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Code · REGISTER · 2008-05-09 · Federal Aviation Administration (FAA), Department of Transportation (DOT) · Rules and Regulations

Rules and Regulations. Final rule; request for comments

15,961 words·~73 min read·/register/2008/05/09/08-1238

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 39 [Docket No. FAA-2008-0524; Directorate Identifier 2007-SW-77-AD; Amendment 39-15519; AD 2007-26-52] RIN 2120-AA64 Airworthiness Directives; Agusta S.p.A. Model A109C, A109E, and A109K2 Helicopters AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule; request for comments. SUMMARY: This document supersedes Airworthiness Directive
(AD)2001-24-07 R1 and adopts AD 2007-26-52, which was sent previously to all known U.S. owners and operators of Agusta S.p.A. (Agusta) Model A109C, A109E, and A109K2 helicopters by individual letters. This AD requires inspections for swelling, deformation, bonding separation, or a crack on each main rotor blade
(MRB)with a certain tip cap installed, and if any of these conditions are found that exceed the prescribed limits, replacing the MRB before further flight. This amendment is prompted by a report of the in-flight loss of part of a tip cap. The actions specified in this AD are intended to prevent an increase in vibration of the MRB and subsequent loss of control of the helicopter. DATES: Effective May 27, 2008, to all persons except those persons to whom it was made immediately effective by Emergency AD 2007-26-52, issued on December 20, 2007, which contained the requirements of this amendment. The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of May 27, 2008. The Director of the Federal Register approved the incorporation by reference of Agusta Alert Bollettino Tecnico No. 109-106, No. 109K-22, and No. 109EP-1, all Revision B and all dated December 19, 2000, listed in the AD as of January 7, 2002 (66 FR 60144, December 3, 2001). Comments for inclusion in the Rules Docket must be received on or before July 8, 2008. ADDRESSES: Use one of the following addresses to submit comments on this AD: • *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. You may get the service information identified in this AD from Agusta, 21017 Cascina Costa di Samarate
(VA)Italy, Via Giovanni Agusta 520, telephone 39
(0331)229111, fax 39
(0331)229605-222595. *Examining the Docket:* You may examine the docket that contains the AD, any comments, and other information on the Internet at *http://www.regulations.gov,* or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Operations office (telephone
(800)647-5527) is located in Room W12-140 on the ground floor of the West Building at the street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Sharon Miles, Aviation Safety Engineer, FAA, Rotorcraft Directorate, Safety Management Group, Fort Worth, Texas 76193-0111, telephone
(817)222-5122, fax
(817)222-5961. SUPPLEMENTARY INFORMATION: On June 16, 2004, the FAA issued AD 2001-24-07 R1, Amendment 39-13687 (69 FR 35511, June 25, 2004). That AD required inspecting each MRB, part number (P/N) 709-0103-01, tip cap, for either bonding separation or a crack, and provided a terminating action for the requirements of the AD by replacing each tip cap with an airworthy tip cap, P/N 709-0103-29-109. Since issuing that AD, there has been one report of in-flight loss of part of a tip cap, P/N 709-0103-29-109, resulting in an emergency landing due to an increase in vibrations. There has also been one report of cracking on the tip cap leading edge. Therefore, on December 20, 2007, we issued Emergency AD 2007-26-52, which superseded AD 2001-24-07 R1 (69 FR 35511, June 25, 2004), to remove the terminating action of replacing a tip cap with tip cap, P/N 709-0103-29-109, and to remove the serial number limitation of AD 2001-24-07 R1. The Emergency AD requires inspecting and replacing certain MRBs, if necessary. The European Aviation Safety Agency (EASA), which is the Technical Agent for Italy, a Member State of the European Community, notified us that an unsafe condition may exist on Agusta Model A109C, A109E, and A109K2 helicopters. The EASA advises that an incident occurred in which a Model A109E helicopter lost part of the tip of the MRB due to fracture of the welded bead (joint line of shells). The manufacturer advises that the investigation relating to this tip cap failure is still ongoing. Agusta has issued Alert Bollettino Tecnico No. 109-106 for the Model A109C, No. 109K-22 for the Model A109K2, and No. 109EP-1 for the Model A109E, all Revision B and all dated December 19, 2000, which describe inspecting the MRB tip cap for bonding separation and a crack; a tap inspection of the tip cap for bonding separation in the blade bond; and a dye-penetrant inspection of the tip cap leading edge along the welded joint line of the upper and lower tip cap skin shells for a crack. Since then, Agusta has issued Bollettino Tecnico No. 109-125 for the Model A109C, No. 109EP-85 for the Model A109E, and No. 109K-48 for the Model A109K2, all dated December 13, 2007, which describe procedures for inspecting the tip cap, P/N 709-0103-29-109, for cracks and for damage on the tip cap leading edge at the welded bead (joint line of shells). The EASA classified these bollettino tecnicos as mandatory and issued EASA Emergency AD No. 2007-0306-E, dated December 14, 2007, to ensure the continued airworthiness of these helicopters in Italy. These helicopter models are manufactured in Italy and are type certificated for operation in the United States under the provisions of 14 CFR 21.29 and the applicable bilateral agreement. Pursuant to the applicable bilateral agreement, the EASA, the agent for Italy, has kept the FAA informed of the situation described above. The FAA has examined the findings of the EASA, reviewed all available information, and determined that AD action is necessary for products of these type designs that are certificated for operation in the United States. Since the unsafe condition described is likely to exist or develop on other Agusta Model A109C, A109E, and A109K2 helicopters of the same type designs, the FAA issued Emergency AD 2007-26-52 to prevent an increase in vibration of the MRB and subsequent loss of control of the helicopter. The AD requires, for any MRB with a serial number with a prefix of either “EM-” or “A5-”, except a MRB with a tip cap, P/N 709-0103-29-109, within 10 hours TIS and thereafter at intervals not to exceed 25 hours time-in-service (TIS): • A tap inspection of the upper and lower sides of each tip cap for bonding separation and in the tip cap to blade bond area; • A visual inspection of the upper and lower side of each blade tip cap for swelling or deformation; and • A dye-penetrant inspection of the tip cap leading edge along the welded joint line of the upper and lower tip cap skin shells for a crack. The AD also requires visually inspecting each MRB with a tip cap, P/N 709-0103-29-109, for a crack on the leading edge at the welded bead (joint line of shells) using a 10x or higher power magnifying glass, and if there is damage other than a crack, inspecting the area using a dye-penetrant inspection method, within the following compliance times: • For a tip cap, P/N 709-0103-29-109, with 600 or more hours TIS, inspect within the next 5 hours TIS or 30 days, whichever occurs first, and thereafter at intervals not to exceed 50 hours TIS; or • For a tip cap with less than 600 hours TIS, inspect before reaching 600 hours TIS, and thereafter, at intervals not to exceed 50 hours TIS. If dwelling, deformation, a crack, or bonding separation that exceeds the prescribed limits is found in a MRB with an affected prefix, except a MRB with a tip cap, P/N 709-0103-29-109, the MRB must be replaced with an airworthy MRB before further flight. If a crack is found in a MRB with tip cap, P/N 709-0103-29-109, then before further flight the MRB must be replaced with an airworthy MRB. The actions must be accomplished in accordance with the bollettino tecnicos described previously. The short compliance time involved is required because the previously described critical unsafe condition can adversely affect the structural integrity and controllability of the helicopter. Therefore, the applicable inspections of each affected MRB and replacing any unairworthy MRB are required before further flight, and this AD must be issued immediately. Since it was found that immediate corrective action was required, notice and opportunity for prior public comment thereon were impracticable and contrary to the public interest, and good cause existed to make the AD effective immediately by individual letters issued on December 20, 2007 to all known U.S. owners and operators of Model A109C, A109E, and A109K2 helicopters. These conditions still exist, and the AD is hereby published in the **Federal Register** as an amendment to 14 CFR 39.13 to make it effective to all persons. The FAA estimates that this AD will affect 101 helicopters of U.S. registry (44 without a tip cap, P/N 709-0103-29-109, plus 57 with that tip cap), and will take, for MRBs with any tip cap, except tip cap, P/N 709-0103-29-109, approximately 6 work hours per helicopter to accomplish the initial and 24 25-hour TIS repetitive inspections (assuming they include dye-penetrant inspections), and for MRBs with tip cap, P/N 709-0103-29-109, installed, approximately 8 work hours per helicopter to accomplish the initial and 12 50-hour TIS repetitive inspections, assuming that these inspections require using a dye-penetrant method also, at an average labor rate of $80 per work hour. Based on these figures, we estimate the total cost impact of the AD on U.S. operators to be $495,360. Comments Invited This AD is a final rule that involves requirements that affect flight safety and was not preceded by notice and an opportunity for public comment; however, we invite you to submit any written data, views, or arguments regarding this AD. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2008-0524; Directorate Identifier 2007-SW-77-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the AD. We will consider all comments received by the closing date and may amend the AD in light of those comments. We will post all comments we receive, without change, to *http://www.regulations.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this AD. Using the search function of our docket Web site, you can find and read the comments to any of our dockets, including the name of the individual who sent the comment. You may review the DOT'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.* Regulatory Findings We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared an economic evaluation of the estimated costs to comply with this AD. See the AD docket to examine the economic evaluation. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. Section 39.13 is amended by adding a new airworthiness directive to read as follows: **2007-26-52 Agusta S.p.A.:** Amendment 39-15519. Docket No. FAA-2008-0524; Directorate Identifier 2007-SW-77-AD. Supersedes AD 2001-24-07 R1, Amendment 39-13687, Docket No. 2001-SW-15-AD. *Applicability:* Model A109C, A109E, and A109K2 helicopters, with a main rotor blade (MRB), Part Number (P/N) 709-0103-01-all dash numbers, certificated in any category. *Compliance:* Required as indicated.
(a)For a MRB with a serial number that has a prefix of either “EM-” or “A5-”, except a MRB with a tip cap, P/N 709-0103-29-109, installed, within 10 hours time-in-service (TIS), unless accomplished previously, and thereafter at intervals not to exceed 25 hours TIS:
(1)Tap inspect the upper and lower sides of each tip cap for bonding separation between the metal shells and the honeycomb core using a steel tap hammer, P/N 109-3101-58-1, or a coin (quarter) in the area indicated as honeycomb core on Figure 1 of Alert Bollettino Tecnico
(BT)No. 109-106, No. 109K-22, or No. 109EP-1, all Revision B, and all dated December 19, 2000, as applicable to your model helicopter. Also, tap inspect for bonding separation in the tip cap to blade bond area (no bonding voids are permitted in this area).
(2)Visually inspect the upper and lower sides of each blade tip cap for swelling or deformation.
(3)Dye-penetrant inspect the tip cap leading edge along the welded joint line of the upper and lower tip cap skin shells for a crack in accordance with the Compliance Instructions, steps 3. through 3.2.6., of the applicable BT.
(4)If any swelling, deformation, crack, or bonding separation that exceeds the prescribed limits in the applicable maintenance manual is found, replace the blade with an airworthy blade before further flight.
(b)For a MRB with a tip cap, P/N 709-0103-29-109, installed, perform the following in accordance with Table 1: Table 1 For each tip cap: Comply: With 600 or more hours TIS Within the next 5 hours TIS or 30 days, whichever occurs first, and thereafter at intervals not to exceed 50 hours TIS. With less than 600 hours TIS Before reaching 600 hours TIS, and thereafter, at intervals not to exceed 50 hours TIS.
(1)Using a 10x or higher power magnifying glass, visually inspect the tip cap leading edge welded bead (joint line between the two metallic shells) for a crack in accordance with the Compliance Instructions, steps 1. through 2. of BT No. 109-125, No. 109EP-85, or No. 109K-48, all dated December 13, 2007, as applicable to your model helicopter.
(2)If there is damage other than a crack, inspect the tip cap leading edge along the welded joint line of the shells for a crack using a dye penetrant method in accordance with the Compliance Instructions, steps 3. through 3.7. of BT No. 109-125, No. 109EP-85, or No. 109K-48, all dated December 13, 2007, as applicable to your model helicopter.
(3)If a crack is present, remove the blade and replace it with an airworthy blade before further flight.
(c)To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Contact the Manager, Safety Management Group, FAA, ATTN: Sharon Miles, Rotorcraft Directorate, Fort Worth, Texas 76193-0111, telephone
(817)222-5122, fax
(817)222-5961, for information about previously approved alternative methods of compliance.
(d)The inspections shall be done in accordance with the specified portions of the service information described in paragraphs (d)(1) and (d)(2) of this AD.
(1)The Director of the Federal Register approved the incorporation by reference of Agusta Bollettino Tecnico No. 109-125, No. 109EP-85, and No. 109K-48, all dated December 13, 2007, in accordance with 5 U.S.C. 552(a) and 1 CFR part 51.
(2)The Director of the Federal Register previously approved the incorporation by reference of Agusta Alert Bollettino Tecnico No. 109-106, No. 109K-22, and No. 109EP-1, all Revision B and all dated December 19, 2000, on January 7, 2002 (66 FR 60144, December 3, 2001).
(3)Copies may be obtained from Agusta, 21017 Cascina Costa di Samarate
(VA)Italy, Via Giovanni Agusta 520, telephone 39
(0331)229111, fax 39
(0331)229605-222595.
(4)Copies may be inspected at the FAA, Office of the Regional Counsel, Southwest Region, 2601 Meacham Blvd., Room 663, Fort Worth, Texas or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.* Note: The subject of this AD is addressed in European Aviation Safety Agency
(EASA)AD No. 2007-0306-E, dated December 14, 2007.
(e)This amendment becomes effective on May 27, 2008, to all persons except those persons to whom it was made immediately effective by Emergency AD 2007-26-52, issued December 20, 2007, which contained the requirements of this amendment. Issued in Fort Worth, Texas, on May 1, 2008. Mark R. Schilling, Acting Manager, Rotorcraft Directorate, Aircraft Certification Service. [FR Doc. E8-10054 Filed 5-8-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2008-0527; Directorate Identifier 2008-CE-027-AD; Amendment 39-15520; AD 2008-10-13] RIN 2120-AA64 Airworthiness Directives; EADS SOCATA Model TBM 700 Airplanes AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule; request for comments. SUMMARY: We are adopting a new airworthiness directive
(AD)for the products listed above. This AD results from mandatory continuing airworthiness information
(MCAI)issued by the aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: A rupture of the alternator and vapour cycle cooling system pulley drive assembly has reportedly been found. Such a failure could lead to the loss of the alternator and vapour cycle cooling systems and could also cause mechanical damage inside the powerplant compartment. This AD requires actions that are intended to address the unsafe condition described in the MCAI. DATES: This AD becomes effective May 29, 2008. On May 29, 2008, the Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD. We must receive comments on this AD by June 9, 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. Examining the AD Docket You may examine the AD docket on the Internet at *http://www.regulations.gov* ; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone
(800)647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Albert Mercado, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:
(816)329-4119; fax:
(816)329-4090. SUPPLEMENTARY INFORMATION: Discussion The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA AD No.: 2008-0067-E, dated April 3, 2008 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states: A rupture of the alternator and vapour cycle cooling system pulley drive assembly has reportedly been found. Such a failure could lead to the loss of the alternator and vapour cycle cooling systems and could also cause mechanical damage inside the powerplant compartment. To address this condition, AD 2008-0063-E had been published to require a check of the pulley drive assembly for leakage and, as an interim action, removal of the compressor drive belt from the assembly, and adoption of a new operational procedure to keep the air-conditioning system deactivated. This AD retains the requirements of AD 2008-0063-E which is superseded, introduces a mandatory terminating action which consists in replacing the original pulley drive assembly by a new one of an improved design—corresponding to the EADS SOCATA modification MOD 70-0231-21—that permits reinstallation of the compressor drive belt. The MCAI requires you to deactivate the air conditioning system, inspect the pulley drive assembly for leaks, and replace the pulley drive assembly if leaks are found. You may obtain further information by examining the MCAI in the AD docket. Relevant Service Information EADS SOCATA has issued Mandatory Service Bulletin SB 70-156, Amendment 1, dated March 2008. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. FAA's Determination and Requirements of the AD This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with this State of Design Authority, they have notified us of the unsafe condition described in the MCAI and service information referenced above. We are issuing this AD because we evaluated all information provided by the State of Design Authority and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design. The MCAI and the service information require replacement of the pulley drive assembly part number (P/N) T700G215504900000 with the new P/N T700G215505710000 and reinstallation of the compressor drive belt by no later than March 31, 2009. This AD is considered an interim action because we are only mandating this replacement if a leak is found. The Administrative Procedure Act does not permit the FAA to “bootstrap” a long-term requirement into an urgent safety of flight action where the rule becomes effective at the same time the public has the opportunity to comment. The short-term action and the long-term action are analyzed separately for justification to bypass prior public notice. After issuing this AD, we may initiate further AD action (notice of proposed rulemaking followed by a final rule) to require such a terminating action. Differences Between This AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might have also required different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are described in a separate paragraph of the AD. These requirements take precedence over those copied from the MCAI. FAA's Determination of the Effective Date An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because a rupture of the alternator and vapour cycle cooling system pulley drive assembly has been reported. Such a failure could lead to the loss of the alternator and vapor cycle cooling systems and could cause mechanical damage inside the powerplant compartment. Therefore, we determined that notice and opportunity for public comment before issuing this AD are impracticable and that good cause exists for making this amendment effective in fewer than 30 days. Comments Invited This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2008-0527; Directorate Identifier 2008-CE-027- AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments. We will post all comments we receive, without change, to *http://www.regulations.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this AD. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and
(3)Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **2008-10-13 EADS SOCATA:** Amendment 39-15520; Docket No. FAA-2008-0527; Directorate Identifier 2008-CE-027-AD. Effective Date
(a)This airworthiness directive
(AD)becomes effective May 29, 2008. Affected ADs
(b)None. Applicability
(c)This AD applies to Models TBM 700 airplanes, serial numbers 434 through 455, certificated in any category. Subject
(d)Air Transport Association of America
(ATA)Code 24: Electric Power. Reason
(e)The mandatory continuing airworthiness information
(MCAI)states: A rupture of the alternator and vapour cycle cooling system pulley drive assembly has reportedly been found. Such a failure could lead to the loss of the alternator and vapour cycle cooling systems and could also cause mechanical damage inside the powerplant compartment. To address this condition, AD 2008-0063-E had been published to require a check of the pulley drive assembly for leakage and, as an interim action, removal of the compressor drive belt from the assembly, and adoption of a new operational procedure to keep the air-conditioning system deactivated. This AD retains the requirements of AD 2008-0063-E which is superseded, introduces a mandatory terminating action which consists in replacing the original pulley drive assembly by a new one of an improved design—corresponding to the EADS SOCATA modification MOD 70-0231-21—that permits reinstallation of the compressor drive belt. The MCAI requires you to deactivate the air conditioning system, inspect the pulley drive assembly for leaks, and replace the pulley drive assembly if leaks are found. Actions and Compliance
(f)Unless already done, before further flight after May 29, 2008 (the effective date of this AD), do the following actions:
(1)Position to “OFF” the air-conditioning “AIR COND” switch.
(2)Check for oil leakage in the pulley drive assembly by following EADS SOCATA Service Bulletin
(SB)No. 70-156 Amendment 1, dated March 2008.
(3)If any leak is found, before further flight, replace the pulley drive assembly part number (P/N) T700G215504900000 with P/N T700G215505710000 following EADS SOCATA Service Bulletin
(SB)No. 70-156 Amendment 1, dated March 2008.
(4)If no leak is found, before further flight, remove the compressor drive belt from the pulley drive assembly following either EADS SOCATA Service Bulletin
(SB)No. 70-156, original issue; or EADS SOCATA Service Bulletin
(SB)No. 70-156, Amendment 1; both dated March 2008.
(5)The air-conditioning “AIR COND” switch must be in the “OFF” position and the compressor drive belt must remain removed until the pulley drive assembly part number (P/N) T700G215504900000 is replaced with P/N T700G215505710000 following EADS SOCATA Service Bulletin
(SB)No. 70-156 Amendment 1, dated March 2008. This replacement must be done before further flight if any leak is found and may be done at any time as terminating action to this AD. FAA AD Differences Note: This AD differs from the MCAI and/or service information as follows:
(1)The MCAI and the service information require replacement of the pulley drive assembly part number (P/N) T700G215504900000 with the improved design P/N T700G215505710000 and reinstallation of the compressor drive belt by no later than March 31, 2009.
(2)This AD is considered an interim action because we are only mandating this replacement if a leak is found. The Administrative Procedure Act does not permit the FAA to “bootstrap” a long-term requirement into an urgent safety of flight action where the rule becomes effective at the same time the public has the opportunity to comment. The short-term action and the long-term action are analyzed separately for justification to bypass prior public notice.
(3)After issuing this AD, we may initiate further AD action (notice of proposed rulemaking followed by a final rule) to require the replacement of the pulley drive assembly part number (P/N) T700G215504900000 with the new P/N T700G215505710000, and reinstallation of the compressor drive belt as a terminating action. Appropriate credit would be given for the initial actions done under this AD. Other FAA AD Provisions
(g)The following provisions also apply to this AD:
(1)*Alternative Methods of Compliance (AMOCs):* The Manager, Standards Office, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Send information to ATTN: Albert Mercado, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:
(816)329-4119; fax:
(816)329-4090. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector
(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.
(2)*Airworthy Product:* For any requirement in this AD to obtain corrective actions from a manufacturer or other source, use these actions if they are FAA-approved. Corrective actions are considered FAA-approved if they are approved by the State of Design Authority (or their delegated agent). You are required to assure the product is airworthy before it is returned to service.
(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the Office of Management and Budget
(OMB)has approved the information collection requirements and has assigned OMB Control Number 2120-0056. Special Flight Permit
(h)Under 14 CFR 39.23, we are limiting the special flight permits for this AD under the following condition: The air-conditioning “AIR-COND” switch is set to the “OFF” position. Related Information
(i)Refer to MCAI European Aviation Safety Agency
(EASA)Emergency AD No.: 2008-0067-E, dated April 3, 2008, and EADS SOCATA Service Bulletin
(SB)No. 70-156, Amendment 1, dated March 2008, for related information. Material Incorporated by Reference
(j)You must use EADS SOCATA Service Bulletin
(SB)No. 70-156, original issue; or EADS SOCATA Service Bulletin
(SB)No. 70-156, Amendment 1, both dated March 2008, to do the actions required by this AD, unless the AD specifies otherwise.
(1)The Director of the Federal Register approved the incorporation by reference of this service information under 5 U.S.C. 552(a) and 1 CFR part 51.
(2)For service information identified in this AD, contact EADS SOCATA—Direction des Services, 65921 Tarbes Cedex 9, France; telephone: +33 (0)5 62 41 73 00; fax: +33 (0)5 62 41 7-54; or in the United States contact EADS SOCATA North America, Inc., North Perry Airport, 7501 South Airport Road., Pembroke Pines, Florida 33023; telephone:
(954)893-1400; fax:
(954)964-4141.
(3)You may review copies at the FAA, Central Region, Office of the Regional Counsel, 901 Locust, Room 506, Kansas City, Missouri 64106; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html* . Issued in Kansas City, Missouri, on April 30, 2008. Patrick R. Mullen, Acting Manager, Small Airplane Directorate, Aircraft Certification Service. [FR Doc. E8-10066 Filed 5-8-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9397] RIN 1545-BH95 Assumption of Liabilities AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final regulations and removal of temporary regulations. SUMMARY: This document contains final regulations relating to the assumption of liabilities under section 358(h) of the Internal Revenue Code (Code). Section 358(h) provides that, after application of section 358(d), the basis in stock received in a nonrecognition transaction shall be reduced to the fair market value of the stock by the amount of any liability assumed in the exchange. The Treasury Department and the IRS have determined that removing an exception to section 358(h) is necessary to prevent abuse. These regulations affect corporations and their shareholders. DATES: *Effective Date:* These regulations are effective on May 9, 2008. *Applicability Date:* For dates of applicability, see §§ 1.358-5(a) and (b). FOR FURTHER INFORMATION CONTACT: Robert M. Rhyne
(202)622-7550 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background This document contains amendments to 26 CFR part 1 under section 358(h) of the Code. As part of the Consolidated Appropriations Act of 2001 (Pub. L. 106-554, 114 Stat. 2763), Congress enacted, on December 21, 2000, section 358(h), applicable to assumptions of liability after October 18, 1999, to address certain transactions in which property is transferred to a corporation in exchange for both stock and the corporation's assumption of certain obligations of the transferor. In these transactions, transferors took the position that the obligations were not liabilities within the meaning of section 357(c) or that they were described in section 357(c)(3), and, therefore, the obligations did not reduce the basis of the stock received by transferor. These assumed obligations, however, did reduce the value of the stock. The transferors then sold the stock and claimed a loss. In this way, taxpayers attempted to duplicate a loss in corporate stock and to accelerate deductions that typically are allowed only on the economic performance of these types of obligations. Section 358(h)(1) addresses these transactions by requiring that, after application of section 358(d), the basis in stock received in an exchange to which section 351, 354, 355, 356, or 361 applies be reduced (but not below the fair market value of the stock) by the amount of any liability assumed in the exchange. Section 358(h)(2) provides exceptions to section 358(h)(1) where:
(A)The trade or business with which the liability is associated is transferred to the person assuming the liability as part of the exchange; or
(B)substantially all of the assets with which the liability is associated are transferred to the person assuming the liability as part of the exchange (the “Asset Exception”). The Secretary, however, has the authority to limit these exceptions. Section 358(h)(3) provides that the term “liability” for purposes of section 358(h) includes any fixed or contingent obligation to make payment without regard to whether the obligation is otherwise taken into account for purposes of the Code. On May 26, 2005, temporary regulations (TD 9207) were published in the **Federal Register** (70 FR 30334) making unavailable the exception of section 358(h)(2)(B), the Asset Exception. A notice of proposed rulemaking (REG-106736-00) cross-referencing those temporary regulations was published in the **Federal Register** (71 FR 30380) on the same day. The IRS and the Treasury Department received no comments responding to the proposed and temporary regulations. No public hearing was requested or held. The IRS and the Treasury Department have determined that making the exception of section 358(h)(2)(B) unavailable is necessary to prevent abuse; therefore, this document contains final regulations adopting the provisions of the proposed regulations with no change and the corresponding temporary regulations are removed. Special Analyses It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. Pursuant to 5 U.S.C. 553(d)(3) it has been determined that a delayed effective date is unnecessary because this rule finalizes, without change, currently effective temporary rules regarding the assumption of liabilities. It is hereby certified that these regulations will not have a significant economic impact on a substantial number of small entities. This certification is based upon the fact that the only impact of the regulations is to require taxpayers to calculate the basis of stock received in certain transactions more accurately. Therefore, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. Chapter 6) is not required. Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking preceding these regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Drafting Information The principal author of these regulations is Robert M. Rhyne of the Office of Associate Chief Counsel (Corporate). However, other personnel from the IRS and the Treasury Department participated in their development. List of Subjects in 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. Adoption of Amendments to the Regulations Accordingly, 26 CFR part 1 is amended as follows: PART 1—INCOME TAXES **Paragraph 1** . The authority citation for part 1 is amended by adding an entry in numerical order to read as follows: Authority: 26 U.S.C. 7805 * * * § 1.358-5 also issued under 26 U.S.C. 358(h)(2). * * * **Par. 2.** Section 1.358-5 is added to read as follows: § 1.358-5 Special rules for assumption of liabilities.
(a)*In general* . Section 358(h)(2)(B) does not apply to an exchange occurring on or after May 9, 2008.
(b)*Effective/Applicability date.* For exchanges occurring on or after June 24, 2003, and before May 9, 2008, see § 1.358-5T as contained in 26 CFR part 1 in effect on April 1, 2007. § 1.358-5T [Removed] **Par. 3.** Section 1.358-5T is removed. Linda E. Stiff, Deputy Commissioner for Services and Enforcement. Approved: April 28, 2008. Eric Solomon, Assistant Secretary of the Treasury(Tax Policy). [FR Doc. E8-10454 Filed 5-8-08; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9396] RIN 1545-BH52 Corporate Reorganizations; Amendment to Transfers of Assets or Stock Following a Reorganization AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final regulation. SUMMARY: This document contains final regulations that amend TD 9361, titled Transfers of Assets or Stock Following a Reorganization. These final regulations make certain clarifying amendments to the rules regarding the effect of certain transfers of assets or stock on the continuing qualification of transactions as reorganizations under section 368(a). These regulations affect corporations and their shareholders. DATES: *Effective Date:* These regulations are effective on *May 9, 2008* . *Applicability Date:* For dates of applicability, see § 1.368-2(k)(3). FOR FURTHER INFORMATION CONTACT: Mary W. Lyons, at
(202)622-7930 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background As noted in the preamble to TD 9361 (72 FR 60556), § 1.368-1(a) provides that a transaction must be evaluated under all relevant provisions of law, including the step transaction doctrine, in determining whether it qualifies as a reorganization under section 368(a). Section 1.368-2 provides guidance regarding whether a transaction satisfies the explicit statutory requirements of a particular reorganization. Specifically, section 1.368-2(k) provides that a transaction otherwise qualifying as a reorganization will not be disqualified or recharacterized as a result of certain subsequent transfers of assets or stock described therein. The fact that a subsequent transfer of assets or stock is not described in § 1.368-2(k) does not necessarily preclude reorganization qualification, but the overall transaction would then be subject to analysis under the step transaction doctrine. Section 1.368-2(k), as in effect prior to these final regulations, generally permits one or more post-reorganization transfers (or successive transfers) of assets or stock, provided that the Continuity of Business Enterprise
(COBE)requirement is satisfied and the transfer(s) qualify as “distributions” (as described in § 1.368-2(k)(1)(i)) or “other transfers” (as described in § 1.368-2(k)(1)(ii)). These final regulations amend those rules to clarify that a transfer to the former shareholders of the acquired corporation (other than a former shareholder that is also the acquiring corporation) or the surviving corporation, as the case may be, is not described in paragraph (k)(1) to the extent it constitutes the receipt by such shareholders of consideration for their proprietary interests in the acquired corporation or the surviving corporation, as the case may be. Any such transfer to the former shareholders following a transaction otherwise qualifying as a reorganization under section 368(a) calls into question whether the underlying transaction satisfies the continuity of interest requirement in Treas. Reg. § 1.368-1(e) as well as certain statutory limitations on permissible consideration (such as the “solely for voting stock” requirement in section 368(a)(1)(B) or (C)). Therefore, such transfers are outside the scope of the safe harbor protection afforded by these final regulations. Nevertheless, the safe harbor of Treas. Reg. § 1.368-2(k) continues to apply to transfers to the former shareholders that do not constitute consideration for their proprietary interests in the acquired corporation or the surviving corporation, as the case may be, such as certain pro-rata dividend distributions by the acquiring corporation following a reorganization. Moreover, the amendment provides that the limitation on the scope of Treas. Reg. 1.368-2(k) does not apply to transfers to a shareholder that also is the acquiring corporation in the reorganization. Thus, the regulations continue to provide safe harbor protection to certain “upstream” reorganizations followed by a transfer of acquired assets. See, for example, Rev. Rul. 69-617, 1969-2 CB 57. In addition, these final regulations amend § 1.368-2(k) to clarify that the safe harbor shall not apply to a transfer by the former shareholders of the acquired corporation (other than a former shareholder that is also the acquiring corporation) or the surviving corporation, as the case may be, of consideration initially received in the potential reorganization to the issuing corporation or a person related to the issuing corporation (see definition of “related person” in § 1.368-1(e)). Further, these final regulations revise the title of paragraph (k)(1)(ii) and the requirement in paragraph (k)(1)(ii)(A). These amendments are intended to clarify that a distribution to shareholders is not a transfer described in paragraph (k)(1)(ii) regardless of whether or not it is described in paragraph (k)(1)(i). Additionally, these final regulations amend paragraph (k)(1)(ii)(C) to clarify that a transfer is not described in paragraph (k)(1)(ii) if the acquired corporation, the acquiring corporation, or the surviving corporation, as the case may be, terminates its corporate existence for Federal income tax purposes in connection with the transfer. Finally, conforming changes are made to the analysis in *Examples 1, 6, 7, 8* and *9,* and one clarifying change is made to the facts in *Example 3.* Special Analyses It has been determined that this Treasury decision 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 a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Therefore, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small businesses. Drafting Information The principal author of these final regulations is Mary W. Lyons of the Office of Associate Chief Counsel (Corporate). However, other personnel from the IRS and Treasury Department participated in their development. Availability of IRS Documents IRS revenue rulings, procedures, and notices cited in this preamble are made available by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402. List of Subjects in 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. Adoption of Amendments to the Regulations Accordingly, 26 CFR part 1 is amended as follows: PART 1—INCOME TAXES **Paragraph 1.** The authority citation for part 1 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * **Par. 2.** Section 1.368-2(k) is revised to read as follows: § 1.368-2 Definition of terms.
(k)*Certain transfers of assets or stock in reorganizations* —(1) *General rule* . A transaction otherwise qualifying as a reorganization under section 368(a) shall not be disqualified or recharacterized as a result of one or more subsequent transfers (or successive transfers) of assets or stock, provided that the requirements of § 1.368-1(d) are satisfied and the transfer(s) are described in either paragraph (k)(1)(i) or (k)(1)(ii) of this section. However, this paragraph
(k)shall not apply to a transfer to the former shareholders of the acquired corporation (other than a former shareholder that is also the acquiring corporation) or the surviving corporation, as the case may be, to the extent it constitutes the receipt of consideration for a proprietary interest in the acquired corporation or the surviving corporation, as the case may be. Similarly, this paragraph
(k)shall not apply to a transfer by the former shareholders of the acquired corporation (other than a former shareholder that is also the acquiring corporation) or the surviving corporation, as the case may be, of consideration initially received in the potential reorganization to the issuing corporation or a person related to the issuing corporation (see definition of “related person” in § 1.368-1(e)).
(i)*Distributions* . One or more distributions to shareholders (including distribution(s) that involve the assumption of liabilities) are described in this paragraph (k)(1)(i) if—
(A)The property distributed consists of— ( *1* ) Assets of the acquired corporation, the acquiring corporation, or the surviving corporation, as the case may be, or an interest in an entity received in exchange for such assets in a transfer described in paragraph (k)(1)(ii) of this section; ( *2* ) Stock of the acquired corporation provided that such distribution(s) of stock do not cause the acquired corporation to cease to be a member of the qualified group (as defined in § 1.368-1(d)(4)(ii)); or ( *3* ) A combination thereof; and
(B)The aggregate of such distributions does not consist of— ( *1* ) An amount of assets of the acquired corporation, the acquiring corporation (disregarding assets held prior to the potential reorganization), or the surviving corporation (disregarding assets of the merged corporation), as the case may be, that would result in a liquidation of such corporation for Federal income tax purposes; or ( *2* ) All of the stock of the acquired corporation that was acquired in the transaction.
(ii)*Transfers Other Than Distributions* . One or more other transfers are described in this paragraph (k)(1)(ii) if—
(A)The transfer(s) do not consist of one or more distributions to shareholders;
(B)The property transferred consists of— ( *1* ) Part or all of the assets of the acquired corporation, the acquiring corporation, or the surviving corporation, as the case may be; ( *2* ) Part or all of the stock of the acquired corporation, the acquiring corporation, or the surviving corporation, as the case may be, provided that such transfer(s) of stock do not cause such corporation to cease to be a member of the qualified group (as defined in § 1.368-1(d)(4)(ii)); or
(3)A combination thereof; and
(C)The acquired corporation, the acquiring corporation, or the surviving corporation, as the case may be, does not terminate its corporate existence for Federal income tax purposes in connection with the transfer(s).
(2)*Examples* . The following examples illustrate the application of this paragraph (k). Except as otherwise noted, P is the issuing corporation, and T is an unrelated target corporation. All corporations have only one class of stock outstanding. T operates a bakery that supplies delectable pastries and cookies to local retail stores. The acquiring corporate group produces a variety of baked goods for nationwide distribution. Except as otherwise noted, P owns all of the stock of S-1 and 80 percent of the stock of S-4, S-1 owns 80 percent of the stock of S-2 and 50 percent of the stock of S-5, S-2 owns 80 percent of the stock of S-3, and S-4 owns the remaining 50 percent of the stock of S-5. The examples are as follows: Example 1. *Transfers of acquired assets to members of the qualified group after a reorganization under section 368(a)(1)(C)* .
(i)*Facts* . Pursuant to a plan of reorganization, T transfers all of its assets to S-1 solely in exchange for P stock, which T distributes to its shareholders, and S-1's assumption of T's liabilities. In addition, pursuant to the plan, S-1 transfers all of the T assets to S-2, and S-2 transfers all of the T assets to S-3.
(ii)*Analysis.* Under this paragraph (k), the transaction, which otherwise qualifies as a reorganization under section 368(a)(1)(C), is not disqualified by the successive transfers of all of the T assets to S-2 and from S-2 to S-3 because the transfers are not one or more distributions to shareholders, the transfers consist of part or all of the assets of the acquiring corporation, the acquiring corporation does not terminate its corporate existence for Federal income tax purposes in connection with the transfers, and the transaction satisfies the requirements of § 1.368-1(d). Example 2. *Distribution of acquired assets to a member of the qualified group after a reorganization under section 368(a)(1)(C)* .
(i)*Facts* . Pursuant to a plan of reorganization, T transfers all of its assets to S-1 solely in exchange for P stock, which T distributes to its shareholders, and S-1's assumption of T's liabilities. In addition, pursuant to the plan, S-1 distributes half of the T assets to P, and P assumes half of the T liabilities.
(ii)*Analysis.* Under this paragraph (k), the transaction, which otherwise qualifies as a reorganization under section 368(a)(1)(C), is not disqualified by the distribution of half of the T assets from S-1 to P, or P's assumption of half of the T liabilities from S-1, because the distribution consists of assets of the acquiring corporation, the distribution does not consist of an amount of S-1's assets that would result in a liquidation of S-1 for Federal income tax purposes (disregarding S-1's assets held prior to the acquisition of T), and the transaction satisfies the requirements of § 1.368-1(d). Example 3. *Indirect distribution of acquired assets to a member of the qualified group after a reorganization under section 368(a)(1)(C).*
(i)*Facts* . The facts are the same as *Example 2* , except that, instead of S-1 distributing half of the T assets to P and having P assume half of the T liabilities, S-1 contributes half of the T assets to newly formed S-6, S-6 assumes half of the T liabilities, and S-1 distributes all of the S-6 stock to P.
(ii)*Analysis* . Under this paragraph (k), the transaction, which otherwise qualifies as a reorganization under section 368(a)(1)(C), is not disqualified by the transfer of half of the T assets to S-6 and the distribution of the S-6 stock to P because the transfer of half of the T assets to S-6 is described in paragraph (k)(1)(ii) of this section, the distribution of the S-6 stock to P is an indirect distribution of assets of the acquiring corporation, the distribution does not consist of an amount of S-1's assets that would result in a liquidation of S-1 for Federal income tax purposes (disregarding S-1's assets held prior to the acquisition of T), and the transaction satisfies the requirements of § 1.368-1(d). Example 4. *Distribution of acquired stock to a controlled partnership after a reorganization under section 368(a)(1)(B)* .
(i)*Facts* . P owns 80 percent of the stock of S-1, and an 80-percent interest in PRS, a partnership. S-4 owns the remaining 20-percent interest in PRS. PRS owns the remaining 20 percent of the stock of S-1. Pursuant to a plan of reorganization, the T shareholders transfer all of their T stock to S-1 solely in exchange for P stock. In addition, pursuant to the plan, S-1 distributes 90 percent of the T stock to PRS in redemption of 5 percent of the stock of S-1 owned by PRS.
(ii)*Analysis* . Under this paragraph (k), the transaction, which otherwise qualifies as a reorganization under section 368(a)(1)(B), is not disqualified by the distribution of 90 percent of the T stock from S-1 to PRS because the distribution consists of less than all of the stock of the acquired corporation that was acquired in the transaction, the distribution does not cause T to cease to be a member of the qualified group (as defined in § 1.368-1(d)(4)(ii)), and the transaction satisfies the requirements of § 1.368-1(d). Example 5. *Transfer of acquired stock to a non-controlled partnership* .
(i)*Facts* . Pursuant to a plan, the T shareholders transfer all of their T stock to S-1 solely in exchange for P stock. In addition, as part of the plan, T distributes half of its assets to S-1, S-1 assumes half of the T liabilities, and S-1 transfers the T stock to S-2. S-2 and U, an unrelated corporation, form a new partnership, PRS. Immediately thereafter, S-2 transfers all of the T stock to PRS in exchange for a 50 percent interest in PRS, and U transfers cash to PRS in exchange for a 50 percent interest in PRS.
(ii)*Analysis* . Under this paragraph (k), the transaction, which otherwise qualifies as a reorganization under section 368(a)(1)(B), is not disqualified by the distribution of half of the T assets from T to S-1, or S-1's assumption of half of the T liabilities from T, because the distribution consists of assets of the acquired corporation, the distribution does not consist of an amount of T's assets that would result in a liquidation of T for Federal income tax purposes, and the transaction satisfies the requirements of § 1.368-1(d). Further, this paragraph
(k)describes the transfer of the acquired stock from S-1 to S-2, but does not describe the transfer of the acquired stock from S-2 to PRS because such transfer causes T to cease to be a member of the qualified group (as defined in § 1.368-1(d)(4)(ii)). Therefore, the characterization of this transaction must be determined under the relevant provisions of law, including the step transaction doctrine. See § 1.368-1(a). The transaction fails to meet the control requirement of a reorganization described in section 368(a)(1)(B) because immediately after the acquisition of the T stock, the acquiring corporation does not have control of T. Example 6. *Transfers of acquired assets to members of the qualified group after a reorganization under section 368(a)(1)(D)* .
(i)*Facts* . P owns all of the stock of T. Pursuant to a plan of reorganization, T transfers all of its assets to S-1 solely in exchange for S-1 stock, which T distributes to P, and S-1's assumption of T's liabilities. In addition, pursuant to the plan, S-1 transfers all of the T assets to S-2, and S-2 transfers all of the T assets to S-3.
(ii)A *nalysis* . Under this paragraph (k), the transaction, which otherwise qualifies as a reorganization under section 368(a)(1)(D), is not disqualified by the successive transfers of all the T assets from S-1 to S-2 and from S-2 to S-3 because the transfers are not one or more distributions to shareholders, the transfers consist of part or all of the assets of the acquiring corporation, the acquiring corporation does not terminate its corporate existence for Federal income tax purposes in connection with the transfers, and the transaction satisfies the requirements of § 1.368-1(d). Example 7. *Transfer of stock of the acquiring corporation to a member of the qualified group after a reorganization under section 368(a)(1)(A) by reason of section 368(a)(2)(D).*
(i)*Facts* . Pursuant to a plan of reorganization, S-1 acquires all of the T assets in the merger of T into S-1. In the merger, the T shareholders receive solely P stock. Also, pursuant to the plan, P transfers all of the S-1 stock to S-4.
(ii)*Analysis* . Under this paragraph (k), the transaction, which otherwise qualifies as a reorganization under section 368(a)(1)(A) by reason of section 368(a)(2)(D), is not disqualified by the transfer of all of the S-1 stock to S-4 because the transfer is not a distribution to shareholders, the transfer consists of part or all of the stock of the acquiring corporation, the transfer does not cause S-1 to cease to be a member of the qualified group (as defined in § 1.368-1(d)(4)(ii)), the acquiring corporation does not terminate its corporate existence for Federal income tax purposes in connection with the transfer, and the transaction satisfies the requirements of § 1.368-1(d). Example 8. *Transfer of acquired assets to a partnership after a reorganization under section 368(a)(1)(A) by reason of section 368(a)(2)(D)* .
(i)*Facts* . Pursuant to a plan of reorganization, S-1 acquires all of the T assets in the merger of T into S-1. In the merger, the T shareholders receive solely P stock. In addition, pursuant to the plan, S-1 transfers all of the T assets to PRS, a partnership in which S-1 owns a 33 1/3 -percent interest. PRS continues T's historic business. S-1 does not perform active and substantial management functions as a partner with respect to PRS' business.
(ii)*Analysis* . Under this paragraph (k), the transaction, which otherwise qualifies as a reorganization under section 368(a)(1)(A) by reason of section 368(a)(2)(D), is not disqualified by the transfer of T assets from S-1 to PRS because the transfer is not a distribution to shareholders, the transfer consists of part or all of the assets of the acquiring corporation, the acquiring corporation does not terminate its corporate existence for Federal income tax purposes in connection with the transfers, and the transaction satisfies the requirements of § 1.368-1(d). Example 9. *Sale of acquired assets to a member of the qualified group after a reorganization under section 368(a)(1)(C)* .
(i)*Facts* . Pursuant to a plan of reorganization, T transfers all of its assets to S-1 in exchange for P stock, which T distributes to its shareholders, and S-1's assumption of T's liabilities. In addition, pursuant to the plan, S-1 sells all of the T assets to S-5 for cash equal to the fair market value of those assets.
(ii)*Analysis* . Under this paragraph (k), the transaction, which otherwise qualifies as a reorganization under section 368(a)(1)(C), is not disqualified by the sale of all of the T assets from S-1 to S-5 because the transfer is not a distribution to shareholders, the transfer consists of part or all of the assets of the acquiring corporation, the acquiring corporation does not terminate its corporate existence for Federal income tax purposes in connection with the transfer, and the transaction satisfies the requirements of § 1.368-1(d).
(3)*Effective/applicability dates* . This paragraph
(k)applies to transactions occurring on or after *May 9, 2008* , except that it does not apply to any transaction occurring pursuant to a written agreement which is binding before *May 9, 2008* , and at all times after that. Linda E. Stiff, Deputy Commissioner for Services and Enforcement. Approved: May 2, 2008. Eric Solomon, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. E8-10451 Filed 5-8-08; 8:45 am] BILLING CODE 4830-01-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 80 [EPA-HQ-2005-0036; FRL-8564-3] RIN 2060-AO89 Control of Hazardous Air Pollutants From Mobile Sources: Early Credit Technology Requirement Revision AGENCY: Environmental Protection Agency (EPA). ACTION: Withdrawal of Direct Final Rule. SUMMARY: Because EPA received significant adverse comment, we are withdrawing the direct final rule for revising the February 26, 2007 mobile source air toxics rule's requirements that specify the benzene control technologies that qualify a refiner to generate early benzene credits, published on March 12, 2008. DATES: Effective May 9, 2008, EPA withdraws the direct final rule published at 73 FR 13132 on March 12, 2008. FOR FURTHER INFORMATION CONTACT: Christine Brunner, Office of Transportation and Air Quality, Assessment and Standards Division, Environmental Protection Agency, 2000 Traverwood, Ann Arbor, MI 48105; telephone number:
(734)214-4287; fax number:
(734)214-4816; e-mail address: *brunner.christine@epa.gov* . Alternative contact: Assessment and Standards Division Hotline, telephone number:
(734)214-4636; e-mail address: *asdinfo@epa.gov* . SUPPLEMENTARY INFORMATION: Because EPA received significant adverse comment, we are withdrawing the direct final rule for revising the February 26, 2007 mobile source air toxics rule's requirements that specify the benzene control technologies that qualify a refiner to generate early benzene credits, published on March 12, 2008 (73 FR 13132). We stated in that direct final rule that if we received adverse comment by April 11, 2008, the direct final rule would not take effect and we would publish a timely withdrawal in the **Federal Register** . We subsequently received significant adverse comment on that direct final rule. We will address those comments in any subsequent final action, which will be based on the parallel proposed rule also published on March 12, 2008 (73 FR 13163). As stated in the direct final rule and the parallel proposed rule, we will not institute a second comment period on this action. Dated: May 1, 2008. Stephen L. Johnson, Administrator. Accordingly, the amendments to the rule published on March 12, 2008 (73 FR 13132) are withdrawn as of May 9, 2008. [FR Doc. E8-10404 Filed 5-8-08; 8:45 am] BILLING CODE 6560-50-P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 660 [Docket No. 080408542-8615-01] RIN 0648-AW63 Magnuson-Stevens Act Provisions; Fisheries Off West Coast States; Pacific Coast Groundfish Fishery; Biennial Specifications and Management Measures AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Final rule. SUMMARY: This final rule establishes the 2008 fishery specifications for Pacific whiting in the U.S. exclusive economic zone
(EEZ)and state waters off the coasts of Washington, Oregon, and California, as authorized by the Pacific Coast Groundfish Fishery Management Plan (FMP). These specifications include the level of the acceptable biological catch (ABC), optimum yield (OY), tribal allocation, and allocations for the non-tribal commercial sectors. This document also corrects Table 2a, which inadvertently omitted a listing in the December 29, 2006 document. DATES: Effective May 9, 2008. ADDRESSES: Although there is no formal comment period, comments and suggestions on this rulemaking are welcome and should be sent to D. Robert Lohn, Administrator, Northwest Region, NMFS, 7600 Sand Point Way N.E., BIN C15700, Bldg. 1, Seattle, WA 98115-0070. Comments also may be sent via facsimile
(fax)to 206-526-6736. FOR FURTHER INFORMATION CONTACT: Becky Renko (Northwest Region, NMFS) 206-526-6110. SUPPLEMENTARY INFORMATION: Electronic Access This final rule is accessible via the Internet at the Office of the Federal Register's Website at *http://www.gpoaccess.gov/fr/index.html* . Background information and documents are available at the NMFS Northwest Region Web site at *http://www.nwr.noaa.gov/Groundfish-Halibut/Groundfish-Fishery-Management/index.cfm* . Background A proposed rulemaking to implement the 2007-2008 specifications and management measures for the Pacific Coast groundfish fishery was published on September 29, 2006 (71 FR 57764) and was followed by a final rule on December 29, 2006 (71 FR 78638). These specifications and management measures were codified in the CFR (50 CFR part 660, subpart G). The regulations were subsequently amended by correcting amendments published on March 20, 2007 (72 FR 13043) and September 18, 2007 (72 FR 53165). A final rule, published on April 9, 2007 (72 FR 19390), established the 2007 Pacific whiting harvest specifications Inseason measures to revise management measures were published on July 5, 2007 (72 FR 36617), August 3, 2007 (72 FR 43193), October 4, 2007 (72 FR 56664), December 4, 2007 (72 FR 68097) and December 18, 2007 (72 FR 71583). In November 2003, the U.S. and Canada signed an agreement regarding the conservation, research, and catch sharing of Pacific whiting. In that agreement, the U.S. and Canadian governments agreed upon a Pacific whiting catch sharing arrangement that provided 73.88 percent of the total catch OY to U.S. fisheries and 26.12 percent to Canadian fisheries. At this time, both countries are taking steps to fully implement the agreement. Until this occurs, the negotiators recommended that each country apply the agreed upon provisions to their respective fisheries. The Agreement is expected to become effective in 2008. Consistent with the U.S.-Canada agreement, NMFS, at the recommendation of the Council, adopted a range for OYs and ABCs for Pacific whiting in the 2007-2008 specifications, published on December 29, 2006. For 2008, the Council recommended and NMFS adopts in this final rule ABC and OY values that are based on a new stock assessment. The impacts are consistent with the scope of impacts considered in the FEIS for the 2007 and 2008 management measures. Pacific Whiting Stock Status In general, Pacific whiting is a very productive species with highly variable recruitment (the biomass of fish that mature and enter the fishery each year) and a relatively short life span when compared to most other groundfish species. In 1987, the Pacific whiting biomass was at a historically high level due to an exceptionally large number of fish spawned in 1980 and 1984 (fish spawned during a particular year are referred to as a year class). As these large year classes of fish passed through the population and were replaced by moderate sized year classes, the stock declined. The Pacific whiting stock stabilized between 1995 and 1997, but then declined to its lowest level in 2001. After 2001, the Pacific whiting biomass increased substantially as a strong 1999 year class matured and entered the spawning population. The spawning biomass is expected to increase in the near future because of a moderately strong 2005 year class. However, the strength of the 2005 recruitment is still very uncertain. The joint U.S.-Canada Stock Assessment Review
(STAR)panel met February 11-14, 2008, in Seattle, Washington to review the following three draft stock assessment documents on Pacific whiting: *A Stock Assessment of Pacific Hake (whiting) in U.S. and Canadian Waters in 2008* by Helser *et al.* ; *An Assessment and Management Advice for Pacific Hake in U.S. and Canadian Waters in 200* 8 by Steven Martell; and *A Virtual Population Analysis* by Alan Sinclair and Chris Grandin. The primary differences among the three assessments involved are assumptions regarding survey selectivity and catchability, stock productivity, and the reliability of historical data, as well as the treatment of ageing error and the aggregation and weighting of data used in the models. After consideration of all three stock assessments by the Council's STAR Panel, the “base model” presented by Helser *et al.* was chosen as the preferred stock assessment model. The STAR Panel recommended the base model because it provided a more flexible platform for evaluating assumptions about the stock and it made better use of the available data. The 2008 base model is similar to that used in the 2007 assessment, except that the 2008 base model estimated the natural mortality rate of older fish; used the Bayseian priors to estimate the value of “h”, or the stock-recruitment steepness (a proportional measure of expected recruitment relative to the number of adult fish)which serve to constrain the range within which the estimate will fall; accounted for the value of “q”, which is known as the ageing error, or the acoustic survey catchability coefficient which, along with age-specific selectivity, defines the proportion of Pacific whiting biomass that the hydroacoustic survey is able to measure relative to the total amount of Pacific whiting in the surveyed area; and, eliminated the use of the pre-recruit survey data. In the previous assessments, the value of q was identified as a major source of uncertainty. The uncertainty in estimating the value of q is largely driven by conflicting signals from the acoustical survey biomass time series and age compositions. Each year from 2003 to 2007, two stock assessment models were presented with different values for q with each being assumed to have been equally likely. For 2008, the base model integrated uncertainty regarding all estimated parameters. The base model forecasts a positive trajectory for Pacific whiting indicating that the 1999 year-class is still available to the fishery and a reasonably strong 2005 year-class has shown up both in the fishery and the NMFS survey. The Pacific whiting stock biomass is estimated to be approximately 42.6 percent (based on the 50th percentile of estimated probability distribution for depletion level) of its unfished biomass in 2008. The 2008 assessment estimated the stock biomass to be lower and the depletion level to be higher than in the 2007 assessment because the current assessment freely estimated the value for q, and because an age-reading error matrix was used that resulted in a lower estimate of the unfished biomass and increased estimate of the size of the 1999 year class. The results of the new 2008 base model indicate that spawning stock biomass for the most recent years was generally lower than had been estimated in the 2007 assessment, but is greater relative to the estimate of unfished biomass. At the Council's March 2008 meeting the Scientific and Statistical Committee
(SSC)reviewed the assessments and endorsed the use of the 2008 base model and the associated decision table for management purposes. Although the SSC endorsed the base model for management purposes, concerns were expressed about estimating natural mortality and selectivity for the oldest ages and whether the data used to estimate the value of q were informative enough to rely only on the point estimate from the base model for management decisions. In addition, the SSC noted that there was considerable uncertainty associated with stock size estimates given that the 2005 recruitment has not been sampled adequately to confirm its strength, and that the three assessments presented to the STAR Panel differ in their predictions. The SSC also noted that the population dynamics of Pacific whiting may not match the default harvest policy of F40% specified in the provisions of the U.S.-Canada agreement. A rate of F40% can be explained as that which reduces spawning potential per female to 40 percent of what it would have been under long-term unfished conditions. The selection of the F40% value was based on an analysis of stock and recruitment data for other whiting
(hake)species. However, because long-term application of the current harvest rate of F40% would be expected to drive the Pacific whiting stock well below the biomass target, the SSC recommended that further work be done on the development of a more suitable control rule. Despite the identified concerns, the SSC concluded that none of the concerns warranted changing the recommendations of the STAR Panel. ABC/OY Recommendations The range of U.S. ABCs and OYs analyzed in the FEIS for the 2007 and 2008 specifications and management measures included: A low ABC of 244,425 mt and a high ABC of 733,275 mt (50 percent and 150 percent, respectively, of the 2006 U.S. ABC of 488,850); and a low OY of 134,534 mt and a high OY of 403,604 mt (50 percent and 150 percent, respectively, of the 2005/2006 U.S. OY of 269,069). These broad ranges in Pacific whiting harvest levels were analyzed in order to assess the potential range of the effects of the Pacific whiting fishery on incidentally-caught overfished species and the economic effects to coastal communities. At its March 10-14, 2008, meeting in Sacramento, California the Council reviewed the results of the new Pacific whiting stock assessments and recommended adopting a U.S.-Canada coastwide ABC of 400,000 mt with a corresponding U.S. ABC of 295,520 mt. The coastwide ABC is below the risk averse ABC of 414,000 mt projected from the base model and recommended by the SSC. The range of U.S.-Canada coastwide OY values considered by the Council included: 546,297 mt, which is the highest harvest analyzed within the FEIS for 2007 and 2008 specifications and management measures; 400,000 mt, which is an intermediate value based on a constant catch level; 328,358 mt which is the 2007 status quo value; 300,000 mt, which is an intermediate value based on a constant catch level; 259,775 mt, which is the amount projected to be harvested with a widow bycatch limit of 275 mt; and 250,000 mt, which is the most conservative value in the stock assessment projections. Following discussion and public testimony, the Council recommended adopting a U.S.-Canada coastwide OY of 364,842 mt with a corresponding U.S. OY of 269,545 mt. The U.S. OY is similar to the 2005 and 2006 U.S. OYs. Risk factors identified by the SSC concerning the fishery were cause for concern such that a more risk averse OY was recommended by the Council. The Council indicated that a precautionary approach was needed to account for both assessment and management uncertainty. The Council's recommendation also took into consideration the very limited amounts of canary, darkblotched and widow rockfish (bycatch limit species) available to be taken incidentally in the Pacific whiting fishery. With a U.S. OY of 269,545 mt, the industry would need to continue to avoid the incidental catch of bycatch limit species to fully utilize the OY. The Council indicated that the expectation of the Pacific whiting OY to be fully utilized was near the upper end of what would be expected given the understanding of the catch of bycatch limit species. It is unknown exactly how much risk is involved with the use of the current assessments and harvest control rule with a species such as Pacific whiting. When coupled with the observation that the stock biomass has been in decline since 2003 while ABC has increased substantially over the same period, the best available information suggests there may be cause for concern if the full ABC were harvested. The Council's OY recommendation was consistent with the concerns expressed by the SSC. Allocations In 1994, the United States formally recognized that the four Washington coastal treaty Indian tribes (Makah, Quileute, Hoh, and Quinault) have treaty rights to fish for groundfish in the Pacific Ocean. In general terms, the quantification of those rights is 50 percent of the harvestable surplus of groundfish that pass through the tribes' usual and accustomed ocean fishing areas (described at 50 CFR 660.324). The Pacific Coast Indian treaty fishing rights, described at 50 CFR 660.385, allow for the allocation of fish to the tribes through the specification and management measures process. A tribal allocation is subtracted from the species OY before limited entry and open access allocations are derived. The tribal whiting fishery is a separate fishery, and is not governed by the limited entry or open access regulations or allocations. To date, only the Makah Tribe has participated in the fishery. It regulates, and in cooperation with NMFS, monitors this fishery so as not to exceed the tribal allocation. Beginning in 1999, NMFS set the tribal allocation according to an abundance-based sliding scale method, proposed by the Makah Tribe in 1998. (See 64 FR 27928, 27929 (May 29, 1999); 65 FR 221, 247 (January 4, 2000); and 66 FR 2338, 2370 (January 11, 2001)). Details on the abundance-based sliding scale allocation method and related litigation are discussed in the preamble to the proposed rule (69 FR 56570; September 21, 2004) and are not repeated here. On December 28, 2004, the Ninth Circuit Court of Appeals upheld the sliding scale approach in Midwater Trawler Cooperative v. Daley, 393 F. 3d 994 (9th Cir. 2004). Under the sliding scale allocation method, the tribal allocation varies with U.S. Pacific whiting OY, ranging from 14 percent (or less) of the U.S. OY when OY levels are above 250,000 mt, to 17.5 percent of the U.S. OY when the OY level is at or below 145,000 mt. For 2008, using the sliding scale allocation method, the tribal allocation will be 35,000 mt. The Makah are the only Washington Coast tribe that requested a Pacific whiting allocation for 2008. The 2008 commercial OY (non-tribal) for Pacific whiting is 232,545 mt. This is calculated by deducting the 35,000-mt tribal allocation and 2,000-mt for research catch and bycatch in non-groundfish fisheries from the 269,545 mt total catch OY. Regulations at 50 CFR 660.323(a)(4) divide the commercial OY into separate allocations for the non-tribal catcher/processor, mothership, and shore-based sectors of the Pacific whiting fishery. The catcher/processor sector is comprised of vessels that harvest and process Pacific whiting. The mothership sector is comprised of catcher vessels that harvest Pacific whiting for delivery to motherships. Motherships are vessels that process, but do not harvest, Pacific whiting. The shoreside sector is comprised of vessels that harvest Pacific whiting for delivery to shoreside processors. Each sector receives a portion of the commercial OY in accordance with the regulations at 50 CFR 660.323(a)(4). For 2008, the catcher/processors receive 34 percent (79,065 mt), motherships receive 24 percent (55,811 mt), and the shore-based sector receives 42 percent (97,669 mt) of the total catch OY. Correction An omission was identified in Table 2a, which was published in the final rule of the 2007-2008 harvest specifications (December 29, 2006, 71 FR 78638). The ABC value for darkblotched rockfish in Table 2a was inadvertently left out of the table, but identified in the associated footnote to the table. The ABC value of 487 mt has been inserted into the table. The 2007 OY value for darkblotched rockfish in Table 1a inadvertently carried over into Table 2a for 2008. The associated footnote contained the correct OY value of 330 mt. Therefore Table 2a has been revised to include the OY value of 330 mt for darkblotched rockfish. Table 2a in the Proposed Rule also contained these errors, but the preamble to the Proposed Rule that explained and summarized the rebuilding plan for darkblotched rockfish clearly stated the correct ABC and OY for 2008 for darkblotched rockfish (September 29, 2006, 71 FR 57764, 57780). Classification The final Pacific whiting specifications and management measures for 2008 are issued under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) and are in accordance with 50 CFR part 660, the regulations implementing the FMP. For the following reasons, NMFS finds good cause, pursuant to 5 U.S.C. 553(b)(B) to waive prior public notice and comment on the 2008 Pacific whiting specifications. The FMP requires that fishery specifications be evaluated periodically using the best scientific information available. NMFS completes a Pacific whiting stock assessment every year in cooperation with Canadian scientists. The 2008 stock assessment for Pacific whiting was prepared in early 2008, which is the optimal time of year to conduct stock assessments for this species due to the unavailability 2007 data until that time. New 2007 data used in this assessment include updated total catch, length and age data from the U.S. and Canadian fisheries, and biomass indices from the Joint US-Canadian acoustic/midwater trawl surveys. Pacific whiting differs from other groundfish species in that it has a shorter life span and the population fluctuates more swiftly. Thus, it is important to use the most recent stock assessment when determining ABC and OY. Because of the timing of the assessment, the results are not available for use in developing the new ABC and OY until just before the Council's annual March meeting. For the actions to be implemented in this final rule, affording the time necessary for prior notice and opportunity for public comment would prevent the agency from managing the Pacific whiting and related fisheries using the best available science to approach without exceeding the OYs. Delaying this action would be impracticable and contrary to the public's interest and NMFS's obligations under the Magnuson-Stevens Act. Also for these reasons, NMFS finds good cause to waive the 30-day delay in effectiveness pursuant to 5 U.S.C. 553(d)(3), so that this final rule may become effective as soon as possible after the April 1, 2008, fishery start date. As stated previously, Pacific whiting differs from other groundfish species in that it has a shorter life span and the population fluctuates more swiftly. Thus, it is important to use the most recent stock assessment when determining ABC and OY. Because of the timing of the assessment, the results are not available for use in developing the new ABC and OY until just before the Council's annual March meeting. Because of the timing of the assessment, the results are not available for use in developing the new ABC and OY until just before the Council's annual March meeting. Delaying the implementation of the rule to allow for the 30-day delay in effectiveness would prevent the agency from managing the Pacific whiting and related fisheries using the best available science to approach without exceeding the OYs. Thus, the AA waives the 30-day delay in effectivess and makes this rule effective upon publication. The environmental impacts associated with the Pacific whiting harvest levels being adopted by this action are consistent with the impacts in the final environmental impact statement for the 2007-2008 specification and management measures. Copies of the FEIS and the ROD are available from the Council (see ADDRESSES ). An Initial Regulatory Flexibility Analysis
(IRFA)and FRFA were prepared for the 2007-2008 harvest specifications and management measures, which included the regulatory impacts of this action on small entities. The IRFA was summarized in the proposed rule published on September 29, 2006 (71 FR 57764). The following summary of the FRFA analysis, which covers the entire groundfish regulatory scheme of which this is a part, was published in the final rule on December 29, 2006 (71 FR 78638). The need for and objectives of this final rule are contained in the SUMMARY and in the Background section under SUPPLEMENTARY INFORMATION . The final 2007-2008 specifications and management measures were intended to allow West Coast commercial and recreational fisheries participants to fish the harvestable surplus of more abundant stocks while also ensuring that those fisheries do not exceed the allowable catch levels intended to rebuild and protect overfished and depleted stocks. The specifications (ABCs and OYS) follow the guidance of the Magnuson-Stevens Act, the national standard guidelines, and the FMP for protecting and conserving fish stocks. Fishery management measures include trip and bag limits, size limits, time/area closures, gear restrictions, and other measures intended to allow year-round West Coast groundfish landings without compromising overfished species rebuilding measures. In recent years the number of participants in the Pacific whiting fishery has ranged from 29 to 37 shoreside trawl vessels; 4 to 6 motherships with a fleet of 11 to 20 catcher vessels, 5 and 9 catcher processors and 14 to 15 shorebased processors. As explained below, we expect that this final rule will result in some positive economic impacts due to increased production and revenue and some negative impacts due to rising fuel prices. Because of the uncertainty of these impacts, it is not possible for NMFS to quantify the net change in economic impact of this final rule as compared to that analyzed in the FEIS for the 2007-2008 specifications and management measures. The 2007 fishery landed 224,529 mt that generated $37 million in ex-vessel revenues at $165 per ton. Ex-vessel revenues in 2007 were the highest on record. The 2008 OY is approximately 9 percent larger than the 2007 OY. Being able to harvest the entire Pacific whiting OY will depend on how well the industry stays within the bycatch limits established for overfished species taken incidentally in the fishery. Assuming that there are no bycatch issues, it is expected that 2008 landings will continue the growth in annual revenue that has occurred since 2004 when the fishery harvested about 215,000 mt worth $17 million at about $80 per ton ex-vessel. In addition to an increase in the OY, the major factor for increased revenues is the increased demand for whiting products, especially headed and gutted products. Over the 2004-2007 period, wholesale prices for headed and gutted product increased from about $1,200 per ton to $1,600 per ton. While indicating that there are signs that wholesale prices may be leveling off, industry publications are also indicating that markets for the Pacific whiting products will be as strong in 2008 as they were in 2007 as a result of European and Asian exchange rates, growing market demand, and declines in whiting production from South American sources. Therefore, revenues in 2008 may be greater than in 2007 either as a result of a potential price increases or because of the increase in the OY. Although wholesale and ex-vessel prices may either level off or continue to rise, fuel prices, a major expenditure category for whiting vessels, have been increasing dramatically since last year. For example, April 2008 marine diesel prices in Newport, Oregon, reached $3.70 per gallon compared to April 2007 levels of $2.39 per gallon. Therefore, levels of profitability achieved in 2007 may not be maintained in 2008. NMFS issued Biological Opinions under the ESA on August 10, 1990, November 26, 1991, August 28, 1992, September 27, 1993, May 14, 1996, and December 15, 1999 pertaining to the effects of the Pacific Coast groundfish FMP fisheries on Chinook salmon (Puget Sound, Snake River spring/summer, Snake River fall, upper Columbia River spring, lower Columbia River, upper Willamette River, Sacramento River winter, Central Valley spring, California coastal), coho salmon (Central California coastal, southern Oregon/northern California coastal, and Oregon coastal), chum salmon (Hood Canal summer, Columbia River), sockeye salmon (Snake River, Ozette Lake), and steelhead (upper, middle and lower Columbia River, Snake River Basin, upper Willamette River, central California coast, California Central Valley, south/central California, southern California). NMFS reinitiated a formal section 7 consultation under the ESA in 2005 for both the Pacific whiting midwater trawl fishery and the groundfish bottom trawl fishery. The December 19, 1999 Biological Opinion had defined an 11,000 Chinook incidental take threshold for the Pacific whiting fishery. During the 2005 Pacific whiting season, the 11,000 fish Chinook incidental take threshold was exceeded, triggering reinitiation. Also in 2005, new data from the West Coast Groundfish Observer Program became available, allowing NMFS to do a more complete analysis of salmon take in the bottom trawl fishery. NMFS completed its reinitiation of consultation and prepared a Supplemental Biological Opinion dated March 11, 2006. In its 2006 Supplemental Biological Opinion, NMFS concluded that catch rates of salmon in the 2005 Pacific whiting fishery were consistent with expectations considered during prior consultations. Chinook bycatch has averaged about 7,300 over the last 15 years and has only occasionally exceeded the reinitiation trigger of 11,000. Since 1999, annual Chinook bycatch has averaged about 8,450. The Chinook ESUs most likely affected by the Pacific whiting fishery have generally improved in status since the 1999 section 7 consultation. Although these species remain at risk, as indicated by their ESA listing, NMFS concluded that the higher observed bycatch in 2005 does not require a reconsideration of its prior “no jeopardy” conclusion with respect to the fishery. For the groundfish bottom trawl fishery, NMFS concluded that incidental take in the groundfish fisheries is within the overall limits articulated in the Incidental Take Statement of the 1999 Biological Opinion. The groundfish bottom trawl limit from that opinion was 9,000 fish annually. NMFS will continue to monitor and collect data to analyze take levels. NMFS also reaffirmed its prior determination that implementation of the Groundfish FMP is not likely to jeopardize the continued existence of any of the affected ESUs. Lower Columbia River coho (70 FR 37160, June 28, 2005) were recently listed and Oregon Coastal coho (73 FR 7816, February 11, 2008) were recently relisted as threatened under the ESA. The 1999 biological opinion concluded that the bycatch of salmonids in the Pacific whiting fishery were almost entirely Chinook salmon, with little or no bycatch of coho, chum, sockeye, and steelhead. The Southern Distinct Population Segment
(DPS)of green sturgeon (71 FR 17757, April 7, 2006) were also recently listed as threatened under the ESA. As a consequence, NMFS has reinitiated its Section 7 consultation on the PFMC's Groundfish FMP. After reviewing the available information, NMFS concluded that, in keeping with Sections 7(a)(2) and 7(d) of the ESA, the proposed action would not result in any irreversible or irretrievable commitment of resources that would have the effect of foreclosing the formulation or implementation of any reasonable and prudent alternative measures. Pursuant to Executive Order 13175, this action was developed after meaningful consultation and collaboration with tribal officials from the area covered by the FMP. Under the Magnuson-Stevens Act at 16 U.S.C. 1852(b)(5), one of the voting members of the Council must be a representative of an Indian tribe with federally recognized fishing rights from the area of the Council's jurisdiction. In addition, regulations implementing the FMP establish a procedure by which the tribes with treaty fishing rights in the area covered by the FMP request new allocations or regulations specific to the tribes, in writing, before the first of the two meetings at which the Council considers groundfish management measures. Only the Makah Tribe requested a whiting allocation for 2008. The regulations at 50 CFR 660.324(d) further state “the Secretary will develop tribal allocations and regulations under this paragraph in consultation with the affected tribe(s) and, insofar as possible, with tribal consensus.” The tribal whiting allocation finalized by this final rule was recommended by the Council based on the sliding scale allocation formula which was recommended by the Makah tribe and is described above. This final rule has been determined to be not significant for purposes of Executive Order 12866. List of Subjects in 50 CFR Part 660 Fisheries, Fishing, and Indian fisheries. Dated: May 5, 2008. John Oliver, Deputy Assistant Administrator for Operations, National Marine Fisheries Service. For the reasons set out in the preamble, 50 CFR part 660 is amended as follows: PART 660—FISHERIES OFF WEST COAST STATES 1. The authority citation for part 660 continues to read as follows: Authority: 16 U.S.C. 1801 *et seq.* 2. In § 660.385 paragraph
(e)is revised to read as follows: § 660.385 Washington coastal tribal fisheries management measures.
(e)Pacific whiting. The tribal allocation is 35,000 mt. 3. Tables 2a, 2b, and 2c to part 660 subpart G are revised to read as follows: BILLING CODE 3510-22-S Er09my08.067 Er09my08.068 Er09my08.069 Er09my08.070 Er09my08.071 Er09my08.072 Er09my08.073 Er09my08.074 Er09my08.075 Er09my08.076 [FR Doc. E8-10382 Filed 5-8-08; 8:45 am] BILLING CODE 3510-22-C DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 679 [Docket No. 071106673-8011-02] RIN 0648-XH78 Fisheries of the Exclusive Economic Zone Off Alaska; Pacific Cod by Catcher Vessels Less Than 60 ft (18.3 m) LOA Using Pot or Hook-and-Line Gear in the Bering Sea and Aleutian Islands Management Area AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Temporary rule; closure. SUMMARY: NMFS is prohibiting directed fishing for Pacific cod by catcher vessels less than 60 ft (<18.3 meters (m)) length overall
(LOA)using pot or hook-and-line gear in the Bering Sea and Aleutian Islands management area (BSAI). This action is necessary to prevent exceeding the 2008 Pacific cod total allowable catch
(TAC)allocated to catcher vessels < 60 ft (18.3 m) LOA using pot or hook-and-line gear in the BSAI. DATES: Effective 1200 hrs, Alaska local time (A.l.t.), May 6, 2008, through 2400 hrs, A.l.t., December 31, 2008. FOR FURTHER INFORMATION CONTACT: Jennifer Hogan, 908-586-7228. SUPPLEMENTARY INFORMATION: NMFS manages the groundfish fishery in the BSAI according to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area
(FMP)prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679. The 2008 and 2009 final harvest specification for groundfish in the BSAI (73 FR 10160, February 26, 2008), the reallocation on February 26, 2008 (73 FR 11562, March 4, 2008), and the reallocation on April 10, 2008 (73 FR 19748, April 11, 2008) allocated a directed fishing allowance for Pacific cod of 4,660 metric tons to catcher vessels <60 ft (18.3 m) LOA using pot or hook-and-line gear in the BSAI. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that the 2008 Pacific cod directed fishing allowance allocated to catcher vessels less than 60 ft (18.3 m) LOA using pot or hook-and-line gear in the BSAI has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific cod by catcher vessels <60 ft (18.3 m) LOA using pot or hook-and-line gear in the BSAI. After the effective date of this closure the maximum retainable amounts at § 679.20(e) and
(f)apply at any time during a trip. Classification This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of Pacific cod by catcher vessels <60 ft (18.3 m) LOA using pot or hook-and-line gear in the BSAI. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of May 5, 2008. The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment. This action is required by § 679.20 and is exempt from review under Executive Order 12866. Authority: 16 U.S.C. 1801 *et seq.* Dated: May 6, 2008. James P. Burgess, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service. [FR Doc. 08-1238 Filed 5-6-08; 12:49 pm]
Connectionstraces to 17
Traces to 17 documents
19 references not yet in our index
  • 14 CFR 39
  • 1 CFR 51
  • 26 CFR 1
  • T.D. 9397
  • Pub. L. 106-554
  • 114 Stat. 2763
  • T.D. 9207
  • T.D. 9396
  • T.D. 9361
  • Rev. Rul. 69-617
  • 40 CFR 80
  • 50 CFR 660
  • 50 CFR 660.324
  • 50 CFR 660.385
  • 393 F.3d 994
  • 50 CFR 660.323(a)(4)
  • 50 CFR 660.324(d)
  • 50 CFR 679
  • 50 CFR 600
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Rules and Regulations
Final rule; request for comments
C.F.R.§ 21.29
C.F.R.§ 39.13
Fed. Reg.Proposed Rules
Fed. Reg.Notices
U.S.C.§ 106
C.F.R.§ 39.19
U.S.C.§ 552
U.S.C.§ 3501
C.F.R.§ 39.23
F. App'x393 F.3d 994
Cite14 CFR 39
Cite1 CFR 51
Cites 36 · showing 12Cited by 0 across 0 sources
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