of the equipment, DOE examined standard size and non-standard size PTACs and PTHPs separately. In addition, since the energy efficiency equations for PTACs and PTHPs established by EPCA and ASHRAE/IESNA Standard 90.1-1999 are a function of the equipment's cooling capacity, DOE examined specific cooling capacities for standard size and non-standard size PTACs and PTHPs, which are referred to as representative cooling capacities. See Table 1 and Table 2 of 10 CFR Part 431.97 and ASHRAE/IESNA Standard 90.1-1999 for the energy efficiency equations. DOE reviewed the shipments data provided by ARI for the 2000 Screening Analysis and today's rulemaking, 12 and found the majority of shipments have a cooling capacity within the 7,000 Btu/h to 15,000 Btu/h range. See Chapter 3 of the TSD for more details on the shipments data. Consequently, DOE choose to examine these four equipment classes further. 12 ARI provided DOE shipments data from 2000 for the 2000 Screening Analysis and shipments data from 2006 for today's rulemaking. For standard size PTAC and PTHP equipment classes, DOE identified two representative cooling capacities. The representative cooling capacities for standard size PTACs and PTHPs are 9,000 Btu/h and 12,000 Btu/h. DOE found these two representative cooling capacities to have the highest number of shipments based on data in the 2006 ARI Directory, the ACEEE database of equipment, as well as the shipment information provided to DOE found in the 2000 Screening Analysis. For non-standard size equipment, DOE could not identify representative cooling capacities or wall sleeve dimensions. The non-standard size PTAC and PTHP market also has a greater variety of shipments based on the customers that use them and specialized applications. DOE used 11,000 Btu/h as the representative cooling capacity for non-standard size equipment because it is the middle of the cooling capacity range. Therefore, for the engineering analysis and subsequent analyses, DOE analyzed non-standard size PTACs and PTHPs with 11,000 Btu/h cooling capacity. See Chapter 5 of the TSD for additional details. DOE developed the cost-efficiency curves based on these representative cooling capacities and wall sleeve-size units. Table IV.4 exhibits the representative cooling capacities within each equipment class analyzed in the engineering analysis. Table IV.4.—Representative Cooling Capacities for the Engineering Analysis Equipment type Equipment class Representative cooling capacity (Btu/h) PTAC Standard Size* 9,000 12,000 Non-Standard Size** 11,000 PTHP Standard Size* 9,000 12,000 Non-Standard Size** 11,000 * Standard size refers to PTAC or PTHP equipment with wall sleeve dimensions greater than or equal to 16 inches high, or greater than or equal to 42 inches wide. ** Non-standard size refers to PTAC or PTHP equipment with wall sleeve dimensions less than 16 inches high and less than 42 inches wide. DOE's selection of representative cooling capacities for further examination is based on shipment information provided by ARI. For the PTAC and PTHP equipment classes with a cooling capacity greater than or equal to 7,000 Btu/h and less than or equal to 15,000 Btu/h, the energy efficiency equation characterizes the relationship between the EER of the equipment and cooling capacity (i.e., EER is a function of the cooling capacity of the equipment). Therefore, for these equipment classes, DOE explicitly analyzed the two cooling capacities with the greatest number of shipments, which allows DOE to investigate the slope of the energy efficiency capacity relationship. For all cooling capacities less than 7,000 Btu/h and all cooling capacities greater than 15,000 Btu/h, the EER is calculated based on the energy efficiency equation for 7,000 Btu/h or 15,000 Btu/h, respectively. For PTACs and PTHPs, DOE is proposing to equate the amended energy conservation standards for equipment with a cooling capacity less than 7,000 Btu/h with the amended energy conservation standards for equipment with a cooling capacity equal to 7,000 Btu/h. Similarly, for PTACs and PTHPs, DOE is proposing to equate the amended energy conservation standards for equipment with a cooling capacity greater than 15,000 Btu/h to the amended energy conservation standards for equipment with a cooling capacity equal to 15,000 Btu/h. This is the same method established in the Energy Policy Act of 1992 as shown by the existing Federal minimum energy conservation standards and maintained by ASHRAE Standard 90.1-1999 for calculating the EER and COP of equipment with cooling capacities less than 7,000 Btu/h and greater than 15,000 Btu/h. More details explaining how DOE developed the proposed energy efficiency equations based on the analysis results for the representative cooling capacities are found in section V.A of today's notice. 3. Cost Model DOE developed a manufacturing cost model to estimate the manufacturing production cost
(MPC)of PTACs and PTHPs. The manufacturing cost model is a spreadsheet model, which details the structured bill of materials to estimate the MPCs of a PTAC or PTHP based on all the manufacturing and fabrication resources required to manufacture the equipment. Developing the cost model involved disassembling various PTACs and PTHPs, analyzing the materials and manufacturing processes, and developing component costing flexible enough to be applicable to all equipment classes. In addition to disassembling various PTACs and PTHPs, manufacturers provided DOE supplemental component data for various PTAC and PTHP equipment. The manufacturing cost model used the component specifications supplied by manufacturers, the teardown data, component cost sources, and engineering interviews to estimate the MPCs. DOE reported the MPCs in aggregated form to maintain confidentiality of sensitive component data. DOE obtained input from stakeholders on the MPC estimates and assumptions to confirm accuracy. DOE used the cost model for all of the representative cooling capacities within the PTAC and PTHP equipment classes. Chapter 5 of the TSD provides details and assumptions of the cost model. DOE applied a manufacturer markup to the MPC estimates to arrive at the MSP. This is the price at which the manufacturer can recover both production and non-production costs 13 and earns a profit. DOE developed a market-share-weighted average industry markup by examining the major PTAC and PTHP manufacturers' gross margin information from annual reports and Securities and Exchange Commission
(SEC)10-K reports. The manufacturers DOE examined represent approximately 75 percent of the PTAC and PTHP industry. Each of these companies is a subsidiary of a more diversified parent company that manufactures equipment other than PTACs and PTHPs. Because the SEC 10-K reports do not provide gross margin information at the subsidiary level, the estimated markups represent the average markups that the parent company applies over its entire range of offerings. 13 Full production costs include direct labor, direct material, and direct overhead. Non-production costs include selling, general and administrative, research and development, and interest. See Chapter 5 of the TSD for more details. DOE evaluated manufacturer markups from 2002 to 2006, except for one manufacturer, whose markup was evaluated from 1998 to 2002 because data from the latter years was not publicly available. The manufacturer markup is calculated as 100/(100 − average gross margin), where gross margin is calculated as revenue − cost of goods sold (COGS). DOE used Internal Revenue Service industry statistics to validate the SEC 10-K and annual report information. DOE estimated the average manufacturer markup within the industry as 1.29. See Chapter 5 of the TSD for additional details. 4. Baseline Equipment As mentioned above, the engineering analysis estimates the incremental costs for equipment with efficiency levels above the baseline in each equipment class. For the purpose of the engineering analysis, DOE used the engineering baseline EER as the starting point to build the cost efficiency curves. DOE usually uses the Federal minimum energy conservation standards to represent the baseline model's energy efficiency in the engineering analysis. However, all of the PTAC and PTHP equipment offered for sale, according to the ARI directory, exceed the efficiency levels specified by the existing Federal minimum energy conservation standards. Consequently, DOE identified the lowest efficiency equipment currently on the market and is utilizing it as the engineering baseline. DOE established engineering baseline specifications for each of the equipment classes modeled in the engineering analysis by reviewing available manufacturer data, selecting several representative units from available manufacturer data, and then aggregating the physical characteristics of the selected units. These specifications include wall sleeve dimensions, number of components, and other equipment features that affect energy consumption, as well as a base cost (the cost of a piece of equipment not including the major efficiency-related components such as compressors, fan motors, and heat exchanger coils). By excluding the equipment designs, which can be attributable to specific manufacturers, DOE created an engineering baseline that is representative of each equipment class with average characteristics, including dimensions, components, and other equipment features that are necessary to calculate the MPC of each unit within each equipment class. The cost model was used to develop the MPC for each equipment class. Specifications of the baseline equipment are provided in Chapter 5 of the TSD. In estimating the economic impacts of standards, DOE used the efficiency levels in ASHRAE/IESNA Standard 90.1-1999 as the baseline efficiencies in order to estimate the impacts of standards more stringent than ASHRAE/IESNA Standard 90.1-1999. ASHRAE/IESNA Standard 90.1-1999 is the least stringent energy efficiency level DOE could adopt since EPCA directs that if ASHRAE/IESNA Standard 90.1 is amended, DOE must adopt an amended standard at the new level in ASHRAE/IESNA Standard 90.1 unless clear and convincing evidence supports a determination that adoption of a more stringent level as a national standard would produce significantly more energy savings and be technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)(II)) Consequently, the minimum energy conservation standard levels DOE could adopt in this rulemaking proceeding would be the efficiency levels contained in ASHRAE/IESNA Standard 90.1-1999. Thus, DOE is evaluating in this rulemaking whether efficiency levels above those contained in ASHRAE/IESNA Standard 90.1-1999 are technologically feasible and economically justified. 14 14 DOE's estimates of potential energy savings from an amended energy conservation standard are further discussed in section V.3. 5. Alternative Refrigerant Analysis a. R-22 In 1987, the United Nations Environment Programme
(UNEP)adopted the Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol), which regulates the phase-out of ozone-depleting substances through a collaborative and international effort. In 1988, the United States ratified the Montreal Protocol and thus committed to the phase-out. 15 15 The 1987 Montreal Protocol on Substances that Deplete the Ozone Layer (as agreed in 1987). United Nations Environment Programme. *http://ozone.unep.org/Ratification_status/montreal_protocol.shtml* . In 1990, the Clean Air Act was amended to include Title VI, “Stratospheric Ozone Protection,” to implement the Montreal Protocol. (42 U.S.C. 7671, *et seq.* ) Title VI mandated the phase-out by 2020 of hydrochlorofluorocarbon
(HCFC)refrigerants for use in new air-conditioning systems. (42 U.S.C. 7671d) Title VI, however, also authorized the Environmental Protection Agency
(EPA)to accelerate this date if certain criteria were met, (42 U.S.C. 7671e) and EPA subsequently adopted a rule on December 10, 1993 to require the phase-out of HCFC refrigerants for use in new equipment by 2010. 58 FR 65018. R-22, the only refrigerant currently used by PTACs and PTHPs, is an HCFC refrigerant and subject to the phase-out requirement. Phase-out of this refrigerant could have a significant impact on the manufacturing, performance, and cost of PTAC and PTHP equipment. b. R-410A As part of the engineering analysis, DOE performed an alternative refrigerant analysis to characterize the performance implications on PTACs and PTHPs. This analysis included researching technical journal reports, discussions with industry experts and manufacturers, and developing an analysis that used the methodology DOE used in performing the engineering analysis as to equipment using the R-22 refrigerant. ARI, in comment on the March 13, 2006, Notice of Document Availability (71 FR 12634) commented that R-410A is the most likely replacement refrigerant for R-22 in standard and non-standard size PTACs and PTHPs. (Docket No. EE-RM/STD-03-100, EE-RM/STD-03-200, EE-RM/STD-03-300, ARI, No. 26 at pp. 2-3) 16 Every manufacturer interview confirmed that the industry is planning to substitute R-410A for R-22 in PTACs and PTHPs. Industry representatives expressed a preference for R-410A due to its performance similarities to R-22 and experience with other HVAC equipment that use R-410A. Therefore, DOE performed its alternative refrigerant analysis based on the use of R-410A. See Chapter 5 of the TSD for additional details. 16 “ARI, No. 26 at pp 2-3” refers
(1)to a statement that was submitted by the Air-Conditioning and Refrigeration Institute and is recorded in the Resource Room of the Building Technologies Program in the docket under “Energy Efficiency Program for Commercial and Industrial Equipment: Efficiency Standards for Commercial Heating, Air-Conditioning and Water Heating Equipment,” Docket Number EE-RM-STD-03-100, EE-RM- STD-03-200, and EE-RM-STD-03-300, as comment number 26; and
(2)a passage that appears on pages 2 and 3 of that statement. DOE identified the “max-tech” efficiency levels as described in section III.B.2 of today's proposed rule. These “max-tech” efficiency levels are based on currently available R-22 PTACs and PTHPs for a given representative cooling capacity within a given equipment class. In order to analyze the impact of using R-410A in PTACs and PTHPs, DOE considered the impact of using R-410A on PTAC components, the engineering analysis of past rulemakings that addressed the refrigerant phase-out, and markets in which a similar transition has occurred. First, DOE expects that the phase-out of R-22 and the subsequent adoption of R-410A refrigerants in PTACs and PTHPs will require the redesign of the sealed systems found inside the PTAC and PTHP units. The sealed system consists of the indoor and outdoor heat exchangers, the compressor, refrigerant flow-control devices, and any piping that connects these components through which refrigerant flows during unit operation. Since R-22 refrigerants have different operating characteristics than R-410A, the sealed system in a PTAC or PTHP unit using R-410A will have to be redesigned to optimize the unit for operation with R-410A. Specifically, equipment using R-410A operates at higher system pressure requiring stronger sealed system walls and the use of different oils (i.e., R-410 equipment will use POE, while R-22 equipment uses mineral). In addition, R-410A compressors must also be designed with thicker and stronger compressor shells and components to withstand 50 percent to 60 percent more pressure than R-22 compressors. 17 17 Emerson Climate Technologies. R410A Questions. *http://www.emersonclimate.com/faq_copeland.htm#R410A* (Last accessed August 2, 2007.) We will need to save the portion of this web site that we rely upon for the administrative record. The loss in compressor efficiency can be overcome with optimized heat exchanger design to a limited extent. As discussed in the market and technology assessment (Chapter 3 of the TSD), different heat exchanger redesigns not currently associated with compressors could increase overall system performance. According to manufacturers, some redesigns, such as adding coils, re-circuiting, and increasing the frontal heat exchanger surface area, are applicable to PTACs and PTHPs regardless of the refrigerant used. However, DOE does not have sufficient information to predict with precision the performance benefits of heat exchanger redesigns. Initially, DOE expects any such redesigns to result in efficiency improvements insufficient to offset the efficiency reductions resulting from the switch from R-22 to R-410A. Thus, DOE expects the overall system efficiency of R-410A PTAC and PTHP equipment will be lower than if that equipment used R-22, as predicted by manufacturer testing, ARI's research, 18 National Institute of Standards and Technology studies, 19 and as observed in response to the transition from R-22 to R-410A in the residential air conditioning market. Optimizing the heat exchanger and HVAC circuits to compensate could be costly, depending on whether a heat exchanger manufacturer needs to change the fin tooling, expansion, and assembly systems. 18 Air-Conditioning and Refrigeration Institute. *Response to ASHRAE 90.1 Continuous Maintenance Proposal on Package Terminal Equipment.* May 18, 2006. 19 Payne, W., Domanski, P. *A Comparison of an R22 and an R410A Air Conditioner Operating at High Ambient Temperatures.* National Institute of Standards and Technology Building Environment Division: Thermal Machinery Group. *http://www.fire.nist.gov/bfrlpubs/build02/PDF/b02186.pdf.* (Last accessed August 2, 2007.) Therefore, in this rulemaking, DOE is using an overall lower system performance for PTAC and PTHP equipment with R-410A. For standard size PTACs and PTHPs with 9,000 Btu/h cooling capacity, DOE calculated an overall system performance degradation consistent with ARI estimates of 6.3 percent. 20 For standard size PTACs and PTHPs with 12,000 Btu/h cooling capacity, DOE calculated overall system performance degradation consistent with ARI estimates of 7.6 percent. 21 For non-standard size PTACs and PTHPs of all cooling capacities, DOE calculated overall system performance degradation of 6.8 percent. See Chapter 5 of the TSD for additional details. 20 Air-Conditioning and Refrigeration Institute. *Response to ASHRAE 90.1 Continuous Maintenance Proposal on Package Terminal Equipment.* May 18, 2006. 21 *Id.* DOE has no evidence that the incremental efficiency gains from the design options used in the R-22 case would have a different effect on the system performance of R-410A equipment. Therefore, DOE assumed the design options for the R-22 analysis previously discussed are applicable to the alternative refrigerant analysis. DOE also assumed that the corresponding incremental EER improvement for each design option in the R-22 analysis would be the same in the alternative refrigerant analysis. See Chapter 5 of the TSD for additional details. Similar issues existed within the residential, central air conditioning industry. Systems utilizing R-410A have been available in the residential air-conditioning market for several years, and DOE believes the impact of the refrigerant transition to R-410A for PTACs and PTHPs and on the manufacturers and purchasers of central air conditioners and heat pumps will be similar. The residential air-conditioning market is a much larger market than the PTAC and PTHP market, and thus offers greater incentives for compressor manufacturers to make the necessary investments to produce more efficient R-410A compressors. Initially, DOE found that the R-410A compressors available for use in residential, central air conditioning equipment were less efficient than their R-22 counterparts they were replacing. However, DOE has observed that residential, central air conditioning manufacturers were able to develop technologies and redesign their equipment, so that the R-22 phase-out has had little effect on system efficiency when the equipment eventually came onto the market. At a minimum, DOE believes manufacturers of PTAC and PTHP equipment will be able to manufacture equipment with R-410A at the efficiency levels specified by ASHRAE/IESNA Standard 90.1-1999. Since PTAC and PTHP equipment utilizing R-22 exists at efficiency levels well above ASHRAE/IESNA Standard 90.1-1999, DOE believes the manufacturers will be able to produce equipment utilizing R-410A at least at the efficiency levels specified by ASHRAE/IESNA Standard 90.1-1999, even after the estimated performance degradations from the engineering analysis are applied. DOE has preliminarily concluded that the R-410A compressors available for use in PTAC and PTHP equipment could be less efficient than their R-22 counterparts could at the time the takes effect, based upon manufacturer feedback during interviews and by examining other air-conditioning markets where similar refrigerant transitions have taken place. However, DOE is hopeful that over time component manufacturers and PTAC and PTHP manufacturers will be able to overcome the degradation in system efficiency caused by the switch to R-410A refrigerant. Therefore, DOE is continuing to analyze, the higher, R-22-based, energy efficiency levels identified in section III.B.2 as the “max-tech” efficiency levels. DOE will give particular attention to the PTAC and PTHP efficiency levels that cannot be met with current technologies and practices with R-410A in weighing the benefits and burdens of the various TSLs. Based on information received in public comments concerning this NOPR, DOE may consider and adopt in the final rule other potential standard levels that take into account the impact of R-410A. c. R-410A Compressor Availability The availability of R-410A compressors in a wide range of efficiencies is uncertain. Several compressor manufacturers make R-22, PTAC and PTHP compressors of different capacities and efficiencies for standard and non-standard equipment. When the market transitions to R-410A, these manufacturers may only offer one line of compressors for PTACs and PTHPs. In engineering interviews, compressor manufacturers said they do not know if R-410A compressors will have equivalent performance to R-22 compressors by the 2010 date. They also stated in interviews that they expect to offer R-410A compressors at only one efficiency level in the initial stages of the phase-out, which could further reduce compressor options for PTAC and PTHP manufacturers. d. R-410A Manufacturing Production Cost To derive the baseline MPCs for the R-410A PTACs and PTHPs, DOE made additional cost determinations (e.g., R-410 refrigerant pricing, R-410A compressor pricing, etc.) and incorporated them in the same cost model used for the R-22 engineering analysis. See Chapter 5 of the TSD for additional details about component prices using R-410A. DOE assumed a 25 percent increase in heat exchanger tubing thickness to account for the higher pressures of R-410A refrigerant based on technical journals and manufacturer interviews. DOE switched the working refrigerant in the cost model to R-410A and used the current R-410A refrigerant price based upon cost estimates from refrigerant suppliers and engineering interviews with manufacturers. During engineering interviews, several manufacturers of PTAC and PTHP equipment and several component manufacturers stated that compressor prices would increase anywhere between 10 percent and 20 percent from current R-22 compressor prices. To incorporate manufacturers' comments, DOE assumed that compressor costs would increase by 15 percent, which is consistent with the feedback DOE received during the engineering interviews. Using the above assumptions, DOE recalculated baseline equipment and design option MPCs to establish the cost-efficiency relationship for R-410A equipment. The physical differences between PTACs and PTHPs are mainly in the reversing valve and other minor components. The results from the engineering and teardown analysis showed that the sum of the MPCs for reversing valves and other minor components are constant across the cost-efficiency relationship for the R-22 case. Therefore, DOE initially concluded that the cost-efficiency relationship (i.e., cost-efficiency curves) of PTACs is the same as the cost-efficiency relationship of PTHPs, minus the MPCs for the reversing valve and other minor components at various cooling capacities. In performing the alternative refrigerant analysis, DOE found no evidence that the cost-efficiency relationships for PTACs and PTHPs would be any different for equipment using R-410A. Therefore, DOE assumed that incremental cumulative MPCs for PTACs and PTHPs of the same equipment class would be the same as in the R-22 case (i.e., that both PTACs and PTHPs have the same incremental cost-efficiency curves in the R-410A case). To be consistent, DOE used the same cost model as in the R-22 analysis to estimate MPCs of equipment at various efficiency levels in the R-410A analysis. Chapter 5 of the TSD provides additional details on the alternative refrigerant analysis. 6. Cost-Efficiency Results The results of the engineering analysis are reported as a set of cost-efficiency data (or “curves”) in the form of MPC (in dollars) versus EER, which form the basis for other analyses in the NOPR. DOE created cost-efficiency curves for the six representative cooling capacities within the four equipment classes of PTACs and PTHPs, as discussed in section IV.C.2, above. DOE used the R-410A cost-efficiency curves for all subsequent analyses in the NOPR. See Chapter 5 of the TSD for additional detail on the engineering analysis and complete cost-efficiency results. DOE also conducted a sensitivity analysis on material prices to examine the effect of spikes in metal prices that the industry has experienced over the past few years. The sensitivity analysis used the annual average 2006 prices for various metals used in the manufacturing of PTACs and PTHPs. Chapter 5 of the TSD shows the results of the sensitivity analysis. 7. Mapping Energy Efficiency Ratio to Coefficient of Performance DOE used the analyses detailed in the sections above to determine the relationship between cost and cooling efficiency
(EER)for PTACs and PTHPs. DOE also performed an analysis to determine the heating efficiency
(COP)that corresponds to the cooling efficiency
(EER)analyzed. DOE reviewed the 2006 ARI directory and the PTHP units listed. There were 675 units listed, which DOE separated into two groups based on wall sleeve size (standard size and non-standard size). DOE then selected all of the standard size 9,000 and 12,000 Btu/h cooling capacity units, and all of the non-standard units. Within each group, DOE next eliminated repetitive and discontinued units and then constructed a listing of the units by EER and ranked them by COP. DOE graphed each listing (EER versus COP) and calculated the minimum, maximum, and average COPs. Table IV.5 shows the average EER and COP pairings for PTHPs. DOE seeks comment on the average EER and COP pairings for PTHPs as shown in Table IV.5, which DOE has identified as Issue 3 under “Issues to Which DOE Seeks Comment” in section VII.E of this NOPR. Additional details detailing how DOE arrived at the average EER and COP pairings for PTHPs is shown in Chapter 5 of the TSD. Table IV.5.—Average EER and COP Pairings for PTHPs Equipment class Efficiency level Standard Size PTHP—9,000 Btu/h Cooling Capacity EER = 10.9 COP = 3.1 EER = 11.1 COP = 3.2 EER = 11.3 COP = 3.3 EER = 11.5 COP = 3.3 EER = 12 COP = 3.5 Standard Size PTHP—12,000 Btu/h Cooling Capacity EER = 10.2 COP = 3.0 EER = 10.4 COP = 3.1 EER = 10.6 COP = 3.1 EER = 10.8 COP = 3.1 EER = 11.7 COP = 3.3 Non-Standard Size PTHP—11,000 Btu/h Cooling Capacity EER = 9.4 COP = 2.8 EER = 9.7 COP = 2.8 EER = 10.0 COP = 2.9 EER = 10.7 COP = 2.9 EER = 11.4 COP = 2.9 D. Markups To Determine Equipment Price DOE understands that the price of PTAC or PTHP equipment depends on the distribution channel the customer uses to purchase the equipment. Typical distribution channels include manufacturers' national accounts, wholesalers, mechanical contractors, and/or general contractors. The customer price of this equipment is not generally known. Therefore, DOE developed supply chain markups in the form of multipliers that represent increases above MSP and include distribution costs. DOE applied these markups (or multipliers) to the MSPs it developed from the engineering analysis, and then added sales taxes and installation costs, to arrive at the final installed equipment prices for baseline and higher efficiency equipment. See Chapter 6 of the TSD for additional details on markups. As shown in Table IV.6, DOE identified four distribution channels for PTACs and PTHPs to describe how the equipment passes from the manufacturer to the customer. Table IV.6.—Distribution Channels for PTAC and PTHP Equipment Channel 1 Channel 2 Channel 3 Channel 4 Manufacturer (through national accounts) Manufacturer Manufacturer Manufacturer. Wholesaler Wholesaler Mechanical Contractor Wholesaler. General Contractor. Customer Customer Customer Customer. Using Ducker Worldwide data, 22 DOE estimated percentages, for both the new construction and replacement markets, of the total sales in each market through each of the four distribution channels, as shown in Table IV.7. The entire market of PTAC and PTHP equipment consists of standard size equipment (85 percent of shipment volume) and non-standard size equipment (15 percent of shipment volume). Of the standard size equipment, 80 percent are sold for the replacement market and 20 percent are for the new construction market. Non-standard size equipment is only used in the replacement market. This results in approximately 17 percent of PTAC and PTHP equipment that are purchased to be installed in new construction, while the remaining 83 percent is assumed to replace existing PTAC and PTHP equipment. 22 Ducker Worldwide, 2001. 2000 U.S. Market for Residential and Specialty Air Conditioning: Packaged Terminal Air Conditioning. HVAC0002. Final Report, March 2001. Ducker Industrial Standards, 6905 Telegraph Road, Suite 300, Bloomfield Hills, Michigan 48301. Table IV.7.—Percentage of PTAC and PTHP Market Shares Passing Through Each Distribution Channel Channel 1 Channel 2 Channel 3 Channel 4 Replacement Market 15 25 60 0 New Construction Market 30 0 38 32 For each of the steps in the distribution channels presented above, DOE estimated a baseline markup and an incremental markup. DOE defined a baseline markup as a multiplier that converts the MSP of equipment with baseline efficiency to the customer purchase price for the equipment at the same baseline efficiency level. An incremental markup is defined as the multiplier to convert the incremental increase in MSP of higher efficiency equipment to the customer purchase price for the same equipment. Both baseline and incremental markups are only dependent on the particular distribution channel and are independent of the efficiency levels of the PTACs and PTHPs. DOE developed the markups for each step of the distribution channels based on available financial data. DOE based the wholesaler and mechanical contractor markups on the Heating, Airconditioning & Refrigeration Distributors International (HARDI) 2005 Profit Planning Report, Air Conditioning Contractors of America (ACCA), and the 2002 U.S. Census Bureau financial data for the plumbing, heating, and air conditioning industry. 23 DOE derived the general contractor markups from U.S. Census Bureau financial data for the commercial and institutional building construction sector. DOE estimated average markup for sales through national accounts to be one-half of those for the wholesaler to customer distribution channel. DOE determined this markup for national accounts on an assumption that the resulting national account equipment price must fall somewhere between the MSP (i.e., a markup of 1.0) and the customer price under a typical chain of distribution (i.e., a markup of wholesaler, mechanical contractor, or general contractor). 23 The 2002 U.S. Census Bureau financial data for the plumbing, heating, and air conditioning industry is the latest version data set and was issued in December 2004. The overall markup is the product of all the markups (baseline or incremental markups) for the different steps within a distribution channel plus sales tax. Sales taxes were calculated based on State-by-State sales tax data reported by the Sales Tax Clearinghouse. Because both contractor costs and sales tax vary by State, DOE developed distributions of markups within each distribution channel as a function of State and business type (e.g., large chain hotel/motel, independent hotel, health care facility, or office). Because the State-by-State distribution of PTAC and PTHP units varies by business type (e.g., large chain hotels/motels may be more prevalent relative to independent hotels in one part of the country than in another), the National level distribution of the markups varies among business types. Additional detail on markups can be found in Chapter 6 of the TSD. E. Energy Use Characterization The building energy use characterization analysis was used to assess the energy savings potential of PTAC and PTHP equipment at different efficiency levels. This analysis accomplishes this by estimating the energy use of PTACs and PTHPs at specified energy efficiency levels through energy use simulations for key commercial building types, across a range of climate zones. The energy simulations yielded hourly estimates of the building energy consumption, including lighting, plug, and air-conditioning and heating equipment. The annual energy consumption of PTACs and PTHPs are used in subsequent analyses including the LCC, PBP, and NES. In determining the reduction in energy consumption of PTAC and PTHP equipment due to increased efficiency, DOE did not take into account a rebound effect. The rebound effect occurs when a piece of equipment, when it is made more efficient, would be used more intensively, so the expected energy savings from the efficiency improvement do not fully materialize. Since the user of the equipment, e.g., the customer in a hotel/motel room, does not pay the utility bill, the customer's usage will be unaffected by increasing the efficiency. Therefore, DOE has no basis for concluding that a rebound effect would occur and has not taken the rebound effect into affect in the energy use characterization. DOE seeks comment on the rebound effect for the PTAC and PTHP customer and DOE's assumption that the rebound effect is not applicable to this industry. DOE identified this as Issue 4 under “Issues on Which DOE Seeks Comment” in section VII.E of this NOPR. See Chapter 7 of the TSD for additional details. 1. Building Type PTAC and PTHP units generally are used in hotel/motel rooms, health care facilities (e.g., assisted living homes, nursing homes etc.), small offices, or any application that requires individual zone heating and cooling. According to the Ducker Worldwide analysis, PTAC and PTHP units are primarily used in hotels/motels with less than 125 rooms and less than 3 stories, each. Therefore, DOE selected this type of hotel/motel building as the representative commercial building in order to assess the energy use of PTAC and PTHP units. While DOE realizes that PTACs and PTHPs are found in other building types, DOE believes that, based on engineering judgment and consultation with industry experts, the cooling and heating loads of an individual room served by a single PTAC or PTHP unit are independent of the building type in which the room is situated. 2. Simulation Approach DOE used a whole-building hourly simulation tool, DOE-2.1E, to estimate the energy use of PTACs and PTHPs in the representative hotel/motel building for various efficiency levels and equipment classes at various climate locations within the United States. The DOE-2.1E program has a built-in PTAC/PTHP module in its HVAC system components. DOE used the EIA 2003 Commercial Building Energy Consumption Survey (2003 CBECS) as the primary source of data, supplemented by other data sources, to develop the representative building size and other building characteristics for this analysis (i.e., aspect ratio, building construction type, envelope characteristics, internal loads and schedules, mechanical systems and equipment etc.). DOE modeled hotel/motel guest rooms facing in all orientations by rotating a symmetrical rectangular floor plan prototype building 90 degrees to capture the orientation-driven changes in annual energy use of the PTAC and PTHP. The Ducker Worldwide analysis and other available data estimated that PTHPs represent approximately 45 percent of the total market for packaged terminal equipment. Therefore, DOE estimated the annual energy use per unit using a PTHP as well as a PTAC in each climate location. DOE assumed that generally the building would use a PTAC or PTHP unit. DOE calculated the weighted-average annual energy use for each PTAC and PTHP equipment class in each State through the population weighting of the representative climate location(s) within the state. DOE further aggregated the energy use at the State level to national average energy use using the 2000 Census population data, published by the U. S. Census Bureau. DOE estimated the annual energy use for each equipment class at the baseline efficiency level (i.e., the efficiency level specified by ASHRAE/IESNA Standard 90.1-1999) plus five higher efficiency levels. As is to be expected, annual energy use of PTAC and PTHP units decreases as the efficiency level increases from the baseline efficiency level to the highest efficiency level analyzed. Additional details on the energy use characterization analysis can be found in Chapter 7 of the TSD. F. Life-Cycle Cost and Payback Period Analyses DOE conducted the LCC and PBP analyses to estimate the economic impacts of potential standards on individual customers of PTACs and PTHPs. DOE analyzed these impacts for PTACs and PTHPs, first, by calculating the change in customers' LCCs likely to result from higher efficiency levels as compared with the baseline efficiency levels. The LCC calculation considers total installed cost (MSP, sales taxes, distribution chain markups, and installation cost), operating expenses (energy, repair, and maintenance costs), equipment lifetime, and discount rate. DOE calculated the LCC for all customers as if each would purchase a new PTAC or PTHP unit in the year the standard takes effect. A standard becomes effective on the date on and after which the equipment manufactured must meet or exceed the standard, which is September 30, 2012 for this rulemaking. To compute LCCs, DOE discounted future operating costs to the time of purchase and summed them over the lifetime of the equipment. Second, DOE analyzed the effect of changes in installed costs and operating expenses by calculating the PBP of potential standards relative to baseline efficiency levels. The PBP estimates the amount of time it would take the customer to recover, through lower operating costs, the increment that represents the increase in purchase expense of more energy efficient equipment. The PBP is that change in purchase price divided by the change in annual operating cost that results from the standard. DOE expresses this period in years. Similar to the LCC, the PBP is based on the total installed cost and the operating expenses. However, unlike the LCC, only the first year's operating expenses are considered in the calculation of the PBP. Because the PBP does not account for changes in operating expense over time or the time value of money, it is also referred to as a simple PBP. DOE conducted the LCC and PBP analyses using a spreadsheet model developed in Microsoft Excel. When combined with Crystal Ball (a commercially available software program), the LCC and PBP model generates a Monte Carlo simulation to perform the analyses by incorporating uncertainty and variability considerations in certain of the key parameters as discussed below. The results of DOE's LCC and PBP analyses are summarized in section V.B.1.a below and described in detail in TSD Chapter 8. 1. Approach Recognizing that each business that uses PTAC and PTHP equipment is unique, DOE analyzed variability and uncertainty by performing the LCC and PBP calculations for four types of businesses, each of which tends to have different costs of financing because of the nature of the business. The first type of business is a “large chain” hotel or motel, which, DOE believes, has access to a wide range of financing options and thus a relative low financing costs. The second type is an “independent” hotel or motel, which is not affiliated with a national chain, which has fewer financing options and thus a relative high financing costs. A third type of business is called “health care” and includes nursing homes, as well as assisted living and long-term care facilities, which, similar to the large chain hotel, has a relative low financing costs. The fourth type is called “office” and applies to small office buildings that are occupied by offices of non-hospital medical professionals such as physicians and dentists which, DOE believes, has the fewest financing options, and as a result, the highest costs. DOE derived the financing costs based on data from the Damodaran Online site. 24 24 Damodaran Online. Leonard N. Stern School of Business, New York University: *http://www.stern.nyu.edu/adamodar/New_Home_Page/data.html* . January 2006. The LCC analysis used the estimated annual energy use for each PTAC or PTHP unit as described in section IV.E, energy use characterization. Energy use of PTACs and PTHPs is sensitive to climate, so it varies by State within the United States. Aside from energy use, other important factors influencing the LCC and PBP analyses include energy prices, installation costs, equipment distribution markups, and sales tax. At the National level, the LCC spreadsheets explicitly modeled both the uncertainty and the variability in the model's inputs, using probability distributions based on the shipment of PTAC and PTHP equipment to different States. As mentioned above, DOE generated LCC and PBP results as probability distributions using a simulation based on Monte Carlo analysis methods, in which certain key inputs to the analysis consist of probability distributions rather than single-point values. Therefore, the outcomes of the Monte Carlo analysis can also be expressed as probability distributions. As a result, the Monte Carlo analysis produces a range of LCC and PBP results. A distinct advantage of this type of approach is that DOE can identify the percentage of customers achieving LCC savings or attaining certain PBP values due to an increased efficiency level, in addition to the average LCC savings or average PBP for that efficiency level. 2. Life-Cycle Cost Inputs For each efficiency level analyzed, the LCC analysis requires input data for the total installed cost of the equipment, its operating cost, and the discount rate. Table IV.8 summarizes the inputs and key assumptions used to calculate the customer economic impacts of all energy efficiency levels analyzed in this rulemaking. A more detailed discussion of the inputs follows. Table IV.8.—Summary of Inputs and Key Assumptions Used in the LCC and PBP Analyses Inputs Description Affecting Installed Costs Equipment Price Derived by multiplying MSP (from the engineering analysis) by wholesaler markups and contractor markups plus sales tax (from markups analysis). Used the probability distribution for the different markups to describe their variability. Installation Cost Includes installation labor, installer overhead, and any miscellaneous materials and parts, derived from RS Means CostWorks 2007. Affecting Operating Costs Annual Energy Use Derived from whole-building hourly energy use simulation for PTACs or PTHPs in a representative hotel/motel building in various climate locations (from energy use characterization analysis). Used annual electricity use per unit. Used the probability distribution to account for which State a unit will be shipped to, which in turn affects the annual energy use. Electricity Price Calculated average commercial electricity price in each State, as determined from EIA data for 2006. Used the AEO2007 forecasts to estimate the future electricity prices. Used the probability distribution for the electricity price. Maintenance Cost Annual maintenance cost did not vary as a function of efficiency. Repair Cost Estimated the annualized repair cost for baseline efficiency PTAC and PTHP equipment as $15, based on costs of extended warranty contracts for PTACs and PTHPs and further discussed in Chapter 8 of the TSD. Assumed that repair costs would vary in direct proportion with the MSP at higher efficiency levels because it generally costs more to replace components that are more efficient. Affecting Present Value of Annual Operating Cost Savings Equipment Lifetime Used the probability distribution of lifetimes, with mean lifetime for each of four equipment classes assumed to be 10 years based on literature reviews and consultation with industry experts. Discount Rate Mean real discount rates ranging from 5.7 percent for owners of health care facilities to 8.2 percent for independent hotel/motel owners. Used the probability distribution for the discount rate. Date Standards Become Effective September 30, 2012 (four years after the publication of the final rule). Analyzed Efficiency Levels Analyzed Efficiency Levels Baseline efficiency levels (ASHRAE/IESNA Standard 90.1-1999) and five higher efficiency levels for six equipment classes (DOE also considered levels that were combinations of efficiency levels for PTACs and PTHPs). a. Equipment Prices The price of a PTAC or PTHP reflects the application of distribution channel markups and the addition of sales tax to the MSP. As described in section IV.C above, DOE determined manufacturing costs for a set of six cooling capacities of equipment representing all equipment classes. To derive the manufacturing costs for other sizes of PTACs and PTHPs, DOE scaled the costs from these six cooling capacities. For the LCC and PBP analyses and subsequent analyses in today's rulemaking, DOE used the manufacturing costs as developed in the Engineering Analysis for PTAC and PTHP equipment utilizing R-410A. Each baseline MSP is the price charged by manufacturers to either a wholesaler/distributor or very large customer for equipment meeting a baseline efficiency. Each standard-level MSP increase is the change in MSP associated with producing equipment at an efficiency level above the baseline. DOE developed MSP, which increases as a function of efficiency level for each of the six representative capacities. Refer to Chapter 5 of the TSD for details. The markup is the percentage increase in price as the PTAC and PTHP equipment passes through the distribution channel. As discussed earlier, distribution chain markups are based on one of four distribution channels, as well as whether the equipment is being purchased for the new construction market or to replace existing equipment. Probability distributions were used for the different distribution channel markups to describe their variability. DOE developed markups for both the standard size and non-standard size PTAC and PTHP equipment as explained in section IV.D above. b. Installation Costs DOE derived installation costs for PTACs and PTHPs from data provided in *RS Means CostWorks 2007* (RS Means). 25 RS Means provides estimates on the person-hours required to install PTAC and PTHP equipment and the labor rates associated with the type of crew required to install the equipment. Specifically, RS Means provides person-hour and labor rate data for the installation of “Unitary Air Conditioning Equipment,” which includes PTAC and PTHP equipment. Labor rates vary significantly from region to region of the country and the RS Means data provide the necessary information to capture this regional variability. RS Means provides cost indices that reflect the labor rates for 295 cities in the United States. Several cities in all 50 States and the District of Columbia are identified in the RS Means data. DOE incorporated these cost indices into the analysis to capture variation in installation cost, depending on the location of the customer. DOE calculated the installation cost by multiplying the number of person-hours by the applicable labor rate. DOE assumed the installation costs are fixed for each equipment class and independent of the efficiency of the equipment. 25 R.S. Means Company, Inc. 2007. RS Means CostWorks 2007. Kingston, Massachusetts. c. Annual Energy Use DOE estimated the electricity consumed by the PTAC and PTHP equipment based on the energy use characterization as described previously in section IV.E. DOE used a whole-building hourly simulation tool to estimate the energy use in a representative hotel/motel building for different efficiency levels and equipment classes at various climate locations within the United States. DOE aggregated the average annual energy use per unit at the State level by applying a population-weighting factor for each examined climate location within a State. Details of the annual energy use calculations can be found in TSD Chapter 7. d. Electricity Prices The applicable electricity prices are needed to convert the electric energy savings into energy cost savings. Because of the wide variation in electricity consumption patterns, wholesale costs, and retail rates across the country, it is important to consider regional differences in electricity prices. In order to simplify the NOPR analysis, DOE decided not to develop marginal electricity prices from the tariff-based electricity price model in this rulemaking. Instead, DOE used average effective commercial electricity prices at the State level from EIA data for 2006. This approach captured a wide range of commercial electricity prices across the Untied States. Furthermore, DOE recognized that different kinds of businesses typically use electricity in different amounts at different times of the day, week, and year, and therefore face different effective prices. To make this adjustment, DOE used EIA's 2003 CBECS data set to identify the average prices paid by the four kinds of businesses in this analysis and compared them with the average prices paid by all commercial customers. 26 The ratios of prices paid by the four types of businesses to the national average commercial prices seen in the 2003 CBECS were used as multipliers to adjust the average commercial 2006 price data from EIA. 26 EIA's 2003 CBECS is the most recent version of the data set. DOE weighted the prices paid by each business in each State by the estimated sales of PTACs and PTHPs to each business type to obtain a weighted-average national electricity price. The State/business type weights reflect the probabilities that a given PTAC or PTHP unit shipped will be operated with a given electricity price. To account for this variability, DOE used a probability distribution for not only which State the equipment is shipped to, but also to determine which business type would purchase the equipment and therefore, what electricity price they would pay. The effective prices (2006$) range from approximately 5.5 cents per kWh to approximately 23.2 cents per kWh. The development and use of State-average electricity prices by business type are described in more detail in Chapter 8 of the TSD. The electricity price trend provides the relative change in electricity prices for future years out to the year 2042. Estimating future electricity prices is difficult, especially considering that there are efforts in many States throughout the country to restructure the electricity supply industry. DOE applied the AEO2007 reference case as the default scenario and extrapolated the trend in values from the years 2020 to 2030 of the forecast to establish prices in the years 2030 to 2042. This method of extrapolation is in line with methods currently being used by the EIA to forecast fuel prices for the Federal Energy Management Program. DOE provides a sensitivity analysis of the LCC savings and PBP results to future electricity price scenarios using both the AEO2007 high-growth and low-growth forecasts in Chapter 8 of the TSD. e. Maintenance Costs Maintenance costs are the costs to the customer of maintaining equipment operation. Maintenance costs include services such as cleaning heat-exchanger coils and changing air filters. DOE was not able to identify publicly available data on annual maintenance costs per unit. DOE estimated annual routine maintenance costs for PTAC and PTHP equipment at $50 per year per unit. Some manufacturers interviewed for the manufacturer impact analysis indicated verbally that this assumption was reasonable. Because data were not available to indicate how maintenance costs vary with equipment efficiency, DOE thus determined to use this preventative maintenance costs that remain constant as equipment efficiency is increased. f. Repair Costs The repair cost is the cost to the customer for replacing or repairing components that have failed in the PTAC and PTHP equipment. DOE estimated the annualized repair cost for baseline efficiency PTAC and PTHP equipment as $15, based on costs of extended warranty contracts PTACs and PTHPs. DOE determined that repair costs would increase in direct proportion with increases in equipment prices, because the price of PTAC and PTHP equipment increases with its efficiency and DOE recognizes that complexity for repair will increase as the efficiency of equipment increases. DOE specifically seeks comment on its estimation for the repair costs, as well as the installation and maintenance costs. In particular, DOE is interested in how the installation, maintenance, and repair costs may change with the use of R-410A refrigerant in 2010 because DOE's estimates are based on data from the field for equipment using R-22. See Chapter 8 of the TSD for additional information. DOE identified this as Issue 5 under “Issues on Which DOE Seeks Comment” in section VII.E of this NOPR. g. Equipment Lifetime DOE defines equipment lifetime as the age when a PTAC or PTHP unit is retired from service. DOE reviewed available literature and consulted with manufacturers in order to establish typical equipment lifetimes. The literature and experts consulted offered a wide range of typical equipment lifetimes. Individuals with previous experience in manufacturing or distribution of PTACs and PTHPs suggested a typical lifetime of 5 to 15 years. Some experts suggested that the lifetime could be even lower because of the daily or continuous use of the equipment and neglect of maintenance such as cleaning the heat exchangers or replacing the air filters. Previously, DOE used a 15-year lifetime for PTACs and PTHPs in the 2000 Screening Analysis based on data from ASHRAE's 1995 *Handbook of HVAC Applications.* Stakeholders commented on the 2000 Screening Analysis and suggested DOE use the 10-year lifetime assumption rather than 15-year lifetime to more accurately reflect the life and usage characteristics of this equipment. 27 66 FR 3336, 3349[0]. Therefore, based on the information it gathered, DOE concluded that a typical lifetime of 10 years is appropriate for PTAC and PTHP equipment. Furthermore, DOE modeled the lifetime of PTAC and PTHP equipment as a Weibull statistical distribution with an average lifetime of 10 years and a maximum lifetime of 20 years. Chapter 3 of the TSD contains a discussion of equipment lifetime, and TSD Chapter 8 discusses how equipment life is modeled in the LCC analysis. 27 U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy. “Energy Efficiency Program for Commercial and Industrial Equipment: Efficiency Standards for Commercial Heating, Air Conditioning and Water Heating Equipment; Final Rule”. January 2001. h. Discount Rate The discount rate is the rate at which future expenditures are discounted to establish their present value. DOE estimated the discount rate by estimating the cost of capital for purchasers of PTAC and PTHP equipment. Most purchasers use both debt and equity capital to fund investments. Therefore, for most purchasers, the discount rate is the weighted average cost of debt and equity financing, or the weighted-average cost of capital (WACC), less the expected inflation. To estimate the WACC of PTAC and PTHP equipment purchasers, DOE used a sample of companies including large hotel/motel chains and health care chains drawn from a database of 7,319 U.S. companies given on the *Damodaran Online* website. This database includes most of the publicly traded companies in the United States. Based on this database, DOE calculated the weighted average after-tax discount rate for PTAC and PTHP purchases, adjusted for inflation, as 5.71 percent for large hotel chains and 5.65 percent for health care (nursing homes and assisted living facilities). The cost of capital for independent hoteliers, and small office companies with more limited access to capital is more difficult to determine. Individual credit-worthiness varies considerably, and some franchisees have access to the financial resources of the franchising corporation. However, personal contacts with a sample of commercial bankers yielded an estimate for the small operator weighted cost of capital of about 200 to 300 basis points (2 percent to 3 percent) higher than the rates for larger hotel chains. Therefore, DOE used a central value equal to the weighted average of discount rate for large hotel chains plus 2.5 percent for independent hotel/motels and the same adder was used to the discount rate for large nursing home/assisted care companies to derive an estimate for small office buildings. As a result, DOE calculated the weighted average after-tax discount rate for PTAC and PTHP purchases, adjusted for inflation, as 8.21 percent for independent hotels and 8.15 percent for small offices (medical and dental offices). The discount rate is another key variable for which DOE used a probability distribution in the LCC and PBP analyses. TSD Chapter 8 contains the detailed calculations on the discount rate. 3. Payback Period DOE also determined the economic impact of potential standards on customers by calculating the PBP of the TSLs relative to a baseline efficiency level. The PBP measures the amount of time it takes the commercial customer to recover the assumed higher purchase expense of more energy efficient equipment through lower operating costs. Similar to the LCC, the PBP is based on the total installed cost and the operating expenses and is calculated as a range of payback periods, depending on the probability distributions of the two key inputs (i.e., the supply chain markups and where the unit is likely to be shipped to). However, unlike for the LCC, in the calculation of the PBP, by definition, DOE considered only the first year's operating expenses. Because the PBP does not take into account changes in operating expense over time or the time value of money, it is also referred to as a simple payback period. Additional details of the PBP can be found in Chapter 8 of the TSD. G. National Impact Analysis—National Energy Savings and Net Present Value Analysis The national impacts analysis evaluates the impact of a proposed standard from a national perspective rather than from the customer perspective represented by the LCC. This analysis assesses the NES, and the NPV (future amounts discounted to the present) of total commercial customer costs and savings, which are expected to result from amended standards at specific efficiency levels. For each TSL, DOE calculated the NPV, as well as the NES, as the difference between a base case forecast (without amended standards) and the standards case (with amended standards). The NES refers to cumulative energy savings from 2012 through 2042. The NPV refers to cumulative monetary savings. DOE calculated net monetary savings in each year relative to the base case as the difference between total operating cost savings and increases in total installed cost. Cumulative savings are the sum of the annual NPV over the specified period. DOE accounted for operating cost savings until 2062; that is, until all the equipment installed through 2042 is retired. 1. Approach Over time, in the standards case, equipment that is more efficient gradually replaces less efficient equipment. This affects the calculation of both the NES and NPV, both of which are a function of the total number of units in use and their efficiencies, and thus are dependent on annual shipments and equipment lifetime, including changes in shipments and retirement rates in response to changes in equipment costs due to standards. Both calculations start by using the estimate of shipments, and the quantity of units in service, that are derived from the shipments model. With regard to estimating the NES, because more efficient PTACs and PTHPs gradually replace less efficient ones, the energy per unit of capacity used by the PTACs and PTHPs in service gradually decreases in the standards case relative to the base case. DOE calculated the NES by subtracting energy use under a standards scenario from energy use in a base-case scenario. Unit energy savings for each equipment class are the same weighted-average values as calculated in the LCC and PBP spreadsheet. To estimate the total energy savings for each TSL, DOE first calculated the national site energy consumption (i.e., the energy directly consumed by the units of equipment in operation) for PTACs or PTHPs for each year, beginning with the expected effective date of the standards (2012), for the base case forecast and the standards case forecast. Second, DOE determined the annual site energy savings, consisting of the difference in site energy consumption between the base case and the standards case. Third, DOE converted the annual site energy savings into the annual amount of energy saved at the source of electricity generation (the source energy), using a site-to-source conversion factor. Finally, DOE summed the annual source energy savings from 2012 to 2042 to calculate the total NES for that period. DOE performed these calculations for each TSL considered in this rulemaking. DOE considers whether a rebound effect is applicable in its NES analysis. A rebound effect occurs when an increase in equipment efficiency leads to an increased demand for its service. EIA in its NEMS model assumes a certain elasticity factor to account for an increased demand for service due to the increase in cooling (or heating) efficiency. EIA refers to this as an efficiency rebound. 28 For the commercial cooling equipment market, there are two ways that a rebound effect could occur: 28 EIA, 2007. Assumptions to the Annual Energy Outlook 2007. accessed at *http://www.eia.doe.gov/oiaf/aeo/assumption/index.html* 1. An increased use of the cooling equipment within the commercial buildings they are installed in. 2. Additional instances of cooling a commercial building where it was not being cooled before. The first instance does not occur for the PTAC and PTHP equipment that are typically used in guest rooms of hotel/motel buildings, and patient rooms in hospitals and health care clinics since these buildings are already being operated and conditioned 24 hours a day and seven days a week. Furthermore, the guest or the patient in these rooms has no incentive to use the equipment more or less, because they do not pay the electricity bills. Additionally, DOE feels that the PTAC and PTHP equipment would not significantly penetrate into previously un-cooled building spaces. The existing market for this equipment is specialized to lodging type applications where the equipment serves both a cooling and heating need for a small room on the perimeter of a building. Drawbacks for installing these equipment in other spaces include noise, increased installation costs, high use of electric resistance heating, and their limitation of being able to provide cooling to only perimeter spaces. These considerations make the packaged terminal equipment, in general, not the first choice for adding cooling to other non-conditioned building spaces. Therefore, DOE did not assume a rebound effect in the present NOPR analysis. To estimate NPV, DOE calculated the net impact as the difference between total operating cost savings (including electricity, repair, and maintenance cost savings) and increases in total installed costs (which consists of MSP, sales taxes, distribution chain markups, and installation cost). DOE calculated the NPV of each TSL over the life of the equipment, using the following three steps. First, DOE determined the difference between the equipment costs under the TSL case and the base case in order to obtain the net equipment cost increase resulting from the TSL. Second, DOE determined the difference between the base case operating costs and the TSL operating costs, in order to obtain the net operating cost savings from the TSL. Third, DOE determined the difference between the net operating cost savings and the net equipment cost increase in order to obtain the net savings (or expense) for each year. DOE then discounted the annual net savings (or expenses) to the year 2008 for PTACs and PTHPs bought on or after 2012 and summed the discounted values to provide the NPV of a TSL. An NPV greater than zero shows net savings (i.e., the TSL would reduce customer expenditures relative to the base case in present value terms). An NPV that is less than zero indicates that the TSL would result in a net increase in customer expenditures in present value terms. To make the analysis more accessible and transparent to all stakeholders, DOE used an MS Excel spreadsheet model to calculate the energy savings and the national economic costs and savings from amended standards. In addition, the TSD (chapter 10) and other documentation on the website that DOE provides during the rulemaking help explain the models and how to use them, and stakeholders can review DOE's analyses by changing various input quantities within the spreadsheet. Unlike the LCC analysis, the NES spreadsheet does not use distributions for inputs or outputs. DOE examined sensitivities by applying different scenarios. DOE used the NES spreadsheet to perform calculations of energy savings and NPV, using the annual energy consumption and total installed cost data from the LCC analysis. DOE forecasted the energy savings, energy cost savings, equipment costs, and NPV of benefits for each of equipment classes from 2012 through 2042. The forecasts provided annual and cumulative values for all four output parameters as described above. 2. Shipments Analysis An important element in the estimate of the future impact of a standard is equipment shipments. DOE developed shipments projections under a base case and each of the standards cases using a shipments model. DOE used the standards case shipments projection and, in turn, the standards case equipment stock to determine the NES. The shipments portion of the spreadsheet model forecasts PTAC and PTHP shipments from 2012 to 2042. The details of the shipment projections are given in chapter 10 of the TSD. DOE developed shipments forecasts by accounting for:
(1)The growth in the building stock of hotel/motel, health care and office buildings that are the primary end users of PTACs and PTHPs;
(2)market segments;
(3)equipment retirements; and
(4)equipment ages. The shipments model assumes that, in each year, each existing PTAC or PTHP either ages by one year or breaks down, and that equipment that breaks down is replaced. In addition, new equipment can be shipped into new commercial building floor space, and old equipment can be removed through demolitions. Historical shipments are critical to the development of the shipments model, since DOE used the historical data to calibrate the model. DOE's primary source of historical data for shipments of PTACs and PTHPs was the shipment data provided by ARI. ARI provided DOE with shipments data for 10 years (1997-2006), which allowed DOE to allocate sales of equipment to the different equipment classes. The shipments data is summarized in Chapter 3 of the TSD. Although there is a provision in the spreadsheet for a change in projected shipments in response to efficiency level increases, DOE has no information with which to calibrate such a relationship. Therefore, for the NOPR analysis, DOE presumed that the shipments do not change in response to the changing TSLs. Table IV.9 shows the forecasted shipments for the different equipment classes of PTACs and PTHPs for the baseline efficiency level (ASHRAE/IESNA Standard 90.1-1999) for selected years from 2012 to 2042. As equipment purchase price increases with efficiency, generally a drop in shipments would be expected. Although there is a provision in the shipments analysis spreadsheet for a change in shipments as the efficiency increases and the equipment becomes more expensive, DOE has no basis for concluding that such a change would occur as the efficiency of PTACs and PTHPs increases. Therefore, DOE presumed that total shipments do not change with TSL and that the effect of the standards would be to shift the percentage mix of shipments from lower to higher efficiencies. Table IV.9 also shows the cumulative shipments for PTAC and PTHP equipment from 2012 to 2042. Table IV.9.—Shipments Forecast for Base Case PTAC and PTHP Equipment Equipment Thousands of units shipped by year and equipment class 2012 2015 2020 2025 2030 2035 2040 2042 Cumulative shipments (2012-2042) Standard Size PTACs 242 249 266 286 307 333 361 373 9,256 Standard Size PTHPs 181 186 199 214 230 249 270 279 6,918 Non-Standard Size PTACs 17 16 15 13 12 11 10 9 398 Non-Standard Size PTHPs 13 12 11 10 9 8 7 7 300 Total 453 464 490 522 558 600 648 668 16,873 DOE also uses the shipments estimates developed above as an input to the MIA, discussed in section IV.I. Chapter 10 of the TSD provides additional details on the shipments forecasts. 3. Base Case and Standards Case Forecasted Distribution of Efficiencies The annual energy consumption of a PTAC or PTHP unit is directly related to the efficiency of the unit. Thus, DOE forecasted shipment-weighted average equipment efficiencies that, in turn, enabled a determination of the shipment-weighted annual energy consumption values for the base case and each TSL analyzed. DOE based shipment-weighted average efficiency trends for PTAC and PTHP equipment on first converting the 2005 PTAC and PTHP equipment shipments by equipment class into market shares by equipment class. DOE then adapted a cost-based method used in the NEMS to estimate market shares for each equipment class by TSL. Then, from those market shares and projections of shipments by equipment class, DOE extrapolated future equipment efficiency trends both for a base case scenario and standards case scenarios. The difference in equipment efficiency between the base case and standards cases was the basis for determining the reduction in per-unit annual energy consumption that could result from amended standards. There is, however, the refrigerant phase-out issue that also affects the equipment efficiency. DOE recognizes that the industry has been able to meet the ASHRAE/IESNA Standard 90.1-1999 efficiency levels with R-22 as the primary refrigerant, but is waiting to switch to R-410A as the primary refrigerant starting in 2010. For the base case, DOE assumed that, absent amended standards, forecasted market shares would remain frozen at the 2012 efficiency levels until the end of the forecast period (30 years after the effective date—the year 2042). DOE realized that this prediction may have the effect of causing DOE to overestimate the savings associated with the TSLs discussed in this notice since historical data indicated PTACs and PTHP equipment efficiencies or relative equipment class preferences may change voluntarily over time. Therefore, DOE seeks comment on this assumption and the potential significance of any overestimate of savings. In particular, DOE requests data that would enable it to better characterize the likely increases in efficiency that would occur over the 30-year analysis period absent adoption of either the standards proposed, or the TSLs considered, in this rule. DOE identified this as Issue 6 under “Issues to Which DOE Seeks Comment” in section VII.E of this NOPR. For each of the TSLs analyzed, DOE used a “roll-up” scenario to establish the market shares by efficiency level for the year that standards become effective (i.e., 2012). Information available to DOE suggests that the efficiencies of equipment in the base case that did not meet the standard level under consideration would “roll-up” to meet the standard level. In addition, available information suggests that all equipment efficiencies in the base case that were above the standard level under consideration would not be affected. DOE specifically seeks input on its basis for the NES-forecasted base case distribution of efficiencies and its prediction on how amended energy conservation standards impact the distribution of efficiencies in the standards case. DOE identified this as Issue 7 under “Issues on Which DOE Seeks Comment” in section VII.E of this NOPR. In addition, DOE specifically seeks comment on whether DOE's adoption of higher amended energy conservation standard levels would be likely to cause the PTAC and PTHP customers to shift to using other, less efficient type of equipment. Acknowledging over 80 percent of PTAC and PTHP equipment are sold for the replacement market, DOE believes it is unlikely that PTAC and PTHP equipment users would switch to other type of equipment due to the additional installation cost caused by this potential switching. However, DOE recognizes that potential equipment switching from PTHPs to a combination of PTACs and electric resistance heating might occur if DOE were to adopt a standard level for PTHPs significantly higher than the proposed standard level for PTACs. DOE specifically seeks input on whether disparity in the proposed standards for PTACs and PTHPs is likely to cause the PTHP customers to shift to PTACs with electric resistance heating. DOE identified this as Issue 8 under “Issues on Which DOE Seeks Comment” in section VII.E of this NOPR. 4. National Energy Savings and Net Present Value The PTAC and PTHP equipment stock at any point in time is the total number of PTACs and PTHPs purchased or shipped from previous years that have survived until that point. The NES spreadsheet, through the use of the shipments model, keeps track of the total number of PTAC and PTHP units shipped each year. For purposes of the NES and NPV analyses, DOE assumes that retirements follow a Weibull distribution with a 10-year mean lifetime. Retired units are not replaced until 2042. For units shipped in 2042, any units still remaining at the end of 2062 are retired. The national annual energy consumption is the product of the annual unit energy consumption and the number of PTAC and PTHP units of each vintage. This approach accounts for differences in unit energy consumption from year to year. In determining national annual energy consumption, DOE initially calculated the annual energy consumption at the site (i.e., electricity in kWh consumed by the PTAC and PTHP unit). DOE then calculated primary energy consumption from site energy consumption by applying a marginal site-to-source conversion factor to account for losses associated with the generation, transmission, and distribution of electricity. The site-to-source conversion factor is a multiplier used for converting site energy consumption, expressed in kWh, into primary or source energy consumption, expressed in quads (quadrillion Btu). The site-to-source conversion factor accounts for losses in electricity generation, transmission, and distribution. DOE obtained these conversion factors using the NEMS model. The conversion factors vary over time, due to projected changes in electricity generation sources (i.e., the power plant types projected to provide electricity to the country). To discount future impacts, DOE follows OMB guidance in the selection of seven percent and three percent in evaluating the impacts of regulations. In selecting the discount rate corresponding to a public investment, OMB directs agencies to use “the real Treasury borrowing rate on marketable securities of comparable maturity to the period of analysis.” Office of Management and Budget
(OMB)Circular No. A-94, “Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs,” dated October 29, 1992, section 8.c.1. The seven percent rate is an estimate of the average before-tax rate of return on private capital in the United States economy, and reflects the returns to real estate and small business capital as well as corporate capital. DOE used this discount rate to approximate the opportunity cost of capital in the private sector, since recent OMB analysis has found the average rate of return on capital to be near this rate. In addition, DOE used the 3 percent rate to capture the potential effects of standards on private customers' consumption (e.g., through higher prices for equipment and purchase of reduced amounts of energy). This rate represents the rate at which “society” discounts future consumption flows to their present value. This rate can be approximated by the real rate of return on long-term government debt (e.g., yield on Treasury notes minus annual rate of change in the Consumer Price Index), which has averaged about 3 percent on a pre-tax basis for the last 30 years. Table IV.10 summarizes the inputs to the NES spreadsheet model along with a brief description of the data sources. The results of DOE's NES and NPV analysis are summarized in section V.B.3 below and described in detail in TSD Chapter 11. Table IV.10.—Summary of NES and NPV Model Inputs Inputs Description Shipments Annual shipments from shipments model (see Chapter 10 of the TSD). Effective Date of Standard September 2012. Base Case Efficiencies Distribution of base case shipments by efficiency level. Standard Case Efficiencies Distribution of shipments by efficiency level for each standards case. Standards case annual shipment-weighted market shares remain the same as in the base case and each standard level for all efficiencies above the TSL. All other shipments are at the TSL efficiency. Annual Energy Use per Unit Annual national weighted-average values are a function of efficiency level (Chapter 7 of the TSD). Total Installed Cost per Unit Annual weighted-average values are a function of efficiency level (Chapter 8 of the TSD). Repair Cost per Unit Annual weighted-average values increase with manufacturer's cost level (Chapter 8 of the TSD). Maintenance Cost per Unit Annual weighted-average value equals $50 (Chapter 8 of the TSD). Escalation of Electricity Prices 2007 EIA AEO forecasts (to 2030) and extrapolation for beyond 2030 (Chapter 8 of the TSD). Electricity Site-to-Source Conversion Factor Conversion factor varies yearly and is generated by EIA's NEMS* model. Includes the impact of electric generation, transmission, and distribution losses. Discount Rate 3 percent and 7 percent real. Present Year Future costs are discounted to year 2008. * Chapter 14 on the utility impact analysis provides more detail on NEMS model. H. Life-Cycle Cost Sub-Group Analysis In analyzing the potential impact of new or amended standards on customers, DOE evaluates the impact on identifiable groups (i.e., subgroups) of customers, such as different types of businesses, which may be disproportionately affected by a national standard level. For this rulemaking, DOE identified small businesses as a PTAC and PTHP customer subgroup that could be disproportionately affected, and examined the impact of proposed standards on this group. DOE determined the impact on this PTAC and PTHP customer sub-group using the LCC spreadsheet model. DOE conducted the LCC and PBP analysis for both PTAC and PTHP customers. The standard LCC and PBP analysis (described in section IV.F) includes various types of businesses occupying commercial buildings that use PTAC and PTHP equipment. The LCC spreadsheet model allows for the identification of one or more subgroups of businesses, which can then be analyzed by sampling only each such subgroup. The results of DOE's LCC subgroup analysis are summarized in section V.B.1.c below and described in detail in TSD Chapter 12. I. Manufacturer Impact Analysis 1. Overview DOE performed an MIA to estimate the financial impact of higher energy conservation standards on both manufacturers of standard size PTACs and PTHPs and manufacturers of non-standard size PTACs and PTHPs, and to calculate the impact of such standards on employment and manufacturing capacity. The MIA has both quantitative and qualitative aspects. The quantitative part of the MIA relies on the GRIM, an industry-cash-flow model customized for this rulemaking. The GRIM inputs are information regarding the industry cost structure, shipments, and revenues. This includes information from many of the analyses described above, such as manufacturing costs and prices from the engineering analysis and shipments forecasts. The key GRIM output is the industry net present value. Different sets of assumptions (scenarios) will produce different results. The qualitative part of the MIA addresses factors such as equipment characteristics, characteristics of particular firms, and market and equipment trends, and includes assessment of the impacts of standards on sub-groups of manufacturers. The complete MIA is outlined in Chapter 13 of the TSD. DOE conducted the MIA for PTACs and PTHPs in three phases. Phase 1, Industry Profile, consisted of preparing an industry characterization, including data on market share, sales volumes and trends, pricing, employment, and financial structure. Phase 2, Industry Cash Flow, focused on the industry as a whole. In this phase, DOE used the GRIM to prepare an industry-cash-flow analysis. Using publicly available information developed in Phase 1, DOE adapted the GRIM's generic structure to perform an analysis of PTAC and PTHP energy conservation standards. In Phase 3, Subgroup Impact Analysis, DOE conducted interviews with manufacturers representing the majority of domestic PTAC and PTHP sales. This group included large and small manufacturers of both standard and non-standard size PTACs and PTHPs, providing a representative cross-section of the industry. During these interviews, DOE discussed engineering, manufacturing, procurement, and financial topics specific to each company and also obtained each manufacturer's view of the industry as a whole. The interviews provided valuable information DOE used to evaluate the impacts of an amended energy conservation standard on manufacturers' cash flows, manufacturing capacities, and employment levels. a. Phase 1, Industry Profile In Phase 1 of the MIA, DOE prepared a profile of the PTAC and PTHP industry based on the market and technology assessment prepared for this rulemaking. Before initiating the detailed impact studies, DOE collected information on the present and past structure and market characteristics of the PTAC and PTHP industry. The information DOE collected at that time included market share, equipment shipments, markups, and cost structure for various manufacturers. The industry profile includes further detail on equipment characteristics, estimated manufacturer market shares, the financial situation of manufacturers, trends in the number of firms, the market, and equipment characteristics of the PTAC and PTHP industry. The industry profile included a top down cost analysis of PTAC and PTHP manufacturers that DOE used to derive cost and preliminary financial inputs for the GRIM (e.g., revenues; material, labor, overhead, and depreciation expenses; selling, general, and administrative expenses (SG&A); and research and development (R&D) expenses). DOE also used public sources of information to further calibrate its initial characterization of the industry, including SEC 10-K reports, Standard & Poor's (S&P) stock reports, and corporate annual reports. b. Phase 2, Industry Cash Flow Analysis Phase 2 of the MIA focused on the financial impacts of amended energy conservation standards on the industry as a whole. Higher energy conservation standards can affect a manufacturer's cash flow in three distinct ways, resulting in:
(1)A need for increased investment;
(2)higher production costs per unit; and
(3)altered revenue by virtue of higher per-unit prices and changes in sales values. To quantify these impacts in Phase 2 of the MIA, DOE performed separate cash flow analyses, using the GRIM, on the part of the industry that manufactures standard size PTACs and PTHPs and on the part of the industry that manufactures non-standard size equipment. In performing these analyses, DOE used the financial values derived during Phase 1 and the shipment scenarios used in the NES analyses. c. Phase 3, Sub-Group Impact Analysis Using average cost assumptions to develop an industry-cash-flow estimate is not adequate for assessing differential impacts among subgroups of manufacturers. For example, small manufacturers, niche players, or manufacturers exhibiting a cost structure that largely differs from the industry average could be more negatively affected. DOE used the results of the industry characterization analysis (in Phase 1) to group manufacturers that exhibit similar characteristics. DOE established two sub-groups for the MIA corresponding to the two types of PTAC and PTHP equipment and manufacturers, i.e., manufacturers of standard size equipment and manufacturers of non-standard size equipment. The standard size PTAC and PTHP market is mostly domestically owned with manufacturing facilities located outside of the United States, where as the non-standard size PTAC and PTHP market is mostly domestically owned with manufacturing facilities located inside of the United States. There has been a recent trend of foreign owned, foreign operated companies to enter the standard size PTAC and PTHP market and sell equipment within the United States. Based on the identification of these two sub-groups, DOE prepared two different interview guides—one for standard size PTAC and PTHP manufacturers and one for non-standard size PTAC and PTHP manufacturers. These interview guides were used to tailor the GRIM to address unique financial characteristics of manufacturers of each equipment size. DOE interviewed companies from each subgroup, including small and large companies, subsidiaries and independent firms, and public and private corporations. The purpose of the meetings was to develop an understanding of how manufacturer impacts vary with the TSLs. During the course of the MIA, DOE interviewed manufacturers representing the majority of domestic PTAC and PTHP sales. Many of these same companies also participated in interviews for the engineering analysis. However, the MIA interviews broadened the discussion from primarily technology-related issues to include business related topics. One objective was to obtain feedback from industry on the assumptions used in the GRIM and to isolate key issues and concerns. DOE also evaluated the impact of the energy conservation standards on the manufacturing impacts of small businesses. Small businesses, as defined by the SBA for the PTAC and PTHP manufacturing industry, are manufacturing enterprises with 750 or fewer employees. DOE shared the interview guides with small manufacturers and tailored specific questions for small PTAC and PTHP manufacturers. See Chapter 13 of the TSD for details. 2. Government Regulatory Impact Model Analysis As mentioned above, DOE uses the GRIM to quantify changes in cash flow that result in a higher or lower industry value. The GRIM analysis uses a standard, annual-cash-flow analysis that incorporates manufacturer prices, manufacturing costs, shipments, and industry financial information as inputs and models changes in costs, distribution of shipments, investments, and associated margins that would result from new or amended regulatory conditions (in this case, standard levels). The GRIM spreadsheet uses a number of inputs to arrive at a series of annual cash flows, beginning with the base year of the analysis, 2007, and continuing to 2042. DOE calculated INPVs by summing the stream of annual discounted cash flows during this period. DOE used the GRIM to calculate cash flows using standard accounting principles and to compare changes in INPV between a base case and different TSLs (the standards cases). Essentially, the difference in INPV between the base case and a standards case represents the financial impact of the amended energy conservation standards on manufacturers. DOE collected this information from a number of sources, including publicly available data and interviews with several manufacturers. See Chapter 13 of the TSD for details. 3. Manufacturer Interviews As part of the MIA, DOE discussed potential impacts of amended energy conservation standards with manufacturers responsible for a majority of PTAC and PTHP sales. The manufacturers interviewed manufacture 90 percent of the standard size PTACs and PTHPs and over 50 percent of the non-standard size PTACs and PTHPs. 29 These interviews were in addition to those DOE conducted as part of the engineering analysis. The interviews provided valuable information that DOE used to evaluate the impacts of amended energy conservation standards on manufacturers' cash flows, manufacturing capacities, and employment levels. 29 DOE contacted other non-standard size manufacturers as part of the MIA, but they did not wish to participate in the MIA process. a. Issues According to all manufacturers interviewed, the biggest concern relating to this rulemaking is the EPA mandated phase-out of the HCFC refrigerants that are used in current PTAC and PTHP equipment. Every manufacturer interviewed stated that it intends to switch from the current R-22 refrigerant to R-410A refrigerant in PTAC and PTHP equipment, regardless of equipment class. All manufacturers interviewed expect to be affected by the refrigerant phase-out for the following reasons: • Availability of R-410A refrigerant compressors—All of the manufacturers interviewed stated their concern that only a small number of compressors utilizing R-410A refrigerant are or will be available before the R-22 refrigerant must be replaced in 2010. Furthermore, not all current cooling capacities available in R-22 refrigerant compressors are or will be available in R-410A refrigerant versions. In addition, not all voltages currently offered by some manufacturers of PTAC and PTHP equipment are or will be available in an R-410A refrigerant version. All manufacturers noted that the small size of their industry gives them little to no leverage to encourage compressor manufacturers to develop R-410A refrigerant compressors for them. • Compressor performance degradation—According to all manufacturers of PTAC and PTHP equipment, R-410A refrigerant compressors currently on the market have at least a 0.8 to 1.0 EER compressor performance degradation relative to the R-22 refrigerant compressors that they are intended to replace. The degradation in compressor performance can be attributed to several factors including a reduction in displacement, increase in complexity, necessity of increase in strength of the compressor shell, and use of non-mineral oils. As a result, some manufacturers anticipate difficulty initially meeting even the ASHRAE/IESNA Standard 90.1-1999 efficiency levels with R-410A-based units. • Increase in manufacturing costs—All manufacturers expect their PTAC and PTHP equipment manufacturing costs to increase as the sealed-system portions of the equipment are upgraded to handle the higher system pressures associated with R-410A refrigerant. In addition to an increase in manufacturing cost to accommodate higher working pressures associated with R-410A refrigerant and increased refrigerant and compressor costs, manufacturers are concerned about the anticipated drop in compressor efficiency, which would cause them to incorporate some level of redesign into their R-410A refrigerant equipment to help offset this degradation and would further increase manufacturing costs. All manufacturers noted that cost-recovery is very difficult in this industry due to intense price competition. Multiple United States-based manufacturers noted the entry of foreign-based competitors as a source for the intense price competition. • Combination of regulations—All manufacturers anticipate that the combination of the R-22 refrigerant phase-out and possible amendment of Federal energy conservation standards will lead the industry to reduce the scope of equipment offered. In addition, several manufacturers anticipate as a result of the three factors just discussed, shifts in market share, consolidation within the industry, and/or the departure of marginal manufacturers from the business. Other manufacturing issues include the delineation of non-standard size equipment classes and the timing of the regulations. First, manufacturers of non-standard size PTACs and PTHPs anticipate that, if the ASHRAE/IESNA Standard 90.1-1999 equipment class definition ( *i.e.* , equipment with wall sleeve dimensions less than 16 inches high and less than 42 inches wide) is adopted by DOE, a significant portion of the equipment they currently offer for replacement purposes will be misclassified as new construction. For example, a PTAC or PTHP unit with one of its wall sleeve dimensions less than the 16 inches high and 42 inches wide would be classified as standard size equipment. Manufacturers stated that these types of units are often sold on demand as custom order to replace existing equipment with the same wall sleeve dimensions. The comments assert that if DOE adopts the ASHRAE definitions of standard and non-standard units, it will force a small volume of non-standard sleeve size equipment to meet higher efficiency levels, intended for standard size equipment, which these units are physically unable to meet because of physical constraints due to the equipment size. Further, some manufacturers estimated that up to half of their equipment lines could be eliminated if DOE chooses to adopt ASHRAE's delineations of equipment classes. 30 30 DOE understands that ARI has submitted a continuous maintenance proposal to modify the definitions of non-standard size PTACs and PTHPs, which was subsequently approved by ASHRAE as Addendum t to ASHRAE/IESNA Standard 90.1-2007. As further discussed in section IV.A.2 above, if ASHRAE is able to adopt Addendum t to ASHRAE/IESNA Standard 90.1-2007 prior to September 2008, when DOE must issue a final rule on this rulemaking, DOE proposes to incorporate the modified definition into its final rule. Second, the EPA mandated R-22 refrigerant phase-out date (January 1, 2010) and the anticipated effective date of the DOE amended energy conservation standards rulemaking (September 2012) are a concern for all manufacturers. All manufacturers stated that, because of the gap between these dates, as well as the fact that DOE does not expect to promulgate its rule until September 30, 2008, each manufacturer will have to make a separate development effort to comply with each of these regulations. Most manufacturers stated that there could be some gains if each is able to combine its efforts to comply with the conversion to R-410A refrigerant and amended minimum energy conservation standards. Most manufacturers were uncertain, however, of the magnitude of the anticipated benefit from any such combined effort. b. Government Regulatory Impact Model Scenarios and Key Inputs i. Base Case Shipments Forecast The GRIM estimates manufacturer revenues based on total-unit-shipment forecasts and the distribution of these values by EER. Changes in the efficiency mix at each standard level are a key driver of manufacturer finances. For this analysis, the GRIM used both the NES shipments forecasts and a modified version referred to as the R-410A shipments forecasts for both standard size and non-standard size PTACs and PTHPs from 2007 to 2042. Total shipments forecasted by the NES for the base case in 2012 are shown in Table IV.11 and are further discussed in this section of today's notice. DOE allocated to the closest representative cooling capacity, in the appropriate equipment class, any shipments forecasted by the NES of equipment that was not within one of the representative cooling capacities. For example, the total PTAC or PTHP shipments with a cooling capacity less than 10,000 Btu/h for standard size equipment are included with the 9,000 Btu/h representative cooling capacity. Table IV.11.—Total NES-Forecasted Shipments in 2012 Equipment class (cooling capacities) Total industry shipments* Standard Size PTACs (9,000 Btu/h) 97,900 Standard Size PTHPs (9,000 Btu/h) 76,500 Standard Size PTACs (12,000 Btu/h) 144,100 Standard Size PTHPs (12,000 Btu/h) 104,400 Non-Standard Size PTACs 17,100 Non-Standard Size PTHPs 12,900 * Estimates rounded to the nearest hundred. DOE also estimated, in the shipments analysis, the distribution of efficiencies in the base case for PTACs and PTHPs. (See Chapter 10 of the TSD.) Table IV.12 shows one example of the distribution of efficiencies in the base case for standard size PTACs with a cooling capacity of 9,000 Btu/h plus those with cooling capacities allocated to this category. The distribution of efficiencies in the base case for other equipment classes shown in Chapter 10 of the TSD. Table IV.12.—NES Distribution of Shipments in the Base Case for Standard Size PTACs with Cooling Capacities Less Than 10,000 Btu/h TSL
(EER)Baseline 10.6 TSL 1, 2, 4 10.9 TSL 3 11.1 TSL 5 11.3 TSL 6 11.5 TSL 7 12.0 Distribution of Shipments (%) 19.2 18.0 17.2 16.4 15.6 13.5 During the course of the MIA interviews, DOE asked manufacturers to comment on the NES shipment forecasts. For all equipment classes, manufacturers were in general agreement with the NES total shipment results. However, their views differed on the impacts of the refrigerant phase-out on the distribution of efficiencies in the base case. Many manufacturers commented that the NES shipments forecast did not adequately account for the reduction in efficiency resulting from the refrigerant phase-out. Manufacturers believe there will be a system performance degradation as characterized in the engineering analysis. In particular, manufacturers commented that they were planning to implement R-410A refrigerant as a “drop-in” redesign to meet the initial 2010 deadline. In a drop-in redesign, manufacturers would continue to use the current basic R-22 design for the PTAC or PTHP equipment, and only replace compressors, refrigerant and make other minor adjustments. DOE considered manufacturers' concerns with the NES shipments forecast and derived an alternative shipments forecast (referred to as the “R-410A-shipments forecast”). Several manufacturers interviewed stated that total shipments for both standard and non-standard size equipment would not be affected by the R-22 refrigerant phase-out. Therefore, DOE assumed that the total industry shipments forecasted in the shipment analysis would not change due to the refrigerant phase-out (i.e., DOE assumed the total shipments of equipment with R-410A refrigerant would be equal to the total shipments of equipment with R-22 refrigerant as forecasted by the NES). Furthermore, DOE assumed that, for both standard and non-standard size PTACs and PTHPs, the distributions by efficiencies would shift in accordance with the degradation in system performance that the engineering analysis estimates will occur in 2010 (i.e., effective date for the R-22 refrigerant phase-out). DOE assumed that manufacturers with equipment that would fall below ASHRAE/IESNA Standard 90.1-1999 levels with a drop-in redesign would nevertheless modify such equipment so that it would achieve at least these baseline efficiency levels. As an example of the impact of the refrigerant phase-out on the distribution of efficiencies in the base case, Table IV.13 illustrates the change in the distribution of efficiencies for standard size PTACs with a cooling capacity of 9,000 Btu/h from 2009 to 2010. DOE is seeking comment about the distribution of efficiencies in the R-410A base case for each of the representative cooling capacities. Table IV.13.—R-410A Distribution of Efficiencies as Forecasted by the NES and as Forecasted by the R-410A-Shipment Forecast TSL
(EER)Baseline 10.6 TSL 1, 2, 4 10.9 TSL 3 11.1 TSL 5 11.3 TSL 6 11.5 TSL 7 12.0 NES Distribution of Shipments (%) 19.2 18.0 17.2 16.4 15.6 13.5 R-410A-Shipments Forecast Distribution of Shipments (%) 70.9 15.6 0 13.5 0 0 ii. Standards Case Shipments Forecast For each standards case, DOE assumed that shipments at efficiencies below the projected minimum standard levels were most likely to roll up to those efficiency levels in response to an increase in energy conservation standards. This scenario assumes that demand for high efficiency equipment is a function of its price without regard to the standard level. In addition, DOE assumed that manufacturers would not be able to manufacture equipment higher than TSL 5 or TSL 6 depending on equipment class for R-410A equipment using today's technology. For TSLs above TSL 5 or TSL 6 depending on equipment class, DOE assumed one hundred percent of the products would be manufactured at the efficiency levels specified by the TSL. See Chapter 13 for additional details. iii. R-410A Base Case and Amended Energy Conservation Standards Markup Scenarios The PTAC and PTHP manufacturer impact analysis is explicitly structured to account for the cumulative burden of sequential refrigerant and amended energy conservation standards. This section describes the markup scenarios DOE used to calculate the base case INPV after implementation of the R-22 refrigerant phase-out, and the standards case INPV at each TSL. DOE learned from interviews with manufacturers that the majority of manufacturers offer only one equipment line. A single equipment line means that there is no markup strategy used to differentiate a lower efficiency piece of equipment from a premium piece of equipment. Through its analysis of the PTAC and PTHP industry, DOE also learned that prices of a PTAC and a PTHP made by the same manufacturer at the same cooling capacity do not demand different pricing strategies. Therefore, for the R-22 base case industry cash flow analysis, DOE assumed a flat markup for all equipment regardless of whether it is a PTAC or PTHP and regardless of cooling capacity. During interviews, many manufacturers stated that they have not been able to recover fully the increased costs from increased metals prices. Instead, manufacturers were only able to recover a percentage of the full increase in manufacturing production cost. Many manufacturers believe a similar situation would happen as a result of both the R-22 refrigerant phase-out and amended energy conservation standards. Therefore, DOE made different assumptions about how manufacturers could recoup both R-410A refrigerant conversion costs and the costs associated with amended energy conservation standards, so that it could examine the effects of different cost recovery scenarios. After discussions with manufacturers, DOE analyzed two distinct R-410A base case and amended energy conservation standards markup scenarios:
(1)The flat markup scenario, and
(2)the partial cost recovery markup scenario. The flat markup scenario can also be characterized as the “preservation of gross margin percentage” scenario. Under this scenario, DOE applied, across all TSLs, a single uniform “gross margin percentage” markup that DOE believes represents the current markup for manufacturers in the PTAC and PTHP industry. This flat markup scenario implies that, as production costs increase with efficiency, the absolute dollar markup will also increase. DOE calculated that the non-production cost markup, which consists of SG&A expenses, R&D expenses, interest, and profit, is 1.29. This markup is consistent with the one DOE used in the engineering analysis and GRIM analysis for the base case. The implicit assumption behind the “partial cost recovery” scenario is that the industry can pass-through only part of its regulatory-driven increases in production costs to consumers in the form of higher prices. DOE implemented this markup scenario in the GRIM by setting the non-production cost markups at each TSL to yield an increase in MSP equal to half the increase in production cost. These markup scenarios characterize the markup conditions described by manufacturers, and reflect the range of market responses manufacturers expect as a result of the R-22 phase-out and the amended energy conservation standards. See Chapter 13 of the TSD for additional details of the markup scenarios. iv. Equipment and Capital Conversion Costs Energy conservation standards typically cause manufacturers to incur one-time conversion costs to bring their production facilities and equipment designs into compliance with the amended standards. For the purpose of the MIA, DOE classified these one-time conversion costs into two major groups; equipment conversion and capital conversion costs. Equipment conversion expenses are one-time investments in research, development, testing, and marketing, focused on making equipment designs comply with the new energy conservation standard. Capital conversion expenditures are one-time investments in property, plant, and equipment to adapt or change existing production facilities so that new equipment designs can be fabricated and assembled. DOE assessed the R&D expenditures manufacturers would be required to make at each TSL. It obtained financial information through manufacturer interviews and compiled the results in an aggregated form to mask any proprietary or confidential information from any one manufacturer. For both standard size and non-standard size PTACs and PTHPs at each TSL, DOE considered a number of manufacturer responses. DOE estimated the total equipment conversion expenditures by gathering the responses received during the manufacturer interviews, then weighted these data by market share for each industry and, finally, extrapolated each manufacturer's R&D expenditures for each product. DOE also evaluated the level of capital conversion costs manufacturers would incur to comply with amended energy conservation standards. It prepared preliminary estimates of the capital investments required using the manufacturing cost model. DOE then used the manufacturer interviews to gather additional data on the level of capital investment required at each TSL. Manufacturers explained how different TSLs impacted their ability to use existing plants, warehouses, tooling, and equipment. From the interviews, DOE was able to estimate what portion of existing manufacturing assets needed to be replaced and/or reconfigured, and what additional manufacturing assets were required to manufacture the higher efficiency equipment. In most cases, DOE projects that, as standard levels for PTACs and PTHPs increase, the proportion of existing assets that manufacturers would have to replace would also increase. Additional information on the estimated equipment conversion and capital conversion costs is set forth in Chapter 13 of the TSD. J. Employment Impact Analysis Employment impact is one of the factors that DOE considers in selecting a standard. Employment impacts include direct and indirect impacts. Direct employment impacts are any changes in the number of employees for PTAC and PTHP manufacturers, their suppliers, and related service firms. Indirect impacts are those changes of employment in the larger economy that occur due to the shift in expenditures and capital investment that is caused by the purchase and operation of more efficient PTAC and PTHP equipment. The MIA in this rulemaking addresses only the employment impacts on manufacturers of PTACs and PTHPs, *i.e.* , the direct employment impacts (See Chapter 13 of the TSD); this section describes other, primarily indirect, employment impacts. Indirect employment impacts from PTAC and PTHP standards consist of the net jobs created or eliminated in the national economy, other than in the manufacturing sector being regulated, as a consequence of
(1)reduced spending by end users on energy (electricity, gas—including liquefied petroleum gas—and oil);
(2)reduced spending on new energy supply by the utility industry;
(3)increased spending on the purchase price of new PTACs and PTHPs; and
(4)the effects of those three factors throughout the economy. DOE expects the net monetary savings from standards to be redirected to other forms of economic activity. DOE also expects these shifts in spending and economic activity to affect the demand for labor. In developing this proposed rule, DOE estimated indirect national employment impacts using an input/output model of the United States economy, called ImSET (Impact of Sector Energy Technologies) developed by DOE's Building Technologies Program. ImSET is a personal-computer-based, economic-analysis model that characterizes the interconnections among 188 sectors of the economy as national input/output structural matrices, using data from the United States Department of Commerce's 1997 Benchmark United States table. 31 The ImSET model estimates changes in employment, industry output, and wage income in the overall United States economy resulting from changes in expenditures in the various sectors of the economy. DOE estimated changes in expenditures using the NES spreadsheet. ImSET then estimated the net national indirect employment impacts of potential PTAC and PTHP equipment efficiency standards on employment by sector. 31 Lawson, Ann M., Kurt S. Bersani, Mahnaz Fahim-Nader, and Jiemin Guo. 2002. “Benchmark Input-Output Accounts of the U.S. Economy, 1997,” Survey of Current Business, December, pp. 19-117. The ImSET input/output model suggests the proposed PTAC and PTHP efficiency standards could increase the net demand for labor in the economy; the gains would most likely be very small relative to total national employment. DOE therefore concludes only that the proposed PTAC and PTHP standards are likely to produce employment benefits that are sufficient to offset fully any adverse impacts on employment in the PTAC and PTHP industry. For more details on the employment impact analysis, see Chapter 15 of the TSD. K. Utility Impact Analysis The utility impact analysis estimates the effects of reduced energy consumption due to improved equipment efficiency on the utility industry. This utility analysis consists of a comparison between forecast results for a case comparable to the AEO2007 Reference Case and forecasts for policy cases incorporating each of the PTAC and PTHP TSLs. DOE analyzed the effects of proposed standards on electric utility industry generation capacity and fuel consumption using a variant of the EIA's NEMS. NEMS, which is available in the public domain, is a large, multi-sectoral, partial-equilibrium model of the United States energy sector. EIA uses NEMS to produce its AEO, a widely recognized baseline energy forecast for the United States. DOE used a variant known as NEMS-BT. DOE conducted the utility analysis as policy deviations from the AEO2007, applying the same basic set of assumptions. The utility analysis reported the changes in installed capacity and generation—by fuel type—that result for each TSL, as well as changes in end-use electricity sales. Chapter 14 of the TSD provides details of the utility analysis methods and results. L. Environmental Analysis DOE has prepared a draft Environmental Assessment
(EA)pursuant to the National Environmental Policy Act and the requirements under 42 U.S.C. 6295(o)(2) to determine the environmental impacts of the proposed standards. (42 U.S.C. 6316(a)) As part of the environmental analysis, DOE calculated the reduction in power plant emissions of CO <sup>2</sup> , NO <sup>X</sup> and mercury (Hg), using the NEMS-BT computer model. The EA has been integrated into Chapter 16 of the TSD. The analyses do not include the estimated reduction in power plant emissions of SO 2 because, as discussed below, any such reduction resulting from an energy conservation standard would not affect the overall level of SO 2 emissions in the United States. The NEMS-BT is run similarly to the AEO2007 NEMS, except that PTAC and PTHP energy usage is reduced by the amount of energy (by fuel type) saved due to the TSLs. DOE obtained the inputs of national energy savings from the NES spreadsheet model. For the environmental analysis, the output is the forecasted physical emissions. The net benefit of the standard is the difference between emissions estimated by NEMS-BT and the AEO2007 Reference Case. The NEMS-BT tracks CO 2 emissions using a detailed module that provides results with a broad coverage of all sectors and inclusion of interactive effects. In the case of SO 2 , the Clean Air Act Amendments of 1990 set an emissions cap on all power generation. The attainment of this target, however, is flexible among generators and is enforced by applying market forces, using emissions allowances and tradable permits. As a result, accurate simulation of SO 2 trading tends to imply that the effect of energy conservation standards on physical emissions will be near zero because emissions will always be at, or near, the ceiling. Thus, there is virtually no real possible SO 2 environmental benefit from electricity savings as long as there is enforcement of the emissions ceilings. However, although there may not be an actual reduction in SO 2 emissions from electricity savings, there still may be an economic benefit from reduced demand for SO 2 emission allowances. Electricity savings decrease the generation of SO 2 emissions from power production, and consequently can decrease the need to purchase or generate SO 2 emissions allowance credits. This decreases the costs of complying with regulatory caps on emissions. M. Discussion of Other Issues 1. Effective Date of the Proposed Amended Energy Conservation Standards Generally, covered equipment to which a new or amended energy conservation standard applies must comply with the standard if they are manufactured or imported on or after a specified date. Section 342(a)(6)(A)(ii)(II) of EPCA directs DOE to “establish an amended uniform national standard for [PTACs and PTHPs] at the minimum level for each effective date specified in the amended ASHRAE Standard 90.1 [-1999 for PTACs and PTHPs], unless the Secretary determines, by rule published in the **Federal Register** and supported by clear and convincing evidence, that adoption of a uniform national standard more stringent than such amended ASHRAE/IESNA Standard 90.1 [-1999 for PTACs and PTHPs] would result in significant additional conservation of energy and is technologically feasible and economically justified.” (42 U.S.C. 6313(a)(6)(A)(ii)(II)) In today's NOPR, DOE is proposing to adopt a rule prescribing energy conservation standards higher than the efficiency levels contained in ASHRAE/IESNA Standard 90.1-1999. EPCA states that any such standards “shall become effective for products manufactured on or after a date which is four years after the date such rule is published in the **Federal Register** .” (42 U.S.C. 6313(a)(6)(D)) DOE has applied this four-year implementation period to determine the effective date of any energy conservation standard prescribed by this rulemaking. Thus, since DOE expects to issue a final rule in this proceeding in September 2008 32 , the rule would apply to products manufactured on or after September 2012, four years from the date of publication of the final rule. Thus, DOE calculated the LCCs and PBPs for all customers as if each one purchased a new PTAC or PTHP in 2012. 32 This rulemaking is subject to a Consent Decree filed with the U.S. District Court for the Southern District of New York to settle the consolidated cases of *State of New York, et al.* v. *Bodman* , and *Natural Resources Defense Council, Inc., et al.,* (Civ. 7807
(JES)and Civ. 7808
(JES)(S.D.N.Y consolidated December 6, 2005)), under which DOE is required to publish a final rule for amended energy conservation standards for PTACs and PTHPs by September 30, 2008. 2. ASHRAE/IESNA Standard 90.1-1999 Labeling Requirement ASHRAE/IESNA Standard 90.1-1999 established separate categories for PTACs and PTHPs based on standard and non-standard size wall sleeve dimensions. Further, it described standard size units as being for new construction and non-standard size units as being for replacement purposes. In addition, ASHRAE Standard 90.1-1999 includes a labeling requirement in order to differentiate between new construction and replacement equipment. Specifically, under ASHRAE/IESNA Standard 90.1-1999, to be considered a non-standard size unit ( *i.e.* , replacement), PTACs and PTHPs must have a sleeve size less than 16 inches high and less than 42 inches wide, and be labeled as being for replacement applications only. DOE believes ASHRAE included a labeling requirement for PTACs and PTHPs to help deter less efficient, non-standard size equipment from being used for new construction. Section 344 of EPCA provides the Secretary with the authority to establish labeling rules for certain commercial equipment, including PTACs and PTHPs. (42 U.S.C. 6315(e)) Section 344 of EPCA directs the Secretary to consider labeling rules which:
(1)Indicate the energy efficiency of the equipment on the permanent nameplate attached to such equipment or on other nearby permanent marking;
(2)prominently display the energy efficiency of the equipment in new equipment catalogs used by the manufacturer to advertise the equipment; and
(3)include such other markings as the Secretary determines necessary solely to facilitate enforcement of the standards established for such equipment. (42 U.S.C. 6315(e)) In addition, section 344 of EPCA states that the Secretary shall not promulgate labeling rules for any class of industrial equipment, including PTACs and PTHPs, unless DOE has determined that: • Labeling in accordance with this section is technologically and economically feasible with respect to such class; • Significant energy savings will likely result from such labeling; and • Labeling in accordance with this section is likely to assist consumers in making purchasing decisions. (42 U.S.C. 6315(h)). At this time, DOE is uncertain of the types of energy use or efficiency information commercial customers and owners of PTACs and PTHPs would find useful for making purchasing decisions. Before DOE can establish labeling rules, it must first ascertain whether the above-referenced criteria are met. DOE will work with the Federal Trade Commission and other stakeholders to determine the types of information and the forms ( *e.g.* , labels, fact sheets, or directories) that would be most useful for commercial customers and owners of PTACs and PTHPs. DOE preliminarily believes that a label on PTAC and PTHP equipment indicating the equipment class would be useful for enforcement of both the energy conservation standards as well as the building codes and would assist States and other stakeholders in determining which application correlates to a given PTAC or PTHP (based upon size). DOE anticipates proposing labeling requirements for PTAC and PTHP equipment in a separate rulemaking. DOE invites public comment on the type of information and other requirements or factors it should consider in developing a proposed labeling rule for PTACs and PTHPs. V. Analytical Results A. Trial Standard Levels Table V.1 presents the baseline efficiency level and the efficiency level of each TSL analyzed for standard size and non-standard size PTACs and PTHPs subject to today's proposed rule. The baseline efficiency levels correspond to the efficiency levels specified by the energy efficiency equations in ASHRAE/IESNA Standard 90.1-1999. TSLs 1, 3, 5, 6 represent matched pairs of efficiency levels for the three representative cooling capacities of PTACs and PTHPs. The efficiency levels for PTACs and PTHPs with the same cooling capacity and wall sleeve dimensions are equal. DOE maintained the 0.7 EER decrement established by ASHRAE/IESNA Standard 90.1-1999 between the standard size equipment with cooling capacities of 9,000 Btu/h and 12,000 Btu/h. TSL 7 is the maximum technologically feasible (“max tech”) level for each class of equipment as discussed in section III.B.2, above. TSLs 2 and 4 combine different efficiency pairings between PTACs and PTHPs. In other words, DOE examined the impacts of amended energy conservation standards when PTACs and PTHPs are required to meet different efficiency levels. For TSL 2, DOE combined TSL 1 for PTACs and TSL 3 for PTHPs. For TSL 4, DOE combined TSL 1 for PTACs and TSL 5 for PTHPs. These two combination levels serve to maximize LCC savings, while recognizing the differences in LCC results for PTACs and PTHPs. Table V.1.—Standard Size and Non-Standard Size PTACs and PTHPs Baseline Efficiency Levels and TSLs Equipment class (cooling capacity) Efficiency metric Baseline (ASHRAE/IESNA Standard 90.1-1999) TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 Max-Tech Standard Size PTAC 9,000 Btu/h EER 10.6 10.9 10.9 11.1 10.9 11.3 11.5 12.0 Standard Size PTAC 12,000 Btu/h EER 9.9 10.2 10.2 10.4 10.2 10.6 10.8 11.5 Non-Standard Size PTAC 11,000 Btu/h EER 8.6 9.4 9.4 9.7 9.4 10.0 10.7 11.2 Standard Size PTHP 9,000 Btu/h EER 10.4 10.9 11.1 11.1 11.3 11.3 11.5 12.0 COP 3.0 3.1 3.2 3.2 3.3 3.3 3.3 3.5 Standard Size PTHP 12,000 Btu/h EER 9.7 10.2 10.4 10.4 10.6 10.6 10.8 11.7 COP 2.9 3.0 3.1 3.1 3.1 3.1 3.1 3.3 Non-Standard PTHP 11,000 Btu/h EER 8.5 9.4 9.7 9.7 10.0 10.0 10.7 11.4 COP 2.6 2.8 2.8 2.8 2.9 2.9 2.9 2.9 As stated in the engineering analysis (see Chapter 5 of this TSD), current Federal energy conservation standards and the efficiency levels specified by ASHRAE/IESNA Standard 90.1-1999 for PTACs and PTHPs are a function of the equipment's cooling capacity. Both the Federal energy conservation standards and the efficiency standards in ASHRAE/IESNA Standard 90.1-1999 are based on equations to calculate the efficiency levels for PTACs and PTHPs with a cooling capacity greater than or equal to 7,000 Btu/h and less than or equal to 15,000 Btu/h for each equipment class. To derive the standards (i.e., efficiency level as a function of cooling capacity), DOE plotted the representative cooling capacities and the corresponding efficiency levels for each TSL. DOE then calculated the equation of the line passing through the EER values for 9,000 Btu/h and 12,000 Btu/h for standard size PTACs and PTHPs. More details describing how DOE determined the energy efficiency equations for each TSL are found in Chapter 9 of the TSD. Table V.2 and Table V.3 identify the energy efficiency equations for each TSL for standard size PTACs and PTHPs. Table V.2.—Energy-Efficiency Equations (EER as a Function of Cooling Capacity) by TSL for Standard Size PTACs Standard size** PTACs Energy efficiency equation* Baseline ASHRAE/IESNA Standard 90.1-1999 EER = 12.5−(0.213 × Cap † /1000) TSL 1 EER = 13.0−(0.233 × Cap † /1000) TSL 2 EER = 13.0−(0.233 × Cap † /1000) TSL 3 EER = 13.2−(0.233 × Cap † /1000) TSL 4 EER = 13.0−(0.233 × Cap † /1000) TSL 5 EER = 13.4−(0.233 × Cap † /1000) TSL 6 EER = 13.6−(0.233 × Cap † /1000) TSL 7 EER = 13.5−(0.167 × Cap † /1000) * For equipment rated according to the DOE test procedure, all EER values must be rated at 95 °F outdoor dry-bulb temperature for air-cooled products and evaporatively-cooled products and at 85 °F entering water temperature for water cooled products. ** Standard size refers to PTAC or PTHP equipment with wall sleeve dimensions greater than or equal to 16 inches high, or greater than or equal to 42 inches wide. † Cap means cooling capacity in Btu/h at 95 °F outdoor dry-bulb temperature. Table V.3.—Energy-Efficiency Equations (EER as a Function of Cooling Capacity) by TSL for Standard Size PTHPs Standard size** PTHPs Energy efficiency equation* Baseline ASHRAE/IESNA Standard 90.1-1999 EER = 12.3−(0.213 × Cap † /1000) COP = 3.2−(0.026 × Cap † /1000) TSL 1 EER = 13.0−(0.233 × Cap † /1000) COP = 3.6−(0.046 × Cap † /1000) TSL 2 EER = 13.2−(0.233 × Cap † /1000) COP = 3.6−(0.044 × Cap † /1000) TSL 3 EER = 13.2−(0.233 × Cap † /1000) COP = 3.6−(0.044 × Cap † /1000) TSL 4 EER = 13.4−(0.233 × Cap † /1000) COP = 3.7−(0.053 × Cap † /1000) TSL 5 EER = 13.4−(0.233 × Cap † /1000) COP = 3.7−(0.053 × Cap † /1000) TSL 6 EER = 13.6−(0.233 × Cap † /1000) COP = 3.8−(0.053 × Cap † /1000) TSL 7 EER = 12.9−(0.100 × Cap † /1000) COP = 4.1−(0.074 × Cap † /1000) * For equipment rated according to the DOE test procedure, all EER values must be rated at 95 °F outdoor dry-bulb temperature for air-cooled products and evaporatively-cooled products and at 85 °F entering water temperature for water cooled products. All COP values must be rated at 47 °F outdoor dry-bulb temperature for air-cooled products, and at 70 °F entering water temperature for water-source heat pumps. ** Standard size refers to PTAC or PTHP equipment with wall sleeve dimensions greater than or equal to 16 inches high, or greater than or equal to 42 inches wide. † Cap means cooling capacity in Btu/h at 95 °F outdoor dry-bulb temperature. For non-standard size PTACs and PTHPs, DOE used the ASHRAE/IESNA Standard 90.1-1999 equation slope and the representative cooling capacity (i.e., 11,000 Btu/h cooling capacity) to determine the energy efficiency equations corresponding to each TSL. More details describing how DOE determined the energy efficiency equations for each TSL are found in Chapter 9 of the TSD. Table V.4 and Table V.5 identify the energy efficiency equations for each TSL for non-standard size PTAC and PTHP. Table V.4—Energy-Efficiency Equations (EER as a Function of Cooling Capacity) by TSL for Non-Standard Size PTACs Non-standard size ** PTACs Energy efficiency equation * Baseline ASHRAE/IESNA Standard 90.1-1999 EER = 10.9 − (0.213 × Cap † /1000) TSL 1 EER = 11.7 − (0.213 × Cap † /1000) TSL 2 EER = 11.7 − (0.213 × Cap † /1000) TSL 3 EER = 12.0 − (0.213 × Cap † /1000) TSL 4 EER = 11.7 − (0.213 × Cap † /1000) TSL 5 EER = 12.3 − (0.213 × Cap † /1000) TSL 6 EER = 13.0 − (0.213 × Cap † /1000) TSL 7 EER = 13.5 − (0.213 × Cap † /1000) * For equipment rated according to the DOE test procedure, all EER values must be rated at 95 °F outdoor dry-bulb temperature for air-cooled products and evaporatively-cooled products and at 85 °F entering water temperature for water cooled products. ** Non-standard size refers to PTAC or PTHP equipment with wall sleeve dimensions less than 16 inches high and less than 42 inches wide. † Cap means cooling capacity in Btu/h at 95 °F outdoor dry-bulb temperature. Table V.5—Energy-Efficiency Equations (EER as a Function of Cooling Capacity) by TSL for Non-Standard Size PTHPs Non-standard size ** PTHPs Energy efficiency equation * Baseline ASHRAE/IESNA Standard 90.1-1999 EER = 10.8 − (0.213 × Cap † /1000) COP = 2.9 − (0.026 × Cap † /1000) TSL 1 EER = 11.7 − (0.213 × Cap † /1000) COP = 3.1 − (0.026 × Cap † /1000) TSL 2 EER = 12.0 − (0.213 × Cap † /1000) COP = 3.1 − (0.026 × Cap † /1000) TSL 3 EER = 12.0 − (0.213 × Cap † /1000) COP = 3.1 − (0.026 × Cap † /1000) TSL 4 EER = 12.3 − (0.213 × Cap † /1000) COP = 3.1 − (0.026 × Cap † /1000) TSL 5 EER = 12.3 − (0.213 × Cap † /1000) COP = 3.1 − (0.026 × Cap † /1000) TSL 6 EER = 13.0 − (0.213 × Cap † /1000) COP = 3.2 − (0.026 × Cap † /1000) TSL 7 EER = 13.7 − (0.213 × Cap † /1000) COP = 3.2 − (0.026 × Cap † /1000) * For equipment rated according to the DOE test procedure, all EER values must be rated at 95 °F outdoor dry-bulb temperature for air-cooled products and evaporatively-cooled products and at 85 °F entering water temperature for water cooled products. All COP values must be rated at 47 °F outdoor dry-bulb temperature for air-cooled products, and at 70 °F entering water temperature for water-source heat pumps. ** Non-standard size refers to PTAC or PTHP equipment with wall sleeve dimensions less than 16 inches high and less than 42 inches wide. † Cap means cooling capacity in Btu/h at 95 °F outdoor dry-bulb temperature. For PTACs and PTHPs with cooling capacity less than 7,000 Btu/h, DOE determined the EERs using a cooling capacity of 7,000 Btu/h in the efficiency-capacity equations. For PTACs and PTHPs with a cooling capacity greater than 15,000 Btu/h cooling capacity, DOE determined the EERs using a cooling capacity of 15,000 Btu/h in the efficiency-capacity equations. This is the same method established in the Energy Policy Act of 1992 and provided in ASHRAE 90.1-1999 for calculating the EER and COP of equipment with cooling capacities smaller than 7,000 Btu/h and larger than 15,000 Btu/h. B. Economic Justification and Energy Savings 1. Economic Impacts on Commercial Customers a. Life-Cycle Cost and Payback Period DOE's LCC and PBP analyses provided five outputs for each TSL that are reported in Tables V.6 through V.11 below. The first three outputs are the proportion of PTAC and PTHP purchases where the purchase of a standard-compliant piece of equipment would create a net LCC increase, no impact, or a net LCC savings for the customer. The fourth output is the average net LCC savings from standard-compliant equipment. Finally, the fifth output is the average PBP for the customer investment in standard-compliant equipment. Table V.6.—Summary LCC and PBP Results for Standard Size PTAC With a Cooling Capacity of 9,000 Btu/h Trial standard level 1 2 3 4 5 6 7 EER 10.9 10.9 11.1 10.9 11.3 11.5 12 PTAC with Net LCC Increase (%) 11 11 23 11 35 47 65 PTAC with No Change in LCC (%) 81 81 63 81 46 29 14 PTAC with Net LCC Savings (%) 8 8 14 8 19 23 22 Mean LCC Savings* ($) 0 0 0 0
(13)Mean PBP (years) 11.6 11.6 12.5 11.6 13.2 14.0 16.0 *Numbers in parentheses indicate negative LCC savings, i.e., an increase in LCC. Table V.7.—Summary LCC and PBP Results for Standard Size PTHP With a Cooling Capacity of 9,000 Btu/h Trial standard level 1 2 3 4 5 6 7 EER 10.9 11.1 11.1 11.3 11.3 11.5 12 PTHP with Net LCC Increase (%) 4 6 6 8 8 15 20 PTHP with No Change in LCC (%) 81 64 64 47 47 30 14 PTHP with Net LCC Savings (%) 15 30 30 45 45 55 66 Mean LCC Savings ($) 13 23 23 32 32 30 40 Mean Payback Period (years) 4.5 4.0 4.0 3.9 3.9 4.5 4.8 Table V.8.—Summary LCC and PBP Results for Standard Size PTAC With a Cooling Capacity of 12,000 Btu/h Trial standard level 1 2 3 4 5 6 7 EER 10.2 10.2 10.4 10.2 10.6 10.8 11.5 PTAC with Net LCC Increase (%) 13 13 25 13 41 54 75 PTAC with No Change in LCC (%) 80 80 62 80 44 28 12 PTAC with Net LCC Savings (%) 7 7 13 7 15 18 13 Mean LCC Savings* ($)
(36)Mean PBP (years) 13.0 13.0 13.9 13.0 14.8 15.9 19.8 *Numbers in parentheses indicate negative savings, i.e., an increase in LCC. Table V.9.—Summary LCC and PBP Results for Standard Size PTHP With a Cooling Capacity of 12,000 Btu/h Trial standard level 1 2 3 4 5 6 7 EER 10.2 10.4 10.4 10.6 10.6 10.8 11.7 PTHP with Net LCC Increase (%) 5 7 7 15 15 27 45 PTHP with No Change in LCC (%) 80 62 62 45 45 28 12 PTHP with Net LCC Savings (%) 15 31 31 40 40 45 43 Mean LCC Savings ($) 15 26 26 22 22 18 8 Mean PBP (years) 4.9 4.4 4.4 5.3 5.3 6.1 7.5 Table V.10.—Summary LCC and PBP Results for Non-Standard Size PTACs With a Cooling Capacity of 11,000 Btu/h Trial standard level 1 2 3 4 5 6 7 EER 9.4 9.4 9.7 9.4 10 10.7 11.2 PTAC with Net LCC Increase (%) 3 3 9 3 16 33 48 PTAC with No Change in LCC (%) 80 80 62 80 44 27 12 PTAC with Net LCC Savings (%) 17 17 30 16 40 40 40 Mean LCC Savings ($) 27 27 31 27 33 26 12 Mean PBP (years) 4.2 4.2 4.9 4.2 5.7 7.8 9.6 Table V.11.—Summary LCC and PBP Results for Non-Standard Size PTHPs With a Cooling Capacity of 11,000 Btu/h Trial Standard level 1 2 3 4 5 6 7 EER 9.4 9.7 9.7 10 10 10.7 11.4 PTHP with Net LCC Increase (%) 0 2 2 3 3 14 29 PTHP with No Change in LCC (%) 81 62 62 45 45 27 12 PTAC with Net LCC Savings (%) 19 36 36 53 53 59 59 Mean LCC Savings ($) 61 66 66 81 80 74 53 Mean PBP (years) 2.0 2.6 2.6 2.8 2.8 4.2 5.8 For PTACs and PTHPs with a cooling capacity less than 7,000 Btu/h, DOE established the proposed energy conservation standards using a cooling capacity of 7,000 Btu/h in the proposed efficiency-capacity equation. DOE believes the LCC and PBP impacts for equipment in this category will be similar to the impacts of the 9,000 Btu/h units because the MSP and usage characteristics are in a similar range. Similarly, for PTACs and PTHPs with a cooling capacity greater than 15,000 Btu/h, DOE established the proposed energy conservation standards using a cooling capacity of 15,000 Btu/h in the proposed efficiency-capacity equation. Further, for PTACs and PTHPs with a cooling capacity greater than 15,000 Btu/h, DOE believes the impacts will be similar to units with a cooling capacity of 12,000 Btu/h. More details explaining how DOE developed the proposed energy efficiency equations based on the analysis results for the representative cooling capacities are provided in Section V.A of today's notice. b. Life-Cycle Cost Sub-Group Analysis Using the LCC spreadsheet model, DOE determined the impact of the TSLs on the following customer subgroup: small businesses. Table V.12 shows the mean LCC savings from proposed energy conservation standards, and Table V.13 shows the mean payback period (in years) for this subgroup. More detailed discussion on the LCC subgroup analysis and results can be found in Chapter 12 of the TSD. Table V.12.—Mean Life-Cycle Cost Savings for PTAC or PTHP Equipment Purchased by LCC Sub-Groups (2006$) Equipment class (cooling capacity) TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 Standard Size PTAC (9,000 Btu/h) ($1) ($1) ($2) ($1) ($4) ($7) ($17) Standard Size PTHP (9,000 Btu/h) 10 19 19 26 26 23 30 Standard Size PTAC (12,000 Btu/h)
(42)Standard Size PTHP (12,000 Btu/h) 11 20 20 16 16 11
(4)Non-Standard Size PTAC 22 22 25 22 26 16 1 Non-Standard Size PTHP 53 56 56 69 69 60 37 *Numbers in parentheses indicate negative savings. Table V.13.—Mean Payback Period for PTAC or PTHP Equipment Purchased by LCC Sub-Groups (Years) Equipment class (cooling capacity) TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 Standard Size PTAC (9,000 Btu/h) 11.5 11.5 12.4 11.5 13.2 13.9 15.9 Standard Size PTHP (9,000 Btu/h) 4.5 4.0 4.0 3.9 3.9 4.5 4.8 Standard Size PTAC (12,000 Btu/h) 12.9 12.9 13.8 12.9 14.7 15.7 19.7 Standard Size PTHP (12,000 Btu/h) 4.9 4.4 4.4 5.2 5.2 6.1 7.5 Non-Standard Size PTAC 4.2 4.2 4.9 4.2 5.7 7.8 9.5 Non-Standard Size PTHP 2.0 2.6 2.6 2.8 2.8 4.2 5.8 For PTACs and PTHPs with a cooling capacity less than 7,000 Btu/h, DOE believes that the LCC and PBP impacts for equipment in this category will be similar to the impacts of the 9,000 Btu/h units because the MSP and usage characteristics are in a similar range. Similarly, for PTACs and PTHPs with a cooling capacity greater than 15,000 Btu/h, DOE believes the impacts will be similar to units with a cooling capacity of 12,000 Btu/h. See chapter 5 of the TSD for how we selected representative capacities that were analyzed. 2. Economic Impacts on Manufacturers DOE performed an MIA to estimate the impact of amended energy conservation standards on PTAC and PTHP manufacturers. (See TSD, Chapter 13.) a. Industry Cash Flow Analysis Results i. Standard Size PTACs and PTHPs Table V.14 and Table V.15 show the MIA results for each TSL using both markup scenarios described above for standard size PTACs and PTHPs. 33 33 The MIA estimates the impacts on standard size manufacturers of equipment in the entire range of cooling capacities (i.e., the MIA results in Tables V.15 and V.16 take into consideration the impacts on manufacturers of equipment from all 6 standard size equipment classes). Table V.14.—Manufacturer Impact Analysis for Standard Size PTACs and PTHPs Under the Flat Markup Scenario R-410A full cost recovery with amended energy standards full recovery of increased cost Units Base case Trial standard level 1 2 3 4 5 6 7 INPV (2006$ millions) 305 305 303 306 300 308 304 314 Change in INPV (2006$ millions)
(2)1
(5)3
(1)9 (%) −0.1 −0.8 0.2 −1.5 0.9 −0.2 3.1 R-410A Equipment Conversion Expenses * (2006$ millions) 14.0 R-410A Capital Conversion Expenses * (2006$ millions) 7.0 Amended Energy Conservation Standards Equipment Conversion Expenses (2006$ millions) 4.4 7.2 6.1 10.3 7.0 13.1 17.5 Amended Energy Conservation Standards Capital Conversion Expenses (2006$ millions) 3.4 5.6 4.7 7.9 5.4 10.1 13.5 Total Investment Required ** (2006$ millions) 28.8 33.8 31.9 39.2 33.4 44.3 52.2 * Equipment conversion expenses and capital conversion expenses for converting PTACs and PTHPs to R-410A are made in 2009 and accounted for in the base case. ** Total investment calculates both the equipment conversion expenses and the capital investments necessary for both converting PTACs and PTHPs to R-410A and complying with amended energy conservation standards. Table V.15.—Manufacturer Impact Analysis for Standard Size PTACs and PTHPs Under the Partial Cost Recovery Markup Scenario R-410A base case full cost recovery with amended energy standards partial cost recovery Units Base case Trial standard level 1 2 3 4 5 6 7 INPV (2006$ millions) 305 268 257 250 249 236 210 139 Change in INPV (2006$ millions)
(166)(%) −12.1 −15.7 −18.1 −18.3 −22.7 −31.2 −54.5 R-410A Equipment Conversion Expenses * (2006$ millions) 14.0 R-410A Capital Conversion Expenses * (2006$ millions) 7.0 Amended Energy Conservation Standards Equipment Conversion Expenses (2006$ millions) 4.4 7.2 6.1 10.3 7.0 13.1 17.5 Amended Energy Conservation Standards Capital Conversion Expenses (2006$ millions) 3.4 5.6 4.7 7.9 5.4 10.1 13.5 Total Investment Required ** (2006$ millions) 28.8 33.8 31.9 39.2 33.4 44.3 52.2 * Equipment conversion expenses and capital conversion expenses for converting PTACs and PTHPs to R-410A are made in 2009 and accounted for in the base case. ** Total investment calculates both the equipment conversion expenses and the capital investments necessary for both converting PTACs and PTHPs to R-410A and complying with amended energy conservation standards. For the results shown above, DOE examined only the impacts of amended energy conservation standards on the INPV. The results shown assume that manufacturers are able to recover all of costs associated with the conversion to R-410A refrigerant, which allows DOE to examine the impacts of the refrigerant phase-out separately in the cumulative regulatory burden analysis. DOE also estimated the impacts of amended energy conservation standards when manufacturers were only able to recover part of the costs associated with the conversion to R-410A and presented the results in the TSD. See Chapter 13 of the TSD for a complete summary of results including the cumulative regulatory burden analysis. At TSL 1, the impact on INPV and cash flow varies greatly depending on the manufacturers and their ability to pass on increases in MPCs to the customer. DOE estimated the impacts in INPV at TSL 1 to range from less than −$1 million up to −$37 million, or a change in INPV of negative 0.1 percent up to negative 12.1 percent. At this level, the industry cash flow decreases by approximately 25 percent, to $9 million, compared to the base case value of $12 million in the year leading up to the standards. Since more than 75 percent of PTAC and PTHP market is at or above the efficiency levels specified by TSL 1 using the R-22 refrigerant, those manufacturers that do not fall below the efficiency levels specified by TSL 1 after the refrigerant phase-out will not have to make additional modifications to their product lines to conform to the amended energy conservation standards. DOE expects the lower end of the impacts to be reached, which indicates that industry revenues and costs are not significantly negatively impacted as long as manufacturers are able to recover fully the increase in manufacturer production cost from the customer. At TSL 2, the impact on INPV and cash flow would be similar to TSL 1 and dependent on whether manufacturers are able to recover fully the increases in MPCs from the customer. DOE estimated the impacts in INPV at TSL 2 to range from −$2 million up to −$48 million, or a change in INPV of −0.8 percent up to −15.7 percent. At this level, the industry cash flow decreases by approximately 33 percent, to $8 million, compared to the base case value of $12 million in the year leading up to the standards. Up to 75 percent of PTACs and up to 50 percent of PTHPs being sold are already at or above this level using R-22 refrigerant. Similar to TSL 1 for PTACs, manufacturers whose equipment does not fall below the efficiency levels specified by TSL 1 after the refrigerant phase-out will not have to make additional modifications to their product lines to conform to TSL 2. For PTHPs, the required higher level of efficiency will cause some manufactures to make additional modifications to their product lines to conform to the amended energy conservation standards. These additional plant and product modifications are estimated in the capital and product conversion costs shown in Tables V.14 and V. 15. Even though TSL 2 requires efficiency levels that are different for PTACs and PTHPs, there are small differences between the EER values for a given capacity in sleeve size, which will minimize the amount of redesign manufacturers will have to undertake to modify their product lines. DOE expects the impacts of TSL 2 on manufacturers of standard size PTACs will be greater than TSL 1, but the magnitude of impacts largely depends on the ability of manufacturers to recover fully the increase in MPC from the customer and minimize the level of redesign between the two efficiency levels. At TSL 3, the impact on INPV and cash flow continues to vary depending on the manufacturers and their ability to pass on increases in MPCs to the customer. DOE estimated the impacts in INPV at TSL 3 to range from approximately positive $1 million to −$55 million, or a change in INPV of 0.2 percent to −18.1 percent. At this level, the industry cash flow decreases by approximately 33 percent, to $8 million, compared to the base case value of $12 million in the year leading up to the standards. Currently the bulk of the equipment being sold is already at or above this level using R-22 refrigerant. DOE does not expect industry revenues and costs to be impacted significantly as long as standard size PTAC and PTHP manufacturers are able the increase in manufacturer production cost from the customer. The positive INPV value is explained by increases in MSP due to higher costs of R-410A equipment, which DOE assumed under this scenario that manufacturers would be able to recover fully the investments needed for conversion to R-410A. See Chapter 13 of the TSD for additional details of each markup scenario. At TSL 4, DOE estimated the impacts in INPV to range from approximately −$5 million to −$56 million, or a change in INPV of −1.5 percent up to −18.3 percent. At this level, the industry cash flow decreases by approximately 50 percent, to $6 million, compared to the base case value of $12 million in the year leading up to the standards. At higher TSLs, manufacturers have a harder time fully passing on larger increases in MPCs to the customer. At to TSL 4, manufacturers are concerned about whether they will be able to produce PTHPs, by the effective date of the standard, that use R-410A refrigerant. Using the performance degradations from the engineering analysis, TSL 4 for PTHPs using R-410A would correspond to the “max-tech” efficiency levels for PTHPs unless higher efficiency compressors enter the market prior to the effective date of an amended energy conservation standard. Based on information submitted by industry, manufacturers would be required to redesign completely their PTHP equipment lines. Since most manufacturers only manufacture one product line, and combine their R&D efforts for PTACs and PTHPs into one design, manufacturers would likely choose to redesign their entire equipment offering. Similar to TSL 1, for PTACs, manufacturers that do not fall below TSL 1 after the refrigerant phase-out will not have to make additional modifications to their PTAC equipment lines to conform to TSL 4. Due to the disparity between efficiency levels of standard size PTACs and PTHPs specified by TSL 4, DOE initially believes that it is more likely that the higher end of the range of impacts could be reached (i.e., a drop of 18.3 percent in INPV). At TSL 5, DOE estimated the impacts in INPV to range from approximately $3 million up to −$69 million, or a change in INPV of approximately 1 percent up to −22.7 percent. At this level, the industry cash flow decreases by approximately 33 percent, to $8 million, compared to the base case value of $12 million in the year leading up to the standards. As with TSL 4, standard size PTAC and PTHP manufacturers continue to have a hard time fully passing on larger increases in MPCs to the customer. At TSL 5, manufacturers stated their concerns over the ability to be able to produce both PTACs and PTHPs by the effective date of the standard utilizing R-410A refrigerant. Using the performance degradations from the engineering analysis, TSL 5 would correspond to the “max-tech” efficiency levels for both PTACs and PTHPs using R-410A unless higher efficiency compressors enter the market prior to the effective date of an amended energy conservation standard. Based on information submitted by industry, the majority of manufacturers would require a complete redesign of their equipment. Thus, DOE believes it is likely that the higher range of the impacts could be reached. At TSL 6, DOE estimated the impacts in INPV to range from −$1 million up to −$95 million, or a change in INPV of approximately −0.2 percent up to −31.2 percent. At this level, the industry cash flow decreases by approximately 66 percent, to $4 million, compared to the base case value of $12 million in the year leading up to the standards. At higher TSLs, manufacturers have a harder time fully passing on larger increases in MPCs to the customer, and therefore manufacturers expect the higher end of the range of impacts to be reached (i.e., a drop of 31.2 percent in INPV). TSL 6 requires the production of standard size PTACs and PTHPs using R-410A that are not currently available on the market today assuming the system performance degradations estimated in the engineering analysis. If manufacturers do not have the ability to integrate a high efficiency R-410A compressor into the PTACs and PTHPs, the impacts could be greater than characterized by DOE's MIA analysis. At TSL 7 (max tech), DOE estimated the impacts in INPV to range from $9 million up to −$166 million, or a change in INPV of approximately 3 percent up to −54.5 percent. At this level, the industry cash flow decreases by approximately 92 percent, to $1 million, compared to the base case value of $12 million in the year leading up to the standards. At higher TSLs, manufacturers have a harder time fully passing on larger increases in MPCs to the customer, and therefore manufacturers expect the higher end of the range of impacts to be reached (i.e., a drop of 31.2 percent in INPV). Currently, there is only one model being manufactured at these efficiency levels, which uses R-22 refrigerant. Most manufacturers did not provide DOE with projected equipment conversion costs or capital conversion costs at this level, since they could not conceive of what designs using R-410A might achieve this efficiency level. The industry would experience an increase in net present value if it were able to fully pass through to customers the increase in production costs associated with meeting new amended energy conservation standards. However, there is a risk of very large negative impacts if manufacturers' expectations are realized about reducing profit margins. During the interviews, manufacturers expressed disbelief at the possibility of manufacturing an entire equipment line at the max-tech levels using R-410A refrigerant. ii. Non-Standard Size PTACs and PTHPs Table V.16 and Table V.17 shows the MIA results for each TSL using both markup scenarios described above for non-standard size PTACs and PTHPs. 34 34 The MIA estimates the impacts on non-standard size manufacturers of equipment in the entire range of cooling capacities (i.e., the MIA results in Tables V.15 and V.16 take into consideration the impacts on manufacturers of equipment from all 6 non-standard size equipment classes). Table V.16.—Manufacturer Impact Analysis for Non-Standard Size PTACs and PTHPs Under Full Cost Recovery Markup Scenario R-410A full cost recovery with amended energy standards full recovery of increased cost Units Base case Trial standard level 1 2 3 4 5 6 7 INPV (2006$ millions) 28 25 22 23 18 21 18 16 Change in INPV (2006$ millions)
(11)(%) −7.7 −18.5 −15.7 −34.2 −24.6 −32.9 −40.6 R-410A Equipment Conversion Expenses * (2006$ millions) 0.6 R-410A Capital Conversion Expenses * (2006$ millions) 7.0 Amended Energy Conservation Standards Equipment Conversion Expenses (2006$ millions) 2.5 6.3 5.6 10.6 8.8 11.9 15.0 Amended Energy Conservation Standards Capital Conversion Expenses (2006$ millions) 1.3 2.2 1.9 3.5 2.6 3.2 3.9 Total Investment Required ** (2006$ millions) 11.4 16.1 15.1 21.7 18.9 22.7 26.5 * Equipment conversion expenses and capital conversion expenses for converting PTACs and PTHPs to R-410A are made in 2009 and accounted for in the base case. ** Total investment calculates both the equipment conversion expenses and the capital investments necessary for both converting PTACs and PTHPs to R-410A and complying with amended energy conservation standards. Table V.17.—Manufacturer Impact Analysis for Non-Standard Size PTACs and PTHPs Under the Partial Cost Recovery Markup Scenario R-410A Base case full cost recovery with amended energy standards partial cost recovery Units Base case Trial standard level 1 2 3 4 5 6 7 INPV (2006$ millions) 28 23 20 20 15 17 13 7 Change in INPV (2006$ millions)
(21)(%) −14.8 −26.9 −25.7 −43.9 −37.5 −53.4 −74.7 R-410A Equipment Conversion Expenses * (2006$ millions) 0.6 R-410A Capital Conversion Expenses * (2006$ millions) 7.0 Amended Energy Conservation Standards Equipment Conversion Expenses (2006$ millions) 2.5 6.3 5.6 10.6 8.8 11.9 15.0 Amended Energy Conservation Standards Capital Conversion Expenses (2006$ millions) 1.3 2.2 1.9 3.5 2.6 3.2 3.9 Total Investment Required ** (2006$ millions) 11.4 16.1 15.1 21.7 18.9 22.7 26.5 * Equipment conversion expenses and capital conversion expenses for converting PTACs and PTHPs to R-410A are made in 2009 and accounted for in the base case. ** Total investment calculates both the equipment conversion expenses and the capital investments necessary for both converting PTACs and PTHPs to R-410A and complying with amended energy conservation standards. For the results shown above, DOE examined only the impacts of amended energy conservation standards on the INPV. The results shown assume that manufacturers are able to recover all of costs associated with the conversion to R-410A refrigerant, which allows DOE to examine the impacts of the refrigerant phase-out separately in the cumulative regulatory burden analysis. See Chapter 13 of the TSD for a complete summary of results including the cumulative regulatory burden analysis. At TSL 1, DOE estimated the impacts in INPV to range from less than −$2 million up to −$4 million, or a change in INPV of −7.7 percent up to −14.8 percent. At this level, the industry cash flow decreases by approximately 50 percent, $1 million, compared to the base case value of $2 million in the year leading up to the standards. Since more than half of the equipment being sold is already at or above this level using R-22 refrigerant, those manufacturers that do not fall below TSL 1 using R-410A refrigerant will not have to make additional modifications to their product lines to conform to the amended energy conservation standards. At TSL 1, the results of the analysis show the least impact on manufacturers. At TSL 2, DOE estimated the impacts in INPV to range from −$5 million up to −$7 million, or a change in INPV of −18.5 percent up to −26.9 percent. At this level, the industry cash flow decreases by approximately 150 percent, −$1 million, compared to the base case value of $2 million in the year leading up to the standards. At this level, the majority of the industry is impacted. At higher TSLs, manufacturers have a harder time fully passing on larger increases in MPCs to the customer, thus manufacturers expect the higher end of the range of impacts to be reached (i.e., a drop of 26.9 percent in INPV). At TSL 3, DOE estimated the impacts in INPV to range from −$4 million up to −$7 million, or a change in INPV of −15.7 percent up to −25.7 percent. At this level, the industry cash flow decreases by approximately 150 percent, −$1 million, compared to the base case value of $2 million in the year leading up to the standards. At higher TSLs, manufacturers continue to have a hard time fully passing on larger increases in MPCs to the customer, thus manufacturers expect the higher end of the range of impacts to be reached (i.e., a drop of 25.7 percent in INPV). Manufacturers stated that the level of re-design required to manufacture all the equipment lines and cooling capacity ranges would be so extensive that they would consider not investing the time, research, or development efforts necessary to make equipment utilizing R-410A at TSL 3. At TSL 4, DOE estimated the impacts in INPV to range from −$9 million up to −$12 million, or a change in INPV of −34.2 percent up to −43.9 percent. At this level, the industry cash flow decreases by approximately 250 percent, −$3 million, compared to the base case value of $2 million in the year leading up to the standards. At TSL 4, manufacturers stated their concerns over the ability to be able to produce PTHPs by the effective date of the standard utilizing R-410A refrigerant. Using the performance degradations from the engineering analysis, TSL 4 for PTHPs would correspond to the “max-tech” efficiency levels for PTHPs unless higher efficiency compressors enter the market prior to the effective date of an amended energy conservation standard. Based on information submitted by industry, manufacturers would be required to redesign completely their PTHP equipment lines. At TSL 5, DOE estimated the impacts in INPV to range from −$7 million up to −$10 million, or a change in INPV of −24.6 percent up to −37.5 percent. At this level, the industry cash flow decreases by approximately 200 percent, −$2 million, compared to the base case value of $2 million in the year leading up to the standards. Using the performance degradations from the engineering analysis, TSL 5 for PTACs and PTHPs would correspond to the “max-tech” efficiency levels for PTHPs unless higher efficiency compressors enter the market prior to the effective date of an amended energy conservation standard. At TSL 6, DOE estimated the impacts in INPV to range from −$9 million up to −$15 million, or a change in INPV of −32.9 percent up to −53.4 percent. At this level, the industry cash flow decreases by approximately 300 percent, −$4 million, compared to the base case value of $2 million in the year leading up to the standards. At TSL 5 and 6, manufacturers stated their concerns over the ability to be able to produce this equipment by the effective date of the standard utilizing R-410A. Based on information submitted by industry, manufacturers would require a complete redesign of their non-standard PTAC and PTHP platforms. Many manufacturers stated they would be unwilling to redesign completely non-standard size equipment because of the small size of the market and the declining sales. Manufacturers also commented non-standard size PTACs and PTHPs are manufactured to order based on unique building designs for replacement applications. Therefore, manufacturers did not see the advantage to completely redesigning non-standard size PTACs and PTHPs in small and declining market. At TSL 7, DOE estimated the impacts in INPV to range from −$11 million up to −$21 million, or a change in INPV of −40.6 percent up to −74.7 percent. At this level, the industry cash flow decreases by approximately 350 percent, −$5 million, compared to the base case value of $2 million in the year leading up to the standards. During their MIA interviews, all manufacturers stated that this level is simply not achievable with current technologies after the refrigerant phase-out. In addition, some manufacturers would not provide equipment conversion cost or capital conversion costs at this level, since they could not conceive what designs might reach this efficiency level. Lastly, non-standard size manufacturers stated great concern over the amplification of impacts if ASHRAE/IESNA Standard 90.1-1999 definitions are adopted by DOE and their equipment lines are reduced. Several manufacturers believe the ASHRAE/IESNA Standard 90.1-1999 definitions would cause up to 50 percent of their equipment lines to be misclassified. Consequently, this equipment would be required to meet the higher energy conservation standards for standard size equipment, which manufacturers do not believe is attainable with non-standard size equipment. If manufacturers' expectations were reached with a declining equipment offering, the INPV and cash flow impacts of the declining industry as estimated by the MIA would be further negatively affected. b. Cumulative Regulatory Burden While any one regulation may not impose a significant burden on manufacturers, the combined effects of several impending regulations may have serious consequences for some manufacturers, groups of manufacturers, or an entire industry. Assessing the impact of a single regulation may overlook this cumulative regulatory burden. As previously mentioned, all PTAC and PTHP manufacturers believe that the refrigerant phase-out will be the biggest external burden on manufacturers. DOE took all comments and concerns into consideration and examined different impacts the refrigerant phase-out would have on standard and non-standard size PTAC and PTHP industries. DOE first examined the possible impacts on INPV from converting current production of R-22 equipment into R-410A equipment. DOE then examined the possible impacts of amended energy conservation standards on the R-410A base case. In other words, DOE examined the cumulative impacts of both R-410A conversion and compliance with the proposed energy conservation standards (see Chapter 13 of the TSD). Table V.18 and Table V.19 show the changes in INPV because of conversion to R-410A in 2012 on the base case (i.e., the shipments forecast in the absence of amended mandatory energy conservation standards beyond the levels in ASHRAE/IESNA Standard 90.1-1999). For the results presented in the two tables below, DOE assumed manufacturers would be able to cover fully any increase in manufacturing costs associated with the conversion to R-410A in 2010. DOE also estimated the impacts on the base case from the R-410A conversion if manufacturers were not able to recover fully the increases in MPCs and displayed the results in Chapter 13 of the TSD. In general, if manufacturers were not able to recover fully the increases in MPC because of the R-410A conversion, the impacts on the base case would be amplified. Table V.18.—Changes in Industry Net Present Value for Standard Size PTACs and PTHPs From R-410A Conversion TSL Energy conservation standards flat markup INPV $MM Change in INPV from base case $MM % Change Base Case (R-22 only) 298 Base Case (R-22 with R-410A Conversion) 305 7 2.3% Table V.19.—Changes in Industry Net Present Value for Non-Standard Size PTACs and PTHPs From R-410A Conversion TSL Energy conservation standards flat markup INPV $MM Change in INPV from base case $MM % Change Base Case (R-22 only) 32 Base Case (R-22 with R-410A Conversion) 28
(4)−12.5% c. Impacts on Employment DOE estimated industry-wide labor expenditures based on the engineering analysis. Coil fabrication; tube cutting and soldering; electronic connection assembly; package assembly; testing and packing of the completed PTAC or PTHP represent the bulk of the labor. DOE estimated the amount of labor needed to perform these functions, and incorporated these estimates into the GRIM, which projects labor expenditures annually. Under the GRIM, total labor expenditures are a function of the labor intensity in manufacturing equipment, the sales volume, and the unit cost of labor (i.e., the wage rate), which remains fixed in real terms over time. Table V.20 and Table V.21 provide DOE's estimate of the changes in labor measured as the change in labor expenditures for standard and non-standard size PTACs and PTHPs in 2012, the date DOE expects the amended energy conservation standard to become effective, compared to the base case. Table V.20.—Projected Change in Labor Expenditures, Standard Size PTACs and PTHPs
(2012)Trial standard levels TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 +1.9% +2.4% +3.0% +2.9% +4.3% +5.7% +11.5% Table V.21.—Projected Change in Labor Expenditures, Non-Standard Size PTACs and PTHPs
(2012)Trial standard levels TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 +1.8% +2.2% +2.7% +2.6% +3.7% +7.3% +11.6% Based on these results, DOE expects no significant discernable direct employment impacts among standard and non-standard size PTAC and PTHP manufacturers for TSL1 through TSL 7. This conclusion is independent of any conclusions regarding employment impacts in the broader United States economy, which are documented in Chapter 15 of the TSD. This conclusion also ignores the possible relocation of domestic employment to lower-labor-cost countries. Manufacturers stated their concerns, throughout the interviews, about increasing offshore competition entering the market over the past five years. d. Impacts on Manufacturing Capacity According to the majority of standard and non-standard size PTAC and PTHP manufacturers, amended energy conservation standards will not significantly affect the manufacturer's production capacity. Any necessary redesign of PTACs and PTHPs will not change the fundamental assembly of the equipment. However, manufacturers anticipate some minimal changes to the assembly line due to the conversion to R-410A refrigerant. Because of the properties of R-410A refrigerant, the assembly line will need to give special attention to creating vacuums within each unit's chambers, and additional assembly will be needed if the number of fan motors increases. DOE believes manufacturers will be able to maintain production capacity levels and continue to meet market demand under amended energy conservation standards. e. Impacts on Subgroups of Manufacturers As discussed above, using average cost assumptions to develop an industry cash flow estimate is not adequate for assessing differential impacts among subgroups of manufacturers. Small manufacturers, niche players, or manufacturers exhibiting a cost structure that differs largely from the industry average could be affected differently. DOE used the results of the industry characterization to group manufacturers exhibiting similar characteristics. DOE evaluated the impact of amended energy conservation standards on small businesses, as defined by the SBA for the PTAC and PTHP manufacturing industry as manufacturing enterprises with 750 or fewer employees. DOE shared the interview guides with small PTAC and PTHP manufacturers and tailored specific questions for these manufacturers. During DOE's interviews with small manufacturers, they provided information, which suggested that the impacts of standards on them would not differ from impacts on larger companies within the industry. (See TSD, Chapter 13.) 3. National Impact Analysis a. Amount and Significance of Energy Savings Table V.22 shows the forecasted national energy savings for all the equipment classes of PTACs and PTHPs at each of the TSLs. DOE estimated the national energy savings using the AEO2007 energy price forecast. The table also shows the magnitude of the energy savings if the savings are discounted at rates of 7 percent and 3 percent. Each TSL considered in this rulemaking would result in significant energy savings, and the amount of savings increases with higher energy conservation standards. (See TSD, Chapter 11.) Table V.22.—Summary of Cumulative National Energy Savings for PTACs and PTHPs (Energy Savings for Units Sold From 2012 to 2042) Trial standard level Primary national energy savings (quads) (sum of all equipment classes) Undiscounted 3% Discounted 7% Discounted 1 0.008 0.005 0.002 2 0.014 0.008 0.004 3 0.017 0.009 0.004 4 0.019 0.010 0.005 5 0.027 0.014 0.007 6 0.038 0.021 0.010 7 0.086 0.046 0.023 DOE reports both undiscounted and discounted values of energy savings. There is evidence that each TSL that is more stringent than the corresponding level in ASHRAE/IESNA Standard 90.1-1999 results in additional energy savings, ranging from 0.008 quads to 0.086 quads for TSLs 1 through 7. For example, the estimated energy savings for TSL 4 is equivalent to the electricity used annually by approximately 4,000 motels. 35 35 Energy Information Agency. *http://www.eia.doe.gov/emeu/cbecs/cbecs2003/detailed_tables_2003/2003set1/2003pdf/b1.pdf.* June 2006. b. Net Present Value The NPV analysis is a measure of the cumulative benefit or cost of standards to the Nation. Tables V.23 and V.24 provide an overview of the NPV results. Table V.23.—Summary of Cumulative Net Present Value for PTACs Trial standard level NPV* (billion 2006$) 7% discount rate 3% discount rate 1 $0.000 $0.005 2 0.000 0.005 3 (0.001) 0.007 4 0.000 0.005 5 (0.006) 0.005 6 (0.014) (0.000) 7 (0.066) (0.071) * Numbers in parentheses indicate negative NPV, i.e., a net cost. Table V.24.—Summary of Cumulative Net Present Value for PTHPs Trial standard level NPV* (billion 2006$) 7% discount rate 3% discount rate 1 $0.006 $0.021 2 0.014 0.043 3 0.014 0.043 4 0.016 0.056 5 0.016 0.056 6 0.010 0.052 7 (0.001) 0.074 * Numbers in parentheses indicate negative NPV, i.e., a net cost. Use of a 3 percent discount rate increases the present value of future equipment-purchase costs and operating cost savings. Because annual operating cost savings in later years grow at a faster rate than annual equipment purchase costs, use of a 3 percent discount rate increases the NPV at most TSLs. (See TSD, Chapter 11.) c. Impacts on Employment DOE develops estimates of the indirect employment impacts of proposed standards in the economy in general. As discussed above, DOE expects energy conservation standards for PTACs and PTHPs to reduce energy bills for commercial customers, and the resulting net savings to be redirected to other forms of economic activity. DOE also realizes that these shifts in spending and economic activity could affect the demand for labor. To estimate these effects, DOE used an input/output model of the U.S. economy using BLS data (as described in section IV.J). (See TSD, Chapter 15.) This input/output model suggests the proposed PTAC and PTHP energy conservation standards are likely to increase the net demand for labor in the economy. Neither the BLS data nor the input/output model used by DOE includes the quality or wage level of the jobs. As shown in Table V.25, DOE estimates that net indirect employment impacts from a proposed PTAC and PTHP standards are likely to be very small. The net increase in jobs is so small that it would be imperceptible in national labor statistics and might be offset by other, unanticipated effects on employment. Table V.25.—Net National Change in Indirect Employment, Jobs in 2042 Trial standard level Net national change in jobs (number of jobs) PTACs PTHPs 1 11 20 2 11 40 3 24 40 4 11 62 5 44 62 6 69 82 7 147 195 4. Impact on Utility or Performance of Equipment In performing the engineering analysis, DOE considered design options that would not lessen the utility or performance of the individual classes of equipment. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(IV)) As presented in section III.D.4, of this notice, DOE concluded that none of the efficiency levels proposed for standard size and non-standard size equipment in this notice will reduce the utility or performance of PTACs and PTHPs except the small fraction of the market that is potentially misclassified under ASHRAE/IESNA Standard 90.1-1999. PTAC and PTHP manufacturers currently offer equipment that meet or exceed the proposed standard levels. As detailed in section IV.A.2 above, DOE recognizes ARI's concerns regarding non-standard size equipment and the possible misclassification under the definitions established by ASHRAE/IESNA Standard 90.1-1999. If ASHRAE is able to adopt Addendum t to ASHRAE/IESNA Standard 90.1-2007 prior to September 2008, DOE proposes to incorporate the modified definition in the final rule to help alleviate manufacturers concerns about reduced product availability. 5. Impact of Any Lessening of Competition EPCA directs DOE to consider any lessening of competition that is likely to result from standards. It directs the Attorney General to determine in writing the impact, if any, of any lessening of competition likely to result from a proposed standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(V)) To assist the Attorney General in making such a determination, DOE has provided the Department of Justice
(DOJ)with copies of this notice and the TSD for review. DOE found that numerous foreign manufacturers have entered the standard size PTAC and PTHP market over the past several years. DOE believes this will continue to happen in this market regardless of the proposed standard level chosen. 6. Need of the Nation To Conserve Energy Increasing the energy efficiency of PTACs and PTHPs promotes the Nation's energy security by reducing overall demand for energy, and thus reducing the Nation's reliance on foreign sources of energy. Reduced demand also may improve the reliability of the Nation's electricity system, particularly during peak-load periods. As a measure of this reduced demand, DOE expects the proposed standards to eliminate the need for the construction of new power plants with approximately 81 megawatts
(MW)electricity generation capacity in 2042. Enhanced energy efficiency also produces environmental benefits. The expected energy savings from higher [PTAC and PTHP] standards will reduce the emissions of air pollutants and greenhouse gases associated with fossil fuel use as well as other energy-related environmental impacts. Table V.26 shows cumulative CO <sup>2</sup> , NO <sup>X</sup> , and Hg emissions reductions for all the [PTAC and PTHP] equipment classes over the forecast period. The cumulative CO <sup>2</sup> , NO <sup>X</sup> and Hg emission reductions range up to 6.13 Mt, 0.53 kt, and −0.04 t, respectively, for PTACs and 6.94 Mt, 0.40 kt, and −0.03 t, respectively, for PTHPs. In Chapter 16 of the TSD, DOE reports annual changes in CO <sup>2</sup> , NO <sup>X</sup> and Hg emissions attributable to each TSL. As discussed in section IV.L, DOE does not report SO <sup>2</sup> emissions reduction from power plants because such reduction from an energy conservation standard would not affect the overall level of SO <sup>2</sup> emissions in the United States due to the caps on power plant emissions of SO <sup>2</sup> . The impact of these NO <sup>X</sup> emissions will be affected by the Clean Air Interstate Rule
(CAIR)issued by the U.S. Environmental Protection Agency on March 10, 2005. 36 70 FR 25162 (May 12, 2005). CAIR will permanently cap emissions of NO <sup>X</sup> in 28 eastern States and the District of Columbia. As with SO <sup>2</sup> emissions, a cap on NO <sup>X</sup> emissions means that equipment energy conservation standards are not likely to have a physical effect on NO <sup>X</sup> emissions in States covered by the CAIR caps. Therefore, while the emissions cap may mean that physical emissions reductions in those States will not result from standards, standards could produce an environmental-related economic benefit in the form of lower prices for emissions allowance credits. However, as with SO <sup>2</sup> allowance prices, DOE does not plan to monetize this benefit for those States because the impact on the NO <sup>X</sup> allowance price from any single energy conservation standard is likely to be small and highly uncertain. DOE seeks comment on how it might value NO <sup>X</sup> emissions for the 22 States not covered under CAIR. 36 See *http://www.epa.gov/cleanairinterstaterule/.* With regard to mercury emissions, DOE is able to report an estimate of the physical quantity changes in mercury emissions associated with an energy conservation standard. Based on the NEMS-BT modeling, Hg emissions generally decline out to 2020 or 2025. However, there is a slight Hg increase by 2030, depending on the TSL level and the equipment type. These changes in Hg emissions, as shown in Table V.26, are extremely small, i.e., none of the changes come close to approaching a 1 percent change in annual emissions. The NEMS-BT model accounts for a wide variety of factors. One possible reason for the Hg emissions increase could be due to emissions banking. The NEMS-BT model assumed that power plant operators would be permitted to bank emission allowances from years in which they release fewer emissions than the maximum permitted. Power plant operators may then release more emissions than permitted by their allowances in a later year. The NEMS-BT model assumed that these emissions would be subject to EPA's Clean Air Mercury Rule 37 (CAMR), which would permanently cap emissions of mercury for new and existing coal-fired plants in all States by 2010. Similar to SO <sup>2</sup> and NO <sup>X</sup> , DOE assumed that under such system, energy conservation standards would result in no physical effect on these emissions, but would be expected to result in an environmental-related economic benefit in the form of a lower price for emissions allowance credits. DOE's plan for addressing analysis does not include monetizing the benefits of reduced mercury emissions, because DOE considered that valuation of such impact from any single energy conservation standard would likely be small and highly uncertain. 37 70 FR 28606 (May 18, 2005). On February 8, 2008, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) issued its decision in *State of New Jersey, et al.* v. *Environmental Protection Agency,* 38 in which the Court, among other actions, vacated the CAMR referenced above. Accordingly, DOE is considering whether changes are needed to its plan for addressing the issue of mercury emissions in light of the D.C. Circuit's decision. DOE invites public comment on addressing mercury emissions in this rulemaking. 38 No. 05-1097, 2008 WL 341338, at *1 (D.C. Cir. Feb. 8, 2008). Table V.26.—Summary of Emissions Reductions for [PTAC and PTHP] (Cumulative reductions for equipment sold from 2012 to 2042) Trial standard levels TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 Emissions reductions for PTACs* CO <sup>2</sup>
(Mt)0.50 0.50 1.06 0.50 1.83 2.95 6.13 NO <sup>X</sup>
(kt)0.04 0.04 0.09 0.04 0.16 0.26 0.53 Hg
(t)0.00 0.00 -0.01 0.00 -0.01 -0.02 -0.04 Emissions reductions for PTHPs* CO <sup>2</sup>
(Mt)0.73 1.49 1.49 2.19 2.19 3.00 6.94 NO <sup>X</sup>
(kt)0.04 0.08 0.08 0.12 0.12 0.13 0.40 Hg
(t)0.00 -0.01 -0.01 -0.01 -0.01 -0.02 -0.03 * Negative values indicate emission increases. DOE is considering taking into account a monetary benefit of CO <sup>2</sup> emission reductions associated with this rulemaking. During the preparation of its most recent review of the state of climate science, the Intergovernmental Panel on Climate Change
(IPCC)identified various estimates of the present value of reducing carbon-dioxide emissions by one ton over the life that these emissions would remain in the atmosphere. The estimates reviewed by the IPCC spanned a range of values. In the absence of a consensus on any single estimate of the monetary value of CO <sup>2</sup> emissions, DOE used the estimates identified by the study cited in Summary for Policymakers prepared by Working Group II of the IPCC's Fourth Assessment Report to estimate the potential monetary value of the CO <sup>2</sup> reductions likely to result from the standards under consideration in this rulemaking. To put the potential monetary benefits from reduced CO <sup>2</sup> emissions into a form that is likely to be most useful to decision makers and stakeholders, DOE used the same methods used to calculate the net present value of consumer costs savings: The estimated year-by-year reductions in CO <sup>2</sup> emissions were converted into monetary values ranging from the $0 and $14 per ton. These estimates were based on an assumption of no benefit to an average benefit value reported by the IPCC. 39 The resulting annual values were then discounted over the life of the affected appliances to the present using both 3 percent and 7 percent discount rates. The resulting estimates of the potential range of net present value benefits associated with the reduction of CO <sup>2</sup> emissions are reflected in Table V.27. 39 According to the IPCC, the mean social cost of carbon
(SCC)reported in studies published in peer-reviewed journals was U.S. $43 per ton of carbon. This translates into about $12 per ton of carbon dioxide. The literature review (Tol 2005) from which this mean was derived did not report the year in which these dollars are denominated. However, since the underlying studies spanned several years on either side of 2000, the estimate is often treated as year 2000 dollars. Updating that estimate to 2007 dollars yields a SCC of $14 per ton of carbon dioxide. Table V.27.—Preliminary Estimates of Savings From CO <sup>2</sup> Emissions Reductions Under Considered PTACs and PTHP Trial Standard Levels PTAC TSL Estimated CO <sup>2</sup>
(Mt)emission reductions Value of estimated CO <sup>2</sup> emission reductions based on IPCC range (million $) 1 0.50 0 to 7.00 2 0.50 0 to 7.00 3 1.06 0 to 14.84 4 0.50 0 to 7.00 5 1.83 0 to 25.62 6 2.95 0 to 41.3 7 6.13 0 to 85.82 Table V.27.—Preliminary Estimates of Savings From CO <sup>2</sup> Emissions Reductions Under Considered PTACs and PTHP Trial Standard Levels—Continued PTHP TSL Estimated CO <sup>2</sup>
(Mt)emission reductions Value of estimated CO <sup>2</sup> emission reductions based on IPCC range (million $) 1 0.73 0 to 10.22 2 1.49 0 to 26.64 3 1.49 0 to 26.64 4 2.19 0 to 30.66 5 2.19 0 to 30.66 6 3.00 0 to 42.00 7 6.94 0 to 97.16 DOE relied on the average of the IPCC reported estimate as an upper bound on the benefits resulting from reducing each metric ton of U.S. CO <sup>2</sup> emissions. It is important to note that the estimate of the upper bound value represents the value of worldwide impacts from potential climate impacts caused by CO <sup>2</sup> emissions, and are not confined to impacts likely to occur within the U.S. In contrast, most of the other estimates of costs and benefits of increasing the efficiency of PTACs and PTHPs in this proposal include only the economic values of impacts that would be experienced in the U.S. For example, in determining impacts on manufacturers, DOE generally does not consider impacts that occur solely outside of the U.S. Consequently, as DOE considers a monetary value for CO <sup>2</sup> emission reductions, the value might be restricted to a representation of those cost/benefits likely to be experienced in the United States. Currently, there are no estimated values for the U.S. benefits likely to result from CO <sup>2</sup> emission reductions. However, DOE expects that, if such values were developed, DOE would use those U.S. benefit values, and not world benefit values, in its analysis. DOE further expects that, if such values were developed, they would be lower than comparable global values. DOE invites public comment on the above discussion of CO <sup>2</sup> . 7. Other Factors The Secretary of Energy, in determining whether a standard is economically justified, may consider any other factors that he/she deems to be relevant. (42 U.S.C. 6316 (a); 42 U.S.C. 6295(o)(2)(B)(i)(VI)) The Secretary has decided to consider the impacts of setting different amended energy conservation standards for PTACs and PTHPs (i.e., setting an amended standard level for a given PTAC cooling capacity, which would be significantly different from the amended standard level for a PTHP with the same cooling capacity). In addition, DOE also considered the uncertainties associated with the impending refrigerant phase-out in 2010, including equipment availability, compressor availability, and the available efficiencies of R-410A PTACs and PTHPs. C. Proposed Standard 1. Overview EPCA, at 42 U.S.C. 6313(a)(6)(A)(ii)(II), specifies that, for any commercial and industrial equipment addressed in section 342(a)(6)(A)(i) of EPCA, 42 U.S.C. 6313(a), DOE may prescribe an energy conservation standard more stringent than the level for such equipment in ASHRAE/IESNA Standard 90.1, as amended, only if “clear and convincing evidence” shows that a more stringent standard “would result in significant additional conservation of energy and is technologically feasible and economically justified.” (42 U.S.C. 6313(a)(6)(A)(ii)(II)). In selecting the proposed energy conservation standards for PTACs and PTHPs for consideration in today's notice of proposed rulemaking, DOE started by examining the maximum technologically feasible levels, and determined whether those levels were economically justified. Upon finding the maximum technologically feasible levels not to be justified, DOE analyzed the next lower TSL to determine whether that level was economically justified. DOE repeated this procedure until it identified a TSL that was economically justified. To aid the reader as DOE discusses the benefits and/or burdens of each TSL, Table V.28 presents a summary of quantitative analysis results for each TSL based on the assumptions and methodology discussed above. This table presents the results or, in some cases, a range of results, for each TSL, and will aid the reader in the discussion of costs and benefits of each TSL. The range of values reported in this table for industry impacts represents the results for the different markup scenarios that DOE used to estimate manufacturer impacts. Table V.28.—Summary of Results Based Upon the AEO2007 Energy Price Forecast * TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 TSL 7 Primary energy saved (quads) 0.008 0.014 0.017 0.019 0.027 0.038 0.086 7% Discount rate 0.002 0.004 0.004 0.005 0.007 0.010 0.023 3% Discount rate 0.005 0.008 0.009 0.010 0.014 0.021 0.046 Generation capacity reduction
(GW)** 0.042 0.062 0.081 0.081 0.141 0.209 0.461 NPV (2006$ billion): 7% Discount rate $0.007 $0.014 $0.013 $0.017 $0.010 ($0.004) ($0.067) 3% Discount rate $0.026 $0.049 $0.050 $0.061 $0.061 $0.052 $0.003 Industry impacts: Industry NPV (2006$ million) (2)-(41) (8)-(55) (4)-(62) (14)-(68) (4)-(80) (10)-(110) (2)-(187) Industry NPV (% Change) (1)-(12) (2)-(17) (1)-(19) (4)-(20) (1)-(24) (3)-(33) (1)-(56) Cumulative emissions impacts † : CO <sup>2</sup>
(Mt)1.24 1.99 2.55 2.69 4.02 5.95 13.07 NO <sup>X</sup>
(kt)0.08 0.12 0.17 0.16 0.28 0.39 0.93 Hg
(t)0.00 −0.01 −0.02 −0.01 −0.02 −0.04 −0.07 Mean LCC savings * (2006$): Standard Size PTAC, 9,000 Btu/h 0 0
(0)0
(13)Standard Size PTHP, 9,000 Btu/h 13 23 23 32 32 30 40 Standard Size PTAC, 12,000 Btu/h
(36)Standard Size PTHP, 12,000 Btu/h 14 26 26 22 22 18 8 Non-Standard Size PTAC 27 27 31 27 33 26 12 Non-Standard Size PTHP 61 66 66 81 81 74 53 Mean PBP (years): Standard Size PTAC, 9,000 Btu/h 11.6 11.6 12.5 11.6 13.2 14.0 16.0 Standard Size PTHP, 9,000 Btu/h 4.5 4.0 4.0 3.9 3.9 4.5 4.8 Standard Size PTAC, 12,000 Btu/h 13.0 13.0 13.9 13.0 14.8 15.9 19.8 Standard Size PTHP, 12,000 Btu/h 4.9 4.4 4.4 5.3 5.3 6.1 7.5 Non-Standard Size PTAC 4.2 4.2 4.9 4.2 5.7 7.8 9.6 Non-Standard Size PTHP 2.0 2.6 2.6 2.8 2.8 4.2 5.8 LCC Results: Standard Size PTAC, 9,000 Btu/h Net Cost (%) 11.7 11.7 23.5 11.7 35.4 47.5 64.8 No Impact (%) 80.8 80.8 62.8 80.8 45.5 29.1 13.5 Net Benefit (%) 7.5 7.5 13.8 7.5 19.1 23.4 21.6 Standard Size PTHP, 9,000 Btu/h Net Cost (%) 4.0 6.2 6.2 8.0 8.0 14.7 19.7 No Impact (%) 81.2 63.7 63.7 46.7 46.7 30.2 14.4 Net Benefit (%) 14.9 30.1 30.1 45.3 45.3 55.2 65.9 Standard Size PTAC, 12,000 Btu/h Net Cost (%) 12.9 12.9 25.7 12.9 40.8 54.3 74.7 No Impact (%) 80.1 80.1 61.6 80.1 44.1 27.6 12.1 Net Benefit (%) 7.0 7.0 12.7 7.0 15.1 18.1 13.2 Standard Size PTHP, 12,000 Btu/h Net Cost (%) 4.9 7.2 7.2 15.0 15.0 26.7 44.8 No Impact (%) 80.2 62.1 62.1 44.6 44.6 27.9 12.1 Net Benefit (%) 14.8 30.7 30.7 40.5 40.5 45.4 43.0 Non-Standard Size PTAC Net Cost (%) 3.4 3.4 8.8 3.4 16.3 32.9 48.1 No Impact (%) 80.2 80.2 61.6 80.2 43.8 26.9 12.5 Net Benefit (%) 16.4 16.4 29.6 16.4 39.9 40.2 39.4 Non-Standard Size PTHP Net Cost (%) 0.2 1.9 1.9 2.8 2.8 13.8 28.9 No Impact (%) 80.9 62.4 62.4 44.6 44.6 27.4 12.4 Net Benefit (%) 18.9 35.7 35.7 52.7 52.7 58.8 58.7 * Parentheses indicate negative (−) values. For LCCs, a negative value means an increase in LCC by the amount indicated. ** Change in installed generation capacity by the year 2042 based on AEO2007 Reference Case. † CO <sup>2</sup> emissions impacts include physical reductions at power plants. NO <sup>X</sup> emissions impacts include physical reductions at power plants as well as production of emissions allowance credits where NO <sup>X</sup> emissions are subject to emissions caps. SO <sup>2</sup> emissions impacts include physical reductions at households only. In addition to the quantitative results, DOE also considered other factors that might affect economic justification. DOE took into consideration the EPA mandated refrigerant phase-out and its effect on PTAC and PTHP equipment efficiency, which concern both standard size and non-standard size PTACs and PTHPs. In addition, DOE considered the uniqueness of the PTAC and PTHP industry, that is, manufacturers of non-standard size equipment. In particular, DOE considered the declining shipments of this equipment, the small size segment of the industry (both relative to the rest of the PTAC and PTHP industry and in absolute terms), and the differential impacts of potential amended energy conservation standards on non-standard size manufacturers when compared to standard size manufacturers. 2. Conclusion First, DOE considered TSL 7, the max-tech level. TSL 7 would likely save 0.086 quads of energy through 2042, an amount DOE considers significant. Discounted at seven percent, the projected energy savings through 2042 would be 0.023 quads. For the Nation as a whole, DOE projects that TSL 7 would result in a net decrease of $67 million in NPV, using a discount rate of seven percent. The emissions reductions at TSL 7 are 13.07 Mt of CO2 and 0.93 kt of NO <sup>X</sup> . Total generating capacity in 2042 is estimated to decrease compared to the reference case by 0.461 gigawatts
(GW)under TSL 7. At TSL 7, DOE projects that the average PTAC customer will experience an increase in LCC for all standard size equipment classes. Purchasers of PTACs are projected to lose on average $21 (2006$) over the life of the product and purchasers of PTHPs would save on average $26 (2006$). DOE estimates LCC increases for 70 percent of customers in the Nation that purchase a standard size PTAC, and for 34 percent of customers in the Nation that purchase a standard size PTHP. DOE also estimates LCC increases for 48 percent of customers in the Nation that purchase a non-standard size PTAC, and for 29 percent of customers in the Nation that purchase a non-standard size PTHP. The mean payback period of each standard size PTAC equipment classes at TSL 7 is projected to be substantially longer than the mean lifetime of the equipment. The projected change in industry value
(INPV)ranges from a decrease of $2 million to a decrease of $187 million. For PTACs and PTHPs, the impacts are driven primarily by the assumptions regarding the ability to pass on larger increases in MPCs to the customer. Currently, there is only one product line being manufactured at TSL 7 efficiency levels, and it uses R-22 refrigerant, as discussed in section III.B.2 above. DOE believes that PTAC and PTHP manufacturers will eventually be able to design and produce R-410A equipment at TSL 7, based on manufacturers' response to the residential central air conditioners refrigerant phase-out and amended energy conservation standards. However, DOE has not initially been able to identify technologies and design approaches for R-410A units to meet these higher levels in the absence of a high efficiency compressor. At TSL 7, DOE recognizes the risk of very large negative impacts if manufacturers' expectations about reduced profit margins are realized. In particular, if the high end of the range of impacts is reached as DOE expects, TSL 7 could result in a net loss of 56 percent in INPV to the PTAC and PTHP industry. After carefully considering the analysis and weighing the benefits and burdens of TSL 7, the Secretary has reached the following initial conclusion: At TSL 7, even if manufacturers overcome the barriers to produce R-410 equipment by the effective date of an amended energy conservation standard, the benefits of energy savings and emissions reductions would be outweighed by the potential multi-million dollar negative net economic cost to the Nation, the economic burden on consumers, and the large capital conversion costs that could result in a reduction in INPV for manufacturers. Next, DOE considered TSL 6. Primary energy savings is estimated at 0.038 quads of energy through 2042, which DOE considers significant. Discounted at seven percent, the energy savings through 2042 would be 0.010 quads. For the Nation as a whole, DOE projects that TSL 6 would result in a net decrease of $4 million in NPV, using a discount rate of seven percent. The emissions reductions are projected to be 5.95 Mt of CO2 and 0.39 kt of NO <sup>X</sup> . Total generating capacity in 2042 under TSL 6 is estimated to decrease by 0.209 GW. At TSL 6, DOE found the impacts of amended energy conservation standards on customers of PTACs would likely differ significantly from their impacts on PTHP customers. While only 22 percent of customers of standard size PTHPs would likely have an LCC increase at TSL 6, a majority of customers of standard size PTACs (52 percent) would have LCC increase at this TSL. A customer for a standard size PTAC, on average, would experience an increase in LCC of $8, while the customer for a standard size PTHP, on average, would experience a decrease in LCC of $23. In addition, the customer for a non-standard size PTAC, on average, would experience a decrease in LCC of $26, while the customer for a non-standard size PTHP, on average, would experience a decrease in LCC of $74. At TSL 6, DOE projects that the average PTAC customer for a standard size PTAC will experience an increase in LCC in each equipment class. In addition, the mean payback period of each standard size PTAC equipment class at TSL 6 is projected to be substantially longer than the mean lifetime. At TSL 6, the projected change in INPV ranges between a loss of $10 million and a loss of $110 million. For manufacturers of non-standard size equipment alone, DOE estimated a decrease in the collective value of the industry to range from 33 percent to 53 percent. The magnitude of projected impacts is still largely determined, however, by the manufacturers' ability to pass on larger increases in MPC to the customer. Thus, the potential INPV decrease of $110 million assumes DOE's projections of partial cost recovery as described in Chapter 13 of the TSD. In addition, at TSL 6 the impending refrigerant phase-out could have a significant impact on manufacturers. Currently, both standard size and non-standard size PTACs and PTHPs using R-22 refrigerant are available on the market at TSL 6 efficiency levels. But, if the performance degradations that DOE estimated in the engineering analysis for R-410A equipment prove to be valid, manufacturers might be unable to produce R-410A equipment at these levels unless high efficiency R-410A compressors become available. The absence of such compressors would likely mean that the negative financial impacts of TSL 6 would be greater than characterized by DOE's MIA analysis. Even though the ability of manufacturers to produce equipment utilizing R-410A is greater at TSL 6 than at TSL 7, DOE anticipates that it would still be difficult for manufacturers to produce standard size and non-standard size PTACs and PTHPs at TSL 6 in the full range of capacities available today due to the physical size constraints imposed by the wall sleeve dimensions. While DOE recognizes the increased economic benefits to the nation that could result from TSL 6, DOE concludes that the benefits of a Federal standard at TSL 6 would still be outweighed by the economic burden that would be placed upon PTAC customers. In addition, DOE believes at TSL 6, the benefits of energy savings and emissions impacts would be outweighed by the large impacts on manufacturers' INPV. Finally, DOE is concerned that manufacturers may be unable to offer the full capacity range of equipment utilizing R-410A by the effective date of the amended energy conservation standards. Next, DOE considered TSL 5. DOE projects that TSL 5 would save 0.027 quads of energy through 2042, an amount DOE considers significant. Discounted at seven percent, the projected energy savings through 2042 would be 0.007 quads. For the Nation as a whole, DOE projects TSL 5 to result in net savings in NPV of $10 million, using a discount rate of seven percent, and $61 million, using a discount rate of three percent. The estimated emissions reductions are 4.02 Mt of CO 2 and 0.28 kt of NO X . Total generating capacity in 2042 under TSL 5 would likely decrease by 0.141 GW. At TSL 5, DOE projects that the average customer for standard size PTAC will experience an increase in LCC in each equipment classes. Purchasers of PTACs are projected to lose on average $5 (2006$) over the life of the product and purchasers of PTHPs would save on average $26 (2006$). DOE estimates LCC savings for 39 percent of customers of standard size PTACs, and for 12 percent of customers of standard size PTHPs. LCC increases are estimated for 16 percent of customers of non-standard size PTACs, and for 3 percent of customers of non-standard size PTHPs. The mean payback period for each standard size PTAC equipment class at TSL 6 is projected to be substantially longer than the mean lifetime of the equipment. The projected change in INPV ranges between a loss of $4 million and a loss of $80 million. For manufacturers of non-standard size equipment alone, DOE projects their collective industry value would decrease by 25 percent to 38 percent. Just as with TSL 6 and 7, the projected impacts continue to be driven primarily by the manufacturers' ability to pass on increases in MPCs to the customer. The loss of $80 million assumes DOE's projections of partial cost recovery as described in Chapter 13 of the TSD. TSL 5 requires the production of standard size and non-standard size PTACs and PTHPs using R-410A that would have efficiencies equivalent to the “max tech” efficiency levels with R-410A applying the degradations estimated in the engineering analysis in the absence of a high efficiency compressor. After carefully considering the analysis and weighing the benefits and burdens, the Secretary has concluded that, at TSL 5, the benefits of energy savings and emissions reductions would be outweighed by the potential multi-million dollar net economic cost to the Nation, the economic burden on PTAC consumers as compared with PTHP customers, and the large capital conversion costs that could result in a reduction in INPV for manufacturers. Next, DOE considered TSL 4. For TSL 4, DOE combined TSL 1 for PTACs and TSL 5 for PTHPs. This combination of efficiency levels serves to maximize LCC savings, while recognizing the differences in LCC results for PTACs and PTHPs. DOE projects that TSL 4 would save 0.019 quads of energy through 2042, an amount DOE considers significant. Discounted at seven percent, the projected energy savings through 2042 would be 0.005 quads. For the Nation as a whole, DOE projects that TSL 4 would result in net savings in NPV of $17 million, using a discount rate of seven percent, and $61 million, using a discount rate of three percent. The estimated emissions reductions are 2.69 Mt of CO 2 and 0.16 kt of NO X . Total generating capacity in 2042 under TSL 4 would likely increase by 0.081 GW. At TSL 4, DOE projects that the average PTAC or PTHP customer would experience LCC savings. Purchasers of standard size PTACs, on average, have LCC increase of $1 (2006$) over the life of the product and purchasers of PTHPs would save on average $26 (2006$). DOE estimates LCC savings for 12 percent of customers in the Nation that purchase a standard size PTAC, and for 12 percent of customers in the Nation that purchase a standard size PTHP. DOE estimates LCC increases for 3 percent of customers in the Nation that purchase a non-standard size PTAC, and for 3 percent of customers in the Nation that purchase a non-standard size PTHP. For both standard size and non-standard size PTACs and PTHPs, the remainder of customers would experience either a decrease or no change in LCC. DOE also projects that the mean payback period of each standard size PTAC equipment class at TSL 4 would be substantially longer than the mean lifetime of the equipment. The projected change in INPV ranges between a loss of $14 million and a loss of $68 million. For manufacturers of non-standard size equipment alone, DOE projects their collective industry value would decrease by 34 percent to 44 percent. Just as with TSL 5, 6, and 7, the projected impacts continue to be driven primarily by the manufacturers' ability to pass on increases in MPCs to the customer. The loss of $68 million assumes DOE's projections of partial cost recovery as described in Chapter 13 of the TSD. TSL 4 requires the production of standard size and non-standard size PTACs at TSL 1 efficiency levels and PTHPs at TSL 5 efficiency levels. Thus, TSL 4 requires the production of standard size and non-standard size PTHPs using R-410A that would have efficiencies equivalent to the “max tech” efficiency levels with R-410A applying the degradations estimated in the engineering analysis in the absence of a high efficiency compressor. After considering the analysis and weighing the benefits and the burdens, DOE tentatively concludes that the benefits of a TSL 4 standard outweigh the burdens. In particular, the Secretary concludes that TSL 4 saves a significant amount of energy and is technologically feasible and economically justified. Therefore, DOE today proposes to adopt the energy conservation standards for PTACs and PTHPs at TSL 4. Table V.29 demonstrates the proposed energy conservation standards for all equipment classes of PTACs and PTHPs, including all cooling capacities. Table V.29.—Proposed Energy Conservation Standards for PTACs and PTHPs Equipment class Equipment Category Cooling capacity Proposed energy conservation standards * PTAC Standard Size ** < 7,000 Btu/h EER = 11.4 ≥7,000 Btu/h and ≤15,000 Btu/h EER = 13.0 − (0.233 × Cap †† ) >15,000 Btu/h EER = 9.5 Non-Standard Size † <7,000 Btu/h EER = 10.2 ≥ 7,000 Btu/h and ≤ 15,000 Btu/h EER = 11.7−(0.213 × Cap †† ) > 15,000 Btu/h EER = 8.5 PTHP Standard Size ** < 7,000 Btu/h EER = 11.8, COP = 3.3 ≥ 7,000 Btu/h and ≤ 15,000 Btu/h EER = 13.4−(0.233 × Cap †† ) COP = 3.7−(0.053 × Cap †† ) > 15,000 Btu/h EER = 9.9, COP = 2.9 Non-Standard Size † < 7,000 Btu/h EER = 10.8, COP = 3.0 ≥ 7,000 Btu/h and ≤ 15,000 Btu/h EER = 12.3−(0.213 × Cap †† ) COP = 3.1−(0.026 × Cap †† ) > 15,000 Btu/h EER = 9.1, COP = 2.8 * For equipment rated according to the DOE test procedure (ARI Standard 310/380-2004), all energy efficiency ratio
(EER)values must be rated at 95° F outdoor dry-bulb temperature for air-cooled equipment and evaporatively-cooled equipment and at 85° F entering water temperature for water cooled equipment. All coefficient of performance
(COP)values must be rated at 47° F outdoor dry-bulb temperature for air-cooled equipment, and at 70° F entering water temperature for water-source heat pumps. ** Standard size refers to PTAC or PTHP equipment with wall sleeve dimensions greater than or equal to 16 inches high, or greater than or equal to 42 inches wide. † Non-standard size refers to PTAC or PTHP equipment with wall sleeve dimensions less than 16 inches high and less than 42 inches wide. †† Cap means cooling capacity in thousand British thermal units per hour (Btu/h) at 95° F outdoor dry-bulb temperature. As noted, TSL 4 would require PTHPs to meet the same efficiency levels as specified in TSL 5. DOE believes that these efficiency levels are equivalent to the expected “max tech” efficiency levels for equipment utilizing R-410A applying the degradations estimated in the engineering analysis. Therefore, DOE strongly encourages stakeholders to scrutinize closely the analyses and other information presented with this notice, and to comment on the viability of this standard level. In addition, since TSL 4 requires different efficiency levels for PTACs and PTHPs, DOE solicits comment on potential equipment switching as discussed in section IV.G.3 of today's notice. In particular, DOE is interested in receiving comment on whether:
(1)Evidence shows that equipment switching is likely and would likely negate the energy savings from setting a standard at different efficiency levels for PTHPs and PTACs; and
(2)such evidence warrants DOE adoption of some other TSL level or the ASHRAE/IESNA Standard 90.1-1999 efficiency levels rather than TSL 4 for the final rule. Aside from the considerations discussed above, DOE is also concerned about the unique nature of the non-standard size segment of the PTAC and PTHP industry. At TSL 4, non-standard size manufacturers are expected to lose from $9 million to $12 million in INPV, which is a reduction in 34 percent to 44 percent. Many manufacturers stated they would be unwilling to redesign completely non-standard size equipment because of the small size of the market and the declining sales. In supporting this assertion, manufacturers also pointed out that non-standard size PTACs and PTHPs are manufactured to order based on unique building designs for replacement applications. In addition, manufacturers expressed great concern that negative impacts would be amplified if DOE were to adopt the ASHRAE/IESNA Standard 90.1-1999 equipment class delineations, and their equipment lines were reduced. Several manufacturers believe the ASHRAE/IESNA Standard 90.1-1999 delineations would cause up to 50 percent of their equipment lines to be misclassified, and be subject to standard levels they could not meet with resulting decline in equipment offerings. If these concerns were realized, the negative INPV and cash flow impacts on the declining industry would be even greater than estimated by the MIA. DOE is particularly interested in receiving comments on the differential impacts on non-standard size manufacturers and on whether DOE should adopt lower minimum efficiency levels (e.g., TSL 1, TSL 2, or TSL 3) for non-standard size PTAC and PTHP equipment in the final rule. VI. Procedural Issues and Regulatory Review A. Review Under Executive Order 12866 Today's regulatory action has been determined to be a significant regulatory action under Executive Order 12866, “Regulatory Planning and Review.” 58 FR 51735 (October 4, 1993). Accordingly, this action was subject to review under the Executive Order by the Office of Information and Regulatory Affairs at the Office of Management and Budget (OMB). The Executive Order requires that each agency identify in writing the specific market failure or other specific problem that it intends to address that warrant new agency action, as well as assess the significance of that problem, to enable assessment of whether any new regulation is warranted. Executive Order 12866, § 1(b)(1). DOE's preliminary analysis suggests that much of the hospitality industry segment using PTAC and PTHP equipment tends to be small hotels or motels. DOE believes that these small hotels and motels tend to be individually owned and operated, and lack corporate direction in terms of energy policy. The transaction costs for these smaller owners or operators to research, purchase, and install optimum efficiency equipment are too high to make such action commonplace. DOE believes that there is a lack of information and/or information processing capability about energy efficiency opportunities in the PTAC and PTHP market available to hotel or motel owners. Unlike residential heating and air conditioning products, PTACs and PTHPs are not included in energy labeling programs such as the Federal Trade Commission's energy labeling program. Furthermore, the energy use of PTACs and PTHPs is dependent on climate and the equipment usage and, as such, is not readily available for the owners or operators to make a decision on whether improving the energy efficiency of PTAC and PTHP equipment is cost-effective. DOE seeks data on the efficiency levels of existing PTAC and PTHP equipment in use by building type (e.g., hotel, motel, small office building, nursing home facility, etc.), electricity price (and/or geographic region of the country) and installation type (i.e., new construction or replacement). DOE recognizes that PTACs and PTHPs are not purchased in the same manner as regulated appliances that are sold in retail stores, e.g., room air conditioners. When purchased by the end user, PTACs and PTHPs are more likely purchased through contractors and builders that perform the installation. The Air-Conditioning and Refrigeration Institute
(ARI)Directory of Certified Product Performance includes PTACs and PTHPs and provides the energy efficiency and capacity information on PTACs and PTHPs produced by participating manufacturers. DOE seeks comment on the experience with this directory and the extent to which the information it provides leads to more informed choices, specifically given how such equipment are purchased. To the extent, there is potentially a substantial information problem, one could expect the energy efficiency for PTACs and PTHPs to be more or less randomly distributed across key variables such as energy prices and usage levels. However, since data are not available on how such equipment is purchased, DOE seeks detailed data on the distribution of energy efficiency levels for both new construction and replacement markets. DOE plans to use these data to test the extent to which purchasers of this equipment behave as if they are unaware of the costs associated with their energy consumption. In the case of the PTHP equipment with multiple heating systems (reverse cycle and electric resistance), estimating the energy consumption from component level changes is even more complex. DOE found energy efficiency and energy cost savings are not the primary drivers of the hotel and motel business. Instead, hotel and motel operators work on a fixed budget and are primarily concerned with providing clean and comfortable rooms to the customers to ensure customer satisfaction. If consumer satisfaction decreases, hotel or motel owners may incur increased transaction costs, thus preventing access to capital to finance energy efficiency investment. A related issue is the problem of asymmetric information (one party to a transaction has more and better information than the other) and/or high transactions costs (costs of gathering information and effecting exchanges of goods and services) among the PTAC and PTHP equipment customers. In the case of PTACs and PTHPs, in many cases, the party responsible for the equipment purchase may not be the one who pays the cost to operate it. For example, PTAC and PTHP equipment are also used in nursing homes and medical office buildings where the builder or complex owner often makes decisions about PTACs and PTHPs without input from tenants nor do they offer options to tenants to upgrade them. Furthermore, DOE believes the tenant typically pays the utility bills. If there were no transactions costs, it would be in the builder or complex owners' interest to install equipment the tenants would choose on their own. For example, a tenant who knowingly faces higher utility bills from low-efficiency equipment would expect to pay less in rent, thereby shifting the higher utility cost back to the complex owner. However, this information is not costless, and it may not be in the interest of the tenant to take the time to develop it, or, in the case of the complex owner who installs less efficient equipment, to convey that information to the tenant. To the extent that asymmetric information and/or high transaction costs are problems, one would expect to find certain outcomes with respect to PTAC and PTHP efficiency. For example, other things being equal, one would not expect to see higher rents for office complexes with high efficiency equipment. Alternatively, one would expect higher energy efficiency in rental units where the rent includes utilities compared to those where the tenant pays the utility bills separately. DOE seeks data that might enable it to conduct tests of market failure. In addition, this rulemaking is likely to yield certain “external” benefits resulting from improved energy efficiency of PTACs and PTHPs that are not captured by the users of such equipment. These include both environmental and energy security related externalities that are not reflected in energy prices, such as reduced emissions of greenhouse gases. With regard to environmental externalities, the emissions reductions in today's proposed rule are projected to be 2.7 Mt of CO <sup>2</sup> and 0.16 kt of NO <sup>X</sup> . DOE invites comments on the weight that should be placed on these factors in DOE's determination of the maximum energy efficiency level at which the total benefits are likely to exceed the total burdens resulting from an amended DOE standard. DOE conducted a regulatory impact analysis
(RIA)and, under the Executive Order, was subject to review by the Office of Information and Regulatory Affairs
(OIRA)in the OMB. DOE presented to OIRA for review the draft proposed rule and other documents prepared for this rulemaking, including the RIA, and has included these documents in the rulemaking record. They are available for public review in the Resource Room of the Building Technologies Program, 950 L'Enfant Plaza, SW., 6th Floor, Washington, DC 20024,
(202)586-9127, between 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. The RIA is contained in the TSD prepared as a separate report for the rulemaking. The RIA consists of:
(1)A statement of the problem addressed by this regulation, and the mandate for government action;
(2)a description and analysis of the feasible policy alternatives to this regulation;
(3)a quantitative comparison of the impacts of the alternatives; and
(4)the national economic impacts of the proposed standard. The RIA calculates the effects of feasible policy alternatives to PTAC and PTHP amended energy conservation standards, and provides a quantitative comparison of the impacts of the alternatives. DOE evaluated each alternative in terms of its ability to achieve significant energy savings at reasonable costs, and compared it to the effectiveness of the proposed rule. DOE analyzed these alternatives using a series of regulatory scenarios as input to the NES Shipments Model for PTACs and PTHPs, which it modified to allow inputs for these measures. DOE identified the following major policy alternatives for achieving increased PTAC and PTHP energy efficiency: • No new regulatory action; • Commercial customer rebates; • Commercial customer tax credits; • Voluntary energy-efficiency targets—ENERGY STAR; Table VI.1.—Non-Regulatory Alternatives to Standards Policy alternatives Energy savings* (quads) Net present value** (billion 2006$) 7% Discount rate 3% Discount rate No New Regulatory Action 0.000 0.000 0.000 Commercial Customer Rebates 0.006 0.003 0.017 Commercial Customer Tax Credits 0.010 0.007 0.032 Voluntary Energy-Efficiency Targets—ENERGY STAR 0.017 0.013 0.057 Today's Standards at TSL 4 0.019 0.016 0.061 * Energy savings are in source quads. ** Net present value is the value in the present of a time series of costs and savings. DOE determined the net present value from 2012 to 2062 in billions of 2006$. The net present value amounts shown in Table VI.1 refer to the NPV for commercial customers. The costs to the government of each policy (such as rebates or tax credits) are not included in the costs for the NPV since, on balance, customers are both paying for (through taxes) and receiving the benefits of the payments. The following paragraphs discuss each of the policy alternatives listed in Table VI.1. (See TSD, Regulatory Impact Analysis.) *No new regulatory action.* The case in which no regulatory action is taken with regard to PTACs and PTHPs constitutes the “base case” (or “No Action”) scenario. In this case, between the years 2012 and 2042, PTACs and PTHPs are expected to use 2.63 quads of primary energy. By definition, no new regulatory action yields zero
(0)energy savings and a net present value of zero dollars. *Financial Incentives Policies.* DOE considered several scenarios in which the Federal government would provide some form of financial incentive. It studied two types of incentives: tax credits and rebates. Tax credits could be granted to customers who purchase high efficiency PTAC and PTHP equipment. Alternatively, the government could issue tax credits to manufacturers or customers to offset costs associated with producing or purchasing high-efficiency equipment. For this analysis, only a customer tax credit, patterned after provision in the EPACT of 2005, was considered. The second incentive program involved a rebate program that was nominally patterned after existing rebate programs currently offered by several utilities. *Commercial Customer Rebates.* DOE modeled the impact of the customer rebate policy by determining the increased customer participation rate due to the rebates (i.e., the percent increase in customers purchasing high-efficiency equipment). It then applied the resulting increase in market share of efficient units to the NES spreadsheet model to estimate the resulting NES and NPV with respect to the base case. After reviewing several utility rebate programs currently in place (see Chapter 3 of the TSD), DOE decided to pattern a potential national rebate program after a program now undertaken by Xcel Energy. Xcel Energy is a large utility that provides service to eight Western and Midwestern states. A small public utility in Minnesota, Shakopee Public Utilities, offers a similar rebate program. Under these programs, commercial and industrial businesses buying PTACs can receive a base payment of $7.50 per ton for units rated at 9.20 EER and $1.25 per ton for every incremental increase of 0.1 EER above base requirements. When compared against the incremental retail costs of higher efficiency PTACs shown in Chapter 8 of the TSD, the rebates generally range between 17 and 23 percent of the incremental cost beyond TSL 1. Because the baseline (ASHRAE/IESNA Standard 90.1-1999) efficiency standards are above 9.2 EER for all equipment, it is more difficult to assess an appropriate level of the rebate for equipment just above the baseline (specifically, at TSL 1) used in this NOPR. For purposes of this analysis, it was assumed that the same incremental fraction of the cost between the baseline unit and TSL 1 would be rebated as for higher incremental efficiency levels. A base payment for any unit exceeding a minimum efficiency was also assumed to be paid to commercial or industrial customers applying for the rebate. The specific provisions of the rebate assumed for PTAC equipment were:
(a)$10.00 per ton for units rated above the ASHRAE/IESNA Standard 90.1-1999 efficiency levels.
(b)A rebate paying 25 percent of the incremental price difference between the baseline efficiency level and the particular TSL. For PTHP equipment, the rebate programs offered by Xcel Energy and Shakopee Public Utilities double the payment for incremental efficiency above the baseline (from $1.25 to $2.50 per ton per 0.1 increments in the EER). Following that pattern, the provisions assumed for the PTHP equipment were:
(a)$10.00 per ton for units rated above the ASHRAE/IESNA Standard 90.1-1999 efficiency levels.
(b)A rebate paying 50 percent of the incremental price difference between the baseline efficiency level and the particular TSL. As an example comparison, the rebate application form for Xcel Energy shows the calculation for 9,000 Btu/h PTAC with an EER of 11.0. This unit would receive a rebate of $39.37 under Xcel Energy's program. Under the provisions of the National rebate program constructed for this analysis, a 9,000 Btu/h PTHP unit at TSL 2 (EER = 11.1) would receive a rebate of $38.97. Using the method described in Chapter 10 of the TSD to estimate market shares, a new distribution of sales by efficiency level (corresponding to the various TSLs) was computed. The rebates elicit greater purchases of higher efficiency equipment that lower the overall average annual energy consumption per unit. The changes in shipment-weighted annual energy consumption are shown in Table VI.2. Table VI.2.—Shipment-Weighted Average Annual Energy Consumption per Unit for Customer Rebate Program Equipment classes Representative cooling capacity (Btu/h) ASHRAE/IESNA standard 90.1-1999 (base case) kWh/yr Customer rebate Percent change Standard Size PTAC 9,000 1,012 1,007 −0.46 12,000 1,277 1,271 −0.49 Standard Size PTHP 9,000 1,984 1,974 −0.49 12,000 2,379 2,366 −0.54 Non-Standard Size PTAC 11,000 1,556 1,549 −0.42 Non-Standard Size PTHP 11,000 2,505 2,499 −0.23 The rebate program lowers the retail cost to the customer, but must be financed by tax revenues. From a societal point of view, the installed cost at any efficiency level does not change with the rebate policy; it simply transfers part of the cost from the customer to tax payers as a whole. Thus, for calculation of total cost of equipment, the revised estimates of sales by efficiency level are multiplied by the pre-rebate costs (i.e., identical to those in the base case). *Commercial Customer Tax Credits.* DOE assumed a (commercial or industrial) customer tax credit that is patterned after the tax credits that were created in EPACT 2005. EPACT 2005 provided tax credits to customers who purchase and install specific products such as energy efficient windows, insulation, doors, roofs, and heating and cooling equipment. For many of these products, the tax credit is equal to the 10 percent of the retail cost, limited to specific dollar levels. For example, to receive the tax credit for energy efficient windows, the windows need to meet the requirements of the 2000 IECC and updated versions of the IECC published since 2000. The 10 percent customer tax credits were assumed to apply to all PTAC equipment above the baseline efficiency (ASHRAE/IESNA Standard 90.1-1999). The credits were assumed to apply only to the retail cost of the equipment and not to any additional costs related to installation. The 10 percent cost tax credit leads to increased shares of sales of equipment with efficiencies above the baseline. In Chapter 11, a market allocation algorithm is used to estimate market shares of current sales of PTAC and PTHP equipment. This same algorithm was used to estimate the impact of the tax credit upon the shares of equipment by efficiency (as before, the discrete efficiency levels correspond to the TSLs). As for the rebate policy, the method described in Chapter 11 of the TSD was used to estimate the change in market shares that may result from a 10 percent tax credit. A new distribution of sales by efficiency level (corresponding to the various TSLs) was computed. The tax credits elicit greater purchases of higher efficiency equipment that lower the overall average annual energy consumption per unit. The changes in shipment-weighted annual energy consumption are shown in Table VI.3. Table VI.3.—Shipment-Weighted Average Annual Energy Consumption per Unit for Customer Tax Credit Program Equipment classes Representative cooling capacity (Btu/h) ASHRAE/IESNA standard 90.1-1999 (base case) kWh/yr Customer tax credit (10%) Percent change Standard Size PTAC 9,000 1,012 1,005 −0.68 12,000 1,277 1,269 −0.65 Standard Size PTHP 9,000 1,984 1,971 −0.64 12,000 2,379 2,364 −0.63 Non-Standard Size PTAC 11,000 1,556 1,544 −0.78 Non-Standard Size PTHP 11,000 2,505 2,487 −0.73 DOE assumed that a policy for national voluntary energy efficiency targets would be administered through the Federal government's ENERGY STAR voluntary program conducted by the Environmental Protection Agency
(EPA)and DOE. EPA and DOE qualify energy efficient products as those that exceed Federal minimum standards by a specified amount, or if no Federal standard exists, exhibit selected energy saving features. Generally, the ENERGY STAR program works to recognize the top quartile of the products on the market, meaning that approximately 25 percent of products on the market meet or exceed the ENERGY STAR levels. Although an ENERGY STAR program for PTACs and PTHPs does not exist, DOE is in the process of developing such a program. The program is designed to encourage manufacturers to manufacture and promote compliant (labeled) equipment and for customers to purchase labeled equipment. As yet, no specific criteria have been established as to the specific efficiency levels that would qualify PTAC or PTHP equipment to receive an ENERGY STAR label. Most types of appliances and equipment in the ENERGY STAR program must be 10 percent or more efficient than the prevailing National efficiency standard. For the purpose of modeling PTACs and PTHPs, DOE has assumed that TSL 3 is a reasonable estimate of where an ENERGY STAR qualifying efficiency level may be established. The promotional activities of the ENERGY STAR program are directed toward increasing the sales of qualifying equipment over time. For purposes of this analysis, DOE assumed that the market shares of ENERGY STAR equipment would increase by a minimum of 20 percent as compared to the base case. The revised market shares of sales by efficiency translate into percentage increases (above the base case) in the average EER for future shipments. Because this is a voluntary program, without specific financial incentives, some method must be developed to generate the market distribution of equipment with various efficiencies that would result from an ENERGY STAR program. As for the financial incentive programs, the market shares algorithm described in Chapter 11 of the TSD was employed. For each equipment class, the overall increase in the sales-weighted efficiency achieved in this manner is shown in Table VI.4. Table VI.4.—Shipment-Weighted Average Annual Energy Consumption per Unit for a Future ENERGY STAR program Equipment Representative cooling capacity ASHRAE/IESNA standard 90.1-1999 (base case) kWh/yr ENERGY STAR level Percent change Standard Size PTAC 9,000 Btu/h 1,012 1,006 −0.64% 12,000 Btu/h 1,277 1,271 −0.50% Standard Size PTHP 9,000 Btu/h 1,984 1,958 −1.32% 12,000 Btu/h 2,379 2,353 −1.09% Non-Standard Size PTAC 11,000 Btu/h 1,556 1,532 −1.52% Non-Standard Size PTHP 11,000 Btu/h 2,505 2,463 −1.68% *Early Replacement Incentives.* Early replacement refers to the replacement of PTAC/PTHP equipment before the end of their useful lives. The purpose of this policy is to retrofit or replace old, inefficient equipment with high efficiency units. DOE studied the feasibility of a Federal program to promote early replacement of appliances and equipment under EPACT 1992. In this study, DOE identified Federal policy options for early replacement that include a direct national program, replacement of Federally-owned equipment, promotion through equipment manufacturers, customer incentives, incentives to utilities, market behavior research, and building regulations. While cost effective opportunities to install units that are more efficient exist on a limited basis, DOE determined that a Federal early replacement program is not economically justified because the market for PTAC and PTHP equipment is relatively small and narrow. Moreover, the savings are not likely to be significantly higher than those achieved by a voluntary program such as ENERGY STAR program. A temporary surge in PTAC and PTHP sales in the early 2000s further reduces the potential for an effective early replacement program. *Bulk Government Purchases.* In this policy alternative, bulk government purchases refers to Federal, State, and local governments being encouraged to purchase equipment meeting the energy conservation standards. The motivations for this policy are that
(1)aggregating public sector demand could provide a market signal to manufacturers and vendors that some of their largest customers seek suppliers with equipment that meet an efficiency target at good prices, and
(2)this could induce “market pull” impacts through the effects of manufacturers and vendors achieving economies of scale for high efficiency equipment. As with the early retirement policy, bulk government purchases may provide cost effective opportunities to install more efficient equipment on a limited basis, however it was concluded that a widespread bulk purchase program was not economically justified. This is because the segment/share of the market that would be affected by a bulk government purchase program is a small portion of an already relatively small market, as most of the shipments/sales are to non-governmental customers. *Energy Conservation Standards (TSL 4).* DOE proposes to adopt the energy conservation levels listed in section V.C. As indicated in the paragraphs above, none of the alternatives DOE examined would save as much energy as the proposed standards. In addition, several of the alternatives would require new enabling legislation, such as customer tax credits, since authority to carry out those alternatives does not presently exist. B. Review Under the Regulatory Flexibility Act/Initial Regulatory Flexibility Analysis The Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ) requires preparation of an initial regulatory flexibility analysis for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. As required by Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” 67 FR 53461 (August 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the rulemaking process. 68 FR 7990. DOE has made its procedures and policies available on the Office of General Counsel's Web site: *http://www.gc.doe.gov* . Small businesses, as defined by the Small Business Administration
(SBA)for the PTAC and PTHP manufacturing industry, are manufacturing enterprises with 750 employees or fewer. DOE used the small business size standards published on January 31, 1996, as amended, by the SBA to determine whether any small entities would be required to comply with the rule. 61 FR 3286 and codified at 13 CFR part 121. The size standards are listed by North American Industry Classification System (NAICS) code and industry description. PTAC and PTHP manufacturing is classified under NAICS 333415. The PTAC and PTHP industry is characterized by both domestic and international manufacturers. Standard size PTACs and PTHPs are primarily manufactured abroad with the exception of one domestic PTAC and PTHP manufacturer. Non-standard size PTACs and PTHPs are primarily manufactured domestically by a handful of manufacturers. Consolidation within the PTAC and PTHP industry has reduced the number of parent companies that manufacture similar equipment under different affiliates and labels. Prior to issuing this notice of proposed rulemaking, DOE interviewed two small businesses affected by the rulemaking. DOE also obtained information about small business impacts while interviewing manufacturers that exceed the small business size threshold of 750 employees. DOE reviewed ARI's Applied Directory of Certified Product Performance
(2006)and created a list of every manufacturer that had certified equipment ratings in the directory. DOE also asked stakeholders and ARI representatives within the PTAC and PTHP industry if they were aware of any other small manufacturers. DOE then looked at publicly available data and contacted manufacturers, where needed, to determine if they meet the SBA's definition of a small manufacturing facility and have their manufacturing facilities located within the United States. Based on this analysis, DOE estimates that there are two small manufacturers of PTACs and PTHPs. Of these two manufacturers, one of them operates manufacturing facilities within the United States. The one domestic manufacturer solely produces non-standard equipment. DOE, then, contacted both small manufacturers. It subsequently conducted two on-site interviews with small manufacturers, one standard size manufacturer and one non-standard size manufacturer, to determine if there are differential impacts on these companies that may result from amended energy conservation standards. DOE found that, in general, small manufacturers have the same concerns as large manufacturers regarding amended energy conservation standards. DOE summarized the key issues for standard size and non-standard size manufacturers in section IV.I.3 of today's notice. Both manufacturers echoed the same concerns regarding amended energy conservation standards as the larger manufacturers. In addition, the small manufacturer of non-standard size equipment particularly stated its concern for the equipment class misclassification within ASHRAE/IESNA Standard 90.1-1999, which is detailed in sections IV.A.2 and V.C of today's notice. DOE found no significant differences in the R&D emphasis or marketing strategies between small business manufacturers and large manufacturers. Therefore, for the classes comprised primarily of small businesses, DOE believes the GRIM analysis, which models each equipment class separately, is representative of the small businesses affected by standards. The qualitative and quantitative GRIM results are summarized in section V.B.2 of today's notice. DOE reviewed the standard levels considered in today's notice of proposed rulemaking under the provisions of the Regulatory Flexibility Act and the procedures and policies published on February 19, 2003. Based on the foregoing, DOE determined that it cannot certify that these proposed energy conservation standard levels, if promulgated, would have no significant economic impact on a substantial number of small entities. DOE made this determination because of the potential impacts that the proposed energy conservation standard levels under consideration for standard size and non-standard size PTACs and PTHPs would have on the manufacturers, including the small businesses, which manufacture them. Consequently, DOE has prepared an initial regulatory flexibility analysis
(IRFA)for this rulemaking. The IRFA describes potential impacts on small businesses associated with standard size and non-standard size PTAC and PTHP design and manufacturing. The potential impacts on standard size and non-standard size PTAC and PTHP manufacturers are discussed in the following sections. DOE has transmitted a copy of this IRFA to the Chief Counsel for Advocacy of the Small Business Administration for review. 1. Reasons for the Proposed Rule Part A-1 of Title III of EPCA addresses the energy efficiency of certain types of commercial and industrial equipment. (42 U.S.C. 6311-6317) It contains specific mandatory energy conservation standards for commercial PTACs and PTHPs. (42 U.S.C. 6313(a)(3)) EPACT 1992, Public Law 102-486, also amended EPCA with respect to PTACs and PTHPs, providing definitions in section 122(a), test procedures in section 122(b), labeling provisions in section 122(c), and the authority to require information and reports from manufacturers in section 122(e). 40 DOE publishes today's NOPR pursuant to Part A-1. The PTAC and PTHP test procedures appear at Title 10 CFR section 431.96. 40 These requirements are codified in Part A-1 of Title III of EPCA, as amended, 42 U.S.C. 6311-6316, and Title 10 of the Code of Federal Regulations, Part 431 (10 CFR Part 431) at 10 CFR 431.92, 431.96, 431.97, and subparts U and V. EPCA established Federal energy conservation standards that generally correspond to the levels in ASHRAE/IESNA Standard 90.1, as in effect on October 24, 1992 (ASHRAE/IESNA Standard 90.1-1989), for each type of covered equipment listed in section 342(a) of EPCA, including PTACs and PTHPs. (42 U.S.C. 6313(a)) For each type of equipment, EPCA directed that if ASHRAE/IESNA Standard 90.1 is amended, DOE must adopt an amended standard at the new level in ASHRAE/IESNA Standard 90.1, unless clear and convincing evidence supports a determination that adoption of a more stringent level as a national standard would produce significant additional energy savings and be technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)(II)) In accordance with these statutory criteria, DOE is proposing in today's notice to amend the energy conservation standards for PTACs and PTHPs by raising the efficiency levels for this equipment above the efficiency levels specified by ASHRAE/IESNA Standard 90.1-1999. 2. Objectives of, and Legal Basis For, the Proposed Rule For each type of equipment, EPCA directed that if ASHRAE/IESNA Standard 90.1 is amended, DOE must adopt an amended standard at the new level in ASHRAE/IESNA Standard 90.1, unless clear and convincing evidence supports a determination that adoption of a more stringent level as a national standard would produce significant additional energy savings and be technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)(II)) To determine whether economic justification exists, DOE reviews comments received and conducts analysis to determine whether the economic benefits of the proposed standard exceed the burdens to the greatest extent practicable, taking into consideration seven factors set forth in 42 U.S.C. 6295(o)(2)(B) (see Section II.B of this preamble). (42 U.S.C. 6316(a)) Further information concerning the background of this rulemaking is provided in Chapter 1 of the TSD. 3. Description and Estimated Number of Small Entities Regulated By researching the standard size and non-standard size PTAC and PTHP market, developing a database of manufacturers, and conducting interviews with manufacturers (both large and small), DOE was able to estimate the number of small entities that would be regulated under a proposed energy conservation standard. DOE estimates that, of the 4 domestic manufacturers it has identified as making residential PTACs and PTHPs, one is known to be a small business. See Chapter 12 of the TSD for further discussion about the methodology used in DOE's manufacturer impact analysis and its analysis of small-business impacts. 4. Description and Estimate of Compliance Requirements Potential impacts on manufacturers, including small businesses, come from impacts associated with standard size and non-standard size design and manufacturing. The margins and/or market share of manufacturers, including small businesses, in the standard size and non-standard size PTAC and PTHP industry could be negatively impacted in the long term by the standard levels under consideration in this notice of proposed rulemaking, specifically TSL 4. At TSL 4, as opposed to lower TSLs, small manufacturers would have less flexibility in choosing a design path. However, as discussed under subsection 6 (Significant alternatives to the rule) below, DOE expects that the differential impact on small, standard and non-standard size PTAC and PTHP manufacturers (versus large businesses) would be smaller in moving from TSL 1 to TSL 2 than it would be in moving from TSL 3 to TSL 4. The rationale for DOE's expectation is best discussed in a comparative context and is therefore elaborated upon in subsection 6 (Significant alternatives to the rule). As discussed in the introduction to this IRFA, DOE expects that the differential impact associated with PTAC and PTHP design and manufacturing on small, non-standard size and standard size businesses would be negligible. 5. Duplication, Overlap, and Conflict With Other Rules and Regulations DOE is not aware of any rules or regulations that duplicate, overlap, or conflict with the rule being considered today. 6. Significant Alternatives to the Rule The primary alternatives to the proposed rule considered by DOE are the other TSLs besides the one being considered today, TSL 4. These alternative TSLs and their associated impacts on small business are discussed in the subsequent paragraphs. In addition to the other TSLs considered, the TSD associated with this proposed rule includes a report referred to in section VI.A in the preamble as the regulatory impact analysis (RIA—discussed earlier in this report and in detail in the TSD). This report discusses the following policy alternatives:
(1)No new regulatory action,
(2)financial incentives policies,
(3)voluntary energy efficiency targets—ENERGY STAR,
(4)early replacement incentives, and
(5)bulk government purchases. The energy savings and beneficial economic impacts of these regulatory alternatives are one to two orders of magnitude smaller than those expected from the standard levels under consideration. The entire non-standard size PTAC and PTHP industry has such low shipments that no designs are produced at high volume. There is little repeatability of designs, so small businesses can competitively produce many non-standard size PTAC and PTHP designs. The PTAC and PTHP industry as a whole primarily has experience producing equipment with efficiencies that would comply with the ASHRAE/IESNA Standard 90.1-1999 baseline. In addition, the standard-size PTAC and PTHP industry produces a significant number of units that would comply with efficiency levels above the baseline using R-22 refrigerant. All manufacturers, including small businesses, would have to develop designs to enable compliance to higher TSLs, with the expected Environmental Protection Agency mandated alternative refrigerant requirement to take affect in 2010. Development costs would be more burdensome to small businesses. Product redesign costs tend to be fixed and do not scale with sales volume. Thus, small businesses would be at a relative disadvantage at higher TSLs because research and development efforts would be on the same scale as those for larger companies, but these expenses would be recouped over smaller sales volumes. At TSL 4, manufacturers stated their concerns over the ability to be able to produce PTHPs by the future effective date of the standard using R-410A refrigerant. Using the performance degradations from the engineering analysis, TSL 4 for PTHPs would correspond to the “max-tech” efficiency levels for PTHPs unless higher efficiency compressors enter the market prior to the effective date of an amended energy conservation standard. At TSL 4 and above, DOE estimates that the majority of manufacturers would be negatively impacted, especially non-standard size manufacturers. Based on information submitted by industry, manufacturers would require a complete redesign of their non-standard PTAC and PTHP platforms' higher TSLs. They did not see the advantage to completely redesigning non-standard size PTACs and PTHPs in small and declining market and would not be willing to redesign completely non-standard size equipment because of the small size of the market and the declining sales. Manufacturers also commented non-standard size PTACs and PTHPs are manufactured to order based on unique building designs for replacement applications. This concern was echoed by all manufacturers, not just small business manufacturers. The primary difference between TSL 3 and TSL 4 from the manufacturers' viewpoint is that at TSL 3 both PTACs and PTHPs have to conform to the same, higher efficiency levels at a given capacity. TSL 4 would require manufacturers to design PTHPs at higher efficiency levels than that of PTACs at the same cooling capacity. The differences in efficiencies between PTACs and PTHPs could negatively affect the margins or decrease the market share of small businesses because manufacturers would potentially need to design separate platforms of PTACs and PTHPs. Each platform would require significant capital for research and development that small business may not readily have as their large competitors. Chapter 12 of the TSD contains more information about the impact of this rulemaking on manufacturers. DOE interviewed two small businesses affected by this rulemaking (see also section IV.F.1 above). DOE also obtained information about small business impacts while interviewing manufacturers that exceed the small business size threshold of 750 employees. C. Review Under the Paperwork Reduction Act This rulemaking will impose no new information or record keeping requirements. Accordingly, Office of Management and Budget clearance is not required under the Paperwork Reduction Act. (44 U.S.C. 3501 *et seq.* ) D. Review Under the National Environmental Policy Act DOE has prepared a draft environmental assessment
(EA)of the impacts of the proposed rule, pursuant to the National Environmental Policy Act of 1969 (42 U.S.C. 4321 *et seq.* ), the regulations of the Council on Environmental Quality (40 CFR parts 1500-1508), and DOE's regulations for compliance with the National Environmental Policy Act (10 CFR part 1021). The EA has been incorporated into the TSD; the environmental impact analyses are contained primarily in Chapter 16 for that document. Before issuing the final rule for PTACs and PTHPs, DOE will consider public comments and, as appropriate, issue the final EA. Based on the EA, DOE will determine whether to issue a finding of no significant impact or prepare an environmental impact statement for this rulemaking. E. Review Under Executive Order 13132 Executive Order 13132, “Federalism,” 64 FR 43255 (August 4, 1999) imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to assess carefully the necessity for such actions. The Executive Order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. DOE has examined today's proposed rule and has determined that it does 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. EPCA governs and prescribes Federal preemption of State regulations as to energy conservation for the equipment that is the subject of today's proposed rule. States can petition DOE for exemption from such preemption to the extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297(d) and 6316(b)(2)(D)) No further action is required by Executive Order 13132. F. Review Under Executive Order 12988 With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (February 7, 1996) imposes on Federal agencies the general duty to adhere to the following requirements:
(1)Eliminate drafting errors and ambiguity;
(2)write regulations to minimize litigation; and
(3)provide a clear legal standard for affected conduct rather than a general standard and promote simplification and burden reduction. Section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation:
(1)Clearly specifies the preemptive effect, if any;
(2)clearly specifies any effect on existing Federal law or regulation;
(3)provides a clear legal standard for affected conduct while promoting simplification and burden reduction;
(4)specifies the retroactive effect, if any;
(5)adequately defines key terms; and
(6)addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this proposed rule meets the relevant standards of Executive Order 12988. G. Review Under the Unfunded Mandates Reform Act of 1995 Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4)
(UMRA)requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. For a proposed regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a),(b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed “significant intergovernmental mandate,” and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect small governments. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA (62 FR 12820) (also available at *http://www.gc.doe.gov* ). The proposed rule published today contains neither an intergovernmental mandate nor a mandate that may result in expenditure of $100 million or more in any year, so these requirements do not apply. H. Review Under the Treasury and General Government Appropriations Act, 1999 Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. This rule would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment. I. Review Under Executive Order 12630 DOE has determined, under Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights,” 53 FR 8859 (March 18, 1988), that this regulation would not result in any taking that would require compensation under the Fifth Amendment to the United States Constitution. J. Review Under the Treasury and General Government Appropriations Act, 2001 The Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines were published at 67 FR 62446 (October 7, 2002). DOE has reviewed today's notice under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines. K. Review Under Executive Order 13211 Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001) requires Federal agencies to prepare and submit to the Office of Information and Regulatory Affairs
(OIRA)at OMB, a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgated or is expected to lead to promulgation of a final rule, and that:
(1)Is a significant regulatory action under Executive Order 12866, or any successor order; and
(2)is likely to have a significant adverse effect on the supply, distribution, or use of energy, or
(3)is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use. Today's regulatory action would not have a significant adverse effect on the supply, distribution, or use of energy and, therefore, is not a significant energy action. Accordingly, DOE has not prepared a Statement of Energy Effects. L. Review Under the Information Quality Bulletin for Peer Review On December 16, 2004, OMB, in consultation with the Office of Science and Technology (OSTP), issued its “Final Information Quality Bulletin for Peer Review” (Bulletin). 70 FR 2664 (January 14, 2005). The Bulletin establishes that certain scientific information shall be peer reviewed by qualified specialists before it is disseminated by the Federal government, including influential scientific information related to agency regulatory actions. The purpose of the bulletin is to enhance the quality and credibility of the Government's scientific information. Under the Bulletin, the energy conservation standards rulemakings analyses are “influential scientific information.” The Bulletin defines “influential scientific information” as “scientific information the agency reasonably can determine will have, or does have, a clear and substantial impact on important public policies or private sector decisions.” 70 FR 2667 (January 14, 2005). In response to OMB's Bulletin, DOE conducted formal in-progress peer reviews of the energy conservation standards development process and analyses and has prepared a Peer Review Report pertaining to the energy conservation standards rulemaking analyses. The “Energy Conservation Standards Rulemaking Peer Review Report” dated February 2007 has been disseminated and is available at the following Web site: *http://www.eere.energy.gov/buildings/appliance_standards/peer_review.html.* DOE on June 28-29, 2005. VII. Public Participation A. Attendance at Public Meeting The time and date of the public meeting are listed in the DATES section at the beginning of this notice of proposed rulemaking. The public meeting will be held at the U.S. Department of Energy, Forrestal Building, Room 1E-245, 1000 Independence Avenue, SW., Washington, DC, 20585-0121. To attend the public meeting, please notify Ms. Brenda Edwards at
(202)586-2945. Foreign nationals visiting DOE Headquarters are subject to advance security screening procedures, requiring a 30-day advance notice. Any foreign national wishing to participate in the meeting should advise DOE of this fact as soon as possible by contacting Ms. Brenda Edwards to initiate the necessary procedures. B. Procedure for Submitting Requests To Speak Any person who has an interest in today's notice, or who is a representative of a group or class of persons that has an interest in these issues, may request an opportunity to make an oral presentation. Such persons may hand-deliver requests to speak, along with a computer diskette or CD in WordPerfect, Microsoft Word, PDF, or text (ASCII) file format to the address shown in the ADDRESSES section at the beginning of this notice of proposed rulemaking between the hours of 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. Requests may also be sent by mail or e-mail to: *Brenda.Edwards@ee.doe.gov* . Persons requesting to speak should briefly describe the nature of their interest in this rulemaking and provide a telephone number for contact. DOE requests persons selected to be heard to submit an advance copy of their statements by 4 p.m., April 21, 2008. At its discretion, DOE may permit any person who cannot supply an advance copy of their statement to participate, if that person has made advance alternative arrangements with the Building Technologies Program. The request to give an oral presentation should ask for such alternative arrangements. C. Conduct of Public Meeting DOE will designate a DOE official to preside at the public meeting and may use a professional facilitator to aid discussion. The meeting will not be a judicial or evidentiary-type public hearing, but DOE will conduct it in accordance with 5 U.S.C. 553 and section 336 of EPCA, 42 U.S.C. 6306. A court reporter will be present to record the proceedings and prepare a transcript. DOE reserves the right to schedule the order of presentations and to establish the procedures governing the conduct of the public meeting. After the public meeting, interested parties may submit further comments on the proceedings as well as on any aspect of the rulemaking until the end of the comment period. The public meeting will be conducted in an informal, conference style. DOE will present summaries of comments received before the public meeting, allow time for presentations by participants, and encourage all interested parties to share their views on issues affecting this rulemaking. Each participant will be allowed to make a prepared general statement (within time limits determined by DOE), before the discussion of specific topics. DOE will permit other participants to comment briefly on any general statements. At the end of all prepared statements on a topic, DOE will permit participants to clarify their statements briefly and comment on statements made by others. Participants should be prepared to answer questions by DOE and by other participants concerning these issues. DOE representatives may also ask questions of participants concerning other matters relevant to this rulemaking. The official conducting the public meeting will accept additional comments or questions from those attending, as time permits. The presiding official will announce any further procedural rules or modification of the above procedures that may be needed for the proper conduct of the public meeting. DOE will make the entire record of this proposed rulemaking, including the transcript from the public meeting, available for inspection at the U.S. Department of Energy, Forrestal Building, Resource Room of the Building Technologies Program, 950 L'Enfant Plaza, SW., 6th Floor, Washington, DC 20024,
(202)586-9127, between 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. Any person may buy a copy of the transcript from the transcribing reporter. D. Submission of Comments DOE will accept comments, data, and information regarding the proposed rule before or after the public meeting, but no later than the date provided at the beginning of this notice of proposed rulemaking. Please submit comments, data, and information electronically. Send them to the following e-mail address: *ptac_hp@ee.doe.gov* . Submit electronic comments in WordPerfect, Microsoft Word, PDF, or text (ASCII) file format and avoid the use of special characters or any form of encryption. Comments in electronic format should be identified by the docket number EE-RM/STD-2007-BT-STD-0012 and/or RIN 1904-AB44, and wherever possible carry the electronic signature of the author. Absent an electronic signature, comments submitted electronically must be followed and authenticated by submitting the signed original paper document. No telefacsimiles (faxes) will be accepted. According to 10 CFR 1004.11, any person submitting information that he or she believes to be confidential and exempt by law from public disclosure should submit two copies: one copy of the document including all the information believed to be confidential, and one copy of the document with the information believed to be confidential deleted. DOE will make its own determination about the confidential status of the information and treat it according to its determination. Factors of interest to DOE when evaluating requests to treat submitted information as confidential include:
(1)A description of the items;
(2)whether and why such items are customarily treated as confidential within the industry;
(3)whether the information is generally known by or available from other sources;
(4)whether the information has previously been made available to others without obligation concerning its confidentiality;
(5)an explanation of the competitive injury to the submitting person which would result from public disclosure;
(6)when such information might lose its confidential character due to the passage of time; and
(7)why disclosure of the information would be contrary to the public interest. E. Issues on Which DOE Seeks Comment DOE is particularly interested in receiving comments and views of interested parties concerning the following issues: 1. Addendum t to ASHRAE/IESNA Standard 90.1-2007 (i.e., ARI's continuous maintenance proposal on PTACs and PTHPs), which proposes changes to the non-standard delineations in ASHRAE/IESNA Standard 90.1-1999. As explained in section IV.C.2, of this preamble, DOE proposes to incorporate the modified definitions in Addendum t in the final rule if ASHRAE adopts Addendum t prior to September 2008. 2. The approach to extrapolate the engineering analysis to cooling capacities for which complete analysis was not performed. 3. The EER and COP pairings for PTHPs based on current ARI product directory information. 4. The rebound effect for the PTAC and PTHP industry. 5. Estimation for the installation, maintenance, and repair costs. In particular, DOE is interested in how the installation, maintenance, and repair costs may change with the implementation of R-410A refrigerant in 2010 because DOE's estimates are based on R-22 data from the field. 6. The prediction and the potential significance of the overestimate in energy savings due to the assumption that forecasted market shares of PTACs and PTHPs at each efficiency level considered in the NOPR would remain frozen beginning in 2012 until the end of the forecast period (30 years after the effective date—the year 2042). In particular, DOE requests data that would enable it to better characterize the likely increases in efficiency that would occur over the 30-year analysis period in the absence of this rule (i.e., the distribution of efficiency levels in absence of standards is assumed to be constant). 7. The NES-forecasted base case distribution of efficiencies after the refrigerant phaseout and its prediction on how amended energy conservation standards impact the distribution of efficiencies in the standards case. 8. Whether amended energy conservation standards will result in PTAC and PTHP customers shifting to other, less efficient equipment types. 9. The NES shipments forecasts of total shipments for standard size and non-standard size equipment. In addition, the distribution of standard size equipment being placed into new construction buildings versus replacing existing units. 10. The proposed standard level, TSL 4, for standard size PTACs and PTHPs and non-standard size PTACs and PTHPs. 11. Whether DOE should consider either a higher or a lower TSL, including the ASHRAE/IESNA Standard 90.1-1999 baseline efficiency levels, in the final rule due to the magnitude of the impacts and the cumulative regulatory burdens of the R-22 phaseout. 12. The proposal to adopt TSL 4 which requires different efficiency levels for PTACs and PTHPs, DOE is interested in receiving comment on potential equipment switching as discussed in section IV.G.3 of today's notice (i.e., will TSL 4 cause PTHP customers to shift to less efficient PTACs). 13. The unique impacts on the non-standard size equipment and manufacturers. In particular, the consideration of a lower TSL for non-standard size PTACs and PTHPs due to the unique market and potentially substantial impacts. For example, at TSL 4, non-standard size manufacturers are expected to lose from $9 million to $12 million in INPV, which is a reduction in 34 percent to 44 percent. In addition, whether the ASHRAE/IESNA Standard 90.1-1999 delineations for standard and non-standard size units would result in equipment lines being misclassified and unavailable. 14. The above-discussed approach for labeling of PTACs and PTHPs. Specifically, DOE invites comments on the types of energy use information and format consumers would find useful on a PTAC or PTHP label. VIII. Approval of the Office of the Secretary The Secretary of Energy has approved publication of this proposed rule. List of Subjects in 10 CFR Part 431 Administrative practice and procedure, Energy conservation, Household appliances. Issued in Washington, DC, on March 28, 2008. Alexander A. Karsner, Assistant Secretary, Energy Efficiency and Renewable Energy. For the reasons set forth in the preamble, chapter II of title 10, Code of Federal Regulations, part 431 is proposed to be amended to read as set forth below. PART 431—ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND INDUSTRIAL EQUIPMENT 1. The authority citation for part 431 continues to read as follows: Authority: 42 U.S.C. 6291-6317. 2. Section 431.92 of Subpart F is amended by adding in alphabetical order new definitions for “Non-standard size” and “Standard size,” to read as follows: § 431.92 Definitions concerning commercial air conditioners and heat pumps. *Non-standard size* means a packaged terminal air conditioner or packaged terminal heat pump with wall sleeve dimensions less than 16 inches high and less than 42 inches wide. *Standard size* means a packaged terminal air conditioner or packaged terminal heat pump with a wall sleeve dimension greater than or equal to 16 inches high, or greater than or equal to 42 inches wide. 3. Section 431.97 of Subpart F is amended by revising paragraph (a), including Tables 1 and 2, and by adding a new paragraph
(c)to read as follows: § 431.97 Energy efficiency standards and their effective dates.
(a)All small or large commercial package air-conditioning and heating equipment manufactured on or after January 1, 1994 (except for large commercial package air-conditioning and heating equipment, for which the effective date is January 1, 1995), and before January 1, 2010 in the case of the air-cooled equipment covered by the standards in paragraph (b), must meet the applicable minimum energy efficiency standard level(s) set forth in Tables 1 and 2 of this section. Each packaged terminal air conditioner or packaged terminal heat pump manufactured on or after January 1, 1994, and before September 30, 2012, must meet the applicable minimum energy efficiency standard level(s) set forth in Tables 1 and 2 of this section. Table 1 to § 431.97.—Minimum Cooling Efficiency Levels Product Category Cooling capacity Sub-category Efficiency level 1 Products manufactured until October 29, 2003 Products manufactured on and after October 29, 2003 Small Commercial Packaged Air Conditioning and Heating Equipment Air Cooled, 3 Phase <65,000 Btu/h Split System Single Package SEER = 10.0 SEER = 9.7 SEER = 10.0. SEER = 9.7. Air Cooled ≥65,000 Btu/h and <135,000 Btu/h All EER = 8.9 EER = 8.9. Water Cooled Evaporatively Cooled, and Water-Source <17,000 Btu/h ≥17,000 Btu/h and <65,000 Btu/h AC HP AC HP EER = 9.3 EER = 9.3 EER = 9.3 EER = 9.3 EER = 12.1. EER = 11.2. EER = 12.1. EER = 12.0. ≥65,000 Btu/h and <135,000 Btu/h. AC HP EER = 10.5 EER = 10.5 EER = 11.5. 2 EER = 12.0. Large Commercial Packaged Air Conditioning and Heating Equipment Air Cooled ≥135,000 Btu/h and <240,000 Btu/h All EER = 8.5 EER = 8.5. Water-Cooled and Evaporatively Cooled ≥135,000 Btu/h and <240,000 Btu/h All EER = 9.6 EER = 9.6. 3 Packaged Terminal Air Conditioners and Heat Pumps All <7,000 Btu/h All EER = 8.88 EER = 8.88. ≥7,000 Btu/h and ≤15,000 Btu/h EER = 10.0−(0.16 × capacity [in kBtu/h at 95°F outdoor dry-bulb temperature]) EER = 10.0−(0.16 × capacity [in kBtu/h at 95°F outdoor dry-bulb temperature]). >15,000 Btu/h EER = 7.6 EER = 7.6 1 For equipment rated according to the ARI standards, all EER values must be rated at 95 °F outdoor dry-bulb temperature for air-cooled products and evaporatively-cooled products and at 85 °F entering water temperature for water-cooled products. For water-source heat pumps rated according to the ISO standard, EER must be rated at 30 °C (86 °F) entering water temperature. 2 Deduct 0.2 from the required EER for units with heating sections other than electric resistance heat. 3 Effective 10/29/2004, the minimum value became EER = 11.0. Table 2 to § 431.97.—Minimum Heating Efficiency Levels Product Category Cooling capacity Sub-category Efficiency level 1 Products manufactured until October 29, 2003 Products manufactured on and after October 29, 2003 Small Commercial Packaged Air Conditioning and Heating Equipment Air Cooled, 3 Phase <65,000 Btu/h Split System Single Package HSPF = 6.8 HSPF = 6.6 HSPF = 6.8. HSPF = 6.6. Water-Source <135,000 Btu/h Split System and Single Package COP = 3.8 COP = 4.2. Air Cooled ≥65,000 Btu/h and ≤135,000 Btu/h All COP = 3.0 COP = 3.0. Large Commercial Packaged Air Conditioning and Heating Equipment Air Cooled ≥135,000 Btu/h and <0,000 Btu/h Split System and Single Package COP = 2.9 COP = 2.9. Packaged Terminal Heat Pumps All All All COP = 1.3+(0.16 × the applicable minimum cooling EER prescribed in Table 1—Minimum Cooling Efficiency Levels) COP = 1.3+(0.16 × the applicable minimum cooling EER prescribed in Table 1—Minimum Cooling Efficiency Levels). 1 For units tested by ARI standards, all COP values must be rated at 47° F outdoor dry-bulb temperature for air-cooled products, and at 70° F entering water temperature for water-source heat pumps. For heat pumps tested by the ISO Standard 13256-1, the COP values must be obtained at the rating point with 20° C (68° F) entering water temperature.
(c)Each packaged terminal air conditioner or packaged terminal heat pump manufactured on or after September 30, 2012, shall have an Energy Efficiency Ratio and Coefficient of Performance no less than: Equipment Category Cooling capacity Efficiency level * Packaged Terminal Air Conditioner Standard Size <7,000 Btu/h ≥7,000 Btu/h and ≤15,000 Btu/h EER = 11.4 EER = 13.0—(0.233 × Cap ** ) >15,000 Btu/h EER = 9.5 Non-Standard Size <7,000 Btu/h EER = 10.2 ≥7,000 Btu/h and ≤15,000 Btu/h EER = 11.7—(0.213 × Cap ** ) >15,000 Btu/h EER = 8.5 Packaged Terminal Heat Pump Standard Size <7,000 Btu/h EER = 11.8 COP = 3.3 ≥7,000 Btu/h and ≤15,000 Btu/h EER = 13.4—(0.233 × Cap ** ) COP = 3.7—(0.053 × Cap ** ) >15,000 Btu/h EER = 9.9 COP = 2.9 Non-Standard Size <7,000 Btu/h EER = 10.8 COP = 3.0 ≥7,000 Btu/h and ≤15,000 Btu/h EER = 12.3—(0.213 × Cap ** ) COP = 3.1—(0.026 × Cap ** ) >15,000 Btu/h EER = 9.1 COP = 2.8 * For equipment rated according to the DOE test procedure, all EER values must be rated at 95° F outdoor dry-bulb temperature for air-cooled products and evaporatively-cooled products and at 85° F entering water temperature for water cooled products. All COP values must be rated at 47° F outdoor dry-bulb temperature for air-cooled products, and at 70° F entering water temperature for water-source heat pumps. ** Cap means cooling capacity in thousand British thermal units per hour (Btu/h) at 95° F outdoor dry-bulb temperature. [FR Doc. E8-6907 Filed 4-4-08; 8:45 am] BILLING CODE 6450-01-P 73 67 Monday, April 7, 2008 Rules and Regulations Part III Department of Health and Human Services Centers for Medicare & Medicaid Services 42 CFR Part 423 Medicare Program; Standards for E-Prescribing Under Medicare Part D and Identification of Backward Compatible Version of Adopted Standard for E-Prescribing and the Medicare Prescriptions Drug Program (Version 8.1); Final Rule DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Part 423 [CMS-0016-F and CMS-0018-F] RINs 0938-AO66 and 0938-AO42 Medicare Program; Standards for E-Prescribing Under Medicare Part D and Identification of Backward Compatible Version of Adopted Standard for E-Prescribing and the Medicare Prescription Drug Program (Version 8.1) AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS. ACTION: Final rule. SUMMARY: This final rule adopts uniform standards for medication history, formulary and benefits, and fill status notification (RxFill) for the Medicare Part D electronic prescribing (e-prescribing) drug program as required by section 1860D-4(e)(4)(D) of the Social Security Act (the Act). In addition, we are adopting the National Provider Identifier
(NPI)as a standard for identifying health care providers in e-prescribing transactions. It also finalizes the June 23, 2006 interim final rule with comment period that identified the National Council for Prescription Drug Programs (NCPDP) Prescriber/Pharmacist Interface SCRIPT standard, Implementation Guide, Version 8.1 (“NCPDP SCRIPT 8.1”) as a backward compatible update of the NCPDP SCRIPT 5.0 (“NCPDP SCRIPT 5.0”), until April 1, 2009. This final rule also retires NCPDP SCRIPT 5.0 and adopts the newer version, NCPDP SCRIPT 8.1, as the adopted standard. Finally, except as otherwise set forth herein, we are implementing our compliance date of 1 year after the publication of these final uniform standards. This is the second set in a continuing process of issuing e-prescribing final standards for the Medicare Part D program, DATES: *Effective Date:* These regulations are effective on June 6, 2008. The incorporation by reference of the publications listed in this final rule is approved by the Director of the **Federal Register** June 6, 2008. FOR FURTHER INFORMATION CONTACT: Denise M. Buenning, (410-786-6711) or Andrew Morgan,
(410)786-2543. SUPPLEMENTARY INFORMATION: I. Background Section 101 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(MMA)(Pub. L. 108-173) amended Title XVIII of the Social Security Act (the Act) to establish a voluntary prescription drug benefit program. Prescription Drug Plan
(PDP)sponsors, Medicare Advantage
(MA)organizations offering Medicare Advantage-Prescription Drug Plans (MAPDs) and other Medicare Part D sponsors are required to establish electronic prescription drug programs to provide for electronic transmittal of certain information to the prescribing provider and dispensing pharmacy and the dispenser. This includes information about eligibility, benefits (including drugs included in the applicable formulary, any tiered formulary structure and any requirements for prior authorization), the drug being prescribed or dispensed and other drugs listed in the medication history, as well as the availability of lower cost, therapeutically appropriate alternatives (if any) for the drug prescribed. Section 101 of the MMA established section 1860D-4(e)(4)(D) of the Act, which directed the Secretary to promulgate final uniform standards for the electronic transmission of such data. There is no requirement that prescribers or dispensers implement e-prescribing. However, prescribers and dispensers who electronically transmit prescription and certain other prescription-related information for Medicare Part D covered drugs prescribed for Medicare Part D eligible individuals, directly or through an intermediary, are required to comply with any applicable final standards that are in effect. Section 1860D-4(e)(4) of the Act generally requires the Secretary to conduct a pilot project to test initial standards recognized under section 1860D-4(e)(4)(A) of the Act, prior to issuing final standards in accordance with section 1860D-4(e)(4)(D) of the Act. Section 1860D-4(e)(4)(C)(ii) of the Act created an exception to the requirement for pilot testing of standards where, after consultation with the National Committee on Vital and Health Statistics (NCVHS), the Secretary determined that there already was adequate industry experience with the standards. Such standards could be recognized by the Secretary and adopted through notice and comment rulemaking as final standards without pilot testing. We exercised this option in the E-Prescribing and Prescription Drug Program final rule, published on November 7, 2005 (70 FR 67568), when we adopted three “foundation standards” that met the criteria for adoption without pilot testing. Those foundation standards are as follows: • The National Council for Prescription Drug Programs (NCPDP) SCRIPT standard, Implementation Guide, Version 5, Release 0 (Version 5.0), hereinafter referred to as “NCPDP SCRIPT 5.0,” for communicating prescription or prescription related information between prescribers and dispensers for the transactions listed at § 423.160(b)(2). • Accredited Standards Committee
(ASC)X12N 270/271-Health Care Eligibility Benefit Inquiry and Response, Version 4010 and Addenda to Health Care Eligibility Benefit Inquiry and Response, Version 4010A1 for communicating eligibility information between Medicare Part D sponsors and prescribers. • NCPDP Telecommunication Standard Specification, Version 5, Release 1 (Version 5.1) and equivalent NCPDP Batch Standard Batch Implementation Guide, Version 1, Release 1 (Version 1.1) supporting Telecommunications Standard Implementation Guide, Version 5, Release 1 (Version 5.1) for NCPDP Data Record in the Detail Data Record, hereinafter referred to as “NCPDP Telecom 5.1” for communicating eligibility information between Medicare Part D sponsors and dispensers. In that same final rule, we established three exemptions to the use of the NCPDP SCRIPT foundation standard. The first exemption provided for entities transmitting prescriptions or prescription-related information by means of computer-generated facsimile. We ultimately modified this exemption in the CY 2008 Physician Fee Schedule final rule with comment period, which was published November 27, 2007 (72 FR 66222). (For a more in-depth discussion of the computer-generated facsimile exemption, please see the preamble discussion in the November 27, 2007 final rule with comment at 72 FR 66334.) The second exemption required the use of either HL7 or the adopted NCPDP SCRIPT standards in electronic transmittals of prescriptions or prescription related information when the sender and recipient are part of the same legal entity (for example, within a staff model HMO). The third exemption was when an entity is required by law to issue a prescription for a patient to a nonprescribing provider (such as a nursing facility) that in turn forwards the prescription to a dispenser. This exemption was established to accommodate many legitimate business needs of entities in the long-term care setting. The November 7, 2005 final rule (70 FR 67579) also established a means of addressing the industry's desire for a streamlined standards updating and maintenance process that could keep pace with changing business needs. That process provided that a standard could be updated with a new version, and identified whether and when the update/maintenance would necessitate notice and comment rulemaking. Where it is determined that the notice and comment rulemaking is not required, the new version is adopted by incorporating the new version by reference through a **Federal Register** publication. In that case, use of either the new or old version would be considered compliant. “Backward compatible” new versions of standards are eligible for recognition through this process. This version updating and maintenance of the implementation specifications for the adopted identifying and e-prescribing standards allows for the correction of technical errors, the elimination of technical inconsistencies, and the addition of functions that are unnecessary for the specified e-prescribing transaction. Subsequent industry input indicated that the adopted e-prescribing standard for the transactions listed at § 423.160(b)(2) should be updated to permit the use of NCPDP SCRIPT 5.0 or a later version of the standard, NCPDP SCRIPT standard, Implementation Guide, Version 8, Release 1 (Version 8.1), October 2005, hereinafter referred to as NCPDP SCRIPT 8.1. Using the streamlined process established in the November 7, 2005 rule, we published an interim final rule with comment period on June 23, 2006, updating the adopted NCPDP SCRIPT standard, thereby permitting either NCPDP SCRIPT 5.0 or 8.1 to be used. (For more information, see section III of this final rule and the June 23, 2006 interim final rule with comment period (71 FR 36020).) Previously, six initial standards were recognized by the Secretary in 2005 and then tested in a pilot project during calendar year
(CY)2006. Based upon the evaluation of the pilot project, the Secretary issued a report to Congress on the pilot results. The Secretary is required to issue this set of final uniform standards for e-prescribing by no later than April 1, 2008. These final standards must be effective not later than 1 year after the date of their issuance. Based on the pilot results as detailed in the report to Congress, we issued a notice of proposed rulemaking on November 16, 2007 (72 FR 64900) and solicited comments from stakeholders and other interested parties on industry experience with certain standards. In that proposed rule (72 FR 64906 through 64907), we also solicited comments regarding the impact of adopting NCPDP SCRIPT 8.1 and retiring SCRIPT 5.0. Those comments and our responses are addressed in section III. B.1. of this final rule. For a complete discussion of the statutory basis for this final rule and the statutory requirements at section 1860D-4(e) of the Act, please refer to the E-Prescribing and the Prescription Drug Program proposed rule published November 16, 2007 (72 FR 64901). II. Pilot Testing of Initial Standards In the November 16, 2007 proposed rule (72 FR 64901), we discussed the provision at section 1860D-4(e)(4)(A) of the Act which requires the Secretary develop, adopt, recognize or modify “initial uniform standards” for e-prescribing in 2005 and pilot test these initial e-prescribing standards in 2006. To fulfill this requirement, the Secretary ultimately recognized (based in part on NCVHS input) six “initial” standards in a September 2005 “Request for Applications”. For more information on the pilot test findings, refer to the November 16, 2007 proposed rule (72 FR 64904 through 64906). In the November 16, 2007 proposed rule (72 FR 64903) we noted that, as we had not published a final rule identifying the foundation standards at the time the Request for Applications was published, the proposed foundation standards were included among the Request for Applications list of “initial standards” to be tested. Any proposed foundation standards that were not adopted as foundation standards were to be tested as initial standards in the pilot project. Furthermore, if the proposed foundation standards were ultimately adopted as foundation standards, those standards nevertheless were to be used in the pilot project to ensure interoperability with the initial standards. The Request for Applications also specified that pilot sites would use NCPDP SCRIPT 5.0. With the Secretary's adoption of the updated NCPDP SCRIPT 8.1, the Agency for Healthcare Research and Quality (AHRQ), in its capacity as the administrator of the pilot project, gave pilot sites the option to voluntarily use NCPDP SCRIPT 8.1 in place of NCPDP SCRIPT 5.0. As a result, all grantees/contractors in the pilot sites voluntarily decided to use the updated NCPDP SCRIPT 8.1 in their various testing modalities. The initial standards and the results of the pilot test are as follows: • *Formulary and benefits information* —NCPDP Formulary and Benefits Standard, Implementation Guide, Version 1, Release 0 (hereinafter referred to as NCPDP Formulary and Benefits 1.0), to provide prescribers with information from a plan about a patient's drug coverage at the point of care. The Medicare Part D e-prescribing formulary and benefits standard must provide a uniform means for pharmacy benefit payers (Medicare Part D sponsors) to communicate a range of formulary and benefits information to prescribers via point-of-care
(POC)systems. These include general formulary data; formulary status of individual drugs; preferred alternatives (including any coverage restrictions, such as quantity limits and need for prior authorization); and co-payment. NCPDP Formulary and Benefits 1.0 enables the prescriber to consider this information at the point of care and make the most appropriate drug choice without extensive back-and-forth administrative activities with the pharmacy or the health plan. The pilot sites demonstrated that NCPDP Formulary and Benefits 1.0 can be successfully implemented between prescriber and plan, and is ready to be used as part of the e-prescribing program under Medicare Part D. • *Exchange of medication history* —“The Medication History Standard”, included in the National Council for Prescription Drug Programs (NCPDP) Prescriber/Pharmacist Interface SCRIPT standard, Version 8, Release 1 and its equivalent NCPDP Prescriber/Pharmacist Interface SCRIPT Implementation Guide, Version 8, Release 1 (hereinafter referred to as the Medication History Standard), provides a uniform means for prescribers and payers to communicate about the list of drugs that have been dispensed to a patient. It may provide information that would help identify potential drug interactions. This Medication History Standard meets the requisite objectives, functionality and criteria required by the MMA for use in the Medicare Part D e-prescribing program and has been widely adopted by the prescribing industry. The pilot sites found that the Medication History Standard supported the exchange of this information, and is ready to be used for the Medicare Part D e-prescribing program. • *Structured and Codified Sig* —NCPDP Structured and Codified Sig Standard 1.0, (hereinafter referred to as NCPDP Structured and Codified Sig 1.0), provides a standard structured code set for expressing patient instructions for taking medications (such as “by mouth, three times a day”). These instructions are currently generally provided as free text at the end of a prescription. Pilot sites tested NCPDP Structured and Codified Sig 1.0 and found that it needed additional work on field definitions and examples, field naming conventions, and clarifications of field use. There were contradictions with other structured fields, and there were limitations on the ability to capture directions for use of topical drugs (such as the area of application). Analysis showed that NCPDP Structured and Codified Sig 1.0 was not able to meet the requisite objectives, functionality and criteria required by the MMA for use in the Medicare Part D e-prescribing program. • *Fill status notification* —The Fill Status Notification, or RxFill, was included in NCPDP SCRIPT 5.0 and the updated NCPDP SCRIPT 8.1, but it previously was not proposed as a foundation standard due to a lack of adequate industry experience. RxFill is a function within versions 5.0 and 8.1 of the NCPDP SCRIPT standard that enables a pharmacy to notify a prescriber when the prescription has been dispensed (medication picked up by patient), partially dispensed (partial amount of medication picked up by the patient), or not dispensed (medication not picked up by patient, resulting in the medication being returned to stock). This information can provide prescribers with information regarding their patients' adherence to a prescribed medication regimen, especially for those patients with chronic conditions such as hypertension and diabetes, which require medication management. It also has the potential to assist in combating fraud and abuse, and contribute to preventing prescription drug diversion. While the standard was technically capable of performing the function, the pilot sites' experiences and observations indicated there was no marketplace demand for this information. Prescribers had previously expressed concerns about being inundated with data if they were to receive fill status notifications every time a patient picked up a prescription at the pharmacy, and weren't sure how useful the information that the Fill Status Notification transaction generated would be in their medical practices. Dispensers were concerned about having to make significant business process changes, such as, having to check to make sure that fill status notification information was being transmitted by their pharmacy to those prescribers who requested it. The proposed rule therefore relayed that adoption of RxFill “May cause an unnecessary administrative burden on prescribers and dispensers.” (72 FR 64905). As such, in the proposed rule, we asked about the marketplace demand for Fill Status Notification and solicited stakeholder comments regarding their potential utilization of RxFill for the Fill Status Notification transaction. Those comments and our responses are addressed in section III.C.1. of this final rule. • *Clinical drug terminology* —RxNorm, a standardized nomenclature for clinical drugs developed by the National Library of Medicine (NLM), provides standard names for clinical drugs (active ingredient + strength + dose form) and for dose forms as administered to a patient. These concepts are relevant to how a physician would order a drug. It provides links from clinical drugs, both branded and generic, to their active ingredients, drug components (active ingredient + strength), and related brand names. National Drug Codes
(NDCs)for specific drug products (where there are often many NDCs for a single product) are linked to that product in RxNorm. NDCs for specific drug products identify not only the drug but also the manufacturer and the size of the package from which it is dispensed. NDCs are relevant to how a pharmacy would dispense the drug. There are often several NDCs for any specific drug product, which are linked to a specific drug product code in RxNorm. RxNorm links its drug product codes to many of the drug vocabularies commonly used in pharmacy management and drug interaction software. By providing links between these vocabularies, RxNorm can mediate messages between systems not using the same software and vocabulary. The pilot sites demonstrated that RxNorm had significant potential to simplify e-prescribing, create efficiencies, and reduce dependence on NDCs among dispensers. In some testing, RxNorm erroneously linked some NDCs to lists of ingredients rather than to the drugs themselves and sometimes the NDCs linked by RxNorm did not match to the semantic clinical drug (SCD), which always contains the ingredient(s), strength and dose form, in that order. This indicates either an error in matching to the correct RxNorm concept, or an error with RxNorm itself, with more than one term being available for the same clinical drug concept (that is, unresolved synonymy). Analysis showed that, as of the time of the pilot study, RxNorm was not able to meet the requisite objectives, functionality and criteria required by section 1860D-4(e)(3) of the Act for use for Medicare Part D e-prescribing. • *Prior authorization* —The Accredited Standards Committee
(ASC)X12N 275 Version 4010 with HL7, and ASC X12N 278, Version 4010 and addendum 4010A1, (hereinafter collectively referred to as the Prior Authorization standard), were utilized in concert to allow prescribers to obtain certification from a plan that a patient meets the coverage criteria for a given drug. Prior Authorization is a very complex standard to implement, involving four different standards and multiple payer requirements. The pilot sites found that the combination of the ASC X12N 278, and the ASC X12N 275 with the HL7 Prior Authorization
(PA)attachment was cumbersome, confusing and required expertise that may limit adoption. Because health plans typically require prior authorization only for a small subset of drugs, the pilot sites had limited live experience with this standard. Investigators agreed that the HIPAA Prior Authorization standard—the ASC X12N 278 Version 4010, and Addendum 4010A— was not adequate to support e-prescribing prior authorization because it was designed for service or procedure prior authorizations, not for medication prior authorization. Modifications to the standard would need to be made prior to adoption as a final standard for the Medicare Part D e-prescribing program. As required by section 1860D-4(e)(4)(C)(iv)(II), the Secretary issued a report to Congress, “Pilot Testing of Initial Electronic Prescribing Standards,” in April 2007 on the results of the pilot test of the initial standards. The report is available at *http://www.healthit.ahrq.gov/erxpilots.* III. Provisions of and Analysis and Response to Public Comments for the June 23, 2006 Interim Final Rule With Comment Period and the November 16, 2007 Proposed Rule A. June 23, 2006 Interim Final Rule With Comment Period Using the streamlined process established in the November 7, 2005 rule, we published an interim final rule with comment on June 23, 2006 updating the adopted NCPDP SCRIPT standard, thereby permitting either NCPDP SCRIPT 5.0 or 8.1 to be used for the covered transactions listed below effective June 23, 2006. Version 8.1 of the NCPDP SCRIPT standard is an update to Version 5.0, and we had determined that it was backward compatible with the adopted NCPDP SCRIPT Version 5.0. (Although Version 8.1 of the NCPDP SCRIPT standard has additional e-prescribing functionalities, we did not adopt any of these additional functionalities at that time.) Use of Version 8.1 of the NCPDP SCRIPT standard for the communication of a prescription or prescription-related information between prescribers and dispensers, for the following functions, therefore constituted compliance with the adopted e-prescribing standard: • Get message transaction. • Status response transaction. • Error response transaction. • New prescription transaction. • Prescription change request transaction. • Prescription change response transaction. • Refill prescription request transaction. • Refill prescription response transaction. • Verification transaction. • Password change transaction. • Cancel prescription request transaction. • Cancel prescription response transaction. We received 5 timely public comments on this interim final rule with comment period. The following is a summary of the comments and our responses: *Comment:* All commenters supported the voluntary use of the backward compatible functions of version 8.1 of the NCPDP SCRIPT standard. Four commenters recommended that it be adopted as soon as reasonably possible, and that NCPDP SCRIPT 5.0 be retired as soon as reasonably practicable. They also indicated that NCPDP SCRIPT 8.1 was already in widespread use throughout their respective industries. One commenter indicated a concern with making backward compatibility “the criteria” for determining if notice and comment rulemaking is required. The commenter stated that backward compatibility must be viewed as just one factor in making a determination to adopt a modified standard. *Response:* We agree with the commenters who supported the retirement of NCPDP SCRIPT 5.0 in favor of NCPDP SCRIPT 8.1. Regarding the comment that backward compatibility should not be the single criterion for determining if notice and comment rulemaking is used for the purpose of adopting a modified standard and that we should look for and support other effective alternatives to the backward compatibility issue, we note that we are required by law to employ notice and comment rulemaking to modify an adopted e-prescribing standard. We are also required by section 1860D-4(e)(3) of the Act to ensure, among other things, that the adopted standards meet certain objectives and design criteria. Based on these various statutory requirements and our own policies, we analyze various factors in addition to backward compatibility such as the standard modification's impact on affected entities relative to cost and benefit projections, productivity and workflow losses/gains, etc., as well as industry and stakeholder feedback by both the written comment process and input from the NCVHS. (For more information, see the June 23, 2006 interim final rule with comment (71 FR 36020). B. November 16, 2007 Proposed Rule In the November 16, 2007 proposed rule (72 FR 64900) we discussed the results of the pilot test, and based largely on those results, we proposed the following: • To retire NCPDP SCRIPT 5.0 and adopt NCPDP SCRIPT 8.1 as a final standard for the transactions listed at § 423.160(b)(1). • To adopt a final e-prescribing standard for the medication history transaction. • To adopt a final e-prescribing standard for the formulary and benefits transaction. • To adopt the National Provider Identifier
(NPI)as a standard for identifying health care providers in e-prescribing transactions. • To establish a compliance date of 1 year after the publication of the final uniform standards. We received 70 timely comments on the November 16, 2007 proposed rule from dispensers and physicians; national retail drug store chains; vendors; national healthcare industry professional and trade associations; a standards development organization (SDO); state pharmacy associations; a state department of health; healthcare plans and systems; consumer/beneficiary advocacy groups; national prescription information exchange networks; long-term care industry representatives; corporations and pharmaceutical manufacturers, and a federal government agency. These documents frequently contained multiple comments on the various proposals and issues detailed in the proposed rule. We also received comments outside the scope of the proposed rule. These included one set of comments on another, unrelated notice of proposed rulemaking, and comments on Medicare program operations that are outside the scope of this final rule. The relevant and timely comments within the scope of the proposed rule that we received and our responses to those comments, are discussed in the following sections. 1. Proposed Retirement of NCPDP SCRIPT 5.0 and Adoption of NCPDP SCRIPT 8.1 as a Final Standard In section III.A. of this final rule we discussed the identification of NCPDP SCRIPT 8.1 as a backward compatible update to NCPDP SCRIPT 5.0. In that discussion, we noted that under the interim final rule with comment, the use of NCPDP SCRIPT 8.1 was voluntary. Commenters to this rule recommended that NCPDP SCRIPT 8.1 be adopted as soon as possible and that NCPDP SCRIPT 5.0 be retired. Therefore, in the November 16, 2007 proposed rule (72 FR 64906 through 64907), we summarized comments received on the voluntary use of NCPDP SCRIPT 8.1 and proposed to revise § 423.160(b)(1) and
(c)to replace the NCPDP SCRIPT 5.0 standard with NCPDP SCRIPT 8.1 for the transactions listed at § 423.160(b)(1) (see section III.A. of this final rule). We also solicited additional comments on the retirement of NCPDP SCRIPT 5.0. *Comment:* Most commenters supported the adoption of NCPDP SCRIPT 8.1, and retirement of NCPDP SCRIPT 5.0, for the transactions listed at § 423.160(b)(1). They noted that NCPDP SCRIPT 8.1 will provide a uniform communications mechanism for prescribers, dispensers, and payers, support reconciliation of useful data from a larger number of sources, and raise awareness of the availability of medication history and, subsequently, its use among prescribers. Some commenters noted that the industry is already using NCPDP SCRIPT 8.1, so there would be limited impact of converting to NCPDP SCRIPT 8.1 to only those few still using NCPDP SCRIPT 5.0. They indicated that conversion from NCPDP SCRIPT 5.0 to NCPDP SCRIPT 8.1 would not require any significant enhancements for the majority of entities. Seven commenters supported ultimately moving to NCPDP SCRIPT 10.5, but only one commenter recommended bypassing NCPDP SCRIPT 8.1 and adopting version NCPDP SCRIPT 10.5 directly. *Response:* NCPDP SCRIPT 8.1 is already in widespread use, has adequate industry experience, and supports the e-prescribing transactions for which it was pilot tested (with the exception of long-term care e-prescribing applications). Therefore, we believe at this time that NCPDP SCRIPT 8.1 should be adopted in place of NCPDP SCRIPT 5.0 at § 423.160(b)(2)(ii) and (c). In keeping with the pilot findings, the exception to this standard at § 423.160(a)(3)(iii) for e-prescribing in long-term care settings will be retained until a subsequent version of NCPDP SCRIPT is adopted that will support transactions in that setting. Regarding the comment that we bypass NCPDP SCRIPT 8.1, and adopt NCPDP SCRIPT 10.5, NCPDP SCRIPT 10.5 has not yet been approved by the NCPDP Board of Directors and the Accredited National Standards Institute (ANSI). 1 Based on the Department's criteria consistently applied to the adoption of e-prescribing standards, NCPDP SCRIPT 10.5 will not be considered by the Secretary for adoption until such time as that SDO/ANSI approval process has been completed. 1 ANSI accredits the procedures of national standards development organizations. Accreditation by ANSI signifies that the procedures used by the standards body in connection with the standard's development meet the Institute's requirements for openness, balance, consensus and due process. Refer to *www.ansi.org* for additional information. *Comment:* A number of commenters favored adoption of NCPDP SCRIPT 8.1, but with the caveat that CMS not preclude stakeholders who need to use the advanced functionalities of NCPDP SCRIPT 10.2 or higher, such as those in long-term care settings, from doing so voluntarily. One commenter noted that any version of NCPDP SCRIPT 10.0 or higher would be acceptable. Others said that NCPDP SCRIPT 10.2 or 10.3 would be the appropriate standard for use in long-term care. We also received comments that the agency should retire NCPDP SCRIPT 8.1 in favor of NCPDP SCRIPT 10.5 by the year 2010, and one commenter supported the current adoption of NCPDP SCRIPT 8.1, but with adoption of NCPDP SCRIPT 10.5 within a year's time. *Response:* By their very nature, standards are subject to updating and modifications as new business needs, workflows and other issues are identified and resolved. We recognize industry's desire for adoption of the most current and robust versions of standards. We note that, in instances where a subsequent standard is backward compatible with previously adopted standards, the streamlined process described earlier can allow for use of subsequent versions of the adopted standard as well as the previously adopted version of the standard. Under this process, the Secretary may identify a subsequent backward compatible version(s) of an adopted non-HIPAA standard, and, with publication of an interim final rule with comment in the **Federal Register** , adopt such subsequent versions of the standard for voluntary use. As new backward compatible versions of non-HIPAA e-prescribing standards such as NCPDP SCRIPT are identified, they could be adopted under this process for voluntary use as an alternative to NCPDP SCRIPT 8.1. With regard to the recommendation that we adopt versions of standards “X.X or higher,” we cannot adopt versions of standards that do not currently exist. Notice and comment rulemaking requires a meaningful opportunity to comment. It is not possible to comment meaningfully on a version of a standard that is not yet in existence, and as such, is not available for public review. *Comment:* One commenter suggested voluntary use of the Get Message and Password Change transactions supported by NCPDP SCRIPT 8.1. *Response:* The NCPDP SCRIPT 5.0 standard includes standards for the Get Messsage and Password Change transactions (70 FR 67594). The NCPDP SCRIPT 8.1 standard also includes standards that support these transactions. Those who elect to electronically transmit prescription and prescription-related information for Medicare Part D covered drugs prescribed for Medicare Part D eligible individuals, directly or through an intermediary, are required to comply with final standards that are in effect. We will finalize the recognition of NCPDP SCRIPT 8.1 as a backward compatible version of the adopted NCPDP SCRIPT 5.0, but in response to the comments that were received to that interim final rule with comment, as of April 1, 2009, we will retire NCPDP SCRIPT 5.0 and leave NCPDP SCRIPT 8.1 as the adopted standard. To effectuate this, we are— • Redesignating and amending proposed § 423.160(b)(1) as § 423.160(b)(2)(ii) to apply to transactions on or after April 1, 2009; • Adding a new § 423.160(b)(1) to identify which paragraphs are applicable to which timeframes; and • Adding new § 423.160(b)(2)(i) to apply to transactions before April 1, 2009 and adding the appropriate regulatory citations to § 423.160(b) to identify where each standard is incorporated by reference, if applicable. 2. Proposed Adoption of an E-Prescribing Standard for Medication History Transaction In the November 16, 2007 proposed rule (72 FR 64907), we discussed that if NCPDP SCRIPT 8.1 is adopted in place of NCPDP SCRIPT 5.0 at § 423.160(b)(1), we would also add a new § 423.160(b)(3) to adopt the NCPDP SCRIPT 8.1 Medication History Standard for electronic medication history exchange among the Medicare Part D sponsor, prescriber, and the dispenser when e-prescribing Medicare Part D covered drugs for Medicare Part D eligible individuals. We also discussed how the adoption of the NCPDP SCRIPT 8.1 Medication History Standard will provide a uniform communications mechanism for prescribers, dispensers and payers, support reconciliation of useful data from a large number of sources, and raise awareness of medication history availability and use among prescribers. *Comment:* Most commenters supported the adoption of the NCPDP SCRIPT 8.1 Medication History Standard, noting that over time, medication history will help reduce adverse drug events, doctor shopping, and prescription drug diversion/fraud, and provide for emergency prescription drug histories in case of natural disasters. One commenter believes that large scale implementation of the NCPDP SCRIPT 8.1 Medication History Standard will result in significant challenges as well as useful refinement of the standard. A number of commenters supported adoption of the standard, but only on a voluntary basis between trading partners, noting that requiring use of the medication history function could cause some current e-prescribers to revert to paper prescribing if they cannot meet the compliance date. One commenter on the NCPDP SCRIPT 8.1 Medication History Standard stated that the pilot test was performed in a closed system and is not scalable in larger deployments, and also indicated that the medication history transaction, while relatively mature in the prescribing sector, is not widely used in the dispensing sector. The commenter recommended that the use of the standard be encouraged but not required. *Response:* The Medication History Standard was tested in four of five pilot project sites, among community physicians, dispensers, plans and payers. The testing included the two national prescription information exchange networks. While tested within closed systems, the pilot project evaluators determined that the testing adequately supported concluding that the standard met the requisite objectives, functionality and criteria (including not imposing an undue burden on the industry thanks to there being adequate health care industry experience with the standard) for adoption as a Medicare Part D e-prescribing standard. The pilot project demonstrated that the NCPDP SCRIPT 8.1 Medication History Standard works effectively, and includes the functionality and meets the e-prescribing standards criteria and objectives identified in sections 1860D-4(e)(2) and 1860D-4(e)(3) of the Act, and we will adopt it as a standard. We note that, while Medicare Part D sponsors are required to support all e-prescribing functions for which standards have been adopted, prescribers and dispensers are not required to do so. As a result, prescribers and dispensers who currently use e-prescribing but do not utilize the medication history function will not be required to conduct transactions using the NCPDP SCRIPT 8.1 Medication History Standard. However, if they choose to conduct an electronic medication history transaction in the context of e-prescribing Medicare Part D covered drugs for Medicare Part D eligible individuals, they must use the adopted standard. Regarding the comment that some current e-prescribers might revert to paper prescribing if they are required to use the NCPDP SCRIPT 8.1 Medication History Standard by the proposed compliance date, we refer back to comments received from a wide spectrum of the industry, that NCPDP SCRIPT 8.1 is already in widespread use, and the Medication History function already resides on the standard. Most providers need only to enable the function on their software system. For those who already enjoy the benefits of e-prescribing, reverting to paper would constitute a setback for their practices. We assume that they would continue to build upon the investment they have already made in their e-prescribing systems and become current, within the time allowed, with the adopted standards for those e-prescribing functionalities they choose to transact. *Comment:* Commenters made a number of recommendations about the completeness and availability of medication history data to prescribers and dispensers. Several noted that information about all medications should be made available through the medication history transaction, including controlled substances (which cannot be e-prescribed under current law), over-the-counter drugs, drugs for which the beneficiary paid in cash, and drugs not covered under Medicare Part D, including those prescribed in the hospital setting. Other commenters recommended that medication history should be available 24 hours a day, 7 days a week through downloads to any prescriber and pharmacy, and that medication history data should not be limited to those who subscribe to any given e-prescribing system or network. One commenter suggested that any Medicare Part D e-prescribing standard for medication history should accommodate family and medical history information that supports linkage of these data sources to an electronic health record system. *Response:* Our intent for the scope of this final rule is to establish standards that will be used to support the Medicare electronic prescription program. These standards will provide additional common language and terminology for those operating in the Medicare Part D e-prescribing environment that will further the electronic exchange of information in a data format that is consistent and recognizable. We agree that the more complete a medication history is, the more useful it will be to the prescriber. However, prescriptions paid for in cash that are not adjudicated through insurance claims systems, and over-the-counter medications, for example, may not be captured by the patient's Medicare Part D sponsor medication history, and therefore would not be available for communication using the standard. The suggestion that we include family and medical history information in the NCPDP SCRIPT 8.1 Medication History Standard is outside of the scope of this rule. While the MMA does provide for the establishment of appropriate medical history standards, no initial standards were identified for this function. The NCPDP SCRIPT 8.1 Medication History Standard is the product of NCPDP, a voluntary consensus standards development organization. Only NCPDP could expand the NCPDP SCRIPT 8.1 Medication History Standard to encompass medical history. Despite its limited function, we believe that the NCPDP SCRIPT 8.1 Medication History Standard will facilitate the flow of available medication history data from Medicare Part D sponsors, and we expect this will have a positive impact on medication errors and ADEs. *Comment:* Several commenters noted operational and business flow shortcomings that could limit the utility of medication history. One commenter indicated that the current criteria for medication history match is higher than that for formulary and benefits, and that current experience with one prescription information exchange network demonstrates a 50 to 65 percent match rate for submitted eligibility requests. Another commenter mentioned that many physicians are unable to access all medication history information, and that physicians should be able to add medications to the medication history without having to generate a prescription. Another commenter noted that as the pilot results showed, clinicians' willingness to access medication history was limited due to incomplete information, and that further testing of the standard is needed prior to adoption to clarify requirements for completeness and usability of information, and to determine where the information can be most effectively introduced and exchanged within the provider's workflow. Another commenter noted that the current medication history transaction does not support drug utilization review and medication management. *Response:* In the November 16, 2007, proposed rule, we acknowledged that many physicians were unaware of the medication history function likely because, while it resides within the widely used NCPDP SCRIPT 8.1 suite of functional standards, most users have apparently not activated this feature on their e-prescribing systems. We expect that, as the standard achieves widespread use, industry feedback to the SDO will result in improvements and modifications that support more robust and complete medication history capacities. While industry input indicates there may be many reasons for less than a 100 percent match rate, including incomplete access to eligibility data, data inconsistencies and inaccuracies, etc., they also indicate that this could be corrected through the use of a unique identifier. While there is significant opportunity to improve the use of medication history, we believe that adopting the standard and expanding its use will help identify and drive process improvements. We have adopted the NCPDP SCRIPT 8.1 Medication History Standard as proposed with two technical changes. We redesignated the standard from § 423.160(b)(3) to § 423.160(b)(4) and added a reference to the paragraph regarding the incorporation by reference of this standard. 3. Proposed Adoption of an E-prescribing Standard for Formulary and Benefits In the November 16, 2007, proposed rule (72 FR 64907), we discussed that, as a result of pilot testing, we proposed to add § 423.160(b)(4) to adopt NCPDP Formulary and Benefits 1.0, as a standard for electronic transactions communicating formulary and benefits information between the prescriber and the Medicare Part D sponsor when e-prescribing for covered Medicare Part D drugs for Medicare Part D eligible individuals. *Comment:* We received many comments supporting adoption of the NCPDP Formulary and Benefits 1.0, which noted that the pilot test demonstrated that NCPDP Formulary and Benefits 1.0 was technically capable of communicating the intended information to support this transaction. A prescription information exchange network also concurred, relaying that they began certifying physician software vendors and payers for formulary and benefits functionality last year, and have had good results implementing it since that time. A few commenters also pointed to the inherent complexities associated with implementing the standard, saying that without real-time information, patient information is often outdated and lacks detail, which can lead to higher co-pays and confusion for patients. They said that plans, carriers, and pharmacy benefit managers
(PBMs)should be required to provide accurate, timely and complete formulary and benefits information. One commenter recommended that plans not be required to conduct the transaction, but if they do so, they must use the standard. Several commenters indicated that use of the transaction be voluntary among trading partners. *Response:* Based on pilot test results and industry comments on the proposed rule, we agree that NCPDP Formulary and Benefits 1.0 has met the requisite objectives, functionality and criteria requirements of the MMA for use in the Medicare Part D e-prescribing program, and we will adopt it as a standard. E-prescribing under Medicare Part D, as outlined in section 101 of the MMA, is voluntary for providers and dispensers. However, Medicare Part D sponsors must support the use of, and comply with, these standards when electronically transmitting prescriptions or prescription-related information for covered Medicare Part D drugs for Medicare Part D eligible individuals. We do not believe that there would be any additional value gained from continued pilot testing of the standard. We acknowledge that formularies are complex, frequently change due to updates in coverage decisions, and that coverage benefits are fluid, sometimes changing from day to day. Currently, the industry practice is to send formulary and benefits information periodically and in batch-file format. We agree that the capacity to provide this information on a real-time basis is an important step toward realizing the full potential of the benefit of the standard, and expect that, as the standard gains widespread use, marketplace forces will encourage incorporation of real-time transaction capacities into the formulary and benefits e-prescribing process. In the meantime, we believe that additional testing, not of the standard itself but of the ability to provide real-time benefit responses, is desirable as the industry seeks to maximize e-prescribing system capabilities, and it is our understanding that industry efforts are underway to test real-time transactions through electronic prescription information exchange networks. Also, as the NCPDP commented, there is an effort underway to bring industry participants together for further analysis and testing to address any remaining NCPDP Formulary and Benefits 1.0 implementation issues, which result from missing or incomplete data, and are not the result of the standard functioning inadequately for the transaction. NCPDP also is following up on a Healthcare Information Technology Standards Panel (HITSP) recommendation that NCPDP evaluate data element/list requirements and propose solutions to any outstanding issues. *Comment:* Several commenters stated the need to restrict the “list of alternative drugs” to only those products that are bioequivalent or that have received the “AB” designation from the Food and Drug Administration (FDA), preventing the prescribing of potentially inappropriate or unsafe therapeutic substitutions. They supported adoption of the standard, but not the current version that includes “preferred” or “formulary alternatives lists.” *Response:* NCPDP Formulary and Benefits 1.0 supports a codified way of sending information that includes “preferred” or “formulary alternatives lists,” if a health plan offers such products. The standard does not assess the appropriateness of the alternatives, rather it merely conveys the applicable formulary requirements, including any step therapy requirements, of a given patient's health coverage. The Medicare Part D program provides for formularies in which therapeutically non-equivalent and non-bioequivalent drugs are offered in each category and class of a Medicare Part D drug formulary. (See § 423.120(b)(2).) The Medicare Part D program allows Medicare Part D sponsors to have utilization review management procedures, including step therapy guidelines, within approved formularies. Our adoption of NCPDP Formulary and Benefits 1.0 applies specifically to e-prescriptions for Medicare Part D covered drugs prescribed for Medicare Part D eligible individuals. As such, we believe that it should support conveying formulary information about the non-equivalent and non-bioequivalent drugs that are part of an approved Medicare Part D sponsor's formulary. We have adopted the NCPDP Formulary and Benefits 1.0 standard as proposed with two technical changes. We redesignated the standard from the proposed § 423.160(b)(4) to § 423.160(b)(5) and added a reference to the paragraph regarding the incorporation by reference of this standard. 4. Adoption of the National Provider Identifier
(NPI)as a Standard for Use in E-Prescribing In the November 16, 2007, proposed rule (72 FR 64908), we proposed to add § 423.160(b)(5) to adopt the National Provider Identifier
(NPI)as a standard identifier for health care providers for use in e-prescribing among the Medicare Part D sponsor, prescriber, and the dispenser. NCPDP SCRIPT 8.1, which we proposed to adopt, supports the use of the NPI. We solicited comments from the industry and other stakeholders on the adoption of the NPI as an e-prescribing standard, and we specifically requested comments as to whether use of the NPI in HIPAA-compliant transactions constitutes adequate industry experience for purposes of using NPI as a covered health care provider identifier in Medicare Part D e-prescribing transactions. *Comment:* Commenters generally acknowledged industry familiarity with the NPI from having used it in HIPAA standard transactions. While most commenters supported the use of the NPI on electronic prescriptions to identify the prescriber and the dispenser, they agreed that the NPI must not be used for routing transactions (message envelope), or sender/receiver-level information used in e-prescribing routing transactions, as it does not offer the clarity needed for routing data to destinations. However, it can be used to identify an organization or a provider involved in electronic prescribing transactions. We received several comments about how the adoption of the NPI as a health care provider identifier for use in e-prescribing would improve the ability to uniquely identify a prescriber, but that the NPI must be used to identify a prescriber at the individual versus organizational level. A number of commenters urged CMS to provide more specific guidance on the use of the NPI in e-prescribing. Three commenters opposed the adoption of the NPI as a standard identifier for use in Medicare e-prescribing because they contend that, as it is currently constructed, the NPI does not convey appropriate location and routing information which is essential to the e-prescribing process. One commenter said the NPI works as a name, but not as an address (that is, the location and setting of the prescriber). Another commenter stated that they do not use the NPI for e-prescribing because its use would force the industry to incur significant implementation costs. This commenter took issue with CMS' assumption that experience in using NPI in HIPAA-covered transactions constitutes adequate industry experience for adopting it for use in e-prescribing Medicare Part D covered drugs for Medicare Part D eligible individuals. One other commenter stated that, since it was not pilot tested, the NPI should be adopted only after pilot testing has been conducted and evaluated. *Response:* Our intention in proposing the use of the NPI in e-prescribing transactions was to extend the functionality of the NPI from HIPAA-covered transactions to non-HIPAA e-prescribing transactions so that those with NPIs could use one identifier for both HIPAA-covered transactions and non-HIPAA e-prescribing transactions, versus a separate identifier(s), and allow the identification of both an individual prescriber and the dispensers. As the NPI has the ability to identify health care providers such as prescribers and dispensers, and as NCPDP SCRIPT 8.1 supports the NPI, its use in the e-prescribing of Medicare Part D covered drugs for Medicare Part D eligible individuals would fulfill the function for which it was intended. If the NPI is used as we proposed, as that of an identifier of individual, non-institutional health care providers, and not for routing or location purposes, we see nothing that would preclude its use for purposes of identification, or that would require pilot testing. Therefore, in NCPDP SCRIPT 8.1, the NPI would be used in the PVD Provider Segments to identify the prescriber or the dispenser. However, the NPI would not be used in the UIH Interactive Interchange Control Segment to route the transaction. Based on our analysis of the comments received, we will adopt the NPI for use in e-prescribing to identify the individual healthcare prescriber and the dispenser. We note that, in doing this, we do not alter the compliance dates or other requirements under HIPAA for covered entities with respect to e-prescribing transactions that are also HIPAA covered transactions. For instance, we do not intend to alter any provisions requiring the use of the NPI for identifying institutional providers in HIPAA transactions, including those HIPAA transactions which are also e-prescribing transactions. We will also provide specific guidance in the future regarding how the NPI should and should not be used in e-prescribing Medicare Part D covered drugs for Medicare Part D eligible individuals. *Comment:* A number of commenters noted that not all prescribers are covered entities under HIPAA, and expressed concern that if the NPI were mandated as the sole identifier for prescribers, prescribers who do not have an NPI may not be able to engage in e-prescribing. *Response:* While not all providers are required by HIPAA to obtain an NPI, they are all permitted to do so. Moreover, we believe that most, if not all, providers who treat Medicare beneficiaries, already have an NPI, either because they are HIPAA-covered entities, or if not, because as providers they are otherwise identified on HIPAA transactions (for example, as a rendering physician) or on submitted paper claims, as Medicare requires the use of the NPI on paper claims. *Comment:* One commenter suggested that the DEA number be used to clarify the identity of the prescribing provider when the NPI number is not adequately specific. Another noted that the DEA number is still required for prescribing controlled substances, but it is unclear as to whether prescribers will need to use their DEA number in the e-prescribing of controlled substances once it is allowable under law. *Response:* Not all providers prescribe controlled substances and thus, not all providers have DEA numbers. As e-prescribing of controlled substances is still not allowed by law, we cannot speculate as to the potential role of the DEA number in that process. We also note that as the intent of the NPI is to consolidate multiple and/or proprietary prescriber identifiers for use in the Medicare program, it would appear to be counterproductive to use one number, namely the DEA number, to clarify another number, the NPI. *Comment:* One commenter requested that CMS allow adequate time for adoption. *Response:* We will monitor industry feedback regarding this issue and respond accordingly. *Comment:* One commenter stated that dispensers should not be deemed to be in violation of e-prescribing standards if the prescriber does not have an NPI or fails to include an NPI in an e-prescribing message, and questioned what effect that may have on the dispenser's compliance with e-prescribing regulations. *Response:* If a prescriber is e-prescribing under the Medicare Part D program, the prescriber is required to use the adopted standards, in this case, the NPI, to identify an individual e-prescribing provider. By the compliance date of this final rule, we expect that providers who participate in Medicare, including those who submit paper claims, will have already have obtained their NPI for claims reimbursement purposes. Absent an NPI, prescribers likely would not be engaged in e-prescribing. However, in the instance of a dispenser receiving an e-prescription for a Part D covered drug for a Part D eligible individual from a prescriber without an NPI, the prescriber, not the dispenser, would be considered to be in violation of Part D e-prescribing regulations. We have adopted the NPI as a standard identifier as proposed with a technical change. We redesignated this standard from the proposed § 423.160(b)(5) to § 423.160(b)(6). 5. Proposed Compliance Date In accordance with sections 1860D-4(e)(1) and 1860D-4(e)(4)(D) of the Act, the Secretary must issue certain final uniform standards for e-prescribing no later than April 1, 2008, to become effective not later than 1 year after the date of their promulgation. Therefore, in accordance with this requirement, we proposed a compliance date of 1 year after the publication of the final rule. We also proposed adopting NCPDP SCRIPT 8.1 as the e-prescribing standard for the transactions listed in section II.A. of the proposed rule (72 FR 64906), effective 1 year after publication of the final rule. We solicited comments in the proposed rule regarding the impact of these proposed dates on industry and other interested stakeholders, and whether an earlier compliance date should be established. *Comment:* Many commenters supported a compliance date of 1 year after issuance of the final rule, stating that based on their respective industry feedback and experience with NCPDP SCRIPT 8.1, 1 year should be adequate time for the industry to work toward implementation of these standards with minimum impact. A few thought that industry compliance prior to that time could be achieved. A few other commenters said that the proposed compliance date is extremely aggressive and does not take into consideration vendor system development life cycles, release dates of supporting systems, and time and resources required for health systems to adopt and deploy the needed infrastructure to attain the expected financial and safety benefits of e-prescribing. One commenter stated that the proposed implementation date is problematic for Medicare Part D sponsors that own dispensers that have already begun to adopt e-prescribing, because having to retrofit standards into existing systems may be more costly and time consuming. This commenter suggested an additional year or two beyond the proposed compliance date to allow adopters to bring current e-prescribing systems into compliance. Another recommended that providers be given a minimum of 2 years to comply. Two commenters requested that we consider contingency plans if the industry is unable to meet the 1 year compliance timeframe. One commenter recommended that CMS conduct a study to identify pharmacy preparedness, and that once the final rule is released, that CMS monitor the progress of the industry in implementing the standards, and develop an extended adoption timeframe as warranted. *Response:* Section 1840D-4(e)(4)(D) of the Act requires that final e-prescribing standards be promulgated by the Secretary by April 1, 2008, with implementation no more than 1 year following that date, which would place the latest possible implementation date at April 1, 2009. We agree that, based on comments received, adoption of these standards with the 1 year compliance date imposes no undue burden on the industry, and concur with commenters who supported the proposed 1 year compliance date. Based on industry feedback, numerous e-prescribing software systems now using NCPDP SCRIPT 8.1 have been certified for use by electronic prescribing networks. The NCPDP Formulary and Benefits 1.0 standard is based on a proprietary transaction developed by RxHub, which is currently being used to communicate this information in many e-prescribing products. The NCPDP SCRIPT 8.1 Medication History Standard is already contained in NCPDP SCRIPT 8.1, which is in widespread use. We anticipate that any e-prescribing software vendor or service has already, or will provide, these standards upgrades as part of a monthly subscription charge or annual maintenance fee, and that it would not require massive systems changes that would be overly burdensome. We have received no extensive stakeholder or vendor feedback that upgrades to current e-prescribing systems are more burdensome than installations of new e-prescribing systems. There will always be modifications to standards to which e-prescribing systems must be retrofitted, and we trust that industry software vendors will anticipate these modifications and accommodate standards upgrades to make their use by existing customers as smooth and seamless a transition as possible. We cannot delay the implementation date for the standards adopted under section 1860D-4(e)(4)(D) of the Act, which is set by statute, and continue to believe that 1 year is adequate time to accomplish any system changes necessitated by the adoption of these final standards. However, we will monitor industry feedback relative to their ability to meet the 1 year compliance timeframe and determine the need for any other action based on that information within the applicable statutory parameters. We are adopting a compliance date of 1 year after publication of the final standards as proposed. Therefore, to clarify the compliance dates for the revised and existing standards, we have revised § 423.160(b) as follows: • Redesignated the proposed paragraphs (b)(1) through (b)(5) (we proposed to add new paragraphs (b)(3) through (b)(5)) as paragraphs (b)(2) through (b)(6). • Added a new paragraph (b)(1) that identifies the compliance dates for each standards in paragraphs (b)(2) through (b)(6). • In newly redesignated (b)(2) (the prescription standard), revised the standard to separately identify the NCPDP SCRIPT 8.1 and NCPDP SCRIPT 5.0 based on the compliance dates of these standards. C. Related Issues Included in and Analysis and Response to Public Comments for the November 16, 2007 Proposed Rule In the November 16, 2007 proposed rule, we requested comments on various issues related to the e-prescribing process. We received numerous comments on those and other issues and we discuss those comments and our responses below. 1. Fill Status Notification (RxFill) In the November 16, 2007 proposed rule, we explained that the Fill Status Notification within the NCPDP SCRIPT 8.1 enables a pharmacy to notify a prescriber when the prescription has been dispensed, partially dispensed, or not dispensed. The pilot test demonstrated that the standard was technically capable of performing this function, but pilot sites questioned whether prescribers would be inundated with data, and dispensers would be burdened by the business process changes that would ensue. We solicited industry comments regarding RxFill's usefulness. *Comment:* Many commenters noted that RxFill contains useful functionality, such as monitoring patient adherence to a medication regimen, or identifying drug diversion/abuse. However, most recommended that the transaction be used on a voluntary basis among trading partners, noting that the need for information provided by RxFill varies by prescriber. One commenter predicted that physician demand for this standard will increase dramatically following the rollout of the 2008 Physician Quality Reporting Initiative
(PQRI)measures, as performance on these measures is influenced by patient compliance with therapy. Several commenters stated that the NCPDP SCRIPT 8.1 Medication History Standard offers prescribers and dispensers similar but richer information, making RxFill unnecessary. A number of commenters noted that there were business process and implementation issues associated with RxFill. Others noted shortcomings in the standard, such as omission of features such as pharmacy receipt, patient pick up, reason for refusal of fill, and the placement of the order in the prescription filling process. They recommended additional analysis and testing prior to adoption. *Response:* As stated in the November 16, 2007 proposed rule, we previously referenced industry feedback that had indicated that the adoption of RxFill “may cause an unnecessary administrative burden on prescribers and dispensers” as a basis for not proposing the adoption of RxFill. This feedback was derived from the findings contained in the report to Congress on the results of the CY 2006 e-prescribing pilot ( *http://www.healthit.ahrq.gov/erxpilots* ). The report noted that the industry feared that adoption of the RxFill standard for electronic fill status notification transactions might result in increased “administrative workflow” issues, namely being inundated with fill status notifications every time a patient picked up (or conversely, did not pick up) a prescription. However, it is now clear from the comments received in response to the November 16, 2007 proposed rule that the industry, upon further consideration, now perceives there to be no administrative burden associated with the adoption of the RxFill standard. This is a result of the realization by the industry that the prescriber would have to use their e-prescribing system to electronically “flag” or switch on the fill status notification transaction for those patients whose medication adherence they wish to monitor. When a patient picks up a prescription at the pharmacy, they likely sign an electronic signature log. In instances in which the prescriber has switched on the fill status notification transaction in their eRx system, this electronic signature triggers a pharmacy software system update which, in turn, would trigger a fill status notification message using the RxFill standard to be sent back to the prescriber. Prescriber comments in response to the proposed rule indicates that they perceived real value in RxFill for prescribers whose patients with chronic conditions may benefit from closer medication adherence monitoring. In addition, the pilot demonstrated that RxFill supports the transactions for which it was tested. Given the voluntary nature of e-prescribing for dispensers and prescribers under Medicare Part D, prescribers can choose whether or not they want to avail themselves of the information that use of this standard in the electronic Fill Status Notification transaction would provide, and voluntarily incur costs, if any, associated with its use. Therefore, we will revise § 423.160(c) and add a paragraph
(M)to § 423.160(b)(2)(ii) to adopt the Rxfill standard by adding the prescription Fill Status Notification and its three business cases; Prescription Fill Status Notification Transaction—Filled, Prescription Fill Status Notification Transaction—Not Filled, and Prescription Fill Status Notification Transaction—Partial Fill) to provide for the communication of fill status notification of Medicare Part D prescription drugs for Medicare Part D eligible individuals, among Medicare Part D sponsors, prescribers and dispensers, to the list of transactions for which NCPDP SCRIPT 8.1 is used. *Comment:* Several commenters who supported RxFill's adoption suggested modifications that they believed might make it less burdensome to providers. These included the suggestion of identifying only key categories of drugs, such as blood pressure or diabetes medications, that would trigger an RxFill notification to a provider from a pharmacy; or an RxFill notification if a patient did not pick up an e-prescribed prescription at their pharmacy within one week to 10 days after its transmission. One commenter also suggested the use of RxFill as a way to auto-populate medication history fields. *Response:* We expect that increased use of RxFill will allow the industry to identify a variety of functional and business flow improvements that could be incorporated through the standards maintenance process. The Department will continue to monitor the further development of, and revisions to, this standard and will consider updating the adopted standard when and as appropriate. 2. RxNORM, Structured and Codified Sig, and Prior Authorization In the proposed rule we identified three of the six initial standards that the pilot results showed were not ready for adoption: RxNORM, NCPDP Structured and Codified Sig 1.0, and the Prior Authorization Standard. We also noted that RxFill was technically ready for adoption, but as previously discussed, we were unsure as to industry's desire to adopt it as a standard. As a result, we did not propose to adopt these standards, but we solicited public comment on this decision. *Comment:* Most commenters agreed that the standards for NCPDP Structured and Codified Sig 1.0, clinical drug terminology (RxNorm) and the Prior Authorization Standard were technically unable to convey the needed information and lacked adequate industry experience. Only one commenter asserted that all six initial standards tested in the CY 2006 pilot could feasibly be implemented by 2009. *Response:* We agree that these standards are not ready for implementation, and are not adopting them at this time. *Comment:* Many commenters stressed the potential value of these standards, and urged us to work actively with the industry to promptly mitigate the problems and concerns with the standards. Commenters also noted that there are efforts underway to bring industry participants together for further analysis and testing of RxNorm, NCPDP Structured and Codified Sig 1.0, and the Prior Authorization Standard, to expand upon and bring to completion the work begun in the CY 2006 e-prescribing pilot. Several commenters asked that CMS include language “in the standards that commits it
(CMS)to development and pilot testing of the Prior Authorization Standard.” One commenter who was familiar with the pilot of the initial standards stated that many of the shortcomings of RxNorm that were identified in the pilot test were focused on difficulties in conveying information about drug delivery devices and packages, and not the overall function of the standard in other contexts. They said that while there may have been instances of unresolved synonymy, that at least half of them, if not all of them, have already been resolved. Commenters stated that they believed the Prior Authorization Standard is an inefficient, time consuming process that is a source of frustration for both physicians and patients, and a process that is ripe for improvement. One commenter recommended additional research on the Prior Authorization Standard to alleviate the manual administrative burden associated with the high volume of prior authorizations in the long-term care setting. *Response:* One commenter asked that CMS include language in the standards that commits it to development and pilot testing of the prior authorization standard. We note that standards are guidelines, rules or characteristics for activities, and are the purview of the standards development organizations and not CMS; therefore, the inclusion of such language as part of the technical specifications of a standard would be inappropriate. We agree that these three standards would contribute significant value to e-prescribing, and will continue to work with the SDOs, industry, and interested stakeholders toward readying these standards for consideration by the Secretary for adoption as final standards for e-prescribing Medicare Part D covered drugs for Medicare Part D eligible individuals. 3. Exemption for Computer-Generated Facsimiles The November 2, 2005 foundation standards final rule (70 FR 67568) exempted entities that transmit prescriptions or prescription-related information by means of a computer-generated facsimile from the requirement to use the adopted NCPDP SCRIPT standard for the transactions that, prior to this rule, were listed at § 423.160(b)(1). In response to industry concerns that the exemption was hindering the movement toward computer-to-computer e-prescribing, we included a proposal to eliminate the exemption in the CY 2008 Physician Fee Schedule proposed rule (July 12, 2007 (72 FR 38122, 38196)), effective January 2009. In the November 27, 2007 CY 2008 Physician Fee Schedule Final Rule with Comment, 72 FR 66334, we modified the computer-generated facsimiles exemption, but did not eliminate it entirely, allowing computer-generated facsimiles to be used in the event that an EDI-transmitted prescription fails due to network transmission failures or similar, temporary communication problems that are episodic and nonrepetitive in nature. In the November 16, 2007 proposed rule (72 FR 64902) we referenced, but did not solicit comments on our inclusion of a proposal to remove the exemption for computer-generated facsimiles in the CY 2008 Physician Fee Schedule proposed rule (72 FR 8196). However, we received comments on this provision in response to our solicitation for comments on the November 16, 2007 proposed rule. *Comment:* Several commenters requested that we not eliminate the use of all facsimiles (including computer-generated facsimiles) as a means of transmitting prescriptions and prescription-related information between provider and pharmacy, and vice versa. Commenters stated that if all facsimiles of prescriptions and prescription-related information were eliminated, it would constitute a burden on dispensers and provider offices that would have to revert to paper, which would result in decreased productivity and increased costs. Another commenter stated that use of secure facsimile via computer to computer link or computer to facsimile link, should be allowed when the NCPDP SCRIPT 8.1 standard transmission is “not available” to all prescribers. Two commenters stated that the elimination of the exemption for computer-generated facsimiles should be delayed until January 2010; and that the provisions of the final rule should be modified to allow its use when transmitting prescription or prescription-related information to dispensers and facilities that do not e-prescribe, or when prescribing controlled substances. *Response:* First, we note that transmitting paper prescriptions from one facsimile machine to another for Medicare Part D covered drugs for Medicare Part D eligible individuals, as described by one of the commenters, does not constitute electronic data interchange. Such paper faxing is not subject to the Medicare Part D e-prescribing standards adopted for the e-prescribing of Medicare Part D covered drugs for Medicare Part D eligible individuals. In the July 2007 proposed rule, we did not propose the elimination of the use of paper facsimiles as a way to transmit prescriptions and prescription-related information. Rather, we proposed eliminating the exemption for computer-generated e-prescribing facsimiles from the adopted NCPDP SCRIPT standard for the communication of prescriptions and prescription-related information between prescribers and dispensers for the transactions listed at § 423.160(b)(1)(i) through (xii). In the final rule, we acknowledged that computer-generated facsimiles may be needed for prescriptions which fail due to network transmission failures or similar, temporary communication problems that are episodic and non-repetitive in nature and preclude the use of NCPDP SCRIPT. However, this exception applies only to transmission failures, and not simply to those who choose to use e-prescribing software that does not employ the NCPDP SCRIPT standard. We assume the commenter is referring to such a situation when referencing that computer to computer link or computer to facsimile link, should be allowed when the NCPDP SCRIPT 8.1 standard transmission is “not available” to all prescribers. During the time period allotted for comment following the issuance of the July 2007 proposed rule we received several comments regarding the elimination of the exemption for computer-generated facsimiles. A number of commenters disagreed with the lifting of the exemption, indicating that its elimination could be problematic in performing a certain e-prescribing function, that of prescription refill requests, but only one of those commenters offered substantiation. Absent receipt of any other industry feedback on the impact of the elimination of computer-generated facsimiles on prescription refill requests, and not considering these comments to constitute widespread concern regarding the refill request function, we proceeded in CY 2008 Physician Fee Schedule final rule (72 FR 66334) to amend the exemption to eliminate the exemption except, as noted above, in cases of network failure. Taken in the aggregate, we determined that the 1 year time period was adequate time during which providers and dispensers would have the opportunity to change over to conducting true e-prescribing (computer to computer EDI) and that costs would be mitigated due to the growing volume of e-prescriptions and practice of e-prescribing, with a commensurate reduction in transmission, software and other costs during that 1 year time period. These changes are due to become effective in January 2009. Since that time, we have been informed by the industry that the elimination of the exemption for computer-generated facsimiles would have a significant adverse effect in the electronic transmission of prescription refill requests, and interested stakeholders have provided us with more specific information regarding the economic and workflow impact that will result from the modification of the exemption that was not forthcoming during the public comment period. In particular, dispensers have indicated that they use computer-generated facsimiles for a significant volume of refill requests, and that eliminating the exemption would require them to revert to paper facsimiles for those transactions. We are now in the process of examining and considering these data, and may soon issue a proposed solution through the rulemaking process that we intend to finalize prior to the scheduled January 2009 effective date. Through this process the public will, once again, be afforded an opportunity to offer public comment. 4. Elimination of the Exemption for Non-Prescribing Providers (Long Term Care) In the proposed rule (72 FR 64902 through 64906), we noted that, because NCPDP SCRIPT was not proven to support the workflows and legal responsibilities in the long-term care setting, entities transmitting prescriptions or prescription-related information where the prescriber is required by law to issue a prescription for a patient to a non-prescribing provider (such as a nursing facility) that in turn forwards the prescription to a dispenser (“three-way prescribing communications” between facility, physician, and pharmacy), were provided with an exemption from the requirement to use NCPDP SCRIPT 5.0 in transmitting such prescriptions or prescription-related information. We also noted the results of the CY 2006 e-prescribing pilot relative to the use of NCPDP SCRIPT 8.1 in the long-term care setting, namely that workarounds were needed to accommodate the unique workflow needs in long term care. We conveyed that, when an updated version of the NCPDP SCRIPT standard in the long-term care setting, we would consider removing the current exemption. We then solicited comments on the impact and timing of lifting this exemption. *Comment:* Commenters generally acknowledged that progress is being made toward accommodating the specific needs of the long term industry in e-prescribing standards, and supported the eventual elimination of the long-term care exemption to the NCPDP SCRIPT standard. They noted that, while NCPDP SCRIPT 8.1 may work well in most instances, each higher level of NCPDP SCRIPT (10.0 or higher) contains more functionality that ultimately will build to that which will be needed for long-term care applications. They noted that one of these higher level standards should be the designated standard for use if/when the exemption for e-prescribing in the long-term care setting is eliminated. Several commenters stated that the exemption for e-prescribing in long-term care could be lifted upon adoption of NCPDP SCRIPT version 10.2. This newer version of the standard is ANSI approved, and, according to these commenters, meets the basic e-prescribing needs of the long-term care industry. Another commenter recommended adoption of NCPDP SCRIPT 10.3, citing its expanded ability to support resupply requests, fill status and census notification messages in the long-term care setting. Still other commenters insisted that CMS should adopt NCPDP SCRIPT 10.5 for use in e-prescribing in the long-term care setting. Commenters also stated that they anticipated that the Certification Commission for Healthcare Information Technology (CCHIT) would begin work in 2009 to launch certification of electronic health records products for long-term care, and that in preparation for that activity, national standards for e-prescribing for long-term care will need to be in place. One commenter stated that the long-term care exemption should remain in place until such time as e-prescribing standards can support the needs of long-term care, taking in account medication management across multiple care settings and providers. Another stated that the exemption should not be lifted until all standards for e-prescribing had been adopted, and the industry had conducted adequate testing. One commenter recommended that CMS should, with this final rule, remove the current exemption for long term care entities from using the Medicare Part D e-prescribing standards, effective with the compliance date of this rule. *Response:* While NCPDP SCRIPT 10.2 was approved in July 2007, NCPDP SCRIPT 10.3 is not scheduled for approval until April 2008, and NCPDP SCRIPT 10.5 is not scheduled for approval until July 2008. We agree with commenters that NCPDP SCRIPT 10.5 appears to meet all of the long-term care business needs that have been identified to date, and therefore would be appropriate for adoption. When NCPDP SCRIPT 10.5 is approved by NCPDP, we will review it with the purpose of ascertaining whether it is backward compatible with the adopted standard, and thus a candidate for the streamlined process outlined earlier that would permit its use in place of NCPDP SCRIPT 8.1, or if rulemaking will be required. We anticipate eliminating the long-term care exemption when rulemaking is utilized to retire the then-existing standard in favor of version 10.5. From feedback received from the industry, NCPDP SCRIPT 10.2 meets the basic needs of the long-term care industry relative to e-prescribing, including the “need no later than” date/time added for special delivery needs. NCPDP SCRIPT 10.3 features this as well as additional functionality, including medication history source and fill number information for de-duplicate processing. NCPDP SCRIPT 10.5 features all of the functionality of these previous NCPDP SCRIPT 10.0 and above versions, and supports federal medication terminologies code sets. We agree with commenters that NCPDP SCRIPT 10.5 appears to meet all of the long-term care business needs identified to date. Therefore, it would be appropriate to adopt the standard with the most robust functions, since this is what vendors will incorporate into their products. As we indicated in the previous discussion, once NCPDP SCRIPT 10.5. is balloted and approved by the NCPDP, and then approved by the Accredited National Standards Institute (ANSI), we will review it with the intent of moving forward if appropriate. However, we note that long-term care facilities may voluntarily use the standard at any time, and we encourage its adoption in that setting. 5. Electronic Prescribing for Controlled Substances *Comment:* Several commenters noted that all categories of prescriptions—including controlled substances—should be able to be electronically prescribed, and that to require handwritten prescriptions for controlled substances would necessitate a dual paper/electronic system which would be a major barrier to adoption. For example, a physician noted that one out of every ten prescriptions he wrote could not be e-prescribed because they were for controlled substances. One commenter recommended that it be mandated that prescribers should check the identification of patients before prescribing for them electronically. *Response:* We agree that the inability to e-prescribe controlled substances can hinder broader e-prescribing adoption. The Drug Enforcement Administration
(DEA)which has responsibility for administering the Controlled Substances Act, currently requires that controlled substances be prescribed on paper with a written signature. We continue to work with the DEA toward revised requirements that would permit such e-prescribing while maintaining safeguards against drug diversion. 6. Diagnosis on Prescription *Comment:* One commenter proposed that Medicare require diagnosis information on electronic prescriptions, arguing that this would allow the pharmacy to evaluate the drug prescribed against the diagnosis and thus identify potential errors. *Response:* NCPDP SCRIPT 8.1 does contain an optional field for diagnosis, but requiring its use is outside the scope of our proposed rule. We have not solicited nor have we received any industry feedback on this issue, and therefore cannot attest as to the industry's use and/or perceived value of this feature. 7. Issues Related to State Law *Comment:* One commenter urged CMS to take a broader view of the authority to preempt state law than we outlined in the November 7, 2005 final rule (70 FR 67574 through 67576). They stated that the lack of national applicability of the standards we adopt serves as a barrier to broader adoption of e-prescribing. *Response:* In the November 7, 2005 final rule, we identified four categories of State law that restrict the ability to carry out Medicare Part D standards, and which pertain to electronic transmission of prescription-related information. We encouraged States to consider the impact on Federal e-prescribing standards of laws that could directly or indirectly impede the adoption of e-prescribing technology and standards on a statewide and national basis. We also urged States to enact legislation consistent with, and complementary to, the goals of the MMA's e-prescribing provisions. This included removing existing barriers to e-prescribing. The commenter did not identify any specific State laws that stand as an obstacle to Congress's goal of implementing uniform e-prescribing standards that are to be used in e-prescribing of Medicare Part D covered drugs for Medicare Part D eligible individuals. Therefore, we will not re-evaluate the scope of preemption at this time. We would consider recommendations related to any specific statute or regulation if such laws and recommendations are brought to our attention at some point in the future. *Comment:* Another commenter noted that some State laws restrict communication of “sensitive” medication information (for example, drugs indicative of HIV status, substance abuse, genetic disorder, etc.). The commenter recommended that we preempt any State or local statute or regulation that would limit disclosure of a patient's medication history, noting that these laws and regulations are often inconsistent and hard to find, impeding the ability of vendors to display this information to the prescriber at the point of care. *Response:* We acknowledge that medication history data will be most valuable to the prescriber when it is complete. However, these laws do provide patients with additional safeguards for certain categories of medical information. We believe that, as medication history becomes more available to prescribers, these limitations will be identified, and may be appropriate for future regulation. We will not, however, address this issue at this time since it is outside of the scope of this final rule. 8. Incentives to e-prescribing *Comment:* A number of commenters suggested that CMS should support adequate financial incentives, and should itself provide financial incentives, to physicians and dispensers to assist them with their investments in, and implementation of, e-prescribing. *Response:* The Administration supports the adoption of health information technology as a normal cost of doing business. However, other means of encouraging the adoption of e-prescribing are already in place, such as regulations that provide a safe harbor under the federal anti-kickback statute and an exception under the federal Physician Self-Referral (“Stark”) Law for certain arrangements involving the donation of e-prescribing and electronic health records technology. These regulations pave the way for increased adoption of health information technology by physicians and other health care providers. We also note that providers may participate in, and receive incentives through, the 2008 Physician Quality Reporting Initiative (PQRI). This project includes measures for patient compliance with therapy, which can be supported through the utilization of e-prescribing transactions such as fill status notification. 9. “Pharmacist” versus “Dispenser” *Comment:* One comment included a recommendation that we refer to “pharmacists”, rather than “dispensers” in the final rule because referring to a pharmacist as a “dispenser” ignores the clinical component of pharmacist-patient interactions. *Response:* We fully recognize and appreciate the importance of the pharmacist-patient relationship, which provides critical clinical and educational support to the patient. However, we wish to clarify that we have defined the term “dispenser” at 42 CFR 423.159 to mean a person or other legal entity licensed, registered, or otherwise permitted by the jurisdiction in which the person practices or the entity is located to provide drug products for human use by prescription. Based on this definition, we will continue to use the term “dispenser” when referencing these entities. *Comment:* A number of commenters stated that the benefits of e-prescribing will not be fully realized until e-prescribing is included among CCHIT-certified interoperable electronic health records
(EHR)featuring robust decision-making software. *Response:* We recognize the immediate benefits that e-prescribing as a stand-alone function can bring to the health care community. However, we support the Administration's health information technology initiatives including EHR certification and standards harmonization, and agree that the full benefits of e-prescribing will be realized through the adoption of certified interoperable electronic health records. Additionally, CMS has participated in the development of the medication management use case that will ultimately result in harmonized standards and support interoperable e-prescribing functionality. 10. Mandatory e-prescribing *Comment:* One commenter expressed support for the recommendation from the American Health Information Community
(AHIC)that the Secretary seek authority to mandate e-prescribing under Medicare. Another commenter opposed mandating e-prescribing, and another suggested it not be mandated until at least 50 percent of prescribers and dispensers are e-prescribing. *Response:* Currently, e-prescribing under Medicare Part D, as outlined in the MMA, is voluntary for prescribers and dispensers. Medicare Part D sponsors must support the use of these standards in e-prescribing transactions. The breadth of this final rule is limited to that statutory authority. 11. Exemption for e-prescribing in a Closed Enterprise *Comment:* Several commenters requested clarification regarding whether prescriptions transmitted within a closed enterprise (for example, from prescribers within an HMO plan to a plan-owned pharmacy) are exempted from the use of the NCPDP SCRIPT standard. *Response:* Entities may use either HL7 messages or the adopted NCPDP SCRIPT standard to conduct internal electronic transmittals (that is, when all parties to the transaction are employed by, and part of, the same legal entity) for the specified NCPDP SCRIPT transactions as described above. 12. Commercial Messaging *Comment:* One commenter said that commercially oriented messages should not be permitted in e-prescribing until adequate standards for content, integrity, and display of these messages have been developed. *Response:* We agree that there needs to be an appropriate balance between providing appropriate information at the point of care, and messaging that might steer the prescriber to use specific drugs and therapeutics as specified at section 1860 D-4(e)(3)(D) of the Act. We also recognize the potential for inappropriate messaging to occur in e-prescribing and share concerns about how the provision of certain information may unduly influence physician prescribing patterns. For example, inappropriate messages include those that would steer the filling of a prescription to a particular mail order pharmacy versus a retail pharmacy, and electronic “detailing” messages from a manufacturer promoting a particular brand or brand-name drug over and above that which the Medicare Part D sponsor requires or to which it gives preference. Moreover, if a drug manufacturer engages in this practice to promote unapproved uses for a drug, this could be a violation of the Federal Food, Drug, and Cosmetic Act. We will monitor this as an operational issue and will provide guidance to Medicare Part D sponsors at a future date and, if necessary, propose more specific standards for messaging. 13. E-prescribing Errors *Comment:* One commenter noted an increasing number of new errors are associated with electronic prescribing. Computerized Physician Order Entry
(CPOE)systems have the potential to contribute to errors in certain situations, such as the selection of a wrong drug or dose selection from a drop down menu that a dispenser, if they are aware of the error, must then communicate to the prescriber to address. The commenter urged us to consider the potential for new types of errors as the industry implements e-prescribing standards and clarify in the final regulation ways the agency will address or prevent such errors. *Response:* We cite this commenter's example to raise the point that no system, whether electronic or paper, is infallible. Just as in paper prescribing, errors can still take place. E-prescribing helps to substantially mitigate some risk, such as illegible prescriber hand writing on a paper script that could be mis-interpreted by the dispenser; and medication history, which supports the reduction of the occurrence of adverse drug events at the prescriber level. We would expect that e-prescribing software systems would employ safeguards and redundancies, such as multiple prompts asking for prescriber review and confirmation of non-conforming information, prior to transmission. 14. Privacy and Medication History *Comment:* Two commenters expressed concern with privacy and medication history. One inquired as to who would have access to medication history under the HIPAA Privacy Rule; the other stated that the HIPAA notice of privacy practices should make it very clear that e-prescribing is taking place and that prescription information is part of one's medical record. One commenter felt that individuals should have the right not to participate in either e-prescribing or electronic medical records, and to have the right to determine who has access to their prescription histories. *Response:* Patients can always ask their physicians to refrain from requesting their personal medication histories as derived from the patient's Medicare Part D sponsor. While there is no legal guarantee a provider would agree to their request, patients may always ask that their prescribers only use paper prescriptions when prescribing for them. 15. Regular Cycle of Rulemaking *Comment:* Two commenters suggested that CMS consider creating a regular cycle of rulemaking in order to keep standards adoption in sync with the rapid pace of standards development by the industry. For example, CMS could issue a new notice of proposed rulemaking for e-prescribing standards every 2 years in a particular month. *Response:* The creation of a regular cycle of rulemaking to adopt e-prescribing standards would restrict CMS' ability to adopt standards when they meet the requisite objectives, functionality and other criteria required that CMS employs in deciding whether to adopt e-prescribing standards. We further reiterate that in response to industry's desire for a streamlined updating process that could keep pace with changing business needs, as previously discussed in this final rule, we adopted a process for the Secretary to adopt subsequent version(s) of a standard for voluntary use where the new version(s) are backwards compatible with the adopted standard. The industry's request for a regular cycle of rulemaking clearly indicates a desire to adopt standards as soon as possible, which is contrary to a bi-annual rulemaking process. 16. Medicaid Prescription Requirements *Comment:* One commenter raised the issue that federal Medicaid regulations require a prescriber's hand written authorization for dispensers to dispense brand name drugs when an equivalent generic is available, which would appear to be in conflict with federal e-prescribing guidelines. *Response:* The issue that the commenter raised applies to prescriptions obtained under their Medicaid benefits. Under section 1860D-4(e) of the Act, e-prescribing regulations apply only to covered Medicare Part D covered drugs prescribed for Medicare Part D eligible individuals. In those instances in which Medicare Part D provides prescription drug coverage for beneficiaries who receive their Medicaid prescription drug benefits through the Medicare program (dual-eligible beneficiaries), Medicare Part D e-prescribing regulations would apply. IV. Collection of Information Requirements Under the Paperwork Reduction Act of 1995 (PRA), agencies are required to provide a 30-day notice in the **Federal Register** and solicit public comment before a collection of information requirement is submitted to the Office of Management and Budget
(OMB)for review and approval. In order to fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the PRA requires that we solicit comment on the following issues: • Whether the information collection is necessary and useful to carry out the proper functions of the agency. • The accuracy of the agency's estimate of the information collection burden. • The quality, utility, and clarity of the information to be collected. • Recommendations to minimize the information collection burden on the affected public, including automated collection techniques. We solicited public comment on each of these issues for 42 CFR 423.160, “Standards for Electronic Prescribing.” The emerging and increasing use of health care electronic data interchange
(EDI)standards and transactions have raised the issue of the applicability of the PRA. It has been determined that a regulatory requirement mandating the use of a particular EDI standard constitutes an agency-sponsored third-party disclosure as defined under the PRA. As a third-party disclosure requirement subject to the PRA, Medicare Part D sponsors must support and comply with the adopted e-prescribing standards relating to covered Medicare Part D drugs, prescribed for Medicare Part D eligible individuals. However, the requirement that Medicare Part D sponsors support electronic prescription drug programs in accordance with standards set forth in this section, as established by the Secretary, does not require that prescriptions be written or transmitted electronically by prescribers or dispensers. These entities are required to comply with the adopted standards when they electronically transmit prescription or prescription-related information for covered transactions. Testimony presented to the NCVHS indicates that most health plans/PBMs currently have e-prescribing capability either directly or through contract with another entity. Therefore, we do not believe that utilizing the adopted standards will impose an additional burden on Medicare Part D sponsors. Since the standards that have been adopted are already familiar to industry, we believe the requirement to utilize them in covered e-prescribing transactions constitutes a usual and customary business practice. As such, the burden associated with the requirements is exempt from the PRA as stipulated under 5 CFR section 1320.3(b)(2). As required by section 3504(h) of the Paperwork Reduction Act of 1995, we have submitted a copy of this document to OMB for its review of these information collection requirements. V. Regulatory Impact Analysis We have examined the impacts of this rule as required by Executive Order 12866 (September 1993, as further amended, Regulatory Planning and Review), the Regulatory Flexibility Act
(RFA)(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 1995 (March 22, 1995, Pub. L. 104-4), Executive Order 13132 on Federalism and the Congressional Review Act (5 U.S.C. 804(2)). Executive Order 12866 (as amended by Executive Order 13258, which merely reassigns responsibility of duties, and as further amended by Executive Order 13422) directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Among other things, a regulatory impact analysis
(RIA)must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). We estimate that this rulemaking will have an annual benefit on the economy of $100 million or more and will have “economically significant effects.” We believe that prescribers and dispensers that are now e-prescribing have already largely invested in the hardware, software and connectivity necessary to e-prescribe. We do not anticipate that the retirement of NCPDP SCRIPT 5.0 in favor of NCPDP SCRIPT 8.1 for the transactions listed at § 423.160(b)(2), the adoption of the NCPDP SCRIPT 8.1 Medication History Standard for the exchange of medication history information, the adoption of the NCPDP Formulary and Benefits 1.0 for formulary and benefits transactions, the adoption of NPI for use in e-prescribing transactions and the adoption of NCPDP SCRIPT 8.1 (RxFill) for electronic fill status notification purposes will result in significant costs. We solicited industry and other interested stakeholder comment and input on this issue. We anticipate that the ability to utilize electronic formulary and benefits inquiries will result in administrative efficiencies and increased prescribing of generic drugs versus brand name drugs, and the access to medication history at the point of care will result in reduced adverse drug events (ADEs). The benefits accruing from using the adopted standards in these transactions will have an economically significant effect on Medicare Part D program costs and patient safety. As this is a significant rule under Executive Order 12866, we are required to prepare a regulatory impact analysis
(RIA)for this final rule. The Regulatory Flexibility Act
(RFA)requires agencies to analyze options for regulatory relief of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by qualifying as small businesses under the Small Business Administration's size standards (revenues of $6.5 million to $31.5 million in any 1 year for the health care industry). States and individuals are not included in the definition of a small entity. For details, see the Small Business Administration's regulation that set forth the current size standards for health care industries at *http://sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf* (refer to the 620000 series). Based on our initial analysis, we expect this rulemaking will not have a significant impact on a substantial number of small entities because, while many prescribing physician practices and independent dispensers would be small entities, e-prescribing is voluntary for prescribers and dispensers. For prescribers and dispensers that have already implemented e-prescribing, the adoption of NCPDP SCRIPT 8.1 would in most cases be accommodated through software upgrades whose cost would already be included in annual maintenance fees. Medicare Part D sponsors are required to support e-prescribing, and may incur some costs to support the NCPDP Formulary and Benefits 1.0, the NCPDP SCRIPT 8.1 Medication History Standard, the NCPDP SCRIPT 8.1 standard for fill status notification (RxFill), and the National Provider Identifier (NPI). However, using the SBA revenue guidelines, the majority of Medicare Part D sponsors would not be considered small entities as they represent major insurance companies with annual revenues of over $31.5 million. We also do not anticipate that the requirement to use NPI in e-prescribing would have any effect on Medicare Part D sponsors, prescribers or dispensers as they likely are already using the NPI in HIPAA-covered transactions. Section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a core-bed Metropolitan Statistical Area and has fewer than 100 beds. This rule will not affect small rural hospitals because the program will be directed at outpatient prescription drugs covered under Medicare Part D and not drugs provided during a hospital stay. Prescription drugs provided during hospital stays are covered under Medicare Part A as part of Medicare payments to hospitals. Therefore, for purposes of our obligations under section 1102(b) of the Act, we are not providing an analysis. *Comment:* It was recommended by one commenter that CMS prepare a regulatory impact analysis for small rural hospitals, as this rule may have a significant impact on small rural hospitals that dispense discharge medication and “after hours” emergency medications to patients. *Response:* In the November 16, 2007 proposed rule (72 FR 64909), we considered how adoption of these standards might affect small rural hospitals. We determined that drugs dispensed to Medicare beneficiaries by small rural hospitals are, for the most part, drugs dispensed in an inpatient setting and as such, are covered under Medicare Part A. The smaller volume of Medicare Part D drugs that might be dispensed as noted by the commenter did not constitute a major impact to the extent that it that would necessitate a regulatory impact analysis. Section 202 of the Unfunded Mandates Reform Act of 1995
(UMRA)also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2008, that threshold is approximately $127 million. Since only Medicare Part D sponsors are required to support e-prescribing, this rule does not include any mandate that would result in this spending by State, local or tribal governments. We acknowledge that there may be transaction costs borne by payers and pharmacy benefit managers (PBMs), but, based on our analysis, they would fall below the $127 million threshold. We would expect that many Medicare Part D sponsors already support the exchange of formulary, benefits, and medication history, because the standards we are proposing are based on proprietary transactions originally developed by RxHub which are already in use in the current e-prescribing environment. Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a rule that imposes substantial direct costs on State and local governments, preempts State law, or otherwise has Federalism implications. No State categorically bars e-prescribing. In recent years, many States have more actively legislated in this area. Should a State law be contrary to the Medicare Part D e-prescribing standards, or should it restrict the ability to carry out the Medicare Part D e-prescribing program, section 101 of the MMA established preemption of that State law at section 1860D-4(e)(5) of the Act. It provides the following:
(5)Relation to State Laws. The standards promulgated under this subsection shall supersede any State law or regulation that—
(A)Is contrary to the standards or restricts the ability to carry out this part; and
(B)Pertains to the electronic transmission of medication history and of information on eligibility, benefits, and prescriptions with respect to covered Medicare Part D drugs under this part. For the same reasons given above, we have determined that States would not incur any direct costs as a result of this proposed rule. We believe that, taken as a whole, this final rule would meet these requirements. We have consulted with the National Association of Boards of Pharmacy directly and through participation in NCVHS hearings, and we believe that the approach we suggested provides both States and other affected entities the best possible means of addressing preemption issues. This section constitutes the Federalism summary impact statement required under the Executive Order. The objective of this regulatory impact analysis is to summarize the cost and benefits of implementing the standards for the conversion from NCPDP SCRIPT 5.0 to NCPDP SCRIPT 8.1 at § 423.160(b)(2); the adoption of final uniform standards for the electronic communication of prescription and prescription-related information on formulary and benefits, medication history, and prescription fill notification status; and the adoption of NPI for use as a health provider identifier in e-prescribing. The adoption of these standards for use in Medicare Part D e-prescribing will build upon the foundation standards e-prescribing requirements that were published as a final rule on November 7, 2005 (70 FR 67568). That rule contained an impact analysis that addressed the costs associated with implementing the use of those foundation standards, and it also discussed, in concept, the benefits that will accrue from e-prescribing in general. In the November 7, 2005 final rule (70 FR 67589), we noted that commenters had suggested that the estimated e-prescribing start-up costs for an individual physician to be at least $1,500 and perhaps in excess of $2,000. For average e-prescribing software implementation, according to a 2003 Center for Information Technology Leadership
(CITL)Report, “The Value of Computerized Provider Order Entry” ( *http://www.citl.org/research* ), a basic-e-prescribing system cost $1,248 plus $1,690 for annual support, maintenance, infrastructure and licensing costs. The total first year cost averaged approximately $3,000. The Journal of Healthcare Information Management has published that physicians reported paying user-based licensing fees ranging from $80 to $400 per month, although we believe through anecdotal information that these licensing fees have decreased over time to between $25 to $66 a month ($300 to $800 annually). (For further discussion of the start-up costs associated with e-prescribing, see the November 7, 2005 final rule (70 FR 67589)). The impact analysis built upon the foundation rule analysis, and we referred to the foundation rule analysis to assure that costs and benefits were not counted twice. *Comment:* One commenter discussed CMS' assumptions regarding the cost of e-prescribing systems for physicians, especially those practices which have five or less physicians, which they categorize as small practices. One commenter suggested that CMS consider scaling the savings to be realized through e-prescribing according to practice size. Another comment was that CMS omitted opportunity costs, and that advanced e-prescribing systems that have more robust features differ significantly from basic systems and are therefore, more costly, which CMS did not take into account. They contend that CMS may have double counted licensing fees that were already included in overall cost figures, and that there are significant technology, training and upgrade costs, as well as significant differences between the cost of a T1 Internet access line in a rural versus urban area which the agency should take into account. As only three of the six initial standards were found to be technologically ready for use, they asked that the adoption of standards should continue to be voluntary for physicians, thus keeping their costs at a minimum. Another commenter also asked that CMS recognize additional costs related to processing e-prescriptions, and the ongoing expenses incurred by prescribers for hardware/software and other associated costs. *Response:* In the impact analysis for the November 16, 2007 proposed rule, we attempted to address the cost and benefit of implementation of the two standards that were proposed for adoption at that time, namely medication history and formulary and benefits, and not that of e-prescribing in general, so as not to double count costs already attributed to the implementation of the foundation standards. In the November 7, 2005 final rule (70 FR 67589), we considered the cost of e-prescribing in general. At that time, all of the commenters suggested estimated start-up costs for an individual physician to be at least $1,500 and perhaps exceeding $2,000. This estimate would vary based on market share, covered lives and local market competition. Given that, we proffered a conservative estimate of $3,000, taking into account variations in products, level of adoption, etc., and industry feedback indicated that vendors often provided free and low cost handheld or similar devices. The Journal of Healthcare Information Management report cited by one commenter took this practice into account, but also noted that physicians reported paying user-based licensing fees ranging from $80 to $400 per month. We did not note that this cost was included in the overall cost of e-prescribing as cited in that report, nor at that time did we account for opportunity costs because e-prescribing for Medicare Part D is voluntary for providers and dispensers, and we received no feedback from industry and other interested stakeholders indicating that opportunity costs should be considered. As one commenter noted, The Journal of Healthcare Information Management also reported that in some instances prescribers had to invest in new or updated hardware, such as computer servers, and networking infrastructure to use an e-prescribing system, but again, that the amount varied significantly by product and level of adoption. Since that time, we note that the cost of new or updated hardware in particular has come down dramatically due to increased semi-conductor production, improved computer manufacturing methods and total factor productivity growth. 2 One commenter said that e-prescribing requires a T1 data transmission line, which may be true for very large practices, but if the mainstream physician practice constitutes less than five physicians, we believe that e-prescribing can be initiated by many physician practices without the installation of a T1 data transmission line. 2 Congressional Budget Office, The Role of Computer Technology in the Growth of Productivity May 2002, *http://www.cbo.gov/* . We have acknowledged, and continue to acknowledge, that e-prescribing has both initial and ongoing costs associated with it. Those include, and for the most part we have accounted for, some initial loss of productivity, hardware costs, software costs, training, etc., but with widespread e-prescribing, we anticipate that prescribers will eventually absorb these as a cost of doing business, much as they would any purchase of equipment. Additionally, provider costs for e-prescribing are very much contingent on a wide variety of factors, including the size of the practice; whether an e-prescribing system under consideration for purchase is a stand-alone versus integrated into an electronic health record system; the level at which a provider enters into e-prescribing (in other words, entry-level necessitating the purchase of hardware/software, versus integrating into existing hardware/software); whether the provider is located in an urban versus rural area, and the related costs/availability of connectivity; the features, whether basic, intermediate or advanced, of any given e-prescribing package; the number of patients seen per year, and the number of prescriptions written, etc. Physicians in some medical specialties (such as geriatrics or internal medicine) may regularly prescribe a higher volume of prescription drugs per patient due to severity of illness, multiple diagnoses, etc., versus other medical specialties, and thus realize more benefits through more frequent, repeated use. We also acknowledged in the proposed rule that benefits will not be immediately recognized, that benefits will accrue over a multi-year timeframe and that, with more widespread adoption, we anticipate that costs will come down, systems capabilities will be more robust, and the full benefits of e-prescribing will be realized. We again reiterate that nothing in the proposed rule or this final rule changes the tenet of section 101 of the MMA that e-prescribing Medicare Part D covered drugs for Medicare Part D eligible individuals is voluntary for prescribers and dispensers. Because adoption of e-prescribing is voluntary under Medicare Part D, we also assume that an individual provider or group practice will perform their own cost/benefit analysis, and will make the decision to invest in e-prescribing if they determine that their investment will yield a net benefit and positive patient outcome results. Dispensers may incur higher transaction fee costs as a result of the increased volume of electronic prescriptions, and any costs associated with dispenser access to medication history. Again, we anticipate that with this increased volume of e-prescriptions, transaction fees will decrease, and whatever residual transaction and/or access costs associated with medication history remain, eventually will be absorbed into the dispenser's cost of doing business, while benefits continue to accrue. *Comment:* One commenter said that there currently is no way to verify that the pharmacy has received an electronically transmitted prescription or renewal, which, since many dispensers do not routinely check their electronic prescription messages or facsimiles, results in an increase of physician office inquiries and call backs from the pharmacy. The commenter noted that this workflow issue was not accounted for in the impact analysis relative to physician costs of e-prescribing. *Response:* We have received industry feedback that most physician e-prescribing software packages feature a response mechanism that indicates a successful transmission of the electronic prescription to the pharmacy. In the case of EDI transmissions, we also understand that the failure rate of EDI transmission is less than three tenths of one percent. We assume that the small failure rate of EDI transmission, combined with basic pharmacy workflow adjustments to routinely check on the receipt of electronic prescriptions, that any resulting call backs to physicians' offices would be minimized, and would not represent a significant cost for either the dispenser or provider. A. Overall Impact In the November 7, 2007 proposed rule (72 FR 64912) we noted that according to 2006 CMS data, approximately 24 million beneficiaries were enrolled in a Medicare Part D sponsor's plan, either a stand-alone Prescription Drug Plan or a Medicare Advantage Drug Plan. This data has since been revised to approximately 25 million Medicare beneficiaries. 3 Another 7 million retirees were enrolled in employer or union-sponsored retiree drug coverage receiving the Retiree Drug Subsidy (RDS); 3 million in Federal retiree programs such as TRICARE and the Federal Employees Health Benefits Plans (FEHBP) and 5 million receiving drug coverage from alternative sources, including 2 million who have coverage through the Veterans' Administration. The breadth of Medicare's coverage suggests that e-prescribing under Medicare Part D could impact virtually every pharmacy and a large percentage of the physician practices in the country. Standards established for the e-prescribing of Medicare Part D covered drugs for Medicare Part D eligible individuals will, as a matter of economic necessity, be adopted by vendors of e-prescribing and pharmacy software, and as a result, would extend to other e-prescribing populations unless they are manifestly unsuited for the purpose. However, we note again that e-prescribing Medicare Part D covered drugs for Medicare Part D eligible individuals is voluntary for both prescribers and dispensers under the Medicare Part D e-prescribing program. 3 CMS, Total Medicare Beneficiaries with Prescription Drug Coverage as of January 2008, 1-31-08, *http://www.cms.hhs.gov/PrescriptionDrugCovGenIn/* . Our pilot testing and industry collaboration activities were partially intended to prevent the development of multiple, “parallel” e-prescribing environments, with their attendant incremental costs. We have worked to avoid imposing an undue administrative burden on prescribing health care professionals, and dispensers. With the exception of the NPI, the standards we are adopting in this final rule, as with the foundation standards adopted previously, are maintained by accredited standards development organizations. The standards for the Medication History, Formulary and Benefits, and Fill Status Notification transactions have been shown through pilot testing to work effectively with the foundation standards. B. Costs Because e-prescribing is voluntary for prescribers and dispensers, we anticipate that entities who currently do not now e-prescribe and who will not implement e-prescribing during the period reflected in the regulatory impact analysis will incur neither costs nor benefits. Entities that do not now e-prescribe, but that will implement e-prescribing during the period reflected in the regulatory impact analysis will incur the costs and benefits associated with the foundation standards (which we discussed in the November 7, 2005 final rule (70 FR 67568) but we do not claim either in this analysis). We assume that as e-prescribing becomes more widespread, workflow adjustments will follow that will result in the full range of benefits that can potentially be realized through e-prescribing. Also, implementation of the standards that are adopted in this rule will not materially affect the implementation cost that was projected for NCPDP SCRIPT 5.0 in the foundation standards final rule. That is, the cost to implement NCPDP SCRIPT 8.1 under § 423.160(b)(2), the NCPDP SCRIPT 8.1 Medication History Standard, NCPDP Formulary and Benefits 1.0, the National Provider Identifier
(NPI)and the NCPDP SCRIPT 8.1 standard for fill status notification (RxFill) are not materially higher than the cost of implementing the NCPDP SCRIPT 5.0 foundation standard alone. These entities could incur additional costs for the purchase of new e-prescribing products that include functions that support the ability to conduct transactions using these e-prescribing standards. They would also incur the benefits of the all of these final standards. *Comment:* One commenter stated that our analysis did not take into account the adoption of RxFill, and any associated costs and benefits. *Response:* In the November 16, 2007, proposed rule we asked for stakeholder comments on the potential utilization of RxFill in Medicare Part D e-prescribing, but did not propose its adoption. As previously discussed, in the proposed rule we referenced industry feedback that the adoption of RxFill “may cause an unnecessary administrative burden on prescribers and dispensers,” and solicited feedback regarding industry's views on any potential administrative burden associated with its use. Therefore, no cost/benefit analysis was performed in consideration of the adoption of RxFill as a final uniform standard. As a result of comments received through the notice and comment rulemaking process, and as we discussed above, the industry has now indicated that it believes there will be no administrative burden associated with the adoption of the RxFill standard. Therefore, we will adopt both the NPI, and the RxFill standard for fill status notification transactions for use by providers who see value in utilizing electronic transaction using the adopted standards to support patient medication management and discuss both the costs and benefits here. Because use of the electronic fill status notification transaction is voluntary, we have no clear indication from the industry as to how many providers potentially will see value in, and use transactions utilizing the adopted e-prescribing standards for this function. The feedback we have received from provider organizations indicates that they envision that its use will be more prevalent among those providers who wish to track medication adherence for Medicare Part D beneficiaries who have chronic medical conditions, such as diabetes, hypertension, etc., for whom following a medication regimen is imperative. We also note that RxFill is limited to informing the prescriber that the prescription has been filled, not filled, etc., and it is but an initial indicator of a patient's intention to actually take the prescribed medication. The assumption here is that a patient is more likely to take a medication prescribed for him/her if they know that the prescriber will be monitoring this information, and more likely to take the medication if they have made the effort to go to the pharmacy, purchase and take the prescription drug home. We also understand from industry feedback that prescription information exchange networks have fill status notification functionality (RxFill) built into their systems but that most physicians currently are not signed up to use it. When a patient picks up a prescription at the pharmacy, they likely sign an electronic signature log. This electronic signature triggers a pharmacy software system update which, in turn, triggers a fill status notification message transaction using the RxFill standard to be sent to the prescriber, if the prescriber has requested receipt of such information. Conversely, when a prescription is not picked up and returned to inventory, this activity also triggers a similar message if the prescriber has requested receipt of such information. Stand alone e-prescribing systems usually send such updates to requesting prescribers overnight; however, there are integrated e-Signature systems which employ real-time notification. Given that most dispensers who are already e-prescribing use an electronic signature pad to verify prescription pick-up by the patient are already gathering this information and need acknowledgement from the prescriber through a “flag” in their e-prescribing software system that they want to receive this information, we do not believe that there will be any significant changes to pharmacy or prescriber workflows once that “flag” is activated, and no cost impact associated with the use of RxFill for those prescribers and dispensers who are currently e-prescribing. Those dispensers still using paper logs to record patient pick-up of a prescription likely are not e-prescribing and therefore, would not be impacted either from a workflow or economic perspective. We agree with commenters who stated that neither the medication history nor the formulary and benefits standard would result in additional e-prescribing costs for those already e-prescribing, and apply that rationale to RxFill. As the fill status notification function resides on the NCPDP SCRIPT 8.1 standard alongside the medication history function, we expect that it would also not result in any additional costs being incurred. For those not currently e-prescribing, they would incur the costs and benefits associated with the foundation standards (which we discussed in the final rule at 70 FR 67568), but which we did not claim in our analysis. One potential benefit anticipated from the use of RxFill are those associated with better medication adherence on the part of patients, and this varies depending on the clinical condition. According to a study entitled, “Impact of Medication Adherence on Hospitalization Risk and Healthcare Cost”, 4 adherence with medication therapy is generally low—approximately 50 to 65 percent, on average, for common chronic conditions such as hypertension and diabetes. In this study, for diabetes, the average annual incremental drug cost associated with a 20 percent increase in drug utilization was $177, and the associated disease-related medical cost reduction was $1,251, for a net savings of $1,074 per patient, or an average return on investment of 7.1:1. Other studies of a mental health condition such as schizophrenia estimate the cost of non-compliance with medication therapy to be about $705 million over a 2-year period. 5 Another study on medication therapy adherence in hypertensive patients showed that interventions aimed at improving compliance with medication regimens increased patient adherence by up to 11 percent, and that when it came to prescription refills, partial compliance with prescription refills identified important clinical consequences of reduced compliance, with gaps in taking medication resulting in an increase in hospitalizations. 6 4 Michael C. Sokol, M.D., M.S.; Kimberly A. McGuigan, PhD; Robert R. Vebrugge, PhD. And Robert S. Epstein, M.D., M.S.. Impact of Medication Adherence on Hospitalization Risk and Healthcare Cost. Medical Care. 2005;43:521-530. 5 Theida, Patricia, M.A., Beard, Stephen, M.S., Richter, Anke, Ph.D., and Kane, John, M.D. An Economic Review of Compliance with Medication Therapy in the Treatment of Schizophrenia. Psychiatric Services. April 2003: 54:508-516. 6 Steiner, J.F., Prochazka, A.V. The assessment or refill compliance using pharmacy records: methods, validity and applications. Journal of Clinical Epidemiology. 1997: 50:105-116. Researchers generally agree that it is difficult to arrive at a dollar figure that would reflect the outcomes of medication adherence for all clinical conditions, but we believe that, based on studies such as those cited, it is prudent to assume that in the Medicare Part D program, an increase in prescription drug utilization by patients as a result of better medication adherence would be far offset by a larger reduction in the cost of Medicare beneficiary hospitalizations, outpatient procedures and other clinical treatments that might result from non-adherence to medication regimens. Relative to the NPI, in the proposed rule we discussed that we did not anticipate any significant costs to be associated with the use of the NPI by vendors, prescribers, dispensers or Medicare Part D sponsors for e-prescribing transactions under section 1860D-4(e). Use of the NPI is already required in order to conduct HIPAA-covered transactions which require the identity of HIPAA-covered health care providers; and the compliance date for the NPI, May 27, 2007, has already passed. The NPI is easily obtainable, and there is no cost associated with applying for and/or obtaining an NPI. Once received, the NPI is usually entered by the physician initially into their e-prescribing software system, and it is carried thereafter by the system, which automatically populates the NPI field on the NCPDP SCRIPT 8.1 standard. The NPI is in widespread use by HIPAA-covered entities in HIPAA transactions. Although the transactions using the NCPDP SCRIPT standard are not HIPAA transactions, the prescribers and dispensers that conduct such transactions would be HIPAA-covered entities, and as such, they would already be using NPI as they conduct their HIPAA transactions. They would, therefore, already be familiar with the NPI, even though they may not currently use it in the context of transactions using the NCPDP SCRIPT standard. For e-prescribers whose software products are not able to generate transactions using the NCPDP SCRIPT 8.1 standard, they will not have the capability to use the NCPDP Formulary and Benefits Standard 1.0, the NCPDP SCRIPT 8.1 Medication History transaction, or the NCPDP SCRIPT 8.1 RxFill standard. Costs would be incurred if they were to replace such software with software that generates transactions that comply with the adopted standards. We anticipate that the NCPDP SCRIPT 8.1 will be accommodated in later software version upgrades where that standard is not already utilized. We believe that the implementation of the NPI would be accomplished as part of this transition. Prescribers and dispensers already should be using the NPI to conduct retail pharmacy drug claim transactions. Medicare Part D sponsors will not be significantly affected by the adoption of the NPI because the Medicare Part D sponsors already use the NPI in HIPAA transactions, such as the retail pharmacy drug claim. Software vendors are already implementing NCPDP SCRIPT 8.1 in their products, NPI is supported by NCPDP SCRIPT 8.1, and we believe that any needed upgrades will be included in routine version upgrades. Benefits for the use of the NPI in e-prescribing under Medicare Part D have not been quantified by the industry. The NPI provides a standard way for dispensers to identity individual prescribers in an e-prescribing transaction. We anticipate that its use will help dispensers reduce the number of callbacks to a physicians office to verify an e-prescriber's identity, although it is unclear and unsubstantiated from industry feedback as to what percentage of callbacks between the dispenser and the prescriber can be attributed solely to this inquiry. *Comment:* One commenter offered that neither the adoption of NCPDP SCRIPT 8.1 nor adoption of the standards for medication history and formulary and benefits would result in significant costs as the majority of the e-prescribing industry is already using these standards. The commenter agreed that the costs for entities that do not now e-prescribe, but will be implementing the e-prescribing technology in the future, would not be substantially increased by the adoption of these standards. Another commenter said although the NCPDP SCRIPT 8.1 Medication History transaction and the NCPDP Formulary Benefit Standard 1.0 are relatively new, it is not accurate for CMS to state that they are not currently deployed for use in the functions that were listed at § 423.160(b)(1). *Response:* From industry feedback, we have learned that the medication history and formulary and benefits functions were adopted by some entities nearly two years ago, and there are others in the industry that have been using them for even longer. As such, our conclusion remains the same that adoption of these standards now would result in no new additional costs. Entities that e-prescribe now using a software product that cannot use the NPI and conduct medication history, formulary and benefits, and fill status notification standards, and that cannot be upgraded to conduct them (for example, stand-alone Microsoft Word-based prescription writers) will not be required to conduct these transactions (if they choose to conduct these transactions) using the NCPDP SCRIPT standard until April 2009. If they decide to upgrade their entire e-prescribing system to take advantage of the benefits of these new standards, they would incur costs. However, we have no clear sense of how many entities would fall into this category. Entities that e-prescribe now using a product that could be upgraded to conduct medication history, formulary and benefits, and fill status notification using the three adopted standards would incur no cost or benefit if they decide not to upgrade. If they decide to upgrade, they would incur the cost of the upgrade (unless the upgrade is included in their maintenance agreement) and any testing costs, and would incur the benefits of utilizing these three standards. This would also apply to entities that e-prescribe now using a product that conducts the three transactions using nonstandard (Non NCPDP SCRIPT) formats, but the functionality is not used. Based on our research, this category likely is the one in which most current e-prescribers fall. Entities that e-prescribe now using a product that conducts one or more of the three transactions using nonstandard formats and who continue to use the electronic transactions would have to upgrade their software. They would not enjoy all the benefits of conducting transactions using the three new standards since they would have already been performing them in some manner, but definitely would incur cost savings due to the increased interoperability of using the NCPDP SCRIPT standards. However, any entity engaging in e-prescribing would incur benefits due to increased interoperability, as the existence of standards simplifies data exchange product selection and testing. 1. Retail Pharmacy Because e-prescribing is voluntary for dispensers, unless they were to commence e-prescribing, those who do not currently conduct e-prescribing would not incur any costs related to any of the provisions of this rule. However, we recognize that costs would be incurred by those dispensers that currently conduct e-prescribing transactions, as well as those who voluntarily implement e-prescribing during the period reflected in our regulatory impact analysis. Industry estimates are that 97 percent of the nation's retail chain dispensers currently e-prescribe, in contrast to only 27 percent of independent dispensers that e-prescribe. 7 7 Surescripts, National Report on E-prescribing, December 2007. *http://www.surescripts.com/report/.* Transactions using NCPDP Formulary and Benefits 1.0 are carried out between the plan and prescriber and, therefore, dispensers will not incur any cost related to this transaction. While the NCPDP SCRIPT 8.1 Medication History Standard can be used in transactions to support communication between the dispenser and prescriber, its use is, nonetheless, voluntary for both. We assume for purposes of this analysis that the NCPDP SCRIPT 8.1 Medication History Standard will be used in medication history exchange transactions. Effective May 23, 2008 dispensers are required under HIPAA to use the NPI to conduct retail pharmacy drug claim transactions. Therefore, we associate no additional costs with the use of the NPI in Medicare Part D e-prescribing for retail dispensers. *Comment:* One commenter remarked that the cost of migrating to NCPDP SCRIPT 8.1 has already been borne by dispensers and their system vendors, and that there should be no cost associated with adoption of NCPDP Formulary and Benefits 1.0. However, the commenter acknowledged that there may be some costs to dispensers that supply data to support the medication history functionality and these costs are already being borne by participating dispensers. *Response:* The benefits of e-prescribing in general, and the specific standards to be adopted through this final rule, are significant, especially in terms of patient safety. As noted in the November 16, 2007 proposed rule (72 FR 64912), depending on their stage of e-prescribing adoption, there may be costs associated with the adoption of these standards for dispensers. These costs are far outweighed by the eventual economies realized by improved workflows and productivity savings within the pharmacy environment; marketplace forces should come into play as e-prescribing volume increases, which will help drive down costs and realize economies of scale. The adoption of NCPDP SCRIPT 8.1 in place of the NCPDP SCRIPT 5.0 foundation standard for the transactions listed at § 423.160(b)(2) will impact dispensers that conduct e-prescribing. Dispensers will have to ensure that their software can accept prescription transactions using the NCPDP SCRIPT 8.1 standard, and they will need to test with prescribers to assure that their electronic transactions are being received and can be processed. We believe there is little, if any, incremental costs associated with these activities. Software vendors have or are already incorporating NCPDP SCRIPT 8.1 in their products, and we believe that any needed upgrades will be included in routine version upgrades. The number of current e-prescribers per pharmacy is small, and the testing process is not complicated. We believe that the implementation of the NPI will be accomplished as part of this transition. Prescribers and dispensers already use the NPI to conduct retail pharmacy drug claim transactions. 2. Medical Practices Medical practices, compared to dispensers, face a different set of costs in implementing information systems for clinical care and financial management. Unlike dispensers, where technology has become an important part of operations (especially for larger retail chains), many providers have been cautious in their adoption of health information technology. We assume that, based on industry estimates, anywhere from 5 to 18 percent of physicians are e-prescribing today. 8 Because e-prescribing is voluntary for prescribers, medical practices that do not currently conduct e-prescribing would not incur any costs related to any of the provisions of this rule. However, we recognize that costs would be incurred by those prescribers currently e-prescribing, as well as those who voluntarily begin to e-prescribe during the period reflected in our regulatory impact analysis. If a practice decides to implement e-prescribing at a later time, we anticipate that the software products on the market would be compliant with these standards and, therefore, no additional cost would be incurred. In assessing the cost to prescribers that are currently e-prescribing, many of the e-prescribing software products generally already contain some capability to communicate formulary and benefits and medication history information because they incorporate the RxHub proprietary format on which the proposed standards were based. We expect that any changes that might be necessary as a result of this rulemaking would likely be included in routine version upgrades that are covered by annual maintenance and subscription fees. 8 E-Prescribing and the Prescription Drug Program final rule, published November 7, 2005 (70 FR 67568). For e-prescribers whose software products are not able to generate transactions using the NCPDP SCRIPT 8.1 standards, they will not have the capability to conduct electronic transactions using the NCPDP Formulary and Benefits Standard 1.0 and NCPDP SCRIPT 8.1 Medication History Standard. Costs would be incurred if they were to replace such software with software that can conduct transactions that comply with the proposed standards. We anticipate that the NCPDP SCRIPT 8.1 will be accommodated in later software version upgrades where that standard is not already utilized. We believe that the implementation of the NPI will be accomplished as part of this transition. As the fill status notification function resides on the NCPDP SCRIPT 8.1 standard alongside the medication history function, we expect that it would also not result in any additional costs being incurred. However, we recognize that the use of RxFill may result in workflow changes for the prescriber who must determine what he/she will do with the information provided by the RxFill transaction relative to their clinical practices. For those not currently e-prescribing, they would incur the costs and benefits associated with the foundation standards (which we discussed in the final rule at (70 FR 67568)), but which we did not claim in our analysis. 3. Medicare Part D Sponsors and Pharmacy Benefit Managers
(PBMs)Medicare Part D sponsors will be required to support NCPDP SCRIPT 8.1 for the transactions listed at § 423.160(b)(2), the NCPDP Formulary and Benefits 1.0, and the NCPDP SCRIPT 8.1 Medication History Standard. They will need to assure that their software can receive and conduct transactions utilizing NCPDP Formulary and Benefits 1.0 and the NCPDP SCRIPT 8.1 Medication History Standard, and that their internal systems and databases can supply the information needed to build the transaction. For example, they will need to be able to extract prescription claims history and format it according to the NCPDP SCRIPT 8.1 Medication History Standard. We believe that many Medicare Part D sponsors will have already implemented this functionality because the standards we are proposing are based on proprietary file transfer protocols developed by Rx-Hub that have been included in many e-prescribing products. Medicare Part D sponsors may need to restructure systems to assure that the data output is in the proper format, but, for the most part, the needed functionality is in place. We recognize that some Medicare Part D sponsors may need to make additional investments to support these standards. Because plans typically pay the per transaction network fees for eligibility transactions, which likely includes providing a formulary and benefits response as well as a medication history response, Medicare Part D sponsors will incur increased transaction costs for formulary and benefits and medication history transactions as the frequency in which these transactions are conducted electronically increases. Through information provided by SureScripts and industry consultants, this transaction fee appears to range from 6 cents to 25 cents per transaction, with the midpoint being 15 cents. In 2006, RxHub, one of the nation's largest electronic prescription and prescription-related information routing networks, estimated that their transaction volume increased 50 percent, from 29 million in 2005 to more than 43 million in 2006. These transactions were real-time requests for patient eligibility and benefits, formulary, and medication history information. 9 9 RxHub Announces 2006 e-Prescribing Results and Highlights Milestones for 2007, St. Paul, MN, February 23, 2007, *http://www.rxhub.com.* Based on data available at that time, we estimated that approximately 24 million Medicare beneficiaries received Medicare Part D benefits in 2006. (These data have since been revised to approximately 25 million Medicare beneficiaries). 10 This figure reflected those Medicare beneficiaries enrolled in a Medicare Prescription Drug Plan
(PDP)or a Medicare Advantage plan with Prescription Drug coverage (MA-PD) or both, for which we have prescription drug event data. Approximately 825,000,000 claims (prescription drug events) were finalized and accepted for 2006 payment. The annual percentage increase in the number of Medicare Part D prescriptions was estimated by CMS at 4.6 percent based on industry feedback ( *http://www.imshealth.com/ims/portal/front/articleC/0,2777,6599_3665_80415465,00.html* ). So that impact comparisons could be made equally across all years, inflation was removed from the price effects. Conservatively, we calculated the increase in the number of Medicare Part D prescriptions and applied the current estimates of 5 and 18 percent electronic prescribing adoption rates to arrive at the number of Medicare Part D electronic transactions, and cost them out at a range of a low of 6 cents per transaction to a high of 25 cents per transaction. We estimated costs for Medicare Part D sponsors of between $2 million to $46 million per year. 10 CMS, Total Medicare Beneficiaries with Prescription Drug Coverage as of January 2008, 1-31-08, *http://www.cms.hhs.gov/PrescriptionDrugCovGenIn/.* Medicare Part D sponsors may negotiate the cost of e-prescribing transactions as part of the dispensing fees included in their pharmacy contracts, and account for these costs in their annual bids to participate in the Medicare Part D program. In these instances, inclusion of these costs may increase the cost of their Medicare Part D bids. However, we anticipated that these costs would be negated by the savings from an increased rate of conversion from brand name to generic prescriptions realized through utilization of NCPDP Formulary and Benefits 1.0, which would more than offset the transaction costs. Medicare Part D sponsors would not be affected by the adoption of the NCPDP SCRIPT 8.1 for the transactions listed at § 423.160(b)(2) because these transactions are conducted between prescribers and dispensers, and Medicare Part D sponsors are not involved. Medicare Part D sponsors would not be significantly affected by the adoption of the NPI as a standard for use in e-prescribing transactions among the Medicare Part D sponsors, prescribers, and dispensers because the Medicare Part D sponsors already use the NPI in HIPAA transactions, such as the retail pharmacy drug claim. 4. Vendors Vendors of e-prescribing software would incur costs to bring their products into compliance with these requirements. However, we considered the need to enhance functionality and comply with industry standards to be a normal cost of doing business that will be subsumed into normal version upgrade activities. Vendors may incur somewhat higher costs connected with testing activities but vendors should be able to address this potential workload on a flow basis. We believed these costs to be minimal. *Comment:* A commenter noted that the costs to vendors of migrating to NCPDP SCRIPT 8.1 for the transactions listed at § 423.160(b)(2), as well as adding the NCPDP SCRIPT 8.1 Medication History Standard, the fill status notification standard (RxFill), and the NCPDP Formulary and Benefits 1.0 to their applications, are a normal cost of vendors doing business, and these costs have in large part already been borne by e-prescribing vendors. *Response:* We agree with the commenter's contention that minimal additional costs will be incurred by vendors by switching to the NCPDP SCRIPT 8.1 standard, nor by adding the use of the NPI, RxFill, the NCPDP SCRIPT 8.1 Medication History Standard and the NCPDP Formulary and Benefits 1.0 to their applications. Many of them have already incorporated Formulary and Benefits 1.0 into their software products, and have already transitioned to NCPDP SCRIPT 8.1, which houses the RxFill and the Medication History functionality on its platform. As previously discussed in the Cost section of this regulatory impact analysis, software vendors are already implementing NCPDP SCRIPT 8.1 in their products, NPI is supported by NCPDP SCRIPT 8.1, and we believe that any needed upgrades will be included in routine version upgrades. Vendors did not indicate in their comments in response to the proposed rule that the use of the NPI in e-prescribing will create any additional vendor costs, and we assume that any costs that might be incurred, such as testing, would be absorbed by vendors as a cost of doing business. C. Benefits In the November 16, 2007 proposed rule (72 FR 64913), we assumed that the benefits of the proposed adoption of standards for formulary and benefits and medication history transactions would take place over a multiyear timeframe. (For discussion of the benefits associated with the adoption of these standards, refer to the discussion in the November 16, 2007 proposed rule (72 FR 64913).) 1. Formulary and Benefits Standard—Generic Drug Usage We based our assumptions on industry estimates that approximately 5 percent to 18 percent of group practices are e-prescribing today. We anticipated that transactions utilizing NCPDP Formulary and Benefits 1.0 would allow the prescriber to view formulary drugs, alternative preferred drugs in a given class that may offer savings to the patient, or to see in advance what other, less costly drugs within a given drug classification or generic drugs can be substituted for a given brand name prescription drug, resulting in reduced calls to the plan, and fewer callbacks from a pharmacy because a prescribed drug is not on a beneficiary's drug plan formulary. In the first half of 2006, the ratio of generic versus brand name prescription drugs in the Medicare Part D program was 60 percent versus 40 percent. An industry study indicated a 15 percent increase in generic substitution rates for physicians with e-prescribing. However, not all beneficiaries will accept generic prescription drugs and there are some instances in which the brand name prescription drug has proven through physician experience to be the more effective drug. Therefore, we applied a more conservative 7 percent increase in generic prescriptions. Based on industry data, we assumed the cost of a brand name prescription drug at $111.02 and the cost of a generic drug at $32.23. 11 11 *http://www.nacds.org/wmspage.cfm?parm1=5507.* National Association of Chain Drug Stores data. While Medicare beneficiaries will be the most direct recipients of the savings realized by the conversion of brand name to generic prescription drugs, the Medicare program also will save money as it will be paying for an increased number of lower cost generic prescriptions versus higher cost, brand-name prescription drugs. We calculated a ten-year cost savings of $95 million to $410 million. *Comment:* A commenter agreed that while they did not conduct a financial analysis, the benefits identified by CMS in the proposed rule appeared to be reasonable. Another commenter stated that CMS underestimated the benefits that the switch from brand name to generic drugs would generate as a result of prescribers having access to formulary and benefits information at the point of care, and that it would vastly exceed CMS' 7 percent estimate. *Response:* We made a good faith effort to estimate both costs and benefits associated with the adoption of these standards using very conservative assumptions on the benefit side, and estimating costs so as to elicit industry and stakeholder comments on the feasibility of our approach. While we believe that the benefits of adoption of these standards could far exceed expectations, we also caution that any one of a number of factors—for example, delays in making real-time formulary and benefits information available to prescribers at the point of care—could hinder the adoption of e-prescribing and the benefits to be realized through, for example, anticipated wider use of generic versus brand name prescription drugs in the Medicare Part D prescription drug program. Given this, we estimated that realistically, a 7 percent increase in the prescribing of generic versus brand name drugs could be achieved through the use of formulary and benefits information. 2. Formulary and Benefits Standard—Administrative Savings a. Physician and Physician Office Staff The 2004 Medical Group Management Association
(MGMA)survey entitled, “Analyzing the Cost of Administrative Complexity” ( *http://www.mgma.com/about/default.aspx?id=280* ) estimated the staff and physician time spent, on a per physician full time equivalent
(FTE)basis, interacting with dispensers on formulary questions and generic substitutions. Physician time was estimated at almost 16 hours a year; another 14 hours were spent per physician per year on generic substitution issues. Staff spent almost 26 hours per FTE physician on formulary issues, and another 24 hours per FTE physician on generic substitution issues. CMS estimated the number of physicians in active practice who participated in the Medicare program in 2006 at 1,048,243, and a percentage rise in the number of physicians participating in the Medicare program of .94 percent per year, so we applied that percentage increase to estimate the number of Medicare physicians for 2009 through 2013. We also applied the previous assumption that from 5 to 18 percent of prescribers are e-prescribing today. Per the MGMA survey, we assumed a physician labor cost of $100 per hour and an average staff labor cost of $22 per hour per physician FTE. Pilot site experience shows that with e-prescribing, responding to refill requests, and resolving pharmacy callbacks were all done more efficiently with e-prescribing than before. However, full implementation would be difficult to achieve, and we used an estimate of 25 percent implementation. Our model calculated that, at that rate of implementation, physicians and staff would realize savings ranging from $55 million to $206 million. b. Dispensers If each physician and their office staff saved a total of 80 hours a year by using the NCPDP Formulary and Benefits 1.0, and reduced the time spent on the phone with dispensers, we assumed that dispensers would save the equivalent amount of time by not making these calls. Since the MGMA survey assumed a dispenser labor rate of $60 per hour, our model predicted an annualized cost benefit savings ranging from a low of $65 million to a high of $242 million at 25 percent implementation. *Comment:* A commenter expressed concern that the administrative savings for dispensers as represented in Table 4 of the proposed rule overestimated the administrative cost savings for dispensers. They stated that while dispensers are on the phone waiting for a response from a physician on a formulary question, dispensers often perform other work concurrently, and thus devote less time than was estimated for this particular task, which in turn affects the overall estimate of administrative cost-savings benefits to dispensers. *Response:* When estimating the benefits accrued to dispensers in Table 4 of the proposed rule, we were conservative in our assumptions so as not to unnecessarily inflate the benefit projections. We used the generally accepted 5 and 18 percent e-prescribing adoption rates versus much higher rates as projected in some widely read industry publications. We relied upon the Medical Group Management Association
(MGMA)study of physician and staff time spent on the phone resolving, among other things, formulary and benefits issues, and further reduced our benefit projects down to the 25 percent level. 3. Medication History Standard—Reduction of Adverse Drug Events
(ADEs)Utilizing the medication history standard in the transmission of medication history information will simplify medication reconciliation through transitions in care and, in so doing, provide consumers with a safer medication delivery system, and greater convenience. Although outpatient ADEs were difficult to estimate, literature estimated that, as of 2005, there were 530,000 preventable ADEs for Medicare beneficiaries annually. Moreover, the estimated cost per ADE ranged from $2,000 to upwards of $6,000 depending on the care setting. We computed the benefits of using the NCPDP SCRIPT 8.1 Medication History Standard based on data regarding ADEs as a percentage of the total Medicare population. Based on CMS Medicare population data, we calculated that of the total Medicare population, ADEs occur in about 1.24 percent of that population each year. Based on pilot experience, we assumed that the reduction in the risk of ADEs could be attributed mostly to the use of the NCPDP SCRIPT 8.1 Medication History Standard history rather than to e-prescribing in general. The pilot project demonstrated that 50 percent of preventable ADEs could be eliminated if e-prescribing is used, but also recognized that the pilot project may not have accurately represented mainstream experience. Given that, we conservatively assumed that the number of ambulatory ADEs associated with Medicare Part D beneficiaries could be reduced by the use of medication history by 25 percent for those patients for whom prescriptions were written electronically; we used the same uptake e-prescribing estimates (5 to 18 percent) as earlier for e-prescribing adoption. We estimated a potential cost savings over 10 years of $13 million to $156 million from avoided ADEs. 4. RxFill—Medication Adherence As previously discussed in the Cost section of this regulatory impact analysis, one potential benefit anticipated from the use of RxFill are those associated with better medication adherence on the part of patients, and this varies depending on the clinical condition. Researchers generally agree that it is difficult to arrive at a dollar figure that would reflect the outcomes of medication adherence for all clinical conditions, but we believe that it is prudent to assume that in the Medicare Part D program, an increase in prescription drug utilization by patients as a result of better medication adherence would be far offset by a larger reduction in the cost of Medicare beneficiary hospitalizations, outpatient procedures and other clinical treatments that might result from non-adherence to medication regimens. See the Cost section of this regulatory impact analysis for more details regarding our benefit assumption for the use of RxFill. 5. National Provider Identifier (NPI)—Reduced Callbacks We reiterate our previous discussion in the Cost section of this regulatory impact analysis that benefits for the use of the NPI in e-prescribing under Medicare Part D have not been quantified by the industry. We anticipate that its use will help dispensers reduce the number of callbacks to a physicians office to verify an e-prescriber's identity, although it is unclear and unsubstantiated from industry feedback as to what percentage of call backs between the dispenser and the prescriber can be attributed solely to this inquiry. D. Total Impact We concluded that the cost of implementing these standards is minimal, with quantifiable benefits reaped by dispensers, prescribers, and beneficiaries. Over five years, we expected that these groups will see average net benefits in a range from $218.0 million to $863.9 million from the utilization of formulary and benefits and medication history transactions, and the promulgation of these standards. As previously discussed, we do not expect that the adoption of RxFill and the use of the NPI in e-prescribing will result in any additional costs. We expect that their use will result in unquantifiable benefits which include the assumption, in the case of RxFill, of better patient medication adherence that will likely result in long-term savings for the Medicare program; and for the NPI, in improved pharmacy workflows via reduced call backs to physician offices to identify individual prescribers. *Comment:* A prescription information exchange network agreed that the benefits to all stakeholders of utilizing the NCPDP Formulary and Benefits 1.0 and adopting NCPDP SCRIPT 8.1 for the transactions listed at § 423.160(b)(2) will far exceed the financial costs. In their estimation, the total benefits range of $218 to $863.9 million appears to be realistic. *Response:* Again, efforts were made to estimate both costs and benefits associated with the adoption of the final standards using very conservative assumptions on the benefit side, and conversely, overestimating costs so as to elicit industry and stakeholder comments on the feasibility of our approach. As previously discussed, in addition to the anticipated costs and benefits associated with use of medication history and formulary and benefits, we expect there will be minimal or no cost associated with the use of either the NPI, or RxFill by providers who find value in use of an electronic fill status transaction for purposes of tracking patient adherence to medication therapies. We expect use of the NPI will assist dispensers to identify individual e-prescribing providers, resulting in a reduction of call backs to physician offices. The use of the Fill Status Notification standard by those providers who use an electronic fill status transaction to monitor patient medication adherence will realize benefits such as reduced patient hospitalizations, outpatient procedures, and clinical treatments, and improved patient outcomes. *Comment:* One commenter made the observation that actual drug costs will increase due to increased volume related to improved patient compliance, and that CMS should account for this in its discussions of costs and benefits. *Response:* We believe that the commenter was referring to the increased drug cost to the Medicare Part D program because the number of prescriptions being picked up at the pharmacy by a Medicare beneficiary might increase with the use of the fill status notification, and not an increase in the the actual cost of the drug itself. It is true that the Medicare Part D program may incur additional costs if more patients had their prescriptions filled, and in some studies this could account for as much as an 11 percent increase, depending on the clinical condition for which the prescription is being dispensed (for example, diabetes versus hypertension). However, we anticipate that medication adherence could result in lower disease-related medical costs, such as hospitalization, that would benefit the Medicare program. In the study, “Impact of Medication Adherence on Hospitalization Risk and Healthcare Cost,” results showed that, for the four clinical conditions studied, hospitalization rates were significantly lower for patients with high medication adherence, and that drug costs are a relatively small fraction of total healthcare costs. Drug costs have high leverage; in other words, a small increase in drug costs (associated with improved adherence) can produce a much larger reduction in medical costs. This leverage will become even stronger as medications become available, and are prescribed as generic drugs, lowering drug costs even more. 12 12 Michael C. Sokol, M.D., M.S.; Kimberly A. McGuigan, PhD; Robert R. Vebrugge, PhD; and Robert S. Epstein, M.D., M.S. Impact of Medication Adherence on Hospitalization Risk and Healthcare Cost. Medical Care. 2005;43:521-530. E. Alternatives Considered For more information on all the alternatives considered, refer to the discussion in the November 16, 2007 proposed rule (72 FR 64916). As we had successful results from the e-prescribing pilot project, and the value added by the proposed additional standards is substantial, we chose to proceed to a final rule. We considered adopting the prior authorization, Structured and Codified Sig and RxNorm standards for adoption, and elected not to do so until outstanding issues with these standards have been resolved. In the case of the RxFill standard, we considered not adopting it, but based on industry feedback, opted for adoption so that those providers who felt it was of value could benefit from the existence of a standard for use in electronic fill status transactions. We considered not adopting the NPI as a standard for identifying health care providers in e-prescribing transactions for Medicare Part D covered drugs for Medicare Part D eligible individuals. The fact that large portions of the health care industry are required to use NPI as a HIPAA standard, convinced us that adoption at this time was feasible and desirable. We considered providing for an effective date for these new and updated standards that was less than the maximum amount of time allowed by the MMA. Based on industry feedback, however, we decided to provide the maximum allowed time prior to the effective date of this rule. List of Subjects in 42 CFR Part 423 Administrative practice and procedure, Emergency medical services, Health facilities, Health maintenance organizations (HMO), Health professions, Incorporation by Reference, Medicare, Penalties, Privacy, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services amends 42 CFR part 423 as follows: PART 423—VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT 1. The authority citation for part 423 continues to read as follows: Authority: Secs. 1102, 1860D-1 through 1860D-42, and 1871 of the Social Security Act (42 U.S.C. 1302, 1395W-101 through 1395w-152, and 1395hh). 2. Section 423.160 is amended by revising paragraphs
(b)and
(c)to read as follows: § 423.160 Standards for electronic prescribing.
(b)Standards.
(1)Entities described in paragraph
(a)of this section must comply with the following adopted standards for transactions under this section:
(i)Before April 1, 2009 the standards specified in paragraphs (b)(2)(i) and (b)(3) of this section.
(ii)On or after April 1, 2009, the standards specified in paragraphs (b)(2)(ii) and (b)(3) through (b)(6) of this section.
(2)*Prescription.*
(i)The National Council for Prescription Drug Programs SCRIPT Standard, Implementation Guide, Version 5, Release 0, (Version 5.0) May 12, 2004 (incorporated by reference in paragraph (c)(1)(iv) of this section), or the National Council for Prescription Drug Programs Prescriber/Pharmacist Interface SCRIPT Standard, Implementation Guide, Version 8, Release 1, (Version 8.1) October 2005 (incorporated by reference in paragraph (c)(1)(i) of this section), to provide for the communication of a prescription or prescription-related information between prescribers and dispensers, for the following:
(A)Get message transaction.
(B)Status response transaction.
(C)Error response transaction.
(D)New prescription transaction.
(E)Prescription change request transaction.
(F)Prescription change response transaction.
(G)Refill prescription request transaction.
(H)Refill prescription response transaction.
(I)Verification transaction.
(J)Password change transaction.
(K)Cancel prescription request transaction.
(L)Cancel prescription response transaction.
(ii)The National Council for the Prescription Drug Programs Prescriber/Pharmacist Interface SCRIPT standard, Implementation Guide, Version 8, Release 1 (Version 8.1) October 2005 (incorporated by reference in paragraph (c)(1)(i) of this section), to provide for the communication of a prescription or prescription-related information between prescribers and dispensers, for the following:
(A)Get message transaction.
(B)Status response transaction.
(C)Error response transaction.
(D)New prescription transaction.
(E)Prescription change request transaction.
(F)Prescription change response transaction.
(G)Refill prescription request transaction.
(H)Refill prescription response transaction.
(I)Verification transaction.
(J)Password change transaction.
(K)Cancel prescription request transaction.
(L)Cancel prescription response transaction.
(M)Fill status notification transaction.
(3)*Eligibility.*
(i)The Accredited Standards Committee X12N 270/271-Health Care Eligibility Benefit Inquiry and Response, Version 4010, May 2000, Washington Publishing Company, 004010X092 and Addenda to Health Care Eligibility Benefit Inquiry and Response, Version 4010, A1, October 2002, Washington Publishing Company, 004010X092A1 (incorporated by reference in paragraph (c)(2)(i) of this section), for transmitting eligibility inquiries and responses between prescribers and Part D sponsors.
(ii)The National Council for Prescription Drug Programs Telecommunication Standard Specification, Version 5, Release 1 (Version 5.1), September 1999, and equivalent NCPDP Batch Standard Batch Implementation Guide, Version 1, Release 1 (Version 1.1), January 2000 supporting Telecommunications Standard Implementation Guide, Version 5, Release 1 (Version 5.1), September 1999, for the NCPDP Data Record in the Detail Data Record (incorporated by reference in paragraph (c)(1)(iii) of this section), for transmitting eligibility inquiries and responses between dispensers and Part D sponsors.
(4)*Medication history.* The National Council for Prescription Drug Programs Prescriber/Pharmacist Interface SCRIPT Standard, Implementation Guide, Version 8, Release 1 (Version 8.1), October 2005 (incorporated by reference in paragraph (c)(1)(i) of this section) to provide for the communication of Medicare Part D medication history information among Medicare Part D sponsors, prescribers, and dispensers.
(5)*Formulary and benefits.* The National Council for Prescription Drug Programs Formulary and Benefits Standard, Implementation Guide, Version 1, Release 0 (Version 1.0), October 2005 (incorporated by reference in paragraph (c)(1)(ii) of this section) for transmitting formulary and benefits information between prescribers and Medicare Part D sponsors.
(6)*Provider identifier.* The National Provider Identifier (NPI), as defined at 45 CFR 162.406, to identify an individual health care provider to Medicare Part D sponsors, prescribers and dispensers, in electronically transmitted prescriptions or prescription-related materials for Medicare Part D covered drugs for Medicare Part D eligible individuals.
(c)*Incorporation by reference.* The Director of the Federal Register approves, in accordance with 5 U.S.C. 552(a) and 1 CFR Part 51, the incorporation by reference of certain publications into this section. You may inspect copies of these publications at the headquarters of the Centers for Medicare & Medicaid Services (CMS), 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday from 8:30 a.m. to 4 p.m. or at the National Archives and Records Administration (NARA). For more information on the availability of this material at NARA, call
(202)741-6030, or go to *http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.* The publications approved for incorporation by reference and their original sources are as follows:
(1)National Council for Prescription Drug Programs, Incorporated, 9240 E. Raintree Drive, Scottsdale, AZ 85260-7518; Telephone
(480)477-1000; and Facsimile
(480)767-1042 or *http://www.ncpdp.org.*
(i)National Council for Prescription Drug Programs Prescriber/Pharmacist Interface SCRIPT Standard, Implementation Guide, Version 8, Release 1, October 2005.
(ii)The National Council for Prescription Drug Programs Formulary and Benefits Standard, Implementation Guide, Version 1, Release 0, October 2005.
(iii)National Council for Prescription Drug Programs Telecommunication Standard Specification, Version 5, Release 1 (Version 5.1), September 1999 and equivalent National Council for Prescription Drug Programs (NCPDP) Batch Standard Batch Implementation Guide, Version 1, Release 1 (Version 1.1), January 2000 supporting Telecommunication Standard Implementation Guide, Version 5, Release 1 (Version 5.1) for the NCPDP Data Record in the Detail Data Record.
(iv)National Council for Prescription Drug Programs SCRIPT Standard, Implementation Guide, Version 5, Release 0, May 12, 2004, excluding the Prescription Fill Status Notification Transaction (and its three business cases; Prescription Fill Status Notification Transaction—Filled, Prescription Fill Status Notification Transaction—Not Filled, and Prescription Fill Status Notification Transaction—Partial Fill).
(2)Accredited Standards Committee, 7600 Leesburg Pike, Suite 430, Falls Church, VA 22043; Telephone
(301)970-4488; and Facsimile:
(703)970-4488 or *http://www.x12.org.*
(i)Accredited Standards Committee
(ASC)X12N 270/271-Health Care Eligibility Benefit Inquiry and Response, Version 4010, May 2000, Washington Publishing Company, 004010X092 and Addenda to Health Care Eligibility Benefit Inquiry and Response, Version 4010A1, October 2002, Washington Publishing Company, 004010X092A1.
(ii)Reserved. (Catalog of Federal Domestic Assistance Program No. 93.773, Medicare—Hospital Insurance; and Program No. 93.774, Medicare—Supplementary Medical Insurance Program) Dated: March 14, 2008. Kerry Weems, Acting Administrator, Centers for Medicare & Medicaid Services. Approved: March 28, 2008. Michael O. Leavitt, Secretary. [FR Doc. 08-1094 Filed 4-2-08; 10:44 am]
Connectionstraces to 65
Traces to 65 documents
U.S. Code
- Assessments§ 1817
- Interests in nonbanking organizations§ 1843
- Open meetings§ 552b
- Congressional findings and declaration of purposes and policy§ 1531
- Congressional findings and declaration of policy§ 1361
- Congressional declaration of purpose§ 4321
- Mineral interests; reservation and conveyance requirements and procedures§ 1719
- Definitions§ 4301
- Bringing in additional parties§ 5
- Civil service; generally§ 3301
- Registration, responsibilities, and oversight of self-regulatory organizations§ 78s
- Definitions and application§ 78c
- National securities exchanges§ 78f
- Public information; agency rules, opinions, orders, records, and proceedings§ 552
- National system for clearance and settlement of securities transactions§ 78q–1
- National market system for securities; securities information processors§ 78k–1
- Immunity from seizure under judicial process of cultural objects imported for temporary exhibition or display§ 2459
- Purposes§ 6501
- Rules, regulations, and recommendations§ 315
- Special permits and exclusions§ 5117
- Federal agency responsibilities§ 3506
- Confidentiality and disclosure of returns and return information§ 6103
- Standards§ 6313
- Administration, penalties, enforcement, and preemption§ 6316
- Energy conservation standards§ 6295
- Effect on other law§ 6297
- Test procedures§ 6314
- Definitions§ 6311
- Definitions§ 7671
- Phase-out of production and consumption of class II substances§ 7671d
- Accelerated schedule§ 7671e
- Labeling§ 6315
- Definitions§ 601
- Purposes§ 3501
- Statements to accompany significant regulatory actions§ 1532
- Rules and regulations§ 3516
- Rule making§ 553
- Administrative procedure and judicial review§ 6306
- EXPEDITED PROCESSING OF REQUESTS FOR JAPANESE IMPERIAL GOVERNMENT RECORDS.§ 804
- Rules and regulations; impact analyses of Medicare and Medicaid rules and regulations on small rural hospitals§ 1302
CFR
- Transactions requiring prior notice.§ 225.41
- List of permissible nonbanking activities.§ 225.28
- Suspension of pension benefits upon employment.§ 2530.203-3
- Filing of documents.§ 2.302
- Hearing requests, petitions to intervene, requirements for standing, and contentions.§ 2.309
- Formal requirements for documents; signatures; acceptance for filing.§ 2.304
- Selection of hearing procedures.§ 2.310
- Delegation of authority to Director of Division of Trading and Markets.§ 200.30-3
- Definitions concerning commercial air conditioners and heat pumps.§ 431.92
- Energy efficiency standards and their compliance dates.§ 431.97
- Definitions.§ 431.2
- Uniform test method for the measurement of energy efficiency of commercial air conditioners and heat pumps.§ 431.96
- Handling information of a private business, foreign government, or an international organization.§ 1004.11
statutes-at-large
register
- Notice of limitation on claims for judicial review of actions by FHWA and other Federal agenciesNotices
- DEPARTMENT OF STATENotices
- Notice of intentNotices
- Temporary final ruleNotices
- Temporary final ruleProposed Rules
- Temporary final ruleNotices
- Final ruleNotices
- /register/2002/08/16/02-21056Notices
- Final ruleRules and Regulations
- Final ruleNotices
public-private-law
51 references not yet in our index
- 12 CFR 225
- Pub. L. 107-327
- Pub. L. 92-463
- 16 USC 668dd-668ee
- 50 CFR 17
- 50 CFR 18
- Pub. L. 93-599
- 43 CFR 2720
- 43 CFR 2720.1-1
- Pub. L. 104-13
- 10 CFR 36
- 5 CFR 6.6
- 3 CFR 1954
- 17 CFR 240.19
- 17 CFR 19
- 79 Stat. 985
- 49 CFR 107
- 49 CFR 1.53(b)
- 49 CFR 173.62(b)
- 49 CFR 172.101
- 49 CFR 173.40
- 49 CFR 171.14(d)(4)
- 49 CFR 173.158(f)(3)
- 49 CFR 173.416(c)
- 49 CFR 172.200
- 49 CFR 173.242(b)
- 49 CFR 180.209(a)
- 49 CFR 173.416
- 49 CFR 173.302
- 44 USC 3501-3521
- 10 CFR 431
- 42 USC 6311-6317
- Pub. L. 102-486
- Pub. L. 109-58
- 42 USC 6311-6316
- 355 F.3d 179
- 10 CFR 430
- 768 F.2d 1355
- 13 CFR 121
- 10 CFR 1021
+ 11 more
Citation graph
cites case law
Notices
Correction and extension of deadline date
F. App'x355 F.3d 179
F. App'x768 F.2d 1355
Cite12 CFR 225
Cites 116 · showing 12Cited by 0 across 0 sources