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Code · REGISTER · 2008-04-17 · Federal Aviation Administration (FAA), DOT · Proposed Rules

Proposed Rules. Notice of proposed rulemaking; extension of comment period

61,492 words·~280 min read·/register/2008/04/17/08-1147

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

BILLING CODE 3410-02-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA 2008-0211; Airspace Docket No. 08-AWP-3] RIN 2120-AA66 Proposed Establishment of Class D Airspace; San Bernardino International Airport, San Bernardino, CA AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking; extension of comment period. SUMMARY: This notice announces an extension of the comment period on a Notice of Proposed Rulemaking
(NPRM)which proposes to establish Class D airspace at San Bernardino International Airport, San Bernardino, CA. This action is being taken in response to interest by several pilot groups and local airspace users working groups in the Los Angeles basin. DATES: Comments must be received on or before May 14, 2008. ADDRESSES: You may send comments by any of the following methods: Federal eRulemaking Portal: Go to *http://www.regulations.gov* . Follow the instructions for submitting comments. Fax: 202-493-2251. Mail: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. Hand Delivery: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. An informal docket may also be examined during normal business hours at the office of the Manager, System Support Group, Western Service Center, Federal Aviation Administration, 1601 Lind Avenue, SW., Renton, WA 98057. FOR FURTHER INFORMATION CONTACT: Larry Tonish, System Support Group, Western Service Center, Federal Aviation Administration, 1601 Lind Avenue, SW., Renton, WA 98057; telephone
(425)203-4532. SUPPLEMENTARY INFORMATION: Background Docket No. FAA 2008-0211; Airspace Docket No. 08-AWP-3, published on March 14, 2008 (71 FR 13811) proposed to establish Class D airspace at San Bernardino International Airport, San Bernardino, CA. This action will extend the comment period closing date on that airspace docket from April 14, 2008 to May 14, 2008 to allow for an additional 30-day comment period. List of Subjects in 14 CFR Part 71 Airspace, Incorporation by reference, Navigation (air). Extension of Comment Period The comment period closing date on Docket No. FAA 2008-0211; Airspace Docket No. 08-AWP-3 is hereby extended to May 14, 2008. Authority: 49 U.S.C. 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., 389. Issued in Seattle, Washington, on April 8, 2008. Clark Desing, Manager, System Support Group, Western Service Center. [FR Doc. E8-8311 Filed 4-16-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2008-0187; Airspace Docket No. 07-ASO-27] Proposed Modification of Area Navigation Route Q-110 and Jet Route J-73; Florida AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: This action proposes to extend the length of Area Navigation
(RNAV)route Q-110 and make a minor realignment of jet route J-73, in support of the Florida West Coast Airspace Redesign project. The extension of Q-110 would provide an RNAV route for use by aircraft transitioning between Miami Air Route Traffic Control Center (ARTCC) and Jacksonville ARTCC airspace. The extension would also assist aircraft in circumnavigating military airspace associated with the Avon Park Air Force Range. The realignment of J-73 would provide space for the Q-110 extension. The FAA is proposing this action to enhance the safe and the efficient use of the navigable airspace in the western Florida area. DATES: Comments must be received on or before June 2, 2008. ADDRESSES: Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, M-30, 1200 New Jersey Avenue, SE., West Building, Ground Floor, Room W12-140, Washington, DC 20590-0001; telephone:
(202)366-9826. You must identify FAA Docket No. FAA-2008-0187 and Airspace Docket No. 07-ASO-27 at the beginning of your comments. You may also submit comments through the Internet at *http://www.regulations.gov.* FOR FURTHER INFORMATION CONTACT: Paul Gallant, Airspace and Rules Group, Office of System Operations Airspace and AIM, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone:
(202)267-8783. SUPPLEMENTARY INFORMATION: Comments Invited Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers (FAA Docket No. FAA-2008-0187 and Airspace Docket No. 07-ASO-27) and be submitted in triplicate to the Docket Management Facility (see ADDRESSES section for address and phone number). You may also submit comments through the Internet at *http://www.regulations.gov.* Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2008-0187 and Airspace Docket No. 07-ASO-27.” The postcard will be date/time stamped and returned to the commenter. All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this action may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket. Availability of NPRM's An electronic copy of this document may be downloaded through the Internet at *http://www.regulations.gov.* Recently published rulemaking documents can also be accessed through the FAA's Web page at *http://www.faa.gov* , or the Federal Register's Web page at *http://www.gpoaccess.gov/fr/index.html.* You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see ADDRESSES section for address and phone number) between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. An informal docket may also be examined during normal business hours at the office of the Eastern Service Center, Federal Aviation Administration, Room 210, 1701 Columbia Ave., College Park, GA 30337. Persons interested in being placed on a mailing list for future NPRM's should contact the FAA's Office of Rulemaking,
(202)267-9677, for a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure. The Proposal The FAA is proposing an amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 to extend RNAV route Q-110 and realign jet route J-73 in western Florida. Currently, Q-110 extends between the FEONA, GA, waypoint
(WP)and the KPASA, FL, WP. This action would extend Q-110 southeastward from KPASA (located near Lakeland, FL) to the THNDR, FL, intersection (located about midway between Fort Myers and West Palm Beach, FL), adding approximately 115 NM to the length of the route. Two new waypoints (JAYMC and RVERO) would be established along Q-110 between KPASA and THNDR. The proposed extension of Q-110 would provide an RNAV route for use by aircraft transitioning between Miami ARTCC and Jacksonville ARTCC airspace and assist aircraft in circumnavigating military airspace associated with the Avon Park Air Force Range. The FAA is also proposing to realign the existing segment of jet route J-73 between the LaBelle, FL, very high frequency omnidirectional range/tactical navigation aid (VORTAC) and the Lakeland, FL, VORTAC by inserting an intermediate point that would be formed by the intersection of the LaBelle 314° True
(T)(313° Magnetic (M)) radial and the Lakeland 162° T (161° M) radial. Shifting J-73 in this manner would provide airspace to accommodate the Q-110 extension. The realignment of J-73 would slightly increase the distance along the segment of the route between the Lakeland VORTAC and the LaBelle VORTAC from the current 77 NM to 78 NM. Additionally, the FAA intends to make an administrative change to the route description of Q-110 by reversing the order in which the points that make up the route are listed. This change is needed to comply with the FAA policy that the points in even numbered route descriptions be listed in a west-to-east format. The change would have no effect on the alignment or charting of the route. These changes are proposed in support of the Florida West Coast Airspace Redesign project and to enhance the safe and efficient use of the navigable airspace in the western Florida area. Jet routes are published in paragraph 2004, and low altitude RNAV routes are published in paragraph 2006, respectively, of FAA Order 7400.9R signed August 15, 2007 and effective September 15, 2007, which is incorporated by reference in 14 CFR 71.1. The jet route and RNAV route listed in this document will be published subsequently in the Order. The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this proposed regulation:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)is not a “significant rule” under Department of Transportation
(DOT)Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and
(3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would modify a jet route and RNAV route in Florida. Environmental Review The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1E, “Environmental Impacts: Policies and Procedures,” paragraph 311a, 311b, and 311k. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment. List of Subjects in 14 CFR Part 71 Airspace, Incorporation by reference, Navigation (air). The Proposed Amendment In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows: PART 71—DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR TRAFFIC SERVICE ROUTES; AND REPORTING POINTS 1. The authority citation for part 71 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389. § 71.1 [Amended] 2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.R, Airspace Designations and Reporting Points, signed August 15, 2006 and effective September 15, 2007, is amended as follows: Paragraph 2004 Jet Routes. J-73 [Amended] From Dolphin, FL; LaBelle, FL; INT Labelle 314°(T)/313°(M) and Lakeland, FL, 162°(T)/161°(M) radials; Lakeland; Seminole, FL; La Grange, GA; Nashville, TN; Pocket City, IN; to Northbrook, IL. Paragraph 2006 United States Area Navigation Routes. Q-110 FEONA, GA to THNDR, FL [Amended] FEONA, GA WP (Lat. 31°36′22″ N., long. 84°43′08″ W.) GULFR, FL WP (Lat. 30°12′23″ N., long. 83°33′08″ W.) BRUTS, FL WP (Lat. 29°30′58″ N., long. 82°58′57″ W.) KPASA, FL WP (Lat. 28°10′34″ N., long. 81°54′27″ W.) RVERO, FL WP (Lat. 27°24′35″ N., long. 81°35′57″ W.) JAYMC, FL WP (Lat. 26°58′51″ N., long. 81°22′08″ W.) THNDR, FL INT (Lat. 26°37′38″ N., long. 80°52′00″ W.) Issued in Washington, DC, on April 8, 2008. Stephen L. Rohring, Acting Manager, Airspace and Rules Group. [FR Doc. E8-8227 Filed 4-16-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 93 [Docket No. FAA-2006-25709; Notice No. 08-04] RIN 2120-AI70 Congestion Management Rule for LaGuardia Airport AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Supplemental notice of proposed rulemaking (SNPRM). SUMMARY: On August 29, 2006, the Federal Aviation Administration published a notice of proposed rulemaking to address congestion at New York's LaGuardia Airport (LaGuardia), which included a proposal to administratively incentivize carriers to use larger planes. The FAA prefers to use measures that allow carriers to respond to market forces to drive the most efficient airline behavior and is amending its original proposal. To minimize disruption, the FAA proposes to grandfather the majority of operations at the airport and develop a robust secondary market by annually auctioning off a limited number of slots. The FAA is proposing two different, mutually exclusive options. Under the first option, the FAA would auction off and retire a portion of the slots and would use the proceeds to mitigate congestion and delay in the New York City area. Under the second option, the FAA would conduct an auction as it would under the first option, but the proceeds would go to the carrier holding the slot rather than the FAA and no portion of existing slots would be retired. This proposal also contains provisions for use-or-lose, unscheduled operations, and withdrawal for operational need. The FAA proposes to sunset the rule in ten years. DATES: Send your comments on or before June 16, 2008. ADDRESSES: You may send comments identified by Docket Number FAA-2006-25709 using any of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov* and follow the online instructions for sending your comments electronically. • *Mail:* Send comments to Docket Operations, M-30; U.S. Department of Transportation, 1200 New Jersey Avenue, SE., Room W12-140, West Building Ground Floor, Washington, DC 20590-0001. • *Hand Delivery or Courier:* Bring comments to Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. • *Fax:* Fax comments to Docket Operations at 202-493-2251. For more information on the rulemaking process, see the SUPPLEMENTARY INFORMATION section of this document. *Privacy:* We will post all comments we receive, without change, to *http://www.regulations.gov* , including any personal information you provide. Using the search function of our docket Web site, anyone can find and read the electronic form of all comments received into any of our dockets, including the name of the individual sending the comment (or signing the comment for an association, business, labor union, etc.). You may review Department of Transportation's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78) or you may visit *http://DocketsInfo.dot.gov* . *Docket:* To read background documents or comments received, go to *http://www.regulations.gov* at any time and follow the online instructions for accessing the docket. Or, go to the Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: For technical questions regarding this rulemaking, contact: Molly W. Smith, Office of Aviation Policy and Plans, APO-001, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone
(202)267-3275; e-mail *molly.w.smith@faa.gov* . For legal questions concerning this rulemaking, contact: Rebecca MacPherson, FAA Office of the Chief Counsel, 800 Independence Ave., SW., Washington, DC 20591; telephone
(202)267-3073; e-mail *rebecca.macpherson@faa.gov* . SUPPLEMENTARY INFORMATION: Later in this preamble under the Additional Information section, we discuss how you can comment on this proposal and how we will handle your comments. Included in this discussion is related information about the docket, privacy, and the handling of proprietary or confidential business information. We also discuss how you can get a copy of this proposal and related rulemaking documents. Authority for This Rulemaking The FAA has broad authority under 49 U.S.C. 40103 to regulate the use of the navigable airspace of the United States. This section authorizes the FAA to develop plans and policy for the use of navigable airspace and to assign the use that the FAA deems necessary for its safe and efficient utilization. It further directs the FAA to prescribe air traffic rules and regulations governing the efficient utilization of the navigable airspace. Table of Contents I. Background A. History of Congestion Management Initiatives at LaGuardia B. Summary of the SNPRM II. Discussion of the NPRM A. Withdrawal of Upgauging Proposal B. Perimeter Rule C. Finite Operating Lives III. Proposal To Allocate Limited Capacity at LaGuardia Efficiently A. Need for a Cap on Operations B. Sunset Provision C. Need for More Efficient Allocation D. Authority To Allocate Slots at LaGuardia 1. Authority To Determine the Best Use of the Airspace 2. Authority To Enter Into Leases and Cooperative Agreements 3. The FAA's Proposed Actions Do Not Constitute a Taking in Violation of the Fifth Amendment E. Allocation of Slots 1. Categories of Slots 2. Initial Allocation of Capacity 3. Market-Based Reallocation of Capacity 4. New and Returned Capacity F. Auction Procedures G. Secondary Trading IV. Unscheduled Operations V. Other Issues A. 30-Minute Allocations B. Limit on Arrivals and Departures C. Use-or-Lose VI. Regulatory Notices and Analyses VII. Draft Regulatory Text I. Background A. History of Congestion Management Initiatives at LaGuardia The FAA managed congestion at LaGuardia under the High Density Rule
(HDR)from 1969 through 2006. 14 CFR part 93 subparts K and S. The FAA first established allocation procedures for slots under the HDR in 1985. 50 FR 52195, December 20, 1985. These procedures included use-or-lose provisions and, while explicitly stating that the slots were not the carriers' property, allowed carriers to buy, sell or lease the slots on the secondary market. On April 5, 2000, Congress enacted the Wendell H. Ford Aviation and Investment Reform Act of the 21st Century (AIR-21 or the Act). The Act phased out the HDR at LaGuardia effective January 1, 2007. In addition to phasing out the HDR, AIR-21 directed the Secretary of Transportation to grant exemptions from the HDR's flight restrictions for flights operated by new entrant carriers or flights serving Small-Hub and Non-Hub airports as long as the aircraft had less than 71 seats. The Act also preserved the FAA's authority to impose flight restrictions by stating that “[n]othing in this section * * * shall be construed * * * as affecting the Federal Aviation Administration's authority for safety and the movement of air traffic.” 49 U.S.C. 41715(b). The slot exemptions mandated by Congress under AIR-21 resulted in gridlock at the airport as the number of exempted operations soared throughout 2000. Using its authority in 49 U.S.C. 40103, the FAA capped AIR-21 slot exemptions and hourly operations at LaGuardia. On December 4, 2000, the agency conducted a lottery that allocated the limited number of exemptions. While hourly operations were limited at the airport, the new cap at LaGuardia was significantly higher than it had been under the HDR prior to enactment of AIR-21. Slots allocated under the HDR were scheduled to expire on January 1, 2007. Based on its experience in 2000, the FAA determined that simply lifting the HDR at LaGuardia would have a significantly adverse impact on the airspace around New York City and potentially on the National Airspace System
(NAS)as a whole. Accordingly, on August 29, 2006, the FAA published a notice of proposed rulemaking
(NPRM)proposing continuation of the cap on hourly operations at the airport as well as a new method of allocating capacity (71 FR 51360). Specifically, the FAA proposed to cap scheduled operations at 75 per hour; cap unscheduled operations at six per hour; impose an average minimum aircraft size requirement for much of the fleet serving the airport; and implement a limit on the duration of operating lives, known as Operating Authorizations, that would assure ten percent of the capacity at the airport would be available annually for reallocation based on an undetermined market mechanism. The average minimum aircraft size proposal was known as the aircraft upgauging proposal. This proposal was designed to maximize airport throughput consistent with the airport's physical constraints. The comment period closed December 29, 2006. The FAA recognized that it would be unable to complete its rulemaking by January 1, 2007, when the HDR was scheduled to expire. On December 27, 2006 the agency published an FAA Order *Operating Limitations at New York LaGuardia Airport* (LaGuardia Order) (71FR 77854). 1 The LaGuardia Order retained the existing cap at the airport of 75 scheduled operations and imposed a reservation system for unscheduled operations that permitted six unscheduled operations per hour. The LaGuardia Order did not retain the conditions imposed by Congress on the AIR-21 exemptions; rather, flights conducted pursuant to the exemptions were rolled into the hourly cap without restriction. The industry response to the new allocation method proposed in the NPRM was universally negative, although very few commenters argued that a cap on operations at the airport was unnecessary. The FAA received comments from 61 different commenters, with some commenters making multiple submissions. The largest group of commenters consisted of Federal, state and local government representatives and community groups who were concerned the FAA's proposal, if adopted, would result in specific communities losing direct service to and from LaGuardia. Fifteen carriers and four of their associations commented on the proposal, as did two airport associations, three other associations, the airport's proprietor the Port Authority of New York and New Jersey (Port Authority), the Canadian Embassy and nine individuals speaking in their private capacity. 1 The LaGuardia Order was amended on November 8, 2007 (72 FR 63224). In general, the carriers and their associations criticized any attempt by the FAA to regulate beyond the simple imposition of a cap on operations, arguing the proposal was too complicated, would not meet the agency's stated objectives, and would prove disruptive to the airport as a whole. Other commenters questioned the FAA's attempt to impose a market-based solution to fair allocation—not because they deemed the measures unduly oppressive, but because they believed market-based measures could not be implemented in a manner that adequately protected the interests of all affected parties. The American Association of Airport Executives
(AAAE)expressed this sentiment most succinctly when it stated that while market-based solutions are generally preferable (since they are more predictable than administrative solutions), they are not preferable when their outcomes are likely to conflict with public policy goals or when artificial constraints are imposed. While operations at LaGuardia remained capped throughout 2007, caps were lifted on afternoon operations at John F. Kennedy International Airport
(JFK)on January 1, 2007, when the HDR expired at that airport. Operations at JFK had already begun to increase during the morning hours, but the increase in operations in the afternoon hours soon led to system overload. Nationally, the summer of 2007 was the second worst on record for flight delays. On September 27, 2007, the Secretary of Transportation announced the formation of the New York Aviation Rulemaking Committee
(ARC)to help the Department of Transportation (Department) and the FAA explore available options for congestion management and how changes to current policy at all three major commercial New York City airports would affect the airlines and the airports. By design, the ARC provided ample opportunity for extensive input by all stakeholders, having members from every major air carrier in the United States as well as foreign carriers and the Port Authority. Through the ARC process, these stakeholders played a key role in exploring ideas to address congestion and ensuring that any actions contemplated by the Department and the FAA would be fully informed. The ARC worked throughout the fall and submitted a report to the Secretary, dated December 13, 2007, discussing its findings. A copy of the ARC Report may be found at *http://www.dot.gov/affairs/FinalARCReport.pdf.* B. Summary of the SNPRM Today's proposal considers not only the concerns raised by commenters in response to the NPRM, but also takes into account the extensive discussions and issues raised by the members of the ARC. In response to the concerns and issues raised, the FAA has decided to withdraw both its upgauging proposal and its proposal to have Operating Authorizations that would have expired on a rolling ten-year cycle. In deference to the universal use of the term “slots,” the FAA has also decided to return to the use of that term rather than calling the operational authority to conduct scheduled operations at LaGuardia Operating Authorizations. 2 Accordingly, for purposes of this rulemaking, a slot is defined as the operational authority assigned by the FAA to a carrier to conduct one scheduled arrival or departure operation at LaGuardia on a particular day of the week during a specific 30-minute period. 2 When discussing comments to the NPRM, the FAA will use the term “Operating Authorization” since that was the term used in the NPRM. In discussing today's proposal, the agency will use the term “slots”. Rather than pursue its earlier proposal for allocating capacity, the FAA today proposes to lease the majority of operations at the airport to the historic operators for non-monetary consideration under its cooperative agreement authority. The agency also proposes to develop a robust market by annually auctioning off leases for a limited number of slots during the first five years of the rule. The FAA plans to evaluate the effects of the slot program proposed today on the distribution of slots and entry into LaGuardia on an ongoing basis. The agency intends to take this experience into account in all congestion management activities. The FAA is proposing two different, mutually exclusive options. Under the first option, the FAA would auction off or retire a portion of the slots and would use the proceeds to mitigate congestion and delay in the New York City area. Under the second option, the FAA would conduct an auction as it would under the first option, but no slots would be retired and the proceeds would go to the carrier holding the slot after the FAA recoups the cost of the auction, rather than the FAA. In order to facilitate understanding of how each option would work within the entire regulatory scheme, the complete regulatory text for each option is set out in the “Draft Regulatory Text” section of this document. Today's proposal also contains provisions for use-or-lose, unscheduled operations, and withdrawal for operational need. The FAA proposes to sunset the rule in ten years. The following table briefly summarizes today's proposal and identifies differences between the two options. Options 1 and 2 of Proposed Regulation for LaGuardia Feature Option 1 Option 2 Base Schedule Week 2 January 2007 Same. Slot Defined as right to land or depart (not both) in a 30-minute time window Same. Number of Slots 75/hour + 3 unscheduled less 2% retired and not redistributed 75/hour + 3 unscheduled. Slot Definitions Common Slots: The Baseline (up to 20 slots per carrier) plus 90% of slots above 20 have 10 year leases; Limited Slots: 8% above the Baseline would have shorter leases and be auctioned over five years (1.6% each) (after which they convert to Unrestricted Slots); and 2% would have shorter leases & then be retired over 5 years (0.4%/yr) Common Slots: The Baseline (up to 20 slots per carrier) plus 80% of slots above 20 would have 10 year leases; Limited Slots 20% would have shorter leases and then be reallocated via auction over five years (4%/yr). Slot Time of Day 6 a.m. through 9:59 p.m., Monday through Friday and Sunday from 12 noon through 9:59 p.m.; no more than 75 in any one hour or 38 in any half-hour Same. Mechanics “Fair” initial distribution with half of slots with less than 10 years life selected by carriers; the other half selected by FAA according to specified rules Same. Auction For slots returned to FAA because life has expired, an ascending clock auction among air carriers Same. Auction Proceeds Auction funds to FAA to defray costs of auction, then to NY capacity/projects Auction funds (net of auction costs) to incumbent holder; incumbent cannot bid on own slots. Use/Lose Only on grandfathered slots as consideration for slots Same. Term Program is through March 2019; slot lives are whatever proportion of 10 years remain upon reallocation Same. Bidders Airlines Same. Holders Holders of record (not marketing carrier) Same. New or returned capacity Auctioned Same. Secondary market Transparent not blind: carrier notifies FAA of intent to sell; FAA makes slot availability known; bilateral negotiations; final terms disclosed to OST for monitoring Same. Logistical swaps of slots Permitted Same. II. Discussion of the NPRM A.Withdrawal of Upgauging Proposal In the NPRM, the FAA proposed a requirement that incentivized carriers to upgauge the size of their aircraft based on an average number of seats. The FAA maintained that increasing the overall number of passengers using the airport would constitute a more efficient use of the NAS. In particular, the proposal was based on the FAA's belief that some of the inefficiencies at LaGuardia are related to the use of smaller aircraft in arguably saturated markets. Under the NPRM's proposal, if a carrier failed to meet the airport's average aircraft size requirement, it would lose its least productive Operating Authorizations. Each carrier would have been allowed to maintain a baseline of operations of 10 daily operations without consideration of aircraft size, so as to minimize disruption. Recognizing the importance of service to LaGuardia to and from relatively small communities, the proposal also included special treatment for small communities, which would have permitted carriers serving those communities to continue service on smaller aircraft without the risk of losing an Operating Authorization. The FAA has decided against moving forward with a proposal requiring upgauging at this time. Several carriers and their associations alleged the FAA's upgauging proposal would be overly disruptive. Among the concerns cited were that the withdrawal of any one Operating Authorization would effectively mean the loss of a second one as well; the proposed one year effective date to upgauge was unduly restrictive and did not give carriers sufficient opportunity to change their fleet mix; and the proposal failed to acknowledge existing lease agreements with the Port Authority. United Airlines (United) and the Republic Group questioned how increasing aircraft size would actually lead to greater throughput, since carriers are presumably already using aircraft suitable for the markets they serve. Along with American Airlines (American), these commenters stated that the upgauging proposal was predicated on the premise that ground facilities are inadequately utilized, and that the inadequate utilization is a function of small and medium aircraft being overused. Not only did the FAA provide no data to support its position, they asserted, but in fact the relatively low load factors at LaGuardia indicate that the proper size aircraft are being used. In addition, the Port Authority and The City of New York noted that gates at LaGuardia are not interchangeable and that many gates (and taxiways) at the airport cannot accommodate larger aircraft. Thus, the proposal would not work because of a fundamental mismatch between the proposal and the management of landside infrastructure. US Airways suggested that if the FAA was committed to upgauging, it could require an increase in the number of available seats, but in a gradual, phased-in manner that is economically sustainable. Some carriers also opined that the proposal was overly disruptive in that the proposed baseline of operations that would be exempt from the upgauging requirements was too small. While carriers with a smaller presence at the airport like JetBlue Airways (JetBlue) favored an increase in the number of protected operations (e.g., 20 daily operations), US Airways favored a carrier being able to protect at least 11 percent of its fleet, with smaller carriers being able to protect 10 operations. Notwithstanding the contemplated carve-out for small community service, United, and to some extent the Regional Airline Association (RAA), argued that requiring upgauging may force a carrier to discontinue service from smaller communities because the market in that community may only support a smaller aircraft. US Airways noted that these operations can be profitable and are unlikely to be discontinued completely; the carrier also asserted that the proposal would likely have the most adverse impact on medium-sized airports that benefit from multiple daily frequencies on smaller aircraft. Concern over the potential loss of small community service was echoed by the Federal, state and local representatives who wrote to the FAA expressing concern that service to specific communities could be lost. Finally, United argued that the upgauging proposal was not rationally related to Congressional authorization in 49 U.S.C. 40103(b), because increasing passenger throughput has nothing to do with assigning the use of the airspace or prescribing air traffic regulations. Rather, according to United, the proposal would have mandated which equipment a carrier may use to access the runway at LaGuardia, and was accordingly beyond the FAA's authority. The Port Authority was likewise concerned that the proposal impermissibly infringed on its rights as the airport proprietor. Based on careful review of the public comments, the FAA has determined that there are simpler, less prescriptive ways to permit airlines to respond more directly to market forces. Given carriers' long-term leasing and purchasing arrangements, the timeframes for implementing the proposal may have been too short; and if adopted, the proposal potentially could have inadvertently disrupted operations at the airport. The FAA recognizes the long-term contractual relationships that exist at LaGuardia. At the same time, the agency prefers that the limited asset that makes up an Operating Authorization be allocated using market principles rather than regulatory or administrative principles. Today's proposal meets that objective without unduly burdening either the airport or the carriers. At this point in time, the FAA does not believe there is a need to dictate a minimum aircraft size to achieve the overall objective that service to and from LaGuardia be reasonably available to the maximum number of people who wish to use it without undue delay. Accordingly, the FAA is withdrawing its proposal for upgauging. Nevertheless, the agency believes that the concept behind its upgauging proposal remains valid: capacity cannot be considered merely in terms of the number of aircraft being handled by the FAA's Air Traffic Control system (ATC). The FAA believes United's interpretation of the FAA's statutory authority to manage the efficient use of the airspace as being limited to the movement of aircraft generically is overly narrow. The characterization of operations in terms of aircraft makes sense to the air traffic controllers, whose job it is to control all aircraft flying under instrument flight rules
(IFR)within their sector. United's characterization does not make sense as a matter of policy or statutory interpretation because it ignores the reality that aircraft operations are designed to move people and cargo. The FAA does not believe the relatively low load factors at LaGuardia support the premise that the market dictates the use of smaller aircraft to many of the markets with service to the airport. It is true that some smaller communities may not be able to support daily operations on larger aircraft. The FAA asserts, however, that certain market patterns, where multiple daily flights on small aircraft are not related to the size of the communities served, indicate an inefficient use of the slot, or behavior that stifles competition. The relatively low load factors in these routes indicate that many of these flights could be combined, resulting in a more efficient use of the system. The FAA also acknowledges that the use of small aircraft to densely populated communities on a frequent basis is not purely a function of the market. As noted by the Port Authority, excessive use of smaller aircraft is to some degree a combination of customer preference for frequent access, but it is also a function of political concerns and a long-standing regulatory regime that created incentives favoring the use of small aircraft. The expiration of the HDR and AIR-21 exemptions should naturally encourage more efficient use of aircraft because there is no longer a perverse incentive to use smaller aircraft, regardless of the market being served. As to consumer preference for more regular flights, the decision to offer numerous daily flights in any particular market will inevitably be driven by market considerations. The FAA believes that the options being proposed today should reduce delay and permit airlines to respond more freely to market forces, favoring efficiency and aircraft upgauging without the government dictating any particular method of increasing overall passenger throughput and without sacrificing service to small communities. B. Perimeter Rule As an alternative to the upgauging proposal, US Airways suggested the FAA preempt the Port Authority's Perimeter Rule. 3 It argued the Perimeter Rule drives the use of smaller aircraft because carriers cannot engage in the long-range operations that support the use of larger aircraft. Alaska Airlines also supported lifting the Perimeter Rule. 3 The Perimeter Rule prohibits non-stop flights of more than 1,500 miles into and out of LaGuardia, except for flights in and out of Denver. The Perimeter Rule was first established in the late 1950s under an informal arrangement between the Port Authority and the airlines. It was formalized in 1984 and unsuccessfully challenged in *Western Airlines* v. *Port Authority of New York and New Jersey,* 658 F. Supp. 952 (SDNY 1986), *aff'd* 817 F2d. 222 (2nd Cir., 1987), *cert. denied,* 485 U.S. 1006 (1988). US Airways maintained there is no justification for retention of the Perimeter Rule. Not only is LaGuardia no longer primarily an airport for business travelers, but JFK no longer needs development, and the introduction of Stage-3 aircraft has sufficiently reduced the airport's overall noise footprint from when the Port Authority established the Perimeter Rule. Thus, according to US Airways, the rationale that the Port Authority provided to the court in *Western Air Lines* v. *Port Authority of New York and New Jersey* is no longer applicable. The FAA has decided against addressing the Perimeter Rule in this rulemaking because of the need to explore more fully several operational and policy issues that may be impacted by changes in the Rule, including potential impacts on airport capacity and air services. The FAA intends to monitor the impact of today's proposal, if adopted, as well as the implications of changes to or elimination of the Rule. Should the agency deem that Federal action on the rule is in the public interest, it may choose to preempt. C. Finite Operating Lives The FAA proposed to initially allocate all Operating Authorizations previously allocated under the HDR, and then pull back ten percent of them every year to force an active market for this scarce resource. The Operating Authorizations would have had an initial operating life ranging from three to thirteen years and, once reallocated, would have had a ten-year operating life. While providing a general discussion of how the Operating Authorizations would be withdrawn, the FAA did not provide a discussion of how they would be reallocated, other than to say that the agency was seeking legislation that would provide additional flexibility in allowing the FAA to reallocate via a market-based mechanism such as an auction or congestion pricing. The FAA has decided that a ten percent annual turnover at LaGuardia could be overly disruptive as a first step in applying market principles and has decided to propose a scaled back reallocation mechanism. This scaled back proposal is discussed in detail later in this document. In general, most commenters characterized the proposal to introduce expiring Operating Authorizations at LaGuardia as unnecessary, unworkable, and unlawful under the Administrative Procedure Act and the Takings Clause of the Fifth Amendment of the US Constitution. Others claimed that the proposal did not go far enough. American asked why the FAA thought it needed such an intrusive and complicated regulatory scheme to promote access to new entrants. It noted that the agency promoted access to new entrants at Chicago's O'Hare International Airport (O'Hare) by adopting a blind Buy/Sell secondary market. Midwest Airlines, Delta Air Lines (Delta) and the RAA argued that the underlying premise that limited operating lives were required to open up the airport to new entrants was based on a false assumption that the airport would otherwise be shut down to new entrants or carriers with a limited presence at the airport. They argued that slots were successfully purchased under the Buy/Sell rule, and that the secondary market only failed when exemptions to the HDR were given away for free under AIR-21. Consistent with their comments on the upgauging proposal, most carriers and their associations argued that randomly terminating and reallocating ten percent of Operating Authorizations each year would wreak havoc with the carriers' schedules. They asserted the impact on industry would be so severe and unreasonable as to render the proposal unworkable, creating perpetual instability that could disrupt airport services and traveler expectations. In particular, The City of New York, Delta and US Airways claimed the full operational impact of the rule could make it virtually impossible to operate short-haul shuttles. American, Delta, and AAAE argued the impact could be especially bad on small communities as transfer of Operating Authorizations from carrier to carrier would make consistent service to these communities difficult. As with the upgauging proposal, the Port Authority said it would be difficult to handle gate assignments and leases with an annual turnover of up to ten percent. American claimed the churning of Operating Authorizations would fragment real estate across the airport over time. The carrier argued this fragmentation would be extremely burdensome for the Port Authority and disruptive to airlines and consumers. Some carriers noted that the operating lives would actually serve as a damper on the free market, rather than the catalyst that the FAA envisioned. American said the proposal failed to recognize that investment in routes and infrastructure is largely dependent on the ability to continue serving that route. US Airways and Midwest Airlines echoed this sentiment, positing expiring lives would actually act as a disincentive to invest in the airport, because there will be no assurance that investment expectations can be met. The Air Transport Association of America
(ATA)queried what impact expiration dates and other restrictions would have on the value of slots in the secondary market. While many commenters claimed they could not meaningfully comment on the proposal since the FAA did not explain how it intended to reallocate withdrawn capacity, 4 others argued that the proposal would be unlawful even if the reallocation mechanism had been explained. United and Midwest Airlines claimed the proposal did not implicate safety or movement of air traffic and was accordingly beyond the FAA's authority. Assuming the FAA retained its authority to impose caps after AIR-21, the ATA and the Airports Council International—North America (ACI-NA) argued it did not necessarily follow that this authority encompasses “management of the nationwide system of air commerce,” as the FAA asserted in the NPRM. They claimed such an assertion connotes the business of air transportation, which exceeds the agency's authority to regulate the safety and movement of air traffic. United asserted that the FAA appeared to rely on the Department's authority in 49 U.S.C. 40101(a), but noted that reliance on that authority was equally misguided since it is limited to the Department's exercise of economic regulation. 4 The FAA stated that it did not provide the reallocation mechanism because it did not have the authority to reallocate other than through an administrative mechanism. The FAA's original analysis was overly simplistic. The FAA correctly stated that it did not have the authority to implement a congestion pricing scheme. However, we also said that we did not have the authority to conduct auctions; this statement was incorrect. As discussed more fully later in the document, the FAA has ample authority to lease or otherwise dispose of its property without running afoul of the restriction on user fees, the restriction that the FAA initially believed was problematic. While carriers generally claimed the proposed reallocation of Operating Authorizations as a confiscation of their respective property rights, some argued the FAA's proposal was in violation of the Takings Clause of the U.S. Constitution because carriers would be deprived of all beneficial use of the property, 5 and the FAA could not meet the standards set forth in *Penn Central Transportation Co* v. *City of New York.* 6 In particular, United and US Airways argued that handicapping competitors through a forced transfer of operating rights does not advance a legitimate government interest, particularly when there is no showing that a forced transfer will actually enhance competition or consumer welfare. 5 Cf., *Lingle* v. *Chevron USA, Inc.,* 544 U.S. 528 (2005). 6 438 U.S. 104 (1978). In contrast, the Air Carrier Association of America
(ACAA)argued that legacy carriers were given large numbers of slots through AIR-21, and did not need the market protection contained within the proposal. It noted that under the LaGuardia Order and the HDR, operating rights were never permanently allocated; nor were carriers offered assurances that they could do whatever they wanted with them. In fact, carriers have always been on notice that the Operating Authorizations and their predecessor slots could be recalled. Accordingly, ACAA urged the FAA to withdraw immediately ten percent of all Operating Authorizations held by carriers holding more than 75 Operating Authorizations and redistribute them to limited incumbents operating larger aircraft. It maintained whatever reallocation mechanism was used should kick in before the proposed three years since that extended timeframe unnecessarily restricts the market. AirTran Airways (AirTran) and WestJet supported the concept of the FAA increasing the number of Operating Authorizations provided to small carriers and immediate implementation of the rule. The FAA disagrees with American's claim that a staggered withdrawal and reallocation of Operating Authorizations is not needed to protect new entrants. This approach is one of several rational means of ensuring that carriers with modest service, or no access at all, have an opportunity to gain or increase access at one of the most sought-after airports in the country. While a blind secondary market would also facilitate new entrant access, and the FAA uses this method to assist new entrants at O'Hare, the agency also made specific provisions in that rulemaking to make new and returned capacity preferentially available to new entrants and carriers with a limited presence at the airport. The FAA does not believe a blind secondary market alone is sufficient to provide opportunities for new or increased access. The FAA agrees that its original proposal could have caused disruption at the airport. The premise underlying the proposal to require a full ten percent turnover at the airport each year was not to force disruption, but rather to ensure the efficient use of a scarce resource and to provide access to new entrants and existing operators in a manner other than creating preferences or exemptions. It is exactly these preferences and exemptions that many commenters claim marginalized the secondary market under the HDR. As the FAA has stated several times over the past few years, its primary goal in addressing congestion is to increase capacity wherever possible. Limiting the number of operations at an airport is a last option because it restricts access to the airport. The FAA also believes the market should play an active role in the allocation of the limited resource whenever it becomes necessary to limit operations for more than a short period of time. The options being proposed today meet the same policy objective that drove the proposal in the NPRM to have operating lives expire, albeit in a less aggressive manner. The FAA believes this new approach will help foster a vibrant secondary market while maintaining stability at the airport. The legal concerns raised by commenters will be addressed later in this document. III. Proposal To Allocate Limited Capacity at LaGuardia Efficiently A. Need for a Cap on Operations The FAA believes that at least for the next several years, LaGuardia will likely be oversubscribed in terms of its physical ability to handle aircraft. Simply put, expansion of the airport by adding runways is not a viable option given its location. Accordingly, a cap on operations at the airport is necessary to provide for the efficient use of the NAS. In the NPRM, the FAA proposed to cap weekday and Sunday afternoon operations at 81 per hour (75 for scheduled operations and six for general aviation). The airport is already capped under the LaGuardia Order at 81 (75 for scheduled operations and six for general aviation). Today's proposal, if adopted, will replace that order. The FAA does not intend to raise the cap unless new capacity becomes available and has proposed reducing the number of operations available for general aviation to three per hour. The Port Authority claimed that 75 scheduled operations per hour was too high, since delays were increasing, and argued that the cap should start at 6 a.m. and cover Saturday mornings because these time periods have operations that exceed runway capacity. In response to the NPRM, the ATA claimed that the FAA had not presented any new data indicating that a cap is necessary, instead relying on delays during the summer of 2000. The ATA argued that the FAA merely assumed that demand exceeds capacity at LaGuardia, without discussing how the proposal would impact that demand. The impact of either the NPRM or today's proposal on demand at LaGuardia is difficult to judge because the LaGuardia Order has kept operations from growing since the expiration of the HDR. Accordingly, the comparison in terms of delay reduction should not be between the LaGuardia Order and any final rule, but rather between an unconstrained airport and a final rule. The last time the airport was close to unconstrained was in 2000, which is why the FAA relied on its experience in 2000 in the NPRM. The FAA believes the summer of 2007 served as a stark reminder that the demand for access to New York City is exceptional. New York City is served by three major airports; theoretically there should be more than enough capacity. However, while LaGuardia remained a constrained airport last summer, JFK and Newark were not constrained and carriers were allowed to add flights at will. As a result, the New York City area airports experienced nearly unprecedented delays last summer, and the level of flight delays were regularly reported in the local and national press. The delay numbers at JFK were so high that the FAA initiated a Scheduling Reduction Meeting in October 2007 and announced a cap at the airport in January of this year. Concerned that those carriers that could not obtain desired access at JFK would quickly oversubscribe Newark, the FAA proposed a cap there in March. Looking forward, all three major airports in the New York City area will be capped. The FAA is unwilling to lift the cap at LaGuardia simply because the last time there was significant growth at the airport was in 2000. Notwithstanding ATA's assertion that perhaps there is no need for a cap, its members appear to support reasonable limits on the number of operations at the airport. When the FAA imposed the cap on LaGuardia after the expiration of the HDR at the end of 2006, no carrier argued that a cap was inappropriate. We agree with the Port Authority that operations at the airport should be limited as early as 6 a.m., and the LaGuardia Order limits operations beginning at that hour. Carriers have moved their morning schedules out sufficiently early that the FAA is encountering excess demand by 6 a.m. The agency has tentatively decided against capping operations on all day Saturday and Sunday morning because the level of congestion during these time periods is significantly less than during the workweek and on Sunday afternoons. The Port Authority has not provided data indicating that a cap is needed on Saturday mornings; it has merely asserted that there are runway constraints. Should the Port Authority continue to believe the cap should be expanded, the FAA welcomes an analysis of the capacity problems on Saturday mornings. B. Sunset Provision The FAA's proposed rule, if adopted, will expire in ten years. To the extent new capacity became available, the FAA could increase the size of the cap and auction off that new capacity for the life of the rule. One of the criticisms of the HDR was that it was a temporary rule that has lasted almost 40 years. As such, it became difficult to manage, particularly as it was amended to address changes in business models. We believe the public interest is better served by directly providing the rule will sunset in ten years. This approach will allow for future determinations by the FAA as to whether a cap is still needed and, if so, whether changes are needed to more efficiently allocate and constrain the scarce resource. At present it is impossible to determine what changes in business models may occur over the next ten years. In addition, full implementation of the New York/New Jersey/Philadelphia Metropolitan Area Airspace Redesign project and NextGen technologies are expected to mitigate and improve air traffic efficiency within the next ten years, and we should not prejudge the market response. C. Need for More Efficient Allocation As noted by American in its comments to the NPRM, Congress has directed the Department to place “maximum reliance on competitive market forces and on actual and potential competition” (49 U.S.C. 40101(a)(6)). This maximum reliance means the FAA is obliged not to simply walk away from an airport once it has imposed caps, but rather to take steps to ensure that there are, in fact, competitive market forces and actual and potential competition. Competition at an airport benefits the flying public by providing price competition and expanded service. The ability of carriers to initiate or expand service at the airport is hindered, in large part, by the imposition of the cap. Accordingly, the FAA believes it must strike a balance between
(1)promoting competition and permitting access to new entrants and
(2)recognizing historical investments in the airport and the need to provide continuity. It is not the role of the Government either to dictate particular business models or to constrain a market and provide no means for others to enter that limited market. Not only is the FAA required to assure the efficient use of the NAS, but it must do so in a manner that does not penalize all potential operators at the airport by effectively shutting them out of the market. Accordingly, the FAA believes that it is well within the agency's authority in 49 U.S.C. 40103 to provide some mechanism for reallocation. Today's proposal attempts to strike the appropriate balance by actively developing a robust secondary market that properly values the limited asset that the FAA created. D. Authority To Allocate Slots at LaGuardia The FAA intends to allocate some portion of the available slots at LaGuardia via an auction process. The FAA would initially allocate the vast majority of slots to incumbents at the airport by entering into a cooperative agreement that would lease the slots for a period of ten years. The remaining slots would revert to the FAA over a five year period for retirement or reallocation via an FAA-sponsored auction. As a result of the auction, the acquiring carrier would enter into a lease agreement with the FAA that would last the remainder of the rule. Leases awarded under the cooperative agreements or awarded pursuant to an auction would be subject to lease terms, and the failure to abide by those lease terms would constitute a default of the lease. Carriers would be allowed to sublease their slots subject to the same terms and conditions imposed by the FAA in the original lease, although new terms and conditions unrelated to the carrier's obligations to the FAA could be added. Under Option 1, the FAA would retain all auction proceeds and dedicate their use to congestion management in the New York City area. Under Option 2, the carrier that had held the slot would be allowed to keep the proceeds after the FAA had recouped its costs associated with running the auction. In the NPRM, the FAA stated that it did not have the authority to reallocate Operating Authorizations via a market-based mechanism. The FAA was concerned that it did not have this authority because of annual appropriations restrictions dating back to 1998 that prohibit the agency from expending funds to “finalize or implement any regulation that would promulgate new aviation user fees not specifically authorized by law after the date of enactment of this Act.” 7 The FAA continues to believe that it cannot rely on a market-based allocation method under a purely regulatory approach, which is why it explicitly sought legislation on this matter. 7 In 2006 this provision could be found in Public Law 109-115. For 2008, the same provision may be found in Public Law 110-161. However, the FAA's authority is not limited to regulatory action. The agency has independent authority to dispose of property, 8 and regulatory action is not required prior to the lease of property. The FAA implemented its general authority to dispose of property in its Acquisition Management System, which went into effect on April 1, 1996. 8 The FAA has had express authority to lease property to others since 1996, Pub. L. 104-264, and general authority to dispose of an interest in property for adequate compensation for long before that in 49 U.S.C. 40110(a)(2). Because of the congressional mandate in 49 U.S.C. 40101(a)(6) to rely to the maximum extent possible on competitive market forces, the FAA has determined that it is appropriate to take a bifurcated approach. Today the agency is requesting comment on an approach whereby the FAA would establish a cap on operations and address which slots would revert to the FAA for reallocation through a regulation, but would use its transaction authority to allow for reallocation of slots via a market-based mechanism. As discussed below, this approach has the added benefit of clarifying the unsettled issue of the extent to which a slot holding should be imbued with property rights. 1. Authority To Determine the Best Use of the Airspace The United States Government claimed exclusive sovereignty over United States airspace in 49 U.S.C. 40103. Citizens of the United States have a public right of transit through navigable airspace, but the FAA is authorized to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. To the extent these needs can be met without specifying which citizen may transit or reserve a particular segment of airspace at a particular time, there was no need for the FAA to place constraints such as slots on the use of the airspace—this remains the case for the vast majority of the NAS. As described above, however, at LaGuardia and a few other airports, in order to ensure the efficient use of airspace, the FAA has had to impose constraints by assigning to carriers operational authority to conduct a scheduled IFR arrival or departure operation on a particular day of the week during a specified 30-minute period. These reservations of airspace were called slots under the HDR. After the FAA issued the Buy/Sell rule, these slots were treated not only as property of the United States Government, but also as if the carriers had a property interest, albeit an interest that was heavily encumbered by the restrictions imposed by the FAA. The nature of this proprietary interest, however, has always been somewhat unclear. To encourage the most efficient use of constrained airspace the FAA is clarifying the property interest that the FAA is willing to transfer to airlines for a limited period of time. However, the FAA has determined that in order to assure the efficient use of airspace, it cannot simply permit those to whom it grants authority to use the airspace to treat that authority as their own. Such an approach would not only ignore the inherently valuable nature of the airspace usage assignment, but allows a select few to profit from a governmental interest to the detriment of their competitors and the public as a whole. Ultimately, it is the FAA that has sovereignty over and controls the airspace. 2. Authority To Enter Into Leases and Cooperative Agreements The FAA has authority to lease real and personal property, including intangible property, to others. 49 U.S.C. 106(l)(6) and 106(n). When disposing of an interest in property, however, the FAA must receive adequate compensation. 49 U.S.C. 40110(a)(2). The FAA also, however, has broad authority to enter into cooperative agreements on such terms and conditions as the agency may consider appropriate. 49 U.S.C. 106(l)(6). Under the Federal Grants and Cooperative Agreements Act, a cooperative agreement is to be used when the principal purpose of the agreement is to transfer a thing of value to a recipient, either public or private, to carry out a public purpose of support or stimulation authorized by law, instead of acquiring (by purchase, lease or barter) property or services for the direct use or benefit of the agency, and there is substantial Federal involvement in the activity. The FAA believes this is the appropriate vehicle to use to transfer most of the slots as described in the following options, for a ten year period, to the carriers that currently have Operating Authorizations at LaGuardia. Doing so will recognize these carriers' historical investment in LaGuardia, and the public interest that has been served by that investment. In addition, doing so will prevent the disruption to the national air transportation system described in the comments to the NPRM that might otherwise occur, allowing the public to benefit from continued certainty of readily available air transportation to and from this airport. There will, however, be substantial ongoing Federal involvement with these slots, as the FAA will retain ATC responsibilities for assuring that the use of these segments of airspace for their specified times is done safely and with maximum possible efficiency. It is therefore appropriate to use cooperative agreements to transfer these property interests. 9 9 Under the cooperative agreements the FAA will be transferring a leasehold interest in the slots, but it will not entirely dispose of its property. Receiving monetary compensation from these transfers is antithetical to the definition of a cooperative agreement. Nonetheless, to the degree that adequate compensation might be considered required under 49 U.S.C. 40110(a)(2), the compensation will be the carriers' agreement to be bound by the terms in the cooperative agreement as well as FAA's recognition of the public value received by the carriers' historical investment at LaGuardia. 3. The FAA's Proposed Actions Do Not Constitute a Taking in Violation of the Fifth Amendment United's and US Airways' assertion that the imposition of a cap on operations at LaGuardia and any reallocation mechanism that does not give incumbent carriers an unrestricted right to the slots created by the cap constitutes a taking in violation of the Fifth Amendment is simply incorrect. Carriers possess no absolute property interest in slots unless the FAA gives it to them. The FAA has consistently refused to do that under both the HDR and the LaGuardia Order. Indeed, upon the expiration of the HDR, any putative interest in those slots expired on December 31, 2006, and the LaGuardia Order specifically states that carriers have no right to Operating Authorizations after the expiration of the order. If the FAA proceeds with today's proposal, carriers will have some property rights in the resulting slots, but those rights will be limited by the terms of any final rule and any lease terms that the FAA specifies. Ultimately, it is the FAA that controls the airspace and controls the rights of carriers to use it. United's reliance on *Lingle* and *Penn Central* in arguing that the annual reversion of Operating Authorizations for reallocation by the FAA would constitute a taking was misplaced, and remains inapplicable to today's proposal. 10 Neither case stands for the proposition that the federal government cannot implement a regulatory scheme like the one proposed here. In *Penn Central* the Supreme Court set forth a general test for determining whether a government regulatory action resulted in a taking of property without just compensation. While noting that such determinations are necessarily fact-specific, the Court set forth three basic criteria to evaluate:
(1)The economic impact of the regulatory action on the claimant,
(2)the level of interference with reasonable investment-backed expectations, and
(3)the character of the governmental action. 11 These standards do not suggest a Takings Clause claim in this instance. 10 The FAA is puzzled by United's reliance on *Lingle* . The holding in *Lingle* was unrelated to any determination by the Court that there was a “permanent physical invasion of her property.” 544 U.S. 528, citing *Lucas* v. *South Carolina Coastal Council* , 505 U.S. 1003, 1019 (1992). United has not alleged that the imposition of a slot regime results in its inability to use its property. Rather, it asserts that its flight schedule is an intangible asset, the use of which is critical for utilizing its tangible assets, *i.e.* , its terminal facilities, gates, servicing facilities, and aircraft (United comments at p. 29). The correct analysis is conducted under *Penn Central* and *Connelly* v. *Pension Benefit Guarantee Corp.* , 475 U.S. 211 (1986). 11 *Connelly* at 224-225. Given the fact that LaGuardia has operated under some type of cap for the past 40 years, no carrier could realistically have investment expectations either that the airport will be unconstrained before sufficient capacity is realized or that it would be granted absolute rights in its historical operating schedule. Indeed, the HDR imposed much more stringent constraints on how carriers could conduct operations at the airport than the FAA is proposing here. Likewise, there is no evidence that the proposed rule, if adopted, will have an unduly harmful impact on any air carrier. At most, less than 20 percent of any carrier's current operations at LaGuardia will be affected. As stated by the Court in *Penn Central* , “ ‘[t]aking' jurisprudence does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated.” 12 When viewed as a whole, the impact of today's proposal on even the most negatively affected carrier is not sufficient to trigger a plausible takings claim. The vast majority of operations will continue under slots grandfathered to the carriers at no charge. Each carrier will be assured that up to 20 of their operations will be protected from any reversion if it meets the minimum usage requirements, and only ten to twenty percent of its operations above twenty will be subject to reversion to the FAA for retirement or reallocation. In addition, carriers will be allowed to sublease their slots subject to the terms and conditions set forth in the lease agreement, thus potentially avoiding the loss of a slot for inadequate usage. 12 *Penn Central* at 130. Nor does the proposed action have the character of a taking as interpreted in well-settled jurisprudence. This rulemaking proposes to minimally adjust the benefits and burdens of the economic life of carriers at LaGuardia in order to promote the common good. The rulemaking proposes to limit flights at LaGuardia in order to relieve congestion that impacts the NAS as a whole and LaGuardia in particular. As such, it will benefit the airline industry, businesses relying on aviation to timely meet their delivery schedules, and the travelling public. The proposed rule anticipates only a modest reduction, under one of two proposed options, in the number of flights currently allowed at LaGuardia under the LaGuardia Order, which has been in place, unchallenged, since January 1, 2007. Unlike the governmental action in *Eastern Enterprises* v. *Apfel* , 524 U.S. 498 (1998), the proposed rulemaking does not single out an air carrier based on conduct far in the past and unrelated to any future commitments or injury it caused. E. Allocation of Slots The FAA is proposing two different options for allocating slots. Under both options the vast majority of slots would be grandfathered to existing carriers at the airport, with a relatively small minority either retired or auctioned off in the free market. The FAA believes either approach would help stimulate a secondary market and would lead to a proper assessment of the slots' true value. The agency also believes that either approach would have a minimal impact on operations at the airport and would avoid much of the potential disruption associated with its proposals in the NPRM. 1. Categories of Slots Under today's proposal, the FAA would lease carriers property interests in slots to carriers for a period of up to ten years, the date the rule would sunset. There would be three categories of slots: common slots, unrestricted slots, and limited slots. Common Slots are those slots grandfathered to carriers currently at the airport. They would be awarded to the carriers under a cooperative agreement for the duration of the rule. The cooperative agreement would provide carriers with a ten-year leasehold interest. Once the rule sunsets, all interests would revert to the FAA. Unlike slots allocated under the HDR and Operating Authorizations allocated under the LaGuardia Order, carriers would be granted clear property rights to Common Slots, which could be collateralized or subleased to another carrier for consideration. These property rights, however, would not be absolute. Common Slots would be subject to reversion to the FAA under the rule's minimum usage provision, and could be temporarily withdrawn for operational reasons. Those slots not categorized as Common Slots would be categorized initially as Limited Slots and then as Unrestricted Slots once they are reallocated. Unrestricted Slots are slots that a carrier would acquire as a leasehold under the auction process discussed later in this document. Since a carrier leasing an Unrestricted Slot would be required to do so because of government action, these slots would not be withdrawn by the FAA either under the use-or-lose provisions or for operational reasons. As with Common Slots, Unrestricted Slots would expire when the rule sunsets. Limited Slots are slots that are identified for retirement or auction and are leased to the carriers under a cooperative agreement for a period of 1-4 years 13 so that they can be retired or reallocated via auction after that period of time. Limited Slots would convert to Unrestricted Slots after they are auctioned off. As with Common Slots, Limited Slots could be withdrawn under the proposed use-or-lose provision, or for operational reasons. 13 Twenty percent of the Limited Slots would not be leased to carriers as Limited Slots. This is because the FAA intends to either retire them or auction them as Unrestricted Slots shortly after the final rule, if adopted, takes effect. 2. Initial Allocation of Capacity Upon the rule's effective date, each carrier at LaGuardia would automatically be awarded up to 20 common slots, which would constitute the carrier's base of operations. The FAA believes this is a rational approach to assuring that no carrier is impacted at a level that could seriously disrupt its existing operations. Air Canada would be awarded an additional 22 common slots because of the United States' treaty obligations with Canada. Under Option 1, 90 percent of the remaining slots would also be grandfathered as Common Slots to the carrier holding the corresponding Operating Authorization under the LaGuardia Order. Under Option 2, 80 percent of the remaining slots would be grandfathered as Common Slots. The determination of which carrier is entitled to any particular slot will be based on which carrier was allocated the corresponding Operating Authorization for that slot during the first full week of January 2007. 14 The FAA is proposing to grandfather the majority of slots at the airport in order to minimize disruption and to recognize the carriers' historical investments in both the airport and the community. The FAA seeks comment on the percentage of slots that should be available for reallocation under either option. 14 US Airways had argued in its comments to the NPRM that looking at a single week did not adequately account for seasonal usage. The FAA has looked at usage patterns at the airport throughout the year, and has not found a significant difference in which carriers are operating at the airport throughout the year. To the extent there is seasonal usage, the FAA believes carriers should be able to lease slots on the secondary market or engage in one-for-one trades. As noted above, the remaining slots will be categorized as Limited Slots. Limited Slots may either be retired by the FAA or reallocated via auction. Under the proposal, the number of slots that a particular carrier would have classified as Limited Slots would be based proportionally on the carrier's presence at the airport, taking into consideration each carrier's base of operations. The FAA would inform all carriers that will be awarded Limited Slots how many Limited Slots they will be entitled to no later than the rule's effective date. Under Option 1, the FAA would randomly select operations in excess of 75 in those hours where there are more than 75 scheduled operations. 15 These operations will be designated as Limited Slots and will be retired, so that there are no hours where there are more than 75 scheduled operations. The FAA has tentatively decided to select these slots because the agency believes delay is best mitigated under this proposal by assuring there are no hours with scheduled operations above 75. An affected carrier would then have ten days to classify 50 percent of the remaining slots that will be scheduled to revert to the FAA for auction or retirement. During the following ten days, the FAA would then determine through a randomized process the remainder of slots that will be categorized as Limited Slots. Thus, if a carrier had 200 Operating Authorizations under the LaGuardia Order, it would be notified on the effective date of the rule that 18 of its slots (ten percent of 180) were subject to designation as Limited Slots. The carrier would have 10 days to notify the FAA which nine slots it designated as Limited Slots, and the FAA would designate the remaining nine. 15 During the first full week of January, 2007, there were more than 75 hourly operations during the 0900 and 1700 hours. In determining which slots should be designated as limited slots, the FAA would initially exclude from consideration slots held during all hours where carriers have collectively determined two or more slots should be a Limited Slot. This approach will assure slots will be available for auction throughout the day. The FAA would also determine in what year (1-4) each Limited Slot will revert to the FAA for reallocation or retirement. In this way, all carriers would know within 20 days of the rule's effective date what slots will become available for purchase and when. The FAA does not currently intend to target any slots for retirement under Option 2. Otherwise, the process to select limited slots would be the same as under Option 1. The FAA is concerned that today's proposal is primarily focused on the efficient allocation of slots and does not significantly reduce delay from levels established under the HDR after AIR-21 and the LaGuardia Order. It recognizes that even under Option 1, the level of delay mitigation would be minimal, with only 18 slots retired after five years. The agency anticipates that at the end of the scheduled retirements, the average minutes of delay would be reduced by approximately one minute as the result of scheduled retirements. The FAA believes that it may be appropriate to better address delay mitigation by reducing the overall number of hourly operations at the airport. In contrast to the 78 total hourly operations proposed today, the HDR permitted a maximum total number of operations at LaGuardia of 68 per hour. 16 The numerous exemptions issued pursuant to AIR-21 effectively increased that hourly rate to approximately 81 operations per hour, with roughly 75 of those operations dedicated to scheduled operations. 16 Of these operations, 48 were allocated to air carriers, 14 were allocated to commuter service, and six were allocated to unscheduled operations. Accordingly, the agency specifically requests comment as to whether it should reduce the maximum number of scheduled operations from 75 to a lower number. In addition, the agency seeks comment on whether it should maintain a maximum number of scheduled operations at 75 per hour but increase the number of slots that would be retired. The FAA also requests comment on whether it should retire some percentage of slots under Option 2 and, if so, by how much. Finally, there are a few hours where there are slightly fewer than 75 scheduled operations. The FAA seeks comment on whether these slots should be retired or reallocated via an auction. The FAA also recognizes that the percentage of slots that the agency proposes to reallocate represents a relatively small percentage of the total number of slots at the airport, particularly since up to 20 of each carrier's slot will not be subject to reversion. Accordingly, the FAA requests comment on whether the percentages proposed under either option are sufficient to ensure the opportunity for new entry and an efficient allocation of slots among all carriers at the airport, such that each slot is allocated to the user who values it the most highly. In addition, the agency seeks input on the appropriate percentages of slots available for auction (both in total and annually) sufficient to assure an efficient allocation of this scarce resource. Under both options, the time windows for the Limited Slots would be evenly distributed over the day to the extent possible. The duration of each Limited Slot would be assigned by a fair allocation process such that each affected carrier's aggregate lease duration would be approximately equal to that of the other affected carriers. A technical report fully explaining how Limited Slots will be categorized and allocated has been placed in the docket for this rulemaking. Commenters are encouraged to review and comment on that document. 3. Market-Based Reallocation of Capacity For the first five years of the rule the FAA would conduct an auction of Limited Slots on an annual basis. Under option one, 80 percent of the Limited Slots would be auctioned off over five years, with 20 percent retired. Under option 2, 100 percent of the Limited Slots would be auctioned off over five years. This auction process would guarantee carriers wishing to initiate or extend operations at the airport an opportunity to acquire slots. Each year there would be approximately 14 (option 1) or 36 (option 2) slots available in the auction. Since carriers need pairs of slots, this is equivalent to seven or 18 round-trips per day. Assuming a minimum competitive pattern of service is between two and three round-trips per day, the equivalent of two to nine routes would be available per year. Carriers would be free to supplement their holdings in the secondary market, which the agency believes will be stimulated by this rule. Under Option 1, the FAA would auction off 16 percent of the Limited Slots annually. Any carrier could bid on the slot, and it would be awarded to the highest responsive bidder. The winning parties could commence operations using the newly acquired slots on the second Sunday of the following March. In the unlikely event no bids were received, the FAA would retire the slot until the next auction. The FAA would retain all auction proceeds. After recouping its costs, the FAA would spend the remainder of the proceeds on congestion and delay management initiatives in the New York City area. The FAA intends to retire four percent of the Limited Slots annually for the first five years of the rule under this option. Should sufficient efficiencies be realized through delay reduction or capacity enhancing measures, the FAA may decide to auction those Limited Slots rather than retire them. In addition, the FAA may decide to auction slots that had previously been retired as new capacity. Under Option 2, the FAA would auction off 20 percent of the Limited Slots annually in a blind auction, with the Unrestricted Slots awarded to the highest responsive bidders. The carrier initially holding the Limited Slot would not be able to bid on the slot, and it could not set a minimum bid price. However, that carrier would retain the auction proceeds after the FAA has recouped its costs associated with conducting the auction. As under Option 1, if no bids were received, the FAA would retire the slot until the next auction in the interest of delay mitigation. While carriers would be unable to bid on the slots that they are auctioning, each carrier may negotiate for subleases or transfers from other carriers in the secondary market or by bidding on other slots concurrently up for auction and held by other carriers. 17 17 The FAA will attempt to auction an even number of slots during each hour to provide an opportunity for a carrier to replace a slot that it is auctioning. This may not always be possible. In response to the NPRM, some carriers urged the FAA to permit complete transparency with respect to the identity of the bidders and their bids in each round of an auction. The FAA believes that such transparency with respect to identity of the bidders and their corresponding bids would encourage gaming of the auction and significantly reduce the economic efficiency of the initial allocation of slots. The FAA also believes that an auction where the identity of the bidders is not known assists new entrants seeking to enter the market. The FAA does not intend to reallocate slots after the first five years (other than those returned under the rule's use-or-lose provisions) because it believes that ideally slots should transfer from one carrier to another through the secondary market. The FAA is proposing to be actively involved in a limited number of slot transactions during the first five years of the rule to help establish that market. Not only will the auctions help create a market for slots, but all carriers will be able to assess the true market value of a slot. As noted by Delta in its comments to the NPRM, giving carriers with marginally profitable slots a financial incentive to sell (or in this instance sublease) to the highest bidder reduces entry barriers and maximizes the value of the slot. Armed with information on how much a given slot is likely to be worth on the open market, carriers (and their shareholders) will be in a better position to determine whether to continue operating marginally-performing flights or to sublease the corresponding slot. The agency believes that it should not take more than five years for a robust secondary market to develop. 4. New and Returned Capacity Given the physical constraints at the airport and the carriers' ability to sublease slots if the operations associated with the slots are not financially productive, the FAA anticipates that there will be little new or returned capacity for most of the time the rule is in effect. With the advent of NextGen technology, there may be new capacity in the later years of the rule. To the extent there is any new or returned capacity, the FAA intends to auction off that capacity under both options, and would categorize the slots as Unrestricted Slots. 18 18 If any slots were not bid on in the final year of the annual auction, the FAA would retire those slots until it reallocated new or returned capacity. It is unlikely that enough new or returned capacity would be available to justify an annual reallocation. F. Auction Procedures The FAA is currently engaged in procuring the services of a contractor to conduct auctions of the proposed Limited Slots. 19 The details regarding the specifics of any potential auction will be disclosed after the contractor has developed and validated an auction process and the FAA is ready to proceed with an auction. 20 In accordance with the agency's Acquisition Management System, the FAA will publicly announce its intent to conduct an auction on a particular date or over the course of a particular period of time. The FAA will also announce its proposed auction procedures and solicit comments on those procedures. The agency will consider the comments and then publish its planned auction procedures. An interested party may protest the procedures up until the date of the auction under 49 U.S.C. 40110(d)(4) and 14 CFR part 17. 19 As indicated in the *Order Limiting Operations at John F. Kennedy International Airport* , 73 FR 3510 (1/18/08) and the *Notice of Proposed Order Limiting Scheduled Operations at Newark Liberty International Airport* , 73 FR 14552 (3/18/08), the FAA intends to auction new or returned capacity, if any, under those orders. The contract would cover auctions at all possible airports. The FAA is not waiting until this rule is finalized to award the contract, because this proposal and the two orders contemplate potentially conducting the first auction before the end of the year. 20 Since the auction will address the lease of slots awarded by the FAA under its leasing authority rather than under any administrative allocation, notice to interested parties will be governed by applicable procurement law rather than the Administrative Procedure Act. The FAA does believe that the auction should be structured to allow for package bidding. With package bidding, each bidder indicates which groups (packages) of slots it wishes to acquire at prices specified by the auctioneer at the beginning of each round of the auction. Given the network nature of the industry, airlines need multiple slots at an airport in order to operate efficiently. Package bidding will ensure that the airlines can use all of the slots that they acquire. In order to assure that auction participants understand how the auction process works, the FAA anticipates the contractor would have to conduct a training seminar and a mock auction prior to each auction. A single training seminar and mock auction would not suffice since presumably not every carrier will participate in every auction. The auction will also have to be structured to prevent gaming. This would likely be accomplished through the use of activity rules. Finally, the contractor would have to provide and maintain a secure communication mechanism for conducting the auction and develop a Web site that provides information on the availability of slots and the logistics of the auction. At present, the FAA is contemplating requiring bidding carriers to provide up-front payments as a prerequisite to participating in the auction and requiring full payment for the slots at the time of award. The Federal Communications Commission
(FCC)has experienced problems with bidders who were not financially secure or who were otherwise unwilling or unable to pay for the awards. The upfront payment could also discourage bid-sniping by preventing carriers from adding slots to their bid package beyond the amount of the upfront payment. The FAA recognizes that paying for the entire lease at one time could be expensive; however, it also believes that serious bidders should be able to obtain the requisite financing. G. Secondary Trading All slots will have value in the secondary market. To the extent that the secondary market is not mature and the value of slots is not well-known, the auction should inform potential buyers of the value of these slots and stimulate the secondary market. The FAA believes that ultimately the best way to maximize competition is with the development of a robust secondary market. To that end, the agency is not proposing a system of set-asides and exemptions that would be available to new entrants and limited incumbents. We agree with several of the carriers who commented on the NPRM and within the ARC that the system of preferences and exemptions developed under the HDR and AIR-21 may have significantly diluted the viability of the secondary market ostensibly created under the HDR's Buy/Sell Rule. However, we are also unconvinced that these exemptions and set-asides were the only reason the Buy/Sell Rule was less than fully effective. Throughout the years the FAA has received several complaints that carriers were unaware of possible opportunities to buy or lease slots and that incumbent carriers were colluding to keep new entrant carriers out of the airport. We believe some measures must be taken to assure access to the secondary market. First, we believe all carriers interested in initiating operations at LaGuardia, or increasing their operations there, should have an opportunity to participate in any transactions. Accordingly, the FAA proposes to
(1)permit carriers to include common slots for sale in the auction, organized by the FAA, and
(2)establish a bulletin-board system whereby carriers seeking to sublet slots outside the auction process, or to acquire such subleases, would notify the FAA, which would then post the relevant information on its Web site. If a carrier wishes to include some of its common slots in the auction, these slots will be treated in the same manner as other slots being auctioned by the FAA. The carrier would be able to specify a minimum price for these slots so that it need not give up the slots unless they command a price that the carrier is willing to accept. The FAA has tentatively decided that transactions via the bulletin-board-system would not have to be blind, and the transaction could include both cash and non-cash payments. While AirTran and ACAA argued in their comments to the NPRM that transparency among parties to the transaction encourages anti-competitive behavior, the FAA finds compelling the comments of other carriers that a blind, cash-only requirement is unduly restrictive. In particular, the FAA agrees with U.S. Airways and Delta that non-cash bids promote competition by enlarging the pool of potential bidders. Thus, non-cash transactions should result in both more bidders and potentially higher bids. However, as noted by United, Northwest Airlines (Northwest), American and Delta, it is critical that the identities of parties be known if non-cash assets are permitted because that is the only way to value those assets. In addition, the non-cash aspect of the transaction would require direct negotiating. The FAA requests comment on ways that these concerns could be met in a blind secondary market. For example, in the NPRM the FAA proposed a hybrid scheme whereby the initial offer and acceptance would be blind and limited to a cash offer, but the parties could negotiate non-cash assets after the offer had been accepted. The FAA continues to believe that such an approach may be workable. During the posting of the lease and subsequent bidding of the slots, the parties' identities would not be known. Once the auction closed, the FAA would forward the highest bid to the seller without any bidder identification. The seller would have a set number of business days to accept the bid. At that point, the parties' identities would be revealed, and they would have a set period of time to negotiate the possibility of non-cash assets in lieu of money as consideration for the lease. If the parties were unable to come to an agreement, the lease would have to proceed on a cash basis. Other alternatives may also be viable. The FAA takes to heart the concern raised by some commenters that non-blind transactions could encourage collusion. Regardless of which approach, if any, is ultimately adopted, the Department already has the authority under 49 U.S.C. 41712 to investigate, prohibit, and impose penalties on an air carrier for an unfair or deceptive practice or an unfair method of competition in air transportation or the sale of air transportation. The Department has consistently held that this authority empowers it to prohibit anticompetitive conduct
(1)that violates the antitrust laws,
(2)that is not yet serious enough to violate the antitrust laws but may do so in the future, or
(3)that, although not a violation of the letter of the antitrust laws, is close to a violation or contrary to their spirit. 21 21 See *United Airlines, Inc.* v. *Civil Aeronautics Board,* 766 F. 2d 1107, 1112, 1114 (7th Cir. 1985) and cases cited therein; see also H.R. Rep. No. 98-793, 98th Cong., 2d Sess.
(1984)at 4-5, *Order 2002-9-2, Complaint of the American Society of Travel Agents, Inc., and Joseph Galloway against United Air Lines, Inc, et al.* (Docket No. OST-99-6410) and *Complaint of The American Society of Travel Agents, Inc., and Hillside Travel, Inc. against Delta Air Lines, et al.* (Docket No. OST-02-12004) (September 4, 2002) at 22-23. In order to assure that the Department can conduct adequate oversight, today's proposal would require carriers to file with the Department a detailed breakdown of all lease terms and asset transfers for each transaction, and the subletting carrier must disclose all bids submitted in response to its solicitation. The slot could not be operated by the acquiring carrier until all documentation has been received, and the FAA has approved the transfer. Within the context of the proposed auction discussion in the NPRM, United suggested that the FAA could publicly disclose non-confidential business information so that all carriers have an assessment of the relative value of the slots that are being traded. We have not included language to this effect in the proposed regulatory text. However, we seek comment on whether it would be helpful for this type of information to be disclosed. Trades among marketing carriers and one-for-one trades would not have to be advertised. Marketing carriers should not have to open up transactions to the carrier community as a whole any more than a single carrier should have to disclose its scheduling decisions with other carriers. The FAA would approve these transactions, as it has done historically. Same day trades among marketing carriers that address emergency situations such as maintenance problems or other unforeseen operational issues could take place without prior approval by the FAA, but carriers must notify the FAA of the trade within five business days. One-for-one trades among carriers would not be subject to the restrictions of the secondary market because they enhance the operational efficiency of the airport. However, the exchange of slots on a one-for-one basis could not be for consideration. IV. Unscheduled Operations As proposed in the NPRM, the FAA intends to limit unscheduled operations into and out of LaGuardia during the constrained hours. These operations have been restricted via the LaGuardia Order to six per hour, but the FAA has recently proposed to reduce that number to three. Under today's proposal, reservations would be required to use the airport (except for emergency operations) and could be obtained up to 72 hours in advance. United requested that scheduled carriers be allowed to ferry aircraft out of LaGuardia for maintenance without having to obtain a reservation for an unscheduled operation as long as the FAA was given advance notice. To the extent ATC can handle additional requests (for example in good weather), it will do so without regard to the reason for the request. In addition, ATC may decide that a single additional flight for maintenance purposes would not introduce any additional delay. However, there is no guarantee that the FAA would accept more than three reservations per hour, and the determination to handle more traffic would likely be made on that day. Reservations for all non-emergency flights would still be required. The FAA originally believed that there was no need to treat public charter operations differently from other unscheduled operations. Based on comments from the National Air Carrier Association (NACA), the agency has reconsidered its position. The FAA proposes to allow public charter operators to reserve one of the three available allowable operations up to six months in advance. If more than one public charter operation is desired for a given hour, the public charter operator without the advance reservation could attempt to secure a reservation within the three-day window that is available for all other unscheduled operations. V. Other Issues A. 30-Minute Allocations The FAA had originally proposed allocating Operating Authorizations in 15-minute increments. The agency believed that 15-minute increments would minimize congestion from schedule peaking. Four carriers, United, Delta, Northwest and American, suggested that slots should be assigned within 30-minute periods, which is consistent with current practice. The carriers noted that shrinking the window to 15 minutes would have no meaningful, positive impact on congestion, but would have a tremendous negative impact on the ability of carriers to operate at the airport by unduly complicating scheduling practices. They argued that a 15-minute window would lead to more schedule modifications as seasonal block times change, additional paperwork burden for carriers because more trades would be needed, and additional aircraft holdouts on the ramps leading to increased ramp and taxiway congestion. The FAA agrees with the commenters and now proposes slots be assigned in 30-minute windows. The FAA cautions, however, that peaking within the 30-minute windows could lead to increased congestion. The FAA will continue to monitor operations and will address any significant operational issues through discussions with carriers. B. Limit on Arrivals and Departures In response to the NPRM, American and The City of New York suggested the final rule should regulate arrivals only. American noted that at O'Hare, the FAA determined delays tend to be more disruptive to arrivals, and the carrier suggested regulating arrivals only will adequately address the congestion problem because for each arrival there would generally be a corresponding departure. American is correct that the FAA determined there was no need to formally limit departures at O'Hare, and both commenters are correct that, in general, for every arrival there is a departure. However, the timing of those departures does not necessarily correlate with arrivals, and the hub scheduling patterns at O'Hare are different from LaGuardia. ATC also has greater flexibility at O'Hare in determining runway configurations to accommodate arrivals and departures. In addition, the sequencing of flights at LaGuardia is so tight that the FAA does not believe it can merely limit arrivals. LaGuardia is constrained, arguably overly so, throughout the day. Simply limiting arrivals would increase the number of minutes of delay already encountered on a daily basis at the airport. Nor would limiting arrivals ensure that there is relative balance between arrival and departure demand that corresponds to available runway capacity. The agency's experience under the HDR and the LaGuardia Order shows that carriers often make internal scheduling adjustments between arrival and departure slots or trade with other carriers to keep schedules within available capacity. Limiting only arrivals or departures would not promote that balancing of demand. Accordingly, the FAA continues to believe both arrivals and departures should be slot-controlled. C. Use-or-Lose For common and limited slots, the FAA is proposing the same use-or-lose requirement that it proposed under the upgauging proposal in the NPRM and the requirement adopted in the LaGuardia Order. For operations not subject to the proposed minimum aircraft size requirement, the FAA proposed an 80 percent usage requirement over a 60-day period, with the usage requirements not applying to new operations for the first 90 days. If the usage requirement were not met, the slots would revert to the FAA and would be retired or auctioned as unrestricted slots in the next auction. The FAA is proposing that unrestricted slots would not be subject to a usage requirement. In response to the NPRM, the Port Authority argued that the FAA should adopt a 90 percent usage requirement rather than the proposed 80 percent, because the lower number allows a carrier to schedule operations only four days of the week. The Port Authority argued that this type of scheduling was inefficient and should be discouraged. When looking at cancelled flights, the Port Authority claimed that carriers would have no problem meeting the suggested 90 percent usage requirement. In a similar vein, ACAA said that carriers should be required to release weekend and holiday slots that they did not intend to use. The association also argued that the usage requirement should be tied to each scheduled operation (i.e., each slot would be specifically tied to a particular flight). It maintained that the current system of determining usage allows carriers with larger holdings to manipulate their flights so that they meet the usage threshold even though a significant number of flights are cancelled. Delta argued that the proposed 90 percent usage requirement would be unduly restrictive. United suggested the FAA allow carriers to cancel a scheduled operation and substitute an unscheduled operation like a maintenance ferry or a charter flight. The Port Authority suggested a carrier that failed to meet the usage requirement be allowed to continue to operate the affected flight until used by another carrier and the new carrier should be given 120 days to start new service rather than the proposed 90. While there is a value to ensuring a limited resource like a slot is used, there are certain actions that a carrier must take to realistically initiate new or expanded service. In the case of subleases acquired through the secondary market, carriers have control over the leases' start and end dates. Accordingly, the FAA believes 90 days is sufficient to initiate new service that results from transactions on the secondary market. Given the conflicting comments on whether the usage threshold should be set at 80 percent or 90 percent, the FAA specifically requests comment on the appropriate threshold. The Port Authority is correct that a more stringent usage requirement would allow fewer instances where a carrier could cancel a flight; however, the FAA believes that the potential problem raised by the Port Authority is less a function of usage requirements and more a function of carriers manipulating how cancelled flights are reported. Since carriers currently decide which flights to report under a particular Operating Authorization, it is possible for them to distribute flights to multiple Operating Authorizations and still meet the usage requirement. For example, four flights could be distributed over five Operating Authorizations and each Operating Authorization would meet the 80 percent usage requirement. The FAA believes it is more meaningful to address this problem directly rather than by changing the usage requirement. Simply put, each slot should have a corresponding scheduled operation. Under today's proposal, carriers would be required to report a series of flights under a single slot number rather than in the aggregate. Flight number or other changes made primarily to circumvent the usage requirement will apply against the carrier for calculation of Use-or-Lose. Carriers would be permitted to operate a charter, maintenance, or ferry operation in lieu of a scheduled operation and not have that operation discounted as long as they did not abuse the privilege. Regulatory Notices and Analyses Changes to Federal regulations must undergo several economic analyses. First, Executive Order 12866 directs that each Federal agency shall propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act (19 U.S.C. 2531-2533) prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, this Trade Act requires agencies to consider international standards and, where appropriate, to be the basis of U.S. standards. Fourth, the Unfunded Mandate Reform Act of 1995 (Pub. L. 104-4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more annually (adjusted for inflation). In conducting these analyses, FAA has determined this final rule
(1)has benefits that justify its costs, is “significant regulatory action” as defined in section 3(f)(1) of Executive Order 12866, which is also known as an “economically significant” regulatory action, and is “significant” as defined in DOT's Regulatory Policies and Procedures;
(2)would not have a significant economic impact on a substantial number of small entities;
(3)would not adversely affect international trade; and
(4)would not impose an unfunded mandate on State, local, or tribal governments, or on the private sector. These analyses, set forth in this document, are summarized below. The 2006 NPRM Initial Regulatory Evaluation Most comments on the Initial Regulatory Evaluation of 2006 NPRM were attributed to cost and benefit estimates of the upgauging requirements and the related analysis of the role of aircraft size in competition and slot allocation. Since the FAA is withdrawing its proposal for upgauging, most of the comments are no longer relevant. See the “Withdrawal of Upgauging Proposal” section in today's notice for additional discussion of comments on and the withdrawal of the upgauging requirements. There were several policy related comments that were mentioned in tandem with comments on the regulatory evaluation. We have treated these comments in the “Discussion of the NPRM” and “Proposal to Allocate Limited Capacity at LaGuardia Efficiently” sections of today's notice. ATA and Delta commented that the FAA used an unrealistic base case in the 2006 regulatory evaluation. They argued that the FAA used the unlikely assumption that LaGuardia would revert to a situation where there would be no cap on the level of operations and therefore the regulatory evaluation overestimated benefits. They claimed that the realistic baseline from which to estimate costs and benefits would be a cap on LaGuardia operations. As discussed elsewhere in today's notice the FAA contends that the LaGuardia Order has kept operations from growing since the expiration of the HDR, but the agency has always been clear that the Order is linked to the publication of a final rule. Therefore, the base case from which to compare the cost and benefits of proposed alternatives in terms of delay reduction should not be between the Order and any final rule, but between an unconstrained airport and a final rule. The airport was close to unconstrained in 2000, which is why the FAA used its experience in 2000 for the 2006 NPRM and today's notice. In addition, the New York City area airports experienced nearly unprecedented delays last summer, since JFK and Newark were not constrained and carriers were allowed to add flights at will. Total Costs and Benefits of This Rulemaking The FAA estimates that this proposed rule would result in a long-term improvement in the allocation of scarce slot resources at LaGuardia. The estimated present value of net benefits of this rule is between $65 million and $197 million between 2009 and 2019. The costs of the rule, with a present value between $12 million and $23 million, are due to the design, implementation and participation in an auction of slots. 22 22 Present value costs and benefits use a seven percent discount rate. The draft Regulatory Evaluation in the docket for this rulemaking contains additional valuations using a three percent discount rate. This regulatory impact analysis also assumes as a baseline that in the absence of this rulemaking. The FAA would not otherwise impose a cap on aircraft operations at LaGuardia. Therefore, consistent with the initial Regulatory Evaluation undertaken for the FAA's 2006 NPRM, the agency estimates that, through the long-term implementation of a cap on aircraft operations, this rulemaking would result in a 32 percent reduction in the average delay per operation at LaGuardia relative to the situation with no cap. This reduction in average delay would generate present value net benefits of approximately $2.02 billion between 2009 and 2019. The benefits are estimated by comparing the no-rule scenario (similar to the situation at LaGuardia in 2000) with the proposed cap. Who Is Potentially Affected by This Rulemaking • Operators of scheduled and non-scheduled, domestic and international flights, and new entrants who do not yet operate at LaGuardia. • All communities, including small communities with air service to LaGuardia. • Passengers of scheduled flights to LaGuardia. • The Port Authority of New York and New Jersey, which operates the airport. Key Assumptions • Base Case: No operating authorizations or caps. • Cap on operations provides additional delay improvement. • Option 1: 100 percent of slots held by carriers with fewer than 21 slots would be grandfathered with 10 years of life; for holders with 21 or more slots, 90 percent of slots would be grandfathered with leases of 10 years, two percent would be retired and eight percent would be assigned with shorter leases auctioned over five years. • Delay improvement in Option 1 due to retirement of approximately one minute per average operation. • Option 2: Identical to Option 1 except there would be no retirement of slots, and for holders with 21 or more slots, 80 percent would be grandfathered with 10 year leases and 20 percent would be assigned with shorter leases auctioned over five years. • For the purposes of this evaluation, the effective date is (11/1/08). Other Important Assumptions • Discount Rate—7%. • Assumes 2008 Current Year Dollars. • Passenger Value of Travel Time—$30.86 per hour. 23 23 GRA, Incorporated “Economic Values for FAA Investment and Regulatory Decisions, A Guide” prepared for the FAA Office of Aviation Policy and Plans (October 3, 2007). Value is weighted using LaGuardia shares of 51 percent leisure and 49 percent business travel. Alternatives We Have Considered • No caps (no action): This alternative would have allowed the HDR to expire on January 1, 2007 without replacing it. Based on history, the FAA expected operators would most likely continue to expand operations, further worsening airport delays. • 2006 NPRM (withdrawal): The 2006 NPRM would have instituted caps, provided for mandatory upgauging, and withdrawn 10 percent of slots annually for reallocation. The FAA is replacing this proposal with the one proposed here. • Caps: This alternative would permanently impose caps at 75 scheduled operations and three unscheduled operations per hour. It would grandfather all current Operating Authorizations. • Option 1 + Caps: This alternative would institute caps as above, retire approximately two percent of eligible slots in the interest of reducing delays and reallocate eight percent of eligible capacity via an annual auction over five years. • Option 2 + Caps: This alternative would institute caps as above, and reallocate 20 percent of eligible slots via an annual auction over five years. We are requesting comment from industry on the range of alternatives considered. Benefits of This Rulemaking The primary benefits of this rulemaking will be due to the delay reduction from the caps on operations and an improvement in the allocation of scarce slot resources through the use of an auction mechanism. In Option 1 of the proposed rulemaking, there will also be some additional benefits due to delay reduction associated with retiring approximately 18 slots. Consumers are likely to benefit from the delay reduction associated with the imposition of caps and the additional retirement of slots under Option 1. Consumers would also benefit from any new service resulting from the reallocation of resources. Costs of This Rulemaking The major costs of this proposed rule cover the costs to the public and private sectors of designing, implementing and participating in the auction. Paperwork Reduction Act This proposal contains the following new information collection requirements. As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), the FAA has submitted the information requirements associated with this proposal to the Office of Management and Budget for its review. Some of the information requirements in today's notice are similar to those originally proposed in the 2006 notice. The FAA has updated these requirements and summarized them below. *Title:* Congestion Management Rule for LaGuardia Airport. *Summary:* The FAA proposes to grandfather the majority of operations at LaGuardia and develop a secondary market by annually auctioning off a limited number of slots. This proposal also contains provisions for use-or-lose and withdrawal for operational need. The FAA proposes to sunset the rule in ten years. More information on the proposed requirements is detailed elsewhere in today's notice. *Use of:* The information is reported to the FAA by scheduled operators holding slots. The FAA logs, verifies, and processes the requests made by the operators. This information is used to allocate, track usage, withdraw, and confirm transfers of slots among the operators and facilitates the buying and selling of slots in the secondary market. The FAA also uses this information in order to maintain an accurate accounting of operations to ensure compliance with the operations permitted under the rule and those actually conducted at the airport. *Respondents:* The respondents to the proposed information requirements in today's notice are scheduled carriers with existing service at LaGuardia, carriers that plan to enter the LaGuardia market (by auction or secondary market), and carriers that enter the LaGuardia market in the future. There are currently fourteen
(14)carriers with existing scheduled service at LaGuardia. *Frequency:* The information collection requirements of the rule involve scheduled carriers notifying the FAA of their use of slots. The carriers must notify the FAA of:
(1)Its designation of 50 percent of its Limited Slots;
(2)request for confirmation to sublease slots;
(3)its consent to transfer slots under the transferring Carrier's marketing control;
(4)requests for confirmation of one-for-one slot trades;
(5)slot usage (operations); and
(6)request for assignment of slots available on a temporary basis. *Annual Burden Estimate:* The annual reporting burden for each subsection of the rule is presented below. Annual burden estimates presented in today's notice are based on burden estimates from the 2006 notice. The burden is calculated by the following formula: Annual Hourly Burden = (# of respondents) * (time involved) * (frequency of the response). § 93.64(c)(3) Categories of Slots: 50 Percent Designation of Limited Slots (6 carriers) * (80 hours per submittal) = 480 hours Based on the current allocation of Operating Authorizations and the proposed level of baseline operations each carrier would be grandfathered under today's proposal, we assumed the 6 carriers with the most operations at LaGuardia would expend up to ten days of planning time each, potentially 80 hours, to develop and submit its designation of 50 percent of its Limited Slots. This designation would occur once, ten days after the final rule effective date. Sections 93.65(c)-(d) and 93.66(a) Initial Assignment of Slots and Assignment of New or Returned Slots We assumed the 14 carriers operating at LaGuardia will expend time submitting and collecting information to participate in the proposed auctions for slot assignments. The FAA is currently in the process of procuring auction software and services. The FAA will make available burden estimates for information requirements relating to auction participation in a separate notice. Section 93.68(b)-(f) Sublease and Transfer of Slots (14 carriers) * (1.5 hours per submittal) * (4 occurrences per year) = 84 hours Based on burden estimates from the 2006 notice, we assumed the 14 carriers operating at LaGuardia would expend one and one half hours for each occurrence of a lease or transfer of a slot. For each operator, we assumed that a lease or transfer of a slot would occur on average quarterly. Section 93.69(b) One-for-One Trades of Operating Authorizations (14 carriers) * (1.5 hours per submittal) * (4 occurrences per year) = 84 hours Based on burden estimates from the 2006 notice, we assumed the 14 marketing carriers operating at LaGuardia expend one and one half hours for each occurrence of a one-for-one trade of a slot. For each operator, we assumed that a one-for-one trade of a slot would occur quarterly. Section 93.72(a) Reporting Requirements (14 carriers) * (1.5 hours per submittal) * (6 occurrences per year) = 126 hours Based on burden estimates from the 2006 notice, we assumed the 14 carriers operating at LaGuardia expend one and one half hours every two months of the data required by § 93.72(a). Section 93.73(d)-(e) Administrative Provisions (14 carriers) * (1.5 hours per submittal) * (4 occurrence per year) = 84 hours Based on burden estimates from the 2006 notice, we assumed the 14 carriers operating at LaGuardia expend one and one half hours every quarter for administrative provisions. Summary *Total First Year Hourly Reporting Burden—858 Hours.* *Total Recurring Annual Hourly Reporting Burden (after first year)—378 Hours.* The agency is soliciting comments to—
(1)Evaluate whether the proposed information requirements are necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2)Evaluate the agency's estimate of the burden;
(3)Enhance the quality, utility, and clarity of the information to be collected; and
(4)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. Individuals and organizations may submit comments on the information collection requirement by [insert date], and should direct them to the address listed in the ADDRESSES section of this document. Comments also should be submitted to the Office of Information and Regulatory Affairs, OMB, via facsimile at
(202)395-6974, Attention: Desk Officer for FAA. According to the 1995 amendments to the Paperwork Reduction Act (5 CFR 1320.8(b)(2)(vi)), an agency may not collect or sponsor the collection of information, nor may it impose an information collection requirement unless it displays a currently valid OMB control number. The OMB control number for this information collection will be published in the **Federal Register** , after the Office of Management and Budget approves it. Regulatory Flexibility Determination The Regulatory Flexibility Act of 1980 (Pub. L. 96-3540
(RFA)establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objective of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the business, organizations, and governmental jurisdictions subject to regulation.” To achieve that principle, the RFA requires agencies to solicit and consider flexible regulatory proposals and to explain the rationale for their actions. The RFA covers a wide-range of small entities, including small businesses, not-for-profit organizations, and small governmental jurisdictions. Agencies must perform a review to determine whether a proposed or final rule would have a significant economic impact on a substantial number of small entities. If the agency determines that it would, the agency must prepare a regulatory flexibility analysis as described in the Act. However, if an agency determines that a proposed or final rule is not expected to have a significant economic impact on a substantial number of small entities, section 605(b) of the 1980 RFA provides that the head of the agency may so certify and a regulatory flexibility analysis is not required. The certification must include a statement providing the factual basis for this determination, and the reasoning should be clear. Such a determination has been made for this proposed rule. The proposed rule affects all 26 scheduled operators at LGA. Based on a review of the number of employees for each scheduled operator, the FAA found none of the scheduled operators at LGA are considerd small entities by Small Buinsess Administration size standards (in this case, firms with 1,500 or fewer employees). In the NPRM, the FAA identified two carriers that it believed could qualify as a small business under the SBA size standards. The agency has reevaluated the size of all carriers currently operating at LaGuardia and has determined that none of them are small businesses. Using Enhanced Traffic Management System
(ETMS)data, FAA has determined that there would be approximately 70 identifiable unscheduled operators at LGA which could be affected by this rule. While some of these operators may be small businesses, we do not believe they would be impacted signficantly by the proposed rule. While there would be three fewer slots per hour under our proposal, these operators seldomly use these slots and typically have greater flexibility to adjust operations than do scheduled operators. Using 2007 Census data, the FAA also reviewed whether there would be interruptions to service to communities of less than 50,000 in population. We do not know if there would be any service interruptions as a result of the rule. We have reviewed population statistics for every city served from LGA in January 2007 (the base for allocation of slots under the proposed rule) and found none with fewer than 50,000 in population. Therefore, the FAA certifies that this proposed rule would not have a significant economic impact on a substantial number of small entities. International Trade Impact Assessment The Trade Agreements Act of 1979 prohibits Federal agencies from establishing any standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Legitimate domestic objectives, such as safety, are not considered unnecessary obstacles. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards. The FAA has assessed the potential effect of this proposed rule and determined that it would impose no costs on international entities and thus have a no trade impact. Canadian entities are the only foreign operators at LaGuardia and their slots are protected by a bilateral aviation agreement and not affected by the rule. They might benefit from the rule if they choose to participate in the proposed auction to acquire additional slots. Unfunded Mandate Assessment The Unfunded Mandate Reform Act of 1995 (the Act) is intended, among other things, to curb the practice of imposing unfunded Federal mandates on State, local, and tribal governments. Title II of the Act requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (adjusted annually for inflation) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $136.1 million in lieu of $100 million. This final rule does not contain such a mandate. The requirements of Title II do not apply. Executive Order 13132, Federalism The FAA has analyzed this proposed rule under the principles and criteria of Executive Order 13132, Federalism. We determined that this action would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government, and, therefore, would not have federalism implications. Environmental Analysis FAA Order 1050.1E, “Environmental Impacts: Policies and Procedures” identifies FAA actions that are normally categorically excluded from preparation of an environmental assessment or environmental impact statement under the National Environmental Policy Act
(NEPA)in the absence of extraordinary circumstances The FAA has determined that this rulemaking qualifies for the categorical exclusions identified in paragraph 312d “Issuance of regulatory documents (e.g., Notices of Proposed Rulemaking and issuance of Final Rules) covering administration or procedural requirements (does not include Air Traffic procedures; specific Air traffic procedures that are categorically excluded are identified under paragraph 311 of this Order)” and paragraph 312f, “Regulations, standards, and exemptions (excluding those which if implemented may cause a significant impact on the human environment).” It has further been determined that no extraordinary circumstances exist that may cause a significant impact and therefore no further environmental review is required. The FAA has documented this categorical exclusion determination. A copy of the determination and underlying documents has been included in the Docket for this rulemaking. Regulations That Significantly Affect Energy Supply, Distribution, or Use The FAA has analyzed this NPRM under Executive Order 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (May 18, 2001). We have determined that it is not a “significant energy action” under the executive order because while a “significant regulatory action” under Executive Order 12866, it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Additional Information Comments Invited The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. We also invite comments relating to the economic, environmental, energy or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, please send only one copy of written comments, or if you are filing comments electronically, please submit your comments only one time. We will file in the docket all comments we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, we will consider all comments we receive on or before the closing date for comments. We will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. We may change this proposal in light of the comments we receive. Proprietary or Confidential Business Information Do not file in the docket information that you consider to be proprietary or confidential business information. Send or deliver this information directly to the person identified in the FOR FURTHER INFORMATION CONTACT section of this document. You must mark the information that you consider proprietary or confidential. If you send the information on a disk or CD-ROM, mark the outside of the disk or CD-ROM and also identify electronically within the disk or CD-ROM the specific information that is proprietary or confidential. Under 14 CFR 11.35(b), when we are aware of proprietary information filed with a comment, we do not place it in the docket. We hold it in a separate file to which the public does not have access, and we place a note in the docket that we have received it. If we receive a request to examine or copy this information, we treat it as any other request under the Freedom of Information Act (5 U.S.C. 552). We process such a request under the DOT procedures found in 49 CFR part 7. Availability of Rulemaking Documents You can get an electronic copy of rulemaking documents using the Internet by— 1. Searching the Federal eRulemaking Portal ( *http://www.regulations.gov* ); 2. Visiting the FAA's Regulations and Policies web page at *http://www.faa.gov/regulations_policies/* ; or 3. Accessing the Government Printing Office's web page at *http://www.gpoaccess.gov/fr/index.html* . You can also get a copy by sending a request to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue, SW., Washington, DC 20591, or by calling
(202)267-9680. Make sure to identify the docket number, notice number, or amendment number of this rulemaking. You may access all documents the FAA considered in developing this proposed rule, including economic analyses and technical reports, from the Internet through the Federal eRulemaking Portal referenced in paragraph (1). List of Subjects in 14 CFR Part 93 Air traffic control, Airports, Navigation (air). VII. Draft Regulatory Text In consideration of the foregoing, the Federal Aviation Administration proposes to amend Chapter I of Title 14, Code of Federal Regulations, as follows: PART 93—SPECIAL AIR TRAFFIC RULES 1. The authority for part 93 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40106, 40109, 40113, 44502, 44514, 44701, 44719, 46301. Proposed Amendment—Option 1 2. Subpart C is added to read as follows: Subpart C—LaGuardia Airport Traffic Rules Sec. 93.61 Applicability. 93.62 Definitions. 93.63 Slots for scheduled arrivals and departures. 93.64 Categories of Slots. 93.65 Initial assignment of Slots. 93.66 Assignment of new or returned Slots. 93.67 Reversion and withdrawal of Slots. 93.68 Sublease and transfer of Slots. 93.69 One-for-one trade of Slots. 93.70 Minimum usage requirements. 93.71 Unscheduled Operations. 93.72 Reporting requirements. 93.73 Administrative provisions. Subpart C—LaGuardia Airport Traffic Rules § 93.61 Applicability.
(a)This subpart prescribes the air traffic rules for the arrival and departure of aircraft used for scheduled and unscheduled service, other than helicopters, at LaGuardia Airport (LaGuardia).
(b)This subpart also prescribes procedures for the assignment, transfer, sublease and withdrawal of Slots issued by the FAA for scheduled operations at LaGuardia.
(c)The provisions of this subpart apply to LaGuardia during the hours of 6 a.m. through 9:59 p.m., Eastern Time, Monday through Friday and from 12 noon through 9:59 p.m., Eastern Time, Sunday. No person shall operate any scheduled arrival or departure into or out of LaGuardia during such hours without first obtaining a Slot in accordance with this subpart. No person shall conduct an Unscheduled Operation to or from LaGuardia during such hours without first obtaining a Reservation.
(d)Carriers that have Common Ownership shall be considered a single air carrier for purposes of this rule.
(e)The Slots assigned under this subpart terminate at 10 p.m. on March 9, 2019. § 93.62 Definitions. For purposes of this subpart, the following definitions apply: *Airport Reservation Office (ARO)* is an operational unit of the FAA's David J. Hurley Air Traffic Control System Command Center. It is responsible for the administration of reservations for unscheduled operations at LaGuardia. *Base of Operations* are those common slots held by a carrier at LaGuardia on [final rule effective date], that do not exceed 20 operations per day and all slots guaranteed under The Air Transport Agreement between the Government of the United States of America and the Government of Canada. *Carrier* is a U.S. or foreign air carrier with authority to conduct scheduled service under Parts 121, 129, or 135 of this chapter and the appropriate economic authority for scheduled service under 14 CFR chapter II and 49 U.S.C. chapter 411. *Common Ownership* with respect to two or more carriers means having in common at least 50 percent beneficial ownership or control by the same entity or entities. *Common Slot (C-slot)* is a slot that is allocated by the FAA as a lease under its cooperative agreement authority for the length of this rule. *Enhanced Computer Voice Reservation System (e-CVRS)* is the system used by the FAA to make arrival and/or departure reservations for unscheduled operations at LaGuardia and other designated airports. *Limited Slot (L-slot)* is a slot, the lease for which expires prior to the expiration of this rule for subsequent allocation by the FAA as an unrestricted slot. *Public Charter* is defined in 14 CFR 380.2 as a one-way or roundtrip charter flight to be performed by one or more direct air carriers that is arranged and sponsored by a public charter operator. *Public Charter Operator* is defined in 14 CFR 380.2 as a U.S. or foreign public charter operator. *Reservation* is an authorization received by a carrier or other operator of an aircraft, excluding helicopters, in accordance with procedures established by the FAA to operate an unscheduled arrival or departure on a particular day of the week during a specific 30-minute period. *Scheduled Operation* is the arrival or departure segment of any operation regularly conducted by a carrier between LaGuardia and another point regularly served by that carrier. *Slot* is the operational authority assigned by the FAA to a carrier to conduct one scheduled arrival or departure operation at LaGuardia on a particular day of the week during a specific 30-minute period. *Unrestricted Slot (U-slot)* is a slot that is allocated to a carrier by the FAA via the auction of a lease. *Unscheduled Operation* is an arrival or departure segment of any operation that is not regularly conducted by a carrier or other operator of an aircraft, excluding helicopters, between LaGuardia and another service point. The following types of carrier operations shall be considered unscheduled operations for the purposes of this rule: public, on-demand, and other charter flights; hired aircraft service; extra sections of scheduled flights; ferry flights; and other non-passenger flights. § 93.63 Slots for scheduled arrivals and departures.
(a)During the hours of 6 a.m. through 9:59 p.m., Eastern Time, Monday through Friday and from 12 noon through 9:59 p.m., Eastern Time, Sunday, no person shall operate any scheduled arrival or departure into or out of LaGuardia without first obtaining a Slot in accordance with this subpart.
(b)Except as otherwise established by the FAA under paragraph
(c)of this section, the number of Slots shall be limited to no more than seventy-five
(75)per hour. The number of Slots may not exceed 38 in any 30-minute period, and 75 in any 60-minute period. The number of arrival and departure slots in any period may be adjusted by the FAA as necessary based on the actual or potential delays created by such number or other considerations relating to congestion, airfield capacity and the air traffic control system.
(c)Notwithstanding paragraph
(b)of this section, the Administrator may increase the number of Slots based on a review of the following:
(1)The number of delays;
(2)The length of delays;
(3)On-time arrivals and departures;
(4)The number of actual operations;
(5)Runway utilization and capacity plans; and
(6)Other factors relating to the efficient management of the National Airspace System. § 93.64 Categories of Slots.
(a)Each Slot shall be designated as a Common Slot, Limited Slot or Unrestricted Slot and shall be assigned to the Carrier under a lease agreement. A lease for a Common or Limited Slot shall be assigned via a cooperative agreement. A lease for an Unrestricted Slot shall be awarded via an auction.
(b)*Common Slots.*
(1)All Slots within any Carrier's Base of Operations as determined on [final rule effective date] shall be designated as Common Slots.
(2)Ten percent of the Slots at LaGuardia on [final rule effective date] not otherwise designated as Common Slots under paragraph
(1)of this section shall be designated as Limited Slots or Unrestricted Slots. All other Slots shall be designated as Common Slots.
(c)*Limited Slots.* Those Slots assigned to a Carrier subject to return to the FAA under § 93.65(c) and
(d)shall be designated as Limited Slots until the date of their reassignment by the FAA as Unrestricted Slots or their retirement by the FAA. A Carrier may continue to use a Limited Slot that has reverted to the FAA until the second Sunday in the following March.
(1)In hours where there are more than 75 operations, the FAA shall designate the excess Slots as Limited Slots and will retire them in accordance with § 93.65(d).
(2)Each Carrier with a total number of daily operations at LaGuardia in excess of its Base of Operations, will be notified by [effective date of the final rule] which of its Slots have been designated as Limited Slots under paragraph (c)(1) of this section and how many of its remaining Slots will be designated as Limited Slots pursuant to paragraphs (c)(3) and
(4)of this section.
(3)A Carrier shall designate 50 percent of its Limited Slots. The Carrier must notify the FAA of its designation by [date 10 days after the final rule effective date].
(4)The FAA will designate the remaining Limited Slots, excluding those hours in which two or more Slots have been designated as Limited Slots by the Carriers.
(5)No later than [date 20 days after the final rule effective date], the FAA will publish a list of all Limited Slots and the dates upon which they will expire.
(d)*Unrestricted Slots.* Unrestricted Slots are Slots acquired by a Carrier through a lease with the FAA awarded via an auction. Unrestricted Slots are not subject to withdrawal by the FAA. § 93.65 Initial assignment of Slots.
(a)Except as provided for under paragraphs
(b)and
(c)of this section, any Carrier allocated operating rights under the Order, Operating Limitations at New York LaGuardia Airport, during the week of January 7-13, 2007, as evidenced by the FAA's records, will be assigned corresponding Slots in 30-minute periods consistent with the limits under § 93.63(b). If necessary, the FAA may utilize administrative measures such as voluntary measures or a lottery to re-time the assigned Slots within the same hour to meet the 30-minute limits under § 93.63(b). The FAA Vice President, System Operations Services, is the final decision-maker for determinations under this section.
(b)If a Carrier was allocated operating rights under the Order Limiting Operations at LaGuardia airport during the week of January 7-13, 2007, but the operating rights were held by another Carrier, then the corresponding Slots will be assigned to the Carrier that held the operating rights for that period, as evidenced by the FAA's records.
(c)On [date 35 days after the effective date] and every year thereafter through 2012, sixteen
(16)percent of the total number of Limited Slots shall revert to the FAA in accordance with the schedule published under § 93.64(c)(5) and be auctioned as Unrestricted Slots by the FAA. Any Slot receiving no responsive bids will be retired until the next auction. An affected Carrier will be allowed to use the Limited Slot until the following second Sunday in March.
(d)Starting March 8, 2009 and on the second Sunday in March every year thereafter through 2013, the FAA will retire four percent of the total number of Limited Slots returned to the FAA under § 93.64(c). Based on the criteria set forth in § 93.63(c), the Administrator may, at his discretion, auction Slots scheduled for retirement that year or auction retired Slots as new capacity. § 93.66 Assignment of new or returned Slots.
(a)New capacity or capacity returned to the FAA pursuant to the provisions of § 93.70 will be reassigned by the FAA via an auction conducted pursuant to § 93.65(c). Slots acquired from the FAA under the auction proceeding shall be designated as Unrestricted Slots.
(b)The FAA may decide to accumulate a quantity of Slots prior to conducting an auction. § 93.67 Reversion and withdrawal of Slots.
(a)This section does not apply to Unrestricted Slots.
(b)A Carrier's Common Slots or Limited Slots revert back to the FAA 30 days after the Carrier has ceased all operations at LaGuardia for any reasons other than a strike.
(c)The FAA may retime, withdraw or temporarily suspend Common Slots and Limited Slots at any time to fulfill operational needs.
(d)Common Slots and Limited Slots will be withdrawn in accordance with the priority list established under § 93.73.
(e)Except as otherwise provided in paragraph
(a)of this section, the FAA will notify an affected Carrier before withdrawing or temporarily suspending a Common Slot or Limited Slot and specify the date by which operations under the Common Slot or Limited Slot must cease. The FAA will provide at least 45 days notice unless otherwise required by operational needs.
(f)Any Common Slot or Limited Slot that is temporarily withdrawn under this paragraph will be reassigned, if at all, only to the Carrier from which it was withdrawn, provided the Carrier continues to conduct Scheduled Operations at LaGuardia. § 93.68 Sublease and transfer of Slots.
(a)A Carrier may sublease its Slots to another Carrier in accordance with this section and subject to the provisions of the Carrier's lease agreement with the FAA.
(b)A Carrier must provide notice to the FAA to sublease a Slot. Such notice must contain: The Slot number and time, effective dates and, if appropriate, the duration of the lease. The Carrier may also provide the FAA with a minimum bid price.
(c)The FAA will post a notice of the offer to sublease the Slot and relevant details on the FAA Web site at *http://www.faa.gov.* An opening date, closing date and time by which bids must be received will be provided.
(d)Upon consummation of the transaction, written evidence of each Carrier's consent to sublease must be provided to the FAA, as well as all bids received and the terms of the sublease, including but not limited to:
(1)The names of all bidders and all parties to the transaction;
(2)The offered and final length of the sublease;
(3)The consideration offered by all bidders and provided by the sublessee.
(e)The Slot may not be used until the conditions of paragraph
(d)of this section have been met, and the FAA provides notice of its approval of the sublease.
(f)A Carrier may transfer a Slot to another Carrier that conducts operations at LaGuardia solely under the transferring Carrier's marketing control, including the entire inventory of the flight. Each party to such transfer must provide written evidence of its consent to the transfer and the FAA must confirm and approve these transfers in writing prior to the effective date of the transaction. However, the FAA will approve transfers under this paragraph up to five business days after the actual operation to accommodate operational disruptions that occur on the same day of the scheduled operation. The FAA Vice President, System Operations Services is the final decision maker for any determinations under this section.
(g)A Carrier wishing to sublease a Slot via an FAA auction under § 93.65(c), rather than pursuant to this section may do so. The Carrier shall retain the proceeds and the Slot shall retain the same designation that it had prior to the Carrier placing it up for auction. § 93.69 One-for-one trade of Slots.
(a)A Carrier may trade a Slot with another Carrier on a one-for-one basis.
(b)Written evidence of each Carrier's consent to the trade must be provided to the FAA.
(c)Each recipient of the trade may not use the acquired Slot until written confirmation has been received from the FAA.
(d)Carriers participating in a one-for-one trade must certify to the FAA that no consideration or promise of consideration was provided by either party to the trade. § 93.70 Minimum usage requirements.
(a)This section does not apply to Unrestricted Slots.
(b)Any Common Slot or Limited Slot that is not used at least 80 percent of the time over a consecutive two-month period will be withdrawn by the FAA.
(c)Paragraph
(b)of this section does not apply to the first 90-day period after assignment of a Common Slot or Limited Slot through a sublease.
(d)The FAA may waive the requirements of paragraph
(b)of this section in the event of a highly unusual and unpredictable condition which is beyond the control of the Carrier and which affects Carrier operations for a period of five or more consecutive days. Examples of conditions which could justify a waiver under this paragraph are weather conditions that result in the restricted operation of the airport for an extended period of time or the grounding of an aircraft type.
(e)The FAA will treat as used any Common Slot or Limited Slot held by a Carrier on Thanksgiving Day, the Friday following Thanksgiving Day, and the period from December 24 through the first Sunday of January. § 93.71 Unscheduled Operations.
(a)During the hours of 6 a.m. through 9:59 p.m., Monday through Friday, and 12 p.m. through 9:59 p.m. on Sunday, no person may operate an aircraft other than a helicopter to or from LaGuardia unless he or she has received, for that Unscheduled Operation, a Reservation that is assigned by the Airport Reservation Office
(ARO)or in the case of Public Charters, in accordance with the procedures in paragraph
(d)of this section. Requests for Reservations will be accepted through the e-CVRS beginning 72 hours prior to the proposed time of arrival to or departure from LaGuardia. Additional information on procedures for obtaining a Reservation is available on the Internet at *http://www.fly.faa.gov/ecvrs.*
(b)Three Reservations are available per hour, including those assigned to Public Charter operations under paragraph
(d)of this section. The ARO will assign Reservations on a 30-minute basis.
(c)The ARO will receive and process all Reservation requests for unscheduled arrivals and departures at LaGuardia. Reservations are assigned on a “first-come, first-served” basis determined by the time the request is received at the ARO. Reservations must be cancelled if they will not be used as assigned.
(d)One Reservation per hour will be available for allocation to Public Charter operations prior to the 72-hour Reservation window in paragraph
(a)of this section.
(1)The Public Charter Operator may request a reservation up to six months in advance of the date of flight operation. Reservation requests should be submitted to Federal Aviation Administration, Slot Administration Office, AGC-200, 800 Independence Avenue, SW., Washington, DC 20591. Submissions may be made via facsimile to
(202)267-7277 or by e-mail to *7-awa-slotadmin@faa.gov.*
(2)The Public Charter Operator must certify that its prospectus has been accepted by the Department of Transportation in accordance with 14 CFR part 380.
(3)The Public Charter Operator must identify the call sign/flight number or aircraft registration number of the direct air carrier, the date and time of the proposed operation(s), the airport served immediately prior to or after LaGuardia, and aircraft type. Any changes to an approved Reservation must be approved in advance by the Slot Administration Office.
(4)If Reservations under paragraph (d)(1) of this section have already been allocated, the Public Charter Operator may request a Reservation under paragraph
(a)of this section.
(e)The filing of a request for a Reservation does not constitute the filing of an IFR flight plan as required by regulation. The IFR flight plan may be filed only after the Reservation is obtained, must include the Reservation number in the “Remarks” section, and must be filed in accordance with FAA regulations and procedures.
(f)Air Traffic Control will accommodate declared emergencies without regard to Reservations. Non-emergency flights in direct support of national security, law enforcement, military aircraft operations, or public-use aircraft operations may be accommodated above the Reservation limits with the prior approval of the Vice President, System Operations Services, Air Traffic Organization. Procedures for obtaining the appropriate waiver will be available on the Internet at *http://www.fly.faa.gov/ecvrs.*
(g)Notwithstanding the limits in paragraph
(b)of this section, if the Air Traffic Organization determines that air traffic control, weather and capacity conditions are favorable and significant delay is unlikely, the FAA may determine that additional Reservations may be accommodated for a specific time period. Unused Slots may also be made available temporarily for Unscheduled Operations. Reservations for additional operations must be obtained through the ARO.
(h)Reservations may not be bought, sold or leased. § 93.72 Reporting requirements.
(a)Within 14 days after the last day of the two-month period beginning March 8, 2009 and every two months thereafter, each Carrier holding a Common Slot or Limited Slot must report, in a format acceptable to the FAA, the following information for each Common Slot or Limited Slot:
(1)The Slot number, time, and arrival or departure designation;
(2)The operating Carrier;
(3)The date and scheduled time of each of the operations conducted pursuant to the Slot, including the flight number and origin/destination;
(4)The aircraft type identifier.
(b)The FAA may withdraw the Slot of any Carrier that does not meet the reporting requirements of paragraph
(a)of this section. § 93.73 Administrative provisions.
(a)Each Slot shall be assigned a number for administrative convenience.
(b)The FAA will assign priority numbers by random lottery for Common Slots and Limited Slots at LaGuardia. Each Common Slot and Limited Slot will be assigned a withdrawal priority number, and the 30-minute time period for the Common Slot or Limited Slot, frequency, and the arrival or departure designation.
(c)If the FAA determines that operations need to be reduced for operational reasons, the lowest assigned priority number Common Slot or Limited Slot will be the last withdrawn.
(d)Any Slot available on a temporary basis may be assigned by the FAA to a Carrier on a non-permanent, first-come, first-served basis subject to permanent assignment under this subpart. Any remaining Slots may be made available for Unscheduled Operations on a non-permanent basis and will be assigned under the same procedures applicable to other operating Reservations.
(e)All transactions under this subpart must be in a written or electronic format approved by the FAA. Proposed Amendment: Option 2 3. Subpart C is added to read as follows: Subpart C—LaGuardia Airport Traffic Rules Sec. 93.61 Applicability. 93.62 Definitions. 93.63 Slots for scheduled arrivals and departures. 93.64 Categories of Slots. 93.65 Initial assignment of Slots. 93.66 Assignment of new or returned Slots. 93.67 Reversion and withdrawal of Slots. 93.68 Sublease and transfer of Slots. 93.69 One-for-one trade of Slots. 93.70 Minimum usage requirements. 93.71 Unscheduled Operations. 93.72 Reporting requirements. 93.73 Administrative provisions. § 93.61 Applicability.
(a)This subpart prescribes the air traffic rules for the arrival and departure of aircraft used for scheduled and unscheduled service, other than helicopters, at LaGuardia Airport (LaGuardia).
(b)This subpart also prescribes procedures for the assignment, transfer, sublease and withdrawal of Slots issued by the FAA for scheduled operations at LaGuardia.
(c)The provisions of this subpart apply to LaGuardia during the hours of 6 a.m. through 9:59 p.m., Eastern Time, Monday through Friday and from 12 noon through 9:59 p.m., Eastern Time, Sunday. No person shall operate any scheduled arrival or departure into or out of LaGuardia during such hours without first obtaining a Slot in accordance with this subpart. No person shall conduct an Unscheduled Operation to or from LaGuardia during such hours without first obtaining a Reservation.
(d)Carriers that have Common Ownership shall be considered a single air carrier for purposes of this rule.
(e)The Slots assigned under this subpart terminate at 10 p.m. on March 9, 2019. § 93.62 Definitions. For purposes of this subpart, the following definitions apply: *Airport Reservation Office (ARO)* is an operational unit of the FAA's David J. Hurley Air Traffic Control System Command Center. It is responsible for the administration of reservations for unscheduled operations at LaGuardia. *Base of Operations* are those common slots held by a carrier on [final rule effective date], that do not exceed 20 operations per day and all slots guaranteed under The Air Transport Agreement between the Government of the United States of America and the Government of Canada. *Carrier* is a U.S. or foreign air carrier with authority to conduct scheduled service under Parts 121, 129, or 135 of this chapter and the appropriate economic authority for scheduled service under 14 CFR chapter II and 49 U.S.C. chapter 411. *Common Ownership* with respect to two or more carriers means having in common at least 50 percent beneficial ownership or control by the same entity or entities. *Common Slot (C-slot)* is a slot that is allocated by the FAA as a lease under its cooperative agreement authority for the length of this rule. *Enhanced Computer Voice Reservation System (e-CVRS)* is the system used by the FAA to make arrival and/or departure reservations for unscheduled operations at LaGuardia and other designated airports. *Limited Slot (L-slot)* is a slot, the lease for which must be transferred to another carrier by the holder of the limited slot as an unrestricted slot prior to the expiration of this rule. *Public Charter* is defined in 14 CFR 380.2 as a one-way or roundtrip charter flight to be performed by one or more direct air carriers that is arranged and sponsored by a public charter operator. *Public Charter Operator* is defined in 14 CFR 380.2 as a U.S. or foreign public charter operator. *Reservation* is an authorization received by a carrier or other operator of an aircraft, excluding helicopters, in accordance with procedures established by the FAA to operate an unscheduled arrival or departure on a particular day of the week during a specific 30-minute period. *Scheduled Operation* is the arrival or departure segment of any operation regularly conducted by a carrier between LaGuardia and another point regularly served by that carrier. *Slot* is the operational authority assigned by the FAA to a carrier to conduct one scheduled arrival or departure operation at LaGuardia on a particular day of the week during a specific 30-minute period. *Unrestricted Slot (U-slot)* is a slot that is assigned to another carrier by the holder of a limited slot pursuant to the mandatory lease transfer provisions of this subpart. *Unscheduled Operation* is an arrival or departure segment of any operation that is not regularly conducted by a carrier or other operator of an aircraft, excluding helicopters, between LaGuardia and another service point. The following types of carrier operations shall be considered unscheduled operations for the purposes of this rule: public, on-demand, and other charter flights; hired aircraft service; extra sections of scheduled flights; ferry flights; and other non-passenger flights. § 93.63 Slots for scheduled arrivals and departures.
(a)During the hours of 6 a.m. through 9:59 p.m., Eastern Time, Monday through Friday and from 12 noon through 9:59 p.m., Eastern Time, Sunday, no person shall operate any scheduled arrival or departure into or out of LaGuardia during such hours without first obtaining a Slot in accordance with this subpart.
(b)Except as otherwise established by the FAA under paragraph
(c)of this section, the number of Slots shall be limited to no more than seventy-five
(75)per hour. The number of Slots may not exceed 38 in any 30-minute period, and 75 in any 60-minute period. The number of arrival and departure Slots in any period may be adjusted by the FAA as necessary based on the actual or potential delays created by such number or other considerations relating to congestion, airfield capacity and the air traffic control system.
(c)Notwithstanding paragraph
(b)of this section, the Administrator may increase the number of Slots based on a review of the following:
(1)The number of delays;
(2)The length of delays;
(3)On-time arrivals and departures;
(4)The number of actual operations;
(5)Runway utilization and capacity plans; and
(6)Other factors relating to the efficient management of the National Airspace System. § 93.64 Categories of Slots.
(a)Each Slot shall be designated as a Common Slot, Limited Slot or Unrestricted Slot and shall be assigned to the Carrier under a lease agreement. A lease for a Common Slot or Limited Slot shall be assigned via a cooperative agreement. A lease for an Unrestricted Slot shall be awarded via an auction.
(b)*Common Slots.*
(1)All Slots within any Carrier's Base of Operations, as determined on [final rule effective date], shall be designated as Common Slots.
(2)Twenty percent of the Slots at LaGuardia on [final rule effective date] not otherwise designated as Common Slots under paragraph (b)(1) of this section shall be designated as Limited Slots or Unrestricted Slots. All other Slots shall be designated as Common Slots.
(c)*Limited Slots.* Those Slots assigned to a Carrier subject to return to the FAA under § 93.65(c) shall be designated as Limited Slots until they are transferred to another Carrier under those provisions. A Carrier may continue to use a Limited Slot until reassigned to another Carrier as an Unrestricted Slot.
(1)Each Carrier with a total number of daily operations at LaGuardia in excess of its Base of Operations, will be notified by [effective date of the final rule] how many of its slots will be designated as Limited Slots pursuant to paragraphs (c)(2) and
(3)of this section.
(2)A Carrier shall designate 50 percent of its Limited Slots. The Carrier must notify the FAA of its designation by [date 10 days after the final rule effective date].
(3)The FAA will designate the remaining Limited Slots, excluding those hours in which two or more Slots have been designated as Limited Slots by the Carriers.
(4)No later than [date 20 days after the final rule effective date], the FAA will publish a list of all Limited Slots and the dates by which they will expire.
(d)Unrestricted Slots are those Slots acquired by a Carrier through a lease with the FAA awarded via an auction. Unrestricted Slots are not subject to withdrawal by the FAA. § 93.65 Initial assignment of Slots.
(a)Except as provided for under paragraphs
(b)and
(c)of this section, any Carrier allocated operating rights under the Order, Operating Limitations at New York LaGuardia Airport, as amended during the week of January 7-13, 2007, as evidenced by the FAA's records, will be assigned corresponding Slots in 30-minute periods consistent with the limits under § 93.63(b). If necessary, the FAA may utilize administrative measures such as voluntary measures or a lottery to re-time the assigned Slots within the same hour to meet the 30-minute limits under § 93.63(b). The FAA Vice President, System Operations Services, is the final decision-maker for determinations under this section.
(b)If a Carrier was allocated operating rights under the Order Limiting Operations at LaGuardia airport during the week of January 7-13, 2007, but the operating rights were held by another Carrier, then the corresponding Slots will be assigned to the Carrier that held the operating rights for that period, as evidenced by the FAA's records.
(c)On [date 35 days after the effective date] and every year thereafter through 2012, twenty
(20)percent of the total number of Limited Slots identified on [date 20 days after the effective date] shall revert to the FAA in accordance with the schedule published under § 93.64(c)(4) and be auctioned as Unrestricted Slots by the FAA and subsequently transferred to another Carrier, effective no later than the following second Sunday in March.
(1)The auction shall be blind, and only cash may be bid.
(2)The holder of a Limited Slot may not bid on its own Slots.
(3)The holder of a Limited Slot shall retain all proceeds from the transaction.
(4)The auction shall be conducted by the FAA, which will dictate all procedures related to the auction, including but not limited to the requirement that the Carrier may not specify a minimum bid price.
(5)In the event no Carrier bids on the Slot, the FAA will retire it until the next auction.
(6)The Carrier holding a Limited Slot will be allowed to use the Slot until the following second Sunday in March. § 93.66 Assignment of new or returned Slots.
(a)New capacity or capacity returned to the FAA pursuant to the provisions of § 93.70 will be reassigned by the FAA via an auction conducted pursuant to § 93.65(c). Slots acquired from the FAA under this section shall be designated as Unrestricted Slots.
(b)The FAA may decide to accumulate a quantity of Slots prior to conducting a auction. § 93.67 Reversion and withdrawal of Slots.
(a)This section does not apply to Unrestricted Slots.
(b)A Carrier's Common Slots and Limited Slots revert back to the FAA 30 days after the Carrier has ceased all operations at LaGuardia for any reasons other than a strike.
(c)The FAA may retime, withdraw or temporarily suspend Common Slots and Limited Slots at any time to fulfill operational needs.
(d)Common Slots and Limited Slots will be withdrawn in accordance with the priority list established under § 93.73.
(e)Except as otherwise provided in paragraph
(b)of this section, the FAA will notify an affected Carrier before withdrawing or temporarily suspending a Common Slot or Limited Slot and specify the date by which operations under the Common Slot or Limited Slot must cease. The FAA will provide at least 45 days notice unless otherwise required by operational needs.
(f)Any Common Slot or Limited Slot that is temporarily withdrawn under this paragraph will be reassigned, if at all, only to the Carrier from which it was withdrawn, provided the Carrier continues to conduct Scheduled Operations at LaGuardia. § 93.68 Sublease and transfer of Slots.
(a)Carriers may sublease Slots to another Carrier in accordance with this section and subject to the provisions of the Carrier's lease agreement with the FAA.
(b)A Carrier must provide notice to the FAA to sublease a Slot. Such notice must contain: The Slot number and time, effective dates and, if appropriate, the duration of the lease. The Carrier may also provide the FAA with a minimum bid price.
(c)The FAA will post a notice of the offer to sublease the Slot and relevant details on the FAA Web site at *http://www.faa.gov.* An opening date, closing date and time by which bids must be received will be provided.
(d)Upon consummation of the transaction, written evidence of each Carrier's consent to sublease must be provided to the FAA, as well as all bids received and the terms of the sublease, including but not limited to:
(1)The names of all bidders and all parties to the transaction;
(2)The offered and final length of the sublease;
(3)The consideration offered by all bidders and provided by the sublessee.
(e)The Slot may not be used until the conditions of paragraph
(d)of this section have been met, and the FAA provides notice of its approval of the sublease.
(f)A Carrier may transfer a Slot to another Carrier that conducts operations at LaGuardia solely under the transferring Carrier's marketing control, including the entire inventory of the flight. Each party to such transfer must provide written evidence of its consent to the transfer and the FAA must confirm and approve these transfers in writing prior to the effective date of the transaction. However, the FAA will approve transfers under this paragraph up to five business days after the actual operation to accommodate operational disruptions that occur on the same day of the scheduled operation. The FAA Vice President, System Operations Services is the final decision maker for any determinations under this section.
(g)A Carrier wishing to sublease a Slot via an FAA auction under § 93.65(c), rather than pursuant to this section may do so. The Carrier shall retain the proceeds and the Slot shall retain the same designation that it had prior to the Carrier placing it up for auction. § 93.69 One-for-one trade of Slots.
(a)A Carrier may trade a Slot with another Carrier on a one-for-one basis.
(b)Written evidence of each Carrier's consent to the transfer must be provided to the FAA.
(c)Each recipient of the trade may not use the acquired Slot until written confirmation has been received from the FAA.
(d)Carriers participating in a one-for-one trade must certify to the FAA that no consideration or promise of consideration was provided by either party to the trade. § 93.70 Minimum usage requirements.
(a)This section does not apply to Unrestricted Slots.
(b)Any Common Slot or Limited Slot that is not used at least 80 percent of the time over a consecutive two-month period will be withdrawn by the FAA.
(c)Paragraph
(b)of this section does not apply to the first 90-day period after assignment of Common Slots or Limited Slots through a sublease.
(d)The FAA may waive the requirements of paragraph
(b)of this section in the event of a highly unusual and unpredictable condition which is beyond the control of the Carrier and which affects Carrier operations for a period of five or more consecutive days. Examples of conditions which could justify a waiver under this paragraph are weather conditions that result in the restricted operation of the airport for an extended period of time or the grounding of an aircraft type.
(e)The FAA will treat as used any Common Slot or Limited Slot held by a Carrier on Thanksgiving Day, the Friday following Thanksgiving Day, and the period from December 24 through the first Sunday of January. § 93.71 Unscheduled Operations.
(a)During the hours of 6 a.m. through 9:59 p.m., Monday through Friday, and 12 p.m. through 9:59 p.m. on Sunday, no person may operate an aircraft other than a helicopter to or from LaGuardia unless he or she has received, for that Unscheduled Operation, a Reservation that is assigned by the Airport Reservation Office
(ARO)or in the case of Public Charters, in accordance with the procedures in paragraph
(d)of this section. Requests for Reservations will be accepted through the e-CVRS beginning 72 hours prior to the proposed time of arrival to or departure from LaGuardia. Additional information on procedures for obtaining a Reservation is available on the Internet at *http://www.fly.faa.gov/ecvrs.*
(b)Three Reservations are available per hour, including those assigned to Public Charter operations pursuant to paragraph
(d)of this section. The ARO will assign Reservations on a 30-minute basis.
(c)The ARO will receive and process all Reservation requests for unscheduled arrivals and departures at LaGuardia. Reservations are assigned on a “first-come, first-served” basis determined by the time the request is received at the ARO. Reservations must be cancelled if they will not be used as assigned.
(d)One Reservation per hour will be available for allocation to Public Charter operations prior to the 72-hour Reservation window in paragraph
(a)of this section.
(1)The Public Charter Operator may request a Reservation up to six months in advance of the date of flight operation. Reservation requests should be submitted to Federal Aviation Administration, Slot Administration Office, AGC-200, 800 Independence Avenue, SW., Washington, DC 20591. Submissions may be made via facsimile to
(202)267-7277 or by e-mail to *7-awa-slotadmin@faa.gov.*
(2)The Public Charter Operator must certify that its prospectus has been accepted by the Department of Transportation in accordance with 14 CFR part 380.
(3)The Public Charter Operator must identify the call sign/flight number or aircraft registration number of the direct air carrier, the date and time of the proposed operation(s), the airport served immediately prior to or after LaGuardia, and aircraft type. Any changes to an approved Reservation must be approved in advance by the Slot Administration Office.
(4)If Reservations under paragraph (d)(1) of this section have already been allocated, the Public Charter Operator may request a Reservation under paragraph
(a)of this section.
(e)The filing of a request for a Reservation does not constitute the filing of an IFR flight plan as required by regulation. The IFR flight plan may be filed only after the Reservation is obtained, must include the Reservation number in the “Remarks” section, and must be filed in accordance with FAA regulations and procedures.
(f)Air Traffic Control will accommodate declared emergencies without regard to Reservations. Non-emergency flights in direct support of national security, law enforcement, military aircraft operations, or public-use aircraft operations may be accommodated above the Reservation limits with the prior approval of the Vice President, System Operations Services, Air Traffic Organization. Procedures for obtaining the appropriate waiver will be available on the Internet at *http://www.fly.faa.gov/ecvrs.*
(g)Notwithstanding the limits in paragraph
(b)of this section, if the Air Traffic Organization determines that air traffic control, weather and capacity conditions are favorable and significant delay is unlikely, the FAA may determine that additional Reservations may be accommodated for a specific time period. Unused Slots may also be made available temporarily for Unscheduled Operations. Reservations for additional operations must be obtained through the ARO.
(h)Reservations may not be bought, sold or leased. § 93.72 Reporting requirements.
(a)Within 14 days after the last day of the two-month period beginning March 8, 2009, and every two months thereafter, each Carrier holding a Common Slot or Limited Slot must report, in a format acceptable to the FAA, the following information for each Common Slot or Limited Slot:
(1)The Slot number, time, and arrival or departure designation;
(2)The operating Carrier;
(3)The date and scheduled time of each of the operations conducted pursuant to the Slot, including the flight number and origin/destination;
(4)The aircraft type identifier.
(b)The FAA may withdraw the Slot of any Carrier that does not meet the reporting requirements of paragraph
(a)of this section. § 93.73 Administrative provisions.
(a)Each Slot shall be assigned a number for administrative convenience.
(b)The FAA will assign priority numbers by random lottery for Common Slots and Limited Slots at LaGuardia. Each Common Slot and Limited Slot will be assigned a withdrawal priority number, and the 30-minute time period for the Common Slot or Limited Slot, frequency, and the arrival or departure designation.
(c)If the FAA determines that operations need to be reduced for operational reasons, the lowest assigned priority number Common Slots or Limited Slots will be the last withdrawn.
(d)Any Slot available on a temporary basis may be assigned by the FAA to a Carrier on a non-permanent, first-come, first-served basis subject to permanent assignment under this subpart. Any remaining Slot may be made available for Unscheduled Operations on a non-permanent basis and will be assigned under the same procedures applicable to other operating Reservations.
(e)All transactions under this subpart must be in a written or electronic format approved by the FAA. Issued in Washington, DC, on April 14, 2008. Nan Shellabarger, Director of Aviation Policy and Plans. [FR Doc. E8-8308 Filed 4-16-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 15 CFR Part 922 50 CFR Part 660 RIN 0648-AT18 Establishment of Marine Reserves and a Marine Conservation Area Within the Channel Islands National Marine Sanctuary AGENCY: National Marine Sanctuary Program (NMSP), National Ocean Service
(NOS)and National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce (DOC). ACTION: Response to Comments. SUMMARY: NOAA published a final rule on May 24, 2007 (72 FR 29208) that established marine reserves and a marine conservation area in the Channel Islands National Marine Sanctuary (Sanctuary). At that time, NOAA decided to defer action on establishing federal marine zones in state waters of the Sanctuary, pending the California Fish and Game Commission closing the gaps between the federal marine zones and the state marine zones. This notice closes the record on NOAA's decision with regard to state waters of the Sanctuary and responds to comments NOAA received on that issue. FOR FURTHER INFORMATION CONTACT: Sean Hastings,
(805)884-1472; e-mail: *Sean.Hastings@noaa.gov* . SUPPLEMENTARY INFORMATION: I. Background In August 2006, NOAA published proposed regulations to consider the establishment of marine reserves and marine conservation areas in the Channel Islands National Marine Sanctuary (Sanctuary). At that time, NOAA also released the related draft environmental impact statement
(DEIS)for public review and comment. Between August and October of 2006, NOAA received public comment and held two hearings on the proposed rule and DEIS. Over 30,000 individuals submitted written comments and/or presented oral testimony on NOAA's proposal. The majority of these individuals supported the establishment of NOAA's Alternative 1A or Alternative 2. Alternatives 1A and 2 would have established marine zones in both federal and state waters with federal regulations overlaying the entire zone network (i.e., from the outer boundary of the federal waters zones to the mean high water line of the Channel Islands). NOAA's preferred alternative was Alternative 1A. During the public comment period, the State of California submitted comments on NOAA's proposal. In its October 2006 letter to NOAA, the California Department of Fish and Game
(CDFG)stated it could only support Alternative 1C as described in the DEIS. Under Alternative 1C, NOAA would establish marine reserves and a marine conservation area (and their associated regulations) only in the federal waters of the Sanctuary. In subsequent consultations with state representatives and in a letter from the Secretary of Resources dated January 2, 2007, the California Resources Agency also stated that it could only support Alternative 1C at that time. As indicated in the DEIS, Alternative 1C left small gaps in protection between the offshore extent of some of the state waters marine zones established by the State of California in 2003 and the federal waters marine zones proposed by NOAA in Alternative 1C. On March 16, 2007, the California Coastal Commission (Coastal Commission) held a public meeting on NOAA's consistency determination with California's Coastal Zone Management Plan under section 307 of the Coastal Zone Management Act (see *http://www.coastal.ca.gov/meetings/mtg-mrn7-3.html* ). At that meeting, the Coastal Commission passed a motion as follows: “In the event NOAA elects not to implement Alternative 1A, NOAA will implement Alternative 1C, with the following additional provisions: Until such time as the Resources Agency and the Fish and Game Commission designate the areas in between the existing State-designated MPAs and the 3 mile limit (i.e., the “gaps” between the existing state MPAs and the federal MPAs depicted in Alternative 1c [and shown on Exhibit 9]), or the Fish and Game Commission/DFG and NOAA enter into an interagency agreement that establishes MPA protection for these “gap” areas, NOAA will expand Alternative 1C to include in its MPA designation these “gaps” between the outer boundaries of the existing state MPAs and the state-federal waters boundary (3nm from shore).” At this meeting, the CDFG representative stated that the California Fish and Game Commission
(FGC)could close these gaps in protection using state laws by August 2007. Based on the record as of May of 2007, NOAA then determined there was sufficient rationale to justify establishing marine zones in the federal waters of the Sanctuary but decided to defer action on establishing federal marine zones in state waters of the Sanctuary, until the State had had an opportunity to close those gaps in protection. As such, NOAA published a final rule on May 24, 2007 (72 FR 29208) that established marine zones in the federal waters and asked for public input on the issue of establishing federal marine zones in the state waters of the Sanctuary. That regulation became effective on July 29, 2007. On October 12, 2007 the FGC closed the gaps between the federal marine zones and the state marine zones in a manner consistent with the Coastal Commission's resolution and the CDFG representative's statement. 1 1 Closing the gaps would also be consistent with the public record supporting the 2002 decision of the California Fish and Game Commission to establish marine zones in the Sanctuary. Therefore, NOAA has, at this time, decided not to extend sanctuary regulations into the state waters of the Sanctuary because there is no regulatory gap in protection between state and federal marine zones. NOAA and the State will continue to work collaboratively on the administration of the entire marine zone network, including monitoring, education and enforcement. II. Summary of Comments and Responses *Comment 1:* The federal government should provide full Sanctuary jurisdiction and oversight for any marine reserves that are located within the CINMS. *Response:* On October 12, 2007, the State of California issued regulations that extend the offshore boundaries of the marine zones in state waters to the inshore boundaries of the marine zones in federal waters (established by NOAA in May of 2007). Those regulations went into effect on December 17, 2007, thus providing protection to the area within the marine zones from shore to the inshore boundary of the federal marine zones established by NOAA in May of 2007. Because there is no regulatory gap in protection between state and federal marine zones, NOAA has decided not to extend sanctuary marine zone regulations into the state waters of the Sanctuary at this time. NOAA and the State will continue to work collaboratively on the administration of the entire marine zone network, including monitoring, education and enforcement. *Comment 2:* Alternative 1A, rather than Alternative 1C, best meets the Sanctuary's goals of ensuring the long-term protection of Sanctuary resources, and protecting, restoring and maintaining functional and intact portions of habitats, populations and ecological processes in the Sanctuary. *Response:* NOAA's analysis identified that the differences among the three sub alternatives (Alternatives 1A, 1B, and 1C) are distinguished by management considerations, not ecological and socioeconomic impacts. As such, because the State of California closed the state water gaps associated with Alternative 1C, the net ecological benefits and socioeconomic impacts between Alternatives 1A (NOAA's original preferred alternative) and 1C (the State of California's recommended alternative) are the same. NOAA has determined, therefore, that Alternative 1C accomplishes the goals of the zoning network. *Comment 3:* The FGC process to undertake a regulatory process to fill the gaps adds additional work and cost to an already overburdened agency. *Response:* Only the FGC can determine if it has the resources to undertake a regulatory process. NOAA notes that the FGC concluded the regulatory process to fill the gaps on October 12, 2007 and the state regulations went into effect on December 17, 2007. *Comment 4:* Overlaid federal regulations applicable network-wide would provide greater enforcement tools for both state and federal resource managers, including the authority to seek injunctive relief in cases where it is determined that there is injury, or imminent risk of injury, to a Sanctuary resource, as well as the assurance that penalties collected as a result of marine zone violations in the CINMS will be used directly to further the protection of CINMS resources. The State would lack these additional enforcement capabilities. *Response:* In section 5.1 of the final environmental impact statement, NOAA detailed the administrative benefits of overlaying state waters with federal marine zone regulations, including enhancing enforcement and prosecution, as noted by the commenter. However, at this time, the State opposes NOAA issuance of sanctuary marine zone regulations in state waters of the Sanctuary. NOAA and the State have in the past worked collaboratively on the administration of the network, including enforcement, and will continue to do so in the future. If, for example, in the future the State determines that its enforcement capabilities could be further enhanced with complementary federal regulations in state waters, NOAA would consider a regulatory action to provide for overlaying federal marine zone regulations in state waters. *Comment 5:* Alternative 1C creates confusion among Sanctuary users and the public, which could result in unintentional non-compliance with the existing marine zones. This also leaves the resources present in or traversing through the gaps unprotected, thereby fragmenting and decreasing the effectiveness of the existing state and soon-to-be finalized federal MPAs. *Response:* The FGC concluded the regulatory process to fill the gaps on October 12, 2007 and the regulations went into effect December 17, 2007. NOAA is unaware of violations or non-compliance due to confusion during the time period from July 2007 to December 2007 when there were gaps between the state and federal marine zones. *Comment 6:* Alternative 1A would align with the State's Marine Managed Areas Improvement Act (AB 1600), which directs the State to consolidate and simplify the range of MPAs within California. *Response:* The terminology and definitions written into the Code of Federal Regulations were drafted to be as consistent as practicable with the State terms and definitions from the Marine Managed Areas Improvement Act. In addition, the combined state and federal marine zoning network remains consistent with the original geographic scope envisioned by the State and supported by NOAA in the Final Environmental Document adopted by the State in October 2002. *Comment 7:* Alternative 1C will result in a fragmented, inefficient and piece-meal approach to the enforcement, monitoring, management, and public education efforts surrounding the Sanctuary MPAs. Implementation of Alternative 1A, on the other hand, would draw on the management and regulatory strengths of both federal and state agencies and thereby ensure that the implementation and protection of the MPA network is carried out in the most efficient, complementary and cohesive fashion. *Response:* NOAA and the State strongly support a close, collaborative working relationship to implement the Sanctuary zoning network and to ensure that management of the network (e.g., enforcement, education and outreach, and monitoring) is implemented in a collaborative, efficient, and effective manner. *Comment 8:* If the FGC were to alter state regulations governing state MPAs at some point in the future, the integrity of the entire network would be threatened. *Response:* NOAA will work closely with the FGC on any future changes to the network. If the State were to alter its regulations in a manner that, in NOAA's judgment, compromises the integrity of the network, NOAA will consider taking further action under the National Marine Sanctuaries Act to maintain the network's integrity. *Comment 9:* If the State fails to close gaps by fall 2007, NOAA should expeditiously finalize regulations that will close the gaps by extending federal protections under the National Marine Sanctuaries Act into state waters to meet the boundaries of the state MPAs created in 2003. *Response:* The FGC closed the gaps on October 12, 2007. The regulations became effective on December 17, 2007. Dated: April 9, 2008. Daniel J. Basta, Director, Office of National Marine Sanctuaries. [FR Doc. E8-7916 Filed 4-16-08; 8:45 am] BILLING CODE 3510-NK-M DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 26 and 301 [REG-147775-06] RIN 1545-BH63 Regulations Under Section 2642(g) AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking and notice of public hearing. SUMMARY: This document contains proposed regulations providing guidance under section 2642(g)(1). The proposed regulations describe the circumstances and procedures under which an extension of time will be granted under section 2642(g)(1). The proposed guidance affects individuals (or their estates) who failed to make a timely allocation of generation-skipping transfer
(GST)exemption to a transfer, and individuals (or their estates) who failed to make a timely election under section 2632(b)(3) or (c)(5). This document also provides notice of a public hearing. DATES: Written or electronic comments must be received by July 16, 2008. Outlines of topics to be discussed at the public hearing scheduled for August 5, 2008, must be received by July 15, 2008. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-147775-06), Internal Revenue Service, Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-147775-06), 1111 Constitution Avenue, NW., Washington, DC 20224; or sent electronically via the Federal eRulemaking Portal at *http://www.regulations.gov* (IRS-REG-147775-06). The public hearing will be held in the IRS auditorium. FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Theresa M. Melchiorre,
(202)622-3090; concerning submissions of comments, the hearing, and/or to be placed on the building access list to attend the hearing, Richard Hurst at *Richard.A.Hurst@irscounsel.treas.gov* or
(202)622-7180 (not toll-free numbers). SUPPLEMENTARY INFORMATION: Paperwork Reduction Act The collections of information contained in this notice of proposed rulemaking have been submitted to the Office of Management and Budget for review in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). Comments on the collections of information should be sent to the Office of Management and Budget, *Attn:* Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503, with copies to the Internal Revenue Service, *Attn:* IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, Washington, DC 20224. Comments on the collection of information should be received by *June 16, 2008* . Comments are specifically requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the IRS, including whether the information will have practical utility; The accuracy of the estimated burden associated with the proposed collection of information; How the quality, utility, and clarity of the information to be collected may be enhanced; How the burden of complying with the proposed collection of information may be minimized, including through the application of automated collection techniques or other forms of information technology; and Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of service to provide information. The reporting requirement in these proposed regulations is in § 26.2642-7(h)(2) and (3). This information must be reported by transferors or the executors of transferors' estates requesting relief under section 2642(g)(1). This information will be used by the IRS to determine whether to grant a transferor or a transferor's estate an extension of time to:
(1)Allocate GST exemption, as defined in section 2631, to a transfer;
(2)elect under section 2632(b)(3) (the election not to have the deemed allocation of GST exemption apply to a direct skip);
(3)elect under section 2632(c)(5)(A)(i) (the election not to have the deemed allocation of GST exemption apply to an indirect skip or transfers made to a particular trust); and
(4)elect under section 2632(c)(5)(A)(ii) (the election to treat any trust as a GST trust for purposes of section 2632(c)). The following estimates are an approximation of the average time expected to be necessary for a collection of information. They are based on the information that is available to the IRS. Individual respondents may require greater or less time, depending on their particular circumstances. *Estimated total annual reporting burden:* 1,800 hours. *Estimated average annual burden:* 2 hours. *Estimated number of respondents:* 900. *Estimated annual frequency of response:* When relief is requested. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget. 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. Background The proposed regulations provide guidance on the application of section 2642(g)(1). Congress added section 2642(g)(1) to the Internal Revenue Code
(Code)in section 564 of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), (Pub. L. 107-16, § 564, 115 Stat. 91). This section directs the Secretary to issue regulations describing the circumstances and procedures under which an extension of time will be granted to:
(1)Allocate GST exemption, as defined in section 2631(a), to a transfer;
(2)elect under section 2632(b)(3) (the election not to have the deemed allocation of GST exemption apply to a direct skip);
(3)elect under section 2632(c)(5)(A)(i) (the election not to have the deemed allocation of GST exemption apply to an indirect skip or transfers made to a particular trust); and
(4)elect under section 2632(c)(5)(A)(ii) (the election to treat any trust as a GST trust for purposes of section 2632(c)). In determining whether to grant relief, section 2642(g)(1) directs that all relevant circumstances be considered including evidence of intent contained in the trust instrument or the instrument of transfer. The legislative history accompanying section 2642(g)(1) indicates that Congress believed that, in appropriate circumstances, an individual should be granted an extension of time to allocate GST exemption regardless of whether any period of limitations had expired. Those circumstances include situations in which the taxpayer intended to allocate GST exemption and the failure to allocate the exemption was inadvertent. H.R. Conf. Rep. No. 107-84, 202 (2001). After the enactment of section 2642(g)(1), the IRS issued Notice 2001-50 (2001-2 CB 189), which announced that transferors may seek an extension of time to make an allocation of GST exemption. The Notice provides, generally, that relief will be granted under § 301.9100-3 of the Procedure and Administration Regulations if the taxpayer satisfies the requirements of those regulations and establishes to the satisfaction of the Commissioner that the taxpayer acted reasonably and in good faith and that a grant of the requested relief will not prejudice the interests of the Government. If relief is granted under § 301.9100-3 and the allocation is made, the amount of GST exemption allocated to the transfer is the Federal gift or estate tax value of the property as of the date of the transfer and the allocation is effective as of the date of the transfer. (Notice 2001-50 will be made obsolete upon the publication of the Treasury decision adopting these proposed regulations as final regulations in the **Federal Register** .) On August 2, 2004, the IRS issued Rev. Proc. 2004-46 (2004-2 CB 142), which provides an alternate simplified method to obtain an extension of time to allocate GST exemption in certain situations. Generally, this method is available only with regard to an inter vivos transfer to a trust from which a GST may be made and only if each of the following requirements is met:
(1)The transfer qualified for the gift tax annual exclusion under section 2503(b);
(2)the sum of the amount of the transfer and all other gifts by the transferor to the donee in the same year did not exceed the applicable annual exclusion amount for that year;
(3)no GST exemption was allocated to the transfer;
(4)the taxpayer has unused GST exemption to allocate to the transfer as of the filing of the request for relief; and
(5)no taxable distributions or taxable terminations have occurred as of the filing of the request for relief. To date, the IRS has issued numerous private letter rulings under § 301.9100-3 granting an extension of time to timely allocate GST exemption in situations in which transferors (or their executors) failed to allocate GST exemption to a trust on a timely filed Federal gift or estate tax return. These proposed regulations are intended to replace § 301.9100-3 with regard to relief under section 2642(g)(1). Accordingly, § 301.9100-3 will be amended to provide that relief under section 2642(g)(1) cannot be obtained through the provisions of §§ 301.9100-1 and 301.9100-3 after the date of publication of the Treasury decision adopting these rules as final regulations in the **Federal Register** . Relief under § 301.9100-2(b) (the automatic 6-month extension) will continue to be available to transferors or transferor's estates qualifying for that relief. In addition, the procedures contained in Revenue Procedure 2004-46 will remain effective for transferors within the scope of that Revenue Procedure. Explanation of Provisions The proposed regulations identify the standards that the IRS will apply in determining whether to grant a transferor or a transferor's estate an extension of time to:
(1)Allocate GST exemption, as defined in section 2631, to a transfer;
(2)elect under section 2632(b)(3) (the election not to have the deemed allocation of GST exemption apply to a direct skip);
(3)elect under section 2632(c)(5)(A)(i) (the election not to have the deemed allocation of GST exemption apply to an indirect skip or transfers made to a particular trust); and
(4)elect under section 2632(c)(5)(A)(ii) (the election to treat any trust as a GST trust for purposes of section 2632(c)). The proposed regulations also identify situations with facts that do not satisfy the standards for granting relief and in which, as a result, an extension of time will not be granted. If an extension of time to allocate GST exemption is granted under section 2642(g)(1), the allocation of GST exemption will be considered effective as of the date of the transfer, and the value of the property transferred for purposes of chapter 11 or chapter 12 will determine the amount of GST exemption to be allocated. If an extension of time to elect out of the automatic allocation of GST exemption under section 2632(b)(3) or (c)(5)(A)(i) is granted under section 2642(g)(1), the election will be considered effective as of the date of the transfer. If an extension of time to elect to treat any trust as a GST trust under section 2632(c)(5)(A)(ii) is granted under section 2642(g)(1), the election will be considered effective as of the date of the first (or each) transfer covered by that election. The amount of GST exemption that may be allocated to a transfer pursuant to an extension granted under section 2642(g)(1) is limited to the amount of the transferor's unused GST exemption under section 2631(c) as of the date of the transfer. Thus, if the amount of GST exemption has increased since the date of the transfer, no portion of the increased amount may be applied by reason of the grant of relief under section 2642(g)(1) to a transfer taking place in an earlier year and prior to the effective date of that increase. Requests for relief under section 2642(g)(1) will be granted when the taxpayer establishes to the satisfaction of the IRS that the taxpayer acted reasonably and in good faith, and that the grant of relief will not prejudice the interests of the Government. For purposes of section 2642(g)(1), the following nonexclusive list of factors will be used to determine whether a transferor or the executor of a transferor's estate acted reasonably and in good faith:
(1)The intent of the transferor or the executor of the transferor's estate to timely allocate GST exemption or to timely make an election under section 2632(b)(3) or (c)(5) as evidenced in the trust instrument, instrument of transfer, or contemporaneous documents, such as Federal gift or estate tax returns or correspondence;
(2)the occurrence of intervening events beyond the control of the transferor as defined in section 2652(a), or of the executor of the transferor's estate as defined in section 2203, that caused the failure to allocate GST exemption to a transfer or the failure to elect under section 2632(b)(3) or (c)(5);
(3)the lack of awareness by the transferor or the executor of the transferor's estate of the need to allocate GST exemption to a transfer after exercising reasonable diligence, taking into account the experience of the transferor or the executor of the transferor's estate and the complexity of the GST issue;
(4)evidence of consistency by the transferor in allocating (or not allocating) the transferor's GST exemption, although evidence of consistency may be less relevant if there is evidence of a change of circumstances or change of trust beneficiaries that would otherwise support a deviation from prior GST tax exemption allocation practices; and
(5)reasonable reliance by the transferor or the executor of the transferor's estate on the advice of a qualified tax professional retained or employed by either (or both) of them, and the failure of the transferor or executor, in reliance on or consistent with that advice, to allocate GST exemption to the transfer or to make an election described in section 2632(b)(3) or (c)(5). The IRS will consider all relevant facts and circumstances in making this determination. For purposes of section 2642(g)(1), the following nonexclusive list of factors will be used to determine whether the interests of the Government would be prejudiced:
(1)The grant of requested relief would permit the use of hindsight to produce an economic advantage or other benefit that either would not have been available if the allocation or election had been timely made, or that results from the selection of one out of a number of alternatives (other than whether or not to make an allocation or election) that were available at the time the allocation or election could have been made timely;
(2)if the transferor or the executor of the transferor's estate delayed the filing of the request for relief with the intent to deprive the IRS of sufficient time (by reason of the expiration or the impending expiration of the applicable statute of limitations or otherwise) to challenge the claimed identity of the transferor, the value of the transferred property that is the subject of the requested relief, or any other aspect of the transfer that is relevant for transfer tax purposes; and
(3)a determination by the IRS that, in the event of a grant of relief under section 2642(g)(1), it would be unreasonably disruptive or difficult to adjust the GST tax consequences of a taxable termination or a taxable distribution that occurred between the time for making a timely allocation of GST exemption or a timely election described in section 2632(b)(3) or (c)(5) and the time at which the request for relief under section 2642(g)(1) was filed. The IRS will consider all relevant facts and circumstances in making this determination. Relief under section 2642(g)(1) will not be granted when the standard of reasonableness, good faith and lack of prejudice to the interests of the Government is not met. This standard is not met in the following situations:
(1)The transferor or the executor of the transferor's estate made an allocation of GST exemption as described in § 26.2632-1(b)(4)(ii)(A)( *1* ), or an election under section 2632(b)(3) or (c)(5), on a timely filed Federal gift or estate tax return, and the relief requested would decrease or revoke that allocation or election;
(2)the transferor or the transferor's executor delayed in requesting relief in order to preclude the IRS, as a practical matter, from challenging the identity of the transferor, the value of the transferred interest on the Federal estate or gift tax return, or any other aspect of the transaction that is relevant for Federal estate or gift tax purposes;
(3)the action or inaction that is the subject of the request for relief reflected or implemented the decision with regard to the allocation of GST exemption or an election described in section 2632(b)(3) or (c)(5) that was made by the transferor or executor of the transferor's estate who had been accurately informed in all material respects by a qualified tax professional retained or employed by either (or both) of them; or
(4)the IRS determines that the transferor's request is an attempt to benefit from hindsight. A request for relief under section 2642(g)(1) does not reopen, suspend or extend the period of limitations on assessment of any estate, gift, or GST tax under section 6501. Thus, the IRS may request that the transferor or the transferor's executor consent under section 6501(c)(4) to extend the period of limitations on assessment of any or all gift and GST taxes on the transfer(s) for which relief under section 2642(g)(1) has been requested. The transferor or the transferor's executor has the right to refuse to extend the period of limitations, or to limit such extension to particular issues or to a particular period of time. See section 6501(c)(4)(B). If the grant of relief under section 2642(g)(1) results in a potential tax refund claim, no refund will be paid or credited to the taxpayer or the taxpayer's estate if, at the time of filing the request for relief, the period of limitations for filing a claim for a credit or refund of Federal gift, estate, or GST tax under section 6511 on the transfer for which relief is granted has expired. Relief provided under section 2642(g)(1) will be granted through the IRS letter ruling program. Proposed Effective Date Section 26.2642-7 applies to requests for relief filed on or after the date of publication of the Treasury decision adopting these rules as final regulations in the **Federal Register** . Availability of IRS Documents The IRS notice and revenue procedure cited in this preamble are published in the Cumulative Bulletin and are available at *http://www.irs.gov* . Special Analyses It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. Pursuant to the Regulatory Flexibility Act
(RFA)(5 U.S.C. chapter 6), it is hereby certified that this regulation will not have a significant economic impact on a substantial number of small entities. The applicability of this rule is limited to individuals (or their estates) and trusts, which are not small entities as defined by the RFA (5 U.S.C. 601). Although it is anticipated that there may be a beneficial economic impact for some small entities, including entities that provide tax and legal services that assist individuals in the private letter ruling program, any benefit to those entities would be indirect. Further, this indirect benefit will not affect a substantial number of these small entities because only a limited number of individuals (or their estates) and trusts would submit a private letter ruling request under this rule. Therefore, only a small fraction of tax and legal services entities would generate business or benefit from this rule. Accordingly, a regulatory flexibility analysis is not required. Pursuant to section 7805(f) of the Code, this regulation has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small entities. Comments and Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed original and eight
(8)copies) or electronic comments that are submitted timely to the IRS. The IRS and Treasury Department request comments on the clarity of the proposed rules and also on how they can be made easier to understand. All comments will be available for public inspection and copying. A public hearing has been scheduled for August 5, 2008 in the IRS auditorium. Due to building security procedures, visitors must enter at the Constitution Avenue entrance. In addition, all visitors must present photo identification to enter the building. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 30 minutes before the hearing starts. For more information about having your name placed on the list to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section of this preamble. The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments at the hearing must submit written (a signed original and eight
(8)copies) or electronic comments by July 16, 2008 and an outline of the topics to be discussed and the time to be devoted to each topic by July 15, 2008. A period of 10 minutes will be allotted to each person for making comments. An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing. Drafting Information The principal author of these regulations is Theresa M. Melchiorre, Office of Chief Counsel, IRS. List of Subjects 26 CFR Part 26 Estate taxes, Reporting and recordkeeping requirements. 26 CFR Part 301 Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements. Proposed Amendments to the Regulations Accordingly, 26 CFR parts 26 and 301 are proposed to be amended as follows: PART 26—GENERATION-SKIPPING TRANSFER TAX REGULATIONS UNDER THE TAX REFORM ACT OF 1986 **Paragraph 1.** The authority citation for part 26 is amended by adding an entry in numerical order to read in part as follows: Authority: 26 U.S.C. 7805 * * * Section 26.2642-7 also issued under 26 U.S.C. 2642(g) * * * **Par. 2** . Section 26.2642-7 is added to read as follows: § 26.2642-7 Relief under section 2642(g)(1).
(a)*In general* . Under section 2642(g)(1)(A), the Secretary has the authority to issue regulations describing the circumstances in which a transferor, as defined in section 2652(a), or the executor of a transferor's estate, as defined in section 2203, will be granted an extension of time to allocate generation-skipping transfer
(GST)exemption as described in sections 2642(b)(1) and (2). The Secretary also has the authority to issue regulations describing the circumstances under which a transferor or the executor of a transferor's estate will be granted an extension of time to make the elections described in section 2632(b)(3) and (c)(5). Section 2632(b)(3) provides that an election may be made by or on behalf of a transferor not to have the transferor's GST exemption automatically allocated under section 2632(b)(1) to a direct skip, as defined in section 2612(c), made by the transferor during life. Section 2632(c)(5)(A)(i) provides that an election may be made by or on behalf of a transferor not to have the transferor's GST exemption automatically allocated under section 2632(c)(1) to an indirect skip, as defined in section 2632(c)(3)(A), or to any or all transfers made by such transferor to a particular trust. Section 2632(c)(5)(A)(ii) provides that an election may be made by or on behalf of a transferor to treat any trust as a GST trust, as defined in section 2632(c)(3)(B), for purposes of section 2632(c) with respect to any or all transfers made by that transferor to the trust. This section generally describes the factors that the Internal Revenue Service
(IRS)will consider when an extension of time is sought by or on behalf of a transferor to timely allocate GST exemption and/or to make an election under section 2632(b)(3) or (c)(5). Relief provided under this section will be granted through the IRS letter ruling program. See paragraph
(h)of this section.
(b)*Effect of Relief* . If an extension of time to allocate GST exemption is granted under this section, the allocation of GST exemption will be considered effective as of the date of the transfer, and the value of the property transferred for purposes of chapter 11 or chapter 12 will determine the amount of GST exemption to be allocated. If an extension of time to elect out of the automatic allocation of GST exemption under section 2632(b)(3) or (c)(5) is granted under this section, the election will be considered effective as of the date of the transfer. If an extension of time to elect to treat any trust as a GST trust under section 2632(c)(5)(A)(ii) is granted under this section, the election will be considered effective as of the date of the first (or each) transfer covered by that election.
(c)*Limitation on relief* . The amount of GST exemption that may be allocated to a transfer as the result of relief granted under this section is limited to the amount of the transferor's unused GST exemption under section 2631(c) as of the date of the transfer. Thus, if, by the time of the making of the allocation or election pursuant to relief granted under this section, the GST exemption amount under section 2631(c) has increased to an amount in excess of the amount in effect for the date of the transfer, no portion of the increased amount may be applied to that earlier transfer by reason of the relief granted under this section.
(d)*Basis for determination* —(1) *In general* . Requests for relief under this section will be granted when the transferor or the executor of the transferor's estate provides evidence (including the affidavits described in paragraph
(h)of this section) to establish to the satisfaction of the IRS that the transferor or the executor of the transferor's estate acted reasonably and in good faith, and that the grant of relief will not prejudice the interests of the Government. Paragraphs (d)(2) and (d)(3) of this section set forth nonexclusive lists of factors the IRS will consider in determining whether this standard of reasonableness, good faith, and lack of prejudice to the interests of the Government has been met so that such relief will be granted. In making this determination, IRS will consider these factors, as well as all other relevant facts and circumstances. Paragraph
(e)of this section sets forth situations in which this standard has not been met and, as a result, in which relief under this section will not be granted.
(2)*Reasonableness and good faith* . The following is a nonexclusive list of factors that will be considered to determine whether the transferor or the executor of the transferor's estate acted reasonably and in good faith for purposes of this section:
(i)The intent of the transferor to timely allocate GST exemption to a transfer or to timely make an election under section 2632(b)(3) or (c)(5), as evidenced in the trust instrument, the instrument of transfer, or other relevant documents contemporaneous with the transfer, such as Federal gift and estate tax returns and correspondence. This may include evidence of the intended GST tax status of the transfer or the trust (for example, exempt, non-exempt, or partially exempt), or more explicit evidence of intent with regard to the allocation of GST exemption or the election under section 2632(b)(3) or (c)(5).
(ii)Intervening events beyond the control of the transferor or of the executor of the transferor's estate as the cause of the failure to allocate GST exemption to a transfer or the failure to make an election under section 2632(b)(3) or (c)(5).
(iii)Lack of awareness by the transferor or the executor of the transferor's estate of the need to allocate GST exemption to the transfer, despite the exercise of reasonable diligence, taking into account the experience of the transferor or the executor of the transferor's estate and the complexity of the GST issue, as the cause of the failure to allocate GST exemption to a transfer or to make an election under section 2632(b)(3) or (c)(5).
(iv)Consistency by the transferor with regard to the allocation of the transferor's GST exemption (for example, the transferor's consistent allocation of GST exemption to transfers to skip persons or to a particular trust, or the transferor's consistent election not to have the automatic allocation of GST exemption apply to transfers to one or more trusts or skip persons pursuant to section 2632(b)(3) or (c)(5)). Evidence of consistency may be less relevant if there has been a change of circumstances or change of trust beneficiaries that would otherwise explain a deviation from prior GST exemption allocation decisions.
(v)Reasonable reliance by the transferor or the executor of the transferor's estate on the advice of a qualified tax professional retained or employed by one or both of them and, in reliance on or consistent with that advice, the failure of the transferor or the executor to allocate GST exemption to the transfer or to make an election described in section 2632(b)(3) or (c)(5). Reliance on a qualified tax professional will not be considered to have been reasonable if the transferor or the executor of the transferor's estate knew or should have known that the professional either—
(A)Was not competent to render advice on the GST exemption; or
(B)Was not aware of all relevant facts.
(3)*Prejudice to the interests of the Government* . The following is a nonexclusive list of factors that will be considered to determine whether the interests of the Government would be prejudiced for purposes of this section:
(i)The interests of the Government would be prejudiced to the extent to which the request for relief is an effort to benefit from hindsight. The interests of the Government would be prejudiced if the IRS determines that the requested relief is an attempt to benefit from hindsight rather than to achieve the result the transferor or the executor of the transferor's estate intended at the time when the transfer was made. A factor relevant to this determination is whether the grant of the requested relief would permit an economic advantage or other benefit that would not have been available if the allocation or election had been timely made. Similarly, there would be prejudice if a grant of the requested relief would permit an economic advantage or other benefit that results from the selection of one out of a number of alternatives (other than whether or not to make an allocation or election) that were available at the time the allocation or election could have been timely made, if hindsight makes the selected alternative more beneficial than the other alternatives. Finally, in a situation where the only choices were whether or not to make a timely allocation or election, prejudice would exist if the transferor failed to make the allocation or election in order to wait to see (thus, with the benefit of hindsight) whether or not the making of the allocation of exemption or election would be more beneficial.
(ii)The timing of the request for relief will be considered in determining whether the interests of the Government would be prejudiced by granting relief under this section. The interests of the Government would be prejudiced if the transferor or the executor of the transferor's estate delayed the filing of the request for relief with the intent to deprive the IRS of sufficient time to challenge the claimed identity of the transferor of the transferred property that is the subject of the request for relief, the value of that transferred property for Federal gift or estate tax purposes, or any other aspect of the transfer that is relevant for Federal gift or estate tax purposes. The fact that any period of limitations on the assessment or collection of transfer taxes has expired prior to the filing of a request for relief under this section, however, will not by itself prohibit a grant of relief under this section. Similarly, the combination of the expiration of any such period of limitations with the fact that the asset or interest was valued for transfer tax purposes with the use of a valuation discount will not by itself prohibit a grant of relief under this section.
(iii)The occurrence and effect of an intervening taxable termination or taxable distribution will be considered in determining whether the interests of the Government would be prejudiced by granting relief under this section. The interests of the Government may be prejudiced if a taxable termination or taxable distribution occurred between the time for making a timely allocation of GST exemption or a timely election described in section 2632(b)(3) or (c)(5) and the time at which the request for relief under this section was filed. The impact of a grant of relief on (and the difficulty of adjusting) the GST tax consequences of that intervening termination or distribution will be considered in determining whether the occurrence of a taxable termination or taxable distribution constitutes prejudice.
(e)*Situations in which the standard of reasonableness, good faith, and lack of prejudice to the interests of the Government has not been met* . Relief under this section will not be granted if the IRS determines that the transferor or the executor of the transferor's estate has not acted reasonably and in good faith, and/or that the grant of relief would prejudice the interests of the Government. The following situations provide illustrations of some circumstances under which the standard of reasonableness, good faith, and lack of prejudice to the interests of the Government has not been met, and as a result, in which relief under this section will not be granted:
(1)*Timely allocations and elections* . Relief will not be granted under this section to decrease or revoke a timely allocation of GST exemption as described in § 26.2632-1(b)(4)(ii)(A)( *1* ), or to revoke an election under section 2632(b)(3) or (c)(5) made on a timely filed Federal gift or estate tax return.
(2)*Timing* . Relief will not be granted if the transferor or executor delayed the filing of the request for relief with the intent to deprive the IRS of sufficient time to challenge the claimed identity of the transferor or the valuation of the transferred property for Federal gift or estate tax purposes. (However, see paragraph (d)(3)(ii) of this section for examples of facts which alone do not constitute prejudice.)
(3)*Failure after being accurately informed.* Relief will not be granted under this section if the decision made by the transferor or the executor of the transferor's estate (who had been accurately informed in all material respects by a qualified tax professional retained or employed by either (or both) of them with regard to the allocation of GST exemption or an election described in section 2632(b)(3) or (c)(5)) was reflected or implemented by the action or inaction that is the subject of the request for relief.
(4)*Hindsight.* Relief under this section will not be granted if the IRS determines that the requested relief is an attempt to benefit from hindsight rather than an attempt to achieve the result the transferor or the executor of the transferor's estate intended when the transfer was made. One factor that will be relevant to this determination is whether the grant of relief will give the transferor the benefit of hindsight by providing an economic advantage that may not have been available if the allocation or election had been timely made. Thus, relief will not be granted if that relief will shift GST exemption from one trust to another trust unless the beneficiaries of the two trusts, and their respective interests in those trusts, are the same. Similarly, relief will not be granted if there is evidence that the transferor or executor had not made a timely allocation of the exemption in order to determine which of the various trusts achieved the greatest asset appreciation before selecting the trust that should have a zero inclusion ratio.
(f)*Period of limitations under section 6501.* A request for relief under this section does not reopen, suspend, or extend the period of limitations on assessment or collection of any estate, gift, or GST tax under section 6501. Thus, the IRS may request that the transferor or the transferor's executor consent, under section 6501(c)(4), to an extension of the period of limitation on assessment or collection of any or all gift and GST taxes for the transfer(s) that are the subject of the requested relief. The transferor or the transferor's executor has the right to refuse to extend the period of limitations, or to limit such extension to particular issues or to a particular period of time. See section 6501(c)(4)(B).
(g)*Refunds.* The filing of a request for relief under section 2642(g)(1) with the IRS does not constitute a claim for refund or credit of an overpayment and no implied right to refund will arise from the filing of such a request for relief. Similarly, the filing of such a request for relief does not extend the period of limitations under section 6511 for filing a claim for refund or credit of an overpayment. In the event the grant of relief under section 2642(g)(1) results in a potential claim for refund or credit of an overpayment, no such refund or credit will be allowed to the taxpayer or to the taxpayer's estate if the period of limitations under section 6511 for filing a claim for a refund or credit of the Federal gift, estate, or GST tax that was reduced by the granted relief has expired. The period of limitations under section 6511 is generally the later of three years from the time the original return is filed or two years from the time the tax was paid. If the IRS and the taxpayer agree to extend the period for assessment of tax, the period for filing a claim for refund or credit will be extended. Section 6511(c). The taxpayer or the taxpayer's estate is responsible for preserving any potential claim for refund or credit. A taxpayer who seeks and is granted relief under section 2642(g)(1) will not be regarded as having filed a claim for refund or credit by requesting such relief. In order to preserve a right of refund or credit, the taxpayer or the executor of the taxpayer's estate also must file before the expiration of the period of limitations under section 6511 for filing such a claim any required forms for requesting a refund or credit in accordance with the instructions to such forms and applicable regulations.
(h)*Procedural requirements* —(1) *Letter ruling program.* The relief described in this section is provided through the IRS's private letter ruling program. See Revenue Procedure 2008-1 (2008-1 IRB 1), or its successor, (which are available at *http://www.irs.gov* ). Requests for relief under this section that do not meet the requirements of § 301.9100-2 of this chapter must be made under the rules of this section.
(2)*Affidavit and declaration of transferor or the executor of the transferor's estate* —(i) The transferor or the executor of the transferor's estate must submit a detailed affidavit describing the events that led to the failure to timely allocate GST exemption to a transfer or the failure to timely elect under section 2632(b)(3) or (c)(5), and the events that led to the discovery of the failure. If the transferor or the executor of the transferor's estate relied on a tax professional for advice with respect to the allocation or election, the affidavit must describe—
(A)The scope of the engagement;
(B)The responsibilities the transferor or the executor of the transferor's estate believed the professional had assumed, if any; and
(C)The extent to which the transferor or the executor of the transferor's estate relied on the professional.
(ii)Attached to each affidavit must be copies of any writing (including, without limitation, notes and e-mails) and other contemporaneous documents within the possession of the affiant relevant to the transferor's intent with regard to the application of GST tax to the transaction for which relief under this section is being requested.
(iii)The affidavit must be accompanied by a dated declaration, signed by the transferor or the executor of the transferor's estate that states: “Under penalties of perjury, I declare that I have examined this affidavit, including any attachments thereto, and to the best of my knowledge and belief, this affidavit, including any attachments thereto, is true, correct, and complete. In addition, under penalties of perjury, I declare that I have examined all the documents included as part of this request for relief, and, to the best of my knowledge and belief, these documents collectively contain all the relevant facts relating to the request for relief, and such facts are true, correct, and complete.”
(3)*Affidavits and declarations from other parties* —(i) The transferor or the executor of the transferor's estate must submit detailed affidavits from individuals who have knowledge or information about the events that led to the failure to allocate GST exemption or to elect under section 2632(b)(3) or (c)(5), and/or to the discovery of the failure. These individuals may include individuals whose knowledge or information is not within the personal knowledge of the transferor or the executor of the transferor's estate. The individuals described in paragraph (h)(3)(i) of this section must include—
(A)Each agent or legal representative of the transferor who participated in the transaction and/or the preparation of the return for which relief is being requested;
(B)The preparer of the relevant Federal estate and/or gift tax return(s);
(C)Each individual (including an employee of the transferor or the executor of the transferor's estate) who made a substantial contribution to the preparation of the relevant Federal estate and/or gift tax return(s); and
(D)Each tax professional who advised or was consulted by the transferor or the executor of the transferor's estate with regard to any aspect of the transfer, the trust, the allocation of GST exemption, and/or the election under section 2632(b)(3) or (c)(5).
(ii)Each affidavit must describe the scope of the engagement and the responsibilities of the individual as well as the advice or service(s) the individual provided to the transferor or the executor of the transferor's estate.
(iii)Attached to each affidavit must be copies of any writing (including, without limitation, notes and e-mails) and other contemporaneous documents within the possession of the affiant relevant to the transferor's intent with regard to the application of GST tax to the transaction for which relief under this section is being requested.
(iv)Each affidavit also must include the name, and current address of the individual, and be accompanied by a dated declaration, signed by the individual that states: “Under penalties of perjury, I declare that I have personal knowledge of the information set forth in this affidavit, including any attachments thereto. In addition, under penalties of perjury, I declare that I have examined this affidavit, including any attachments thereto, and, to the best of my knowledge and belief, the affidavit contains all the relevant facts of which I am aware relating to the request for relief filed by or on behalf of [transferor or the executor of the transferor's estate], and such facts are true, correct, and complete.”
(v)If an individual who would be required to provide an affidavit under paragraph (h)(3)(i) of this section has died or is not competent, the affidavit required under paragraph (h)(2) of this section must include a statement to that effect, as well as a statement describing the relationship between that individual and the transferor or the executor of the transferor's estate and the information or knowledge the transferor or the executor of the transferor's estate believes that individual had about the transfer, the trust, the allocation of exemption, or the election. If an individual who would be required to provide an affidavit under paragraph (h)(3)(i) of this section refuses to provide the transferor or the executor of the transferor's estate with such an affidavit, the affidavit required under paragraph (h)(2) of this section must include a statement that the individual has refused to provide the affidavit, a description of the efforts made to obtain the affidavit from the individual, the information or knowledge the transferor or the executor of the transferor's estate believes the individual had about the transfer, and the relationship between the individual and the transferor or the executor of the transferor's estate.
(i)*Effective/applicability date.* Section 26.2642-7 applies to requests for relief filed on or after the date of publication of the Treasury decision adopting these proposed rules as final regulations in the **Federal Register** . PART 301—PROCEDURE AND ADMINISTRATION **Par. 3.** The authority citation for part 301 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * **Par. 4.** Section 301.9100-3 is amended by adding a new paragraph
(g)to read as follows: § 301.9100-3 Other extensions.
(g)*Relief under section 2642(g)(1)* —(1) *Procedures.* The procedures set forth in this section are not applicable for requests for relief under section 2642(g)(1). For requests for relief under section 2642(g)(1), see § 26.2642-7.
(2)*Effective/applicability date.* Paragraph
(g)of this section applies to requests for relief under section 2642(g)(1) filed on or after the date of publication of the Treasury decision adopting these rules as final regulations in the **Federal Register** . Linda E. Stiff, Deputy Commissioner for Services and Enforcement. [FR Doc. E8-8033 Filed 4-16-08; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 301 [REG-141998-06] RIN 1545-BG13 Withdrawal of Regulations Under Old Section 6323(b)(10) AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking. SUMMARY: This document contains proposed regulations related to the validity and priority of the Federal tax lien against certain persons under section 6323 of the Internal Revenue Code (the Code). The proposed regulations update the corresponding Treasury Regulations in various respects. The proposed regulations reflect the adjustment within section 6323(b) of certain dollar amounts as well as the amendment of section 6323(b)(10) by the IRS Restructuring and Reform Act of 1998 (RRA 1998). In addition, the proposed regulations amend the existing regulations under section 6323(c), (g), and
(h)to reflect that a notice of Federal tax lien
(NFTL)is not treated as meeting the filing requirements until it is both filed and indexed in the office designated by the state (in the case of real property located in a state where a deed is not valid against a purchaser until the filing of such deed has been entered and recorded in the public index); the lien will be extinguished if an NFTL contains a certificate of release and the NFTL is not timely refiled; and current law provides the IRS with a 10-year period to collect an assessed tax. The proposed regulations also make changes to the existing regulations under section 6323(f) to clarify the IRS's authority to file NFTLs electronically. Finally, the proposed regulations make incidental changes throughout the existing regulations under section 6323 to make the dates in the examples more contemporaneous with the present and to remove language deemed no longer necessary. DATES: Written or electronic comments and requests for a public hearing must be received by *June 16, 2008* . ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-141998-06), room 5203, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-141998-06), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC 20224, or via the Federal eRulemaking Portal at *www.regulations.gov* (IRS-141998-06). FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Debra A. Kohn at
(202)622-7985; concerning submissions of comments and the hearing, Regina Johnson at
(202)622-7180 (not toll-free numbers). SUPPLEMENTARY INFORMATION: Background This document contains proposed amendments to the Procedure and Administration Regulations (26 CFR part 301) under section 6323 of the Code. If any person liable for tax neglects or refuses to pay after demand, the amount of that tax is a lien in favor of the United States against all property and rights to property of such person under section 6321. Section 6323 provides that a Federal tax lien is only valid against certain persons if an NFTL is filed and addresses generally the validity and priority of the Federal tax lien against such persons. Section 6323(b) and
(c)addresses the protection of certain interests even though an NFTL has been filed. Section 6323(f) prescribes the place for filing and the form of an NFTL. Section 6323(g) addresses the refiling of an NFTL. Section 6323(h) contains definitions of certain terms used throughout section 6323. Since 1976, there have been numerous amendments to section 6323 that are not reflected in the existing regulations. Section 6323(b)(10) has been amended by RRA 1998. In addition, several subsections of section 6323(b) have been amended to increase the dollar amounts these sections reference. Also, section 6323(f)(4) was amended by the Revenue Act of 1978 to provide that an NFTL does not meet the filing requirements with respect to real property until the filing is entered and recorded in a public index maintained by the state if the laws of the state provide that a deed is not valid against a purchaser unless it is recorded in a public index. Moreover, section 6502, the statute that governs the period the IRS has to take collection action (referenced in various places throughout § 301.6323(g)-1(c)), was amended by the Revenue Act of 1990 to change the period from six years to 10 years. There have also been several changes to IRS practice that are not reflected in the existing regulations. Section 301.6323(f)-1(d)(2) of the existing regulations provides that an NFTL may be filed electronically if the state in which it is being filed permits electronic filing. Whether a state “permits” electronic filing of NFTLs has been subject to varying interpretations, thus casting doubt on the validity of NFTLs filed electronically in jurisdictions that do not specifically provide for electronic filing. However, the requirements for proper filing of liens are a matter of Federal, not state, law. *United States* v. *Union Cent. Life Ins. Co.* , 368 U.S. 291, 82 S. Ct. 349, 7 L. Ed. 2d 294 (1961). Thus, the IRS already possesses the authority to dictate the form and content of its NFTLs. The proposed regulations remove the “permits” language so that they correctly reflect the IRS's authority to file NFTLs electronically. Section 301.6323(g)-1(a)(3) and
(4)of the existing regulations states that the IRS may refile an NFTL once the filing period has elapsed and that failure to refile within the specified period does not affect the existence of the lien. The existing regulations also provide that failure to refile during the specified period does not affect the NFTL with respect to property that is the subject matter of a suit or that was levied upon prior to the expiration of the required refiling period. These provisions concerning the effect of a failure to refile are, to some extent, inconsistent with current IRS practice. Most filed NFTLs now contain a certificate of release that automatically releases the lien as of the date the NFTL prescribes, which is the date at the end of the required refiling period. Therefore, if the IRS does not refile an NFTL within the specified period, the certificate of release contained in the NFTL extinguishes the lien. The proposed regulations update the regulations under section 6323 to reflect these changes in IRS practice. The Code currently provides a 10-year period for instituting a proceeding in court or serving a levy to collect an assessed tax liability, while § 301.6323(g)-1(c) of the existing regulations references the 6-year period that existed until 1990. The proposed regulations update § 301.6323(g)-1(c) to reflect this change in the law. The proposed regulations also update the regulations under section 6323(h) to reflect changes made by the Uniform Commercial Code (UCC). Section 9-312(a) of the UCC, as adopted by most states in 2001, now provides that a security interest in chattel paper, negotiable documents, instruments, or investment property may be perfected by filing. The proposed regulations also make various incidental changes throughout the § 301.6323 regulations. Explanation of Provisions I. Adjustment of Dollar Amounts Under section 6323(b) of the Code, a Federal tax lien is not valid against certain interests even though an NFTL has been filed. Section 6323(b)(4) includes, as one such interest, certain tangible personal property purchased in a casual sale. In 1976, the purchase price of such property was required to be less than $250. The limit of $250 is reflected in § 301.6323(b)-1(d)(1) and in examples 1 and 3 contained in § 301.6323(b)-1(d)(3). This limit has been raised in the most recent amendment to section 6323(b)(4) to $1,000. The statutory limit is indexed annually for inflation. After indexing, the amount for 2008 is $1,320. Section 6323(b)(7) protects a mechanic's lienor with respect to residential property subject to the mechanic's lien. In 1976, the protection extended to such property was limited to an amount not more than $1,000. The limit of $1,000 is reflected in § 301.6323(b)-1(g)(1) and in the examples contained in § 301.6323(b)-1(g)(2). This amount was raised to $5,000 in the most recent amendment to section 6323(b)(7). The statutory limit is indexed annually for inflation. After indexing, the amount for 2008 is $6,600. The proposed regulations update § 301.6323(b)-1(d) and
(g)to make the dollar limits consistent with those applicable under the current version of section 6323(b)(4) and (7). Section 301.6323(b)-1(d)(3), *Example 3* , references a $500 limit on household goods exempt from levy, citing Treas. Reg. § 301.6334-1(a)(2). Section 301.6334-1(a)(2) is the regulation under I.R.C. § 6334(a)(2). The amount reflected in section 6334(a)(2) as set forth in the most recent version of the Code is $6,250. The amounts in both section 6334(a)(2) and the corresponding regulation are indexed annually for inflation. After indexing, the applicable amount for 2008 is $7,900. Accordingly, § 301.6323(b)-1(d)(3), *Example 3* , is amended to make the reference to the limit on household goods exempt from levy consistent with the amounts applicable in section 6334(a)(2) and § 301.6334-1(a)(2). II. Removal of Protection for Passbook Loans Section 6323(b)(10) currently protects from a Federal tax lien certain institutions holding deposit-secured loans, to the extent of any loan made without actual notice or knowledge of the Federal tax lien. Prior to the enactment of RRA 1998, section 6323(b)(10) was entitled “passbook loans” and protected from a Federal tax lien an institution granting a loan without actual notice or knowledge of the Federal tax lien, if the loan was secured by an account evidenced by a passbook and if the lending institution was continuously in possession of the passbook from the time the loan was made. Section 301.6323(b)-1(j) reflects this language and, in addition, includes both a definition of “passbook” and an example of the provision's operation. The amendment of section 6323(b)(10) renders the language in the regulations pertaining to passbook accounts obsolete. Because leaving § 301.6323(b)-1(j) in place is misleading and unnecessary in light of the amendment of section 6323(b)(10), the proposed regulations remove § 301.6323(b)-1(j). III. Clarification of Language Authorizing IRS To File NFTLs Electronically Section 301.6323(f)-1(d)(2) sets forth a definition of a Form 668, the form that, when filed, serves as an NFTL. This section includes NFTLs filed by electronic or magnetic media “if a state in which [an NFTL] is filed permits a notice of Federal tax lien to be filed by the use of an electronic or magnetic medium.” Most local recording offices now have the technological capability to accept electronically-filed NFTLs. The proposed regulations amend § 301.6323(f)-1(d)(2) to provide that a Form 668 may be filed either in paper form or electronically. In addition, the proposed regulations specifically define transmission by fax and e-mail as electronic, as opposed to paper, filings. The regulations as amended reflect the IRS's authority to file NFTLs electronically in all situations and allow the IRS to work with local jurisdictions to receive electronically-filed NFTLs if they have the capacity to do so without obtaining permission from the state. IV. Revision of Language on Late Refiling of NFTLs Section 301.6323(g)-1(a) sets forth general principles pertaining to refiling NFTLs. Section 301.6323(g)-1(a)(1) provides in part that if two or more NFTLs are filed with respect to a particular tax assessment, the failure to refile during the specified period in respect to one of the notices does not affect the effectiveness of the refiling of any other NFTL. Section 301.6323(g)-1(a)(3) states in part that the failure to refile an NFTL during the required filing period does not affect the effectiveness of the notice with respect to property that is the subject matter of a suit or that has been levied upon prior to the expiration of the filing period. Section 301.6323(g)-1(a)(4), as well as several of the examples in § 301.6323(g)-1(b)(3) and (c)(3), suggest that a lien may continue to exist when an NFTL is not refiled. These provisions are, to some extent, inconsistent with current IRS practice. Most NFTLs now contain a certificate of release that automatically becomes effective on the date prescribed in the NFTL, which is the date the required refiling period ends. Therefore, if an NFTL that contains a certificate of release is not timely refiled in each jurisdiction where it was originally filed, the lien self-releases and is extinguished in all jurisdictions. See I.R.C. § 6325(f)(1)(A). The extinguishment of the lien invalidates NFTLs filed in other jurisdictions and requires the IRS to file certificates of revocation, as well as new NFTLs, in each jurisdiction where NFTLs were previously filed. The proposed regulations amend these provisions to provide that, with respect to an NFTL that includes a certificate of release, failure to timely refile the NFTL in any jurisdiction where it was originally filed extinguishes the lien, and that when an NFTL is filed in more than one jurisdiction, certificates of revocation as well as new NFTLs must be filed in all the jurisdictions for the lien to be reinstated. V. Revision of References to 6-Year Collection Period Section 6502 generally affords a 10-year period for instituting a proceeding in court or serving a levy to collect a properly assessed tax. The period section 6502 allowed for taking these collection actions was, until 1990, six years. The existing regulations under section 6323(g) do not reflect this change. Instead, subsections
(b)and
(c)of § 301.6323(g)-1, which addresses refiling of NFTLs, imply that the applicable period for collection is six years. *Example 5* of § 301.6323(g)-1(b)(3) references the 6-year period. In addition, several references to a 6-year collection period occur in § 301.6323(g)-1(c)(1), and additional references to the 6-year period occur in *Example 1* in § 301.6323(g)-1(c)(3). The proposed regulations update § 301.6323(g)-1(c) to reflect this change in the law. VI. Incidental Updates Various references and dates contained in the regulations under section 6323 have been rendered obsolete since 1976. The proposed regulations update various provisions throughout the § 301.6323 regulations to make dates more contemporaneous with the present and remove language deemed no longer necessary. In addition, the proposed regulations remove all references to Internal Revenue Service district directors, as these positions were eliminated by the Internal Revenue Service reorganization implemented pursuant to RRA 1998. Proposed Effective Date These regulations are proposed to generally apply with respect to any NFTL filed on or after the date that these regulations are published as final regulations in the **Federal Register** . Special Analyses It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because these regulations do not impose collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Comments and Requests for Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (a signed original and eight
(8)copies) or electronic comments that are timely submitted to the IRS. The IRS and Treasury Department request comments on the clarity of the proposed rules and how they may be made easier to understand. All comments will be available for public inspection and copying. A public hearing will be scheduled if requested in writing by any person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the public hearing will be published in the **Federal Register** . Drafting Information The principal author of these regulations is Debra A. Kohn of the Office of the Associate Chief Counsel (Procedure and Administration). List of Subjects in 26 CFR Part 301 Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements. Proposed Amendments to the Regulations Accordingly, 26 CFR part 301 is proposed to be amended as follows: PART 301—PROCEDURE AND ADMINISTRATION **Paragraph 1.** The authority citation for part 301 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * **Par. 2.** Section 301.6323(b)-1 is amended as follows: 1. Paragraph (d)(1) is revised. 2. Paragraphs (d)(3) *Example 1* and *Example* 3 are revised. 3. Paragraphs (g)(1), and (g)(2) *Example 1* through *Example 3* are revised. 4. Paragraphs (i)(1)(iii) and
(j)are revised. The revisions read as follows: § 301.6323(b)-1 Protection for certain interests even though notice filed.
(d)*Personal property purchased in casual sale* —(1) *In general* . Even though a notice of lien imposed by section 6321 is filed in accordance with § 301.6323(f)-1, the lien is not valid against a purchaser (as defined in § 301.6323(h)-1(f)) of household goods, personal effects, or other tangible personal property of a type described in § 301.6334-1 (which includes wearing apparel, school books, fuel, provisions, furniture, arms for personal use, livestock, and poultry (whether or not the seller is the head of a family); and books and tools of a trade, business, or profession (whether or not the trade, business, or profession of the seller)), purchased, other than for resale, in a casual sale for less than $1,320, effective for 2008 and adjusted each year based on the rate of inflation (excluding interest and expenses described in § 301.6323(e)-1).
(3)* * * Example 1. A, an attorney's widow, sells a set of law books for $200 to B, for B's own use. Prior to the sale a notice of lien was filed with respect to A's delinquent tax liability in accordance with § 301.6323(f)-1. B has no actual notice or knowledge of the tax lien. In addition, B does not know that the sale is one of a series of sales. Because the sale is a casual sale for less than $1,320 and involves books of a profession (tangible personal property of a type described in § 301.6334-1, irrespective of the fact that A has never engaged in the legal profession), the tax lien is not valid against B even though a notice of lien was filed prior to the time of B's purchase. Example 3. In an advertisement appearing in a local newspaper, G indicates that he is offering for sale a lawn mower, a used television set, a desk, a refrigerator, and certain used dining room furniture. In response to the advertisement, H purchases the dining room furniture for $200. H does not receive any information which would impart notice of a lien, or that the sale is one of a series of sales, beyond the information contained in the advertisement. Prior to the sale a notice of lien was filed with respect to G's delinquent tax liability in accordance with § 301.6323(f)-1. Because H had no actual notice or knowledge that substantially all of G's household goods were being sold or that the sale is one of a series of sales, and because the sale is a casual sale for less than $1,320, H does not purchase the dining room furniture subject to the lien. The household goods are of a type described in § 301.6334-1(a)(2) irrespective of whether G is the head of a family or whether all such household goods offered for sale exceed $7,900 in value.
(g)*Residential property subject to a mechanic's lien for certain repairs and improvements* —(1) *In general* . Even though a notice of a lien imposed by section 6321 is filed in accordance with § 301.6323(f)-1, the lien is not valid against a mechanic's lienor (as defined in § 301.6323(h)-1(b)) who holds a lien for the repair or improvement of a personal residence if—
(i)The residence is occupied by the owner and contains no more than four dwelling units; and
(ii)The contract price on the prime contract with the owner for the repair or improvement (excluding interest and expenses described in § 301.6323(e)-1) is not more than $6,600, effective for 2008 and adjusted each year based on the rate of inflation.
(iii)For purposes of paragraph (g)(1)(ii) of this section, the amounts of subcontracts under the prime contract with the owner are not to be taken into consideration for purposes of computing the $6,600 prime contract price. It is immaterial that the notice of tax lien was filed before the contractor undertakes his work or that he knew of the lien before undertaking his work.
(2)* * * Example 1. A owns a building containing four apartments, one of which he occupies as his personal residence. A notice of lien which affects the building is filed in accordance with § 301.6323(f)-1. Thereafter, A enters into a contract with B in the amount of $800, which includes labor and materials, to repair the roof of the building. B purchases roofing shingles from C for $300. B completes the work and A fails to pay B the agreed amount. In turn, B fails to pay C for the shingles. Under local law, B and C acquire mechanic's liens on A's building. Because the contract price on the prime contract with A is not more than $6,600 and under local law B and C acquire mechanic's liens on A's building, the liens of B and C have priority over the Federal tax lien. Example 2. Assume the same facts as in *Example 1,* except that the amount of the prime contract between A and B is $7,100. Because the amount of the prime contract with the owner, A, is in excess of $6,600, the tax lien has priority over the entire amount of each of the mechanic's liens of B and C, even though the amount of the contract between B and C is $300. Example 3. Assume the same facts as in *Example 1,* except that A and B do not agree in advance upon the amount due under the prime contract but agree that B will perform the work for the cost of materials and labor plus 10 percent of such cost. When the work is completed, it is determined that the total amount due is $850. Because the prime contract price is not more than $6,600 and under local law B and C acquire mechanic's liens on A's residence, the liens of B and C have priority over the Federal tax lien.
(i)* * *
(1)* * *
(iii)After the satisfaction of a levy pursuant to section 6332(b), unless and until the Internal Revenue Service delivers to the insuring organization a notice (for example, another notice of levy, a letter, etc.) executed after the date of such satisfaction, that the lien exists.
(j)*Effective/applicability date* . This section applies to any notice of Federal tax lien filed on or after the date these regulations are published as final regulations in the **Federal Register** . **Par. 3.** Section 301.6323(c)-2 is amended as follows: 1. Paragraph (d), *Example 1* through *Example 5,* is revised. 2. Paragraph
(e)is added. The revisions and addition read as follows: § 301.6323(c)-2 Protection for real property construction or improvement financing agreements.
(d)* * * Example 1. A, in order to finance the construction of a dwelling on a lot owned by him, mortgages the property to B. The mortgage, executed January 4, 2006, includes an agreement that B will make cash disbursements to A as the construction progresses. On February 1, 2006, in accordance with § 301.6323(f)-1, a notice of lien is filed and recorded in the public index with respect to A's delinquent tax liability. A continues the construction, and B makes cash disbursements on June 15, 2006, and December 15, 2006. Under local law B's security interest arising by virtue of the disbursements is protected against a judgment lien arising February 1, 2006 (the date of tax lien filing) out of an unsecured obligation. Because B is the holder of a security interest coming into existence by reason of cash disbursements made pursuant to a written agreement, entered into before tax lien filing, to make cash disbursements to finance the construction of real property, and because B's security interest is protected, under local law, against a judgment lien arising as of the time of tax lien filing out of an unsecured obligation, B's security interest has priority over the tax lien. Example 2.
(i)C is awarded a contract for the demolition of several buildings. On March 3, 2004, C enters into a written agreement with D which provides that D will make cash disbursements to finance the demolition and also provides that repayment of the disbursements is secured by any sums due C under the contract. On April 1, 2004, in accordance with § 301.6323(f)-1, a notice of lien is filed with respect to C's delinquent tax liability. With actual notice of the tax lien, D makes cash disbursements to C on August 13, September 13, and October 13, 2004. Under local law D's security interest in the proceeds of the contract with respect to the disbursements is entitled to priority over a judgment lien arising on April 1, 2004 (the date of tax lien filing) out of an unsecured obligation.
(ii)Because D's security interest arose by reason of disbursements made pursuant to a written agreement, entered into before tax lien filing, to make cash disbursements to finance a contract to demolish real property, and because D's security interest is valid under local law against a judgment lien arising as of the time of tax lien filed out of an unsecured obligation, the tax lien is not valid with respect to D's security interest in the proceeds of the demolition contract. Example 3. Assume the same facts as in *Example 2* and, in addition, assume that, as further security for the cash disbursements, the March 3, 2004, agreement also provides for a security interest in all of C's demolition equipment. Because the protection of the security interest arising from the disbursements made after tax lien filing under the agreement is limited under section 6323(c)(3) to the proceeds of the demolition contract and because, under the circumstances, the security interest in the equipment is not otherwise protected under section 6323, the tax lien will have priority over D's security interest in the equipment. Example 4.
(i)On January 3, 2006, F and G enter into a written agreement, whereby F agrees to provide G with cash disbursements, seed, fertilizer, and insecticides as needed by G, in order to finance the raising and harvesting of a crop on a farm owned by G. Under the terms of the agreement F is to have a security interest in the crop, the farm, and all other property then owned or thereafter acquired by G. In accordance with § 301.6323(f)-1, on January 10, 2006, a notice of lien is filed and recorded in the public index with respect to G's delinquent tax liability. On March 3, 2006, with actual notice of the tax lien, F makes a cash disbursement of $5,000 to G and furnishes him seed, fertilizer, and insecticides having a value of $10,000. Under local law F's security interest, coming into existence by reason of the cash disbursement and the furnishing of goods, has priority over a judgment lien arising January 10, 2006 (the date of tax lien filing and recording in the public index) out of an unsecured obligation.
(ii)Because F's security interest arose by reason of a disbursement (including the furnishing of goods) made under a written agreement which was entered into before tax lien filing and which constitutes an agreement to finance the raising or harvesting of a farm crop, and because F's security interest is valid under local law against a judgment lien arising as of the time of tax lien filing out of an unsecured obligation, the tax lien is not valid with respect to F's security interest in the crop even though a notice of lien was filed before the security interest arose. Furthermore, because the farm is property subject to the tax lien at the time of tax lien filing, F's security interest with respect to the farm also has priority over the tax lien. Example 5. Assume the same facts as in *Example 4* and in addition that on October 2, 2006, G acquires several tractors to which F's security interest attaches under the terms of the agreement. Because the tractors are not property subject to the tax lien at the time of tax lien filing, the tax lien has priority over F's security interest in the tractors.
(e)*Effective/applicability date.* This section applies with respect to any notice of Federal tax lien filed on or after the date these regulations are published as final regulations in the **Federal Register** . **Par. 4.** Section 301.6323(f)-1 is amended as follows: 1. Paragraph (d)(2) is revised. 2. Paragraph
(f)is added. The revision and addition read as follows: § 301.6323(f)-1 Place for filing notice; form.
(d)* * *
(2)*Form 668 defined.* The term *Form 668* means either a paper form or a form transmitted electronically, including a form transmitted by facsimile
(fax)or electronic mail (e-mail). A Form 668 must identify the taxpayer, the tax liability giving rise to the lien, and the date the assessment arose regardless of the method used to file the notice of Federal tax lien.
(f)*Effective/applicability date.* This section applies with respect to any notice of Federal tax lien filed on or after the date these regulations are published as final regulations in the **Federal Register** . **Par 5.** Section 301.6323(g)-1 is amended as follows: 1. Paragraphs (a)(1), (a)(4), (b)(3) *Example 1* , (b)(3) *Example 5* , and (c)(1) are revised. 2. Paragraphs (a)(3), (a)(3)(i), and (a)(3)(ii) are redesignated as paragraphs (a)(3)(i), (a)(3)(i)(A), and (a)(3)(i)(B), respectively. 3. The undesignated text following newly-designated paragraph (a)(3)(i)(B) is designated as paragraph (a)(3)(ii). 4. Newly-designated paragraph (a)(3)(i) introductory text is revised. 5. Newly-designated paragraph (a)(3)(i)(A) is revised. 6. Newly-designated paragraph (a)(3)(ii) is revised. 7. Paragraph (c)(2) is removed. 8. Paragraph (c)(3) is redesignated as paragraph (c)(2) and revised. 9. Paragraph
(d)is added. The revisions and addition read as follows: § 301.6323(g)-1 Refiling of notice of tax lien.
(a)*In general* —(1) *Requirement to refile.* In order to continue the effect of a notice of lien, the notice must be refiled in the place described in paragraph
(b)of this section during the required filing period (described in paragraph
(c)of this section). If two or more notices of lien are filed with respect to a particular tax assessment, and each notice of lien contains a certificate of release that releases the lien when the required refiling period ends, the failure to comply with the provisions of paragraphs (b)(1)(i) and
(c)of this section in respect to one of the notices of lien releases the lien and renders ineffective the refiling of any other notice of lien. .
(3)*Effect of failure to refile.*
(i)If the Internal Revenue Service fails to refile a notice of lien in the manner described in paragraphs
(b)and
(c)of this section, the notice of lien is not effective, after the expiration of the required filing period, as against any person without regard to when the interest of the person in the property subject to the lien was acquired. If a notice of lien contains a certificate of release that releases the lien at the end of the required refiling period and the notice of lien is not refiled during this period, the lien is extinguished and the notice of lien is ineffective with respect to—
(A)Property which is the subject matter of a suit, to which the United States is a party, commenced prior to the expiration of the required filing period; and
(ii)However, if a notice of lien does not contain a certificate of release that releases the lien at the end of the required refiling period, the failure to refile during the required refiling period will not affect the existence of the lien nor the effectiveness of the notice with respect to property which is the subject matter of a suit commenced prior to the expiration of the required refiling period, or property which has been levied upon prior to the expiration of such period.
(4)*Filing of new notice.* If a notice of lien is not refiled, and the notice of lien contains a certificate of release that automatically releases the lien when the required refiling period ends, the lien is released as of that date and is no longer in existence. The Internal Revenue Service must revoke the release before it can file a new notice of lien. This new filing must meet the requirements of section 6323(f) and § 301.6323(f)-1 and is effective from the date on which such filing is made.
(b)* * *
(3)*Examples.* The following examples illustrate the provisions of this section: Example 1. A, a delinquent taxpayer, is a resident of State M and owns real property in State N. In accordance with § 301-6323-f(1), notices of lien are filed in States M and N. The notices of lien contain certificates of release that release the lien at the end of the required refiling period. In order to continue the effect of the notice of lien filed in either M or N, the IRS must refile, during the required refiling period, the notice of lien with the appropriate office in M as well as with the appropriate office in N. Example 5. D, a delinquent taxpayer, is a resident of State M and owns real property in States N and O. In accordance with § 301.6323(f)-1, the Internal Revenue Service files notices of lien in M, N, and O States. Nine years and 6 months after the date of the assessment shown on the notice of lien, D establishes his residence in P, and at that time the Internal Revenue Service receives from D a notification of his change in residence in accordance with the provisions of paragraph (b)(2) of this section. On a date which is 9 years and 7 months after the date of the assessment shown on the notice of lien, the IRS properly refiles notices of lien in M, N, and O which refilings are sufficient to continue the effect of each of the notices of lien. The Internal Revenue Service is not required to file a notice of lien in P because D did not notify the Internal Revenue Service of his change of residence to P more than 89 days prior to the date each of the refilings in M, N, and O was completed.
(c)*Required filing period* —(1) *In general.* For the purpose of this section, except as provided in paragraph (c)(2) of this section, the term *required filing period* means—
(i)The 1-year period ending 30 days after the expiration of 10 years after the date of the assessment of the tax; and
(ii)The 1-year period ending with the expiration of 10 years after the close of the preceding required refiling period for such notice of lien.
(2)*Examples.* The following examples illustrate the provisions of this paragraph: Example 1. On March 10, 1998, an assessment of tax is made against B, a delinquent taxpayer, and a lien for the amount of the assessment arises on that date. On July 10, 1998, in accordance with § 301.6323(f)-1, a notice of lien is filed. The notice of lien filed on July 10, 1998, is effective through April 9, 2008. The first required refiling period for the notice of lien begins on April 10, 2007, and ends on April 9, 2008. A refiling of the notice of lien during that period will extend the effectiveness of the notice of lien filed on July 10, 1998, through April 9, 2018. The second required refiling period for the notice of lien begins on April 10, 2017, and ends on April 9, 2018. Example 2. Assume the same facts as in *Example 1* , except that the Internal Revenue Service fails to refile a notice of lien during the first required refiling period (April 10, 2007, through April 9, 2008). A notice of lien is filed on June 9, 2009, in accordance with § 301.6323(f)-1. This notice is ineffective if the original notice contained a certificate of release, as the certificate of release would have had the effect of extinguishing the lien as of April 10, 2008. The Internal Revenue Service could revoke the release and file a new notice of lien, which would be effective as of the date it was filed.
(d)*Effective/applicability date.* This section applies with respect to any notice of Federal tax lien filed on or after the date these regulations are published as final regulations in the **Federal Register** . **Par. 6.** Section 301.6323(h)-1 is amended as follows: 1. Paragraphs (a)(2)(ii) and (a)(3) are revised. 2. A new paragraph
(h)is added. The revisions and addition read as follows: § 301.6323(h)-1 Definitions.
(a)* * *
(2)* * *
(ii)The following example illustrates the application of paragraph (a)(2): Example.
(i)Under the law of State X, a security interest in certificated securities, negotiable documents, or instruments may be perfected, and hence protected against a judgment lien, by filing or by the secured party taking possession of the collateral. However, a security interest in such intangible personal property is considered to be temporarily perfected for a period of 20 days from the time the security interest attaches, to the extent that it arises for new value given under an authenticated security agreement. Under the law of X, a security interest attaches to such collateral when there is an agreement between the creditor and debtor that the interest attaches, the debtor has rights in the property, and consideration is given by the creditor. Under the law of X, in the case of temporary perfection, the security interest in such property is protected during the 20-day period against a judgment lien arising, after the security interest attaches, out of an unsecured obligation. Upon expiration of the 20-day period, the holder of the security interest must perfect its security interest under local law.
(ii)Because the security interest is perfected during the 20-day period against a subsequent judgment lien arising out of an unsecured obligation, and because filing or the taking of possession before the conclusion of the period of temporary perfection is not considered, for purposes of paragraph (a)(2)(i) of this section, to be a requisite action which relates back to the beginning of such period, the requirements of this paragraph are satisfied. Because filing or taking possession is a condition precedent to continued perfection, filing or taking possession of the collateral is a requisite action to establish such priority after expiration of the period of temporary perfection. If there is a lapse of perfection for failure to take possession, the determination of when the security interest exists (for purposes of protection against the tax lien) is made without regard to the period of temporary perfection.
(3)*Money or money's worth.* For purposes of this paragraph, the term *money or money's worth* includes money, a security (as defined in paragraph
(d)of this section), tangible or intangible property, services, and other consideration reducible to a money value. Money or money's worth also includes any consideration which otherwise would constitute money or money's worth under the preceding sentence which was parted with before the security interest would otherwise exist if, under local law, past consideration is sufficient to support an agreement giving rise to a security interest. A firm commitment to part with money, a security, tangible or intangible property, services, or other consideration reducible to a money value does not, in itself, constitute a consideration in money or money's worth. A relinquishing or promised relinquishment of dower, curtesy, or of a statutory estate created in lieu of dower or curtesy, or of other marital rights is not a consideration in money or money's worth. Nor is love and affection, promise of marriage, or any other consideration not reducible to a money value a consideration in money or money's worth.
(h)*Effective/applicability date.* This section applies as of the date these regulations are published as final regulations in the **Federal Register** . Linda E. Stiff, Deputy Commissioner for Services and Enforcement. [FR Doc. E8-8082 Filed 4-16-08; 8:45 am] BILLING CODE 4830-01-P CENTRAL INTELLIGENCE AGENCY 32 CFR Part 1900 Freedom of Information Act; Implementation AGENCY: Central Intelligence Agency. ACTION: Proposed rule. SUMMARY: Consistent with the Freedom of Information Act (FOIA), as amended by the “Openness Promotes Effectiveness in our National Government Act of 2007,” and Executive Order 13392, the Central Intelligence Agency
(CIA)has undertaken and completed a review of its public FOIA regulations that govern certain aspects of its processing of FOIA requests. As a result of this review, the Agency proposes to revise its FOIA regulations to more clearly reflect the current CIA organizational structure, record system configuration, and FOIA policies and practices and to eliminate ambiguous, redundant and obsolete regulatory provisions. As required by the FOIA, the Agency is providing an opportunity for interested persons to submit comments on these proposed regulations. DATES: Submit comments on or before May 19, 2008. ADDRESSES: Submit comments in writing to the Director of Information Management Services, Central Intelligence Agency, Washington, DC 20505, or by fax to 703-613-3007. FOR FURTHER INFORMATION CONTACT: Joseph W. Lambert, Director of Information Management Services, Central Intelligence Agency, Washington, DC 20505 or by telephone, 703-613-1352. SUPPLEMENTARY INFORMATION: Consistent with the FOIA, as amended by the “Openness Promotes Effectiveness in our National Government Act of 2007,” and Executive Order 13392, the CIA has undertaken and completed a review of its public FOIA regulations that govern certain aspects of its processing of FOIA requests. As a result of this review, the Agency proposes to revise its FOIA regulations to more clearly reflect the current CIA organizational structure, record system configuration, and FOIA policies and practices and to eliminate ambiguous, redundant and obsolete regulatory provisions. These proposed regulatory changes are intended to enhance the administration and operations of the Agency's FOIA program by increasing the transparency and clarity of the regulations governing the Agency's FOIA program. The proposed regulations would establish the positions and responsibilities of the Agency's Chief FOIA Officer, the FOIA Public Liaison and the FOIA Requester Service Center in the Agency's public FOIA regulations. Following the promulgation of Executive Order 13392, the Director of the Central Intelligence Agency designated a senior official to serve as the CIA's Chief FOIA Officer with Agency-wide responsibility for efficient and appropriate compliance with the FOIA. In addition, the Agency created a FOIA Requester Service Center and designated FOIA Public Liaisons to enhance the operation of the Agency's FOIA program and the Agency's responsiveness to FOIA requesters and the public. Consistent with both Executive Order 13392 and the “Openness Promotes Effectiveness in our National Government Act of 2007,” the proposed regulations incorporate into the CIA's public FOIA regulations the important functions the Agency's Chief FOIA Officer, the FOIA Public Liaison and the FOIA Requester Service Center have been performing for the past several years. By formally recognizing the key roles these entities play in the Agency's FOIA processes, the proposed regulations promote the administration of a citizen-centered FOIA program and provide the public with important information about the assistance these entities can offer to FOIA requesters and the public. The proposed regulations would eliminate current regulatory provisions that have had the potential to cause confusion and ambiguity and would more clearly reflect the Agency's current FOIA policies and practices. The proposed regulations would clarify and confirm the Agency's current FOIA practices of processing FOIA requests and appeals on a “first in, first out” basis using two or more processing queues based on the amount of work or time or both involved and of moving a FOIA request to the front of the processing queue when the Agency has granted that requester's request for expedited processing. The proposed regulations would eliminate current regulatory provisions that have had the potential to cause confusion and ambiguity regarding how a requester may appeal a denial of a fee waiver request and how the Agency would adjudicate that appeal. With this change, the Agency's public FOIA regulations would contain clear guidance on how requesters may exercise their rights to appeal denials of fee waiver requests and would remove any ambiguity concerning the responsibility of the Agency Release Panel to adjudicate such appeals. List of Subjects in 32 CFR Part 1900 Classified information, Freedom of Information. As stated in the preamble, the CIA proposes to amend 32 CFR part 1900 as follows: PART 1900—PUBLIC ACCESS TO CIA RECORDS UNDER THE FREEDOM OF INFORMATION ACT
(FOIA)1. Authority citation for part 1900 is revised to read as follows: Authority: 50 U.S.C. 401-442; 50 U.S.C. 403a-403v; 5 U.S.C. 552; E.O. 13292, 68 FR 15315-15334, 3 CFR, 2004 Comp., p. 196-218; E.O. 13392, 70 FR 75373-75377, 3 CFR, 2006 Comp., p. 216-200. 2. Amend § 1900.02 by adding new paragraphs (p), (q), and
(r)to read as follows: § 1900.02 Definitions.
(p)*Chief FOIA Officer* means the senior CIA official, at the CIA's equivalent of the Assistant Secretary level, who has been designated by the Director of the CIA to have Agency-wide responsibility for the CIA's efficient and appropriate compliance with the FOIA.
(q)*FOIA Requester Service Center* means the office within the CIA where a FOIA requester may direct inquiries regarding the status of a FOIA request or an expression of interest he or she filed at the CIA, requests for guidance on narrowing or further defining the nature or scope of his or her FOIA request, and requests for general information about the FOIA program at the CIA.
(r)*FOIA Public Liaison* means the CIA supervisory official(s) who shall assist in the resolution of any disputes between a FOIA requester and the Agency and to whom a FOIA requester may direct a concern regarding the service he or she has received from CIA and who shall respond on behalf of the Agency as prescribed in these regulations. 3. Revise § 1900.03 to revise to read as follows: § 1900.03 Contact for general information and requests.
(a)To file a FOIA request, an expression of interest, or an administrative appeal, please direct your written communication to CIA Information and Privacy Coordinator, Central Intelligence Agency, Washington, DC 20505, or via facsimile at
(703)613-3007, in accordance with the requirements of these regulations.
(b)To inquire about the status of a FOIA request or an expression of interest, to request guidance on narrowing or further defining the nature or scope of a FOIA request, or to obtain general information about the FOIA program at CIA, please direct your inquiry to the CIA FOIA Requester Service Center, Central Intelligence Agency, Washington, DC 20505, via facsimile at
(703)613-3007, or via telephone at
(703)613-1287. Collect calls cannot be accepted.
(c)If you are a FOIA requester with a concern about the service you received from the CIA or a member of the public with a suggestion, comment, or complaint regarding the Agency's administration of the FOIA, please direct your concern to the FOIA Public Liaison, Central Intelligence Agency, Washington, DC 20505, via facsimile at
(703)613-3007, or via telephone at
(703)613-1287. Collect calls cannot be accepted. 4. Revise § 1900.04 to read as follows: § 1900.04 Suggestions and complaints. The CIA remains committed to administering a results-oriented and citizen-centered Freedom of Information Act program, to processing requests in an efficient, timely and appropriate manner, and to working with requesters and the public to continuously improve Agency FOIA operations. The Agency welcomes suggestions, comments, or complaints regarding its administration of the FOIA. Members of the public shall address all such communications to the FOIA Public Liaison as specified at 32 CFR 1900.03. The Agency will respond as determined feasible and appropriate under the circumstances. Requesters seeking to raise concerns about the service received from the CIA FOIA Requester Service Center may contact the FOIA Public Liaison after receiving an initial response from the CIA FOIA Requester Service Center. The FOIA Public Liaison shall assist in the appropriate resolution of any disputes between a FOIA requester and the Agency. 5. Revise § 1900.11 to read as follows: § 1900.11 Preliminary information. Members of the public shall address all communications as specified at 32 CFR 1900.03. Any CIA office or CIA personnel receiving a written communication from a member of the public that requests information or that references the FOIA shall expeditiously forward the communication to the CIA Information and Privacy Coordinator. CIA will not accept a request for information under the FOIA or an appeal of an adverse determination submitted by a member of the public who owes outstanding fees for information services at this or other federal agencies and will terminate the processing of any pending requests submitted by such persons to the CIA or to another agency. 6. Revise § 1900.12 to read as follows: § 1900.12 Requirements as to form and content.
(a)*Required information.* Requesters should identify their written communication as a request for information under the Freedom of Information Act. Requests must reasonably describe the records of interest sought by the requester. This means that the records requested must be described sufficiently so that Agency professionals who are familiar with the subject area of the request are able, with a reasonable amount of effort, to determine which particular records are within the scope of the request. All requesters are encouraged to be as specific as possible in describing the records they are seeking by including the date or date range, the title of the record, the type of record (such as memorandum or report), the specific event or action to which the record refers, and the subject matter but requests for electronic communications must specify the dates and parties. Extremely broad or vague requests or requests requiring research do not satisfy this requirement.
(b)*Additional information for fee determination.* In addition, a requester should provide sufficient information to allow us to determine the appropriate fee category. A requester should also provide an agreement to pay all applicable fees or fees not to exceed a certain amount or request a fee waiver.
(c)*Otherwise.* The CIA FOIA Requester Service Center may contact a requester to seek additional or clarifying information or to assist the requester in reformulating his or her request when the request does not meet the requirements of these regulations. A requester seeking to narrow or further define the nature or scope of his or her request may contact the CIA FOIA Requester Service Center as specified at 32 CFR 1900.03. § 1900.13 [Amended] 7. Amend § 1900.13 by removing and reserving paragraph (c). 8. Amend § 1900.33 by revising paragraph
(b)to read as follows: § 1900.33 Allocation of resources; agreed extensions of time.
(b)*Discharge of FOIA responsibilities.* The Chief FOIA Officer shall monitor the Agency's compliance with the requirements of the FOIA and administration of its FOIA program. The Chief FOIA Officer shall keep the Director of the CIA, the General Counsel of the CIA, and other officials appropriately informed regarding the Agency's implementation of the FOIA and make recommendations, as appropriate. The Chief FOIA Officer shall designate one of more CIA FOIA Public Liaisons who shall report to the Chief FOIA Officer. The CIA FOIA Public Liaison shall be responsible for assisting in reducing delays, increasing transparency and understanding of the status of requests, and assisting in the resolution of disputes between requesters and the Agency. Components shall exercise due diligence in their responsibilities under the FOIA. Components must allocate a reasonable level of resources to process accepted FOIA requests and administrative appeals on a “first in, first out” basis using two or more processing queues based on the amount of work or time or both involved to ensure that smaller as well as larger cases receive equitable attention, except that when a request for expedited processing has been granted under these regulations components must move that request to the front of the processing queue. § 1900.34 [Amended] 9. Amend § 1900.34 by removing and reserving paragraph (a). Joseph W. Lambert, Director, Information Management Services. [FR Doc. E8-8090 Filed 4-16-08; 8:45 am] BILLING CODE 6310-02-P DEPARTMENT OF AGRICULTURE Forest Service 36 CFR Part 242 DEPARTMENT OF THE INTERIOR Fish and Wildlife Service 50 CFR Part 100 [FWS-R7-SM-2008-0020; 70101-1261-0000L6] RIN 1018-AV69 Subsistence Management Regulations for Public Lands in Alaska—2008-09 and 2009-10 Subsistence Taking of Wildlife Regulations AGENCIES: Forest Service, Agriculture; Fish and Wildlife Service, Interior. ACTION: Proposed rule. SUMMARY: This proposed rule would establish regulations for hunting and trapping seasons, harvest limits, methods, and means related to taking of wildlife for subsistence uses during the 2008-09 and 2009-10 regulatory years. These regulations have been subject to an annual public review cycle, but starting in 2008 the Federal Subsistence Management Program will provide a public review process for subsistence hunting and trapping regulations in even-numbered years and subsistence fishing and shellfish regulations in odd-numbered years. The Program will also address customary and traditional use determinations during the applicable biennial cycle. This cycle adjustment does not affect the public's ability to submit special action requests or requests for reconsideration, as outlined in the regulations. When final, the resulting rulemaking will replace the subsistence wildlife taking regulations, which expire on June 30, 2008. This rule would also amend the customary and traditional use determinations of the Federal Subsistence Board and the general regulations on taking of wildlife. DATES: *Public meetings:* The Board will discuss and evaluate the proposed regulatory changes during a public meeting scheduled to be held in Anchorage, AK, beginning on April 29, 2008. In addition, the Federal Subsistence Regional Advisory Councils held public meetings to receive proposals to change this proposed rule on several dates from August 28, 2007, through October 30, 2007. See SUPPLEMENTARY INFORMATION for additional information on the public meetings. *Public comments:* We will accept comments received or postmarked by April 22, 2008. In addition, the Federal Subsistence Board accepted written public comments and proposals to change this proposed rule until January 4, 2008. ADDRESSES: *Public meetings:* The Federal Subsistence Board will meet at the Coast International Inn at 3450 Aviation Avenue, Anchorage, Alaska 99517. *Public comments:* You may submit comments by one of the following methods: • *Federal eRulemaking Portal: http://www.regulations.gov* . Follow the instructions for submitting comments. • *U.S. mail or hand-delivery:* Public Comments Processing, Attn: RIN 1018-AV69; Division of Policy and Directives Management; U.S. Fish and Wildlife Service; 4401 N. Fairfax Drive, Suite 222; Arlington, VA 22203. We will not accept e-mail or faxes. We will post all comments on *http://www.regulations.gov* . This generally means that we will post any personal information you provide us (see the Public Review Process section below for more information). FOR FURTHER INFORMATION CONTACT: Chair, Federal Subsistence Board, c/o U.S. Fish and Wildlife Service, Attention: Peter J. Probasco, Office of Subsistence Management;
(907)786-3888. For questions specific to National Forest System lands, contact Steve Kessler, Regional Subsistence Program Leader, USDA, Forest Service, Alaska Region;
(907)786-3592. SUPPLEMENTARY INFORMATION: Background Under title VIII of the Alaska National Interest Lands Conservation Act (ANILCA) (16 U.S.C. 3111-3126), the Secretary of the Interior and the Secretary of Agriculture (Secretaries) jointly implement the Federal Subsistence Management Program. This program grants a preference for subsistence uses of fish and wildlife resources on Federal public lands and waters in Alaska. The Secretaries first published regulations to carry out this program in the **Federal Register** on May 29, 1992 (57 FR 22940). The Program has subsequently amended these regulations several times. Because this program is a joint effort between Interior and Agriculture, these regulations are located in two titles of the Code of Federal Regulations (CFR): Title 36, “Parks, Forests, and Public Property,” and title 50, “Wildlife and Fisheries,” at 36 CFR 242.1-28 and 50 CFR 100.1-28, respectively. The regulations contain subparts as follows: Subpart A, General Provisions; Subpart B, Program Structure; Subpart C, Board Determinations; and Subpart D, Subsistence Taking of Fish and Wildlife. Federal Subsistence Board Consistent with subparts A, B, and C of these regulations, the Departments established a Federal Subsistence Board to administer the Federal Subsistence Management Program. The Board's composition includes • A Chair appointed by the Secretary of the Interior with concurrence of the Secretary of Agriculture; • the Alaska Regional Director, U.S. Fish and Wildlife Service; • the Alaska Regional Director, U.S. National Park Service; • the Alaska State Director, U.S. Bureau of Land Management; • the Alaska Regional Director, U.S. Bureau of Indian Affairs; and • the Alaska Regional Forester, U.S. Forest Service. Through the Board, these agencies participated in the development of regulations for subparts A, B, and C, which set forth the basic program, and they continue to work together on regularly revising the subpart D regulations, which, among other things, set forth specific harvest seasons and limits. Federal Subsistence Regional Advisory Councils In administering the program, the Secretaries divide Alaska into 10 subsistence resource regions, each of which is represented by a Regional Council. The Regional Councils provide a forum for rural residents with personal knowledge of local conditions and resource requirements to have a meaningful role in the subsistence management of fish and wildlife on Alaska public lands. The Regional Council members represent varied geographical, cultural, and user diversity within each region. Public Review Process—Comments, Proposals, and Public Meetings The Regional Councils had a substantial role in reviewing this proposed rule and making recommendations for the final rule. The Federal Subsistence Board (Board), through the Regional Councils, held meetings on this proposed rule at the following Alaska locations, on the following dates: Region 1—Southeast Regional Council Haines September 24, 2007. Region 2—Southcentral Regional Council Anchorage October 16, 2007. Region 3—Kodiak/Aleutians Regional Council Kodiak September 20, 2007. Region 4—Bristol Bay Regional Council Naknek October 1, 2007. Region 5—Yukon-Kuskokwim Delta Regional Council Marshall September 5, 2007. Region 6—Western Interior Regional Council Galena October 30, 2007. Region 7—Seward Peninsula Regional Council Nome October 10, 2007. Region 8—Northwest Arctic Regional Council Kotzebue September 4, 2007. Region 9—Eastern Interior Regional Council Fairbanks October 16, 2007. Region 10—North Slope Regional Council Barrow August 28, 2007. We published notice of specific dates, times, and meeting locations in local and Statewide newspapers prior to the meetings. The amount of work on each Regional Council's agenda determined the length of each Regional Council meeting. The Board made the written proposals to change the subpart D hunting and trapping regulations and subpart C customary and traditional use determinations available for comment last summer via the Federal Subsistence Management Program's Web site: *http://alaska.fws.gov/asm/index.cfm* . During November 2007, the Board compiled the written proposals and distributed them for an additional public review in a 30-day public comment period. During the public comment period for submitted proposals, which ended on January 4, 2008, the Board accepted written public comments on distributed proposals. The proposals may be viewed at: *http://alaska.fws.gov/asm/law.cfm?wp=1* . The Regional Councils held a second series of meetings in February and March 2008, to assist the Councils in developing recommendations on proposals to the Board. The Regional Councils accepted comments on the published proposals to change hunting and trapping and customary and traditional use determination regulations at those winter meetings. The Board will discuss and evaluate the proposed changes to the subsistence management regulations during a public meeting scheduled to be held in Anchorage, AK, beginning on April 29, 2008. The Council Chairs, or their designated representatives, will present their Council's recommendations at the Board meeting. You may provide additional oral testimony on specific proposals before the Board at that time. At that public meeting, the Board will then deliberate and take final action on proposals received that request changes to this proposed rule. Proposals to the Board to modify wildlife harvest regulations and customary and traditional use determinations must include the following information:
(a)Name, address, and telephone number;
(b)The section and/or paragraph of this proposed rule for which you are suggesting changes;
(c)A statement explaining why the change is necessary;
(d)The proposed wording change; and
(e)Any additional information that you believe will help the Board in evaluating your proposal. The Board rejects proposals that fail to include the above information, or proposals that are beyond the scope of authorities in §_.24, subpart C (the regulations governing customary and traditional use determinations), and §§_.25, and _.26, subpart D (the general and specific regulations governing the subsistence take of wildlife). During the April 29, 2008 meeting, the Board may defer review and action on some proposals to allow time for local cooperative planning efforts, or to acquire additional needed information, or if workload exceeds work capacity of staff, Regional Councils, or the Board. These deferrals will be based on recommendations of the affected Regional Council, staff members, and on the basis of least harm to the subsistence user and the resource involved. The Board may consider and act on alternatives that address the intent of a proposal while differing in approach. Proposed Changes From the 2007-08 Wildlife Seasons and Harvest Limit Regulations Subpart D regulations are subject to periodic review and revision. Through 2007, the public review process was annual. Starting in 2008, the Federal Subsistence Management Program will address subsistence hunting and trapping regulations in even-numbered years and subsistence fishing and shellfishing regulations in odd-numbered years. The Board will also address customary and traditional use determinations during each applicable biennial cycle. This change in schedule is necessary due to Federal budget priorities. The text of the 2007-08 subparts C and D final rule published December 27, 2007 (72 FR 73426), serves as the foundation for this 2008-10 subparts C and D proposed rule. The regulations relating to wildlife contained in this proposed rule will take effect on July 1, 2008, unless elements are changed by subsequent Board action following the public review process outlined above in this document. Conformance With Statutory and Regulatory Authorities National Environmental Policy Act—A Draft Environmental Impact Statement
(DEIS)that described four alternatives for developing a Federal Subsistence Management Program was distributed for public comment on October 7, 1991. The Final Environmental Impact Statement
(FEIS)published on February 28, 1992. The Record of Decision
(ROD)on Subsistence Management for Federal Public Lands in Alaska was signed April 6, 1992. The selected alternative in the FEIS (Alternative IV) defined the administrative framework of an annual regulatory cycle for subsistence regulations. An environmental assessment prepared in 1997 dealt with the expansion of Federal jurisdiction over fisheries and is available at the office listed under FOR FURTHER INFORMATION CONTACT . The Secretary of the Interior, with the concurrence of the Secretary of Agriculture, determined that the expansion of Federal jurisdiction does not constitute a major Federal action significantly affecting the human environment and, therefore, signed a Finding of No Significant Impact. Compliance with section 810 of ANILCA—We completed a section 810 analysis under ANILCA as part of the FEIS process on the Federal Subsistence Management Program. The intent of all Federal subsistence regulations is to accord subsistence uses of fish and wildlife on public lands a priority over the taking of fish and wildlife on such lands for other purposes, unless restriction is necessary to conserve healthy fish and wildlife populations. The final section 810 analysis determination appeared in the April 6, 1992, ROD and concluded that the Federal Subsistence Management Program, under Alternative IV with an annual process for setting subsistence regulations, may have some local impacts on subsistence uses, but will not likely restrict subsistence uses significantly. During the environmental assessment process for extending fisheries jurisdiction, an evaluation of the effects of this rule was also conducted in accordance with section 810. This evaluation supports the Secretaries' determination that the rule will not reach the “may significantly restrict” threshold for notice and hearings under ANILCA section 810(a) for any subsistence resources or uses. Paperwork Reduction Act—The information collection requirements contained in this rule have been approved by the Office of Management and Budget
(OMB)under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ) and assigned OMB control number 1018-0075, which expires October 31, 2009. We may not conduct or sponsor, and you are not required to respond to, a collection of information unless it displays a current valid OMB control number. Regulatory Planning and Review (Executive Order 12866) The Office of Management and Budget
(OMB)has determined that this rule is not significant and has not reviewed this rule under Executive Order 12866. OMB bases its determination upon the following four criteria:
(a)Whether the rule will have an annual effect of $100 million or more on the economy or adversely affect an economic sector, productivity, jobs, the environment, or other units of the government.
(b)Whether the rule will create inconsistencies with other agencies' actions.
(c)Whether the rule will materially affect entitlements, grants, user fees, loan programs, or the rights and obligations of their recipients.
(d)Whether the rule raises novel legal or policy issues. Regulatory Flexibility Act The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 *et seq.* ) requires preparation of flexibility analyses for rules that will have a significant effect on a substantial number of small entities, which include small businesses, organizations, or governmental jurisdictions. This rule does not restrict any existing sport or commercial use of wildlife on public lands, and wildlife uses will continue at essentially the same levels as they currently occur. In general, the resources to be harvested under this rule are already being harvested and consumed by the local harvester and do not result in an additional dollar benefit to the economy. However, we estimate that 2 million pounds of meat are harvested by subsistence users annually and, if given an estimated dollar value of $3.00 per pound, would equate to about $6 million in food value Statewide. The Departments certify based on the above figures that this rulemaking will not have a significant economic effect on a substantial number of small entities within the meaning of the Regulatory Flexibility Act. Small Business Regulatory Enforcement Fairness Act Under the Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 801 *et seq.* ), this rule is not a major rule. It does not have an effect on the economy of $100 million or more, will not cause a major increase in costs or prices for consumers, and does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. Executive Order 12630 Title VIII of ANILCA requires the Secretaries to administer a subsistence priority on public lands. The scope of this program is limited by definition to certain public lands. Likewise, these regulations have no potential takings of private property implications as defined by Executive Order 12630. Unfunded Mandates Reform Act The Secretaries have determined and certify pursuant to the Unfunded Mandates Reform Act, 2 U.S.C. 1502 *et seq.,* that this rulemaking will not impose a cost of $100 million or more in any given year on local or State governments or private entities. The implementation of this rule is by Federal agencies and there is no cost imposed on any State or local entities or tribal governments. Executive Order 12988 The Secretaries have determined that these regulations meet the applicable standards provided in sections 3(a) and 3(b)(2) of Executive Order 12988, regarding civil justice reform. Executive Order 13132 In accordance with Executive Order 13132, the rule does not have sufficient Federalism implications to warrant the preparation of a Federalism Assessment. Title VIII of ANILCA precludes the State from exercising subsistence management authority over fish and wildlife resources on Federal lands unless it meets certain requirements. Executive Order 13175 In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), Executive Order 13175, and 512 DM 2, we have evaluated possible effects on Federally recognized Indian tribes and have determined that there are no substantial direct effects. The Bureau of Indian Affairs is a participating agency in this rulemaking. Executive Order 13211 On May 18, 2001, the President issued Executive Order 13211 on regulations that significantly affect energy supply, distribution, or use. This Executive Order requires agencies to prepare Statements of Energy Effects when undertaking certain actions. This rule is not a significant regulatory action under Executive Order 13211, affecting energy supply, distribution, or use, and no Statement of Energy Effects is required. *Drafting Information—* Theo Matuskowitz drafted these regulations under the guidance of Peter J. Probasco of the Office of Subsistence Management, Alaska Regional Office, U.S. Fish and Wildlife Service, Anchorage, Alaska. Additional assistance was provided by: • Charles Ardizzone, Alaska State Office, Bureau of Land Management; • Sandy Rabinowitch and Nancy Swanton, Alaska Regional Office, National Park Service; • Drs. Warren Eastland and Glenn Chen, Alaska Regional Office, Bureau of Indian Affairs; • Jerry Berg and Carl Jack, Alaska Regional Office, U.S. Fish and Wildlife Service; and • Steve Kessler, Alaska Regional Office, U.S. Forest Service. List of Subjects 36 CFR Part 242 Administrative practice and procedure, Alaska, Fish, National forests, Public lands, Reporting and recordkeeping requirements, Wildlife. 50 CFR Part 100 Administrative practice and procedure, Alaska, Fish, National forests, Public lands, Reporting and recordkeeping requirements, Wildlife. For the reasons set out in the preamble, the Federal Subsistence Board proposes to amend 36 CFR part 242 and 50 CFR part 100 for the 2008-10 regulatory years. Dated: February 22, 2008. Peter J. Probasco, Acting Chair, Federal Subsistence Board, Assistant Regional Director, Office of Subsistence Management, U.S. Fish and Wildlife Service. Dated: February 22, 2008. Steve Kessler, Subsistence Program Leader, USDA—Forest Service. [FR Doc. E8-7854 Filed 4-16-08; 8:45 am] BILLING CODE 3410-11-P, 4310-55-P DEPARTMENT OF AGRICULTURE Forest Service 36 CFR Part 242 DEPARTMENT OF THE INTERIOR Fish and Wildlife Service 50 CFR Part 100 [FWS-R7-EA-2007-0025; 70101-1335-0064L6] RIN 1018-AV72 Subsistence Management Regulations for Public Lands in Alaska—2009-2010 and 2010-2011 Subsistence Taking of Fish and Shellfish Regulations AGENCIES: Forest Service, Agriculture; Fish and Wildlife Service, Interior. ACTION: Proposed rule. SUMMARY: This proposed rule would establish regulations for fishing seasons, harvest limits, methods, and means related to taking of fish and shellfish for subsistence uses during the 2009-2010 and 2010-2011 regulatory years. These regulations have been subject to an annual public review cycle, but starting in 2008 the Federal Subsistence Management Program will provide a public review process for subsistence hunting and trapping regulations in even-numbered years and subsistence fishing and shellfishing regulations in odd-numbered years. The Program will also address customary and traditional use determinations during the applicable biennial cycle. This cycle adjustment does not affect the public's ability to submit special action requests or requests for reconsideration, as outlined in the regulations. When final, the resulting rulemaking would replace the subsistence fish and shellfish taking regulations that will expire on March 31, 2009. This rule would also amend the customary and traditional use determinations of the Federal Subsistence Board and the general regulations on taking of fish and shellfish. DATES: We will accept comments and proposals received or postmarked on or before June 30, 2008. Federal Subsistence Regional Advisory Councils (Regional Councils) will hold public meetings on this proposed rule between August 24, 2008, and October 25, 2008. See SUPPLEMENTARY INFORMATION for additional information on the public meetings. ADDRESSES: You may submit comments by one of the following methods: • *Federal eRulemaking Portal: http://www.regulations.gov.* Follow the instructions for submitting comments. • *U.S. mail or hand-delivery:* Public Comments Processing, Attn: RIN 1018-AV72; Division of Policy and Directives Management; U.S. Fish and Wildlife Service; 4401 N. Fairfax Drive, Suite 222; Arlington, VA 22203. We will not accept e-mail or faxes. We will post all comments on *http://www.regulations.gov.* This generally means that we will post any personal information you provide us (see the Public Review Process section below for more information). FOR FURTHER INFORMATION CONTACT: Chair, Federal Subsistence Board, c/o U.S. Fish and Wildlife Service, Attention: Peter J. Probasco, Office of Subsistence Management;
(907)786-3888. For questions specific to National Forest System lands, contact Steve Kessler, Regional Subsistence Program Leader, USDA, Forest Service, Alaska Region;
(907)786-3592. SUPPLEMENTARY INFORMATION: Background Under title VIII of the Alaska National Interest Lands Conservation Act (ANILCA) (16 U.S.C. 3111-3126), the Secretary of the Interior and the Secretary of Agriculture (Secretaries) jointly implement the Federal Subsistence Management Program. This program grants a preference for subsistence uses of fish and wildlife resources on Federal public lands and waters in Alaska. The Secretaries first published regulations to carry out this program in the **Federal Register** on May 29, 1992 (57 FR 22940). The Program has subsequently amended these regulations several times. Because this program is a joint effort between Interior and Agriculture, these regulations are located in two titles of the Code of Federal Regulations (CFR): Title 36, “Parks, Forests, and Public Property,” and title 50, “Wildlife and Fisheries,” at 36 CFR 242.1-28 and 50 CFR 100.1-28, respectively. The regulations contain subparts as follows: Subpart A, General Provisions; Subpart B, Program Structure; Subpart C, Board Determinations; and Subpart D, Subsistence Taking of Fish and Wildlife. Federal Subsistence Board Consistent with subparts A, B, and C of these regulations, the Departments established a Federal Subsistence Board to administer the Federal Subsistence Management Program. The Board's composition includes • A Chair appointed by the Secretary of the Interior with concurrence of the Secretary of Agriculture; • The Alaska Regional Director, U.S. Fish and Wildlife Service; • The Alaska Regional Director, U.S. National Park Service; • The Alaska State Director, U.S. Bureau of Land Management; • The Alaska Regional Director, U.S. Bureau of Indian Affairs; and • The Alaska Regional Forester, U.S. Forest Service. Through the Board, these agencies participated in the development of regulations for subparts A, B, and C, which set forth the basic program, and they continue to work together on regularly revising the subpart D regulations, which, among other things, set forth specific harvest seasons and limits. Federal Subsistence Regional Advisory Councils In administering the program, the Secretaries divide Alaska into 10 subsistence resource regions, each of which is represented by a Regional Council. The Regional Councils provide a forum for rural residents with personal knowledge of local conditions and resource requirements to have a meaningful role in the subsistence management of fish and wildlife on Alaska public lands. The Regional Council members represent varied geographical, cultural, and user diversity within each region. Public Review Process—Comments, Proposals, and Public Meetings The Regional Councils had a substantial role in reviewing this proposed rule and making recommendations for the final rule. The Federal Subsistence Board (Board), through the Regional Councils, held meetings on this proposed rule at the following Alaska locations, on the following dates: Region 1—Southeast Regional Council Sitka February 26, 2008. Region 2—Southcentral Regional Council Cordova March 12, 2008. Region 3—Kodiak/Aleutians Regional Council Kodiak March 25, 2008. Region 4—Bristol Bay Regional Council Dillingham March 24, 2008. Region 5—Yukon-Kuskokwim Delta Regional Council Lower Kalskag March 20, 2008. Region 6—Western Interior Regional Council Fairbanks February 28, 2008. Region 7—Seward Peninsula Regional Council Nome February 21, 2008. Region 8—Northwest Arctic Regional Council Kotzebue March 7, 2008. Region 9—Eastern Interior Regional Council Tok March 17, 2008. Region 10—North Slope Regional Council Barrow March 4, 2008. We published notice of specific dates, times, and meeting locations in local and Statewide newspapers prior to the meetings. The amount of work on each Regional Council's agenda determined the length of each Regional Council meeting. During May 2008, we will compile and distribute for additional public review the written proposals to change subpart D fishing regulations and subpart C customary and traditional use determinations. A 30-day public comment period will follow distribution of the compiled proposal packet. We will accept written public comments on distributed proposals during the public comment period, which is currently scheduled to end on June 30, 2008. We will hold a second series of Regional Council meetings from August 24 through October 25, 2008, at which the Regional Councils will develop recommendations to the Board. You may also present comments on published proposals to change fishing and customary and traditional use determination regulations to the Regional Councils at those fall meetings. The Board will discuss and evaluate the proposed changes to the subsistence management regulations during a public meeting scheduled to be held in Anchorage, Alaska, beginning on January 13, 2009. The Regional Council Chairs, or their designated representatives, will present their Council's recommendations at the Board meeting. You may provide additional oral testimony on specific proposals before the Board at that time. At that public meeting, the Board will then deliberate and take final action on proposals received that request changes to this proposed rule. Proposals to the Board to modify fish and shellfish harvest regulations and customary and traditional use determinations must include the following information:
(a)Name, address, and telephone number;
(b)The section and/or paragraph of this proposed rule for which you are suggesting changes;
(c)A statement explaining why the change is necessary;
(d)The proposed wording change; and
(e)Any additional information that you believe will help the Board in evaluating your proposal. The Board rejects proposals that fail to include the above information, or proposals that are beyond the scope of authorities in § _.24, subpart C (the regulations governing customary and traditional use determinations), and §§ _.25, _.27, and _.28, subpart D (the general and specific regulations governing the subsistence take of fish and shellfish). During the January 13, 2009 meeting, the Board may defer review and action on some proposals to allow time for local cooperative planning efforts, or to acquire additional needed information, or if workload exceeds work capacity of staff, Regional Councils, or the Board. These deferrals will be based on recommendations of the affected Regional Council(s), staff members, and on the basis of least harm to the subsistence user and the resource involved. The Board may consider and act on alternatives that address the intent of a proposal while differing in approach. Proposed Changes From the 2008-09 Fish and Shellfish Seasons and Harvest Limit Regulations Subpart D regulations are subject to periodic review and revision. Through 2007, the public review process was annual. Starting in 2008, the Federal Subsistence Management Program will address subsistence hunting and trapping regulations in even-numbered years and subsistence fishing and shellfishing regulations in odd-numbered years. The Board will also address customary and traditional use determinations during each applicable biennial cycle. This change in schedule is necessary due to Federal budget priorities. The text of the 2008-09 subparts C and D final rule published March 14, 2008 (73 FR 13761), serves as the foundation for this 2009-11 subparts C and D proposed rule. The regulations relating to fish and shellfish contained in this proposed rule will take effect on April 1, 2009, unless elements are changed by subsequent Board action following the public review process outlined above in this document. Conformance With Statutory and Regulatory Authorities National Environmental Policy Act—A Draft Environmental Impact Statement
(DEIS)that described four alternatives for developing a Federal Subsistence Management Program was distributed for public comment on October 7, 1991. The Final Environmental Impact Statement
(FEIS)published on February 28, 1992. The Record of Decision
(ROD)on Subsistence Management for Federal Public Lands in Alaska was signed April 6, 1992. The selected alternative in the FEIS (Alternative IV) defined the administrative framework of an annual regulatory cycle for subsistence regulations. An environmental assessment prepared in 1997 dealt with the expansion of Federal jurisdiction over fisheries and is available at the office listed under FOR FURTHER INFORMATION CONTACT . The Secretary of the Interior, with the concurrence of the Secretary of Agriculture, determined that the expansion of Federal jurisdiction does not constitute a major Federal action significantly affecting the human environment and, therefore, signed a Finding of No Significant Impact. Compliance with section 810 of ANILCA—We completed a section 810 analysis under ANILCA as part of the FEIS process on the Federal Subsistence Management Program. The intent of all Federal subsistence regulations is to accord subsistence uses of fish and wildlife on public lands a priority over the taking of fish and wildlife on such lands for other purposes, unless restriction is necessary to conserve healthy fish and wildlife populations. The final section 810 analysis determination appeared in the April 6, 1992, ROD and concluded that the Federal Subsistence Management Program, under Alternative IV with an annual process for setting subsistence regulations, may have some local impacts on subsistence uses, but will not likely restrict subsistence uses significantly. During the environmental assessment process for extending fisheries jurisdiction, an evaluation of the effects of the January 8, 1999, rule (64 FR 1276) was also conducted in accordance with section 810. This evaluation supports the Secretaries' determination that the rule will not reach the “may significantly restrict” threshold for notice and hearings under ANILCA section 810(a) for any subsistence resources or uses. Paperwork Reduction Act—The information collection requirements contained in this rule have been approved by the Office of Management and Budget
(OMB)under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ) and assigned OMB control number 1018-0075, which expires October 31, 2009. We may not conduct or sponsor, and you are not required to respond to, a collection of information unless it displays a current valid OMB control number. Regulatory Planning and Review (Executive Order 12866) The Office of Management and Budget
(OMB)has determined that this rule is not significant and has not reviewed this rule under Executive Order 12866. OMB bases its determination upon the following four criteria:
(a)Whether the rule will have an annual effect of $100 million or more on the economy or adversely affect an economic sector, productivity, jobs, the environment, or other units of the government.
(b)Whether the rule will create inconsistencies with other agencies' actions.
(c)Whether the rule will materially affect entitlements, grants, user fees, loan programs, or the rights and obligations of their recipients.
(d)Whether the rule raises novel legal or policy issues. Regulatory Flexibility Act The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 *et seq.* ) requires preparation of flexibility analyses for rules that will have a significant effect on a substantial number of small entities, which include small businesses, organizations, or governmental jurisdictions. This rule does not restrict any existing sport or commercial use of wildlife on public lands, and wildlife uses will continue at essentially the same levels as they currently occur. In general, the resources to be harvested under this rule are already being harvested and consumed by the local harvester and do not result in an additional dollar benefit to the economy. However, we estimate that 2 million pounds of meat are harvested by subsistence users annually and, if given an estimated dollar value of $3.00 per pound, would equate to about $6 million in food value Statewide. The Departments certify based on the above figures that this rulemaking will not have a significant economic effect on a substantial number of small entities within the meaning of the Regulatory Flexibility Act. Small Business Regulatory Enforcement Fairness Act Under the Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 801 *et seq.* ), this rule is not a major rule. It does not have an effect on the economy of $100 million or more, will not cause a major increase in costs or prices for consumers, and does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. Executive Order 12630 Title VIII of ANILCA requires the Secretaries to administer a subsistence priority on public lands. The scope of this program is limited by definition to certain public lands. Likewise, these regulations have no potential takings of private property implications as defined by Executive Order 12630. Unfunded Mandates Reform Act The Secretaries have determined and certify pursuant to the Unfunded Mandates Reform Act, 2 U.S.C. 1502 *et seq.,* that this rulemaking will not impose a cost of $100 million or more in any given year on local or State governments or private entities. The implementation of this rule is by Federal agencies and there is no cost imposed on any State or local entities or tribal governments. Executive Order 12988 The Secretaries have determined that these regulations meet the applicable standards provided in sections 3(a) and 3(b)(2) of Executive Order 12988, regarding civil justice reform. Executive Order 13132 In accordance with Executive Order 13132, the rule does not have sufficient Federalism implications to warrant the preparation of a Federalism Assessment. Title VIII of ANILCA precludes the State from exercising subsistence management authority over fish and wildlife resources on Federal lands unless it meets certain requirements. Executive Order 13175 In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), Executive Order 13175, and 512 DM 2, we have evaluated possible effects on Federally recognized Indian tribes and have determined that there are no substantial direct effects. The Bureau of Indian Affairs is a participating agency in this rulemaking. Executive Order 13211 On May 18, 2001, the President issued Executive Order 13211 on regulations that significantly affect energy supply, distribution, or use. This Executive Order requires agencies to prepare Statements of Energy Effects when undertaking certain actions. This rule is not a significant regulatory action under Executive Order 13211, affecting energy supply, distribution, or use, and no Statement of Energy Effects is required. Drafting Information—Theo Matuskowitz drafted these regulations under the guidance of Peter J. Probasco of the Office of Subsistence Management, Alaska Regional Office, U.S. Fish and Wildlife Service, Anchorage, Alaska. Additional assistance was provided by: • Charles Ardizzone, Alaska State Office, Bureau of Land Management; • Sandy Rabinowitch and Nancy Swanton, Alaska Regional Office, National Park Service; • Drs. Warren Eastland and Glenn Chen, Alaska Regional Office, Bureau of Indian Affairs; • Jerry Berg and Carl Jack, Alaska Regional Office, U.S. Fish and Wildlife Service; and • Steve Kessler, Alaska Regional Office, U.S. Forest Service. List of Subjects 36 CFR Part 242 Administrative practice and procedure, Alaska, Fish, National forests, Public lands, Reporting and recordkeeping requirements, Wildlife. 50 CFR Part 100 Administrative practice and procedure, Alaska, Fish, National forests, Public lands, Reporting and recordkeeping requirements, Wildlife. For the reasons set out in the preamble, the Federal Subsistence Board proposes to amend 36 CFR part 242 and 50 CFR part 100 for the 2009-11 regulatory years. Dated: March 17, 2008. Peter J. Probasco, Acting Chair, Federal Subsistence Board, Assistant Regional Director, Office of Subsistence Management, U.S. Fish and Wildlife Service. Dated: March 17, 2008. Steve Kessler, Subsistence Program Leader, USDA—Forest Service. [FR Doc. E8-7841 Filed 4-16-08; 8:45 am] BILLING CODE 4310-55-P, 3410-11-P DEPARTMENT OF HOMELAND SECURITY Federal Emergency Management Agency 44 CFR Part 67 [Docket No. FEMA-B-7771] Proposed Flood Elevation Determinations AGENCY: Federal Emergency Management Agency, DHS. ACTION: Proposed rule. SUMMARY: Comments are requested on the proposed Base (1 percent annual-chance) Flood Elevations
(BFEs)and proposed BFE modifications for the communities listed in the table below. The purpose of this notice is to seek general information and comment regarding the proposed regulatory flood elevations for the reach described by the downstream and upstream locations in the table below. The BFEs and modified BFEs are a part of the floodplain management measures that the community is required either to adopt or show evidence of having in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP). In addition, these elevations, once finalized, will be used by insurance agents, and others to calculate appropriate flood insurance premium rates for new buildings and the contents in those buildings. DATES: Comments are to be submitted on or before July 16, 2008. ADDRESSES: The corresponding preliminary Flood Insurance Rate Maps (FIRMs) for the proposed BFEs for each community are available for inspection at the community's map repository. The respective addresses are listed in the table below. You may submit comments, identified by Docket No. FEMA-B-7771, to William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472,
(202)646-3151, or (e-mail) *bill.blanton@dhs.gov* . FOR FURTHER INFORMATION CONTACT: William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472,
(202)646-3151 or (e-mail) *bill.blanton@dhs.gov* . SUPPLEMENTARY INFORMATION: The Federal Emergency Management Agency
(FEMA)proposes to make determinations of BFEs and modified BFEs for each community listed below, in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR 67.4(a). These proposed BFEs and modified BFEs, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own, or pursuant to policies established by other Federal, State, or regional entities. These proposed elevations are used to meet the floodplain management requirements of the NFIP and are also used to calculate the appropriate flood insurance premium rates for new buildings built after these elevations are made final, and for the contents in these buildings. Comments on any aspect of the Flood Insurance Study and FIRM, other than the proposed BFEs, will be considered. A letter acknowledging receipt of any comments will not be sent. *Administrative Procedure Act Statement* . This matter is not a rulemaking governed by the Administrative Procedure Act (APA), 5 U.S.C. 553. FEMA publishes flood elevation determinations for notice and comment; however, they are governed by the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and the National Flood Insurance Act of 1968, 42 U.S.C. 4001 *et seq.* , and do not fall under the APA. *National Environmental Policy Act* . This proposed rule is categorically excluded from the requirements of 44 CFR part 10, Environmental Consideration. An environmental impact assessment has not been prepared. *Regulatory Flexibility Act* . As flood elevation determinations are not within the scope of the Regulatory Flexibility Act, 5 U.S.C. 601-612, a regulatory flexibility analysis is not required. *Executive Order 12866, Regulatory Planning and Review* . This proposed rule is not a significant regulatory action under the criteria of section 3(f) of Executive Order 12866, as amended. *Executive Order 13132, Federalism* . This proposed rule involves no policies that have federalism implications under Executive Order 13132. *Executive Order 12988, Civil Justice Reform* . This proposed rule meets the applicable standards of Executive Order 12988. List of Subjects in 44 CFR Part 67 Administrative practice and procedure, Flood insurance, Reporting and recordkeeping requirements. Accordingly, 44 CFR part 67 is proposed to be amended as follows: PART 67—[AMENDED] 1. The authority citation for part 67 continues to read as follows: Authority: 42 U.S.C. 4001 *et seq.* ; Reorganization Plan No. 3 of 1978, 3 CFR, 1978 Comp., p. 329; E.O. 12127, 44 FR 19367, 3 CFR, 1979 Comp., p. 376. § 67.4 [Amended] 2. The tables published under the authority of § 67.4 are proposed to be amended as follows: Flooding source(s) Location of referenced elevation** * Elevation in feet
(NGVD)+ Elevation in feet
(NAVD)# Depth in feet (above ground) Effective Modified Communities affected Habersham County, Georgia, and Incorporated Areas Soquee River Tributary Approximately 770 feet upstream of confluence with Soquee River +1307 +1308 City of Clarkesville. Approximately 380 feet downstream of State Highway 385/Alternate 17/U.S. Highway 441 Business/Grant Street +1307 +1308 * National Geodetic Vertical Datum. + North American Vertical Datum. # Depth in feet above ground. **BFEs to be changed include the listed downstream and upstream BFEs, and include BFEs located on the stream reach between the referenced locations above. Please refer to the revised Flood Insurance Rate Map located at the community map repository (see below) for exact locations of all BFEs to be changed. Send comments to William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472. ADDRESSES City of Clarkesville Maps are available for inspection at City Hall, 210 East Water Street, Clarkesville, GA 30523. Iberia Parish, Louisiana, and Incorporated Areas Bayou Petite Anse-Deblanc Coulee-Segura Branch Approximately 300 ft upstream of U.S. 90 eastbound. None +10 Unincorporated Areas of Iberia Parish. Approximately 300 ft downstream of Southern Pacific RR +11 +12 Commercial Canal Approximately 300 ft downstream of Southern Pacific RR +9 +10 Unincorporated Areas of Iberia Parish, City of New Iberia. Approximately 450 ft upstream of Admiral Doyle Drive. None +11 Duboin Canal Approximately 3,000 ft downstream of Admiral Doyle Drive None +11 Unincorporated Areas of Iberia Parish, City of New Iberia. Intersection with Adrian St None +16 Jacks Coulee Approximately 300 ft downstream of Weeks Island Road None +10 Unincorporated Areas of Iberia Parish. Approximately 300 ft upstream of U.S. Hwy 90 None +11 Jefferson Canal Approximately 300 ft downstream of Southern Pacific RR None +3 Unincorporated Areas of Iberia Parish. Approximately 100 ft upstream of Jefferson Island Road None +6 Little Valley Bayou Approximately 300 ft downstream of Patoutville Road. None +9 Unincorporated Areas of Iberia Parish. Approximately 600 ft upstream of Smith Road None +11 Peebles Coulee Approximately 3,250 ft upstream of J. Allen Daigre Drive None +12 Unincorporated Areas of Iberia Parish, City of New Iberia. Approximately 300 ft downstream of Weeks Island Road +10 +12 Poufette Canal—Bayou Petite Anse-Segura Branch Approximately 100 ft upstream of Norris Road None +10 Unincorporated Areas of Iberia Parish. Approximately 300 ft downstream of Southern Pacific RR +11 +13 Rodere Canal Approximately 300 ft downstream of Southern Pacific RR +9 +12 Unincorporated Areas of Iberia Parish, City of New Iberia. Approximately 2,900 ft upstream of Center Street None +14 Tete Bayou Approximately 500 ft downstream of LA 3195 None +13 Unincorporated Areas of Iberia Parish, City of New Iberia. Approximately 250 feet downstream of N. Lewis St. None +15 * National Geodetic Vertical Datum. + North American Vertical Datum. # Depth in feet above ground. **BFEs to be changed include the listed downstream and upstream BFEs, and include BFEs located on the stream reach between the referenced locations above. Please refer to the revised Flood Insurance Rate Map located at the community map repository (see below) for exact locations of all BFEs to be changed. Send comments to William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472. ADDRESSES City of New Iberia Maps are available for inspection at 457 E. Main St, New Iberia, LA 70560. Unincorporated Areas of Iberia Parish Maps are available for inspection at 209 W. Main St., Suite 102, New Iberia, LA 70560. Livingston Parish, Louisiana, and Incorporated Areas Lake Maurepas—Entire Shoreline Highest elevation approximately 40,800 feet south of confluence with Amite River None +9 Unincorporated Areas of Livingston Parish. Highest elevation at confluence with Tickfaw River None +10 * National Geodetic Vertical Datum. + North American Vertical Datum. # Depth in feet above ground. **BFEs to be changed include the listed downstream and upstream BFEs, and include BFEs located on the stream reach between the referenced locations above. Please refer to the revised Flood Insurance Rate Map located at the community map repository (see below) for exact locations of all BFEs to be changed. Send comments to William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472. ADDRESSES Unincorporated Areas of Livingston Parish Maps are available for inspection at 29261 Frost Rd., Livingston, LA 70754. Davidson County, North Carolina, and Incorporated Areas Little Brush Fork Tributary 1 At the confluence with Little Brushy Fork None +748 Town of Midway, Unincorporated Areas of Davidson County. Approximately 0.7 mile upstream of the confluence of Little Brushy Fork Tributary 1A None +781 Little Brushy Fork At the confluence with Brushy Fork None +732 Town of Midway, Unincorporated Areas of Davidson County. Approximately 1.8 miles upstream of Tom Livengood Road (State Road 1719) None +861 Little Brushy Fork Tributary 1A At the confluence with Little Brushy Fork Tributary 1 None +757 Town of Midway, Unincorporated Areas of Davidson County. Approximately 2,000 feet upstream of Garden Valley Drive None +786 Miller Creek At the confluence with Muddy Creek None +690 Town of Midway. Approximately 250 feet upstream of North Payne Road (State Road 1510) +810 +811 * National Geodetic Vertical Datum. + North American Vertical Datum. # Depth in feet above ground. **BFEs to be changed include the listed downstream and upstream BFEs, and include BFEs located on the stream reach between the referenced locations above. Please refer to the revised Flood Insurance Rate Map located at the community map repository (see below) for exact locations of all BFEs to be changed. Send comments to William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472. ADDRESSES Town of Midway Maps are available for inspection at Midway Town Hall, 125 Gum Tree Road, Midway, NC. Unincorporated Areas of Davidson County Maps are available for inspection at Davidson County Governmental Center, Planning and Zoning Department, 913 Greensboro Street, Lexington, NC. Mercer County, North Dakota, and Incorporated Areas Antelope Creek 100 feet Upstream from Mercer County Road 18/53rd Ave. SW +1743 +1745 Mercer County, City of Hazen. 100 feet Upstream from Walk Bridge on Abandoned BNSF Railway Grade +1756 +1757 Antelope Creek Split 100 feet Upstream from BNSF Railway Bridge None +1754 Mercer County, City of Hazen. 200 feet Upstream from 13th Ave. W. None +1758 East Tributary Reach #1 100 feet Downstream from Roll Drive None +1806 City of Beulah. 100 feet Downstream from Beulah Dam None +1840 East Tributary Reach #2 100 feet Upstream from BNSF Railway Bridge +1780 +1781 City of Beulah. 100 feet Upstream from Beulah Eagle Road +1792 +1795 North Tributary Confluence with East Tributary None +1797 Mercer County, City of Beulah. 100 feet Upstream from Seventh St. None +1819 Upstream Hazen Tributary 100 feet Upstream from the Confluence with Antelope Creek +1754 +1753 City of Hazen. 1000 feet Upstream from the Confluence with Antelope Creek +1754 +1753 West Hazen Tributary 100 feet Upstream from Confluence with Antelope Creek +1748 +1750 City of Hazen. 200 feet Upstream from Divide Street None +1764 * National Geodetic Vertical Datum. + North American Vertical Datum. # Depth in feet above ground. **BFEs to be changed include the listed downstream and upstream BFEs, and include BFEs located on the stream reach between the referenced locations above. Please refer to the revised Flood Insurance Rate Map located at the community map repository (see below) for exact locations of all BFEs to be changed. Send comments to William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472. ADDRESSES City of Beulah Maps are available for inspection at 120 Central Avenue North, Beulah, ND 58523. City of Hazen Maps are available for inspection at 146 Main St. E., Hazen, ND 58545. Mercer County Maps are available for inspection at 1021 Arthur Street, Stanton, ND 58571-0039. Raleigh County, West Virginia, and Incorporated Areas Soak Creek Approximately 100 feet downstream of State Route 29 None +2305 Unincorporated Areas of Raleigh County, Town of Sophia. Approximately 80 feet upstream of McKinney Hollow Road None +2328 * National Geodetic Vertical Datum. + North American Vertical Datum. # Depth in feet above ground. **BFEs to be changed include the listed downstream and upstream BFEs, and include BFEs located on the stream reach between the referenced locations above. Please refer to the revised Flood Insurance Rate. Map located at the community map repository (see below) for exact locations of all BFEs to be changed. Send comments to William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472. ADDRESSES Town of Sophia Maps are available for inspection at Sophia Town Hall, 100 East Railroad Avenue, Sophia, WV 25921. Unincorporated Areas of Raleigh County Maps are available for inspection at Raleigh County Commission Building, 116 1/2 North Heber Street, Beckley, WV 25801. (Catalog of Federal Domestic Assistance No. 97.022, “Flood Insurance.”) Dated: March 31, 2008. David I. Maurstad, Federal Insurance Administrator of the National Flood Insurance Program, Department of Homeland Security, Federal Emergency Management Agency. [FR Doc. E8-8324 Filed 4-16-08; 8:45 am] BILLING CODE 9110-12-P DEPARTMENT OF HOMELAND SECURITY Federal Emergency Management Agency 44 CFR Part 67 [Docket No. FEMA-B-7773] Proposed Flood Elevation Determinations AGENCY: Federal Emergency Management Agency, DHS. ACTION: Proposed rule. SUMMARY: Comments are requested on the proposed Base (1 percent annual-chance) Flood Elevations
(BFEs)and proposed BFE modifications for the communities listed in the table below. The purpose of this notice is to seek general information and comment regarding the proposed regulatory flood elevations for the reach described by the downstream and upstream locations in the table below. The BFEs and modified BFEs are a part of the floodplain management measures that the community is required either to adopt or show evidence of having in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP). In addition, these elevations, once finalized, will be used by insurance agents, and others to calculate appropriate flood insurance premium rates for new buildings and the contents in those buildings. DATES: Comments are to be submitted on or before July 16, 2008. ADDRESSES: The corresponding preliminary Flood Insurance Rate Map
(FIRM)for the proposed BFEs for each community are available for inspection at the community's map repository. The respective addresses are listed in the table below. You may submit comments, identified by Docket No. FEMA-B-7773, to William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472,
(202)646-3151, or (e-mail) *bill.blanton@dhs.gov* . FOR FURTHER INFORMATION CONTACT: William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472,
(202)646-3151 or (e-mail) *bill.blanton@dhs.gov* . SUPPLEMENTARY INFORMATION: The Federal Emergency Management Agency
(FEMA)proposes to make determinations of BFEs and modified BFEs for each community listed below, in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR 67.4(a). These proposed BFEs and modified BFEs, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own, or pursuant to policies established by other Federal, State, or regional entities. These proposed elevations are used to meet the floodplain management requirements of the NFIP and are also used to calculate the appropriate flood insurance premium rates for new buildings built after these elevations are made final, and for the contents in these buildings. Comments on any aspect of the Flood Insurance Study and FIRM, other than the proposed BFEs, will be considered. A letter acknowledging receipt of any comments will not be sent. *Administrative Procedure Act Statement.* This matter is not a rulemaking governed by the Administrative Procedure Act (APA), 5 U.S.C. 553. FEMA publishes flood elevation determinations for notice and comment; however, they are governed by the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and the National Flood Insurance Act of 1968, 42 U.S.C. 4001 *et seq.* , and do not fall under the APA. *National Environmental Policy Act.* This proposed rule is categorically excluded from the requirements of 44 CFR part 10, Environmental Consideration. An environmental impact assessment has not been prepared. *Regulatory Flexibility Act.* As flood elevation determinations are not within the scope of the Regulatory Flexibility Act, 5 U.S.C. 601-612, a regulatory flexibility analysis is not required. *Executive Order 12866, Regulatory Planning and Review.* This proposed rule is not a significant regulatory action under the criteria of section 3(f) of Executive Order 12866, as amended. *Executive Order 13132, Federalism.* This proposed rule involves no policies that have federalism implications under Executive Order 13132. *Executive Order 12988, Civil Justice Reform.* This proposed rule meets the applicable standards of Executive Order 12988. List of Subjects in 44 CFR Part 67 Administrative practice and procedure, Flood insurance, Reporting and recordkeeping requirements. Accordingly, 44 CFR part 67 is proposed to be amended as follows: PART 67—[AMENDED] 1. The authority citation for part 67 continues to read as follows: Authority: 42 U.S.C. 4001 *et seq.* ; Reorganization Plan No. 3 of 1978, 3 CFR, 1978 Comp., p. 329; E.O. 12127, 44 FR 19367, 3 CFR, 1979 Comp., p. 376. § 67.4 [Amended] 2. The tables published under the authority of § 67.4 are proposed to be amended as follows: State City/town/county Source of flooding Location** * Elevation in feet
(NGVD)+ Elevation in feet
(NAVD)# Depth in feet above ground Existing Modified City of Brookport, Illinois Illinois City of Brookport Ohio River Approximately 2,460 feet upstream of U.S. Highway 45 None *339 Approximately 3,680 feet downstream of U.S. Highway 45 None *339 * National Geodetic Vertical Datum. + North American Vertical Datum. # Depth in feet above ground. ** BFEs to be changed include the listed downstream and upstream BFEs, and include BFEs located on the stream reach between the referenced locations above. Please refer to the revised Flood Insurance Rate Map located at the community map repository (see below) for exact locations of all BFEs to be changed. Send comments to William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472. ADDRESSES City of Brookport Maps are available for inspection at City Hall, 209 Ohio Street, City of Brookport, IL 62910. Flooding source(s) Location of referenced elevation** * Elevation in feet
(NGVD)+ Elevation in feet
(NAVD)# Depth in feet above ground Effective Modified Communities affected Bay County, Florida, and Incorporated Areas Beefwood Branch At the confluence with Bayou George None +24 City of Panama City, Unincorporated Areas of Bay County. Approximately 19,900 feet upstream of the confluence with Bayou George None +62 Big Branch At the confluence with Bayou George None +27 City of Panama City, Unincorporated Areas of Bay County. Approximately 24,800 feet upstream of the confluence with Bayou George None +60 Dry Branch Approximately 615 feet upstream of the confluence with Bayou George None +10 Town of Cedar Grove, Unincorporated Areas of Bay County. Approximately 800 feet downstream of Highway 231 None +11 Hammock Branch At the confluence with Bayou George None +23 City of Panama City, Unincorporated Areas of Bay County. Approximately 25,000 feet upstream of the confluence with Bayou George None +50 Island Branch At the confluence with Bayou George None +30 City of Panama City, Unincorporated Areas of Bay County. Approximately 16,900 feet upstream of the confluence with Bayou George None +59 Unnamed Tributary 1 to Bayou George Approximately 650 feet upstream of the confluence with Bayou George None +16 City of Panama City, Unincorporated Areas of Bay County. Approximately 1,400 feet upstream of Nadine Road None +50 Unnamed Tributary 10 to Bayou George At the confluence with Bayou George None +37 City of Panama City, Unincorporated Areas of Bay County. Approximately 3,900 feet upstream of the confluence with Bayou George None +50 Unnamed Tributary 11 to Bayou George At the confluence with Bayou George None +57 Unincorporated Areas of Bay County. Approximately 8,600 feet upstream of the confluence with Bayou George None +64 Unnamed Tributary 2 to Bayou George Approximately 420 feet upstream of the confluence with Bayou George None +25 City of Panama City, Unincorporated Areas of Bay County. Approximately 2,170 feet upstream of John Pitts Road None +47 Unnamed Tributary 3 to Bayou George Approximately 400 feet upstream of the confluence with Bayou George None +23 City of Panama City, Unincorporated Areas of Bay County. Approximately 5,500 feet upstream of John Pitts Road None +56 Unnamed Tributary 4 to Bayou George Approximately 315 feet upstream of the confluence with Bayou George None +31 Town of Cedar Grove, City of Panama City, Unincorporated Areas of Bay County. Approximately 7,780 feet upstream of John Pitts Road None +56 Unnamed Tributary 5 to Bayou George Approximately 560 feet upstream of the confluence with Bayou George None +25 Town of Cedar Grove, Unincorporated Areas of Bay County. Approximately 1,200 feet upstream of Bayou George Drive None +43 Unnamed Tributary 6 to Bayou George Approximately 125 feet upstream of the confluence with Bayou George None +38 Unincorporated Areas of Bay County. Approximately 1,400 feet upstream of the confluence with Bayou George None +38 Unnamed Tributary 7 to Bayou George At John Pitts Road None +19 City of Panama City, Unincorporated Areas of Bay County. Approximately 7,500 feet upstream of Old Majette Tower Road None +54 Unnamed Tributary 8 to Bayou George At the confluence with Bayou George None +23 City of Panama City, Unincorporated Areas of Bay County. Approximately 6,700 feet upstream of the confluence with Bayou George None +46 Unnamed Tributary 9 to Bayou George At the confluence with Bayou George None +24 City of Panama City. Approximately 1,800 feet upstream of the confluence with Bayou George None +35 Water Branch At the confluence with Bayou George None +47 Unincorporated Areas of Bay County. Approximately 22,000 feet upstream of the confluence with Bayou George None +60 White Bucky Branch Approximately 900 feet upstream of the confluence with Bayou George None +26 City of Panama City, Unincorporated Areas of Bay County. Approximately 9,000 feet upstream of the confluence with Bayou George None +54 * National Geodetic Vertical Datum. + North American Vertical Datum. # Depth in feet above ground. ** BFEs to be changed include the listed downstream and upstream BFEs, and include BFEs located on the stream reach between the referenced locations above. Please refer to the revised Flood Insurance Rate Map located at the community map repository (see below) for exact locations of all BFEs to be changed. Send comments to William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472. ADDRESSES City of Panama City Maps are available for inspection at Panama City Hall, Engineering Department, 9 Harrison Avenue, Panama City, FL. Town of Cedar Grove Maps are available for inspection at Cedar Grove Town Hall, 2728 East 14th Street, Cedar Grove, FL. Unincorporated Areas of Bay County Maps are available for inspection at Bay County Planning and Zoning Department, 707 Jenks Avenue, Suite B, Panama City, FL. Washington County, Idaho, and Incorporated Areas Monroe Creek Approximately 350 feet downstream of Union Pacific Railroad None +2108 City of Weiser. Approximately 50 feet downstream of Park Street None +2125 * National Geodetic Vertical Datum. + North American Vertical Datum. # Depth in feet above ground. ** BFEs to be changed include the listed downstream and upstream BFEs, and include BFEs located on the stream reach between the referenced locations above. Please refer to the revised Flood Insurance Rate Map located at the community map repository (see below) for exact locations of all BFEs to be changed. Send comments to William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472. ADDRESSES City of Weiser Maps are available for inspection at 55 West Idaho Street, Wieser, ID 83672. Vermilion Parish, Louisiana, and Incorporated Areas Gulf of Mexico Confluence of Gulf of Mexico and Vermilion Bay +14 +15 Unincorporated Areas of Vermilion Parish. Entire coastline east of intersection with Rollover Bayou +15 +17 Vermilion Bay Divergence with Gulf of Mexico +15 +14 Unincorporated Areas of Vermilion Parish. Confluence with Gulf of Mexico +14 +15 * National Geodetic Vertical Datum. + North American Vertical Datum. # Depth in feet above ground. ** BFEs to be changed include the listed downstream and upstream BFEs, and include BFEs located on the stream reach between the referenced locations above. Please refer to the revised Flood Insurance Rate Map located at the community map repository (see below) for exact locations of all BFEs to be changed. Send comments to William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472. ADDRESSES Unincorporated Areas of Vermilion Parish Maps are available for inspection at 100 N. State St., Suite 200, Abberville, LA 70510. Renville County, Minnesota, and Incorporated Areas Minnesota River Approximately 4,850 feet downstream of the Nicollet County Boundary +818 +819 City of Franklin, City of Morton, Unincorporated Areas of Renville County. Approximately 4,600 feet upstream of the Chippewa County Boundary +882 +883 * National Geodetic Vertical Datum. + North American Vertical Datum. # Depth in feet above ground. ** BFEs to be changed include the listed downstream and upstream BFEs, and include BFEs located on the stream reach between the referenced locations above. Please refer to the revised Flood Insurance Rate Map located at the community map repository (see below) for exact locations of all BFEs to be changed. Send comments to William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472. ADDRESSES City of Franklin Maps are available for inspection at City Hall, 320 Second Avenue East, Franklin, MN 55333. City of Morton Maps are available for inspection at City Hall, 221 West 2nd Street, Morton, MN 56270. Unincorporated Areas of Renville County Maps are available for inspection at Renville County Office Building, 105 South 5th Street, Room 311, Olivia, MN 56277. Lee County, Mississippi, and Incorporated Areas Campbelltown Creek Approximately 375 feet upstream of State Highway 145 None +340 City of Baldwyn, Unincorporated Areas of Lee County. Approximately 4,802 feet upstream of County Road 2790 None +359 Chiwapa Creek Approximately 3,480 feet upstream of the confluence with Chiwapa Creek Tributary 15 None +269 Unincorporated Areas of Lee County. Approximately 3,180 feet upstream of the confluence with Chiwapa Creek Tributary 16 None +274 Coonewah Creek At Interstate 45 None +242 Unincorporated Areas of Lee County, Town of Shannon. Approximately 6,220 feet upstream of State Highway 145 None +252 Coonewah Creek Tributary 3 Approximately 1,210 feet downstream of County Road 484 None +254 Unincorporated Areas of Lee County. Approximately 620 feet upstream of County Road 520 None +266 Euclatubba Creek At the confluence of Mud Creek None +280 Unincorporated Areas of Lee County, Town of Saltillo. Approximately 1,990 feet upstream of State Highway 145 None +302 Mud Creek Approximately 4,465 feet downstream of Interstate 78 +265 +266 Unincorporated Areas of Lee County, City of Tupelo, Town of Saltillo. Approximately 80 feet upstream of County Road 681 None +289 Reeds Branch Approximately 2,410 feet downstream of confluence with Reeds Branch Tributary 1 None +269 Unincorporated Areas of Lee County. Approximately 1,565 feet upstream of County Road 900 None +302 Sand Creek At the confluence with Mud Creek None +280 Unincorporated Areas of Lee County, Town of Saltillo. At State Highway 363 None +307 Sand Creek Tributary 1 At the confluence of Sand Creek None +299 Unincorporated Areas of Lee County, Town of Saltillo. Approximately 2,190 feet upstream of Fellowship Road None +326 Sand Creek Tributary 2 At the confluence of Sand Creek None +304 Town of Saltillo. Approximately 6,890 feet upstream of confluence with Sand Creek None +343 Town Creek Approximately 1,575 feet downstream of the confluence with Kings Creek +256 +257 City of Tupelo, Unincorporated Areas of Lee County. Approximately 2,500 feet upstream of Mount Vernon Road None +279 Approximately 1,070 feet downstream of confluence of Town Creek Tributary 9 None +291 At Lee/Pontotoc county boundary None +328 Town Creek Tributary 1 Approximately 1,900 feet downstream from railroad None +226 Unincorporated Areas of Lee County, Town of Nettleton. Approximately 1,080 feet upstream of railroad None +238 * National Geodetic Vertical Datum. + North American Vertical Datum. # Depth in feet above ground. ** BFEs to be changed include the listed downstream and upstream BFEs, and include BFEs located on the stream reach between the referenced locations above. Please refer to the revised Flood Insurance Rate Map located at the community map repository (see below) for exact locations of all BFEs to be changed. Send comments to William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472. ADDRESSES City of Baldwyn Maps are available for inspection at Baldwyn City Hall, 202 South Second Street, Baldwyn, MS 38824. City of Tupelo Maps are available for inspection at Tupelo Planning Department, Tupelo City Hall, 117 North Broadway, 2nd Floor, MS 38802. Town of Nettleton Maps are available for inspection at Nettleton Town Hall, 124 Short Street, Nettleton, MS 38858. Town of Saltillo Maps are available for inspection at 205 South Second Street, Saltillo, MS 38866. Town of Shannon Maps are available for inspection at Shannon Town Hall, 1426 North Street, Shannon, MS 38868. Unincorporated Areas of Lee County Maps are available for inspection at Lee County Courthouse, 201 West Jefferson, Suite A, Tupelo, MS 38801. Summit County, Ohio, and Incorporated Areas Brandywine Creek Approximately 2,700 feet above confluence with Cuyahoga River None +649 Unincorporated Areas of Summit County, City of Macedonia, Village of Boston Heights, Village of Hudson. Approximately 100 feet upstream Ashley Drive None +1093 Brandywine Creek Tributary Approximately 500 feet downstream of Prospect Street +1034 +1033 Village of Hudson. Approximately 900 feet upstream of Ravenna Street +1061 +1070 Brandywine Creek Tributary 5 At confluence with Brandywine Creek +966 +965 City of Macedonia. Approximately 2,200 feet above confluence with Brandywine Creek None +969 Brandywine Creek Tributary Overflow Approximately 450 feet above Boston Mills Road None +1025 Village of Hudson. Approximately 100 feet downstream from divergence from Brandywine Creek Tributary None +1053 Indian Creek At confluence with Brandywine Creek +965 +959 Unincorporated Areas of Summit County, City of Macedonia. Approximately 3,700 feet upstream of Ledge Road +1032 +1031 Indian Creek Tributary 3 At confluence with Indian Creek +1011 +1010 City of Macedonia. Approximately 1,700 feet upstream of Ledge Road +1019 +1016 Indian Creek Tributary 4 Mouth at Indian Creek +978 +977 City of Macedonia. Approximately 760 feet upstream of Bedford Road None +986 Mud Brook At mouth at Cuyahoga River None +748 City of Akron, City of Cuyahoga Falls, City of Stow, Village of Hudson. Approximately 3,400 feet upstream of Streetsboro Road None +999 Mud Brook Tributary 1 At confluence with Mud Brook +989 +985 City of Stow. Approximately 2,480 feet upstream of Hudson Street None +988 Mud Brook Tributary 1B At confluence with Mud Brook Tributary 1 None +986 Village of Silver Lake, City of Stow. Approximately 100 feet upstream of Carter Lumber Drive +994 +999 Mud Brook Tributary 3 Approximately 1,300 feet downstream of Allen Road +993 +991 City of Stow. Approximately 700 feet upstream of Allen Road +1003 +1006 North Fork Yellow Creek Just downstream of Granger Road +911 +913 Unincorporated Areas of Summit County. Approximately 75 feet upstream of Bath Road None +951 North Fork Yellow Creek Tributary Approximately 100 feet above confluence with North Fork Yellow Creek +924 +923 Unincorporated Areas of Summit County. Approximately 100 feet upstream of Bath Road None +977 Powers Brook Approximately 100 feet downstream of Railroad None +1001 Village of Hudson, City of Stow. Approximately 100 feet upstream of Norton Road None +1074 Powers Brook Tributary 2 At confluence with Powers Brook +1049 +1051 City of Stow. Approximately 1,120 feet upstream of Stow Road None +1058 Yellow Creek Approximately 550 feet downstream of Riverview Road +734 +735 Unincorporated Areas of Summit County, City of Akron, City of Cuyahoga Falls. Approximately 50 feet upstream of Medina Line Road None +1066 Yellow Creek Overflow Approximately 70 feet above confluence with Yellow Creek None +1039 Unincorporated Areas of Summit County. Approximately 1,600 feet above confluence with Yellow Creek None +1050 * National Geodetic Vertical Datum. + North American Vertical Datum. # Depth in feet above ground. ** BFEs to be changed include the listed downstream and upstream BFEs, and include BFEs located on the stream reach between the referenced locations above. Please refer to the revised Flood Insurance Rate Map located at the community map repository (see below) for exact locations of all BFEs to be changed. Send comments to William R. Blanton, Jr., Chief, Engineering Management Branch, Mitigation Directorate, Federal Emergency Management Agency, 500 C Street, SW., Washington, DC 20472. ADDRESSES City of Akron Maps are available for inspection at 166 South High Street, Suite 100, Akron, OH 44308. City of Cuyahoga Falls Maps are available for inspection at 2310 Second Street, Cuyahoga Falls, OH 44221. City of Macedonia Maps are available for inspection at 9691 Valley View Road, Macedonia, OH 44056. City of Stow Maps are available for inspection at 3760 Darrow Road, Stow, OH 44224. Unincorporated Areas of Summit County Maps are available for inspection at 1030 East Tallmadge Avenue, Akron, OH 44310. Village of Boston Heights Maps are available for inspection at 5595 Transportation Boulevard, Suite 100, Hudson, OH 44236. Village of Hudson Maps are available for inspection at 27 East Main Street, Hudson, OH 44236. Village of Silver Lake Maps are available for inspection at 2961 Kent Road, Silver Lake, OH 44224. (Catalog of Federal Domestic Assistance No. 97.022, “Flood Insurance.”) Dated: April 7, 2008. David I. Maurstad, Federal Insurance Administrator of the National Flood Insurance Program, Department of Homeland Security, Federal Emergency Management Agency. [FR Doc. E8-8323 Filed 4-16-08; 8:45 am] BILLING CODE 9110-12-P DEPARTMENT OF HEALTH AND HUMAN SERVICES 45 CFR Part 88 RIN 0991-AB46 Office of Global Health Affairs; Regulation on the Organizational Integrity of Entities Implementing Leadership Act Programs and Activities ACTION: Notice of proposed rulemaking. SUMMARY: The Office of Global Health Affairs within the U.S. Department of Health and Human Services
(HHS)is issuing this Notice of Proposed Rulemaking
(NPRM)to obtain input from stakeholders and other interested parties regarding the separation that must exist between a recipient of HHS funds to implement HIV/AIDS programs and activities under the United States Leadership Against HIV/AIDS, Tuberculosis and Malaria Act of 2003 (the “Leadership Act”), Public Law No. 108-25 (May 27, 2003), and an affiliate organization that engages in activities that are not consistent with a policy opposing prostitution and sex trafficking, as required under Section 301(f) of the Leadership Act. The proposed rule provides additional information on the policy requirement expressed in this law for entities that receive grants, contracts, or cooperative agreements from the U.S. Department of Health and Human Services (“HHS”) to implement programs or projects under the authority of the Leadership Act. Specifically, it describes the legal, financial, and organizational separation that must exist between these recipients of HHS HIV/AIDS funds and an affiliate organization that engages in activities that are not consistent with a policy opposing prostitution and sex trafficking. DATES: To be assured consideration, written comments must be received on or before May 19, 2008. ADDRESSES: You may submit written comments to the following address: U.S. Department of Health and Human Services, Office of Global Health Affairs, Room 639H, 200 Independence Avenue, SW., Washington, DC 20201. Comments will be available for public inspection Monday through Friday, except for legal holidays, from 9 a.m. until 5 p.m., at Room 639H, 200 Independence Avenue, SW., Washington, DC 20201. Please call ahead to 1-202-690-6174, and ask for a representative in the Office of Global Health Affairs to schedule your visit. You may also submit written comments electronically via the Internet at *http://www.regulations.gov* , or via e-mail to *OGHA_Regulation_Comments@hhs.gov.* You can download an electronic version of the NPRM at *http://www.regulations.gov* . HHS/OGHA has also posted the NPRM and related materials to its Web site at the following Internet address: *http://www.globalhealth.gov/* . FOR FURTHER INFORMATION CONTACT: William R. Steiger, PhD, Office of Global Health Affairs, Hubert H. Humphrey Building, Room 639H, 200 Independence Avenue, SW., Washington, DC 20201. SUPPLEMENTARY INFORMATION: I. Statutory Authority This proposed rule implements a provision in the Leadership Act, section 301(f), 22 U.S.C. 7631(f), concerning restrictions on the use of funds covered by the Leadership Act. This provision prohibits the use of any funds made available to carry out the Leadership Act, or any amendment made by this Act, to provide assistance to any group or organization that does not have a policy explicitly opposing prostitution and sex trafficking. There is a related provision in the Leadership Act, Section 301(e), 22 U.S.C. 7631(e), that prohibits the use of funds made available to carry out the Act, or any amendment made by the Act, to promote or advocate the legalization or practice of prostitution or sex trafficking. This restriction, however, does not apply to the use of these funds for palliative care, treatment, or post-exposure pharmaceutical prophylaxis, and necessary pharmaceuticals and commodities, including test kits, condoms, and, when proven effective, microbicides. Section 301(f) of the Leadership Act should be read together with Section 301(e). II. Background The U.S. Government is opposed to prostitution and related activities, which are inherently harmful and dehumanizing, and contribute to the phenomenon of trafficking in persons. It is critical to the effectiveness of the Leadership Act, and to the U.S. Government's foreign policy that underlies this effort, that organizations that receive Leadership Act funds maintain the integrity of the Leadership Act programs and activities they implement, and not confuse the U.S. Government's message opposing prostitution and sex trafficking by holding positions that conflict with this policy. This proposed rule is designed to provide additional clarity for contracting and grant officers, contracting officers’ technical representatives, program officials and implementing partners (e.g., grantees, contractors) of HHS regarding the application of language in Notices of Availability, Requests for Proposals, and other documents pertaining to the policy requirement expressed in 22 U.S.C. 7631(f), which provides that organizations that are receiving Leadership Act funds must have a policy explicitly opposing prostitution and sex trafficking. Any entity that receives Leadership Act funds for HIV/AIDS programs directly or indirectly (“recipient”) cannot use such U.S. Government funds to promote or advocate the legalization or practice of prostitution or sex trafficking. In addition, any recipient must have a policy explicitly opposing prostitution and sex trafficking. The U.S. Government is issuing this proposed rule on “Organizational Integrity” to clarify that the Government's organizational partners that have adopted a policy opposing prostitution and sex-trafficking may, consistent with this policy requirement, maintain an affiliation with separate organizations that do not have such a policy, provided such affiliations do not threaten the integrity of the Government's programs and its message opposing prostitution and sex trafficking, as specified in this proposed rule. To maintain program integrity, adequate separation, as outlined in this proposed rule, is required between an affiliate that expresses views on prostitution and sex trafficking contrary to the Government's message and any federally funded partner organization. This proposed rule applies to funds used by the U.S. Department of Health and Human Services to implement HIV/AIDS programs and activities under the Leadership Act. The rule proposes certification language that organizations must provide to receive grants, cooperative agreements, contracts, and other funding instruments made available by HHS. All prime recipients that receive U.S. Government funds (“prime recipients”) must certify compliance with the proposed Rule on Organizational Integrity prior to actual receipt of such funds, in a written statement addressed to the HHS agency's grants or contract officer. The certifications by prime recipients are prerequisites to the payment of any U.S. Government funds in connection with an award under the Leadership Act. All recipients must insert provisions to implement the applicable parts of this proposed rule in all sub-agreements under their awards. These provisions must be express terms and conditions of the sub-agreement; must acknowledge that compliance with this proposed rule is a prerequisite to the receipt and expenditure of U.S. Government funds in connection with this document; and must acknowledge that any violation of the provisions shall be grounds for unilateral termination of the agreement, prior to the end of its term. Recipients must agree that HHS may, at any reasonable time, inspect the documents and materials maintained or prepared by the recipient in the usual course of its operations that relate to the organization's compliance with this proposed rule. Nothing in the regulation is intended to lessen or relieve relevant prohibitions on Federal Government funding under other applicable Federal laws. III. Discussion of the Proposed Rule These sections discuss the proposed rule by defining the terms relevant to this proposed rule and discussing the restrictions on organizations that receive Leadership Act funds. Section 88.1 Definitions This Section defines the terms that are pertinent to this rule. Specifically, we propose the following definitions: “ *Commercial sex act* ” means any sex act on account of which anything of value is given to or received by any person. “ *Prime recipients* ” are contractors, grantees, applicants or awardees who receive Leadership Act funds for HIV/AIDS programs directly from HHS. “ *Prostitution* ” means procuring or providing any commercial sex act. A “ *recipient* ” is a contractor, grantee, applicant or awardee who receives Leadership Act funds for HIV/AIDS programs directly or indirectly from HHS. Recipients are both prime recipients and sub-recipients. “ *Sex trafficking* ” means the recruitment, harboring, transportation, provision, or obtaining of a person for the purpose of a commercial sex act. “ *Sub-recipients* ” are contractors, grantees, applicants or awardees, other than the prime recipient, who receive Leadership Act funds for HIV/AIDS programs indirectly from HHS through a contract, grant or other financial agreement with a recipient. Section 88.2 Objective Integrity of Recipients This section of the proposed rule describes the separation that must exist between a recipient of HHS funds to implement HIV/AIDS programs and activities under the United States Leadership Against HIV/AIDS, Tuberculosis and Malaria Act of 2003 (the “Leadership Act”), Public Law No. 108-25 (May 27, 2003), and an affiliate organization that engages in activities that are not consistent with a policy opposing prostitution and sex trafficking, as required under Section 301(f) of the Leadership Act. Paragraph
(a)sets forth criteria for establishing the objective integrity and independence that a recipient must have from an affiliate organization that engages in activities inconsistent with a policy opposing prostitution and sex trafficking. The criteria for affiliate independence in this proposed rule are modeled on criteria upheld as facially constitutional by the U.S. Court of Appeals for the Second Circuit in *Velazquez* v. *Legal Services Corp.* , 164 F.3d 757, 767 (2d Cir. 1999), and *Brooklyn Legal Services Corp.* v. *Legal Services Corp.,* 462 F.3d 219, 229-33 (2d Cir. 2006), cases involving similar organization-wide limitations applied to recipients of Federal funding. This proposed rule clarifies that an independent organization affiliated with a recipient of Leadership Act funds need not have a policy explicitly opposing prostitution and sex trafficking for the recipient to maintain compliance with the policy requirement. The independent affiliate's position on these issues will have no effect on the recipient organization's eligibility for Leadership Act funds, so long as the affiliate satisfies the criteria for objective integrity and independence detailed in this proposed rule. By ensuring adequate separation between the recipient and affiliate organizations, these criteria guard against a public perception that the affiliate's views on prostitution and sex-trafficking may be attributed to the recipient organization, and thus to the Government, thereby avoiding the risk of confusing the Government's message opposing prostitution and sex trafficking. Under Paragraph
(b)of this section, an organization is ineligible to receive any Federal funds for HIV/AIDS programs made available under the Leadership Act, unless it has provided the certifications required by § 88.3. Section 88.3 Certifications This section of the proposed rule describes the certifications required to receive Leadership Act funding from HHS. The required certification implements the Organizational Integrity Section through an Organizational Integrity Certification, located at Section 88.3(d)(1), in which a recipient of Leadership Act funds administered by an HHS agency certifies it has objective integrity and independence from any affiliated organization that engages in activities inconsistent with a policy opposing prostitution and sex trafficking. The certification contains Acknowledgement and Sub-Recipient Certifications at Section 88.3(d)(2) and (3). These require each recipient to acknowledge that its provision of the certifications is a prerequisite to receiving Federal funds; that the Federal Government can stop or withdraw those funds if HHS finds a certification to have been inaccurate, or that such a certification becomes inaccurate; and that the prime recipient will ensure all its sub-recipients also provide the required certifications. As detailed in the Certifications Section, a sub-recipient must, at a minimum, provide the same certifications as those provided by the prime recipient. Paragraph
(e)contains information regarding requirements for the renewal of the certifications. HHS requires each recipient to provide renewed certifications each Federal Fiscal Year, in alignment with the award cycle. Additionally, current funding recipients, as of the effective date of the regulation, must file a certification upon any extension, amendment, or modification of the funding instrument that extends the term of such instrument, or adds additional funds to it. IV. Impact Analysis Regulatory Flexibility Act The Secretary certifies under 5 U.S.C. 605(b), as enacted by the Regulatory Flexibility Act (Pub. L. 96-354), that this rule will not result in a significant impact on a substantial number of small entities. Since enactment of the policy requirement in the Leadership Act, HHS has required its contract solicitations and grant announcements for discretionary Leadership Act funding to include a section regarding “Prostitution and Related Activities.” The statute explicitly requires certifications. Executive Order 12866—Regulatory Planning and Review The HHS has drafted and reviewed this regulation in accordance with Executive Order 12866, Section 1(b), Principles of Regulation. HHS has determined this rule is a “significant regulatory action” under Executive Order 12866, Section 3(f)(4), Regulatory Planning and Review, because it raises novel legal or policy issues that arise out of legal mandates and the President's priorities, and, accordingly, the Office of Management and Budget has reviewed it. This benefits of this rule are to ensure that an appropriate separation exists between recipients of Leadership Act funds and affiliated entities that engage in activities inconsistent with a policy opposing prostitution and sex trafficking, which will prevent confusion of the Government's message opposing prostitution and sex trafficking in Leadership Act programs and activities. The cost of this rule is unlikely to be significant. Since 2004, HHS has required recipients of Emergency Plan funding to certify their compliance with Section 301(f) of the Leadership Act, and HHS/OGHA issued a “Guidance on Organizational Integrity,” similar to this proposed regulation, on July 23, 2007. Although HHS/OGHA directed HHS agencies to disseminate this Guidance to their contractors and grantees that receive funding under the Leadership Act, and provided means for the public to comment on that Guidance, including whether the document is economically significant under definitions provided by the Office of Management and Budget, no one has submitted comments. Executive Order 13132—Federalism Executive Order 13132 on Federalism requires Federal Departments and agencies to consult with State and local Government officials in the development of regulatory policies with implications for Federalism. This rule does not have Federalism implications for State or local Governments, as defined in the Executive Order. Unfunded Mandates Reform Act of 1995 Section 202 of the Unfunded Mandates Reform Act of 1995 requires that a covered Federal Department or agency prepare a budgetary impact statement before promulgating a rule that includes any Federal mandate that could result in the expenditure by State, local, and tribal Governments, in the aggregate, or by the private sector, of $100 million or more in any one year. The HHS has determined this rule would not impose a mandate that will result in the expenditure by State, local, and Tribal Governments, in the aggregate, or by the private sector, of more than $100 million in any one year. Assessment of Federal Regulation and Policies on Families Section 654 of the Treasury and General Government Appropriations Act of 1999 requires Federal Departments and agencies to determine whether a proposed policy or regulation could affect family well-being. If the determination is affirmative, then the Department or agency must prepare an impact assessment to address criteria specified in the law. These regulations will not have an impact on family well-being, as defined in this legislation. Paperwork Reduction Act To obtain or retain Leadership Act funding for HIV/AIDS programs and activities, HHS will require recipients to submit certifications. The title of the information collection is “ *Certification Regarding the Organizational Integrity of Entities Implementing Leadership Act Programs and Activities.* ” The documents are necessary to ensure that recipients of Leadership Act funding have objective integrity and independence from any affiliated organizations that engage in activities inconsistent with a policy opposing prostitution and sex trafficking. HHS estimates that 555 respondents will prepare documents to validate that recipients have objective integrity and independence from affiliated organizations that engage in activities inconsistent with policies opposing prostitution and sex trafficking. HHS therefore estimates annual aggregate burden to collect the information as follows: Annual Burden Estimates Instrument Number of respondents Number of responses per respondent Average burden hours per response Total burden hours Certifications 555 1 .5 277.5 HHS has submitted this information collection to the Office of Management and Budget
(OMB)for regular approval, and HHS will accept comments from the public, in accordance with the Paperwork Reduction Act of 1995. Comments received during the comment period should primarily focus on the following:
(1)Whether the proposed collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility;
(2)the accuracy of the Department's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(3)how to enhance the quality, utility, and clarity of the information to be collected; and
(4)how to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology (e.g., by permitting the electronic submission of responses). All comments and suggestions, or questions regarding additional information, should go to HHS/OGHA. List of Subjects in 45 CFR Part 88 Administrative practice and procedure, Federal aid programs, Grant programs, Grants administration. Dated: February 26, 2008. William R. Steiger, Director, Office of Global Health Affairs. Approved: March 18, 2008. Michael O. Leavitt, Secretary of Health and Human Services. For the reasons stated in the preamble, the Office of Global Health Affairs amends 45 CFR to add part 88 as follows: PART 88—ORGANIZATIONAL INTEGRITY OF ENTITIES IMPLEMENTING PROGRAMS AND ACTIVITIES UNDER THE LEADERSHIP ACT Sec. 88.1 Definitions. 88.2 Organizational integrity of recipients. 88.3 Certifications. Authority: 22 U.S.C. 7631(f) and 5 U.S.C. 301. § 88.1 Definitions. *For the purposes of this part: * “ *Commercial sex act* ” means any sex act on account of which anything of value is given to or received by any person. “ *Prime recipients* ” are contractors, grantees, applicants or awardees who receive Leadership Act funds for HIV/AIDS programs directly from HHS. “ *Prostitution* ” means procuring or providing any commercial sex act. A “ *recipient* ” is a contractor, grantee, applicant or awardee who receives Leadership Act funds for HIV/AIDS programs directly or indirectly from HHS. “ *Sex trafficking* ” means the recruitment, harboring, transportation, provision, or obtaining of a person for the purpose of a commercial sex act. “ *Sub-recipients* ” are contractors, grantees, applicants or awardees, other than prime recipients, who receive Leadership Act funds for HIV/AIDS programs indirectly from HHS through a contract, grant or other financial agreement with a recipient. § 88.2 Organizational integrity of recipients.
(a)A recipient must have objective integrity and independence from any affiliated organization that engages in activities inconsistent with a policy opposing prostitution and sex trafficking . Recipients include both prime recipients and subrecipients. A recipient will be found to have objective integrity and independence from such an organization if:
(1)The affiliated organization is a legally separate entity;
(2)The affiliated organization receives no transfer of Leadership Act funds, and Leadership Act funds do not subsidize activities inconsistent with a policy opposing prostitution and sex trafficking; and
(3)The recipient is physically and financially separate from the affiliated organization. Mere bookkeeping separation of Leadership Act funds from other funds is not sufficient. HHS will determine, on a case-by-case basis and based on the totality of the facts, whether sufficient physical and financial separation exists. The presence or absence of any one or more factors will not be determinative. Factors relevant to this determination shall include but will not be limited to the following:
(i)The existence of separate personnel, management, and governance;
(ii)The existence of separate accounts, accounting records, and timekeeping records;
(iii)The degree of separation from facilities, equipment and supplies used by the affiliated organization to conduct activities inconsistent with a policy opposing prostitution and sex trafficking, and the extent of such activities by the affiliate;
(iv)The extent to which signs and other forms of identification that distinguish the recipient from the affiliated organization are present, and signs and materials that could be associated with the affiliated organization or activities inconsistent with a policy opposing prostitution and sex trafficking are absent; and
(v)The extent to which HHS, the U.S. Government and the project name are protected from public association with the affiliated organization and its activities inconsistent with a policy opposing prostitution and sex trafficking in materials, such as publications, conferences and press or public statements.
(b)An organization is ineligible to receive any Leadership Act funds unless it has provided the certifications required by § 88.3. § 88.3 Certifications.
(a)HHS agencies shall include the certification requirements for any grant, cooperative agreement, contract, or other funding instrument in the public announcement of the availability of the grant, cooperative agreement, contract, or other funding instrument.
(b)Unless the recipient is otherwise excepted, a person authorized to bind the recipient shall execute the certifications for the grant, cooperative agreement, contract, or other funding instrument.
(c)A prime recipient must submit its certifications to the grant or contract officer of the HHS agency that will award funds. A sub-recipient must provide its certifications to the prime recipient. The prime recipient will submit certifications from its sub-recipients when requested to do so by the HHS grant or contract officer.
(d)The certifications shall state as follows:
(1)Organizational Integrity Certification: “I hereby certify that [name of recipient], a recipient of the funds made available through this [grant, cooperative agreement, contract, or other funding instrument], as defined in 45 CFR part 88, from any affiliated organization that engages in activities inconsistent with a policy opposing prostitution and sex trafficking.”
(2)Acknowledgement Certification: “I further certify that the recipient acknowledges that these certifications are a prerequisite to receipt of U.S. Government funds in connection with this [grant, cooperative agreement, contract, or other funding instrument], and that any violation of these certifications shall be grounds for termination by HHS in accordance with the Federal Acquisition Regulations, part 49 for contracts, 45 CFR parts 74 or 92 for grants and cooperative agreements, as well as any other remedies as provided by law.”
(3)Sub-Recipient Certification: “I further certify that the recipient will include these identical certification requirements in any [grant, cooperative agreement, contract, or other funding instrument] to a sub-recipient of funds made available under this [grant, cooperative agreement, contract, or other funding instrument], and will require such sub-recipient to provide the same certifications that the recipient provided.”
(e)Prime recipients and sub-recipients of funds must file a renewed certification each Fiscal Year, in alignment with the award cycle. Prime recipients and sub-recipients that are already recipients as of the effective date of this regulation must file a certification upon any extension, amendment, or modification of the grant, cooperative agreement, contract, or other funding instrument that extends the term of such instrument, or adds additional funds to it. [FR Doc. 08-1147 Filed 4-15-08; 10:34 am]
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U.S. Code
46 references not yet in our index
  • 14 CFR 71
  • 14 CFR 93
  • 658 F. Supp. 952
  • 485 U.S. 1006
  • 544 U.S. 528
  • 438 U.S. 104
  • Pub. L. 109-115
  • Pub. L. 110-161
  • Pub. L. 104-264
  • 505 U.S. 1003
  • 475 U.S. 211
  • 524 U.S. 498
  • 14 CFR 17
  • 766 F.2d 1107
  • 19 USC 2531-2533
  • Pub. L. 104-4
  • 5 CFR 1320.8(b)(2)(vi)
  • Pub. L. 96-3540
  • 49 CFR 7
  • 14 CFR 380
  • 15 CFR 922
  • 50 CFR 660
  • Pub. L. 107-16
  • 115 Stat. 91
  • Rev. Proc. 2004-46
  • 26 CFR 26
  • 26 CFR 301
  • 368 U.S. 291
  • 32 CFR 1900
  • 50 USC 401-442
  • 50 USC 403a-403v
  • 36 CFR 242
  • 50 CFR 100
  • 16 USC 3111-3126
  • 36 CFR 242.1-28
  • 50 CFR 100.1-28
  • 44 CFR 67
  • 44 CFR 67.4(a)
  • 44 CFR 60.3
  • 44 CFR 10
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cites case law
Proposed Rules
Notice of proposed rulemaking; extension of comment period
U.S.C.§ 106
C.F.R.§ 71.1
Fed. Reg.Notices
U.S.C.§ 40103
U.S.C.§ 41715
U.S.C.§ 40101
U.S.C.§ 40110
U.S.C.§ 41712
U.S.C.§ 3507
F. Supp.658 F. Supp. 952
SCOTUS485 U.S. 1006
SCOTUS544 U.S. 528
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