Unknown. Final rule

81,425 words·~370 min read·/register/2008/07/01/08-1403

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

--- schema: federal-register doc_type: fedreg source_file: FR-2008-07-01.xml --- 73 127 Tuesday, July 1, 2008 Contents Administration Administration on Aging See Aging Administration Aging Aging Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 37463 E8-14898 Centers Centers for Medicare & Medicaid Services NOTICES Statement of Organization, Functions, and Delegations of Authority, 37463-37464 E8-14896 Commerce Commerce Department See Foreign-Trade Zones Board See Industry and Security Bureau See International Trade Administration See National Oceanic and Atmospheric Administration Defense Defense Department See Navy Department NOTICES 36(b)(1) Arms Sales Notification, 37414-37417 E8-14775 Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 37418 E8-14870 Defense Defense Nuclear Facilities Safety Board NOTICES No FEAR Act, 37421-37422 E8-14848 Drug Drug Enforcement Administration NOTICES Controlled Substances: 2008 Proposed Revised Aggregate Production Quotas, 37496-37498 E8-14903 Education Education Department PROPOSED RULES Federal Perkins Loan Program; Federal Family Education Loan Program: William D. Ford Federal Direct Loan Program, 37694-37725 E8-14140 NOTICES Federal Family Education Loan Program (FFELP), 37422-37451 E8-14820 Meetings:

Historically Black Colleges and Universities Capital Financing Advisory Board, 37451 E8-14930 Employment Employment and Training Administration NOTICES Solicitation for Grant Applications, 37499-37500 E8-14865 Energy Energy Department See Energy Information Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 37451-37453 E8-14886 Energy Energy Information Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 37453-37454 E8-14862 EPA Environmental Protection Agency RULES National Emission Standards for Hazardous Air Pollutants:

Area Source Standards for Plating and Polishing Operations, 37728-37749 E8-14795 NOTICES Proposed Administrative Settlement Pursuant to the Comprehensive Environmental Response, Compensation, And Liability Act, 37454 E8-14906 Public Teleconference of the Science Advisory Board Drinking Water Committee, 37454-37455 E8-14881 Executive Executive Office of the President See Management and Budget Office See Presidential Documents FAA Federal Aviation Administration RULES Airworthiness Directives:

Eurocopter France Model AS 355 N Helicopters, 37358-37359 E8-14717 Viking Air Limited Models DHC-6-1, DHC-6-100, DHC 6 200, and DHC-6-300 Airplanes, 37353-37358 E8-13844 E8-13848 Standard Instrument Approach Procedures, Takeoff Minimums and Obstacle Departure Procedures: Miscellaneous Amendments, 37360-37362 E8-14172 NOTICES Advisory Circulars: Extended Operations and Polar Operations etc., 37526 E8-14879 Federal Highway Federal Highway Administration NOTICES Environmental Impact Statement;

Intent: Boulder, Broomfield, and Jefferson Counties, CO; Rescind, 37526-37527 E8-14907 Final Federal Agency Actions on Proposed Highway in San Bernardino County, CA, 37527-37528 E8-14945 Federal Railroad Federal Railroad Administration NOTICES Petition for Waiver of Compliance: Union Pacific Railroad Co., 37528 E8-14855 Federal Reserve Federal Reserve System NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 37455-37457 E8-14847 Meetings;

Sunshine Act, 37457 08-1403 FTC Federal Trade Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 37457-37458 E8-14866 Financial Financial Management Service See Fiscal Service Fiscal Fiscal Service NOTICES Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies, 37644-37692 E8-14520 Prompt Payment Interest Rate; Contract Disputes Act, 37529 E8-14769 Fish Fish and Wildlife Service NOTICES Endangered and Threatened Wildlife and Plants;

Permits, 37470-37471 E8-14852 Meetings: North American Wetlands Conservation Council, 37471 E8-14849 Food Food and Drug Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 37464-37466 E8-14882 E8-14887 E8-14888 Applications: Innovative Food Defense Projects; New Limited Competition Cooperative Agreement (U13), 37466-37469 E8-14876 Foreign Foreign Assets Control Office RULES Alphabetical Listing of Blocked Persons, Specially Designated Nationals, Specially Designated Terrorists, et al., 37536-37642 E8-14016 NOTICES Additional Designation of an Entity Pursuant to Executive Order 13224, 37529-37530 E8-14838 Additional Designation of Individuals and Entities Pursuant to Executive Order (13224), 37530-37531 E8-14844 Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 37531-37533 E8-14816 E8-14819 Unblocking of Entities Pursuant to Executive Order 13382, 37533 E8-14835 Unblocking of Specially Designated National Pursuant to Executive Order (13224), 37533-37534 E8-14842 MISSING FOR: Foreign-Trade Zones Board Foreign-Trade Zones Board NOTICES Subzone Status: Louisiana Energy Services, L.P. (Gas Centrifuge Production Equipment); Lea County, NM, 37407 E8-14913 GSA General Services Administration NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 37418 E8-14870 Health Health and Human Services Department See Aging Administration See Centers for Medicare & Medicaid Services See Food and Drug Administration See National Institutes of Health NOTICES Designation of a Class of Employees for Addition to the Special Exposure Cohort, 37458-37460 E8-14821 E8-14822 E8-14824 E8-14826 E8-14827 Request for Information and Comments: Implementation of Human Subjects Protection Training and Education Programs, 37460-37463 E8-14917 Homeland Homeland Security Department See U.S.

Citizenship and Immigration Services Industry Industry and Security Bureau NOTICES Action Affecting Export Privileges; Omega Engineering, Inc., 37407-37408 E8-14828 Interior Interior Department See Fish and Wildlife Service See Land Management Bureau See Minerals Management Service See National Park Service See Surface Mining Reclamation and Enforcement Office IRS Internal Revenue Service RULES Employment Tax Adjustments, 37371-37382 E8-14947 Extension of Time for Filing Returns, 37362-37371 E8-14902 PROPOSED RULES Extension of Time for Filing Returns, 37389-37390 E8-14901 NOTICES Community Volunteer Income Tax Assistance

(VITA)Matching Grant Program Availability of Application Packages, 37534 E8-14231 International International Trade Administration NOTICES Antidumping or Countervailing Duty Orders: Finding, or Suspended Investigation; Advance Notification of Sunset Reviews, 37408 E8-14905 Applications for Duty-Free Entry of Scientific Instruments, 37408-37409 E8-14759 Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 37409-37410 E8-14909 Initiation of Five-year (”Sunset”) Reviews, 37411 E8-14910 Quarterly Update to Annual Listing of Foreign Government Subsidies: Articles of Cheese Subject to an In-Quota Rate of Duty, 37412 E8-14912 International International Trade Commission NOTICES Investigations: Certain Frozen Fish Fillets From Vietnam, 37487-37489 E8-14181 Crawfish Tail Meat From China, 37489-37492 E8-14203 Drams and Dram Modules from Korea, 37492-37494 E8-14180 Tow-Behind Lawn Groomers from China, 37494-37495 E8-14840 Judicial Judicial Conference of the United States NOTICES Meetings: Judicial Conference Advisory Committee; Rules of Evidence, 37495 E8-14750 E8-14754 E8-14756 Justice Justice Department See Drug Enforcement Administration Labor Labor Department See Employment and Training Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 37499 E8-14856 Land Land Management Bureau NOTICES Alaska Native Claims Selection, 37471-37472 E8-14713 E8-14851 Management Management and Budget Office NOTICES Federal Family Education Loan Program (FFELP), 37422-37451 E8-14820 Minerals Minerals Management Service NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 37472-37485 E8-14892 E8-14893 E8-14894 NASA National Aeronautics and Space Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 37418 E8-14870 Meetings: Aerospace Safety Advisory Panel, 37500 E8-14817 NIH National Institutes of Health NOTICES Meetings: Center for Scientific Review Special Emphasis Panel, 37469 E8-14837 National Institute of Allergy and Infectious Diseases, 37469-37470 E8-14839 NOAA National Oceanic and Atmospheric Administration RULES Fisheries of the Northeastern United States: Atlantic Mackerel, Squid, and Butterfish Fisheries, 37382-37388 E8-14937 NOTICES General Provisions for Domestic Fisheries; Application for Exempted Fishing Permits, 37412-37414 E8-14834 National Park National Park Service NOTICES National Register of Historic Places; Notification of Pending Nominations and Related Actions, 37485-37486 E8-14841 National Science National Science Foundation NOTICES Committee Management Renewals, 37500-37501 E8-14814 Navy Navy Department NOTICES Record of Decision: Development of the Westside of Marine Corps Base Quantico, Including the 2005 Base Realignment and Closure Action, 37418-37421 E8-14854 Nuclear Nuclear Regulatory Commission NOTICES Applications and Amendments to Facility Operating Licenses Involving No Significant Hazards Considerations, 37501-37508 E8-14342 Governors Designees Receiving Advance Notification of Transportation of Nuclear Waste, 37508-37511 E8-14860 Hearings: Entergy Operations, Inc. et al, 37511-37515 E8-14859 Meetings: Advisory Committee on Reactor Safeguards; Amendment, 37515 E8-14871 Meetings; Sunshine Act, 37515 08-1401 Office Office of Management and Budget See Management and Budget Office Pension Pension Benefit Guaranty Corporation PROPOSED RULES Bankruptcy Filing Date Treated as Plan Termination Date for Certain Purposes: Guaranteed Benefits; Allocation of Plan Assets; Pension Protection Act (of 2006), 37390-37402 E8-14813 Presidential Presidential Documents ADMINISTRATIVE ORDERS North Korea; certification of rescission as a state sponsor of terrorism (Memorandum of June 26, 2008), 37351 08-1404 Public Public Debt Bureau See Fiscal Service Railroad Railroad Retirement Board NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 37515-37516 E8-14825 SEC Securities and Exchange Commission PROPOSED RULES Indexed Annuities and Certain Other Insurance Contracts, 37752-37774 E8-14845 NOTICES Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc., 37516-37518 E8-14831 Municipal Securities Rulemaking Board, 37518-37519 E8-14857 NASDAQ Stock Market LLC, 37519-37521 E8-14830 E8-14833 New York Stock Exchange LLC, 37521-37523 E8-14832 SBA Small Business Administration NOTICES Meetings: SBA North Florida District Advisory Council, 37523-37524 E8-14864 Seeking Exemption Under Section 312 of the Small Business Investment Act, Conflicts of Interest: Emergence Capital Partners SBIC, L.P., 37524 E8-14863 Social Social Security Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 37524-37526 E8-14885 Surface Surface Mining Reclamation and Enforcement Office NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 37486-37487 E8-14757 Transportation Transportation Department See Federal Aviation Administration See Federal Highway Administration See Federal Railroad Administration Treasury Treasury Department See Fiscal Service See Foreign Assets Control Office See Internal Revenue Service NOTICES Federal Family Education Loan Program (FFELP), 37422-37451 E8-14820 Meetings: Debt Management Advisory Committee, 37529 E8-14829 MISSING FOR: U.S. Citizenship and Immigration Services U.S. Citizenship and Immigration Services NOTICES Small Business Non-Retaliation Policy, 37470 E8-14843 Veterans Veterans Affairs Department PROPOSED RULES Vocational Rehabilitation and Employment Program; Duty to Assist, 37402-37406 E8-14823 Separate Parts In This Issue Part II Treasury Department, Foreign Assets Control Office, 37536-37642 E8-14016 Part III Treasury Department, Fiscal Service, 37644-37692 E8-14520 Part IV Education Department, 37694-37725 E8-14140 Part V Environmental Protection Agency, 37728-37749 E8-14795 Part VI Securities and Exchange Commission, 37752-37774 E8-14845 Reader Aids Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws. To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.gpo.gov and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions. 73 127 Tuesday, July 1, 2008 Rules and Regulations DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2008-0368 Directorate Identifier 2008-CE-007-AD; Amendment 39-15532; AD 2008-11-10] RIN 2120-AA64 Airworthiness Directives; Viking Air Limited Models DHC-6-1, DHC-6-100, DHC-6-200, and DHC-6-300 Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. 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 an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: There have been reports of inter-rivet cracking on several wing front spar adapter assemblies (P/N C6WM1027-1) on the horizontal and vertical flanges. It was determined that the cracking was caused by stress corrosion in the short transverse grain initiated by local riveting induced stresses. We are issuing this AD to require actions to correct the unsafe condition on these products. DATES: This AD becomes effective August 5, 2008. On August 5, 2008, the Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD. ADDRESSES: You may examine the AD docket on the Internet at *http://www.regulations.gov* or in person at Document Management Facility, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. FOR FURTHER INFORMATION CONTACT: Pong Lee, Aerospace Engineer, FAA, New York Aircraft Certification Office, 1600 Stewart Avenue, Suite 410, Westbury, New York 11590; telephone:

(516)228-7324; fax:

(516)794-5531. SUPPLEMENTARY INFORMATION: Discussion We issued a notice of proposed rulemaking

(NPRM)to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the **Federal Register** on March 31, 2008 (73 FR 16782). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states: There have been reports of inter-rivet cracking on several wing front spar adapter assemblies (P/N C6WM1027-1) on the horizontal and vertical flanges. It was determined that the cracking was caused by stress corrosion in the short transverse grain initiated by local riveting induced stresses. This directive mandates modification and inspection of the wing front spar adapter fitting and replacement of cracked fittings. Comments We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public. Conclusion We reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed. Differences Between This AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have required different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a NOTE within the AD. Costs of Compliance We estimate that this AD will affect 157 products of U.S. registry. We also estimate that it will take about 18 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $80 per work-hour. Based on these figures, we estimate the cost of this AD on U.S. operators to be $226,080 or $1,440 per product. In addition, we estimate that any necessary follow-on actions will take about 200 work-hours and require parts costing $3,696 for a cost of $19,696 per product. We have no way of determining the number of products that may need these actions. 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 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. 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 the NPRM, 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. 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: **2008-11-10 Viking Air Limited:** Amendment 39-15532; Docket No. FAA-2008-0368; Directorate Identifier 2008-CE-007-AD. Effective Date

(a)This airworthiness directive

(AD)becomes effective August 5, 2008. Affected ADs

(b)None. Applicability

(c)This AD applies to Models DHC-6-1, DHC-6-100, DHC-6-200, and DHC-6-300 airplanes, all serial numbers, that are:

(1)Equipped with wing boxes, part numbers (P/Ns) C6W1002-1, C6W1002-3, WR6-1002-59, or WR6-1002-61, that incorporate a P/N C6WM1027-1 front spar adapter assembly with 10 or more years of service; and

(2)Certificated in any category. Subject

(d)Air Transport Association of America

(ATA)Code 57: Wings. Reason

(e)The mandatory continuing airworthiness information

(MCAI)states: There have been reports of inter-rivet cracking on several wing front spar adapter assemblies (P/N C6WM1027-1) on the horizontal and vertical flanges. It was determined that the cracking was caused by stress corrosion in the short transverse grain initiated by local riveting induced stresses. This directive mandates modification and inspection of the wing front spar adapter fitting and replacement of cracked fittings. Actions and Compliance

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

(1)Within the next 180 days after August 5, 2008 (the effective date of this AD), install inspection holes in the left-hand

(LH)and right-hand

(RH)lower wing skins following Viking DHC-6 Twin Otter Service Bulletin Number V6/541, dated October 1, 2007.

(2)Before further flight after installing the inspection holes required in paragraph (f)(1) of this AD, inspect the LH and RH front spar adapter assemblies for cracks. For wing box P/Ns C6W1002-1 and C6W1002-3, inspect following Viking DHC-6 Twin Otter Service Bulletin Number V6/540, dated October 1, 2007. For wing box P/Ns WR6-1002-59 and WR6-1002-61, inspect following R.W. Martin, Inc. Service Bulletin No. 00160/2, Revision A, dated November 15, 2007. Repetitively inspect all affected wing box P/Ns thereafter at intervals not to exceed 1,200 hours time-in-service or 12 months, whichever occurs first, until the replacement required in paragraph (f)(3) of this AD is done.

(3)Before further flight after doing any inspection required in paragraph (f)(2) of this AD where cracks are found, replace the cracked front spar adapter assembly with a front spar adapter assembly, P/N C6WM1027-3. Do the replacement following Viking DHC-6 Twin Otter Service Bulletin Number V6/542, dated October 1, 2007. This replacement terminates the repetitive inspections required in paragraph (f)(2) of this AD for the replaced front spar adapter assembly.

(4)As a terminating action for the repetitive inspections required in paragraph (f)(2) of this AD, at any time after the initial inspection required in paragraph (f)(2) of this AD, you may replace P/N C6WM1027-1 with P/N C6WM1027-3. FAA AD Differences Note: This AD differs from the MCAI and/or service information as follows:

(1)MCAI Transport Canada AD No. CF-2007-31, dated December 17, 2007, requires incorporating task C57-10-18 of the DHC-6 Corrosion Prevention and Control Manual (CPCM), PSM 1-6-5, within 90 days after the effective date of this AD.

(2)We are not incorporating task C57-10-18 of the DHC-6 CPCM, PSM 1-6-5, into this AD because we are currently examining Transport Canada AD No. CF-94-12R1, dated April 13, 1999, and AD No. CF-99-11, dated May 28, 1999. Transport Canada issued these ADs to incorporate a Corrosion Prevention and Control Program that identifies specific areas that must be inspected to ensure the structural integrity of the DHC-6 fleet. Other FAA AD Provisions

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

(1)*Alternative Methods of Compliance (AMOCs):* The Manager, New York Aircraft Certification 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: Pong Lee, Aerospace Engineer, FAA, New York Aircraft Certification Office, 1600 Stewart Avenue, Suite 410, Westbury, New York 11590; telephone:

(516)228-7324; fax:

(516)794-5531. 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. Related Information

(h)Refer to MCAI Transport Canada AD No. CF-2007-31, dated December 17, 2007; Viking DHC-6 Twin Otter Service Bulletins No. V6/540, dated October 1, 2007; No. V6/541, dated October 1, 2007; and No. V6/542, dated October 1, 2007; and R.W. Martin, Inc. Service Bulletin No. 00160/2, Revision A, dated November 15, 2007, for related information. Material Incorporated by Reference

(i)You must use Viking DHC-6 Twin Otter Service Bulletin No. V6/540, dated October 1, 2007; Viking DHC-6 Twin Otter Service Bulletin No. V6/541, dated October 1, 2007; Viking DHC-6 Twin Otter Service Bulletin No. V6/542, dated October 1, 2007; and R.W. Martin, Inc. Service Bulletin No. 00160/2, Revision A, dated November 15, 2007, 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 Viking Air Limited, 9574 Hampden Road, Sidney, B.C., Canada V8L 5V5 or R.W. Martin, Inc., 37552 Winchester Road, Hangar 20, Murrieta, California 92563.

(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 May 15, 2008. David R. Showers, Acting Manager, Small Airplane Directorate, Aircraft Certification Service. [FR Doc. E8-13844 Filed 6-30-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2008-0367 Directorate Identifier 2007-CE-089-AD; Amendment 39-15574; AD 2008-13-11] RIN 2120-AA64 Airworthiness Directives; Viking Air Limited Models DHC-6-1, DHC-6-100, DHC-6-200, and DHC-6-300 Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. 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 an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: Service experience indicates that as aircraft become older, they are more likely to exhibit indications of corrosion. Additionally, the FAA has reviewed the service experience and finds this action to be necessary based upon that service experience. We are issuing this AD to require actions to correct the unsafe condition on these products. DATES: This AD becomes effective August 5, 2008. On August 5, 2008, the Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD. ADDRESSES: You may examine the AD docket on the Internet at *http://www.regulations.gov* or in person at Document Management Facility, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. FOR FURTHER INFORMATION CONTACT: Richard Beckwith, Aerospace Engineer, FAA, New York Certification Office, 1600 Stewart Avenue, Suite 410, Westbury, New York 11590; telephone:

(516)228-7302; fax:

(516)568-2716. SUPPLEMENTARY INFORMATION: Discussion We issued a notice of proposed rulemaking

(NPRM)to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the **Federal Register** on March 31, 2008 (73 FR 16779). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states: Service experience indicates that as aircraft become older, they are more likely to exhibit indications of corrosion. Transport Canada, in conjunction with other airworthiness authorities, has committed itself to ensuring that additional maintenance programs for older aircraft are developed and implemented to minimize and control corrosive deterioration that could jeopardize airworthiness. Bombardier Inc., as manufacturer of the DHC-6 aircraft, has developed a Corrosion Prevention and Control Program which identifies specific areas that must be inspected to ensure the structural integrity of the DHC-6 fleet. Comments We gave the public the opportunity to participate in developing this AD. We have considered the comment received. The Aircraft Owners and Pilots Association

(AOPA)states that: AOPA opposes broad-based fleet-wide airworthiness directives to address corrosion related issues such as this one. Instead AOPA supports a more focused approach that takes aircraft maintenance and usage into account; instead of an AD based solely on age. In general, the FAA agrees that broad-based fleet-wide ADs are not always appropriate. However, in this case, the FAA has determined an AD should be issued because an unsafe condition exists in the product and the condition is likely to exist or develop in other products of the same type design. The FAA is issuing this AD for two reasons, both of which are stated in the NPRM. First, service experience indicates that as aircraft become older, they are more likely to exhibit indications of corrosion. Second, we have performed a review of the relevant service experience, including a review of the Corrosion Prevention and Control Program inspection reports that were made by operators to the manufacturer. This service experience supports the issuance of an AD. The FAA agrees in principle that based upon maintenance history, type of usage, etc., some operators may be in the position to address this unsafe condition using alternative methods to those proposed in the NPRM. However, it is not possible for the FAA to know all operators' specific conditions and write a different AD for each operator. Operators are encouraged to provide supporting evidence regarding their maintenance and operations in support of an alternative method of compliance

(AMOC)when appropriate and should follow the procedures in 14 CFR 39.19 and this AD for requesting an AMOC. We are not changing the final rule AD action based on this comment. Conclusion We reviewed the available data, including the comment received, and determined that air safety and the public interest require adopting the AD as proposed. 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 assure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have required different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a NOTE within the AD. Costs of Compliance Based on the service information, we estimate that this AD will affect 162 products of U.S. registry. We also estimate that it will take about 40 work-hours per product to comply with basic requirements of this AD. The average labor rate is $80 per work-hour. Based on these figures, we estimate the cost of this AD to the U.S. operators to be $518,400 or $3,200 per product. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We determined that this 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 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. 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 the NPRM, 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. 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: **2008-13-11 Viking Air Limited:** Amendment 39-15574; Docket No. FAA-2008-0367; Directorate Identifier 2007-CE-089-AD. Effective Date

(a)This airworthiness directive

(AD)becomes effective August 5, 2008. Affected ADs

(b)None. Applicability

(c)This AD applies to Models DHC-6-1, DHC-6-100, DHC-6-200, and DHC-6-300 airplanes, serial numbers

(SNs)001 through 844, certificated in any category. Subject

(d)Air Transport Association of America

(ATA)Code 51: Structures. Reason

(e)The mandatory continuing airworthiness information

(MCAI)states: Service experience indicates that as aircraft become older, they are more likely to exhibit indications of corrosion. Transport Canada, in conjunction with other airworthiness authorities, has committed itself to ensuring that additional maintenance programs for older aircraft are developed and implemented to minimize and control corrosive deterioration that could jeopardize airworthiness. Bombardier Inc., as manufacturer of the DHC-6 aircraft, has developed a Corrosion Prevention and Control Program which identifies specific areas that must be inspected to ensure the structural integrity of the DHC-6 fleet. Additionally, the FAA has reviewed the service experience of the Viking Air Limited Models DHC-6-1, DHC-6-100, DHC-6-200, and DHC-6-300 airplanes and finds this action to be necessary based upon that service experience. The MCAI requires that you do the corrosion tasks

(CTs)required by the corrosion prevention and control program. Actions and Compliance

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

(1)Within the next 90 days after August 5, 2008 (the effective date of this AD), develop a schedule for doing the initial and repeat CTs required in paragraph (f)(2) and (f)(3) of this AD.

(2)Initially, do all of the seven basic CTs defined at paragraph 3.0 of Part 3 of DHC-6 Twin Otter (Series 100/200/300) Corrosion Prevention and Control Manual PSM 1-6-5, Revision 3, released and dated January 15, 2007 (individual pages dated as specified in the List of Effective Pages on pages 7 through 12 of the document); and the temporary revisions listed in Table 1— *Viking Temporary Revisions* , of this AD: Table 1.—Viking Temporary Revisions Temporary revision number and date

(i)Viking Temporary Revision, C57-10-18 (TR 2-2), dated December 19, 2007.

(ii)Viking Temporary Revision, Part 3, Supplement 1 (TR 3-2), dated December 19, 2007.

(iii)Viking Temporary Revision, Part 3, Supplement 1 (TR 3-3), dated December 19, 2007.

(iv)Viking Temporary Revision, Part 3, Supplement 1, (TR 3-4), dated December 19, 2007. Determine corrosion level following the definitions contained in the introduction section of DHC-6 Twin Otter (Series 100/200/300) Corrosion Prevention and Control Manual PSM 1-6-5, Revision 3, released and dated January 15, 2007 (individual pages dated as specified in the List of Effective Pages on pages 7 through 12 of the document). The initial accomplishment deadlines are specified in Table 2— *Initial Accomplishment Deadline* , of this AD: Table 2.—Initial Accomplishment Deadline Applicable airplane serial numbers Initial accomplishment deadline for all airplanes in applicable S/N range

(i)001 through 199 15 months after August 5, 2008 (the effective date of this AD).

(ii)200 through 439 27 months after August 5, 2008 (the effective date of this AD).

(iii)440 through 659 51 months after August 5, 2008 (the effective date of this AD).

(iv)660 through 844 63 months after August 5, 2008 (the effective date of this AD).

(3)After the initial completion of each CT, repeat each CT at the repeat interval

(R)specified in the manual. Determine corrosion level following the definitions contained in the introduction section of DHC-6 Twin Otter (Series 100/200/300) Corrosion Prevention and Control Manual PSM 1-6-5, Revision 3, released and dated January 15, 2007 (individual pages dated as specified in the List of Effective Pages on pages 7 through 12 of the document).

(4)If any corrosion is found during any action required by this AD, before further flight, address corrosion following paragraph 4.0 of Part 3 of DHC-6 Twin Otter (Series 100/200/300) Corrosion Prevention and Control Manual PSM 1-6-5, Revision 3, dated January 15, 2007. All repairs are to be done following a method approved by the Manager, New York Aircraft Certification Office or Transport Canada Civil Aviation (or its delegated agent).

(5)Within 21 days after the finding of Level 3 corrosion, submit a plan to the FAA to identify a schedule for accomplishing the applicable CTs on the remainder of the airplanes in the operator's fleet that are subject to this AD or data substantiating that the Level 3 corrosion that was found is an isolated case. The FAA may impose a schedule other than proposed in the plan upon finding that a change to the schedule is needed to assure that any other Level 3 corrosion is detected in a timely manner. For the purposes of this paragraph, the FAA is defined as the cognizant principal maintenance inspector

(PMI)for operators that are assigned a PMI (e.g., part 121, 125, and 135 operators) and the cognizant flight standards district office for other operators (e.g., part 91 operators).

(6)If any Level 3 corrosion is found while doing any action required by this AD, within 21 days after the finding of Level 3 corrosion, report the finding on the form in Figure 1 of this AD and send it to Viking Air Limited, VP Engineering, 9574 Hampden Road, Sidney, British Columbia, Canada V8L 5V5.

(7)Incorporation of the initial and repeat CTs into your FAA-approved maintenance program constitutes terminating action for this AD. If this AD is terminated in this way, then the maintenance program must be in accordance with this AD. FAA AD Differences Note: This AD differs from the MCAI and/or service information as follows: No differences. Other FAA AD Provisions

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

(1)*Alternative Methods of Compliance (AMOCs):* The Manager, New York Aircraft Certification Office (ACO), 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: Richard Beckwith, Aerospace Engineer, FAA, New York ACO, 1600 Stewart Avenue, Suite 410, Westbury, New York 11590; telephone:

(516)228-7302; fax:

(516)568-2716. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate PMI in the FAA Flight Standards District Office (FSDO), or lacking a PMI, your local FSDO.

(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. AD 2008-13-11 INSPECTION REPORT (REPORT ONLY IF YOU FIND LEVEL 3 CORROSION) 1. Operator: 2. Telephone: 3. Airplane Model Number: 4. Airplane Serial Number: 5. Airplane Tail Number: 6. Date of Inspection: 7. Corrosion Task: 8. Description & Specific Location of Findings: 9. Additional Comments of Owner/Operator: Send to: Viking Air Limited VP Engineering 9574 Hampden Road Sidney, British Columbia, Canada V8L 5V5 Telephone: 250.656.7227 Fax: 250.656.9702 Figure 1. Related Information

(h)Refer to MCAI Transport Canada AD No. CF-94-12R1, dated April 13, 1999; Transport Canada AD No. CF-99-11, dated May 28, 1999; DHC-6 Twin Otter (Series 100/200/300) Corrosion Prevention and Control Manual PSM 1-6-5, Revision 3, dated January 15, 2007; and the temporary revisions listed in Table 1— *Viking Temporary Revisions,* of this AD, for related information. Material Incorporated by Reference

(i)You must use the service information specified in Table 3— *Material Incorporated by Reference,* of this AD 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 Viking Air Limited, VP Engineering, 9574 Hampden Road, Sidney, British Columbia, Canada V8L 5V5; Telephone: 250.656.7227; Fax: 250.656.9702.

(i)DHC-6 Twin Otter (Series 100/200/300) Corrosion Prevention and Control Manual PSM 1-6-5 1 through 304 Revision 3 Released and dated January 15, 2007 (individual pages dated as specified in the List of Effective Pages on pages 7 through 12 of the document).

(ii)Viking Temporary Revision, C57-10-18 (TR 2-2) 1 through 3 Temporary Revision No.: 2-2 December 19, 2007.

(iii)Viking Temporary Revision, Part 3, Supplement 1 (TR 3-2) 1 through 2 Temporary Revision No.: 3-2 December 19, 2007.

(iv)Viking Temporary Revision, Part 3, Supplement 1 (TR 3-3) 1 through 2 Temporary Revision No.: 3-3 December 19, 2007.

(v)Viking Temporary Revision, Part 3, Supplement 1, (TR 3-4) 1 through 2 Temporary Revision No.: 3-4 December 19, 2007. Issued in Kansas City, Missouri, on June 12, 2008. Kim Smith, Manager, Small Airplane Directorate, Aircraft Certification Service. [FR Doc. E8-13848 Filed 6-30-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2008-0041; Directorate Identifier 2007-SW-16-AD; Amendment 39-15599; AD 2008-14-04] RIN 2120-AA64 Airworthiness Directives; Eurocopter France Model AS 355 N Helicopters AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: We are adopting a new airworthiness directive

(AD)for Eurocopter France Model AS 355 N helicopters. This AD results from mandatory continuing airworthiness information

(MCAI)originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The European Aviation Safety Agency (EASA), the technical agent for France, with which we have a bilateral agreement, states in the MCAI: “This Airworthiness Directive

(972)641-3460, fax

(972)641-3527. *Examining the AD Docket:* The AD docket contains the Notice of Proposed Rulemaking (NPRM), the economic evaluation, any comments received, and other information. The street address and operating hours for the Docket Operations office (telephone

(800)647-5227) are in the ADDRESSES section of this AD. Comments will be available in the AD docket shortly after they are received. FOR FURTHER INFORMATION CONTACT: Ed Cuevas, Aviation Safety Engineer, FAA, Rotorcraft Directorate, Safety Management Group, Fort Worth, Texas 76193-0111, telephone

(817)222-5355, fax

(817)222-5961. SUPPLEMENTARY INFORMATION: Discussion We issued an NPRM to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the **Federal Register** on January 23, 2008 (73 FR 3891). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states: “This Airworthiness Directive

(AD)is issued because it was found that the power drawn by the starter generators from the engines is above the consumption capacity at altitudes above 3,000 meters, declared for the engines of AS 355 N helicopters. Excessive power consumption of the starter generators reduces the engine surge margin, which can result in engine failure.” Comments By publishing the NPRM, we gave the public an opportunity to participate in developing this AD. However, we received no comment on the NPRM or on our determination of the cost to the public. Therefore, based on our review and evaluation of the available data, we have determined that air safety and the public interest require adopting the AD as proposed except for some formatting changes. These changes will neither increase the economic burden on any operator nor increase the scope of the AD. Relevant Service Information Eurocopter has issued Alert Service Bulletin, Revision 1, No. 01.00.52, dated September 14, 2006. The actions described in the MCAI are intended to correct the same unsafe condition as that identified in the service information. Differences Between This AD and the MCAI AD There are no substantive differences between this AD and the MCAI AD. Costs of Compliance We estimate that this AD will affect about 17 helicopters of U.S. registry. We also estimate that it will take about 15 minutes to install the placard in each helicopter. The average labor rate is $80 per work-hour. The manufacturer states in its service bulletin that the “labels will be delivered free of charge on the Operator's order.” Because the manufacturer has indicated it will provide the placard free of charge, we have assumed there will be no charge for these placards. However, because we do not control warranty coverage for affected parties, some parties may incur costs higher than estimated here. Based on these figures, we estimate the cost of the AD on U.S. operators to be $340 or $20 per helicopter. 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 this AD: 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 and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, 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: **2008-14-04 Eurocopter France:** Amendment 39-15599. Docket No. FAA-2008-0041; Directorate Identifier 2007-SW-16-AD. Effective Date

(a)This amendment becomes effective on August 5, 2008. Other Affected ADs

(b)None. Applicability

(c)This AD applies to Model AS 355 N helicopters, certificated in any category. Reason

(d)The mandatory continuing airworthiness information

(MCAI)states: “This Airworthiness Directive

(e)Within 100 hours time-in-service or within 12 months, whichever occurs first, unless already done, do the following actions:

(1)Install a limitation placard (indicating the new load limitation for the starter generator) on the overhead instrument panel, immediately below the ammeter.

(2)The placard must state the following: Maximum continuous load per generator 100A If Hp>10000 ft. Differences Between This AD and the MCAI AD

(f)None. Other Information

(g)Alternative Methods of Compliance (AMOCs): The Manager, Safety Management Group, 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: Ed Cuevas, Aviation Safety Engineer, Fort Worth, Texas 76193-0111, telephone

(817)222-5355, fax

(817)222-5961. Related Information

(h)MCAI EASA Airworthiness Directive No. 2006-0338, dated November 7, 2006, and Eurocopter Alert Service Bulletin, Revision 1, No. 01.00.52, dated September 14, 2006, contain related information. Air Transport Association of America

(ATA)Tracking Code

(i)ATA Code 2435—Electrical Power Starter Generator, 80—Starting. Issued in Fort Worth, Texas, on June 18, 2008. Judy I. Carl, Acting Manager, Rotorcraft Directorate, Aircraft Certification Service. [FR Doc. E8-14717 Filed 6-30-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 97 [Docket No. 30613; Amdt. No. 3274] Standard Instrument Approach Procedures, and Takeoff Minimums and Obstacle Departure Procedures; Miscellaneous Amendments AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule. SUMMARY: This Rule establishes, amends, suspends, or revokes STANDARD Instrument Approach Procedures (SIAPs) and associated Takeoff Minimums and Obstacle Departure Procedures for operations at certain airports. These regulatory actions are needed because of the adoption of new or revised criteria, or because of changes occurring in the National Airspace System, such as the commissioning of new navigational facilities, adding new obstacles, or changing air traffic requirements. These changes are designed to provide safe and efficient use of the navigable airspace and to promote safe flight operations under instrument flight rules at the affected airports. DATES: This rule is effective July 1, 2008. The compliance date for each SIAP, associated Takeoff Minimums, and ODP is specified in the amendatory provisions. The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of July 1, 2008. ADDRESSES: Availability of matters incorporated by reference in the amendment is as follows: *For Examination* — 1. FAA Rules Docket, FAA Headquarters Building, 800 Independence Avenue, SW., Washington, DC 20591; 2. The FAA Regional Office of the region in which the affected airport is located; 3. The National Flight Procedures Office, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 or, 4. 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.* *Availability* —All SIAPs and Takeoff Minimums and ODPs are available online free of charge. Visit *nfdc.faa.gov* to register. Additionally, individual SIAP and Takeoff Minimums and ODP copies may be obtained from: 1. FAA Public Inquiry Center (APA-200), FAA Headquarters Building, 800 Independence Avenue, SW., Washington, DC 20591; or 2. The FAA Regional Office of the region in which the affected airport is located. FOR FURTHER INFORMATION CONTACT: Harry J. Hodges, Flight Procedure Standards Branch (AFS-420), Flight Technologies and Programs Divisions, Flight Standards Service, Federal Aviation Administration, Mike Monroney Aeronautical Center, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 (Mail Address: P.O. Box 25082, Oklahoma City, OK 73125) Telephone:

(405)954-4164. SUPPLEMENTARY INFORMATION: This rule amends Title 14 of the Code of Federal Regulations, Part 97 (14 CFR part 97), by establishing, amending, suspending, or revoking SIAPS, Takeoff Minimums and/or ODPS. The complete regulators description of each SIAP and its associated Takeoff Minimums or ODP for an identified airport is listed on FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR 97.20. The applicable FAA Forms are FAA Forms 8260-3, 8260-4, 8260-5, 8260-15A, and 8260-15B when required by an entry on 8260-15A. The large number of SIAPs, Takeoff Minimums and ODPs, in addition to their complex nature and the need for a special format make publication in the **Federal Register** expensive and impractical. Furthermore, airmen do not use the regulatory text of the SIAPs, Takeoff Minimums or ODPs, but instead refer to their depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP, Takeoff Minimums and ODP listed on FAA forms is unnecessary. This amendment provides the affected CFR sections and specifies the types of SIAPs and the effective dates of the Associated Takeoff Minimums and ODPs. This amendment also identifies the airport and its location, the procedure, and the amendment number. The Rule This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP, Takeoff Minimums and ODP as contained in the transmittal. Some SIAP and Takeoff Minimums and textual ODP amendments may have been issued previously by the FAA in a Flight Data Center

(FDC)Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for some SIAP and Takeoff Minimums and ODP amendments may require making them effective in less than 30 days. For the remaining SIAPS and Takeoff Minimums and ODPS, an effective date at least 30 days after publication is provided. Further, the SIAPs and Takeoff Minimums and ODPS contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPS and Takeoff Minimums and ODPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedures before adopting these SIAPS, Takeoff Minimums and ODPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making some SIAPs effective in less than 30 days. Conclusion The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) Is not a “significant regulatory action” under Executive Order 12866;

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

(3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. List of Subjects in 14 CFR Part 97 Air traffic control, Airports, Incorporation by reference, and Navigation (Air). Issued in Washington, DC on June 13, 2008. James J. Ballough, Director, Flight Standards Service. Adoption of the Amendment Accordingly, pursuant to the authority delegated to me, under Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) is amended by establishing, amending, suspending, or revoking Standard Instrument Approach Procedures and/or Takeoff Minimums and/or Obstacle Departure Procedures effective at 0902 UTC on the dates specified, as follows: PART 97—STANDARD INSTRUMENT APPROACH PROCEDURES 1. The authority citation for part 97 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40106, 40113, 40114, 40120, 44502, 44514, 44701, 44719, 44721-44722. 2. Part 97 is amended to read as follows: Effective 31 JUL 2008 Kake, AK, Kake, GPS RWY 10, Orig-A, CANCELLED Kake, AK, Kake, NDB/DME RWY 11, Amdt 1 Kake, AK, Kake, RNAV

(GPS)RWY 11, Orig Kake, AK, Kake, Takeoff Minimums and Obstacle DP, Amdt 1 Kivalina, AK, Kivalina, RNAV

(GPS)RWY 12, Amdt 1 Kivalina, AK, Kivalina, RNAV

(GPS)RWY 30, Amdt 1 Kivalina, AK, Kivalina, Takeoff Minimums and Obstacle DP, Orig Point Lay, AK, Point Lay LRRS, RNAV

(GPS)RWY 5, Amdt 1 Point Lay, AK, Point Lay LRRS, RNAV

(GPS)RWY 23, Amdt 1 Point Lay, AK, Point Lay LRRS, Takeoff Minimums and Obstacle DP, Orig Ruby, AK, Ruby, RNAV

(GPS)RWY 21, Amdt 2 Talladega, AL, Talladega Municipal, GPS RWY 3, Orig, CANCELLED Talladega, AL, Talladega Municipal, GPS RWY 21, Orig-A, CANCELLED Talladega, AL, Talladega Municipal, RNAV

(GPS)RWY 3, Orig Talladega, AL, Talladega Municipal, RNAV

(GPS)RWY 21, Orig Talladega, AL, Talladega Municipal, VOR-A, Amdt 7 Talladega, AL, Talladega Municipal, VOR/DME RWY 3, Amdt 5 Talladega, AL, Talladega Municipal, VOR/DME-B, Orig-A, CANCELLED Mountain Home, AR, Ozark Rgnl, VOR-A, Amdt 10 Burbank, CA, Bob Hope, ILS OR LOC Z RWY 8, Amdt 36 Burbank, CA, Bob Hope, LOC Y RWY 8, Amdt 3 Burbank, CA, Bob Hope, VOR RWY 8, Amdt 11 Los Angeles, CA, Los Angeles Intl, ILS OR LOC RWY 6L, Amdt 12 Los Angeles, CA, Los Angeles Intl, ILS OR LOC RWY 6R, Amdt 17 Los Angeles, CA, Los Angeles Intl, ILS OR LOC RWY 7L, Amdt 7 Los Angeles, CA, Los Angeles Intl, ILS OR LOC RWY 7R, Amdt 6 Los Angeles, CA, Los Angeles Intl, RNAV

(GPS)Y RWY 6L, Amdt 1 Los Angeles, CA, Los Angeles Intl, RNAV

(GPS)Y RWY 6R, Amdt 1 Los Angeles, CA, Los Angeles Intl, RNAV

(GPS)Y RWY 7L, Amdt 2 Los Angeles, CA, Los Angeles Intl, RNAV

(GPS)Y RWY 7R, Amdt 2 Los Angeles, CA, Los Angeles Intl, RNAV

(RNP)Z RWY 6L, Orig Los Angeles, CA, Los Angeles Intl, RNAV

(RNP)Z RWY 6R, Orig Los Angeles, CA, Los Angeles Intl, RNAV

(RNP)Z RWY 7L, Orig Los Angeles, CA, Los Angeles Intl, RNAV

(RNP)Z RWY 7R, Orig Los Angeles, CA, Whiteman, VOR-A, Amdt 2 Ontario, CA, Ontario Intl, RNAV

(GPS)Y RWY 8L, Amdt 1 Ontario, CA, Ontario Intl, RNAV

(GPS)Y RWY 26L, Amdt 1 Ontario, CA, Ontario Intl, RNAV

(GPS)Y RWY 26R, Amdt 1 Ontario, CA, Ontario Intl, RNAV

(RNP)Z RWY 8L, Orig Ontario, CA, Ontario Intl, RNAV

(RNP)Z RWY 26L, Orig Ontario, CA, Ontario Intl, RNAV

(RNP)Z RWY 26R, Orig San Jose, CA, Norman Y. Mineta/San Jose Intl, RNAV

(GPS)Y RWY 12R, Amdt 2 San Jose, CA, Norman Y. Mineta/San Jose Intl, RNAV

(GPS)Y RWY 30L, Amdt 2 San Jose, CA, Norman Y. Mineta/San Jose Intl, RNAV

(RNP)Z RWY 12R, Orig San Jose, CA, Norman Y. Mineta/San Jose Intl, RNAV

(RNP)Z RWY 30L, Orig Van Nuys, CA, Van Nuys, VOR-A, Amdt 4 Denver, CO, Centennial, GPS RWY 28, Orig-A, CANCELLED Denver, CO, Centennial, GPS RWY 35R, Orig-A, CANCELLED Denver, CO, Centennial, RNAV

(GPS)RWY 28, Orig Denver, CO, Centennial, RNAV

(GPS)RWY 35R, Orig Denver, CO, Centennial, Takeoff Minimums and Obstacle DP, Amdt 4 Denver, CO, Denver International, Takeoff Minimums and Obstacle DP, Amdt 2 Denver, CO, Front Range, Takeoff Minimums and Obstacle DP, Amdt 2 Denver, CO, Rocky Mountain Metropolitan, Takeoff Minimums and Obstacle DP, Amdt 4 Fort Collins-Loveland, CO, Fort Collins-Loveland Muni, Takeoff Minimums and Obstacle, Amdt 5 Williamantic, CT, Windham, Takeoff Minimums and Obstacle DP, Amdt 4 Crestview, FL, Bob Sikes, RNAV

(GPS)RWY 35, Amdt 1 Crestview, FL, Bob Sikes, Takeoff Minimums and Obstacle DP, Orig Lake City, FL, Lake City Muni, RNAV

(GPS)RWY 28, Amdt 1 Tampa, FL, Tampa Intl, ILS OR LOC RWY 18R, Amdt 4 Tampa, FL, Tampa Intl, RNAV

(GPS)RWY 18R, Amdt 1 Tampa, FL, Tampa Intl, RNAV

(GPS)RWY 36L, Amdt 1 Camilla, GA, Camilla-Mitchell County, NDB RWY 8, Amdt 2 Camilla, GA, Camilla-Mitchell County, RNAV

(GPS)RWY 8, Orig Camilla, GA, Camilla-Mitchell County, RNAV

(GPS)RWY 26, Orig Camilla, GA, Camilla-Mitchell County, Takeoff Minimums and Obstacle DP, Amdt 1 Hazlehurst, GA, Hazlehurst, NDB RWY 14, Amdt 4 Hazlehurst, GA, Hazlehurst, RNAV

(GPS)RWY 14, Orig McRae, GA, Telfair-Wheeler, RNAV

(GPS)RWY 3, Orig Canton, IL, Ingersoll, RNAV

(GPS)RWY 18, Orig Canton, IL, Ingersoll, RNAV

(GPS)RWY 36, Orig Canton, IL, Ingersoll, Takeoff Minimums and Obstacle DP, Orig Canton, IL, Ingersoll, VOR-A, Amdt 8 Champaign/Urbana, IL, University of Illinois-Willard, VOR/DME RWY 14L, Orig Portland, IN, Portland Muni, GPS RWY 27, Orig-A, CANCELLED Portland, IN, Portland Muni, RNAV

(GPS)RWY 9, Orig Portland, IN, Portland Muni, RNAV

(GPS)RWY 27, Orig Portland, IN, Portland Muni, Takeoff Minimums and Obstacle DP, Orig Bedford, MA, Laurence G. Hanscom Field, Takeoff Minimums and Obstacle DP, Amdt 4 Dexter, MO, Dexter Muni, RNAV

(GPS)RWY 18, Amdt 1 Dexter, MO, Dexter Muni, RNAV

(GPS)RWY 36, Amdt 1 Dexter, MO, Dexter Muni, Takeoff Minimums and Obstacle DP, Amdt 3 Dexter, MO, Dexter Muni, VOR/DME RWY 36, Amdt 6 Springfield, MO, Springfield-Branson National, RNAV

(GPS)RWY 2, Amdt 2 Springfield, MO, Springfield-Branson National, RNAV

(GPS)RWY 20, Amdt 2 Meridian, MS, Key Field, ILS OR LOC RWY 1, Amdt 24 Meridian, MS, Key Field, RNAV

(GPS)RWY 1, Amdt 1 Bozeman, MT, Gallatin Field, Takeoff Minimums and Obstacle DP, Amdt 3 Missoula, MT, Missoula Intl, Takeoff Minimums and Obstacle DP, Amdt 8 Bismarck, ND, Bismarck Muni, RNAV

(GPS)RWY 31, Orig-A Fairbury, NE, Fairbury Muni, GPS RWY 17, Orig, CANCELLED Fairbury, NE, Fairbury Muni, GPS RWY 35, Orig, CANCELLED Fairbury, NE, Fairbury Muni, NDB-A, Amdt 3A Fairbury, NE, Fairbury Muni, RNAV

(GPS)RWY 17, Orig Fairbury, NE, Fairbury Muni, RNAV

(GPS)RWY 35, Orig Fairbury, NE, Fairbury Muni, Takeoff Minimums and Obstacle DP, Orig Grant, NE, Grant Muni, RNAV

(GPS)RWY 15, Amdt 1 Grant, NE, Grant Muni, RNAV

(GPS)RWY 33, Amdt 1 Grant, NE, Grant Muni, Takeoff Minimums and Obstacle DP, Orig Sidney, NE, Sidney Muni/Lloyd W Carr Field, RNAV

(GPS)RWY 13, Amdt 2 Sidney, NE, Sidney Muni/Lloyd W Carr Field, RNAV

(GPS)RWY 31, Amdt 2 Sidney, NE, Sidney Muni/Lloyd W Carr Field, Takeoff Minimums and Textual Obstacle DP, Amdt 1 Sidney, NE, Sidney Muni/Lloyd W Carr Field, VOR RWY 13, Amdt 7 Sidney, NE, Sidney Muni/Lloyd W Carr Field, VOR RWY 31, Amdt 7 Sidney, NE, Sidney Muni/Lloyd W Carr Field, VOR/DME OR TACAN RWY 13, Amdt 5 Sidney, NE, Sidney Muni/Lloyd W Carr Field, VOR/DME OR TACAN RWY 31, Amdt 5 Manchester, NH, Manchester, Takeoff Minimums and Obstacle DP, Amdt 8 Hudson, NY, Columbia County, Takeoff Minimums and Obstacle DP, Orig White Plains, NY, Westchester County, Takeoff Minimums and Obstacle DP, Amdt 6 Williamson/Sodus, NY, Williamson-Sodus, RNAV

(GPS)RWY 10, Amdt 1 Williamson/Sodus, NY, Williamson-Sodus, RNAV

(GPS)RWY 28, Amdt 1 Williamson/Sodus, NY, Williamson-Sodus, Takeoff Minimums and Obstacle, DP, Amdt 1 Columbus, OH, Ohio State University, VOR/DME RNAV RWY 27L, Amdt 6D, CANCELLED Guthrie, OK, Guthrie-Edmond Rgnl, RNAV

(GPS)RWY 16, Amdt 1 Guthrie, OK, Guthrie-Edmond Rgnl, RNAV

(GPS)RWY 34, Amdt 1 Bedford, PA, Bedford County, GPS RWY 14, Orig, CANCELLED Bedford, PA, Bedford County, GPS RWY 32, Orig, CANCELLED Bedford, PA, Bedford County, RNAV

(GPS)RWY 14, Orig Bedford, PA, Bedford County, RNAV

(GPS)RWY 32, Orig Bedford, PA, Bedford County, VOR-A, Amdt 1 Coatesville, PA, Chester County G.O. Carlson, GPS RWY 11, Orig-A, CANCELLED Coatesville, PA, Chester County G.O. Carlson, GPS RWY 29, Orig, CANCELLED Coatesville, PA, Chester County G.O. Carlson, ILS OR LOC RWY 29, Amdt 7 Coatesville, PA, Chester County G.O. Carlson, RNAV

(GPS)RWY 11, Orig Coatesville, PA, Chester County G.O. Carlson, RNAV

(GPS)RWY 29, Orig Coatesville, PA, Chester County G.O. Carlson, Takeoff Minimums and Obstacle DP, Orig Factoryville, PA, Seamans Field, Takeoff Minimums and Obstacle, DP, Amdt 3 Pittsburgh, PA, Pittsburgh Intl, CONVERGING ILS RWY 28R, Amdt 4 Pittsburgh, PA, Pittsburgh Intl, ILS OR LOC RWY 28L, ILS RWY 28L (CAT II), Amdt 9 Pittsburgh, PA, Pittsburgh Intl, ILS OR LOC RWY 28R, ILS RWY 28R (CAT II), Amdt 9 Pittsburgh, PA, Pittsburgh Intl, RNAV

(GPS)RWY 28L, Amdt 4 Reedsville, PA, Mifflin County, GPS RWY 24, Orig-A, CANCELLED Reedsville, PA, Mifflin County, LOC RWY 6, Amdt 8 Reedsville, PA, Mifflin County, RNAV

(GPS)RWY 6, Orig Reedsville, PA, Mifflin County, RNAV

(GPS)RWY 24, Orig Memphis, TN, Memphis Intl, ILS OR LOC RWY 9, Amdt 27 Memphis, TN, Memphis Intl, ILS OR LOC RWY 18C, Amdt 1 Memphis, TN, Memphis Intl, ILS OR LOC RWY 18L, Amdt 2 Memphis, TN, Memphis Intl, ILS OR LOC RWY 18R, Amdt 13 Memphis, TN, Memphis Intl, ILS OR LOC RWY 27, Amdt 3 Memphis, TN, Memphis Intl, ILS OR LOC RWY 36C, ILS RWY 36C (CAT II), ILS RWY 36C (CAT III), Amdt 3 Memphis, TN, Memphis Intl, ILS OR LOC RWY 36L, ILS RWY 36L (CAT II), ILS RWY 36L (CAT III), Amdt 14 Memphis, TN, Memphis Intl, ILS OR LOC RWY 36R, ILS RWY 36R (CAT II), ILS RWY 36R (CAT III), Amdt 3 Memphis, TN, Memphis Intl, RNAV

(GPS)RWY 9, Amdt 1 Memphis, TN, Memphis Intl, RNAV

(GPS)RWY 18C, Amdt 1 Memphis, TN, Memphis Intl, RNAV

(GPS)RWY 18L, Amdt 1 Memphis, TN, Memphis Intl, RNAV

(GPS)RWY 18R, Amdt 1 Memphis, TN, Memphis Intl, RNAV

(GPS)RWY 27, Amdt 1 Memphis, TN, Memphis Intl, RNAV

(GPS)RWY 36C, Amdt 1 Memphis, TN, Memphis Intl, RNAV

(GPS)RWY 36L, Amdt 1 Memphis, TN, Memphis Intl, RNAV

(GPS)RWY 36R, Amdt 1 Shelbyville, TN, Bomar Field-Shelbyville Muni, GPS RWY 18, Orig, CANCELLED Shelbyville, TN, Bomar Field-Shelbyville Muni, GPS RWY 36, Orig, CANCELLED Shelbyville, TN, Bomar Field-Shelbyville Muni, RNAV

(GPS)RWY 18, Orig Shelbyville, TN, Bomar Field-Shelbyville Muni, RNAV

(GPS)Y RWY 36, Orig Shelbyville, TN, Bomar Field-Shelbyville Muni, RNAV

(GPS)Z RWY 36, Orig Shelbyville, TN, Bomar Field-Shelbyville Muni, Takeoff Minimums and Obstacle DP, Amdt 1 Shelbyville, TN, Bomar Field-Shelbyville Muni, VOR RWY 36, Amdt 16 Roanoke, VA, Roanoke Rgnl/Woodrum Field, Takeoff Minimums and Obstacle DP, Amdt 8 [FR Doc. E8-14172 Filed 6-30-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 1, 25, 26, 53, 55, 156, 157, and 301 [TD 9407] RIN 1545-BE62 Extension of Time for Filing Returns AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final and temporary regulations and removal of temporary regulations. SUMMARY: This document contains final and temporary regulations relating to the simplification of procedures for obtaining automatic extensions of time to file certain returns. For these returns, the final and temporary regulations also remove the requirements for a signature and an explanation of the need for an extension of time to file. The final and temporary regulations affect taxpayers who are required to file certain returns and need an extension of time to file. The text of the temporary regulations also serves as the text of the proposed regulations set forth in the notice of proposed rulemaking on this subject in the Proposed Rules section of this issue of the **Federal Register** . DATES: *Effective Date:* These regulations are effective on July 1, 2008. *Applicability Date:* For dates of applicability of these regulations see §§ 1.6081-1(c), 1.6081-2T(i), 1.6081-3(e), 1.6081-4(f), 1.6081-5(f), 1.6081-6T(h), 1.6081-7(g), 1.6081-10(f), 1.6081-11(e), 25.6081-1(f), 26.6081-1(f), 53.6081-1(f), 55.6081-1(f), 156.6081-1(f), 157.6081-1(f), and 301.6081-2(e). FOR FURTHER INFORMATION CONTACT: Matthew P. Howard,

(202)622-4910 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background This document contains amendments to 26 CFR parts 1, 25, 26, 53, 55, 156, 157, and 301 under section 6081 of the Internal Revenue Code (Code). On November 8, 2005, a temporary regulation (TD 9229) relating to the simplification of procedures for obtaining automatic extensions of time to file certain returns was published in the **Federal Register** (70 FR 67356). A notice of proposed rulemaking (REG-144898-04) cross-referencing the temporary regulations was published in the **Federal Register** for the same day (70 FR 67397). No public hearing was requested or held. Written or electronic comments responding to the notice of proposed rulemaking were received. After consideration of all the comments, the proposed regulations are adopted as revised by this Treasury decision containing both final and temporary regulations. The revisions are discussed in this preamble. A notice of proposed rulemaking (REG-115457-08) cross-referencing the temporary regulations appears in the Proposed Rules section of this issue of the **Federal Register** . Summary of Comments and Explanation of Revisions These final and temporary regulations simplify the extension process by allowing certain taxpayers to file a single request for an automatic extension of time to file certain returns. Because the extension is automatic, these taxpayers do not need to sign the extension request or provide an explanation of the reasons for requesting an extension. Simplifying, consolidating, and standardizing extension forms will reduce taxpayer burden. This simplification will also lower processing costs and facilitate increased efficiency for the IRS. Individual Income Taxpayers The proposed regulations provided an automatic six-month extension to taxpayers who must file an individual income tax return if they submit a timely, completed application for extension on Form 4868 “Application for Automatic Extension of Time To File a U.S. Individual Income Tax Return.” This new procedure, adopted in the final regulations, replaces the process where an individual could obtain an initial automatic four-month extension by filing Form 4868 and apply for an additional two-month discretionary extension by filing Form 2688, “Application for Additional Extension of Time To File U.S. Individual Income Tax Return.” In connection with the new procedure, the IRS eliminated Form 2688. One commentator noted that individuals who are abroad may qualify for an extension beyond six months and previously applied for this extension using Form 2688. The commentator suggests that the elimination of this form places an added administrative burden on these individual taxpayers who are abroad. The commentator notes that without Form 2688, the alternative for requesting an additional extension beyond six months is to write a letter in accordance with Treas. Reg. § 1.6081-1(b). Thus, the commentator requests that Form 2688 be retained for use by taxpayers who are abroad and require more than a six-month extension of time to file. The primary goal for these regulatory revisions is to reduce taxpayer burden by simplifying the extension process through the elimination of unnecessary forms and required information. The elimination of Form 2688 is among those measures aimed at streamlining the extension process. Although previously used by some taxpayers who are abroad to apply for an additional extension beyond six months, the Treasury Department and the IRS have determined that retention of this form for such a limited purpose and small class of taxpayers would not be efficient. The Treasury Department and the IRS have also determined that due to the discretionary nature of any additional extension for taxpayers who are abroad, requiring a letter explaining the need for the extension is the most appropriate procedure. There is no additional administrative burden from this decision as in both situations the taxpayer must file a document containing substantially the same information and the IRS must process it. Thus, the comment is not adopted and the final regulations eliminate all references to the obsoleted Form 2688. Individual taxpayers who are abroad seeking guidance on applying for an additional extension of time to file beyond six months should refer to IRS Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, or the IRS Internet site at *http://www.irs.gov/formspubs/article/0,,id=154856,00.html* . Corporate Income Taxpayers The proposed regulations did not change the rules regarding filing extensions for corporations but merely changed the appearance and title of Form 7004, now titled “Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns.” While not specifically addressed by the proposed regulations, one comment was received regarding extensions for affiliated groups of corporations filing a consolidated return. The commentator suggests that the requirement under § 1.6081-3(a)(4) to include a statement listing the name and address of each member of the affiliated group if the affiliated group will file a consolidated return is inconsistent with § 1.1502-75(a). Section 1.1502-75(a) allows a group which did not file a consolidated return for the immediately preceding taxable year to file a consolidated return, provided that each member of the group that is eligible to do so files a Form 1122, “Authorization & Consent of Subsidiary Corporation to be included in a Consolidated Income Tax Return,” not later than the last day prescribed by law (including extensions of time) for the filing of the common parent's return. The commentator contends that § 1.6081-3 suggests that in order to have a valid extension all members of the affiliated group must be listed with the extension request even though the affiliated group may not have decided at the time the extension is filed if a consolidated return will be elected. Although, § 1.6081-3 requires a listing of subsidiaries with the extension request, the commentator suggests that, because § 1.1502-75(a) does not require the members of an affiliated group to elect to file a consolidated return until the common parent's extended due date, the failure to include the name and address of a member of the affiliated group that will be filed as part of the consolidated return should not invalidate a request for an automatic extension of time to file. The IRS and Treasury Department find no inconsistency between these regulations. If, at the time the extension request is due, the affiliated entities have not decided whether to file a consolidated return, the various affiliated entities must either file separate returns or individually request an extension of time to file. The failure to do either will result in a late return. Additionally, by including a list of affiliated members with the extension request, each member is deemed to be applying for an extension of time to file. In the event that a subsidiary does not file as part of a consolidated return, that entity will have a valid extension to file its own return. Therefore, the final regulations retain the requirement to list the name and address of each member of the affiliated group with the extension request. To address the commentator's concern, the final regulations explicitly state that the attached list will grant an extension for each member's separate return in the event that the member does not file as part of the consolidated group. Partnership, Trust, and Estate Taxpayers The proposed regulations provided for an automatic six-month extension of time to file returns for certain entities not taxed at the entity level (pass-through entities). Recognizing the potential that some taxpayers may not receive timely information returns from pass-through entities (for example, Schedule K-1s from partnerships) needed to complete their own income tax returns, the proposed regulations specifically requested comments on whether a shorter extension of time to file for pass-through entities might reduce overall taxpayer burden. Several comments addressing this issue were received. Four commentators suggested that the filing date for pass-through entities should be moved back to March 15th instead of April 15th. This would allow these entities to receive six-month extensions of time to file (until September 15th ) but still allow individual taxpayers with ownership interests in the pass-through entities to receive information needed to file a timely and complete income tax return by the October 15th extended due date. The filing dates for these pass-through entity returns are governed by statute. See for example, sections 6012(a), and 6072. Accordingly, without legislative action, the Treasury Department and the IRS are unable to change the filing due dates for these pass-through entities. The remaining comments on this topic suggested that an extension period for pass-through entities of five months or less would benefit individual taxpayers with ownership interests in pass-through entities in preparation of their own individual income tax returns. Three commentators suggested that the proposed regulations would actually increase taxpayer burden by making it easier for pass-through entities to delay the filing of their returns. Two commentators also pointed out that the five-month extension period would not alleviate the burden on corporate taxpayers with ownership interests in pass-through entities. These commentators expressed a concern that even a five-month extension period for pass-through entities would, in most cases, simply align the extended due date for pass-through entities with the extended due date for corporate returns, resulting in the same delay of information to corporate owners of pass-through entities. This delay, the commentators contend, would greatly increase the need for filing amended returns. These commentators suggested shortening the automatic extension for pass-through entities to a period of less than five months, which would ultimately reduce burden on both taxpayers and the IRS. In response to these comments, the Treasury Department and IRS have adopted temporary regulations which will provide for a five-month automatic extension period with no additional extension for certain pass-through entities. These entities are partnerships filing Form 1065, “U.S. Partnership Return of Income,” or Form 8804, “Annual Return for Partnership Withholding Tax,” and estates and trusts filing Form 1041, “U.S. Income Tax Return for Estates and Trusts.” While some commentators suggested adopting an extension period shorter than five months, the Treasury Department and the IRS believe a five-month automatic extension period for certain partnerships, trusts, and estates, strikes a reasonable balance and reduces the overall burden on taxpayers. The Treasury Department and IRS believe the five-month extension period allows pass-through entities, including complex and tiered entities, an adequate time for preparation of the required pass-through return and also ensures the timely and accurate dissemination of information to a large number of taxpayers who require that information for completion of their own income tax returns. It is recognized that some corporations with ownership interests in pass-through entities may continue to experience delayed receipt of information needed to complete their own corporate returns and some pass-through entities may find it difficult to complete their returns. Thus the Treasury Department and the IRS request comments on whether the five-month automatic extension of time to file for these pass-through entities increases or reduces overall taxpayer burden. Please follow the instructions in the “Comments and Public Hearing” section in the notice of proposed rulemaking accompanying these temporary regulations in this issue of the **Federal Register** . Transitional Rule for Pass-Through Entities The temporary regulations allowing certain pass-through entities to obtain an automatic five-month extension apply to applications by these entities for an automatic extension of time to file certain returns due on or after January 1, 2009. These entities will be allowed to obtain an automatic six-month extension of time to file the applicable returns, which are required to be filed before January 1, 2009. 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. Although these final regulations reference forms that are approved under the Paperwork Reduction Act (44 U.S.C. chapter 35), the regulations themselves do not impose a collection of information on small entities. Therefore the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. For the applicability of the Regulatory Flexibility Act to the temporary regulations, refer to the Special Analyses section of the preamble to the cross-reference notice of proposed rulemaking published in the Proposed Rules section of this issue of the **Federal Register** . Pursuant to section 7805(f) of the Internal Revenue 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 businesses. Pursuant to the same provision, the temporary regulations contained in this Treasury Decision will be submitted for comment on their impact on small businesses. Drafting Information The principal author of these regulations is Matthew P. Howard of the Office of the Associate Chief Counsel (Procedure and Administration). List of Subjects 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. 26 CFR Part 25 Gift taxes, Reporting and recordkeeping requirements. 26 CFR Part 26 Generation-skipping transfer taxes, Reporting and recordkeeping requirements. 26 CFR Part 53 Excise taxes, Foundations, Investments, Lobbying, Reporting and recordkeeping requirements. 26 CFR Part 55 Excise taxes, Investments, Reporting and recordkeeping requirements. 26 CFR Part 156 Excise taxes, Reporting and recordkeeping requirements. 26 CFR Part 157 Excise taxes, Reporting and recordkeeping requirements. 26 CFR Part 301 Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements. Adoption of Amendments to the Regulations Accordingly, 26 CFR parts 1, 25, 26, 53, 55, 156, 157, and 301 are amended as follows: PART 1—INCOME TAXES **Paragraph 1.** The authority citation for part 1 is amended by removing the entries for §§ 1.6081-4T, 1.6081-7T, 1.6081-10T, and 1.6081-11T and adding entries in numerical order to read in part as follows: Authority: 26 U.S.C. 7805 * * * Section 1.6081-1 also issued under 26 U.S.C. 6081. Section 1.6081-3 also issued under 26 U.S.C. 6081. Section 1.6081-4 also issued under 26 U.S.C. 6081. Section 1.6081-5 also issued under 26 U.S.C. 6081. Section 1.6081-7 also issued under 26 U.S.C. 6081. Section 1.6081-10 also issued under 26 U.S.C. 6081. Section 1.6081-11 also issued under 26 U.S.C. 6081. * * * **Par. 2.** Section 1.911-7 is amended by revising paragraph (c)(2) and adding paragraph

(e)to read as follows: § 1.911-7 Procedural rules.

(c)* * *

(2)*Extensions.* An individual desiring an extension of time (in addition to the automatic extension of time granted by § 1.6081-4) for filing a return until after the completion of the qualifying period described in paragraph (c)(1) of this section for claiming any exclusion or deduction under section 911 may apply for an extension. An individual whose moving expense deduction is attributable to services performed in two years may apply for an extension of time for filing a return until after the end of the second year. The individual may make such application on Form 2350, “Application for Extension of Time to File U.S. Income Tax Return” or in any other manner prescribed by the Commissioner. The application must be filed in accordance with the instructions to the form or as prescribed by the Commissioner. The application must set forth the facts relied on to justify the extension of time requested and must include a statement as to the earliest date the individual expects to become entitled to any exclusion or deduction by reason of completion of the qualifying period.

(e)*Effective/applicability date.* This section applies to applications for extension of time to file returns filed after July 1, 2008. **Par. 3.** Section 1.6081-1 is amended by revising paragraph

(b)and adding paragraph

(c)to read as follows: § 1.6081-1 Extension of time for filing returns.

(b)*Application for extension of time* —(1) *In general* . Under other sections in this chapter, certain taxpayers may request an automatic extension of time to file certain returns. Except in undue hardship cases, no extension of time to file a return will be allowed under this section until an automatic extension of time to file the return has been allowed under the applicable section. No extension of time to file a return will be granted under this section for a period of time greater than that provided for by automatic extension. A taxpayer desiring an extension of the time for filing a return, statement, or other document shall submit an application for extension on or before the due date of such return, statement, or other document. If a form exists for the application for an extension, the taxpayer should use the form; however, taxpayers may apply for an extension in a letter that includes the information required by this paragraph. Except as provided in § 301.6091-1(b) of this chapter (relating to hand-carried documents), the taxpayer should make the application for extension to the Internal Revenue Service office where such return, statement, or other document is required to be filed. Except for requests for automatic extensions of time to file certain returns provided for elsewhere in this chapter, the application must be in writing, signed by the taxpayer or his duly authorized agent, and must clearly set forth—

(i)The particular tax return, information return, statement, or other document, including the taxable year or period thereof, for which the taxpayer requests an extension; and

(ii)An explanation of the reasons for requesting the extension to aid the internal revenue officer in determining whether to grant the request.

(2)*Taxpayer unable to sign.* In any case in which a taxpayer is unable, by reason of illness, absence, or other good cause, to sign a request for an extension, any person standing in close personal or business relationship to the taxpayer may sign the request on his behalf, and shall be considered as a duly authorized agent for this purpose, provided the request sets forth the reasons for a signature other than the taxpayer's and the relationship existing between the taxpayer and the signer.

(c)*Effective/applicability dates.* This section applies to requests for extension of time filed after July 1, 2008. **Par. 4.** Section 1.6081-2T is revised to read as follows: § 1.6081-2T Automatic extension of time to file certain returns filed by partnerships (temporary).

(a)*In general* .

(1)Except as provided in paragraph

(h)of this section, a partnership required to file Form 1065, “U.S. Partnership Return of Income,” or Form 8804, “Annual Return for Partnership Withholding Tax,” for any taxable year will be allowed an automatic 5-month extension of time to file the return after the date prescribed for filing the return if the partnership files an application under this section in accordance with paragraph

(b)of this section. No additional extension will be allowed pursuant to § 1.6081-1(b) beyond the automatic 5-month extension provided by this section. In the case of a partnership described in § 1.6081-5(a)(1), the automatic extension of time to file allowed under this section runs concurrently with an extension of time to file granted pursuant to § 1.6081-5.

(2)An electing large partnership

(ELP)required to file Form 1065-B, “U.S. Return of Income for Electing Large Partnerships,” for any taxable year will be allowed an automatic 6-month extension of time to file the return after the date prescribed for filing the return if the partnership files an application under this section in accordance with paragraph

(b)of this section.

(b)*Requirements* . To satisfy this paragraph (b), the partnership must—

(1)Submit a complete application on Form 7004, “Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns,” or in any other manner prescribed by the Commissioner;

(2)File the application on or before the later of—

(i)The date prescribed for filing the return of the partnership; or

(ii)The expiration of any extension of time to file granted under § 1.6081-5(a); and

(3)File the application with the Internal Revenue Service office designated in the application's instructions.

(c)*Payment of section 7519 amount.* An automatic extension of time for filing a partnership return of income granted under paragraph

(a)of this section does not extend the time for payment of any amount due under section 7519, relating to required payments for entities electing not to have a required taxable year.

(d)*Section 444 election.* An automatic extension of time for filing a partnership return of income will run concurrently with any extension of time for filing a return allowed because of section 444, relating to the election of a taxable year other than a required taxable year.

(e)*Effect of extension on partner.* An automatic extension of time for filing a partnership return of income under this section does not extend the time for filing a partner's income tax return or the time for the payment of any tax due on a partner's income tax return.

(f)*Termination of automatic extension.* The Commissioner may terminate an automatic extension at any time by mailing to the partnership a notice of termination at least 10 days prior to the termination date designated in such notice. The Commissioner must mail the notice of termination to the address shown on the Form 7004 or to the partnership's last known address. For further guidance regarding the definition of last known address, see § 301.6212-2 of this chapter.

(g)*Penalties.* See section 6698 for failure to file a partnership return.

(h)*Special rule for applications for extensions of time to file returns due on or after July 1, 2008 and before January 1, 2009.* A partnership required to file Form 1065, “U.S. Partnership Return of Income,” or Form 8804, “Annual Return for Partnership Withholding Tax,” on or after July 1, 2008 and before January 1, 2009, will be allowed an automatic 6-month extension of time to file the return after the date prescribed for filing the return if the partnership files an application under this section in accordance with paragraph

(b)of this section.

(i)*Effective/applicability dates.* This section applies to applications for an automatic extension of time to file the partnership returns listed in paragraph

(a)of this section filed on or after July 1, 2008.

(j)*Expiration date.* The applicability of this section expires on or before June 30, 2011. **Par. 5.** Section 1.6081-3 is amended by revising paragraphs (a)(1) and

(4)and

(e)to read as follows: § 1.6081-3 Automatic extension of time for filing corporation income tax returns.

(a)* * *

(1)An application must be submitted on Form 7004, “Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns,” or in any other manner prescribed by the Commissioner.

(4)The application must include a statement listing the name and address of each member of the affiliated group if the affiliated group will file a consolidated return. Upon the timely filing of Form 7004, the 6-month extension of time to file shall be considered as granted to the affiliated group for the filing of its consolidated return or for the filing of each member's separate return.

(e)*Effective/applicability dates.* This section applies to requests for extension of time to file corporation income tax returns filed after July 1, 2008. § 1.6081-3T [Removed] **Par. 6.** Section 1.6081-3T is removed. **Par. 7.** Section 1.6081-4 is added to read as follows: § 1.6081-4 Automatic extension of time for filing individual income tax return.

(a)*In general.* An individual who is required to file an individual income tax return will be allowed an automatic 6-month extension of time to file the return after the date prescribed for filing the return if the individual files an application under this section in accordance with paragraph

(b)of this section. In the case of an individual described in § 1.6081-5(a)(5) or (6), the automatic 6-month extension will run concurrently with the extension of time to file granted pursuant to § 1.6081-5.

(b)*Requirements.* To satisfy this paragraph (b), an individual must—

(1)Submit a complete application on Form 4868, “Application for Automatic Extension of Time To File U.S. Individual Income Tax Return,” or in any other manner prescribed by the Commissioner;

(2)File the application on or before the later of—

(i)The date prescribed for filing the return; or

(ii)The expiration of any extension of time to file granted pursuant to § 1.6081-5;

(3)File the application with the Internal Revenue Service office designated in the application's instructions; and

(4)Show the full amount properly estimated as tax for the taxable year.

(c)*No extension of time for the payment of tax.* An automatic extension of time for filing a return granted under paragraph

(a)of this section will not extend the time for payment of any tax due on such return.

(d)*Termination of automatic extension.* The Commissioner may terminate an automatic extension at any time by mailing to the individual a notice of termination at least 10 days prior to the termination date designated in such notice. The Commissioner must mail the notice of termination to the address shown on the Form 4868 or to the individual's last known address. For further guidance regarding the definition of last known address, see § 301.6212-2 of this chapter.

(e)*Penalties.* See section 6651 for failure to file an individual income tax return or failure to pay the amount shown as tax on the return. In particular, see § 301.6651-1(c)(3) of this chapter (relating to a presumption of reasonable cause in certain circumstances involving an automatic extension of time for filing an individual income tax return).

(f)*Effective/applicability dates.* This section is applicable for applications for an automatic extension of time to file an individual income tax return filed after July 1, 2008. § 1.6081-4T [Removed] **Par. 8.** Section 1.6081-4T is removed. **Par. 9.** Section 1.6081-5 is amended by revising paragraphs (a), (b), and

(f)to read as follows: § 1.6081-5 Extensions of time in the case of certain partnerships, corporations, and U.S. citizens and residents.

(a)An extension of time for filing returns of income and for paying any tax shown on the return is hereby granted to and including the fifteenth day of the sixth month following the close of the taxable year in the case of—

(1)Partnerships which are required under section 6072(a) to file returns on the fifteenth day of the fourth month following the close of the taxable year of the partnership, and which keep their records and books of account outside the United States and Puerto Rico;

(2)Domestic corporations which transact their business and keep their records and books of account outside the United States and Puerto Rico;

(3)Foreign corporations which maintain an office or place of business within the United States;

(4)Domestic corporations whose principal income is from sources within the possessions of the United States;

(5)United States citizens or residents whose tax homes and abodes, in a real and substantial sense, are outside the United States and Puerto Rico; and

(6)United States citizens and residents in military or naval service on duty, including non-permanent or short term duty, outside the United States and Puerto Rico.

(b)In order to qualify for the extension under this section—

(1)A statement must be attached to the return showing that the person for whom the return is made is a person described in paragraph

(a)of this section; or

(2)If a person described in paragraph

(a)of this section requests additional time to file, the person must request the extension on or before the fifteenth day of the sixth month following the close of the taxable year and check the appropriate box on Form 4868, “Application for Automatic Extension of Time To File a U.S. Individual Income Tax Return,” or Form 7004, “Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns,” whichever is applicable, or in any other manner prescribed by the Commissioner.

(f)*Effective/applicability date.* This section is applicable for returns of income due after July 1, 2008. § 1.6081-5T [Removed] **Par. 10.** Section 1.6081-5T is removed. **Par. 11.** Section 1.6081-6T is revised to read as follows: § 1.6081-6T Automatic extension of time to file estate or trust income tax return (temporary).

(a)*In general.*

(1)Except as provided in paragraph

(g)of this section, an estate or trust required to file an income tax return on Form 1041, “U.S. Income Tax Return for Estates and Trusts,” will be allowed an automatic 5-month extension of time to file the return after the date prescribed for filing the return if the estate or trust files an application under this section in accordance with paragraph

(b)of this section. No additional extension will be allowed pursuant to § 1.6081-1(b) beyond the automatic 5-month extension provided by this section.

(2)An estate or trust required to file an income tax return on Form 1041-N, “U.S. Income Tax Return for Electing Alaska Native Settlement,” or Form 1041-QFT, “U.S. Income Tax Return for Qualified Funeral Trusts” for any taxable year will be allowed an automatic 6-month extension of time to file the return after the date prescribed for filing the return if the estate or trust files an application under this section in accordance with paragraph

(b)of this section.

(b)*Requirements.* To satisfy this paragraph (b), an estate or trust must—

(2)File the application on or before the date prescribed for filing the return with the Internal Revenue Service office designated in the application's instructions; and

(3)Show the amount properly estimated as tax for the estate or trust for the taxable year.

(c)*No extension of time for the payment of tax.* An automatic extension of time for filing a return granted under paragraph

(a)of this section will not extend the time for payment of any tax due on such return.

(d)*Effect of extension on beneficiary.* An automatic extension of time to file an estate or trust income tax return under this section will not extend the time for filing the income tax return of a beneficiary of the estate or trust or the time for the payment of any tax due on the beneficiary's income tax return.

(e)*Termination of automatic extension.* The Commissioner may terminate an automatic extension at any time by mailing to the estate or trust a notice of termination at least 10 days prior to the termination date designated in such notice. The Commissioner must mail the notice of termination to the address shown on the Form 7004 or to the estate or trust's last known address. For further guidance regarding the definition of last known address, see § 301.6212-2 of this chapter.

(f)*Penalties.* See section 6651 for failure to file an estate or trust income tax return or failure to pay the amount shown as tax on the return.

(g)*Special rule for applications for extensions of time to file returns due on or after* July 1, 2008 *and before January 1, 2009.* An estate or trust required to file an income tax return on Form 1041, “U.S. Income Tax Return for Estates and Trusts,” on or after July 1, 2008 and before January 1, 2009, will be allowed an automatic 6-month extension of time to file the return after the date prescribed for filing the return if the estate or trust files an application under this section in accordance with paragraph

(b)of this section.

(h)Effective/applicability dates. This section applies to applications for an automatic extension of time to file an estate or trust income tax return filed on or after July 1, 2008.

(i)*Expiration date.* The applicability of this section expires on or before June 30, 2011. **Par. 12.** Section 1.6081-7 is added to read as follows: § 1.6081-7 Automatic extension of time to file Real Estate Mortgage Investment Conduit (REMIC) income tax return.

(a)*In general.* A Real Estate Mortgage Investment Conduit (REMIC) required to file an income tax return on Form 1066, “U.S. Real Estate Mortgage Investment Conduit Income Tax Return,” or Form 8831, “Excise Tax on Excess Inclusions of REMIC Residual Interests,” for any taxable year will be allowed an automatic 6-month extension of time to file the return after the date prescribed for filing the return if the REMIC files an application under this section in accordance with paragraph

(b)of this section.

(b)*Requirements.* To satisfy this paragraph (b), a REMIC must—

(2)File the application on or before the date prescribed for filing the return with the Internal Revenue Service office designated in the application's instructions; and

(3)Show the full amount properly estimated as tax for the REMIC for the taxable year.

(c)*No extension of time for the payment of tax.* An automatic extension of time for filing a return granted under paragraph

(a)of this section will not extend the time for payment of any tax due on such return.

(d)*Effect of extension on residual or regular interest holders.* An automatic extension of time to file a REMIC income tax return under this section will not extend the time for filing the income tax return of a residual or regular interest holder of the REMIC or the time for the payment of any tax due on the residual or regular interest holder's income tax return. An automatic extension will also not extend the time for payment of any excise tax on excess inclusions of REMIC residual interests.

(e)*Termination of automatic extension.* The Commissioner may terminate an automatic extension at any time by mailing to the REMIC a notice of termination at least 10 days prior to the termination date designated in such notice. The Commissioner must mail the notice of termination to the address shown on the Form 7004 or to the REMIC's last known address. For further guidance regarding the definition of last known address, see § 301.6212-2 of this chapter.

(f)*Penalties.* See sections 6698 and 6651 for failure to file a REMIC income tax return or failure to pay an amount shown as tax on the return.

(g)*Effective/applicability dates.* This section applies to applications for an automatic extension of time to file REMIC income and excise tax returns listed in paragraph

(a)of this section filed after July 1, 2008. § 1.6081-7T [Removed] **Par. 13.** Section 1.6081-7T is removed. **Par. 14.** Section 1.6081-10 is added to read as follows: § 1.6081-10 Automatic extension of time to file withholding tax return for U.S. source income of foreign persons.

(a)*In general.* A withholding agent or intermediary required to file a return on Form 1042, “Annual Withholding Tax Return for U.S. Source Income of Foreign Persons,” for any taxable year will be allowed an automatic 6-month extension of time to file the return after the date prescribed for filing the return if the withholding agent or intermediary files an application under this section in accordance with paragraph

(b)of this section.

(b)*Requirements.* To satisfy this paragraph (b), a withholding agent or intermediary must—

(2)File the application on or before the date prescribed for filing the return with the Internal Revenue Service office designated in the application's instructions; and

(3)Remit the amount of the properly estimated unpaid tax liability on or before the date prescribed for payment.

(c)*No extension of time for the payment of tax.* An automatic extension of time for filing a return granted under paragraph

(a)of this section will not extend the time for payment of any tax due on such return.

(d)*Termination of automatic extension.* The Commissioner may terminate an automatic extension at any time by mailing to the withholding agent or intermediary a notice of termination at least 10 days prior to the termination date designated in such notice. The Commissioner must mail the notice of termination to the address shown on the Form 7004 or to the withholding agent or intermediary's last known address. For further guidance regarding the definition of last known address, see § 301.6212-2 of this chapter.

(e)*Penalties.* See section 6651 for failure to file a return or failure to pay an amount shown as tax on the return.

(f)*Effective/applicability dates.* This section is applicable for applications for an automatic extension of time to file the withholding tax return for U.S. source income of foreign persons return filed after July 1, 2008. § 1.6081-10T [Removed] **Par. 15.** Section 1.6081-10T is removed. **Par. 16.** Section 1.6081-11 is added to read as follows: § 1.6081-11 Automatic extension of time for filing certain employee plan returns.

(a)*In general.* An administrator or sponsor of an employee benefit plan required to file a return under the provisions of chapter 61 or the regulations under that chapter on Form 5500 (series), “Annual Return/Report of Employee Benefit Plan,” will be allowed an automatic extension of time to file the return until the 15th day of the third month following the date prescribed for filing the return if the administrator or sponsor files an application under this section in accordance with paragraph

(b)of this section.

(b)*Requirements.* To satisfy this paragraph (b), an administrator or sponsor must—

(1)Submit a complete application on Form 5558, “Application for Extension of Time To File Certain Employee Plan Returns,” or in any other manner as may be prescribed by the Commissioner; and

(2)File the application with the Internal Revenue Service office designated in the application's instructions on or before the date prescribed for filing the information return.

(c)*Termination of automatic extension.* The Commissioner may terminate an automatic extension at any time by mailing to the administrator or sponsor a notice of termination at least 10 days prior to the termination date designated in such notice. The Commissioner must mail the notice of termination to the address shown on the Form 5558 or to the administrator or sponsor's last known address. For further guidance regarding the definition of last known address, see § 301.6212-2 of this chapter.

(d)*Penalties.* See sections 6652, 6692, and the Employee Retirement Income Security Act of 1974 for penalties for failure to file a timely and complete Form 5500.

(e)*Effective/applicability dates.* This section is applicable for applications for an automatic extension of time to file Forms 5500 for plan years ending after July 1, 2008. § 1.6081-11T [Removed] **Par. 17.** Section 1.6081-11T is removed. PART 25—GIFT TAX; GIFTS MADE AFTER DECEMBER 31, 1954 **Par. 18.** The authority citation for part 25 is amended by removing the entry for § 25.6081-1T and adding an entry in numerical order to read in part as follows: Authority: 26 U.S.C. 7805 * * * Section 25.6081-1 also issued under the authority of 26 U.S.C. 6081(a). **Par. 19.** Section 25.6081-1 is added to read as follows: § 25.6081-1 Automatic extension of time for filing gift tax returns.

(a)*In general.* Under section 6075(b)(2), an automatic six-month extension of time granted to a donor to file the donor's return of income under § 1.6081-4 of this chapter shall be deemed also to be a six-month extension of time granted to file a return on Form 709, “United States Gift (and Generation-Skipping Transfer) Tax Return.” If a donor does not obtain an extension of time to file the donor's return of income under § 1.6081-4 of this chapter, the donor will be allowed an automatic 6-month extension of time to file Form 709 after the date prescribed for filing if the donor files an application under this section in accordance with paragraph

(b)of this section. In the case of an individual described in § 1.6081-5(a)(5) or

(6)of this chapter, the automatic 6-month extension of time to file Form 709 will run concurrently with the extension of time to file granted pursuant to § 1.6081-5 of this chapter.

(b)*Requirements.* To satisfy this paragraph (b), a donor must—

(1)Submit a complete application on Form 8892, “Payment of Gift/GST Tax and/or Application for Extension of Time To File Form 709,” or in any other manner prescribed by the Commissioner;

(2)File the application on or before the later of—

(i)The date prescribed for filing the return; or

(ii)The expiration of any extension of time to file granted pursuant to § 1.6081-5 of this chapter; and

(3)File the application with the Internal Revenue Service office designated in the application's instructions.

(c)*No extension of time for the payment of tax.* An automatic extension of time for filing a return granted under paragraph

(a)of this section will not extend the time for payment of any tax due on such return.

(d)*Termination of automatic extension.* The Commissioner may terminate an extension at any time by mailing to the donor a notice of termination at least 10 days prior to the termination date designated in such notice. The Commissioner must mail the notice of termination to the address shown on the Form 8892, or to the donor's last known address. For further guidance regarding the definition of last known address, see § 301.6212-2 of this chapter.

(e)*Penalties.* See section 6651 for failure to file a gift tax return or failure to pay the amount shown as tax on the return.

(f)*Effective/applicability dates.* This section is applicable for applications for an extension of time to file Form 709 filed after July 1, 2008. § 25.6081-1T [Removed] **Par. 20.** Section 25.6081-1T is removed. PART 26—GENERATION-SKIPPING TRANSFER TAX REGULATIONS UNDER THE TAX REFORM ACT OF 1986 **Par. 21.** The authority citation for part 26 is amended by removing the entry for § 26.6081-1T and adding an entry in numerical order to read in part as follows: Authority: 26 U.S.C. 7805 and 26 U.S.C. 2663 * * * Section 26.6081-1 also issued under the authority of 26 U.S.C. 6081(a). **Par. 22.** Section 26.6081-1 is added to read as follows: § 26.6081-1 Automatic extension of time for filing generation-skipping transfer tax returns.

(a)*In general.* A skip person distributee required to file a return on Form 706-GS(D), “Generation-Skipping Transfer Tax Return for Distributions,” or a trustee required to file a return on Form 706-GS(T), “Generation-Skipping Transfer Tax Return for Terminations,” will be allowed an automatic 6-month extension of time to file the return after the date prescribed for filing if the skip person distributee or trustee files an application under this section in accordance with paragraph

(b)of this section.

(b)*Requirements.* To satisfy this paragraph (b), a skip person distributee or trustee must—

(2)File the application on or before the date prescribed for filing the return with the Internal Revenue Service office designated in the application's instructions; and

(3)Remit the amount of the properly estimated unpaid tax liability on or before the date prescribed for payment.

(c)*No extension of time for the payment of tax.* An automatic extension of time for filing a return granted under paragraph

(a)of this section will not extend the time for payment of any tax due on such return.

(d)*Termination of automatic extension.* The Commissioner may terminate an automatic extension at any time by mailing to the skip person distributee or trustee a notice of termination at least 10 days prior to the termination date designated in such notice. The Commissioner must mail the notice of termination to the address shown on the Form 7004 or to the skip person distributee or trustee's last known address. For further guidance regarding the definition of last known address, see § 301.6212-2 of this chapter.

(e)*Penalties.* See section 6651 for failure to file a generation-skipping transfer tax return or failure to pay the amount shown as tax on the return.

(f)*Effective/applicability dates.* This section is applicable for applications for an automatic extension of time to file a generation-skipping transfer tax return filed after July 1, 2008. § 26.6081-1T [Removed] **Par. 23.** Section 26.6081-1T is removed. PART 53—FOUNDATION AND SIMILAR EXCISE TAXES **Par. 24.** The authority citation for part 53 is amended by removing the entry for § 53.6081-1T and adding an entry in numerical order to read in part as follows: Authority: 26 U.S.C. 7805 * * * Section 53.6081-1 also issued under 26 U.S.C. 6081(a). * * * **Par. 25.** Section 53.6081-1 is added to read as follows: § 53.6081-1 Automatic extension of time for filing the return to report taxes due under section 4951 for self-dealing with a nuclear decommissioning fund.

(a)*In general.* A “disqualified person” for purposes of section 4951(e)(4) who engaged in self-dealing with a Nuclear Decommissioning Fund, and must report tax due under section 4951 on Form 1120-ND, “Return for Nuclear Decommissioning Funds and Certain Related Persons,” will be allowed an automatic 6-month extension of time to file the return after the date prescribed for filing the return if the disqualified person files an application under this section in accordance with paragraph

(b)of this section. For guidance on requesting an extension of time to file Form 1120-ND for purposes of reporting contributions received, income earned, administrative expenses of operating the fund, and the tax on modified gross income, see § 1.6081-3 of this chapter.

(b)*Requirements.* To satisfy this paragraph (b), a disqualified person must—

(2)File the application on or before the date prescribed for filing the return with the Internal Revenue Service office designated in the application's instructions; and

(3)Remit the amount of the properly estimated unpaid tax liability on or before the date prescribed for payment.

(c)*No extension of time for the payment of tax.* An automatic extension of time for filing a return granted under paragraph

(a)of this section will not extend the time for payment of any tax due on such return.

(d)*Termination of automatic extension.* The Commissioner may terminate an automatic extension at any time by mailing to the disqualified person a notice of termination at least 10 days prior to the termination date designated in such notice. The Commissioner must mail the notice of termination to the address shown on the Form 7004 or to the disqualified person's last known address. For further guidance regarding the definition of last known address, see § 301.6212-2 of this chapter.

(e)*Penalties.* See section 6651 for failure to file or failure to pay the amount shown as tax on the return.

(f)*Effective/applicability dates.* This section is applicable for applications for an automatic extension of time to file a return to report taxes due under section 4951 for self-dealing with a Nuclear Decommissioning Fund filed after July 1, 2008. § 53.6081-1T [Removed] **Par. 26.** Section 53.6081-1T is removed. PART 55—EXCISE TAX ON REAL ESTATE INVESTMENT TRUSTS AND REGULATED INVESTMENT COMPANIES **Par. 27.** The authority citation is amended by removing the entry for § 55.6081-1T and adding an entry in numerical order to read in part as follows: Authority: 26 U.S.C. 6001, 6011, 6071, 6091, and 7805 * * * Section 55.6081-1 also issued under 26 U.S.C. 6081(a). * * * **Par. 28.** Section 55.6081-1 is added to read as follows: § 55.6081-1 Automatic extension of time for filing a return due under Chapter 44.

(a)*In general.* A Real Estate Investment Trust

(REIT)required to file a return on Form 8612, “Return of Excise Tax on Undistributed Income of Real Estate Investment Trusts,” or a Regulated Investment Company

(RIC)required to file a return on Form 8613, “Return of Excise Tax on Undistributed Income of Regulated Investment Companies,” will be allowed an automatic 6-month extension of time to file the return after the date prescribed for filing the return if the REIT or RIC files an application under this section in accordance with paragraph

(b)of this section.

(b)*Requirements.* To satisfy this paragraph (b), a REIT or RIC must—

(2)File the application on or before the date prescribed for filing the return with the Internal Revenue Service office designated in the application's instructions; and

(3)Remit the amount of the properly estimated unpaid tax liability on or before the date prescribed for payment.

(c)*No extension of time for the payment of tax.* An automatic extension of time for filing a return granted under paragraph

(a)of this section will not extend the time for payment of any tax due on such return.

(d)*Termination of automatic extension.* The Commissioner may terminate an automatic extension at any time by mailing to the REIT or RIC a notice of termination at least 10 days prior to the termination date designated in such notice. The Commissioner must mail the notice of termination to the address shown on the Form 7004 or to the REIT or RIC's last known address. For further guidance regarding the definition of last known address, see § 301.6212-2 of this chapter.

(e)*Penalties.* See section 6651 for failure to file or failure to pay the amount shown as tax on the return.

(f)*Effective/applicable dates.* This section is applicable for applications for an automatic extension of time to file a return due under chapter 44, filed after July 1, 2008. § 55.6081-1T [Removed] **Par. 29.** Section 55.6081-1T is removed. PART 156—EXCISE TAX ON GREENMAIL **Par. 30.** The authority citation is amended by removing the entry for § 156.6081-1T and adding an entry in numerical order to read in part as follows: Authority: 26 U.S.C. 6001, 6011, 6061, 6071, 6091, 6161, and 7805 * * * Section 156.6081-1 also issued under 26 U.S.C. 6081(a). * * * **Par. 31.** Section 156.6081-1 is added to read as follows: § 156.6081-1 Automatic extension of time for filing a return due under chapter 54.

(a)*In general.* A taxpayer required to file a return on Form 8725, “Excise Tax on Greenmail,” will be allowed an automatic 6-month extension of time to file the return after the date prescribed for filing the return if the taxpayer files an application under this section in accordance with paragraph

(b)of this section.

(b)*Requirements.* To satisfy this paragraph (b), a taxpayer must—

(2)File the application on or before the date prescribed for filing the return with the Internal Revenue Service office designated in the application's instructions; and

(3)Remit the amount of the properly estimated unpaid tax liability on or before the date prescribed for payment.

(c)*No extension of time for the payment of tax.* An automatic extension of time for filing a return granted under paragraph

(a)of this section will not extend the time for payment of any tax due on such return.

(d)*Termination of automatic extension.* The Commissioner may terminate an automatic extension at any time by mailing to the taxpayer a notice of termination at least 10 days prior to the termination date designated in such notice. The Commissioner must mail the notice of termination to the address shown on the Form 7004 or to the taxpayer's last known address. For further guidance regarding the definition of last known address, see § 301.6212-2 of this chapter.

(e)*Penalties.* See section 6651 for failure to file or failure to pay the amount shown as tax on the return.

(f)*Effective/applicable dates.* This section is applicable for applications for an automatic extension of time to file a return due under chapter 54, filed after July 1, 2008. § 156.6081-1T [Removed] **Par. 32.** Section 156.6081-1T is removed. PART 157— EXCISE TAX ON STRUCTURED SETTLEMENT FACTORING TRANSACTIONS **Par. 33.** The authority citation is amended by removing the entry for § 157.6081-1T and adding an entry in numerical order to read in part as follows: Authority: 26 U.S.C. 7805 * * * Section 157.6081-1 also issued under 26 U.S.C. 6081(a). * * * **Par. 34.** Section 157.6081-1 is added to read as follows: § 157.6081-1 Automatic extension of time for filing a return due under chapter 55.

(a)*In general.* A taxpayer required to file a return on Form 8876, “Excise Tax on Structured Settlement Factoring Transactions”, will be allowed an automatic 6-month extension of time to file the return after the date prescribed for filing the return if the taxpayer files an application under this section in accordance with paragraph

(b)of this section.

(b)*Requirements.* To satisfy this paragraph (b), the taxpayer must—

(2)File the application on or before the date prescribed for filing the return with the Internal Revenue Service office designated in the application's instructions; and

(3)Remit the amount of the properly estimated unpaid tax liability on or before the date prescribed for payment.

(c)*No extension of time for the payment of tax.* An automatic extension of time for filing a return granted under paragraph

(a)of this section will not extend the time for payment of any tax due on such return.

(e)*Penalties.* See section 6651 for failure to file or failure to pay the amount shown as tax on the return.

(f)*Effective/applicability dates.* This section is applicable for applications for an automatic extension of time to file a return due under chapter 55, filed after July 1, 2008. § 157.6081-1T [Removed] **Par. 35.** Section 157.6081-1T is removed. PART 301—PROCEDURE AND ADMINISTRATION **Par. 36.** The authority citation is amended by removing the entry for § 301.6081-2T and adding an entry in numerical order to read in part as follows: Authority: 26 U.S.C. 7805 * * * Section 301.6081-2 also issued under 26 U.S.C. 6081(a). * * * **Par. 37.** Section 301.6081-2 is added to read as follows: § 301.6081-2 Automatic extension of time for filing an information return with respect to certain foreign trusts.

(a)*In general.* A trust required to file a return on Form 3520-A, “Annual Information Return of Foreign Trust with a U.S. Owner,” will be allowed an automatic 6-month extension of time to file the return after the date prescribed for filing the return if the trust files an application under this section in accordance with paragraph

(b)of this section.

(b)*Requirements.* To satisfy this paragraph (b), a trust must—

(2)File the application on or before the date prescribed for filing the return with the Internal Revenue Service office designated in the application's instructions.

(c)*Termination of automatic extension.* The Commissioner may terminate an automatic extension at any time by mailing to the trust a notice of termination at least 10 days prior to the termination date designated in such notice. The Commissioner must mail the notice of termination to the address shown on the Form 7004 or to the trust's last known address. For further guidance regarding the definition of last known address, see § 301.6212-2 of this chapter.

(d)*Penalties.* See section 6677 for failure to file information returns with respect to certain foreign trusts.

(e)*Effective/applicability dates.* This section is applicable for applications for an automatic extension of time to file an information return with respect to certain foreign trusts listed in paragraph

(a)of this section filed after July 1, 2008. § 301.6081-2T [Removed] **Par. 38.** Section 301.6081-2T is removed. Linda E. Stiff, Deputy Commissioner for Services and Enforcement. Approved: June 24, 2008. Eric Solomon, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. E8-14902 Filed 6-30-08; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 31 and 602 [TD 9405] RIN 1545-BG50 Employment Tax Adjustments AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final regulations. SUMMARY: This document contains final regulations relating to employment tax adjustments and employment tax refund claims. The final regulations modify the process for making interest-free adjustments for both underpayments and overpayments of Federal Insurance Contributions Act

(FICA)and Railroad Retirement Tax Act

(RRTA)taxes and Federal income tax withholding

(ITW)under sections 6205(a) and 6413(a), respectively, of the Internal Revenue Code (Code). These regulations also modify the process for filing claims for refund of overpayments of employment taxes under sections 6402 and 6414. This document contains final regulations relating to the return requirements under section 6011 to reflect the changes to the adjustment and refund processes, and to reflect additional statutory and process updates. This document also contains final regulations under section 6302 to clarify deposit obligations with respect to interest-free adjustments of underpayments and the effect of adjustments and refunds on the deposit schedule of a Form 943 filer. DATES: *Effective Date:* These final regulations are effective on January 1, 2009. *Applicability date:* With respect to the regulations under Code sections 6205, 6402, 6413, and 6414, these final regulations apply to any error ascertained on or after January 1, 2009. FOR FURTHER INFORMATION CONTACT: Ligeia M. Donis,

(202)622-0047 (not a toll-free number). SUPPLEMENTARY INFORMATION: Paperwork Reduction Act The collection of information contained in these final regulations has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) under control number 1545-2097. The collection of information in these proposed regulations is in §§ 31.6011(a)-1, 31.6011(a)-4, 31.6011(a)-5, 31.6205-1, 31.6402(a)-2, 31.6413(a)-1, 31.6413(a)-2, and 31.6414-1. This information is required by the IRS to verify compliance with return requirements under section 6011, employment tax adjustments under sections 6205 and 6413, and claims for refund of overpayments of employment taxes under sections 6402 and 6414. This information will be used to determine whether the amount of tax has been reported and calculated correctly. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103. Background These final regulations are issued in connection with the IRS's development of new forms to report adjustments to employment taxes which will replace the existing process of reporting adjustments of employment taxes on regularly filed employment tax returns. These regulations affect taxpayers that file employment tax returns, including Form 941, “Employer's QUARTERLY Federal Tax Return,” Form 943, “Employer's Annual Tax Return for Agricultural Employees,” Form 944, “Employer's ANNUAL Federal Tax Return,” Form 945, “Annual Return of Withheld Federal Income Tax,” and Form CT-1, “Employer's Annual Railroad Retirement Tax Return,” and any related Spanish-language returns or returns for U.S. possessions. These final regulations are part of the IRS's effort to reduce taxpayer burden by permitting employers to make employment tax adjustments on a separately filed form as soon as an error is ascertained. These regulations amend the Employment Tax Regulations (26 CFR part 31) under section 6011 relating to the requirement to file a return, under sections 6205(a) and 6413(a) relating to the process for making adjustments of underpayments and overpayments, respectively, of employment taxes, under section 6302 relating to deposit obligations, and under sections 6402 and 6414 relating to the process of filing a claim for refund for an overpayment of employment taxes. For purposes of these regulations, the term *employment taxes* means the Federal Insurance Contributions Act

(FICA)tax (both the social security and Medicare portions) imposed on both the employer and the employee, the Railroad Retirement Tax Act

(RRTA)tax imposed on both the employer and employee, and Federal income tax withholding (ITW). To the extent that other types of withholding are treated as ITW under section 3402(a) (that is, gambling withholding, pension withholding, and backup withholding as set forth in sections 3402(q)(7), 3405(f), and 3406(h)(10), respectively), these other types of withholding are included in the term employment taxes. Interest-Free Adjustments Generally, the Code requires that interest be paid to the IRS on any underpayment of tax and that interest be allowed and paid to the taxpayer on any overpayment of tax. See sections 6601(a) and 6611(a), respectively. An exception to the general rule, however, applies uniquely to employment taxes. Where an amount other than the correct amount of tax imposed by sections 3101 (employee FICA tax), 3111 (employer FICA tax), 3201 (employee RRTA tax), 3221 (employer RRTA tax), or 3402

(ITW)is reported to the IRS with respect to any payment of wages or compensation, sections 6205(a) and 6413(a) permit employers to make interest-free adjustments for underpayments and overpayments, respectively. Where the correct amount of tax has been reported but not paid, no adjustment to the amount reported is necessary; accordingly, the interest-free adjustment rules do not apply. Claims for Refund For overpayments of employment taxes, section 6413(b) permits the filing of a claim for refund when an interest-free adjustment cannot be made. Under the regulatory authority in section 6413(b), the IRS has permitted taxpayers to choose between filing a claim for refund pursuant to section 6402(a) and making an interest-free adjustment pursuant to section 6413(a) to correct an overpayment of employment taxes. Under section 6402(a), the IRS, within the applicable period of limitations on credit or refund, may credit the amount of an overpayment, including any interest, against any tax liability of the person who made the overpayment and shall, subject to certain offsets, refund any balance to such person. A claim for refund under section 6402(a) must be filed within the period of limitations on credit or refund. Section 6414 permits refunds of ITW only to the extent the amount of the ITW overpayment was not actually deducted and withheld from an employee. Since 1960, the regulations under sections 6205 and 6413 have provided that employment tax adjustments are made by reporting the adjustment on an employer's current period employment tax return. Because the adjustment was reported on a current period return, the amount of the adjustment was treated as part of the current period's liability. Such a process for making adjustments of employment taxes presented a number of problems for both employers and the IRS, in large part because it required employers to make adjustments for past periods in connection with the filing of their current period returns. The IRS, as part of the Form 94X Project initiated by the Office of Taxpayer Burden Reduction and in response to the request of employers and the payroll community, is developing new forms to be used when making adjustments of employment taxes. The new forms will reduce the employer's burden in making and tracking adjustments and increase the IRS's ability to ensure employment tax compliance. The IRS is simultaneously revising the process for claiming refunds. These final regulations are issued in connection with the IRS's development of such new forms which will be used by employers to make overpayment and underpayment adjustments to employment taxes or to claim refunds of overpaid employment taxes. A notice of proposed rulemaking (REG-111583-07, 2008-4 IRB 323, 72 FR 74233) was published in the **Federal Register** on December 31, 2007. A correction to the notice of proposed rulemaking was published in the **Federal Register** on January 28, 2008 (73 FR 4765). No requests for a public hearing were received, therefore, no public hearing was held. The IRS received written and electronic comments responding to the notice of proposed rulemaking, but none of them requested substantive changes to the proposed regulations. The proposed regulations are adopted as amended by this Treasury decision. The revisions are discussed. Summary of Comments and Explanation of Provisions Several positive comments were received on the proposed regulations. No substantive changes to the regulations were requested. Several commentators suggested changes for the draft form, Form 941X, “Adjusted Employer's QUARTERLY Federal Tax Return or Claim for Refund,” which was released to the public on the IRS Web site ( *http://www.irs.gov* ) on March 4, 2008, as a vision draft for comment. The Form 941X is the first of a series of forms being developed by the IRS in conjunction with these regulations. The series of forms will correspond to Form 941, Form 943, Form 944, Form 945, and Form CT-1 and will be used by employers when making adjustments of employment taxes or claiming refunds of employment taxes. The comments on the draft Form 941X will be taken into account in preparing the final version of the form. As the IRS has continued to prepare for the implementation of the new adjustment and refund claim processes for employment taxes, some necessary changes to the proposed regulations were identified and incorporated into these final regulations. These changes to the proposed regulations are discussed below. Overview of Final Regulations Under Sections 6205 and 6413 The final regulations under sections 6205 and 6413 set forth the procedures for making interest-free adjustments for underpayments and overpayments of employment taxes, respectively. Like the proposed regulations, the final regulations under sections 6205 and 6413 have been drafted to set up parallel structures according to the type of tax being adjusted and when the error is ascertained. Accordingly, the final regulations under sections 6205 and 6413 are divided into provisions dealing with FICA and RRTA taxes and provisions dealing with ITW. The provisions are further broken down based on when the error is ascertained, that is, whether the error is ascertained before or after a return has been filed. Interest-Free Adjustments The final regulations under section 6205 set forth the procedures for making interest-free adjustments for underpayments of employment taxes. They provide that if a return is filed and less than the correct amount of employee or employer portions of FICA or RRTA tax is reported, and the employer discovers such error after filing the return, the employer shall adjust the resulting underpayment of tax by reporting the additional amount due on an adjusted return for the return period in which the wages or compensation was paid. The adjustment must be made by the due date of the return for the return period in which the error is ascertained and the amount of the underpayment must be paid by the time the adjustment is made, or interest will begin to accrue from that date. An underpayment adjustment may only be made within the period of limitations for assessment. For underpayments of ITW where the incorrect amount was withheld, subject to limited exceptions, an adjustment may be made only for errors ascertained during the calendar year in which the wages were paid. Under the final regulations interest-free adjustments for underpayments of FICA tax, RRTA tax, and ITW are available under certain circumstances where the underpayment arises because the employer failed to file an original return or failed to report and pay the correct type of tax. The final regulations revise the processes set forth in the proposed regulations to accommodate the various possibilities of errors in these situations and to ensure the IRS can process the adjustments. Specifically, under the final regulations, if an employer filed a return reporting FICA tax when a return reporting RRTA tax should have been filed, the employer can make an interest-free adjustment by filing an original return reporting the correct amount of RRTA tax and attaching an adjusted return to correct the erroneously reported FICA tax. Conversely, if an employer filed a return reporting RRTA tax when a return reporting FICA tax should have been filed, the employer can make an interest-free adjustment by filing an original return reporting the correct amount of FICA tax and attaching an adjusted return to correct the erroneously reported RRTA tax. In the latter situation, if the employer already filed a return that is used to report FICA tax in order to report ITW, the employer can make an interest-free adjustment by filing an adjusted return to report the correct amount of FICA tax with an adjusted return to correct the erroneously reported RRTA tax. The final regulations also add a cross-reference to the regulations under section 3503 which provide that if an amount is paid under the wrong chapter, that is, an employer erroneously pays FICA tax under chapter 21 instead of RRTA tax under chapter 22, or RRTA tax instead of FICA tax, the amount erroneously paid shall be credited against the tax for which the employer is liable and any balance refunded. In addition, the final regulations provide the process by which an employer can make an interest-free adjustment if the employer failed to file a return for a return period solely because the employer failed to treat any individuals as employees. The employer can make an interest-free adjustment to report the tax due with respect to the reclassified workers by filing an original return and an attached adjusted return reporting the correct amount of tax, in accordance with the instructions for the adjusted return. Generally, such reporting will constitute an interest-free adjustment in each of these situations if the original return and/or adjusted return(s) are filed by the due date of the correct return for the return period in which the error is ascertained. The amount reported must be paid by the time the original return and/or adjusted return(s) are filed or interest will accrue from that date. The final regulations under section 6413(a) set forth the procedures for making interest-free adjustments for overpayments of employment taxes. They provide that, if an employer ascertains an overpayment error within the applicable period of limitations on credit or refund, the employer is required to repay or reimburse its employees the amount of overcollected employee FICA tax or employee RRTA tax prior to the expiration of the applicable period of limitations on credit or refund. However, the requirement to repay or reimburse does not apply to the extent that taxes were not withheld from the employee or if, after reasonable efforts, the employer cannot locate the employee; in such case, the employer may make an adjustment for only the employer share of FICA or RRTA tax. An interest-free adjustment for an overpayment may not be made once a claim for refund has been filed. The final regulations under section 6413(a) further provide that once an employer repays or reimburses an employee to the extent required, the employer may report both the employee and employer portions of FICA or RRTA tax as an overpayment on an adjusted return. The employer must certify on the adjusted return that it has repaid or reimbursed its employees to the extent required. Under the final regulations, the reporting of the overpayment constitutes an interest-free adjustment if the overpayment is reported on an adjusted return filed before the 90th day prior to expiration of the period of limitations on credit or refund. Similar rules apply for making interest-free adjustments for overpayments of ITW, except that an interest-free adjustment may only be made if the employer ascertains the error and repays or reimburses its employees within the same calendar year that the wages were paid and reports the adjustment on an adjusted return. Unlike the proposed regulations, the final regulations do not require the employer to repay or reimburse the employee or to adjust the overpayment by the due date of the return for the return period following the return period in which the error is ascertained. Upon further consideration, the IRS determined there was insufficient reason to impose a timing restriction other than the period of limitations on credit or refund of taxes. For both underpayments and overpayments, interest-free adjustments are made by reporting the error on a separately filed adjusted return. The new adjusted return will not be filed as an attachment to a current return and will not affect the liability reported on the current return. In addition, the regulations provide that the forms used to accept an assessment of employment taxes after an examination (that is, Form 2504, “Agreement and Collection of Additional Tax and Acceptance of Overassessment (Excise or Employment Tax)”, and Form 2504-WC, “Agreement to Assessment and Collection of Additional Tax and Acceptance of Overassessment in Worker Classification Cases (Employment Tax)”) constitute adjusted returns for purposes of permitting the assessment to be treated as an interest-free adjustment. The IRS intends to issue guidance to provide examples of how the final regulations under sections 6205, 6402, 6413, and 6414 apply in different factual scenarios. Deposits, Payments, and Credits The final regulations under section 6302 provide that an employer making an interest-free adjustment must pay the amount of the adjustment by the time it files an adjusted return; such timely payment will satisfy the employer's deposit obligations with respect to the adjustment. Conversely, if the amount of the adjustment is not paid by the time the adjusted return is filed, a penalty under section 6656 for failure to deposit may apply because the deposit obligation for such taxes is not deemed to be satisfied and the employer may not have otherwise satisfied its deposit obligations for accumulated employment taxes. In addition, the final regulations governing agricultural employers (Form 943 filers) provide that for purposes of determining the amount of accumulated taxes in the employer's lookback period (which determines the employer's deposit schedule), adjustments to tax liability made pursuant to the filing of adjusted returns or claims for refund will not be taken into account. This rule is consistent with the rule already in effect with respect to Form 941 and Form 944 filers that adjustments to prior return periods are not taken into account in determining the employment tax liability for such prior return period. See § 31.6302-1T(b)(4). The final regulations also added language to clarify that new agricultural employers are treated as having employment tax liabilities of zero for any lookback period before the date the employer started or acquired its business, which is consistent with the current rule governing the lookback period for Form 941 and Form 944 filers. The adjusted overpayment amount will be applied as a credit toward payment of the employer's liability for the calendar quarter (or calendar year for annual returns being adjusted) in which the adjusted return is filed, unless the IRS notifies the employer that the employer is not entitled to the adjustment (that is, because there is no overpayment or because the requirements for making an adjustment were not satisfied) or that the credit will be applied to a different return period. Refunds for Overpayments In lieu of making an interest-free adjustment for an overpayment, employers may file a claim for refund pursuant to section 6402 or 6414 for the amount of the overpayment. Furthermore, if an employer cannot make an interest-free adjustment with respect to an overpayment because the period of limitations for claiming a credit or refund for such overpayment will expire within 90 days or because the IRS has otherwise notified the employer that it is not entitled to the adjustment, the employer may recover the overpayment only by filing a claim for refund. The final regulations under section 6402(a) set out the procedures for filing a claim for refund of overpaid FICA and RRTA taxes. The regulations permit an employer to file a claim for refund of an overpayment of FICA or RRTA tax, but require the employer to certify as part of the claim process that the employer has repaid or reimbursed the employee's share of FICA or RRTA tax to the employee or has secured the written consent of the employee to allowance of the refund or credit. However, the employer is not required to repay or reimburse the employee or obtain the written consent of the employee to the extent that the overpayment does not include taxes withheld from the employee or, after reasonable efforts, the employer cannot locate the employee or the employee, once contacted, will not provide the requested consent. The final regulations under section 6414 set out the procedures for filing a claim for refund of overpaid ITW which are similar to the procedures for filing a claim for refund of overpaid FICA or RRTA tax, except that an employer may not file a claim for refund of an overpayment of ITW for an amount the employer deducted or withheld from an employee. Tax Returns or Statements The final regulations for reporting employment taxes under section 6011 reflect the changes to the adjustment and refund processes. The final regulations are updated to conform to current law due to the enactment of section 3510, added to the Code by section 2(b)(1) of the Social Security Domestic Employment Reform Act of 1994 (Public Law 103-387), which mandates annual returns for domestic service employment taxes, and to reflect the current use of Schedule H (Form 1040) as the generally prescribed form for reporting wages for domestic service in a private home paid in calendar years beginning after December 31, 1994. 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 has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. In accordance with the Regulatory Flexibility Act (5 U.S.C. chapter 6), this regulation will not have a significant economic impact on a substantial number of small entities. The final regulations under sections 6011, 6205, 6402, 6413, and 6414 affect all taxpayers that file employment tax returns. Therefore, the IRS has determined that these regulations will have an impact on a substantial number of small entities. The IRS has determined, however, that the impact on entities affected by the final regulations will not be significant. The regulations require taxpayers to provide certain information if they file adjusted returns to make interest-free adjustments to their employment taxes for either underpayments or overpayments or file claims for refund for an overpayment of employment tax. The taxpayer must provide an explanation setting forth the basis for the correction or the claim in detail, designating the return period in which the error was ascertained and the return period being corrected, and setting forth such other information as may be required by the instructions to the form. In addition, for adjustments of overpayments and for claims for refund, taxpayers must also obtain and retain the written receipt of the employee showing the date and amount of the repayment, evidence of reimbursement, or the written consent of the employee. For purposes of overpayment adjustments and claims for refund of employee FICA and RRTA tax overcollected in an earlier year, the employer must also obtain and retain the employee's written statement that the employee has not claimed refund or credit of the amount of the overcollection, or if so, such claim has been rejected, and that the employee will not claim refund or credit of the amount. This collection of information is not new to the final regulations and has been in existence since the 1960's when the previous regulations were promulgated. In addition, the amendments to the regulations are being made in conjunction with a project of the Office of Taxpayer Burden Reduction which seeks to revise the process for making corrections to employment tax returns to make it less burdensome to taxpayers. The filing of a claim for refund and the making of an interest-free adjustment pursuant to the final regulations are voluntary on the part of taxpayers. Based on these facts, the IRS hereby certifies that the collection of information contained in these regulations will not have a significant economic impact on a substantial number of small entities. Accordingly, a regulatory flexibility analysis is not required. Pursuant to section 7805(f) of the Code, the proposed regulations preceding these regulations were 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 Ligeia M. Donis of the Office of the Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). However, other personnel from the IRS and Treasury Department participated in their development. List of Subjects 26 CFR Part 31 Employment taxes, Income taxes, Penalties, Pensions, Railroad retirement, Reporting and recordkeeping requirements, Social security, Unemployment compensation. 26 CFR Part 602 Reporting and recordkeeping requirements. Adoption of Amendments to the Regulations Accordingly, 26 CFR parts 31 and 602 are amended as follows: PART 31—EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT THE SOURCE **Paragraph 1.** The authority citation for part 31 continues to read, in part, as follows: Authority: 26 U.S.C. 7805 * * * **Par. 2.** Section 31.6011(a)-1 is amended by revising the text of paragraphs (a)(2), (a)(3), and the section heading and text of paragraphs (a)(4) and

(c)to read as follows: § 31.6011(a)-1 Returns under Federal Insurance Contributions Act.

(a)* * *

(2)*Employers of agricultural workers.* Every employer who pays wages for agricultural labor with respect to taxes imposed by the Federal Insurance Contributions Act must make a return for the first calendar year in which the employer pays such wages and for each subsequent calendar year (whether or not wages are paid) until the employer has filed a final return in accordance with § 31.6011(a)-6. Form 943, “Employer's Annual Federal Tax Return for Agricultural Employees,” is the form prescribed for making the annual return required by this section, except that, if the employer's principal place of business is in Puerto Rico, or if the employer has employees who are subject to income tax withholding for Puerto Rico, the return must be made on Form 943-PR, “Planilla para la Declaración ANUAL de la Contribución Federal del Patrono de Empleados Agrícolas.” However, Form 943 is the form prescribed for making such return in the case of every employer of agricultural workers who is required pursuant to § 31.6011(a)-4 to make a return of income tax withheld from wages.

(3)*Employers of domestic workers.* Schedule H (Form 1040), “Household Employment Taxes,” is the form prescribed for use by every employer in making a return as required under paragraph (a)(1) of this section in respect of wages, as defined in the Federal Insurance Contributions Act, paid by the employer in any calendar year for domestic service as defined in section 3510. Schedule H (Form 1040) is generally filed as an attachment to an income tax return; however, if the employer does not otherwise have an obligation to file an income tax return, Schedule H (Form 1040) may be filed as a separate return. If, however, the employer is required under paragraph (a)(1) of this section to make a return on Form 941, “Employer's QUARTERLY Federal Tax Return,” or under paragraph (a)(2) of this section to make a return on Form 943, “Employer's Annual Federal Tax Return For Agricultural Employees,” or under paragraph (a)(5) of this section to make a return on Form 944, “Employer's ANNUAL Federal Tax Return,” the employer may choose instead to report wages with respect to domestic workers on such Form 941, Form 943, or Form 944. If such wages are included on Form 941, Form 943, or Form 944, the employer must also include Federal unemployment tax for the employee(s) on Form 940, “Employer's Annual Federal Unemployment

(FUTA)Tax Return,” under the provisions of § 31.6011(a)-3.

(4)*Employers in Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands.* Form 941-PR, “Planilla para la Declaración Federal TRIMESTRAL del Patrono,” (or Form 944-PR, “Planilla para la Declaración Federal ANUAL del Patrono,” if the IRS notified the employer that the Form 944-PR must be filed in lieu of Form 941-PR) is the form prescribed for use in making the return required under paragraph (a)(1) (or (a)(5)) of this section in the case of every employer whose principal place of business is in Puerto Rico, or if the employer has employees who are subject to income tax withholding for Puerto Rico. Form 941-SS, “Employer's QUARTERLY Federal Tax Return (American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands),” (or Form 944-SS, “Employer's ANNUAL Federal Tax Return (American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands),” if the IRS notified the employer that Form 944-SS must be filed in lieu of Form 941-SS) is the form prescribed for use in making the return required under paragraph (a)(1) (or (a)(5)) of this section in the case of every employer whose principal place of business is in the U.S. Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands, or if the employer has employees who are subject to income tax withholding for these U.S. possessions. However, Form 941 (or Form 944 if the IRS notified the employer that Form 944 must be filed in lieu of Form 941) is the form prescribed for making such return in the case of every such employer who is required pursuant to § 31.6011(a)-4 to make a return of income tax withheld from wages.

(c)*Adjustments and refunds.* For rules applicable to adjustments and refunds of employment taxes, see sections 6205, 6402, 6413, and 6414, and the applicable regulations. **Par. 3.** Section 31.6011(a)-4 is amended by revising paragraph (a)(2) to read as follows: § 31.6011(a)-4 Returns of income tax withheld.

(a)* * *

(2)*Wages paid for domestic service.* Schedule H (Form 1040), “Household Employment Taxes,” is the form prescribed for making the return required under paragraph (a)(1) of this section with respect to income tax withheld, pursuant to an agreement under section 3402(p), from wages paid for domestic service as defined in section 3510. Schedule H (Form 1040) is generally filed as an attachment to an income tax return; however, if the employer does not otherwise have an obligation to file an income tax return, Schedule H (Form 1040) may be filed as a separate return. The preceding sentence shall not apply in the case of an employer who has chosen under § 31.6011(a)-1(a)(3) to use Form 941, “Employer's QUARTERLY Federal Tax Return,” Form 943, “Employer's Annual Tax Return for Agricultural Employees,” or Form 944, “Employer's ANNUAL Federal Tax Return,” as the return with respect to such payments for purposes of the Federal Insurance Contributions Act. For the requirements relating for Schedule H (Form 1040) with respect to qualified State individual income taxes, see § 301.6361-1(d)(3)(iv). **Par. 4.** Section 31.6011(a)-5 is amended by revising paragraph

(a)to read as follows: § 31.6011(a)-5 Monthly returns.

(a)*In general* —(1) *Requirement* . The provisions of this section are applicable in respect of the taxes reportable on returns required pursuant to § 31.6011(a)-1 or § 31.6011(a)-4. An employer (or other person) who is required by § 31.6011(a)-1 or § 31.6011(a)-4 to make quarterly or annual returns on any such form shall, in lieu of making such quarterly or annual returns, make returns of such taxes in accordance with the provisions of this section if the employer is so notified in writing by the IRS. Every employer (or other person) notified by the IRS shall make a return for the calendar month in which the notice is received, for each of the prior calendar months in the return period, and for each calendar month afterwards (whether or not wages are paid in any such month) until the employer has filed a final return or is required to make quarterly or annual returns pursuant to notification as provided in paragraph (a)(2) of this section. Each return required under this section shall be made on the form prescribed for making the return which would otherwise be required of the employer (or other person) under the provisions of § 31.6011(a)-1 or § 31.6011(a)-4, except that, if some other form is furnished by the IRS for use in lieu of such prescribed form, the return shall be made on such other prescribed form. The IRS may notify any employer (or other person)—

(i)Who by reason of notification as provided in § 301.7512-1, is required to comply with the provisions of such § 301.7512-1; or

(ii)Who failed to—

(A)Make any return required pursuant to § 31.6011(a)-1 or § 31.6011(a)-4;

(B)Pay tax reportable on any such form; or

(C)Deposit any such tax as required under the provisions of § 31.6302-1.

(2)*Termination of requirement* . The IRS, in its discretion, may notify the employer in writing that the employer shall discontinue the filing of monthly returns under this section. If the employer is so notified, the IRS will provide the employer with instructions for filing the final monthly return. Afterwards, the employer shall make quarterly or annual returns in accordance with the provisions of § 31.6011(a)-1 or § 31.6011(a)-4. **Par. 5.** Section 31.6205-1 is amended to read as follows: § 31.6205-1 Adjustments of underpayments.

(a)*In general.*

(1)An employer who has underreported and underpaid employee Federal Insurance Contributions Act

(FICA)tax under section 3101 or employer FICA tax under section 3111, employee Railroad Retirement Tax Act

(RRTA)tax under section 3201 or employer RRTA tax under section 3221, or income tax required under section 3402 to be withheld, with respect to any payment of wages or compensation, shall correct such error as provided in this section. Such correction may constitute an interest-free adjustment as provided in paragraph

(b)or

(c)of this section.

(2)No correction will be eligible for interest-free adjustment treatment if the failure to report relates to an issue that was raised in an examination of a prior return period or if the employer knowingly underreported its employment tax liability.

(3)Every correction under this section of an underpayment of tax with respect to a payment of wages or compensation shall be made on the form prescribed by the IRS that corresponds to the return being corrected. The form, filed in accordance with this section and the instructions, will constitute an adjusted return for the return period being corrected.

(4)Every adjusted return on which an underpayment is corrected pursuant to this section shall designate the return period in which the error was ascertained and the return period being corrected, explain in detail the grounds and facts relied upon to support the correction, and set forth such other information as may be required by the regulations in this section and by the instructions relating to the adjusted return.

(5)For purposes of this section, an error is ascertained when the employer has sufficient knowledge of the error to be able to correct it.

(6)No correction will be eligible for interest-free adjustment treatment pursuant to this section after the earlier of the following:

(i)Receipt from the IRS of notice and demand for payment thereof based upon an assessment.

(ii)Receipt from the IRS of a Notice of Determination of Worker Classification (Notice of Determination) in connection with such underpayment. Prior to receipt of a Notice of Determination, the taxpayer may, in lieu of making a payment, make a cash bond deposit that would have the effect of stopping the accrual of any interest, but would not deprive the taxpayer of its right to receive a Notice of Determination and to petition the Tax Court under section 7436.

(7)Subject to the exceptions specified in paragraphs (a)(2) and (a)(6) of this section, Form 2504, “Agreement and Collection of Additional Tax and Acceptance of Overassessment (Excise or Employment Tax),” Form 2504-WC, “Agreement to Assessment and Collection of Additional Tax and Acceptance of Overassessment in Worker Classification Cases (Employment Tax),” and such other forms as may be prescribed by the IRS, constitute adjusted returns for purposes of this section.

(8)For provisions related to furnishing employee statements and corrected employee statements reporting wages and withheld taxes, see sections 6041 and 6051 and §§ 1.6041-2 and 31.6051-1. For provisions relating to filing information returns and corrected information returns reporting wages and withheld taxes, see sections 6041 and 6051 and §§ 1.6041-2 and 31.6051-2.

(9)For the period of limitations upon assessment and collection of taxes, see § 301.6501(a)-1.

(b)*Federal Insurance Contributions Act and Railroad Retirement Tax Act* —(1) *Undercollection ascertained before return is filed.* If an employer collects less than the correct amount of employee FICA or RRTA tax from an employee with respect to a payment of wages or compensation, and if the employer ascertains the error before filing the return on which the employee tax with respect to such wages or compensation is required to be reported, the employer shall nevertheless report on the return and pay to the IRS the correct amount of employee tax. If the employer does not report the correct amount of tax in these circumstances, the employer may not later correct the error through an interest-free adjustment.

(2)*Error ascertained after return is filed.*

(i)If an employer files a return on which FICA tax or RRTA tax is required to be reported, and reports on the return less than the correct amount of employee or employer FICA or RRTA tax with respect to a payment of wages or compensation, and if the employer ascertains the error after filing the return, the employer shall correct the error through an interest-free adjustment as provided in this section. The employer shall adjust the underpayment of tax by reporting the additional amount due on an adjusted return for the return period in which the wages or compensation was paid, accompanied by a detailed explanation of the amount being reported on the adjusted return and any other information as may be required by this section and by the instructions relating to the adjusted return. The reporting of the underpayment on an adjusted return constitutes an adjustment within the meaning of this section only if the adjusted return is filed within the period of limitations for assessment for the return period being corrected, and by the due date for filing the return for the return period in which the error is ascertained. For purposes of the preceding sentence, the due date for filing the adjusted return is determined by reference to the return being corrected, without regard to the employer's current filing requirements. For example, an employer with a current annual filing requirement who is correcting an error on a previously filed quarterly return must file the adjusted return by the due date for filing a quarterly return for the quarter in which the error is ascertained. The amount of the underpayment adjusted in accordance with this section must be paid to the IRS by the time the adjusted return is filed. If an adjustment is reported pursuant to this section, but the amount of the adjustment is not paid when due, interest accrues from that date (see section 6601).

(ii)If an employer files a return reporting FICA tax for a return period although the employer was required to file a return reporting RRTA tax, and if the employer ascertains the error after filing the return, the employer shall correct the error through an interest-free adjustment as provided in this section. The employer shall adjust the underpayment of RRTA tax by reporting the correct amount of RRTA tax on an original return for reporting RRTA tax for the return period for which the incorrect return was filed, accompanied by an adjusted return corresponding to the incorrect return that was filed to correct the erroneously reported and paid FICA tax. The adjusted return must include a detailed explanation of the amounts being reported on the original return and the adjusted return and any other information as may be required by the regulations in this section and by the instructions relating to the adjusted return. The reporting of the correct amounts for the period constitutes an adjustment within the meaning of this section only if the returns are filed by the due date of the return for reporting the RRTA tax for the return period in which the error is ascertained. Pursuant to § 31.3503-1, the amount of erroneously paid FICA tax will be credited against the underpaid RRTA tax. Any remaining underpayment of RRTA tax adjusted in accordance with this section must be paid to the IRS by the time the returns are filed in accordance with this paragraph. If an adjustment is reported pursuant to this section, but the amount of the remaining underpayment is not paid when due, interest accrues from that date (see section 6601).

(iii)If an employer files a return reporting RRTA tax for a return period although the employer was required to file a return reporting FICA tax, and if the employer ascertains the error after filing the return, the employer shall correct the error through an interest-free adjustment as provided in this section. The employer shall adjust the underpayment of FICA tax by reporting the correct amount of FICA tax on an original return for reporting FICA tax for the return period for which the incorrect return was filed (or an adjusted return for reporting the FICA tax if an original return was already filed for such return period to report the income tax required to be withheld under section 3402), accompanied by an adjusted return corresponding to the incorrect return that was filed to correct the erroneously reported and paid RRTA tax. The adjusted return(s) must include a detailed explanation of the amount being reported on the original return and/or the adjusted return(s) and any other information as may be required by the regulations in this section and by the instructions relating to the form. The reporting of the correct amounts for the period constitutes an adjustment within the meaning of this section only if the returns are filed by the due date of the return for reporting the FICA tax for the return period in which the error is ascertained. Pursuant to § 31.3503-1, the amount of erroneously paid RRTA tax will be credited against the underpaid FICA tax. Any remaining underpayment of FICA tax adjusted in accordance with this section must be paid to the IRS by the time the returns are filed in accordance with this paragraph (b)(2)(iii). If an adjustment is reported pursuant to this section, but the amount of the remaining underpayment is not paid when due, interest accrues from that date (see section 6601).

(3)*Return not filed because of failure to treat individual as employee.* If an employer fails to file a return for a return period solely because the employer failed to treat any individuals properly as employees for the return period (and, therefore, failed to withhold and pay any employer or employee FICA or RRTA tax with respect to wages or compensation paid to the employees) and if the employer ascertains the error after the due date of the return, the employer shall correct the error through an interest-free adjustment as provided in this section. The employer shall report the amount due by filing an original return required to be filed to report the tax for the return period for which the employer failed to file a return, accompanied by an adjusted return as provided in the instructions to the adjusted return. The adjusted return must include a detailed explanation of the amount being reported on the original return and adjusted return and any other information as may be required by this section and by the instructions relating to the adjusted return. The reporting of the correct amount of tax for the return period constitutes an adjustment within the meaning of this section only if the original and adjusted returns are filed by the due date of the return for reporting such tax for the return period in which the error is ascertained. For purposes of the preceding sentence, the due date for filing the adjusted return is determined by reference to the return being corrected, without regard to the employer's current filing requirements. For example, an employer with a current annual filing requirement who is correcting an error on a previously filed quarterly return must file the adjusted return by the due date for filing a quarterly return for the quarter in which the error is ascertained. The amount of the underpayment adjusted in accordance with this section must be paid to the IRS by the time the returns are filed in accordance with this paragraph. If an adjustment is reported pursuant to this section, but the amount of the adjustment is not paid when due, interest accrues from that date (see section 6601).

(c)*Income tax required to be withheld from wages* —(1) *Undercollection ascertained before return is filed.* If an employer collects less than the correct amount of income tax required to be withheld from wages under section 3402, and if the employer ascertains the error before filing the return on which the withheld tax is required to be reported, the employer shall nevertheless report on the return and pay to the IRS the correct amount of tax required to be withheld. If the employer does not report the correct amount of tax in these circumstances, the employer may not correct the error through an interest-free adjustment.

(2)*Error ascertained after return is filed.* If an employer files a return on which income tax required to be withheld from wages is required to be reported and reports on the return less than the correct amount of income tax required to be withheld, and if the employer ascertains the error after filing the return, the employer shall correct the error through an interest-free adjustment as provided in this section. The employer shall adjust the underpayment of tax by reporting the additional amount due on an adjusted return for the return period in which the wages were paid, accompanied by a detailed explanation of the amount being reported on the adjusted return and any other information as may be required by this section and by the instructions relating to the adjusted return. The reporting of the underpayment on an adjusted return constitutes an adjustment within the meaning of this section only if the adjusted return is filed by the due date for filing the return for the return period in which the error is ascertained. For purposes of the preceding sentence, the due date for filing the adjusted return is determined by reference to the return being corrected, without regard to the employer's current filing requirements. For example, an employer with a current annual filing requirement who is correcting an error on a previously filed quarterly return must file the adjusted return by the due date for filing a quarterly return for the quarter in which the error is ascertained. However, an adjustment may only be reported pursuant to this section if the error is ascertained within the same calendar year that the wages to the employee were paid, unless the underpayment is attributable to an administrative error (that is, an error involving the inaccurate reporting of the amount actually withheld), section 3509 applies to determine the amount of the underpayment, or the adjustment is reported on a Form 2504 or Form 2504-WC. The amount of the underpayment adjusted in accordance with this section must be paid to the IRS by the time the adjusted return is filed. If an adjustment is reported pursuant to this section, but the amount of the adjustment is not paid when due, interest accrues from that date (see section 6601).

(3)*Return not filed because of failure to treat individual as employee.* If an employer fails to file a return for a return period solely because the employer failed to treat any individuals properly as employees for the return period (and, therefore, failed to withhold and pay any income tax required to be withheld from wages), the employer shall correct the error through an interest-free adjustment as provided in this section. The employer shall report the amount due by filing an original return for the return period for which the employer failed to file a return, accompanied by an adjusted return as provided in the instructions to the adjusted return. The adjusted return must include a detailed explanation of the amount being reported on the original and adjusted returns and any other information as may be required by this section and by the instructions relating to the adjusted return. The reporting of the correct amount of tax for the return period constitutes an adjustment within the meaning of this section only if the original and adjusted returns are filed by the due date of the return for reporting such tax for the return period in which the error is ascertained. For purposes of the preceding sentence, the due date for filing the adjusted return is determined by reference to the return being corrected, without regard to the employer's current filing requirements. For example, an employer with a current annual filing requirement who is correcting an error on a previously filed quarterly return must file the adjusted return by the due date for filing a quarterly return for the quarter in which the error is ascertained. However, an adjustment may only be reported pursuant to this section if the error is ascertained within the same calendar year that the wages to the employee were paid, or if section 3509 applies to determine the amount of the underpayment, or if the adjustment is reported on a Form 2504 or Form 2504-WC. The amount of the underpayment adjusted in accordance with this section must be paid to the IRS by the time the returns are filed in accordance with this paragraph. If an adjustment is reported pursuant to this section, but the amount of the adjustment is not paid when due, interest accrues from that date (see section 6601).

(d)*Deductions from employee* —(1) *Federal Insurance Contributions Tax Act and Railroad Retirement Tax Act.* If an employer collects less than the correct amount of employee FICA or RRTA tax from an employee with respect to a payment of wages or compensation, the employer must collect the amount of the undercollection by deducting the amount from remuneration of the employee, if any, paid after the employer ascertains the error. Such deductions may be made even though the remuneration, for any reason, does not constitute wages or compensation. The correct amount of employee tax must be reported and paid, as provided in paragraph

(b)of this section, whether or not the undercollection is corrected by a deduction made as prescribed in this paragraph (d)(1), and even if the deduction is made after the return on which the employee tax must be reported is due. If such a deduction is not made, the obligation of the employee to the employer with respect to the undercollection is a matter for settlement between the employee and the employer. If an employer makes an erroneous collection of employee tax from two or more of its employees, a separate settlement must be made with respect to each employee. An overcollection of employee tax from one employee may not be used to offset an undercollection of such tax from another employee. For provisions relating to the employer's liability for the tax, whether or not it collects the tax from the employee, see § 31.3102-1(d). This paragraph (d)(1) does not apply if section 3509 applies to determine the employer's liability.

(2)*Income tax required to be withheld from wages.* If an employer collects less than the correct amount of income tax required to be withheld from wages during a calendar year, the employer must collect the amount of the undercollection on or before the last day of the year by deducting the amount from remuneration of the employee, if any, paid after the employer ascertains the error. Such deductions may be made even though the remuneration, for any reason, does not constitute wages. The correct amount of income tax must be reported and paid, as provided in paragraph

(c)of this section, whether or not the undercollection is corrected by a deduction made as prescribed in this paragraph (d)(2), and even if the deduction is made after the return on which the tax must be reported is due. If such a deduction is not made, the obligation of the employee to the employer with respect to the undercollection is a matter for settlement between the employee and the employer within the calendar year. If an employer makes an erroneous collection of income tax from two or more of its employees, a separate settlement must be made with respect to each employee. An overcollection of income tax from one employee may not be used to offset an undercollection of such tax from another employee. For provisions relating to the employer's liability for the tax, whether or not it collects the tax from the employee, see § 31.3403-1. For provisions relating to the employer's liability for an underpayment of tax unless the employer can show that the income tax against which the tax under section 3402 may be credited has been paid, see § 31.3402(d)-1. This paragraph (d)(2) does not apply if section 3509 applies to determine the employer's liability. **Par. 6.** Section 31.6302-0 is amended by adding new entries for § 31.6302-1 paragraphs (c)(7) and (g)(4)(i) and

(ii)to read as follows: § 31.6302-0 Table of contents. § 31.6302-1 Federal tax deposit rules for withheld income taxes and taxes under the Federal Insurance Contributions Act

(FICA)attributable to payments made after December 31, 1992.

(c)* * *

(7)Exception to the monthly and semi-weekly deposit rules for employers making interest-free adjustments.

(g)* * *

(4)* * *

(i)In general.

(ii)Adjustments and Claims for Refund. **Par. 7.** Section 31.6302-1 is amended by adding paragraph (c)(7) and revising paragraph (g)(4) to read as follows: § 31.6302-1 Federal tax deposit rules for withheld income taxes and taxes under the Federal Insurance Contributions Act

(FICA)attributable to payments made after December 31, 1992.

(c)* * *

(7)*Exception to the monthly and semi-weekly deposit rules for employers making interest-free adjustments.* An employer filing an adjusted return under § 31.6205-1 to report taxes that were accumulated in a prior return period shall pay the amount of the adjustment by the time it files the adjusted return, and the amount timely paid will be deemed to have been timely deposited by the employer. The payment may be made by a check or money order with the adjusted return, by electronic funds transfer, or by other methods of payment as provided by the instructions relating to the adjusted return.

(g)* * *

(4)*Lookback period* —(i) *In general.* For purposes of this paragraph (g), the lookback period for Form 943 taxes is the second calendar year preceding the current calendar year. For example, the lookback period for calendar year 1993 is calendar year 1991. New employers shall be treated as having employment tax liabilities of zero for any lookback period before the date the employer started or acquired its business.

(ii)*Adjustments and Claims for Refund.* The employment tax liability reported on the original return for the return period is the amount taken into account in determining whether the amount of Form 943 taxes accumulated in the lookback period exceeds $50,000. Any amounts reported on adjusted returns or claims for refund pursuant to sections 6205, 6402, 6413 and 6414 filed after the due date of the original return are not taken into account when determining the amount of Form 943 taxes accumulated in the lookback period. However, prior period adjustments reported on Form 943 for 2008 and earlier years are taken into account in determining the employment tax liability for the return period in which the adjustments are reported. **Par. 8.** Section 31.6402(a)-1 is amended by revising paragraph

(a)to read as follows: § 31.6402(a)-1 Credits or refunds.

(a)*In general.* For regulations under section 6402 of special application to credits or refunds of employment taxes, see §§ 31.6402(a)-2, 31.6402(a)-3, and 31.6414-1. For regulations under section 6402 of general application to credits or refunds, see §§ 301.6402-1 and 301.6402-2. For provisions relating to adjustments without interest of overpayments of taxes under the Federal Insurance Contributions Act or the Railroad Retirement Tax Act or income tax withholding, see §§ 31.6413(a)-1 and 31.6413(a)-2. **Par. 9.** Section 31.6402(a)-2 is amended by revising paragraph heading and text of paragraph

(a)and removing paragraph

(c)to read as follows: § 31.6402(a)-2 Credit or refund of tax under Federal Insurance Contributions Act or Railroad Retirement Tax Act

(a)*Claim by person who paid tax to IRS* —(1) *In general.*

(i)Any person may file a claim for credit or refund for an overpayment (except to the extent that the overpayment must be credited pursuant to § 31.3503-1) if the person paid to the IRS more than the correct amount of employee Federal Insurance Contributions Act

(FICA)tax under section 3101 or employer FICA tax under section 3111, employee Railroad Retirement Tax Act

(RRTA)tax under section 3201, employee representative RRTA tax under section 3211, or employer RRTA tax under section 3221, or interest, addition to the tax, additional amount, or penalty with respect to any such tax.

(ii)The claim for credit or refund must be made in the manner and subject to the conditions stated in this section. The claim for credit or refund must be filed on the form prescribed by the IRS and must designate the return period to which the claim relates, explain in detail the grounds and facts relied upon to support the claim, and set forth such other information as may be required by this section and by the instructions relating to the form used to make such claim. No refund or credit pursuant to this section for employer tax will be allowed unless the employer has first repaid or reimbursed its employee or has secured the employee's consent to the allowance of the claim for refund and includes a claim for the refund of such employee tax. However, this requirement does not apply to the extent that the taxes were not withheld from the employee or, after the employer makes reasonable efforts to repay or reimburse the employee or secure the employee's consent, the employer cannot locate the employee or the employee will not provide consent. No refund or credit of employee FICA or RRTA tax overcollected in an earlier year will be allowed if the employee has claimed a refund or credit of the amount of the overcollection which has not been rejected or if the employee has taken the amount of such tax into account in claiming a credit against or refund of the employee's income tax, including instances in which the employee has included an overcollection of employee FICA or RRTA tax in computing a special refund (see § 31.6413(c)-1).

(iii)For adjustments without interest of overpayments of FICA or RRTA taxes, see § 31.6413(a)-2.

(iv)For corrections of FICA and RRTA tax paid under the wrong chapter, see § 31.6205-1(b)(2)(ii) and

(iii)and § 31.3503-1.

(v)For provisions related to furnishing employee statements and corrected employee statements reporting wages and withheld taxes, see sections 6041 and 6051 and §§ 1.6041-2 and 31.6051-1. For provisions relating to filing information returns and corrected information returns reporting wages and withheld taxes, see sections 6041 and 6051 and §§ 1.6041-2 and 31.6051-2.

(vi)For the period of limitations on credit or refund of taxes, see § 301.6511(a)-1.

(2)*Statements supporting employer's claims for employee tax.*

(i)Every employer who files a claim for refund or credit of employee FICA tax under section 3101 or employee RRTA tax under section 3201 collected from an employee must certify as part of the claim process that the employer has repaid or reimbursed the tax to its employee or has secured the employee's written consent to allowance of the filing of the claim for refund except to the extent that the taxes were not withheld from the employee. The employer must retain as part of its records the written receipt of the employee showing the date and amount of the repayment, evidence of reimbursement, or the written consent of the employee, whichever is used in support of the claim.

(ii)Every employer who files a claim for refund or credit of employee FICA tax under section 3101 or employee RRTA tax under section 3201 collected from an employee in a calendar year prior to the year in which the credit or refund is claimed, also must certify as part of the claim process that the employer has obtained the employee's written statement that the employee has not claimed refund or credit of the amount of the overcollection, or if so, such claim has been rejected, and that the employee will not claim refund or credit of the amount. The employer must retain the employee's written statement as part of the employer's records. **Par. 10.** Section 31.6413(a)-1 is revised to read as follows: § 31.6413(a)-1 Repayment or reimbursement by employer of tax erroneously collected from employee.

(a)*Federal Insurance Contributions Act and Railroad Retirement Tax Act* —(1) *Overcollection ascertained before return is filed.*

(i)If an employer during any return period collects from an employee more than the correct amount of employee Federal Insurance Contributions Act

(FICA)tax under section 3101 or employee Railroad Retirement Tax Act

(RRTA)tax under section 3201, and if the employer ascertains the error before filing the return on which the employee tax is required to be reported, repays or reimburses the amount of the overcollection to the employee before filing the return for such return period, and obtains and keeps as part of its records the written receipt of the employee showing the date and amount of the repayment or evidence of reimbursement, the employer shall not report on any return or pay to the IRS the amount of the overcollection.

(ii)Any overcollection not repaid or reimbursed to the employee as provided in paragraph (a)(1)(i) of this section shall be reported and paid to the IRS on the return for reporting such tax for the return period in which the overcollection is made. However, the reporting and payment of the overcollection may subsequently be treated as an overpayment error ascertained after the return is filed for purposes of paragraph (a)(2) of this section.

(iii)For purposes of this paragraph (a)(1), an error is ascertained when the employer has sufficient knowledge of the error to be able to correct it.

(2)*Error ascertained after return is filed.*

(i)If an employer files a return for a return period on which FICA tax or RRTA tax is reported, collects from an employee and pays to the IRS more than the correct amount of the employee FICA or RRTA tax, and if the employer ascertains the error after filing the return and within the applicable period of limitations on credit or refund, the employer shall repay or reimburse the employee in the amount of the overcollection prior to the expiration of such limitations period. However, this paragraph (a)(2) does not apply to the extent that, after reasonable efforts, the employer cannot locate the employee, or the employee does not provide the employer with the written statement required by § 31.6413(a)-1(a)(2)(iv). This paragraph (a)(2) has no application in any case in which an overcollection is made the subject of a claim by the employer for refund or credit under the procedure provided in § 31.6402(a)-2.

(ii)If the employer repays the amount of the overcollection to an employee, the employer shall obtain and keep as part of its records the written receipt of the employee, showing the date and amount of the repayment.

(iii)If the employer reimburses the amount of the overcollection to an employee, the employer shall keep as part of its records evidence of reimbursement. The employer shall reimburse the employee by applying the amount of the overcollection against the employee FICA or RRTA tax which attaches to wages or compensation paid by the employer to the employee prior to the expiration of the applicable period of limitations on credit or refund. If the amount of the overcollection exceeds the amount so applied against such employee tax, the excess amount shall be repaid to the employee as required by this section.

(iv)If, in any calendar year, an employer repays or reimburses an employee in the amount of an overcollection of employee FICA or RRTA tax that was collected from the employee in a prior calendar year, the employer shall obtain from the employee and keep as part of its records a written statement that the employee has not claimed refund or credit of the amount of the overcollection, or if so, such claim has been rejected, and that the employee will not claim refund or credit of such amount. For this purpose, a claim for refund or credit by the employee includes instances in which the employee has included an overcollection of employee FICA or RRTA tax in computing a special refund (see § 31.6413(c)-1).

(v)For purposes of this paragraph (a)(2), an error is ascertained when the employer has sufficient knowledge of the error to be able to correct it.

(vi)For the period of limitations on credit or refund of taxes, see § 301.6511(a)-1.

(vii)For corrections of FICA and RRTA tax paid under the wrong chapter, see § 31.6205-1(b)(2)(ii) and

(iii)and § 31.3503-1.

(b)*Income tax withheld from wages* —(1) *Overcollection ascertained before return is filed.*

(i)If an employer during any return period collects from an employee more than the correct amount of tax required to be withheld from wages under section 3402, and if the employer ascertains the error before filing the return on which such tax is required to be reported, repays or reimburses the amount of the overcollection to the employee before filing the return for such return period and before the end of the calendar year in which the overcollection was made, and obtains and keeps as part of its records the written receipt of the employee showing the date and amount of the repayment or evidence of reimbursement, the employer shall not report on any return or pay to the IRS the amount of the overcollection.

(ii)Any overcollection not repaid or reimbursed to the employee as provided in paragraph (b)(1)(i) of this section shall be reported and paid to the IRS on the return for reporting such tax for the return period in which the overcollection is made. However, the reporting and payment of the overcollection may subsequently be treated as an overpayment error ascertained after the return is filed for purposes of paragraph (b)(2) of this section.

(iii)For purposes of this paragraph (b)(1), an error is ascertained when the employer has sufficient knowledge of the error to be able to correct it.

(2)*Error ascertained after return is filed.*

(i)If an employer files a return for a return period on which tax required to be withheld from wages is reported, collects from an employee and pays to the IRS more than the correct amount of the tax required to be withheld from wages, and if the employer ascertains the error after filing the return but before the end of the calendar year in which the wages were paid, the employer shall repay or reimburse the employee in the amount of the overcollection prior to the end of the calendar year. However, this paragraph does not apply to the extent that, after reasonable efforts, the employer cannot locate the employee.

(iii)If the employer reimburses the amount of the overcollection to an employee, the employer shall keep as part of its records evidence of reimbursement. The employer shall reimburse the employee by applying the amount of the overcollection against the tax under section 3402, which otherwise would be required to be withheld from wages paid by the employer to the employee in the calendar year in which the overcollection is made. If the amount of the overcollection exceeds the amount so applied against such tax, the excess amount shall be repaid to the employee as required by this section.

(iv)For purposes of this paragraph (b)(2), an error is ascertained when the employer has sufficient knowledge of the error to be able to correct it. **Par. 11.** Section 31.6413(a)-2 is revised to read as follows: § 31.6413(a)-2 Adjustments of overpayments.

(a)*In general.*

(1)An employer who has overcollected or overpaid employee Federal Insurance Contributions Act

(FICA)tax under section 3101 or employer FICA tax under section 3111, employee Railroad Retirement Tax

(RRTA)tax under section 3201 or employer RRTA tax under section 3221, or income tax required under section 3402 to be withheld, and has repaid or reimbursed the amount of the overcollection of such tax to the employee, shall correct such error as provided in this section. Such correction may constitute an interest-free adjustment as provided in paragraph

(b)or

(c)of this section.

(2)Every correction under this section of an overpayment of tax shall be made on the form prescribed by the IRS that corresponds to the return being corrected. The form, filed in accordance with this section and the instructions, will constitute an adjusted return for the return period being corrected.

(3)Every adjusted return on which an overpayment is corrected pursuant to this section shall certify that the employer has repaid or reimbursed its employee, except where taxes were not withheld from the employee or where, after reasonable efforts, the employer cannot locate the employee. Every adjusted return shall designate the return period in which the error was ascertained and the return period being corrected, explain in detail the grounds and facts relied upon to support the correction, and set forth such other information as may be required by this section and § 31.6413(a)-1 and by the instructions relating to the adjusted return. Every adjusted return, filed by an employer, for overpayment of employee FICA tax under section 3101 or employee RRTA tax under section 3201 collected from an employee in a calendar year prior to the year in which the adjusted return is filed, must also certify that the employer has obtained the employee's written statement that the employee has not claimed refund or credit of the amount of the overcollection, or if so, such claim has been rejected, and that the employee will not claim refund or credit of the amount.

(4)For purposes of this section, an error is ascertained when the employer has sufficient knowledge of the error to be able to correct it.

(5)For provisions related to furnishing employee statements and corrected employee statements reporting wages and withheld taxes, see sections 6041 and 6051 and §§ 1.6041-2 and 31.6051-1. For provisions relating to filing information returns and corrected information returns reporting wages and withheld taxes, see sections 6041 and 6051 and §§ 1.6041-2 and 31.6051-2.

(b)*Federal Insurance Contributions Act and Railroad Retirement Tax Act—*

(1)*Overcollection ascertained before return is filed.* If an employer collects more than the correct amount of employee FICA or RRTA tax from an employee, and if the employer ascertains the error before filing the return on which the employee tax with respect to such wages or compensation is required to be reported, and repays or reimburses the employee under § 31.6413(a)-1(a)(1), the employer shall not report on any return or pay to the IRS the amount of the overcollection. If the employer does not repay or reimburse the amount of the overcollection under § 31.6413(a)-1(a)(1) before filing the return, the employer must report the amount of the overcollection on the return. However, the payment of the overcollection may subsequently be treated as an overpayment error ascertained after the return is filed for purposes of paragraph (b)(2) of this section.

(2)*Error ascertained after return is filed* —(i) *Employee tax.* If an employer files a return for a return period on which FICA tax or RRTA tax is required to be reported and reports on the return more than the correct amount of employee FICA or RRTA tax, and if the employer ascertains the error after filing the return, and repays or reimburses the employee the amount of the overcollection of employee tax, as provided in § 31.6413(a)-1(a)(2), the employer may correct the error through an interest-free adjustment as provided in this section. The employer shall adjust the overpayment of tax by reporting the overpayment on an adjusted return for the return period in which the wages or compensation was paid, accompanied by a detailed explanation of the amount being reported on the adjusted return as required by paragraph (a)(3) of this section. Except as provided in paragraph

(d)of this section, the reporting of the overpayment on an adjusted return constitutes an adjustment within the meaning of this section only if the adjusted return is filed before the expiration of the period of limitations on credit or refund. The employer shall take the adjusted amount as a credit towards payment of employment tax liabilities for the return period in which the adjusted return is filed unless the IRS notifies the employer that the adjustment is not permitted under paragraph

(d)of this section.

(ii)*Employer tax.* If an employer files a return for a return period on which FICA or RRTA tax is required to be reported and reports on the return more than the correct amount of employer FICA or RRTA tax, and if the employer ascertains the error after filing the return, the employer may correct the error through an interest-free adjustment as provided in this section. The employer must first repay or reimburse the employee the amount of any overcollection of employee tax, if any, as required by § 31.6413(a)-1(a)(2), before making the adjustment for the employer tax. The employer shall adjust the overpayment of tax by reporting the overpayment on an adjusted return for the return period in which the wages or compensation was paid, accompanied by a detailed explanation of the amount being reported on the adjusted return as required by paragraph (a)(3) of this section. Except as provided in paragraph

(d)of this section.

(c)*Income tax withheld from wages* —(1) *Overcollection ascertained before return is filed.* If an employer collects more than the correct amount of income tax required to be withheld from wages, and if the employer ascertains the error before filing the return on which the tax is required to be reported, and repays or reimburses the employee under § 31.6413(a)-1(b)(1), the employer shall not report on any return or pay to the IRS the amount of the overcollection. If the employer does not repay or reimburse the amount of the overcollection under § 31.6413(a)-1(b)(1) before filing the return, the employer must report the amount of the overcollection on the return. However, the reporting and payment of the overcollection may subsequently be treated as an overpayment error ascertained after the return is filed for purposes of paragraph (c)(2) of this section.

(2)*Error ascertained after return is filed.* If an employer files a return for a return period on which income tax required to be withheld from wages is required to be reported and reports on the return more than the correct amount of income tax required to be withheld, and if the employer ascertains the error after filing the return, and repays or reimburses the employee in the amount of the overcollection as provided in § 31.6413(a)-1(b)(2), the employer may correct the error through an interest-free adjustment as provided in this section. The employer shall adjust the overpayment of tax by reporting the overpayment on an adjusted return for the return period in which the wages were paid, accompanied by a detailed explanation of the amount being reported on the adjusted return as required in paragraph (a)(3) of this section. Except as provided in paragraph

(d)of this section, the reporting of the overpayment on an adjusted return constitutes an adjustment within the meaning of this section. If the amount of the overcollection is not repaid or reimbursed to the employee under § 31.6413(a)-1(b)(2), there is no overpayment to be adjusted under this section. However, the employer may adjust an overpayment of tax attributable to an administrative error, that is, an error involving the inaccurate reporting of the amount withheld, pursuant to this section. The employer shall take the adjusted amount as a credit towards payment of employment tax liabilities for the return period in which the adjusted return is filed unless the IRS notifies the employer that the adjustment is not permitted under paragraph

(d)of this section.

(d)*Adjustments not permitted* —(1) *In general.* If an adjustment cannot be made, a claim for refund or credit may be filed in accordance with § 31.6402(a)-2 or § 31.6414-1.

(2)*90-day exception.* No adjustment in respect of an overpayment may be made if the overpayment relates to a return period for which the period of limitations on credit or refund of such overpayment will expire within 90 days of filing the adjusted return.

(3)*No adjustment after claim for refund filed.* No adjustment in respect of an overpayment may be made after the filing of a claim for credit or refund of such overpayment under § 31.6402(a)-2.

(4)*No adjustment after IRS notification.* No adjustment may be made upon notification by the IRS that the adjustment is not permitted. **Par. 12.** Section 31.6414-1 is amended by revising paragraph

(a)to read as follows: § 31.6414-1 Credit or refund of income tax withheld from wages.

(a)*In general.*

(1)Any employer who pays to the IRS more than the correct amount of income tax required to be withheld from wages under section 3402 or interest, addition to the tax, additional amount, or penalty with respect to such tax, may file a claim for refund of the overpayment in the manner and subject to the conditions stated in this section on the form prescribed by the IRS. The claim for refund must designate the return period to which the claim relates, explain in detail the grounds and facts relied upon to support the claim, and set forth such other information as may be required by the regulations in this section and by the instructions relating to the form used to make such claim. No refund to the employer will be allowed under this section for the amount of any overpayment of tax which the employer deducted or withheld from an employee.

(2)For provisions related to furnishing employee statements and corrected employee statements reporting wages and withheld taxes, see sections 6041 and 6051 and §§ 1.6041-2 and 31.6051-1. For provisions relating to filing information returns and corrected information returns reporting wages and withheld taxes, see sections 6041 and 6051 and §§ 1.6041-2 and 31.6051-2.

(3)For interest-free adjustments of overpayments of income tax withheld from wages, see § 31.6413(a)-2. PART 602—OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT **Par. 13.** The authority citation for part 602 continues to read in part as follows: Authority: 26 U.S.C. 7805. **Par. 14.** In § 602.101, paragraph

(b)is amended by adding the following entry in numerical order to the table to read as follows: § 602.101 OMB Control numbers

(b)* * * CFR part or section where identified and described Current OMB control No. * * * * * 31.6011(a)-1 1545-2097 31.6011(a)-4 1545-2097 31.6011(a)-5 1545-2097 31.6205-1 1545-2097 31.6402(a)-2 1545-2097 31.6413(a)-1 1545-2097 31.6413(a)-2 1545-2097 31.6414-1 1545-2097 * * * * * Linda E. Stiff, Deputy Commissioner for Services and Enforcement. Approved: June 23, 2008. Eric Solomon, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. E8-14947 Filed 6-30-08; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 648 [Docket No. 071219865-8771-02] RIN 0648-AP60 Fisheries of the Northeastern United States; Atlantic Mackerel, Squid, and Butterfish Fisheries; Amendment 9 AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Final rule. SUMMARY: NMFS is implementing approved measures contained in Amendment 9 to the Atlantic Mackerel, Squid, and Butterfish

(MSB)Fishery Management Plan (FMP). Amendment 9 was developed by the Mid-Atlantic Fishery Management Council (Council) to remedy deficiencies in the FMP and to address other issues that have arisen since Amendment 8 to the FMP became effective in 1999. Amendment 9 establishes multi-year specifications for all four species managed under the FMP (mackerel, butterfish, *Illex* squid ( *Illex* ), and *Loligo* squid ( *Loligo* )) for up to 3 years; extends the moratorium on entry into the *Illex* fishery, without a sunset provision; adopts biological reference points recommended by the Stock Assessment Review Committee

(SARC)for *Loligo* ; designates essential fish habitat

(EFH)for *Loligo* eggs based on best available scientific information; and prohibits bottom trawling by MSB-permitted vessels in Lydonia and Oceanographer Canyons. DATES: Effective July 31, 2008. ADDRESSES: A final supplemental environmental impact statement (FSEIS) was prepared for Amendment 9 that describes the proposed action and other considered alternatives and provides a thorough analysis of the impacts of the proposed measures and alternatives. Copies of Amendment 9, including the FSEIS, the Regulatory Impact Review (RIR), and the Initial Regulatory Flexibility Analysis (IRFA), are available from: Daniel Furlong, Executive Director, Mid-Atlantic Fishery Management Council, Room 2115, Federal Building, 300 South New Street, Dover, DE 19904-6790. The FSEIS/RIR/IRFA is accessible via the Internet at *http://www.nero.nmfs.gov* . FOR FURTHER INFORMATION CONTACT: Carrie Nordeen, Fishery Policy Analyst, 978- 281-9272, fax 978-281-9135. SUPPLEMENTARY INFORMATION: Background This amendment is needed to remedy deficiencies in the FMP and to address other issues that have arisen since Amendment 8 to the FMP (64 FR 57587, October 26, 1999) became effective in 1999. Amendment 8 was only partially approved by NMFS because the amendment failed to adequately address some Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) requirements for Federal FMPs. Specifically, the amendment was considered deficient with respect to: Consideration of fishing gear impacts on EFH as they relate to MSB fisheries; designation of EFH for *Loligo* eggs; and the reduction of bycatch and discarding of target and non-target species in the MSB fisheries. The final version of Amendment 9 contains alternatives that consider allowing for multi-year specifications and management measures, extending or eliminating the moratorium on entry to the directed *Illex* fishery, revising the biological reference points for *Loligo* , designating EFH for *Loligo* eggs, implementing area closures to reduce gear impacts from MSB fisheries on EFH of other federally managed species, increasing the incidental possession limit for *Illex* vessels during a closure of the *Loligo* fishery, and requiring real-time electronic reporting via vessel monitoring systems in the *Illex* fishery. The Council held four public meetings on Amendment 9 during May 2007. Following the public comment period that ended on May 21, 2007, the Council adopted Amendment 9 on August 6, 2007. The Notice of Availability

(NOA)for Amendment 9 was published on March 25, 2008 (73 FR 15716), with a comment period ending on May 27, 2008. A proposed rule for Amendment 9 was published on April 4, 2008 (73 FR 18483), with a comment period ending on May 19, 2008. On June 17, 2008, NMFS approved Amendment 9 on behalf of the Secretary of Commerce. This rule establishes management measures that were recommended by the Council as part of Amendment 9. Specifically, this rule implements measures that: Allow for multi-year specifications for all four species managed under the FMP (mackerel, butterfish, *Illex* , and *Loligo* ) for up to 3 years; extend the moratorium on entry into the *Illex* fishery, without a sunset provision; adopt biological reference points for *Loligo* recommended by the SARC; designate EFH for *Loligo* eggs based on best available science information; and prohibit bottom trawling by MSB-permitted vessels in Lydonia and Oceanographer Canyons. Approved Measures Multi-Year Specifications and Management Measures Regulations at § 648.21 specify that specifications for mackerel, *Illex* , and butterfish are recommended to the Council on an annual basis, and that specifications for *Loligo* may be specified for up to 3 years, subject to annual review. To streamline the administrative and regulatory process involved in setting specifications and management measures, Amendment 9 establishes multi-year specifications for all four species: Mackerel, *Illex* , *Loligo* , and butterfish. Amendment 9 does not establish any specification measures; rather it affects the periodicity for specifying such regulatory measures through future Council actions. Under multi-year specifications, Amendment 9 requires an annual review of updated information on the fishery by the MSB Monitoring Committee, as is the current practice, during the period of the multi-year specifications. The MSB Monitoring Committee will examine data collected from the fishery and resource surveys and alert the Council of any changes, including those of stock status, that might require a revision to the specifications before the multi-year period elapses. This action allows for specifications and management measures for any or all of the four species in the FMP to be set for up to 3 years, subject to annual review. In the past, the specifications and management measures for MSB fisheries have remained fairly constant across years. This measure still enables the Council to respond to changes in stock status, in any given year, by modifying quotas or management measures. However, if changes were not necessary, the Council and NMFS would not have to recommend and implement annual specifications and management measures. Because this measure is largely administrative, it is not anticipated that there will be effects on the environment. This measure does have the potential to provide MSB fishery participants with an expanded planning horizon for harvesting and processing activities; therefore, it may have positive economic effects for MSB fishery participants. Moratorium on Entry into the *Illex* Fishery A fishery is considered overcapitalized when the harvest potential of the fishing fleet exceeds the harvest at optimum yield (OY). Information presented in Amendment 9 indicates the *Illex* fishery is overcapitalized; therefore, this amendment limits the potential for increases in the harvest capacity of the large-scale, directed *Illex* fishery. In order to prevent excess harvest capacity from developing in the directed *Illex* fishery, a moratorium on new entry into this fishery was established in 1997. In the directed fishery, moratorium-permitted vessels are not subject to any daily *Illex* possession limit. As such, the maximum potential *Illex* landings for moratorium-permitted vessels are unlimited until 95 percent of the annual harvest quota has been achieved in any given year. Once 95 percent of the annual quota has been harvested, the possession limit for vessels with *Illex* moratorium permits becomes 10,000 lb (4.54 mt). The moratorium on new entry was initially scheduled to expire in 2002, but has been extended several times through framework actions and is most recently scheduled to expire in July 2009. Throughout the year, a small-scale, incidental catch fishery for *Illex* is currently provided for through an open-access Federal permit that allows possession of up to 10,000 lb (4.54 mt) of *Illex* on a single trip. In addition to the 10,000-lb (4.54-mt) trip allowance for *Illex* , vessels in possession of this permit are also allowed to land 2,500 lb (1.13 mt) of *Loligo* and 600 lb (0.27 mt) of butterfish in a single trip (unless the directed fishery closes prior to October 1, in which case the limit is 250 lb (0.11 mt)). Amendment 9 does not include any modifications to this permit. Amendment 9 eliminates the scheduled expiration of the moratorium. As such, new entry into the directed commercial fishery for *Illex* is prohibited indefinitely. The transfer of moratorium permits from one participant to another will only be allowed through the transfer of ownership of a permitted vessel. Since the moratorium's implementation in 1997, there has been a slight decline in the number of vessels issued an *Illex* moratorium permit in any given year, from a maximum of 77 in 1998, to 72 in 2003. Amendment 9 prevents expansion of the size of the directed *Illex* fleet beyond the number of permitted vessels in 2008, thereby preventing expansion in a fishery that is already overcapitalized and offering the greatest degree of protection to historic participants in the directed *Illex* fishery. This measure is anticipated to have economic benefits for historical participants already possessing *Illex* moratorium permits and the potential to negatively affect those wanting to become an *Illex* fishery participant in the future. Biological Reference Points for *Loligo* Regulations at § 600.315 state that conservation and management measures must be based upon the best scientific information available, and that FMPs should be amended on a timely basis, as new information indicates the necessity for change in objectives or management measures. Therefore, Amendment 9 revises the proxies for target and threshold fishing mortality rates, F Target and F Threshold , respectively, for *Loligo* to reflect the analytical advice provided by the most recent *Loligo* stock assessment review committee (SARC 34). While Amendment 9 revises the formulas and values for these reference points, the function of the reference points remains unchanged. F Target is the basis for determining OY, and F Threshold is used to determine whether overfishing is occurring. Because *Loligo* is a sub-annual species (i.e., has a lifespan of less than 1 year), the stock is solely dependent on sufficient recruitment year to year to prevent stock collapse. The status quo proxies for F Target (75 percent of the fishing morality rate supporting maximum sustainable yield (F Max )) and F Threshold (F Max ) are based on maximum yield, while the revised proxies for F Target and F Threshold in Amendment 9 are more risk averse because they are based on average fishing mortality rates achieved during a time period when the stock biomass was fairly resilient (1987-2000). The revised proxies are calculated as follows: F Target is the 75 th percentile of fishing mortality rates during 1987-2000 and F Threshold is the average fishing mortality rates during the same period. The revised proxy for F Target (0.32 or 0.24 for trimesters and quarters, respectively) would be used as the basis for establishing *Loligo* OY. However, it should be noted that it is currently not possible to accurately predict *Loligo* stock biomass because recruitment, which occurs throughout the year, is highly variable inter-annually and is influenced by changing environmental conditions. Biological reference points that ensure an adequate number of spawners produce adequate recruitment in the subsequent year are considered most appropriate for squid species. However, until such reference points can be reliably estimated for the *Loligo* stock, the revised reference points in Amendment 9 will serve as an intermediate step for calculating harvest levels that are more robust, with respect to stock sustainability, than status quo reference points. Designation of EFH for *Loligo* Eggs Amendment 9 designates EFH for *Loligo* eggs in order to bring the FMP into compliance with the Magnuson-Stevens Act requirement that FMPs describe and identify EFH for each life history stage of a managed species. The MSB FMP currently identifies and describes EFH for all life stages of MSB species for which information is available, with the exception of *Loligo* eggs. *Loligo* eggs are found attached to rocks and boulders on sand or mud bottom, as well as attached to aquatic vegetation in coastal and offshore bottom habitats from Georges Bank southward to Cape Hatteras. Generally, the following conditions exist where *Loligo* egg EFH is found: Bottom water temperatures between 10° C and 23° C; salinities of 30 to 32 ppt; and depths less than 50 m. Locations of fishery interactions with *Loligo* eggs are reported in Hatfield and Cadrin (2002). 1 1 Hatfield, E.M.C. and S.X. Cadrin. 2002. Geographic and temporal patterns in size and maturity of the longfin inshore squid ( *Loligo pealeii* ) off the northeastern United States. Fish. Bull. 100 (2): 200-213. This action adds a description of EFH and a map for *Loligo* eggs to the FMP that are based on the above information. Some Council members expressed concern that the proposed *Loligo* egg EFH areas are based on anecdotal information (i.e., interviews with fishermen). Also, they considered it likely that the proposed EFH areas are not constant, but instead shift from year to year. Nevertheless, the information on the locations of *Loligo* eggs provided in Hatfield and Cadrin

(2002)is the best scientific information that is currently available. Additionally, EFH designations are meant to include habitat areas used in different years. Failure to designate EFH for *Loligo* eggs in Amendment 9 would be inconsistent with the EFH requirements of the Magnuson-Stevens Act. To the degree that EFH is vulnerable to damage by fishing and/or non-fishing activities, management oversight of these activities in areas designated as EFH for a given life stage of any managed resource will allow for direct and indirect benefits for that resource. That oversight cannot occur, however, without first identifying the geographical locations of EFH. Amendment 9 identifies EFH for *Loligo* eggs based upon documented observations. By implementing Amendment 9, fishing and/or non-fishing activities that could potentially affect *Loligo* egg EFH would not be restricted. However, a requirement would be established whereby NMFS must be consulted to determine whether future Federal non-fishing activities would adversely impact *Loligo* egg EFH. Also, potential adverse impacts of MSB and other federally managed fisheries on *Loligo* egg EFH would have to be evaluated and, if necessary, minimized, in a future management action. Prohibition on Bottom Trawling to Reduce Gear Impacts on EFH by MSB Fisheries Amendment 9 considered reducing gear impacts on EFH by MSB fisheries in order to bring the FMP into compliance with the Magnuson-Stevens Act requirements. The FMP currently lacks adequate analysis of the effects of MSB fisheries on EFH for federally managed species within the geographic scope of the MSB fisheries. Such an analysis has been conducted as part of Amendment 9, and the results indicate that actions should be taken that would reduce impacts to EFH for federally managed species related to the activities of the MSB fisheries by prohibiting bottom trawling by MSB-permitted vessels. This action prohibits bottom trawling in Lydonia and Oceanographer Canyons by MSB-permitted vessels. MSB-permitted vessels transiting these canyons must stow all bottom trawl gear. While Lydonia and Oceanographer Canyons are only minimally used by vessels with bottom trawl gear, this action will prevent future expansion of MSB fisheries into these canyons. This prohibition was determined to be practicable by the Council and is similar to regulations associated with the Northeast Region's Monkfish FMP (i.e., vessels on a monkfish day-at-sea are prohibited from entering these canyons). Even though this action does not prohibit bottom trawling by other federally permitted vessels in Lydonia and Oceanographer Canyons, this prohibition would improve habitat quality in these canyons by reducing the adverse effects of bottom trawling on EFH for federally managed species. Decreased fishery interactions with the managed stocks, non-target species, and protected and endangered species in Lydonia and Oceanographer Canyons are also expected, and this would correspond to localized benefits to these resources. The areas affected by the action represent 3 percent of the total EFH for juvenile tilefish and 2 percent or less for several other species (barndoor skate, little skate, red hake, silver hake, and witch flounder). Short-term costs to fishery participants are related to the size of the area where bottom trawling is prohibited and how frequently those areas are utilized by fishery participants (see FRFA for complete economic analysis). The prohibition of bottom trawling by MSB-permitted vessels in Lydonia and Oceanographer Canyons is likely to have a minimal impact on revenues both for vessel owners and ports. Other restricted area alternatives considered by the Council would have provided greater habitat protection, but were not practicable because their potential economic impact would be higher. Comments and Responses NMFS received four comment letters on the proposed rule for Amendment 9; letters were from one industry representative and three individuals. *Comment 1* : The industry representative and one individual support the measure to extend the moratorium on entry into the *Illex* fishery, without a sunset provision. Commenters explain that this measure benefits current participants in the *Illex* fishery by protecting their investment and preventing overcapitalization. Additionally, the industry representative believes further reduction of capacity in the *Illex* fishery is not necessary because few incentives exist for new participants to enter the *Illex* fishery (i.e., it is a high volume/low value fishery and it is cost prohibitive to install a refrigerated seawater holding system necessary for *Illex* ), and the number of trips targeting *Illex* have declined each year since 1998. *Response:* Amendment 9 prevents expansion of the size of the directed *Illex* fleet beyond the number of permitted vessels in 2008, thereby preventing expansion in a fishery that is already overcapitalized and offering the greatest degree of protection to historic participants in the directed *Illex* fishery. However, Amendment 9 does not preclude a future action to reduce the overcapacity that already exists in the *Illex* fishery. *Comment 2* : One individual expressed support for a complete ban on all trawling that is harmful for the next 70 years. *Response* : While Amendment 9 does not consider a ban on trawling, this comment indicates general support for the measure to prohibit bottom trawling by MSB-permitted vessels in Lydonia and Oceanographer Canyons. *Comment 3* : The industry representative supports the measure to allow for multi-year specifications for all four species (mackerel, butterfish, *Illex* , and *Loligo* ) for up to 3 years, subject to annual review, provided the Council has flexibility to adjust measures through the specification process in response to new information. *Response* : NMFS concurs with the commenter. *Comment 4* : The industry representative does not support revising the biological reference points (i.e., F Target and F Threshold ) recommended by the SARC for *Loligo* because they argue that the status quo reference points are adequate to meet the overfishing requirements. The industry representative also believes that *Loligo* biomass trends have been relatively stable over the past several decades, that changes in indices were mainly due to environmental factors, and that stability of indices are due to the flexibility of life history patterns of *Loligo* . Additionally, the industry representative and one individual believe that language in the proposed rule stating that status quo biological reference points for *Loligo* “may be too liberal and subject the stock to overfishing” is unsupported by the Amendment 9 FSEIS or the report from the most recent *Loligo* squid stock assessment report. The comment letter from the individual further explains that the status quo reference points were rejected by the SARC because they were too analytically complex in light of the dynamic nature of the *Loligo* stock; therefore, the SARC recommended a simpler approach for calculating *Loligo* biological reference points. *Response* : Biological reference points for squid species, such as *Loligo* , need to account for their unique life history in order to ensure stock sustainability. *Loligo* is a sub-annual species and recruits in any given year are produced by the survivors from the previous year. However, annual population abundance levels are highly variable and recruitment levels are currently not predictable. A single recruitment failure could lead to stock collapse. In order to minimize the risk of recruitment overfishing, squid stocks are ideally managed by ensuring that a minimum percentage of the spawners escape each year. The status quo overfishing definition for *Loligo* does not minimize this risk because it maximizes yield, rather than adequate spawner escapement. For these reasons, NMFS disagrees with the conclusion that, because *Loligo* biomass trends have been relatively stable over the past several decades, the status quo reference points *Loligo* are adequate to meet the overfishing requirements. NMFS agrees with the commenters that the language in the proposed rule stating that status quo biological reference points for *Loligo* “may be too liberal and subject the stock to overfishing” may be too general and takes this opportunity to clarify the difference between the status quo biological reference points and the revised reference points in Amendment 9. The status quo reference points maximize yield, while the reference points in Amendment 9 are more risk averse because they are based on estimated fishing mortality rates during a time period (1987-2000) when stock biomass levels appeared to be fairly resilient to the levels of landings that occurred during that same period. In addition, NMFS agrees with the commenter that the status quo reference points were too analytically complex, in light of the dynamic nature of the *Loligo* stock, and that reference points in Amendment 9 are less complex and, therefore, more appropriate for the *Loligo* stock. *Comment 5* : The industry representative does not support the measure to designate EFH for *Loligo* eggs and asserts that *Loligo* egg EFH is based on anecdotal information and areas where eggs have been observed are likely to vary year to year. The comment letter explains that *Loligo* are a short-lived, highly productive animal whose abundance is more vulnerable to environmental conditions such as temperature, depth, and salinity. The letter notes that areas with observation of *Loligo* eggs are productive, historical fishing areas and there is no evidence that the bycatch of *Loligo* eggs reduces productivity or negatively impacts *Loligo* recruitment. Additionally, the commenter believes the proposed rule inappropriately speculates that a future action would evaluate fishing activities to determine if fishing activities adversely impact *Loligo* eggs in an attempt to impose prohibitions on mobile bottom-tending gear. *Response* : As described previously, Amendment 9 brings the FMP into compliance with the Magnuson-Stevens Act requirement that FMPs describe and identify EFH for each life history stage of a managed species. The MSB FMP currently identifies and describes EFH for all life stages of MSB species for which information is available, with the exception of *Loligo* eggs. Failure to designate EFH for *Loligo* eggs in Amendment 9 would be inconsistent with the EFH requirements of the Magnuson-Stevens Act. During the development of and public comment periods on Amendment 9, individuals expressed concern that the proposed *Loligo* egg EFH areas are based on anecdotal information (i.e., interviews with fishermen) and that the proposed EFH areas are not constant, but instead shift from year to year. Nevertheless, information on the location of *Loligo* eggs is based on information in a peer-reviewed, scientific journal and is, therefore, based on the best scientific information available. Additionally, EFH designations are designed to consider year-to-year variability in habitat requirements and implementation of Amendment 9 does not preclude revising descriptions of EFH for *Loligo* eggs as new information becomes available. In addition to requiring that EFH be designated for each life history stage of a managed species, the Magnuson-Stevens Act also requires that potential adverse impacts of MSB fisheries on *Loligo* egg EFH be evaluated. Explaining this requirement in the proposed rule was appropriate. Based upon the outcome of that evaluation, a range of habitat protection measures exist that could be implemented if protection of *Loligo* egg EFH is determined to be necessary. Prohibitions on mobile bottom-tending gear is not the only option for mitigating potential effects of MSB fisheries on *Loligo* egg EFH. *Comment 6* : The industry representative does not support the measure to prohibit bottom trawling by MSB-permitted vessels in Lydonia and Oceanographer Canyons. Opposition to prohibiting bottom trawling by MSB-permitted vessels in Lydonia and Oceanographer Canyons is based on the industry representatives belief that Amendment 9 offers no rationale on why prohibiting trawling in those areas will have an effect on MSB species and how bottom trawling for MSB species affects habitat in those areas. Further, the industry representative claims that this measure is being used to protect deep-sea corals, despite no evidence in Amendment 9 supporting that fishing for MSB species results in coral bycatch, and that, because Amendment 9 does not demonstrate that MSB fishing in these areas results in coral bycatch that NMFS and the Council have approved an alternative that is in opposition to NOAA's General Counsel and illegal. *Response* : As described previously, Amendment 9 considered reducing gear impacts on EFH by MSB fisheries in order to bring the FMP into compliance with the Magnuson-Stevens Act requirements. The FMP currently lacks adequate analysis of the effects of MSB fisheries on EFH for federally managed species within the geographic scope of the MSB fisheries. Such an analysis has been conducted as part of Amendment 9, and the results indicate that actions should be taken that would reduce impacts to EFH for federally managed species related to the activities of the MSB fisheries by prohibiting bottom trawling by MSB-permitted vessels. The prohibition of bottom trawling by MSB-permitted vessels in Lydonia and Oceanographer Canyons is not intended to protect deep-sea coral. Neither the proposed rule or FSEIS for Amendment 9 suggests that this prohibition is because deep-sea coral is bycatch in the MSB fisheries. The proposed rule explained that the proposed prohibition was similar to regulations associated with the Northeast Region's Monkfish FMP because both regulations are based on protecting EFH for fish species (e.g., tilefish) and preventing fishery expansion into offshore canyons that contain habitat vulnerable to bottom trawling. Because neither prohibition (i.e., vessels fishing under a monkfish day-at-sea are prohibited from fishing in Lydonia and Oceanographer Canyons; MSB-permitted vessels are prohibited from bottom trawling in Lydonia and Oceanographer Canyons) is based on protecting coral, neither prohibition is inconsistent with advice from NOAA's Office of General Counsel. Changes From the Proposed Rule There are no changes from the proposed rule. Classification The Administrator, Northeast Region, NMFS, determined that Amendment 9 to the Atlantic Mackerel, Squid, and Butterfish Fishery Management Plan is necessary for the conservation and management of the Atlantic mackerel, squid, and butterfish fisheries and that it is consistent with the Magnuson-Stevens Act and other applicable law. This proposed rule has been determined to be not significant for purposes of Executive Order 12866. The Council prepared an FSEIS for Amendment 9; a notice of availability was published on March 28, 2008 (73 FR 16672). The FSEIS describes the impacts of the Amendment 9 measures on the environment. The measures to allow for multi-year specifications and revised biological reference points for *Loligo* are largely administrative. However, they will provide for an expanded planning horizon for harvesting and processing activities and a fixed constant as a basis for the fishing target definition, respectively. The measure to designate EFH for *Loligo* eggs will not directly affect the environment, but it will allow future impacts to EFH for *Loligo* eggs to be identified and mitigated. Extending the moratorium on entry into the *Illex* fishery without a sunset provision and prohibiting bottom trawling by MSB-permitted vessels in Lydonia and Oceanographer Canyons will have short-term, negative economic impacts, but are expected to have long-term benefits on the biological and physical environment. NMFS, pursuant to section 604 of the Regulatory Flexibility Act (RFA), has prepared a FRFA in support of Amendment 9. The FRFA describes the economic impact that this final rule, along with other non-preferred alternatives, will have on small entities. The FRFA incorporates the economic impacts and analysis summarized in the IRFA for the proposed rule to implement Amendment 9, the comments and responses in this final rule, and the corresponding economic analyses prepared for Amendment 9 (e.g., the FSEIS and the RIR). The contents of these incorporated documents are not repeated in detail here. A copy of the IRFA, the RIR, and the FSEIS are available upon request (see ADDRESSES ). A description of the reasons for this action, the objectives of the action, and the legal basis for this final rule are found in Amendment 9 and the preamble to the proposed and final rules. Statement of Need The purpose of this action is to remedy deficiencies in the FMP and to address other issues that have arisen since Amendment 8 to the FMP became effective in 1999. A Summary of the Significant Issues Raised by the Public Comments in Response to the IRFA, a Summary of the Assessment of the Agency of Such Issues, and a Statement of Any Changes Made in the Proposed Rule as a Result of Such Comments As described previously, several of the measures in Amendment 9 are not anticipated to have direct economic effects on MSB fisheries; however, extending the moratorium on entry into the *Illex* fishery, without a sunset provision, and prohibiting bottom trawling in Lydonia and Oceanographer Canyons by MSB-permitted vessels may have economic effects on MSB fisheries. All public comments on issues relative to the IRFA, in which commenters expressed concern directly and indirectly about the economic impacts of the measures in Amendment 9, are described in the “Comments and Responses” section of the preamble of this rule. NMFS's assessment of the issues raised in comments and responses is also provided in the “Comments and Responses” section of the preamble of this final rule and, therefore, are not repeated here. After taking all public comments into consideration, NMFS approved Amendment 9 on June 17, 2008. Description and Estimate of Number of Small Entities to Which the Rule Would Apply There are no large entities participating in this fishery, as none grossed more than 4 million dollars annually; therefore, there are no disproportionate economic impacts on small entities. The measures in Amendment 9 affect all MSB-permitted vessels; however, many of the proposed measures (e.g., multi-year specifications, revised biological reference points for *Loligo* , designation of EFH for *Loligo* eggs) are not expected to have direct economic impacts. Section 6.5 (Human Communities) in the Amendment 9 FSEIS describes the number of vessels and revenue information for each of the MSB fisheries; therefore, that information is not repeated here. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements This action does not contain any new collection-of-information, reporting, recordkeeping, or other compliance requirements. It does not duplicate, overlap, or conflict with any other Federal rules. Description of the Steps the Agency has taken to Minimize the Significant Economic Impact on Small Entities Consistent with the Stated Objectives of Applicable Statutes, Including a Statement of the Factual, Policy, and Legal Reasons for Selecting the Alternative Adopted in the Final Rule and Why Each One of the Other Significant Alternatives to the Rule Considered by the Agency Which Affect the Impact on Small Entities was Rejected As described previously, several of the approved measures in Amendment 9 are not anticipated to have direct economic effects on MSB fisheries. Implementing multi-year specifications and management measures for all four managed species has the potential to provide MSB fishery participants with an expanded planning horizon for harvesting and processing activities. Therefore, it may have positive economic effects for MSB fishery participants when compared to the non-selected alternative of no action (annual specifications and management measures for mackerel, *Illex* , and butterfish; multi-year specifications and management measures for *Loligo* ). This could lead to better business plans and ultimately greater economic benefits. Amendment 9 contains two alternatives that would have provided for multi-year specifications and management measures; the selected alternative allows for multi-year specifications for up to 3 years, subject to annual review, and a non-selected alternative would have provided for multi-year specifications for up to 5 years, subject to annual review. The 3-year alternative was selected because management based on 3-year stock projections, rather than 5-year stock projections, is likely more appropriate for MSB species, given their relatively brief life spans, but it is difficult to assign a dollar value to this effect. The revisions to biological reference points (F Target and F Threshold ) for *Loligo* are primarily administrative and are not expected to have direct economic effects on fishery participants. Revising the reference points is consistent with Magnuson-Stevens Act requirements to use the best scientific information available, as compared to the non-selective alternative of no action (using status quo reference points for F Target and F Threshold ), but the economic impacts of the proposed action are difficult to predict. The revised reference points are not expected to result in substantial changes to the *Loligo* quota; the annual quota has been set at 17,000 mt each year since 2001. Consumer demand for *Loligo* will affect *Loligo* prices, which, in turn, will result in economic impacts on *Loligo* harvesters that are currently unquantifiable. If, on the other hand, the *Loligo* stock size decreases such that harvest costs increase, then *Loligo* prices would be expected to increase. Because the revised biological reference points are considered more robust, with respect to stock sustainability, than the status quo reference points, it is expected that there would be some long-term economic benefits associated with the revised reference points as compared to benefits associated with the status quo reference points. The measure designating EFH for *Loligo* eggs is not anticipated to have any direct economic effects on MSB participants, when compared to the non-selected alternative of not designating EFH for *Loligo* eggs. Designating EFH for *Loligo* eggs does not result in an immediate action that would restrict the actions of any regulated entity. Additionally, the measure extending the moratorium on entry into the *Illex* fishery, without a sunset provision, is not expected to have any direct economic effects on MSB participants, when compared to the non-selected alternatives (i.e., terminating the moratorium, allowing the moratorium to expire in 2009, extending the moratorium without a sunset provision, but allowing new entry through permit transfer), because the moratorium on entry into the directed *Illex* fishery has been in place since 1997. Failure to extend the moratorium could result in further overcapitalization of this sector of the fishing industry, which in turn could have negative economic consequences for the vessels that depend upon the *Illex* resource. The measure in Amendment 9 that may have economic effects on MSB fisheries is the prohibition on bottom trawling in Lydonia and Oceanographer Canyons by MSB-permitted vessels. The selected alternative and non-selected alternatives prohibiting bottom trawling (either at the head of Hudson Canyon or in the tilefish habitat area of particular concern (HAPC)) would improve habitat quality in the closed areas by reducing the adverse impacts of bottom trawling by MSB-permitted vessels as compared to the no action, non-selected alternative (no new areas closed to bottom trawling by MSB-permitted vessels). Decreased fishery interactions with the managed stocks, non-target species, and protected and endangered species are also expected to be associated with action alternatives, and this would correspond to localized benefits to these resources. Short-term costs to fishery participants are related to the size of the closure area. Analyses of ex-vessel revenues from MSB-permitted bottom trawl vessels were conducted for 2001-2004. The results indicated that closing tilefish HAPC (non-selected alternative) to bottom otter trawling during that period would have reduced annual revenue from bottom trawling by 10 percent or more for about 162 MSB-permitted vessels. Closing the head of Hudson Canyon (non-selected alternative) to bottom trawling in 2001-2004 would have reduced ex-vessel revenues by 10 percent or more for about 64 MSB-permitted bottom trawl vessels. Geographical analysis of fishing effort reveals minimal use of bottom trawl gear in Lydonia and Oceanographer Canyons; therefore, of the significant alternatives considered, the closure of Lydonia and Oceanographer Canyons (selected alternative) would have minimis potential economic impacts on revenue for vessel owners. List of Subjects in 50 CFR Part 648 Fisheries, Fishing, Recordkeeping and reporting requirements. Dated: June 26 2008. John Oliver, Deputy Assistant Administrator for Operations, National Marine Fisheries Service. For the reasons set out in the preamble, 50 CFR part 648 is amended as follows: PART 648—FISHERIES OF THE NORTHEASTERN UNITED STATES 1. The authority citation for part 648 continues to read as follows: Authority: 16 U.S.C. 1801 *et seq.* 2. In § 648.4, paragraph (a)(5)(i) is revised to read as follows: § 648.4 Vessel permits.

(a)* * *

(5)* * *

(i)*Loligo* squid/butterfish and *Illex* squid moratorium permits. 3. In § 648.14, paragraph (p)(12) is added to read as follows: § 648.14 Prohibitions.

(p)* * *

(12)Enter or be in the areas described at § 648.23(a)(4). 4. In § 648.20, paragraph

(b)is revised to read as follows: § 648.20 Maximum optimum yield (OYs).

(b)*Loligo* -the catch associated with a fishing mortality rate of F Threshold . 5. In § 648.21, paragraphs (a)(1) through

(4)are revised to read as follows: § 648.21 Procedures for determining initial annual amounts. (a)* * *

(1)Initial OY (IOY), including research quota (RQ), domestic annual harvest (DAH), and domestic annual processing

(DAP)for *Illex* squid, which, subject to annual review, may be specified for a period of up to 3 years;

(2)IOY, including RQ, DAH, DAP, and bycatch level of the total allowable level of foreign fishing (TALFF), if any, for butterfish, which, subject to annual review, may be specified for a period of up to 3 years;

(3)IOY, including RQ, DAH, DAP, joint venture processing (JVP), if any, and TALFF, if any, for mackerel, which, subject to annual review, may be specified for a period of up to 3 years. The Monitoring Committee may also recommend that certain ratios of TALFF, if any, for mackerel to purchases of domestic harvested fish and/or domestic processed fish be established in relation to the initial annual amounts.

(4)Initial OY (IOY), including research quota (RQ), domestic annual harvest (DAH), and domestic annual processing

(DAP)for *Loligo* squid, which, subject to annual review, may be specified for a period of up to 3 years; and 6. In § 648.23, paragraph (a)(4) is added to read as follows: § 648.23 Gear restrictions. (a)* * *

(4)*Mackerel, squid, and butterfish bottom trawling restricted areas* .

(i)*Oceanographer Canyon* . No permitted mackerel, squid, or butterfish vessel may fish with bottom trawl gear in the Oceanographer Canyon or be in the Oceanographer Canyon unless transiting. Vessels may transit this area provided the bottom trawl gear is stowed in accordance with the provisions of paragraph

(b)of this section. Oceanographer Canyon is defined by straight lines connecting the following points in the order stated (copies of a chart depicting this area are available from the Regional Administrator upon request): Oceanographer Canyon Point N. Lat. W. Long. OC1 40°10.0′ 68°12.0′ OC2 40°24.0′ 68°09.0′ OC3 40°24.0′ 68°08.0′ OC4 40°10.0′ 67°59.0′ OC1 40°10.0′ 68°12.0′

(ii)*Lydonia Canyon* . No permitted mackerel, squid, or butterfish vessel may fish with bottom trawl gear in the Lydonia Canyon or be in the Lydonia Canyon unless transiting. Vessels may transit this area provided the bottom trawl gear is stowed in accordance with the provisions of paragraph

(b)of this section. Lydonia Canyon is defined by straight lines connecting the following points in the order stated (copies of a chart depicting this area are available from the Regional Administrator upon request): Lydonia Canyon Point N. Lat. W. Long. LC1 40°16.0′ 67°34.0′ LC2 40°16.0′ 67°42.0′ LC3 40°20.0′ 67°43.0′ LC4 40°27.0′ 67°40.0′ LC5 40°27.0′ 67°38.0′ LC1 40°16.0′ 67°34.0′ [FR Doc. E8-14937 Filed 6-30-08; 8:45 am] BILLING CODE 3510-22-S 73 127 Tuesday, July 1, 2008 Proposed Rules DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG-115457-08] RIN 1545-BH88 Extension of Time for Filing Returns AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking by cross-reference to temporary regulations and notice of proposed rulemaking. SUMMARY: In the Rules and Regulations section of this issue of the **Federal Register** , the IRS is issuing final and temporary regulations relating to the simplification of procedures for automatic extensions of time to file certain returns. These simplified procedures are aimed at reducing overall taxpayer burden. The text of the temporary regulations also serves as the text of these proposed regulations. DATES: Written or electronic comments and requests for a public hearing must be received by September 29, 2008. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-115457-08), room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-115457-08), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC. Alternatively, taxpayers may submit comments electronically via the Federal eRulemaking Portal at *http://www.regulations.gov* (IRS REG-115457-08). FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Matthew P. Howard,

(202)622-4910; concerning submissions of comments and requests for a public hearing, Oluwafunmilayo Taylor

(202)622-7180 (not toll-free numbers). SUPPLEMENTARY INFORMATION: Background and Explanation of Provisions Partnerships, Trusts, and Estates Final and temporary regulations in the Rules and Regulations section of this issue of the **Federal Register** amend 26 CFR part 1 relating to section 6081. The text of the temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the amendments. The temporary regulations allow certain pass-through entities (most partnerships, estates, and certain trusts) to obtain an automatic five-month extension of time to file certain returns if an application is submitted on Form 7004, “Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns.” In a previous notice of proposed rulemaking by cross-reference to temporary regulations, it was proposed that pass-through entities be allowed to obtain an automatic six-month extension of time to file. In response to comments received regarding the automatic six-month extension of time to file, and in an attempt to alleviate overall taxpayer burden, the Treasury Department and IRS have determined that the automatic extension period for certain pass-through entities should be five months. As a result, a majority of taxpayers with ownership interests in these pass-through entities will receive, in a timely manner, information returns from the entities that they need in order to complete their own income tax returns before those returns are due. For example, an individual income taxpayer with a six-month extension of time to October 15th to file the Form 1040, “U.S. Individual Income Tax Return” will now receive a Schedule K-1, “Partner's Share of Income, Credits, Deductions, etc.” from a partnership in which the taxpayer holds an interest shortly after the partnership files its Form 1065, “U.S. Return of Partnership Income” on its extended due date of September 15th. Although the Treasury Department and IRS are attempting to alleviate overall taxpayer burden, because the automatic extension period for certain pass-through entities will now be five months, comments are requested on whether a five-month extension of time to file for these pass-through entities might increase overall taxpayer burden. Please follow the instructions in the “Comments and Requests for a Public Hearing” portion of this preamble. Pension Excise Taxes This notice of proposed rulemaking also proposes to amend 26 CFR part 54. This amendment would allow filers of Form 8928, “Return of Certain Excise Taxes Under Chapter 43 of the Internal Revenue Code,” to obtain an automatic six-month extension of time to file the return after the date prescribed for filing the return. Special Analyses It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. Although these regulations reference forms that are approved under the Paperwork Reduction Act (44 U.S.C. chapter 35), the regulations themselves do not impose a collection of information on small entities. Therefore the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Internal Revenue Code, this regulation has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact. Comments and Requests for a Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed original and 8 copies) and electronic comments that are submitted timely to the IRS. The IRS and Treasury Department specifically request comments on the clarity of the proposed regulations and how they can be made easier to understand. All comments will be available for public inspection and copying. A public hearing will be scheduled if requested in writing by any person that timely submits comments. If a public hearing is scheduled, notice of the date, time, and place for the public hearing will be published in the **Federal Register** . Drafting Information The principal author of these regulations is Matthew P. Howard of the Office of the Associate Chief Counsel (Procedure and Administration). List of Subjects 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. 26 CFR Part 54 Pension excise taxes, Reporting and recordkeeping requirements. Proposed Amendments to the Regulations Accordingly, 26 CFR parts 1 and 54, are proposed to be amended to read 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 1.6081-2 is added to read as follows: § 1.6081-2 Automatic extension of time to file certain returns filed by partnerships. [The text of proposed § 1.6081-2 is the same as the text of § 1.6081-2T(a) through

(i)published elsewhere in this issue of the **Federal Register** ]. **Par. 3.** Section 1.6081-6 is added to read as follows: § 1.6081-6 Automatic extension of time to file estate or trust income tax return. [The text of proposed § 1.6081-6 is the same as the text of § 1.6081-6T(a) through

(h)published elsewhere in this issue of the **Federal Register** ]. PART 54—PENSION EXCISE TAXES **Par. 4.** The authority citation for part 54 is amended by adding an entry in numerical order to read in part as follows: Authority: 26 U.S.C. 7805 * * * Section 54.6081-1 also issued under authority of 26 U.S.C. 6081(a). **Par. 5.** Section 54.6081-1 is added to read as follows: § 54.6081-1 Automatic extension of time for filing returns for certain excise taxes under Chapter 43.

(a)*In general.* An employer, other person or health plan that is required to file a return on Form 8928, “Return of Certain Excise Taxes Under Chapter 43 of the Internal Revenue Code,” will be allowed an automatic 6-month extension of time to file the return after the date prescribed for filing the return if the employer, other person or health plan files an application under this section in accordance with paragraph

(b)of this section.

(b)*Requirements.* To satisfy this paragraph (b), an employer, other person or health plan must—

(2)File the application on or before the date prescribed for filing the return with the Internal Revenue Service office designated in the application's instructions; and

(3)Remit the amount of the properly estimated unpaid tax liability on or before the date prescribed for payment.

(c)*No extension of time for the payment of tax.* An automatic extension of time for filing a return granted under paragraph

(a)of this section will not extend the time for payment of any tax due on such return.

(d)*Termination of automatic extension.* The Commissioner may terminate an automatic extension at any time by mailing to the estate or trust a notice of termination at least 10 days prior to the termination date designated in such notice. The Commissioner must mail the notice of termination to the address shown on the Form 7004 or to the estate or trust's last known address. For further guidance regarding the definition of last known address, see § 301.6212-2 of this chapter.

(e)*Penalties.* See section 6651 for failure to file a pension excise tax return or failure to pay the amount shown as tax on the return.

(f)*Effective/applicability date* . This section is applicable for applications for an automatic extension of time to file a return due under chapter 43, filed on or after the date final regulations are published in the **Federal Register** . Linda E. Stiff, Deputy Commissioner for Services and Enforcement. [FR Doc. E8-14901 Filed 6-30-08; 8:45 am] BILLING CODE 4830-01-P PENSION BENEFIT GUARANTY CORPORATION 29 CFR Parts 4001, 4022, and 4044 RIN 1212-AA98 Bankruptcy Filing Date Treated as Plan Termination Date for Certain Purposes; Guaranteed Benefits; Allocation of Plan Assets; Pension Protection Act of 2006 AGENCY: Pension Benefit Guaranty Corporation. ACTION: Proposed rule. SUMMARY: This is a proposed rule to implement section 404 of the Pension Protection Act of 2006. Section 404 amended Title IV of ERISA to provide that when an underfunded, PBGC-covered, single-employer pension plan terminates while its contributing sponsor is in bankruptcy, sections 4022 and 4044(a)(3) of ERISA are to be applied by treating the date the sponsor's bankruptcy petition was filed as the termination date of the plan. Section 4022 determines which benefits are guaranteed by PBGC, and section 4044(a)(3) determines which benefits are entitled to priority in “priority category 3” in the statutory hierarchy for allocating the assets of a terminated plan. Thus, under the 2006 amendments, when a plan terminates while the sponsor is in bankruptcy, the amount of benefits guaranteed by PBGC and the amount of benefits in priority category 3 are fixed at the date of the bankruptcy filing rather than at the plan termination date. This will, in most cases, reduce the amount of guaranteed benefits and the amount of benefits in priority category 3. DATES: Comments must be submitted on or before September 2, 2008. ADDRESSES: Comments may be submitted by any of the following methods: *Federal eRulemaking Portal: http://www.regulations.gov* . Follow the Web site instructions for submitting comments. *E-mail: reg.comments@pbgc.gov* . *Fax:* 202-326-4224. *Mail or Hand Delivery:* Legislative and Regulatory Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005-4026. All submissions must include the Regulation Identifier Number for this rulemaking (RIN 1212-AA98). Comments received, including personal information provided, will be posted to *http://www.pbgc.gov* . Copies of comments may also be obtained by writing to Disclosure Division, Office of the General Counsel, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005-4026, or calling 202-326-4040 during normal business hours. (TTY and TDD users may call the Federal relay service toll-free at 1-800-877-8339 and ask to be connected to 202-326-4040.) FOR FURTHER INFORMATION CONTACT: John H. Hanley, Director, or Gail Sevin, Manager, Legislative and Regulatory Department; or James J. Armbruster, Assistant Chief Counsel, Office of Chief Counsel; 1200 K Street, NW., Washington, DC 20005-4026. Mr. Hanley and Ms. Sevin may be reached at 202-326-4024; Mr. Armbruster at 202-326-4020, extension 3068. (TTY/TDD users may call the Federal relay service toll-free at 1-800-877-8339 and ask to be connected to 202-326-4024 or 202-326-4020.) SUPPLEMENTARY INFORMATION: Background The Pension Benefit Guaranty Corporation (“PBGC”) administers the single-employer pension plan termination insurance program under Title IV of the Employee Retirement Income Security Act of 1974 (“ERISA”). The program covers private-sector, single-employer defined benefit plans, which pay premiums to PBGC each year. Covered plans that are underfunded may terminate either in a distress termination under section 4041(c) of ERISA or in an involuntary termination (one initiated by PBGC) under section 4042 of ERISA. When such a plan terminates, PBGC typically is appointed statutory trustee of the plan, and becomes responsible for paying benefits in accordance with the provisions of Title IV. The amount of benefits paid by PBGC under a terminated, trusteed plan is determined by several factors. The starting point is the plan itself: PBGC pays only those benefits that were provided under the plan and that have been earned by the participant under the plan terms. But PBGC does not guarantee all benefits earned under a terminated plan. There are statutory and regulatory limits on PBGC's guarantee, which are discussed below. On the other hand, a participant may sometimes receive from PBGC more than his guaranteed benefits, if either the allocation under section 4044 of ERISA of the plan's assets or the allocation under section 4022(c) of PBGC's recoveries, or both, results in additional benefits being payable. When a plan terminates, a termination date must be established in accordance with section 4048 of ERISA. If the plan is underfunded and terminates in a distress or involuntary termination, the termination date is the date agreed upon by the plan administrator and PBGC or, if they do not agree, the date set by a United States district court. The termination date is a critical date for many purposes under Title IV of ERISA. For example, it is the date as of which a plan sponsor's liability to the PBGC for a terminated plan's unfunded benefit liabilities is determined under section 4062(b) of ERISA. Most relevant to this proposed regulation, the termination date—under prior law—was the date that governed the amount of benefits participants in the terminated plan would receive. The amount of benefits guaranteed by PBGC under section 4022 of ERISA and the amount of any additional benefits payable from the plan's assets under section 4044 or from PBGC's recoveries under section 4022(c) were all determined as of the termination date. Many single-employer pension plans that terminate in a distress or involuntary termination do so while the plan sponsor is in bankruptcy. Indeed, two of the criteria for a distress termination are based on the sponsor's liquidating or reorganizing in bankruptcy. *See* ERISA section 4041(c)(2)(B)(i), (ii). A persistent problem for the PBGC insurance program has been that the funded status of plans often deteriorates significantly while the plan sponsor is in bankruptcy. Many sponsors have failed to make minimum funding contributions to their plans during the bankruptcy, while the plan continues to pay retiree benefits as usual and employees continue to earn additional benefits. Because the termination date often comes after the sponsor has been in bankruptcy for some time, the result has been that PBGC's losses often increase substantially during the course of a bankruptcy proceeding. Congress sought to address this problem in the Pension Protection Act of 2006 (“PPA 2006”), which the President signed into law on August 17, 2006. Section 404 of PPA 2006 provides generally that, if a PBGC-insured plan terminates while its contributing sponsor is in bankruptcy, PBGC's guarantees and the amount of benefits entitled to priority in “priority category 3” in the ERISA section 4044 allocation of the plan's assets are determined as of the date that the sponsor's bankruptcy petition was filed (the “bankruptcy filing date”) rather than as of the termination date. This means, for example, that benefits earned by participants after the bankruptcy filing date are not guaranteed. The changes generally reduce the amount of benefits guaranteed by PBGC and the amount of benefits receiving priority treatment in the section 4044 asset allocation. By protecting PBGC from growth in its liabilities during bankruptcy proceedings, these changes reduce claims on PBGC's funds and thereby strengthen the PBGC insurance program. The changes are described more fully below. PPA 2006 provided that the changes made by section 404 of PPA 2006 are effective for plan terminations that occur during the bankruptcy of the plan sponsor, if the bankruptcy filing date was on or after September 16, 2006 (the date that is 30 days after PPA's enactment). The terminations to which the changes apply are referred to in this preamble and in the proposed regulation as PPA 2006 bankruptcy terminations. Of course, if a plan's termination date is the same as the bankruptcy filing date, then the plan is unaffected by the changes made by section 404. Overview of Proposed Regulatory Changes The proposed regulation implements the statutory changes, described above, made by section 404 of PPA 2006. It would amend PBGC's regulations on Benefits Payable in Terminated Single-Employer Plans, 29 CFR part 4022; Termination of Single-Employer Plans, 29 CFR part 4041; and Allocation of Assets in Single-Employer Plans, 29 CFR part 4044. The amendments would establish rules for PPA 2006 bankruptcy terminations, the most important of which are: • A participant's guaranteed benefit is based on the amount of his service and the amount of his compensation (if applicable) as of the bankruptcy filing date. • The Title IV guarantee limits—the maximum guaranteeable benefit, the phase-in limit, and the accrued-at-normal limit—are all determined as of the bankruptcy filing date. • Only benefits that are nonforfeitable as of the bankruptcy filing date are guaranteed. Thus, for example, early retirement subsidies and disability benefits to which a participant became entitled after the bankruptcy filing date are not guaranteed. • Participants who retired under a subsidized early retirement benefit (or a disability or other benefit) to which they became entitled between the bankruptcy filing date and the termination date will continue in pay status, or may go into pay status if they are not already receiving a benefit, but the amount of the benefit is reduced to reflect that the subsidy (or other benefit) is not guaranteed. • The benefits in priority category 3 under section 4044(a) of ERISA are benefits in pay status, or that could have been in pay status, three years before the bankruptcy filing date, generally taking into account only benefit increases that were effective throughout the five-year period ending on the bankruptcy filing date. • Benefits under section 4022(c) of ERISA are based on (among other things) the value of a plan's unfunded nonguaranteed benefits. Because section 404 of PPA 2006 has changed guaranteed benefits and benefits in priority category 3, the unfunded nonguaranteed benefits are changed and therefore the section 4022(c) benefits are also changed. • Where a plan has more than one contributing sponsor and all contributing sponsors did not file for bankruptcy on the same date, PBGC determines the date to treat as the bankruptcy filing date, based on the facts and circumstances. Although the bankruptcy filing date thus displaces a plan's termination date as the controlling date for certain purposes, the termination date continues to be important for other purposes. For example, although the monthly amount of benefits guaranteed and the monthly amount of benefits in priority category 3 will be determined by reference to the bankruptcy filing date, the value of those benefits is determined—as before PPA 2006—as of the plan's termination date. The value of a terminated plan's assets, too, is determined as of the termination date. Also, determinations under sections 4062(a) and

(b)of ERISA of the parties liable for a plan's unfunded benefit liabilities and the amount of those liabilities are made as of the termination date. The proposed regulation also makes some minor changes unrelated to PPA 2006. The discussion below describes in detail the proposed regulatory changes, as well as areas in which no change to the regulations is needed. Guaranteed Benefits Prior Law PBGC's guarantee is limited, under section 4022(a) of ERISA, to nonforfeitable benefits under a terminated plan. Before PPA 2006, the crucial date for determining guaranteed benefits was the plan's termination date, established under section 4048 of ERISA. PBGC had to determine the amount of benefits participants had earned under the plan, and whether those benefits were nonforfeitable, as of the termination date. In addition, PBGC's guarantee is subject to two important limitations under section 4022(b) of ERISA: the maximum guaranteeable benefit (sometimes referred to as the maximum guarantee limit or the maximum insurance limit) under section 4022(b)(3), and the phase-in limit under sections 4022(b)(1) and 4022(b)(7). The maximum guaranteeable benefit essentially places a ceiling, or cap, on the amount of a participant's guaranteed benefit. The maximum monthly guaranteeable benefit under section 4022(b)(3)(B) was $750 per month for a 65-year-old participant receiving a straight-life annuity in a plan that terminated in 1974. (The maximum guaranteeable benefit may be lower, under section 4022(b)(3)(A), depending on the participant's average monthly gross income, but this limitation rarely applies, and the discussion and examples in this regulation assume that it does not apply.) The $750 monthly figure is adjusted each year based on the contribution and wage base under the Social Security Act; for example, for a plan whose termination date was in 2005 the maximum monthly amount at age 65 payable as a straight-life annuity was $3,801.14. The maximum guaranteeable benefit for an individual participant depends on his age at the later of the plan's termination date or the date he begins receiving his benefit from PBGC, and on the form in which the benefit is paid. For example, the maximum guaranteeable benefit is lower if the participant begins receiving benefits from PBGC before age 65, or if the benefit form will provide a survivor benefit after the participant dies. The phase-in limit under sections 4022(b)(1) and 4022(b)(7) of ERISA provides that PBGC's guarantee of a benefit increase resulting from amendment of an existing plan or adoption of a new plan is phased in over a five-year period. PBGC's guarantee is equal to the number of full years before the termination date that the increase was in effect, multiplied by 20% (or $20 per month, if greater). For example, a benefit increase that was in effect more than two years before the termination date but less than three years is 40% guaranteed (or $40 per month, if greater, but not more than the amount of the increase). A benefit increase is considered to be in effect from the later of the date the benefit increase was adopted or the date it became effective. There is a third limitation on PBGC's guarantee that the agency adopted when it issued its initial guaranteed benefits regulation. (40 FR 43509, Sept. 22, 1975.) Under § 4022.21 of PBGC's regulation, PBGC's guarantee is generally limited to the amount of the participant's benefit payable as a straight-life annuity commencing at normal retirement age. This limit, often referred to as the “accrued-at-normal” limit, means that PBGC generally does not guarantee temporary supplemental benefits payable to a participant who retires before normal retirement age. Consider, for example, a participant who was entitled under his plan to receive $1,000 per month as a straight-life annuity starting at his normal retirement date but who could retire early under certain conditions with an unreduced benefit of $1,000 plus a supplement of $400 per month payable until age 62. If the participant retires early, PBGC generally will not guarantee more than $1,000 per month. Before PPA 2006, the maximum guaranteeable benefit, the phase-in limit, and the accrued-at-normal limit were all calculated as of the termination date of a plan. Accordingly, before PPA 2006, a participant's guaranteed benefit would be the amount of the nonforfeitable plan benefit to which the participant was entitled as of the termination date, subject to the guarantee limits applicable as of that date. PPA 2006 Changes Section 404 of PPA 2006 changed the way in which the amount of guaranteed benefits will be determined in PPA 2006 bankruptcy terminations. Section 404(a) of PPA 2006 added a new subsection

(g)to section 4022 of ERISA. New section 4022(g) provides as follows: Bankruptcy Filing Substituted for Termination Date.—If a contributing sponsor of a plan has filed or has had filed against such person a petition seeking liquidation or reorganization in a case under title 11, United States Code, or under any similar Federal law or law of a state or political subdivision, and the case has not been dismissed as of the termination date of the plan, then this section shall be applied by treating the date such petition was filed as the termination date of the plan. The “section” referred to is section 4022 of ERISA, which as explained above determines the amount of a participant's guaranteed benefit. Thus, for a plan that terminates while its contributing sponsor is in bankruptcy, section 4022(g) requires that a participant's guaranteed benefit be determined by treating the date the sponsor's bankruptcy petition was filed (the “bankruptcy filing date”) as if it were the termination date of the plan. This change has a number of important consequences. First, it means that a participant's guaranteed benefit can be no greater than the amount of his plan benefit as of the bankruptcy filing date. Even though the plan in many cases will have continued after the bankruptcy filing date and (in the absence of a plan freeze) participants will have continued to accrue benefits after that date, those post-bankruptcy accruals will not be guaranteed. Thus, under the change, a participant's guaranteed benefit will be calculated by reference to the amount of his service and the amount of his compensation (or the amount of the plan's benefit “multiplier,” depending on how the plan calculates benefits) as of the bankruptcy filing date. Second, only benefits that were nonforfeitable as of the bankruptcy filing date will be guaranteed. For example, in a plan that has five-year “cliff” vesting, a participant with less than five years of service as of the bankruptcy filing date will have no guaranteed benefit, even if his benefit becomes vested by the section 4048 termination date. Similarly, if a participant becomes entitled to a disability retirement benefit or an early retirement subsidy after the bankruptcy filing date but before the termination date, that disability benefit or subsidy will not be guaranteed. Third, the PBGC guarantee limits—the maximum guaranteeable benefit, the phase-in limit, and the accrued-at-normal limit—will all be determined as of the bankruptcy filing date. For example, if the sponsor's bankruptcy filing date is in 2008 and the plan's termination date is in 2010, the maximum guaranteeable benefit for all plan participants will be based on the 2008 limit. Also, an individual participant's maximum guaranteeable benefit will be based on his age and form of benefit as of the later of the bankruptcy filing date or the date he begins to receive his benefit. Similarly, the phase-in rule will be applied by counting the number of full years before the bankruptcy filing date that a benefit increase has been in effect. The accrued-at-normal limit, too, will be determined based on the facts as of the bankruptcy filing date. The proposed rule would modify PBGC's regulations to reflect the changes described above for PPA 2006 bankruptcy terminations. In most cases, the proposed regulation simply provides that in a PPA 2006 bankruptcy termination, “bankruptcy filing date” is substituted for “termination date” each place that “termination date” appears in a specified section or paragraph of the regulation. The proposed regulation provides a number of examples to clarify what this means in various situations. The regulations are unchanged for plans to which the changes do not apply (non-PPA 2006 bankruptcy terminations). Aggregate Limit on Benefits Guaranteed Title IV of ERISA includes an additional limitation on PBGC's guarantee that applies only when a participant receives benefits under two or more trusteed plans. Section 4022B of ERISA provides that, in such a situation, the sum of the guaranteed benefits payable from PBGC funds with respect to all such plans may not exceed the maximum guaranteeable benefit payable “as of the date of the last plan termination.” PPA 2006 made no change to this provision. PBGC therefore proposes to make no change to part 4022B of its regulations, and proposes to calculate the aggregate limit, as previously, by reference to a participant's maximum guaranteeable benefit as of the section 4048 termination date of the latest-terminating plan. Benefits Payable Under the Section 4044 Allocation Prior Law PPA 2006 also made an important change to the allocation of a terminated plan's assets under section 4044 of ERISA. To understand this change, it is important to understand how the section 4044 allocation worked before the PPA 2006 amendment. As noted above, a participant may receive more than his guaranteed benefit from PBGC, depending on the amount of the plan's assets and whether his benefits are entitled to priority under ERISA's allocation scheme. Section 4044 of ERISA specifies how a plan's assets are to be allocated among various classes of guaranteed and nonguaranteed benefits of participants. Part 4044 of PBGC's existing regulations provides detail about how assets and benefits are valued, and how the assets are allocated to the benefits. (Section 4022(c) of ERISA may provide additional benefits, as discussed below.) The first step in the section 4044 allocation is to assign each participant's plan benefits to one or more of six “priority categories” that are described in paragraphs

(1)through

(6)of subsection 4044(a) of ERISA. Before PPA 2006, the benefits in each priority category were as follows: *Priority category 1:* The portion of a participant's accrued benefit derived from the participant's voluntary contributions. *Priority category 2:* The portion of a participant's accrued benefit derived from the participant's mandatory contributions. *Priority category 3:* The portion of a participant's benefit that was in pay status as of the beginning of the three-year period ending on the termination date of the plan, or that would have been in pay status at the beginning of such three-year period if the participant had retired before the beginning of the three-year period. In either case, however, the benefits in this category are limited to the lowest annuity benefit payable under the plan provisions at any time during the five-year period ending on the termination date ( *e.g.* , disregarding benefit increases in the five-year period). *Priority category 4:* All other guaranteed benefits, and benefits that would be guaranteed but for the aggregate limit of section 4022B of ERISA and the stricter phase-in limit that applies to business owners. *Priority category 5:* All other nonforfeitable benefits under the plan. *Priority category 6:* All other benefits under the plan. PBGC's regulations make a distinction between a participant's “gross” benefit in a priority category and his “net” benefit in that category (although the regulations do not use these terms). The gross benefit is the total amount of the participant's benefit that would be in a priority category, if benefits in higher priority ( *i.e.* , lower numbered) categories were not subtracted. The net benefit is the amount in the priority category after subtracting amounts in higher priority categories. For example, a participant's net benefit in priority category 4 generally excludes any portion of his guaranteed benefit that was allocated to priority categories 2 or 3. *See* 29 CFR 4044.10(c). Descriptions of benefits in a priority category usually refer to the net benefits in that category, and the discussion below generally follows that usage, unless otherwise indicated. Once the benefits of each participant have been assigned to the applicable priority category or categories, the benefits of all participants are valued, using the rules in PBGC's valuation regulation, 29 CFR part 4044, subpart B. The terminated plan's assets are also valued (at fair market value). The valuation of both the plan benefits and the plan assets is done as of the termination date. After the plan benefits and assets are valued, the assets are “poured through” the priority categories, beginning with priority category 1. If the assets are sufficient to pay all benefits in priority category 1, then they pour into priority category 2, and so on until either all benefits in all categories have been covered or until the assets are insufficient to pay all benefits within a category. Where assets are insufficient to pay all benefits within a category, they are allocated among the benefits in that category according to the rules in part 4044 of PBGC's regulations. It is important to note that benefits in priority category 3—which may or may not be guaranteed—come ahead of guaranteed benefits in priority category 4 in the section 4044 asset allocation. Thus, for example, if a terminated plan's assets are sufficient to cover all benefits in priority category 3, those benefits will be paid by PBGC, regardless of whether they are guaranteed. PPA 2006 Changes Section 404 of PPA 2006 made an important change to priority category 3 in the asset allocation, similar to the change to guaranteed benefits. Section 404(b) added a new subsection

(e)to section 4044, which provides as follows: *Allocation of Assets Among Priority Groups in Bankruptcy Proceedings.* —If a contributing sponsor of a plan has filed or has had filed against such person a petition seeking liquidation or reorganization in a case under title 11, United States Code, or under any similar Federal law or law of a State or political subdivision, and the case has not been dismissed as of the termination date of the plan, then subsection (a)(3) shall be applied by treating the date such petition was filed as the termination date of the plan. Subsection (a)(3) of section 4044 describes the benefits assigned to priority category 3. As explained above, before PPA 2006 the benefits in priority category 3 were the benefits that were in pay status as of the beginning of the three-year period ending on the termination date, or that would have been in pay status as of that date if the participant had retired—but based on the plan provisions during the five years before the termination date under which the benefit would be the least. *See* 29 CFR 4044.13. PBGC interprets new section 4044(e) to mean that these three-year and five-year periods are the three-year and five-year periods before the bankruptcy filing date rather than before the termination date. In other words, the benefits in priority category 3 will be benefits in pay status, or that could have been in pay status, three years before the bankruptcy filing date, but generally taking into account only benefit increases that were effective throughout the five-year period ending on the bankruptcy filing date. (The exception in § 4044.13(b)(5) for certain “automatic” benefit increases will apply to applicable benefit increases in the fourth and fifth years preceding the bankruptcy filing date.) In addition, the changes made by PPA 2006 section 404(a) to the way guaranteed benefits are determined necessarily affect the gross benefits that are assigned to priority category 4. As explained above, the gross benefits assigned to priority category 4 are guaranteed benefits (and benefits that would be guaranteed but for the aggregate limit of section 4022B and the stricter phase-in limit that applies to business owners). Because section 404(a) of PPA 2006 has modified PBGC's guarantee, the gross benefits assigned to priority category 4 in a PPA 2006 bankruptcy termination are those benefits guaranteed under new section 4022(g), not the benefits that would be guaranteed absent that provision. In other words, the guaranteed benefits in priority category 4 will be the plan benefits that were both accrued and nonforfeitable as of the bankruptcy filing date, based on the guarantee limits as of that date. In addition, the PPA 2006 changes to benefits in priority category 3 necessarily affect the net benefits in priority category 4 as well; some guaranteed benefits that previously would have been in priority category 3 will now fall into priority category 4. The proposed rule reflects this treatment. PPA 2006 did not amend the other priority categories of section 4044. Therefore, the gross amount of a participant's benefit in those categories will be unaffected by the changes discussed above. For example, the gross amount of a participant's benefit in priority category 5 is all of the participant's benefit that is nonforfeitable as of the plan's termination date. *See* ERISA section 4044(a)(5); 29 CFR 4044.15. Thus, a benefit that is not guaranteed because it was forfeitable as of the bankruptcy filing date will be treated as nonforfeitable for purposes of priority category 5 if the participant satisfied the conditions of entitlement to the benefit between the bankruptcy filing date and the plan's termination date. The net amount of a participant's benefit in priority category 5, however, is necessarily affected by the changes to the benefits in priority categories 3 and 4. For example, benefits that are not guaranteed because they became nonforfeitable between the sponsor's bankruptcy filing date and the plan's termination date will not be in priority category 4 but will be in priority category 5. Thus, a participant in that situation will have a smaller guaranteed benefit in priority category 4 and therefore a larger net benefit in priority category 5. (Benefits in priority category 5 are divided into subcategories, based on whether they would have been payable based on the plan provisions in effect five years before the plan's termination date, or became payable due to subsequent plan amendments. *See* ERISA section 4044(b)(4) (before PPA 2006, section 4044(b)(3)); 29 CFR 4044.10(e). Because PPA 2006 did not amend this provision, PBGC interprets the five-year period in section 4044(b)(4) of ERISA—and in § 4044.10(e) of PBGC's regulation—as still being the five-year period before the termination date. No change in the regulation is needed to embody this interpretation.) Like the change to the guarantee provisions, the PPA 2006 changes to the ERISA section 4044 asset allocation apply to PPA 2006 bankruptcy terminations—plan terminations occurring during a bankruptcy proceeding initiated on or after September 16, 2006. The PPA 2006 changes, as explained above, require PBGC to determine the amount of a participant's monthly benefit in priority category 3 and priority category 4 by reference to the bankruptcy filing date rather than the termination date. Valuing benefits in the priority categories is a different matter. PBGC has always valued benefits and plan assets as of the plan's termination date, and section 4044(e) does not dictate a change to that approach for priority category 3. Although section 4044(e) might be read to suggest that a valuation should be done as of the bankruptcy filing date for purposes of priority category 3, PBGC believes that the better interpretation is that the valuation should still be done as of the termination date. Subsection (a)(3) of section 4044, which is to be “applied” by treating the bankruptcy filing date as the termination date, describes only the kind of benefits that fall into priority category 3, not the time or manner of valuing those benefits or plan assets. Moreover, because the statutory change applies only to priority category 3, benefits and plan assets will still be valued as of the termination date for all other categories. Using a different valuation date for priority category 3 than for all the other priority categories would be complex to administer, difficult to explain to participants, and anomalous in its results. In the absence of a clear statutory mandate of that intricate approach, PBGC proposes to take the simpler and more coherent approach of valuing benefits and assets as of the termination date for all priority categories. Accordingly, the proposed rule makes no change to PBGC's existing rules in this regard. Under § 4044.10(c), benefits in a trusteed plan will still be valued as of the termination date. The tables in Appendix D to part 4044 used to determine a participant's expected retirement age are also unchanged, and continue to be based on the year in which the plan's termination date occurs and on the facts as of the termination date. A terminated plan's assets, too, will still be valued as of the termination date under § 4044.3(b). Benefits Payable Under Section 4022(c) of ERISA Prior Law Under section 4022(c) of ERISA, PBGC pays additional benefits to participants and beneficiaries, beyond guaranteed benefits and benefits provided by the plan's assets. The amount of section 4022(c) benefits depends on PBGC's recoveries of unfunded benefit liabilities under section 4062 (or, in some circumstances, under sections 4063 or 4064). Sections 4062(a) and

(b)of ERISA provide that, when a plan terminates in a distress termination or an involuntary termination, the contributing sponsor of the plan and all members of the contributing sponsor's controlled group are liable to PBGC for the “total amount of the unfunded benefit liabilities (as of the termination date) to all participants and beneficiaries under the plan.” The amount of unfunded benefit liabilities, defined in section 4001(a)(18) of ERISA, is the excess of the value of the plan's benefit liabilities over the value of the plan's assets— *i.e.* , the amount of the shortfall in the plan's assets. PBGC seeks to recover from contributing sponsors and members of their controlled groups as much as it can of terminated plans' unfunded benefit liabilities. A portion of those recoveries is paid to participants and beneficiaries of a terminated plan in accordance with the provisions of section 4022(c) of ERISA. Section 4022(c) provides for determination of a “recovery ratio,” which is then multiplied by the total value of the plan's unfunded nonguaranteed benefits to determine the total amount allocable to participants in the plan who have unfunded nonguaranteed benefits. It is allocated to those unfunded nonguaranteed benefits beginning in the section 4044 priority category where the plan's assets ran out, but none of it is allocated to guaranteed benefits— *i.e.* , this section 4022(c) allocation “skips over” guaranteed benefits in the priority categories. The recovery ratio is described in section 4022(c)(3) of ERISA. For a large plan, it equals the value of PBGC's recovery of unfunded liabilities for that plan divided by the amount of that plan's unfunded benefit liabilities “as of the termination date.” For a small plan, the ratio is based on an average of PBGC's recoveries over a five-year period. For this purpose, a small plan is any plan in which the value of unfunded nonguaranteed benefits is equal to or less than $20 million. (Section 408 of PPA 2006 changed the five-year period over which the recovery ratio is determined for small plans; that change generally applies to plans in which termination was initiated on or after September 16, 2006.) A plan's unfunded nonguaranteed benefits, as the term suggests, are those benefits that are neither funded by the plan's assets under the section 4044 allocation nor guaranteed by PBGC. (PBGC generally uses the term “unfunded nonguaranteed benefits,” because that term is more descriptive than “outstanding amount of benefit liabilities,” the term used in section 4001(a)(19) of ERISA.) Stated differently, the unfunded nonguaranteed benefits are the benefits lost by participants on account of their plan's termination, a portion of which is made up by the section 4022(c) allocation. PPA 2006 Changes New section 4022(g) instructs PBGC to apply section 4022 by treating the bankruptcy filing date as the plan's termination date. Section 4022(c), of course, is part of section 4022. PBGC interprets this statutory language, for section 4022(c) benefits, to mean that in determining a plan's unfunded nonguaranteed benefits, PBGC must take into account the changes to guaranteed benefits under new section 4022(g) and the changes to the asset allocation under new section 4044(e). For example, a benefit that became nonforfeitable between the bankruptcy filing date and the termination date is not guaranteed and thus (if not funded) is included in the unfunded nonguaranteed benefits. The regulation also provides that, as in a non-PPA 2006 bankruptcy termination, PBGC will value the unfunded nonguaranteed benefits as of the termination date. For reasons similar to those explained above regarding priority category 3 benefits, PBGC believes that the statutory provision should not be interpreted to require a different valuation date for this purpose. The proposed regulation similarly provides that the other elements that go into calculation of section 4022(c) benefits are unaffected by the PPA 2006 changes. The recovery ratio described in section 4022(c)(3)(A), as explained above, is based on PBGC's recoveries of unfunded benefit liabilities. Because that section provides that the denominator of the recovery ratio is the amount of the plan's unfunded benefit liabilities as of the termination date, one might conclude that in a PPA 2006 bankruptcy termination the unfunded benefit liabilities should be determined for this purpose as of the bankruptcy filing date. The proposed regulation does not adopt that approach. The numerator of the recovery ratio—PBGC's recoveries—is based on PBGC's statutory claim for unfunded benefit liabilities, which, under section 4062(b) of ERISA, must be determined as of the termination date. Because section 4062(b) was not amended by PPA 2006, PBGC's recoveries will still be based on that termination date-computed claim. PBGC believes that the general language of section 4022(g) should not be interpreted to require a separate determination of unfunded benefit liabilities to be made as of the bankruptcy filing date, when PBGC recoveries will be based on a determination of unfunded benefit liabilities as of the termination date. Thus, the amount of a plan's unfunded benefit liabilities, as in a non-PPA 2006 bankruptcy termination, will be determined based on the value of the plan's assets and benefit liabilities as of the termination date. *See* ERISA sections 4001(a)(18), 4062(b). The proposed rule would add a new § 4022.51 to PBGC's regulations to incorporate the above interpretations. It provides, for example, that in computing section 4022(c) benefits in a PPA 2006 bankruptcy termination, the benefits included in a plan's unfunded nonguaranteed benefits take into account the provisions of sections 4022(g) and 4044(e) of ERISA, and the corresponding provisions of PBGC's regulations. The value of unfunded nonguaranteed benefits would be multiplied by the recovery ratio, as in a non-PPA 2006 bankruptcy termination, to determine the total dollar amount to be allocated for the plan. That dollar amount would be allocated to the unfunded nonguaranteed benefits of participants in the same manner as before PPA 2006, but the result of the allocation would be different because of the changes made by section 404 of PPA 2006 to guaranteed benefits and the benefits in priority category 3. For example, a benefit that would have been guaranteed under prior law but is not guaranteed under PPA 2006 and is not funded under the section 4044 allocation is an unfunded nonguaranteed benefit that might be paid under the section 4022(c) allocation. Other Issues Reduction of Benefits to Title IV Levels In a distress termination, the plan administrator is required, beginning on the proposed termination date, to reduce benefits in pay status to the estimated levels payable under Title IV. *See* ERISA section 4041(c)(3)(D)(ii); 29 CFR 4041.42(c), 4022.61-4022.63. The proposed regulation provides that for any PPA 2006 bankruptcy termination, those estimated benefits are based on the rules described above relating to the bankruptcy filing date. PPA 2006 did not change the provision in section 4041 of ERISA about when these benefit reductions are to be made. Accordingly, the proposed regulation does not change the rule in § 4041.42(c) of the regulations that the reductions are made beginning on the proposed termination date. Recoupment of Overpayments PBGC's current regulations provide that the agency recoups benefit overpayments if it determines that net benefits paid exceed the amount to which a participant is entitled under Title IV of ERISA. *See* 29 CFR 4022.81. For example, if a retiree is paid an estimated Title IV benefit of $3,050 per month while PBGC is processing the termination of the plan, and PBGC later determines that the participant is entitled to a Title IV benefit of only $3,000 per month, the agency generally recoups the net overpayment (the $50 difference times the number of months the benefit was overpaid) from future benefit payments. The amount recouped is determined by multiplying future benefit payments by a fraction the numerator of which is the net overpayment and the denominator of which is the present value of the benefit to which the participant is entitled under Title IV. The proposed regulation amends § 4022.82(a) to provide that the denominator is determined taking into account the changes to participants' benefits made by section 404 of PPA 2006. In computing the net overpayment, the current regulations provide that PBGC takes into account only overpayments made on or after the latest of the proposed termination date, the termination date, or, if no notice of intent to terminate was issued, the date on which proceedings to terminate the plan are instituted pursuant to section 4042 of ERISA. *See* 29 CFR § 4022.81(c)(1). Thus, for example, in a case where a plan is terminated under section 4042 and the termination date is before the date on which PBGC initiated termination proceedings, PBGC does not recoup overpayments made before initiation of the termination proceedings even though those overpayments were made after (what later became) the termination date. PBGC proposes not to make any change to this rule. Accordingly, as under prior law, in determining the amount to be recouped (or otherwise recovered, if there are no future benefits from which to recoup), PBGC will include only overpayments made on or after the latest of the proposed termination date, the termination date, or, if no notice of intent to terminate was issued, the date on which proceedings to terminate the plan are instituted pursuant to section 4042 of ERISA. Entry Into Pay Status As explained above, under new section 4022(g) of ERISA, PBGC will not guarantee a benefit that was forfeitable as of the bankruptcy filing date even it became nonforfeitable by the termination date. This includes, for example, a subsidized early retirement benefit to which a participant became entitled between the two dates. Because the plan normally will have been ongoing as of the bankruptcy filing date, participants who became entitled to subsidized early retirement benefits or other benefits after the bankruptcy filing date but before the termination date may have retired and been put into pay status by the plan administrator. It would impose a hardship on such participants to take them out of pay status, likely depriving them of all or most of their retirement income. To address this situation, the regulation proposes that participants who became entitled under their plan to subsidized early retirement benefits or other benefits between the bankruptcy filing date and the termination date will be continued in pay status or, if they are not already receiving a benefit, will be allowed to go into pay status. The amount of such a benefit, however, would be reduced to reflect that the subsidy is not guaranteed. Sufficiency for Guaranteed Benefits In a distress termination, the plan's enrolled actuary must certify, among other things, whether the plan is sufficient for guaranteed benefits as of the proposed termination date and as of the proposed distribution date. ERISA section 4041(c)(2)(A). In making those determinations, the actuary must take into account nonguaranteed benefits to which the plan's assets must be allocated under section 4044—notably, nonguaranteed benefits in priority category 3. PBGC must determine whether it agrees that the plan is sufficient for guaranteed benefits. ERISA section 4041(c)(3)(A). If PBGC agrees that the plan is sufficient for guaranteed benefits, it so notifies the plan administrator and the administrator then proceeds to distribute the plan's assets and carry out the termination of the plan. ERISA section 4041(c)(3)(B)(ii). One purpose of the determinations under section 4041 of the plan's sufficiency for guaranteed benefits is to avoid PBGC trusteeship of a plan that has enough assets to pay all the benefits that PBGC would pay if it took over the plan. (Any additional benefits that may be payable under section 4022(c) of ERISA are not considered for purposes of whether a plan is sufficient for guaranteed benefits.) The proposed regulation provides that in a PPA 2006 bankruptcy termination, the determination of sufficiency for guaranteed benefits is made taking into account the amendments made by section 404 of PPA 2006. That is, the plan actuary and PBGC should determine sufficiency for guaranteed benefits based on whether, as of the termination date and the distribution date, the plan has sufficient assets to pay the benefits that are guaranteed as of the bankruptcy filing date and the benefits that are in priority category 3 as of three years before the bankruptcy filing date (based generally on the plan provisions as of five years before the bankruptcy filing date). It would make little sense to treat as insufficient for guaranteed benefits—and thus require PBGC to trustee—a plan that has enough assets to provide all the benefits that PBGC would pay if it became statutory trustee of the plan. Amendment of Definition of Basic-Type Benefit PBGC's regulations define the term “basic-type benefit” in § 4001.2 to mean any benefit that is guaranteed under part 4022 or that would be guaranteed if the guarantee limits in §§ 4022.22 through 4022.27 (primarily the maximum guaranteeable benefit and the phase-in limit) did not apply. A “nonbasic-type benefit” is any benefit provided by a plan other than a basic-type benefit. The effect of this distinction is to treat temporary supplements, which as explained above are generally not guaranteed due to the accrued-at-normal limitation in § 4022.21, as nonbasic-type benefits. Nonbasic-type benefits are treated differently from basic-type benefits in the section 4044 allocation. *See, e.g.* , §§ 4044.10(c) and 4044.12. If no change were made to the definition of basic-type benefit in a PPA 2006 bankruptcy termination, benefits that accrued, or to which a participant otherwise became entitled, between the sponsor's bankruptcy filing date and the plan's termination date would become nonbasic-type benefits (because they would not be guaranteed but not due to the limitations in §§ 4022.22 through 4022.27) and thus subject to the different treatment currently accorded temporary supplements. Such benefits would, absent this regulatory change, receive less favorable treatment in priority category 5, a technical result that PBGC believes was not intended by the statutory change. Not amending the regulation would also require PBGC to follow the more complex allocation procedures in part 4044 for nonbasic-type benefits even where a plan has no temporary supplements. Accordingly, the proposed regulation would modify the definition of “basic-type benefits” to provide that benefits not guaranteed solely because they accrued or became nonforfeitable, or the participant became entitled to them, after the bankruptcy filing date will be considered basic-type benefits. This change to the regulatory definition of basic-type benefits requires a conforming change to § 4044.14 of the regulations, to ensure that these nonguaranteed benefits are not placed in priority category 4, which (with limited exceptions for benefits of business owners and of participants in more than one terminated plan) is reserved for guaranteed benefits. Determination of the Bankruptcy Filing Date Section 404 of PPA 2006 requires treating the date that a contributing sponsor of a plan has filed or has had filed against it “a petition seeking liquidation or reorganization in a case under title 11, United States Code, or under any similar Federal law or law of a state or political subdivision” as the termination date of the plan, for the purposes discussed above. The proposed regulation uses the term “bankruptcy filing date” to describe the date when a bankruptcy petition has been filed, and PBGC does not anticipate difficulty determining what that date is in most cases. However, three situations may arise in which there could be ambiguity about the bankruptcy filing date. The first involves conversion of a bankruptcy case—for example, where a bankruptcy case began with the filing of a petition for reorganization under Chapter 11 of the Bankruptcy Code but was later converted to a liquidation case under Chapter 7. The proposed regulation clarifies that, in such a situation, the date of the original bankruptcy petition is the bankruptcy filing date. This is consistent with section 348 of the Bankruptcy Code, which provides that conversion of a case from one chapter to another under the Bankruptcy Code does not change the date of the filing of the petition. The second situation involves plans that have more than one contributing sponsor. Section 404 of PPA 2006 applies where a plan terminates during the bankruptcy proceeding of “a” contributing sponsor of a plan. Although most terminating single-employer plans have only a single contributing sponsor, some plans have more than one contributing sponsor. If a plan with multiple contributing sponsors terminates during the sponsors' bankruptcy proceedings and if the various sponsors all filed for bankruptcy on the same date, the proposed regulation provides that that date is the bankruptcy filing date. However, if the various contributing sponsors filed for bankruptcy on different dates, or if not all of them have filed for bankruptcy, it is not obvious what date should be treated as the bankruptcy filing date. PBGC believes that it would be impracticable to use more than one bankruptcy filing date in determining benefits under a single plan. But PBGC also believes that it would be unwise to attempt to establish a mechanical rule on what date to use that would apply in all cases. The proposed regulation therefore provides that, where a plan has more than one contributing sponsor and not all sponsors filed for bankruptcy on the same date, PBGC will determine the date to treat as the bankruptcy filing date for determining guaranteed benefits and benefits in priority category 3. PBGC's determination will be based on all the relevant facts and circumstances, which may include such things as the size of the various contributing sponsors, the relative amounts of their minimum required contributions to the plan, the amount of time between bankruptcy filing dates, and the expectations of participants regarding continuation of the plan. The third situation involves liquidation or reorganization cases that are filed, not under the U.S. Bankruptcy Code, but under a “similar * * * law of a state or political subdivision.” Some states have insolvency statutes similar to the U.S. Bankruptcy Code and include provisions similar to 11 U.S.C. 301(a), 302(a), and 303(b) under which a case is commenced by the filing of a petition in court. The date on which such a petition is filed would be treated as the bankruptcy filing date under the proposed rule. Other, perhaps more informal, proceedings, such as assignments for the benefit of creditors, may have different procedures for commencing cases, which may vary from state to state. For such proceedings, PBGC would make case-by-case determinations on what date is most analogous to the date of the filing of a bankruptcy petition and would treat that date as the bankruptcy filing date. Changes Unrelated to PPA 2006 A few minor changes unrelated to the PPA 2006 amendments are proposed. For example, in §§ 4022.4(a)(1), 4044.2, and 4044.13, the proposed regulation would change the words “date of termination” or “date of plan termination” to “termination date” to conform to the current phrasing in section 4048(a) of ERISA. The proposed regulation would amend § 4022.4 to codify PBGC's practice of allowing a participant who has elected an optional annuity form of benefit (not a lump sum) at any time up until the date that PBGC is appointed statutory trustee of the plan to receive his benefit in that form, even if it is not one of the PBGC optional forms under § 4022.8(c) of the regulations. The proposed regulation would also correct the reference in § 4022.22 to the provision of the Internal Revenue Code defining “earned income”; the definition has been moved from section 911(b) to section 911(d)(2) of the Code since PBGC's original regulation was adopted. A new § 4022.62(b)(5) has been added to clarify that the rules in § 4022.62(b), which generally apply to the calculation of estimated benefits pending PBGC's determination of final benefits, do not override the requirements of subparts A or B of part 4022 with respect to the requirements for a benefit to be guaranteed by PBGC. Coordination With Other PPA 2006 Amendments Section 404 was only one of a number of provisions of PPA 2006 that affect the determination of benefits under Title IV. PBGC's regulations therefore must coordinate the various provisions, where necessary. Below is a description of certain PPA 2006 amendments that interrelate with the changes made by section 404. Shutdown Benefits and Other Unpredictable Contingent Event Benefits One situation requiring coordination involves section 403 of PPA 2006, which added new section 4022(b)(8) to the guarantee provisions of Title IV. Section 4022(b)(8) provides a special phase-in rule for shutdown benefits and other “unpredictable contingent event benefits.” In cases to which that provision applies, PBGC is to apply the phase-in rules of section 4022 as if a plan amendment had been adopted on the date that the unpredictable contingent event occurred. For example, in a case in which new section 4022(g) does not apply, if an unpredictable contingent event occurred more than two years but less than three years before the termination date, this would mean that the guarantee of a benefit increase arising from the unpredictable contingent event would be 40% phased in. But if section 4022(g) also applies to such a case, PBGC believes that, as with other benefit increases, the five-year phase-in period must be measured by reference to the bankruptcy filing date, not the termination date. Thus, continuing the above example, if the sponsor's bankruptcy filing date were one year before the plan's termination date, then the guarantee of the unpredictable contingent event benefit would be only 20% rather than 40% phased in, because the unpredictable contingent event would have occurred more than one year but less than two years before the bankruptcy filing date. Section 4022(b)(8) applies to benefits that become payable as a result of an unpredictable contingent event that occurs after July 26, 2005. PBGC intends to issue a separate proposed rule to implement section 4022(b)(8). Commercial Airlines Another provision that raises coordination issues is PPA 2006 section 402(g)(2)(A), which added new section 4022(h) to Title IV. Section 4022(h) modifies the guarantee and asset allocation rules primarily for plans of commercial airlines that make an election under section 402(a)(1) of PPA 2006 (relating to special minimum funding rules) and that terminate within 10 years of such election. Section 4022(h) provides that when those conditions are met, section 4022 is to be applied by treating the first day of the first applicable plan year (for the special airline funding rules) as the termination date of the plan. It also provides generally that the plan's assets are to be allocated first to the benefits that would have been guaranteed but for this provision ( *i.e.* , ahead of benefits in all other priority categories under section 4044). Section 4022(h) applies to plan years ending after August 17, 2006. The proposed regulation does not address implementation of section 4022(h) or how it interrelates with the amendments made by section 404 of PPA 2006. PBGC intends to do so in a future rulemaking. Substantial Owner Benefits Section 407 of PPA 2006 amended section 4022(b)(5) of ERISA, which previously provided a special phase-in rule for PBGC's guarantee of the benefits of “substantial owners,” who were generally defined as those owning more than 10% of the business. Under the amendment, a special phase-in rule applies only to benefits of “majority owners,” generally defined as those owning 50% or more of the business. The amendment also completely revamped the way in which the special phase-in rule works. Previously, the substantial owner phase-in rule was used * in lieu* of the usual phase-in rule for benefits of substantial owners. The new majority owner phase-in rule, by contrast, applies *in addition* to the usual phase-in rule, but the additional limitation looks back only 10 years rather than 30 years. Finally, section 407 of PPA 2006 amended section 4044 of ERISA to change the treatment in priority category 4 of benefits subject to the majority owner phase-in. These section 407 amendments are effective for distress terminations in which notices of intent to terminate are provided on or after January 1, 2006, and for involuntary terminations in which notices of determination are provided on or after January 1, 2006. The proposed regulation does not address implementation of these changes or how they interrelate with the amendments made by section 404 of PPA 2006. PBGC intends to do so in a future rulemaking. Applicability Section 404(c) of PPA 2006 provided that the changes made by section 404 apply to any plan whose termination date occurs while bankruptcy proceedings are pending with respect to the contributing sponsor of the plan, if the bankruptcy proceedings were initiated on or after September 16, 2006. Bankruptcy proceedings are pending, for this purpose, if the contributing sponsor has filed or has had filed against it a petition seeking liquidation or reorganization in a case under title 11, United States Code, or under any similar Federal law or law of a State or political subdivision, and the case has not been dismissed as of the termination date of the plan. Accordingly, the proposed regulation, which implements the statutory changes, likewise applies to terminations occurring during a bankruptcy proceeding of the contributing sponsor that was initiated on or after September 16, 2006. Compliance With Rulemaking Guidelines E.O. 12866 PBGC has determined, in consultation with the Office of Management and Budget, that this rule is a “significant regulatory action” under Executive Order 12866. The Office of Management and Budget has therefore reviewed this notice under E.O. 12866. Pursuant to section 1(b)(1) of E.O. 12866 (as amended by E.O. 13422), PBGC identifies the following specific problems that warrant this agency action: Section 404 of the Pension Protection Act of 2006 made significant changes to provisions of Title IV of ERISA relating to the guarantee of benefits under section 4022 and the allocation of a terminated plan's assets under section 4044. The proposed rule implements those statutory changes and, as described in this preamble, clarifies the implications of those changes in areas where there might be ambiguity in the absence of a regulation. The proposed rule provides guidance to participants and beneficiaries of terminated plans about their benefits paid by PBGC; it will also assist PBGC staff in making benefit determinations. Except for a few minor housekeeping items described above under “Changes Unrelated to PPA 2006,” the proposed rule is limited to implementing and clarifying the changes made by section 404. Regulatory Flexibility Act PBGC certifies under section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ) that the amendments in this proposed regulation would not have a significant economic impact on a substantial number of small entities. The amendments implement and in some cases clarify statutory changes made in PPA 2006; they do not impose new burdens on entities of any size. Virtually all of the statutory changes affect only PBGC and persons who receive benefits from PBGC. Accordingly, as provided in section 605 of the Regulatory Flexibility Act, sections 603 and 604 do not apply. List of Subjects 29 CFR Part 4001 Pensions. 29 CFR Part 4022 Pension insurance, Pensions, Reporting and recordkeeping requirements. 29 CFR Part 4044 Pension insurance, Pensions. For the reasons given above, PBGC proposes to amend 29 CFR parts 4001, 4022, and 4044 as follows. PART 4001—TERMINOLOGY 1. The authority citation for part 4001 continues to read as follows: Authority: 29 U.S.C. 1301, 1302(b)(3). 2. In § 4001.2: a. Amend the definition of “ *basic-type benefit* ” by adding at the end: “In a PPA 2006 bankruptcy termination, it also includes a benefit accrued by a participant, or to which a participant otherwise became entitled, on or before the plan's termination date but that is not guaranteed solely because of the provisions of §§ 4022.3(b) or 4022.4(c).” b. Amend the definition of “ *sufficient for guaranteed benefits* ” by adding at the end: “In a PPA 2006 bankruptcy termination, the determination whether a plan is sufficient for guaranteed benefits is made taking into account the limitations in sections 4022(g) and 4044(e) of ERISA (and corresponding provisions of these regulations). The determinations of which benefits are guaranteed and which benefits are in priority category 3 under section 4044(a)(3) of ERISA are made by reference to the bankruptcy filing date, but the present values of those benefits are determined as of the proposed termination date and the date of distribution.” c. Add two new definitions in alphabetical order to read as follows: § 4001.2 Definitions. “ *Bankruptcy filing date* means the date on which a petition commencing a case under the United States Bankruptcy Code is filed, or the date on which any similar filing is made commencing a case under any similar Federal law or law of a state or political subdivision, with respect to the contributing sponsor of a plan, if such case has not been dismissed as of the termination date of the plan. If a bankruptcy petition is filed under one chapter of the United States Bankruptcy Code, or under one chapter or provision of any such similar law, and the case is converted to a case under a different chapter or provision of such Code or similar law (for example, a Chapter 11 reorganization case is converted to a Chapter 7 liquidation case), the date of the original petition is the bankruptcy filing date. If such a plan has more than one contributing sponsor:

(a)If all contributing sponsors entered bankruptcy on the same date, that date is the bankruptcy filing date;

(b)if all contributing sponsors did not enter bankruptcy on the same date (or if not all contributing sponsors have filed for bankruptcy), PBGC will determine the date that will be treated as the bankruptcy filing date based on all the facts and circumstances, including but not limited to the relative sizes of the contributing sponsors, the relative amounts of their minimum required contributions to the plan, and the expectations of participants regarding continuation of the plan. *PPA 2006 bankruptcy termination* means a plan termination to which section 404 of the Pension Protection Act of 2006 applies. Section 404 of the Pension Protection Act of 2006 applies to any plan termination in which the termination date occurs while bankruptcy proceedings are pending with respect to the contributing sponsor of the plan, if the bankruptcy proceedings were initiated on or after September 16, 2006. Bankruptcy proceedings are pending, for this purpose, if a contributing sponsor has filed or has had filed against it a petition seeking liquidation or reorganization in a case under title 11, United States Code, or under any similar Federal law or law of a State or political subdivision, and the case has not been dismissed as of the termination date of the plan.” PART 4022—BENEFITS PAYABLE IN TERMINATED SINGLE-EMPLOYER PLANS 3. The authority citation for part 4022 continues to read as follows: Authority: 29 U.S.C. 1302, 1322, 1322b, 1341(c)(3)(D), and 1344. 4. Immediately preceding subpart A, add the following note: Note: PBGC has not yet amended part 4022 to reflect certain changes made by the Pension Protection Act of 2006, Public Law 109-280. Those changes include Section 402(g)(2)(A) of PPA 2006 added section 4022(h) to ERISA, which modifies the Title IV guarantee and asset-allocation rules primarily for plans of certain commercial airlines. Section 403 of PPA 2006 added section 4022(b)(8) to ERISA, which provides a special rule for the phase-in of PBGC's guarantee of shutdown benefits and other “unpredictable contingent event benefits”. Section 407 of PPA 2006 amended section 4022(b)(5) of ERISA to change the rules for the phase-in of PBGC's guarantee of the benefits of business owners. Section 408 of PPA 2006 amended section 4022(c)(3)(B)(ii) of ERISA to change the five-year period used for averaging PBGC's recoveries in computing benefits under section 4022(c). PBGC intends to amend part 4022 at a later date to conform it to current statutory provisions. § 4022.2 [Amended] 5. In § 4022.2, amend the first paragraph by removing the words “annuity, Code” and adding in their place “annuity, bankruptcy filing date, Code”; and by removing the words “plan year, proposed termination date” and adding in their place “plan year, PPA 2006 bankruptcy termination, proposed termination date”. 6. In § 4022.3: a. Redesignate paragraphs (a), (b), and

(c)as paragraphs (1), (2), and (3). b. Designate the introductory text as paragraph (a), and add a new heading “ *General.* ” c. Add new paragraph

(b)to read as follows: § 4022.3 Guaranteed benefits.

(a)*General.* * * *

(b)*PPA 2006 bankruptcy termination.*

(1)*Substitution of bankruptcy filing date.* In a PPA 2006 bankruptcy termination, “bankruptcy filing date” is substituted for “termination date” each place that “termination date” appears in paragraph

(a)of this section.

(2)*Examples.*

(i)*Vesting.* A plan provides for 5-year “cliff” vesting— *i.e.* , benefits become 100% vested when the participant completes five years of service; before the five-year mark, benefits are 0% vested. The contributing sponsor of the plan files a bankruptcy petition on November 15, 2006. The plan terminates with a termination date of December 4, 2007, and PBGC becomes statutory trustee of the plan. A participant had four years and six months of service at the bankruptcy filing date and became vested in May 2007. None of the participant's benefit is guaranteed because the benefit was not nonforfeitable as of the bankruptcy filing date.

(ii)*Subsidized early retirement benefit.* The facts regarding the plan are the same as in Example (i), but the plan also provides that a participant may retire from active employment with a subsidized ( *i.e.* , not actuarially reduced) early retirement benefit if he is at least age 55 and has completed 10 years of service. A participant was age 55 and had nine years and six months of service at the bankruptcy filing date. The participant continued working for another six months, then retired as of June 1, 2007, and immediately began receiving from the plan a subsidized early retirement benefit. The subsidized early retirement benefit is not guaranteed by PBGC because it was not nonforfeitable on the bankruptcy filing date. PBGC will continue paying the participant a benefit, but it will guarantee only that portion of the participant's benefit that does not include the subsidy. PBGC would also allow a similarly situated participant who had not started receiving a benefit before PBGC became trustee of the plan to begin receiving a benefit, but in an amount that does not include the subsidy.

(iii)*Accruals after bankruptcy filing date.* The facts regarding the plan are the same as in Example (i). A participant has a vested, accrued benefit of $500 per month as of the bankruptcy filing date. At the plan's termination date, the participant has a vested, accrued benefit of $512 per month. His guaranteed benefit is limited to $500 per month, the accrued, nonforfeitable benefit as of the bankruptcy filing date. 7. In § 4022.4: a. Amend paragraph (a)(1) by removing “date of the termination” and adding in its place “termination date”. b. Amend paragraph (a)(3) by removing “; or” at the end. c. Amend paragraph (a)(4) by adding “; or” at the end. d. Revise paragraph (a)(2) and add new paragraph

(c)to read as follows: § 4022.4 Entitlement to benefit.

(a)* * *

(2)The benefit is an annuity form of payment that the participant or beneficiary elected before the termination date of the plan or, if later, the date on which PBGC became statutory trustee of the plan.

(c)In a PPA 2006 bankruptcy termination, “bankruptcy filing date” is substituted for “termination date” each place that “termination date” appears in paragraphs (a)(1) and (a)(3) of this section. 8. In § 4022.6: a. Amend paragraph

(a)by removing “provided in paragraph

(b)of” and adding in its place “otherwise provided in”. b. Add new paragraph

(d)to read as follows: § 4022.6 Annuity payable for total disability.

(d)*PPA 2006 bankruptcy termination.* In a PPA 2006 bankruptcy termination, “bankruptcy filing date” is substituted for “termination date” in paragraph

(a)of this section. 9. In § 4022.21: a. Amend paragraph (a)(1) by removing “(b),

(c)and (d)” in the first sentence and adding in its place “(b), (c), (d), and (e).” b. Add new paragraph

(e)to read as follows: § 4022.21 Limitations; in general.

(e)*PPA 2006 bankruptcy termination.* In a PPA 2006 bankruptcy termination, “bankruptcy filing date” is substituted for “termination date” each place that “termination date” appears in paragraph (a)(1) of this section. Example: A plan provides for normal retirement at age 65. If a participant terminates employment at or after age 55 with 25 years of service, the plan will pay an unreduced early retirement benefit, plus a temporary supplement of $400 per month until the participant reaches age 62. There are no recent benefit increases subject to the phase-in limitation. When the plan's contributing sponsor files a bankruptcy petition in 2008, a participant who is still working has a vested, accrued benefit of $1,500 per month (as a straight-life annuity) and has satisfied the age and service requirements for the unreduced early retirement benefit. The participant retires eight months later, when his vested, accrued benefit is $1,530 per month (as a straight-life annuity). He elects to receive his benefit as a 50% joint-and-survivor annuity, and begins receiving a total benefit of $1,777: his $1,530 accrued benefit, reduced by 10% for the survivor benefit, plus the $400 temporary supplement. The plan terminates six months later, during the sponsor's bankruptcy. From the termination date until the participant reaches age 62, PBGC will guarantee $1,500: the $1,500 accrued benefit (as a straight-life annuity) as of the bankruptcy filing date, reduced to $1,350 to reflect the 10% reduction for the survivor benefit, plus $150 of the temporary supplement that, in combination with the $1,350, does not exceed the $1,500 accrued-at-normal limit. When the participant reaches age 62, his guaranteed benefit is reduced to $1,350, because under plan provisions the temporary supplement ceases at that time. 10. Revise § 4022.22 to read as follows: § 4022.22 Maximum guaranteeable benefit.

(a)*In general.* Subject to section 4022B of ERISA and part 4022B of this chapter, and except as provided in paragraph

(b)of this section, benefits payable with respect to a participant under a plan shall be guaranteed only to the extent that such benefits do not exceed the actuarial value of a benefit in the form of a life annuity payable in monthly installments, commencing at age 65 equal to the lesser of—

(1)One-twelfth of the participant's average annual gross income from his employer during either his highest-paid five consecutive calendar years in which he was an active participant under the plan, or if he was not an active participant throughout the entire such period, the lesser number of calendar years within that period in which he was an active participant under the plan; or

(2)$750 multiplied by the fraction x/ $13,200 where “x” is the Social Security contribution and benefit base determined under section 230 of the Social Security Act in effect at the termination date of the plan.

(b)*PPA 2006 bankruptcy termination.* In a PPA 2006 bankruptcy termination—

(1)The five-year period described in paragraph (a)(1) of this section shall not include any calendar years that end after the bankruptcy filing date.

(2)“Bankruptcy filing date” is substituted for “termination date of the plan” in paragraph (a)(2) of this section. Example: A contributing sponsor files a bankruptcy petition in 2007. The sponsor's plan terminates in a distress termination with a termination date in 2008. PBGC will compute participants' maximum guaranteeable benefits based on the amount determined under paragraph (a)(2) of this section for 2007 ($4,125.00 as a straight-life annuity starting at age 65).

(c)*Gross income.* For purposes of paragraph (a)(1) of this section—

(1)Gross income means “earned income” as defined in section 911(d)(2) of the Code, determined without regard to any community property laws.

(2)If the plan is one to which more than one employer contributes, and during any calendar year the participant received gross income from more than one such contributing employer, then the amounts so received shall be aggregated in determining the participant's gross income for the calendar year. 11. In § 4022.23, add new paragraph

(g)to read as follows: § 4022.23 Computation of maximum guaranteeable benefits.

(g)*PPA 2006 bankruptcy termination.* In a PPA 2006 bankruptcy termination, “bankruptcy filing date” is substituted for “termination date” each place that “termination date” appears in paragraphs (c), (d), and

(f)of this section. Example: The contributing sponsor of a plan files a bankruptcy petition in July 2007, and the sponsor's plan terminates in a PBGC-initiated termination with a termination date in July 2008. At the bankruptcy filing date: • Participant A was age 64 and receiving a benefit from the plan in the form of a 10-year certain-and-continuous annuity, with 4 years remaining in the certain period. • Participant B was age 60 and 6 months and was still working; he began receiving a benefit from the plan in the form of a 50% joint-and-survivor annuity when he turned 61 in January 2008. His spouse was the same age as he. • Participant C was age 59 and was still working; he began receiving a straight-life annuity from the PBGC in July 2010 when he was 62 years old. In accordance with § 4022.22(b)(2), PBGC computes the maximum guaranteeable monthly benefit for Participants A, B, and C based on the amount determined under section 4022.22(a)(2) for 2007. (The gross income-based limitation in § 4022.22(a)(1) does not apply to any of these participants.) Participant A's maximum guaranteeable monthly benefit is $3,759.25 [$4,125.00 × .93 (7% reduction for a benefit starting at age 64) × .98 (2% reduction for a certain-and-continuous annuity with 4 years remaining in the certain period)]. Participant B's maximum guaranteeable monthly benefit is $2,673.00 [$4,125.00 × .72 (28% reduction for a benefit starting at age 61) × .90 (10% reduction due to the 50% joint-and-survivor feature)]. Participant C's maximum guaranteeable monthly benefit is $3,258.75 [$4,125.00 × .79 (21% reduction for a benefit starting at age 62)]. 12. In § 4022.24, add new paragraph

(f)to read as follows: § 4022.24 Benefit increases.

(f)*PPA 2006 bankruptcy termination.* In a PPA 2006 bankruptcy termination, “bankruptcy filing date” is substituted for “termination date” each place that “termination date” appears in paragraphs

(a)and

(c)of this section. 13. In § 4022.25, add new paragraph

(f)to read as follows: § 4022.25 Five-year phase-in of benefit guarantee for participants other than substantial owners.

(c)and

(d)of this section. Example: A plan amendment that was adopted and effective in February 2007 increased a participant's benefit by $300 per month. The contributing sponsor of the plan filed a bankruptcy petition in March 2009 and the plan has a termination date in April 2010. PBGC's guarantee of the participant's benefit increase is limited to $120 ($300 × 40%), because the increase was made more than 2 years but less than 3 years before the bankruptcy filing date. 14. In the heading for Subpart C, remove “Unfunded Nonguaranteed Benefits [RESERVED]” and add in its place “Section 4022(c) Benefits.” 15. Add new § 4022.51 to Subpart C to read as follows: § 4022.51 Determination of section 4022(c) benefits in a PPA 2006 bankruptcy termination.

(a)*Amount of unfunded nonguaranteed benefits.* For purposes of this section, and subject to paragraph (b), a plan's amount of unfunded nonguaranteed benefits means the plan's outstanding amount of benefit liabilities, as defined in section 4001(a)(19) of ERISA, determined as of the plan's termination date. A plan's amount of unfunded nonguaranteed benefits is multiplied by the applicable recovery ratio to determine the aggregate amount to be allocated with respect to participants of the plan under section 4022(c)(1) of ERISA.

(b)*Benefits included in unfunded nonguaranteed benefits.* For purposes of computing benefits under section 4022(c) of ERISA in a PPA 2006 bankruptcy termination, unfunded nonguaranteed benefits are benefits under a plan as of the plan's termination date that are neither guaranteed by PBGC (taking into account section 4022(g) of ERISA) nor funded by the plan's assets (taking into account section 4044(e) of ERISA).

(c)*Determination of recovery ratio.* In a PPA 2006 bankruptcy termination, the recovery ratio under section 4022(c) of ERISA is determined as follows. The numerator is based on PBGC's recoveries under section 4062, 4063, or 4064, valued as of the plan's (or plans') termination date (or dates). The denominator of the recovery ratio is based on the amount of unfunded benefit liabilities, as defined in section 4001(a)(18) of ERISA, as of the plan's (or plans') termination date (or dates). 16. In § 4022.61: a. Amend paragraph

(c)by removing “4022.22(b)” and adding in its place “4022.22(a)(2)” and by adding at the end: “In a PPA 2006 bankruptcy termination, the maximum guaranteeable benefit is determined as of the bankruptcy filing date, in accordance with §§ 4022.22(b) and 4022.23(g) of this part.” b. Amend paragraph

(f)introductory text by removing “:” and adding in its place “.” and by adding at the end “(For examples addressing issues specific to a PPA 2006 bankruptcy termination, see §§ 4022.21(e), 4022.22(b), and 4022.23(g).)”. 17. In § 4022.62: a. Amend paragraph (b)(1) by adding at the end: “In a PPA 2006 bankruptcy termination:” b. Amend paragraph (b)(2) by adding at the end: “In a PPA 2006 bankruptcy termination, the plan administrator shall use the participant's age as of the benefit commencement date and his or her service and compensation as of the bankruptcy filing date.”. c. Redesignate paragraph

(e)as paragraph (f). d. Amend the newly redesignated paragraph

(f)introductory text by removing “:” and adding in its place “.” and by adding at the end: “(For an example addressing issues specific to a PPA 2006 bankruptcy termination, see § 4022.25(f).)”. e. Add new paragraphs (b)(1)(i), (b)(1)(ii), (b)(5), and

(e)to read as follows: § 4022.62 Estimated guaranteed benefits.

(b)* * *

(1)* * *

(i)If the participant was also in pay status as of the bankruptcy filing date, the plan administrator shall use the participant's age and benefit payable under the plan as of the bankruptcy filing date.

(ii)If the participant was not in pay status as of the bankruptcy filing date, the plan administrator shall use the participant's age as of the benefit commencement date and his or her service and compensation as of the bankruptcy filing date.”

(5)Nothing in this paragraph

(b)overrides the provisions of subparts A and B of part 4022 with respect to the requirements necessary for a benefit to be guaranteed by PBGC.

(e)*PPA 2006 bankruptcy termination.* In a PPA 2006 bankruptcy termination, “bankruptcy filing date” is substituted for “proposed termination date” each place that “proposed termination date” appears in paragraph

(c)of this section. 18. In § 4022.63: a. Redesignate paragraph (c)(1) as paragraph (c)(1)(i) and redesignate paragraph (c)(2) as paragraph (c)(1)(ii). b. Redesignate the introductory text of paragraph

(c)as paragraph (c)(1) and add a new heading “ *In general.* ” c. In paragraph (e), amend Example 1 by adding a new paragraph at the end: *PPA 2006 bankruptcy termination.* In a PPA 2006 bankruptcy termination, the methodology would be the same, but “bankruptcy filing date” would be substituted for “proposed termination date” each place that “proposed termination date” appears in the example, and the numbers would change accordingly. d. Add new paragraphs (b)(3) and (c)(2) to read as follows: § 4022.63 Estimated title IV benefits. (b)* * *

(3)*PPA 2006 bankruptcy termination.* In a PPA 2006 bankruptcy termination, “bankruptcy filing date” is substituted for “proposed termination date” in the first sentence of paragraph (b)(2) of this section.

(c)*In general.* * * *

(2)*PPA 2006 bankruptcy termination.* In a PPA 2006 bankruptcy termination, “bankruptcy filing date” is substituted for “proposed termination date” each place that “proposed termination date” appears in paragraph (c)(1) of this section. 19. In § 4022.82: a. Amend paragraph (a)(1) by redesignating the second sentence as paragraph (a)(1)(i), and add a new heading “ *Non-PPA 2006 bankruptcy termination* ” and by redesignating the third sentence as paragraph (a)(1)(iii) and add a new heading “ *Facts and circumstances.* ” b. Amend the newly redesignated (a)(1)(iii) by removing “The PBGC may, however, utilize” and adding in its place “PBGC may use”. c. Add new paragraph (a)(1)(ii) to read as follows: § 4022.82 Method of recoupment.

(a)* * *

(1)* * *

(i)*Non-PPA 2006 bankruptcy termination.* ***

(ii)*PPA 2006 bankruptcy termination.* PBGC will determine the amount of benefit payable with respect to the participant under title IV of ERISA taking into account the limitations in sections 4022(g) and 4044(e) (and corresponding provisions of these regulations), and will determine the present value of that amount as of the termination date, using PBGC interest rates and factors in effect on the termination date.

(iii)*Facts and circumstances.* * * * 20. In Appendix D to Part 4022, amend the introductory text by removing “§ 4022.22(b)” and adding in its place “§ 4022.22(a)(2)”, and by replacing “:” with a “.”, and by adding a sentence at the end to read as follows: “In a PPA 2006 bankruptcy termination, the applicable year is the calendar year in which the bankruptcy filing date occurred.” PART 4044—ALLOCATION OF ASSETS IN SINGLE-EMPLOYER PLANS 21. The authority citation for part 4044 continues to read as follows: Authority: 29 U.S.C. 1301(a), 1302(b)(3), 1341, 1344, 1362. 22. In the Note before subpart A: a. In the second sentence, remove “in the PBGC's” and add in its place “in other provisions of the PBGC's”. b. After the second sentence, add a sentence to read as follows: “In addition, the Pension Protection Act of 2006 has made a number of significant changes, including changes to the treatment in priority category 4 of benefits of owners, and changes to the valuation of PBGC recoveries of liabilities under section 4062(c) of ERISA.” 23. In § 4044.2: a. Amend paragraph

(a)by removing “annuity, basic-type benefit” and adding in its place “annuity, bankruptcy filing date, basic-type benefit” and by removing “plan administrator, single-employer plan” and adding in its place “plan administrator, PPA 2006 bankruptcy termination, single-employer plan”. b. In paragraph (b), amend the definition of “valuation date” by removing “date of termination” and adding in its place “termination date”. 24. In § 4044.10(b), add the phrase “, but, in a PPA 2006 bankruptcy termination, subject to the limitations in sections 4022(g) and 4044(e) of ERISA (and corresponding provisions of these regulations)”, at the end of the last sentence. 25. In § 4044.13, add new paragraph

(c)to read as follows: § 4044.13 Priority category 3 benefits.

(c)*PPA 2006 bankruptcy termination.* In a PPA 2006 bankruptcy termination, “bankruptcy filing date” is substituted for “termination date” and “date of the plan termination” each place that “termination date” and “date of the plan termination” appear in paragraphs

(a)and

(b)of this section. In paragraph (b)(5), “the bankruptcy filing date” is substituted for “termination” in the phrase “during the fourth and fifth years preceding termination.” Example: A plan provides for normal retirement at age 65 and has only one early retirement benefit: a subsidized early retirement benefit for participants who terminate employment on or after age 60 with 20 years of service. These plan provisions have been unchanged since 1990. The contributing sponsor of the plan files a bankruptcy petition in June 2008, and the plan terminates during the bankruptcy with a termination date in September 2010. A participant retired in July 2007, at which time he was age 60 and had 20 years of service, and began receiving the subsidized early retirement benefit. The participant has no benefit in priority category 3, because he was not eligible to retire three or more years before the June 2008 bankruptcy filing date. 26. Amend § 4014.14 by removing “basic-type benefits that do not exceed the guarantee limits set forth in subpart B of part 4022 of this chapter” and adding in its place “guaranteed benefits”. Issued in Washington, DC, this day of June, 2008. Vincent K. Snowbarger, Acting Director, Pension Benefit Guaranty Corporation. [FR Doc. E8-14813 Filed 6-30-08; 8:45 am] BILLING CODE 7709-01-P DEPARTMENT OF VETERANS AFFAIRS 38 CFR Part 21 RIN 2900-AM91 Vocational Rehabilitation and Employment Program—Duty To Assist AGENCY: Department of Veterans Affairs. ACTION: Proposed rule. SUMMARY: This document proposes to amend the vocational rehabilitation and employment regulations of the Department of Veterans Affairs

(VA)concerning VA's responsibility to provide notification regarding information or evidence needed for an individual to substantiate a claim for vocational rehabilitation benefits and services, and regarding applicable time periods. VA's duty to assist claimants in substantiating their claims for benefits is expanded by The Veterans Claims Assistance Act of 2000, and is incorporated in this rulemaking. Specifically, upon receipt of a substantially complete application for benefits, VA will make reasonable efforts to help the claimant obtain the evidence necessary to substantiate the claim. In addition, VA proposes to make changes to improve readability and other clarifying changes that are nonsubstantive. DATES: Comments must be received on or before September 2, 2008. ADDRESSES: Written comments may be submitted through *http://www.Regulations.gov;* by mail or hand-delivery to the Director, Regulations Management (00REG), Department of Veterans Affairs, 810 Vermont Ave., NW., Room 1068, Washington, DC 20420; or by fax to

(202)273-9026. Comments should indicate that they are submitted in response to “RIN 2900-AM91—Vocational Rehabilitation and Employment Program—Duty to Assist.” Copies of comments received will be available for public inspection in the Office of Regulation Policy and Management, Room 1063B, between the hours of 8 a.m. and 4:30 p.m., Monday through Friday (except holidays). Please call

(202)461-4902 for an appointment. This is not a toll free phone number. In addition, during the comment period, comments may be viewed online through the Federal Docket Management System

(FDMS)at *http://www.Regulations.gov.* FOR FURTHER INFORMATION CONTACT: Alvin Bauman, Senior Policy Analyst, Vocational Rehabilitation and Employment Service (28), Veterans Benefits Administration, Department of Veterans Affairs, 810 Vermont Ave., NW., Washington, DC 20420,

(202)461-9613. SUPPLEMENTARY INFORMATION: In 38 CFR part 21, Subpart A—Vocational Rehabilitation Under 38 U.S.C. Chapter 31, we propose to amend VA's regulations concerning claims for vocational rehabilitation and employment benefits and services, by amending 38 CFR 21.32 and adding § 21.33 with regard to VA's duty to assist claimants and applicable time limits. Those provisions would apply to claimants for such benefits and services under 38 U.S.C. chapter 31, Training and Rehabilitation for Veterans with Service-Connected Disabilities and 38 U.S.C. chapter 18, Benefits for Children of Vietnam Veterans and Certain Other Veterans. The Veterans Claims Assistance Act of 2000 (Pub. L. 106-475) (VCAA), enacted November 9, 2000, included provisions amending 38 U.S.C. 5102 and 5103 and adding new sections 38 U.S.C. 5100 and 5103A, pertaining to VA's duty to assist claimants in obtaining evidence in support of claims for benefits. Upon receipt of a substantially complete application for benefits, VA's duty under the VCAA is to make reasonable efforts to help the claimant obtain the evidence necessary to substantiate the claim. This effort is commonly referred to as the “duty to assist.” VA will refrain from providing assistance in obtaining evidence for a claim if the substantially complete application for benefits indicates that there is no reasonable possibility that any assistance VA would provide to the claimant would substantiate the claim. Similarly, VA will discontinue providing assistance in obtaining evidence for a claim if the evidence obtained indicates that there is no reasonable possibility that further assistance would substantiate the claim. Finally, VA will not consider the receipt of a notice of disagreement relating to a claim as an “application” for benefits that would trigger its duty to assist. Section 701 of the Veterans Benefits Act of 2003 (Pub. L. 108-183) further amended 38 U.S.C. 5102 and 5103 regarding time limitations relevant to claimant's applications. Public Law 108-183 allows VA to decide a claim before the one-year time limit for submitting evidence expires. Under 38 U.S.C. 5103A(e), VA is directed to prescribe regulations to carry out the provisions of section 5103A. In the **Federal Register** of August 29, 2001 (66 FR 45620), VA issued a final rule amending 38 CFR part 3, subpart A, to carry out those and other provisions of the VCAA with respect to claims for benefits that are governed by 38 CFR part 3 (including compensation, pension, dependency and indemnity compensation, burial benefits, monetary benefits ancillary to those benefits, and special benefits) (66 FR at 45629). In the **Federal Register** of April 30, 2008 (73 FR 23353), VA published a final rule amending provisions in 38 CFR 3.159 that were included in those 2001 regulations. The final rule was based on the rationale in its preamble and in the preamble to a proposed rule that VA published on October 31, 2006 (71 FR 63732). Those amendments were intended, in part, to clarify when VA has no duty to provide notice under 38 U.S.C. 5103(a) “of any information, and any medical or lay evidence, not previously provided to the Secretary that is necessary to substantiate” a claim for benefits. In particular, that rule included provisions that were intended to clarify that VA's receipt of a notice of disagreement (the means to initiate an appeal of a decision on a claim to the Board of Veterans' Appeals, under 38 U.S.C. 7105 and 38 CFR 20.200) does not trigger VA's duty to provide that notice. (See 73 FR 23353-23354, 23356; 71 FR 63732-63734.) In addition, in the **Federal Register** of April 5, 2007 (72 FR 16962), VA published a final rule that included provisions concerning, among other matters, VA's duty to assist claimants for VA education benefits. The final rule was based on the rationale in its preamble and in the preamble to a proposed rule that VA published in the **Federal Register** of February 22, 2006 (71 FR 9196). The final rule's provisions concerning VA's duty to assist claimants for VA education benefits, which were adopted without change from those in the proposed rule, are contained in 38 CFR 21.1031 and 21.1032. We propose to amend § 21.32 and to add § 21.33 to describe VA's responsibilities for notifying the claimant of necessary information or evidence when a claim for vocational rehabilitation and employment benefits is filed, the time periods for response by the claimant or in which VA may take action in adjudicating the claim, and VA's duty to assist claimants in obtaining evidence. In particular, we are proposing that VA may decide the claim if the claimant has not responded to that notice within 30 days from the date of the notice, as set forth in proposed § 21.32(d). Under that paragraph, if the claimant subsequently submits the specified evidence or information within one year of VA's request, VA must readjudicate the claim. We believe that 30 days is a reasonable time period for these claimants to respond. It is specifically supported by our experience in administering VA's vocational rehabilitation programs, and is the same time for response provided in other circumstances under those programs. A claimant may delay VA action beyond the 30 days by responding with a request that VA wait beyond the 30-day period while the claimant attempts to gather evidence. The proposed 30-day time period also is based on administrative concerns, and is intended to assure that a lack of response does not unnecessarily delay a VA decision on the claim. The proposed rule states that, for purposes of 38 CFR 21.32 and 21.33, the term “application” does not include a notice of disagreement. This is consistent with the provisions of 38 CFR 3.159(b)(3) as added, effective May 30, 2008, by the April 30, 2008, final rule (73 FR 23353, 23356), and the accompanying rationale published by VA in that rule's preamble (73 FR 23353-23354) and in the preamble to the corresponding proposed rule (71 FR 63732-63734). The proposed changes to § 21.32 are also intended to improve readability, including by removing provisions in current § 21.32 that we believe are unnecessary, and to make other clarifying changes that are nonsubstantive. These proposed rules would apply to the vocational rehabilitation programs administered by the Secretary and would apply to claims for vocational rehabilitation benefits and services filed on or after the effective date of the final rule. Finally, we propose to add § 21.8015 to Subpart M of part 21 to clarify VA's responsibilities to claimants who apply for vocational rehabilitation benefits and services under that subpart. The proposed section would provide that §§ 21.32 and 21.33, which are located in subpart A, would apply also to claims for such benefits and services under subpart M. Paperwork Reduction Act of 1995 This document contains no provisions constituting a new collection of information under the Paperwork Reduction Act (44 U.S.C. 3501-3521). Unfunded Mandates The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any 1 year. This proposed rule would have no such effect on State, local, and tribal governments, or on the private sector. Executive Order 12866 Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Executive Order classifies a “significant regulatory action,” requiring review by the Office of Management and Budget

(OMB)unless OMB waives such review, as any regulatory action that is likely to result in a rule that may:

(1)Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;

(2)create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3)materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4)raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. The economic, interagency, budgetary, legal, and policy implications of this proposed rule have been examined and it has been determined to be a significant regulatory action under Executive Order 12866 because it may raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. Regulatory Flexibility Act The Secretary hereby certifies that this proposed regulatory amendment would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. This proposed amendment would not directly affect any small entities. Only individuals could be directly affected. Therefore, pursuant to 5 U.S.C. 605(b), this proposed amendment is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604. Catalog of Federal Domestic Assistance The Catalog of Federal Domestic Assistance numbers and titles for the programs that would be affected by this proposed rule are 64.116, Vocational Rehabilitation for Disabled Veterans, and 64.128, Vocational Training and Rehabilitation for Vietnam Veterans' Children with Spina Bifida or Other Covered Defects. List of Subjects in 38 CFR Part 21 Administrative practice and procedure, Armed forces, Civil rights, Claims, Colleges and universities, Conflict of interests, Education, Employment, Grant programs-education, Grant programs-veterans, Health care, Loan programs-education, Loan programs-veterans, Manpower training programs, Reporting and recordkeeping requirements, Schools, Travel and transportation expenses, Veterans, Vocational education, Vocational rehabilitation. Approved: March 21, 2008. Gordon H. Mansfield, Deputy Secretary of Veterans Affairs. For the reasons set forth in the preamble, VA proposes to amend 38 CFR part 21 (subparts A and M) as follows: PART 21—VOCATIONAL REHABILITATION AND EDUCATION Subpart A—Vocational Rehabilitation and Employment Under 38 U.S.C. Chapter 31 1. The authority citation for part 21, subpart A is revised to read as follows: Authority: 38 U.S.C. 501(a), chs. 18, 31, and as noted in specific sections. 2. The Subpart A heading is revised as set forth above. 3. Revise § 21.32 to read as follows: § 21.32 Notification by VA of necessary information or evidence when a claim is filed; time for claimant response and VA action. The provisions of this section apply to claims that are governed by this subpart or subpart M of this part.

(a)*VA has a duty to notify claimants of necessary information or evidence.* Except when a claim cannot be substantiated because there is no legal basis for the claim, or undisputed facts render the claimant ineligible for the claimed benefit, when VA receives a complete or substantially complete application for vocational rehabilitation benefits and services provided under this subpart or subpart M of this part VA will:

(1)Notify the claimant of any information and evidence that is necessary to substantiate the claim;

(2)Inform the claimant which information and evidence, if any, the claimant is to provide to VA and which information and evidence, if any, VA will try to obtain for the claimant; and

(3)Inform the claimant of the time limit, as provided in paragraph

(c)of this section, for responding to VA's notification, and of actions, as provided in paragraph

(d)of this section, that VA may take to decide the claim if the claimant does not respond to such notification within 30 days.

(b)*Definitions for purposes of §§ 21.32 and 21.33.* For purposes of this section and § 21.33:

(1)The term *application* does not include a notice of disagreement.

(2)The term *notification* means the notice described in paragraph

(a)of this section.

(3)The term *substantially complete application* means, for an individual's first application for vocational rehabilitation benefits and services administered by VA, an application containing:

(i)The claimant's name;

(ii)His or her relationship to the veteran, if applicable;

(iii)Sufficient information for VA to verify the claimed service, if applicable; and

(iv)The benefit claimed.

(4)The term *information* means nonevidentiary facts, such as the claimant's Social Security number or address, or the name of the educational institution the claimant is attending.

(c)*Time limit.* Any information and evidence described in the notification as information and evidence that the claimant is to provide must be received by VA within one year from the date of the notification. If VA does not receive the information and evidence from the claimant within that time period, VA may adjudicate the claim based on the information and evidence in the file.

(d)*Actions VA may take after 30 days if no response from claimant.* If the claimant has not responded to the notification within 30 days, VA may decide the claim before the expiration of the one-year period, based on all the information and evidence in the file, including information and evidence it has obtained on behalf of the claimant. If VA does so, however, and the claimant subsequently provides the information and evidence specified in the notification within one year of the date of the notification, VA must readjudicate the claim. If VA's decision on a readjudication is favorable to the claimant, the award of vocational rehabilitation benefits and services shall take effect as if the prior decision by VA on the claim had not been made.

(e)*Incomplete applications.* If VA receives an incomplete application for benefits, it will notify the claimant of the information necessary to complete the application and will defer assistance until the claimant submits this information. If the information necessary to complete the application is not received by VA within one year from the date of such notice, VA cannot pay or provide any benefits based on that application.

(f)*Who VA will notify.* For the purpose of this section, when VA seeks to notify a claimant, it will provide such notice to:

(1)The claimant;

(2)His or her fiduciary, if any; and

(3)His or her representative, if any. (Authority: 38 U.S.C. 5102, 5103, 5103A(a)(3)) 4. Immediately after § 21.32 and prior to the cross-reference, add § 21.33, to read as follows: § 21.33 VA has a duty to assist claimants in obtaining evidence. The provisions of this section apply to claims that are governed by this subpart or subpart M of this part.

(a)*VA's duty to assist begins when VA receives a complete or substantially complete application.*

(1)Except as provided in paragraph

(d)of this section, upon receipt of a complete or substantially complete application for vocational rehabilitation benefits and services under this subpart or subpart M of this part, VA will:

(i)Make reasonable efforts to help a claimant obtain evidence necessary to substantiate the claim; and

(ii)Give the assistance described in paragraphs

(b)and

(c)of this section to an individual attempting to reopen a finally decided claim.

(2)VA will not pay any fees a custodian of records may charge to provide the records VA requests. (Authority: 38 U.S.C. 5103A)

(b)*Obtaining records not in the custody of a Federal department or agency.*

(1)VA will make reasonable efforts to obtain relevant records not in the custody of a Federal department or agency. These records include relevant records from:

(i)State or local governments;

(ii)Private medical care providers;

(iii)Current or former employers; and

(iv)Other non-Federal governmental sources.

(2)The reasonable efforts described in paragraph (b)(1) of this section will generally consist of an initial request for the records and, if VA does not receive the records, at least one follow-up request. The following are exceptions to this provision concerning the number of requests that VA generally will make:

(i)VA will not make a follow-up request if a response to the initial request indicates that the records sought do not exist or that a follow-up request for the records would be futile.

(ii)If VA receives information showing that subsequent requests to this or another custodian could result in obtaining the records sought, reasonable efforts will include an initial request and, if VA does not receive the records, at least one follow-up request to the new source or an additional request to the original source.

(3)The claimant must cooperate fully with VA's reasonable efforts to obtain relevant records from non-Federal agency or department custodians. The claimant must provide enough information to identify and locate the existing records, including:

(i)The person, company, agency, or other custodian holding the records;

(ii)The approximate time frame covered by the records; and

(iii)In the case of medical treatment records, the condition for which treatment was provided.

(4)If necessary, the claimant must authorize the release of existing records in a form acceptable to the person, company, agency, or other custodian holding the records. (Authority: 38 U.S.C. 5103A)

(c)*Obtaining records in the custody of a Federal department or agency.*

(1)Subject to paragraphs (c)(2) through (c)(4) of this section, VA will make as many requests as are necessary to obtain relevant records from a Federal department or agency. These records include but are not limited to:

(i)Military records;

(ii)Medical and other records from VA medical facilities;

(iii)Records from non-VA facilities providing examination or treatment at VA expense; and

(iv)Records from other Federal agencies.

(2)VA will cease its efforts to obtain records from a Federal department or agency only if VA concludes that the records sought do not exist or that further efforts to obtain those records would be futile. Cases in which VA may conclude that no further efforts are required include cases in which the Federal department or agency advises VA that the requested records do not exist or that the custodian of such records does not have them.

(3)The claimant must cooperate fully with VA's reasonable efforts to obtain relevant records from Federal department or agency custodians. At VA's request, the claimant must provide enough information to identify and locate the existing records, including:

(i)The custodian or agency holding the records;

(ii)The approximate time frame covered by the records; and

(iii)In the case of medical treatment records, the condition for which treatment was provided.

(4)If necessary, the claimant must authorize the release of existing records in a form acceptable to the custodian or agency holding the records. (Authority: 38 U.S.C. 5103A)

(d)*Circumstances where VA will refrain from or discontinue providing assistance.* VA will refrain from providing assistance in obtaining evidence for a claim if the substantially complete or complete application for benefits indicates that there is no reasonable possibility that any assistance VA would provide to the claimant would substantiate the claim. VA will discontinue providing assistance in obtaining evidence for a claim if the evidence obtained indicates that there is no reasonable possibility that further assistance would substantiate the claim. Circumstances in which VA will refrain from or discontinue providing assistance in obtaining evidence include but are not limited to:

(1)The claimant's ineligibility for the benefit sought because of lack of qualifying service, lack of veteran status, or other lack of legal eligibility;

(2)Claims that are inherently not credible or clearly lack merit;

(3)An application requesting a benefit to which the claimant is not entitled as a matter of law; and

(4)The claimant's lack of cooperation in providing or requesting information or evidence necessary to substantiate the claim. (Authority: 38 U.S.C. 5103A)

(e)*Duty to notify claimant of inability to obtain records.*

(1)VA will notify the claimant either orally or in writing when VA:

(i)Has made reasonable efforts to obtain relevant non-Federal records, but is unable to obtain them; or

(ii)After continued efforts to obtain Federal records, concludes that it is reasonably certain they do not exist or that further efforts to obtain them would be futile.

(2)For non-Federal records requests, VA may provide the notice to the claimant at the same time it makes its final attempt to obtain the relevant records.

(3)VA will make a written record of any oral notice conveyed under this paragraph to the claimant.

(4)The notice to the claimant must contain the following information:

(i)The identity of the records VA was unable to obtain;

(ii)An explanation of the efforts VA made to obtain the records;

(iii)The fact described in paragraph (e)(1)(i) or (e)(1)(ii) of this section;

(iv)A description of any further action VA will take regarding the claim, including, but not limited to, notice that VA will decide the claim based on the evidence of record unless the claimant submits the records VA was unable to obtain; and

(v)A notice that the claimant is ultimately responsible for obtaining the evidence.

(5)If VA becomes aware of the existence of relevant records before deciding the claim, VA will notify the claimant of the existence of such records and ask that the claimant provide a release for the records. If the claimant does not provide any necessary release of the relevant records that VA is unable to obtain, VA will ask that the claimant obtain the records and provide them to VA.

(6)For the purpose of this section, if VA must notify the claimant, VA will provide notice to:

(i)The claimant;

(ii)His or her fiduciary, if any; and

(iii)His or her representative, if any. (Authority: 38 U.S.C. 5102, 5103(a), 5103A) Subpart M—Vocational Training and Rehabilitation for Certain Children of Vietnam Veterans—Spina Bifida and Covered Birth Defects 5. The authority citation for part 21, subpart M continues to read as follows: Authority: 38 U.S.C. 101, 501, 512, 1151 note, ch. 18, 5112, and as noted in specific sections. 6. Add § 21.8015 to read as follows: § 21.8015 Notification by VA of necessary information or evidence when a claim is filed; time for claimant response and VA action; and VA's duty to assist claimants in obtaining evidence. The provisions of §§ 21.32 and 21.33 of subpart A of this part also apply to claims for benefits and services under this subpart. [FR Doc. E8-14823 Filed 6-30-08; 8:45 am] BILLING CODE 8320-01-P 73 127 Tuesday, July 1, 2008 Notices DEPARTMENT OF COMMERCE Foreign-Trade Zones Board Order No. 1566 Grant of Authority for Subzone Status, Louisiana Energy Services, L.P. (Gas Centrifuge Production Equipment), Lea County, NM Pursuant to its authority under the Foreign-Trade Zones Act, of June 18, 1934, as amended (19 U.S.C. 81a-81u), the Foreign-Trade Zones Board (the Board) adopts the following Order: *Whereas* , the Foreign-Trade Zones Act provides for ”...the establishment... of foreign-trade zones in ports of entry of the United States, to expedite and encourage foreign commerce, and for other purposes,” and authorizes the Foreign-Trade Zones Board to grant to qualified corporations the privilege of establishing foreign-trade zones in or adjacent to U.S. Customs and Border Protection ports of entry; *Whereas* , the Board's regulations (15 CFR Part 400) provide for the establishment of special-purpose subzones when existing zone facilities cannot serve the specific use involved, and when the activity results in a significant public benefit and is in the public interest; *Whereas* , the City of Albuquerque Aviation Department, grantee of Foreign-Trade Zone 110, has made application to the Board for authority to establish a special-purpose subzone for the assembly and installation of gas centrifuge production equipment for the enrichment of uranium at the facility of Louisiana Energy Services, L.P., located in Lea County, New Mexico (FTZ Docket 18-2007, filed 4/20/07); *Whereas* , notice inviting public comment was given in the **Federal Register** (72 FR 21218-21219, 4/30/07); and, *Whereas* , the Board adopts the findings and recommendations of the examiner's report, and finds that the requirements of the FTZ Act and the Board's regulations are satisfied, and that approval of the application is in the public interest; *Now, therefore* , the Board hereby grants authority for subzone status for activity related to the assembly and installation of gas centrifuge production equipment for the enrichment of uranium at the facility of Louisiana Energy Services, L.P., located in Lea County, New Mexico (Subzone 110B), as described in the application and **Federal Register** notice, and subject to the FTZ Act and the Board's regulations, including Section 400.28. Signed at Washington, DC, this 23rd day of June 2008. David M. Spooner, Assistant Secretary of Commerce for Import Administration, Alternate Chairman, Foreign-Trade Zones Board. Attest: Andrew McGilvray, Executive Secretary. [FR Doc. E8-14913 Filed 6-30-08; 8:45 am] BILLING CODE 3510-DS-S DEPARTMENT OF COMMERCE Bureau of Industry and Security Action Affecting Export Privileges; Omega Engineering, Inc. In the Matter of: Omega Engineering, Inc., One Omega Drive, Stamford, CT 06907; Respondent Order Waiving Remainder of Denial Order Period On November 12, 2003, having approved the terms of a settlement agreement between the Bureau of Industry and Security, United States Department of Commerce (“BIS”), and Respondent Omega Engineering, Inc. (“Omega”), then-Assistant Secretary for Export Enforcement Julie L. Myers issued an order (68 Fed. Reg. 65033, Nov. 18, 2003), resolving an administrative proceeding against Omega pursuant to section 13(c) of the Export Administration Act of 1979, as amended (“Act”), 1 and the Export Administration Regulations (“Regulations”), 2 based on allegations in a proposed charging letter that Omega had committed 17 violations of the Regulations. 1 50 U.S.C. app. 2401-2420 (2000). Since August 21, 2001, the Act has been in lapse and the President, through Executive Order 13222 of August 17, 2001 (3 CFR 2001 Comp. 783 (2002)), which has been extended by successive Presidential Notices, the most recent being that of August 15, 2007 (72 Fed. Reg. 46137 (Aug. 16, 2007)), has continued the Regulations in effect under the International Emergency Economic Powers Act (50 U.S.C. 1701-1706 (2000)) (“IEEPA”). 2 The Regulations are currently codified in the Code of Federal Regulations at 15 CFR Parts 730-774 (2008). The current version of the Regulations governs the procedural aspects of this case. The charged violations occurred in 1997. The Regulations governing the charged violations are found in the 1997 version of the Code of Federal Regulations (15 CFR Part 730774 (1997)). Among other things, the November 12, 2003 Order provided a non-standard denial of export privileges that prohibited Omega, for a period of five years from the date of that Order, from participating in any way in any transaction involving the export from the United States to Pakistan of any item subject to the Regulations or in any other activity subject to the Regulations that involves Pakistan. By letter dated April 25, 2008, Omega submitted a request seeking to terminate the denial order not later than May 6, 2008, rather than on November 12, 2008. Omega's request seeks relief on various grounds, including due to what it has phrased as the “extraordinary support” it provided to BIS in the investigation of another case. The grounds raised by Omega have been considered in full and with the exception of its extraordinary cooperation argument do not merit relief. Subsequent to the entry of the November 12, 2003 Order, Omega provided extraordinary cooperation in a criminal investigation involving an individual attempting to unlawfully export U.S.-origin goods to Iran. The cooperation provided by the Omega helped enable BIS to obtain evidence that was crucial to the investigation and successful prosecution of that criminal matter. Accordingly, upon consideration of this extraordinary cooperation provided by Respondent Omega, and upon consideration of the totality of the circumstances found here, it is therefore ordered: 1. That the remainder of the denial order period imposed on Omega Engineering, Inc., One Omega Drive, Stamford, Connecticut 06907, its successors or assigns, and, when acting for or on behalf of Omega, its officers, representatives, agents or employees, under the November 12, 2003 Order is hereby waived upon the effective date of this Order; and 2. This Order shall be effective upon publication in the **Federal Register** . Entered this 20th day of June, 2008. Darryl W. Jackson, Assistant Secretary of Commerce for Export Enforcement. [FR Doc. E8-14828 Filed 6-30-08; 8:45 am] BILLING CODE 3510-DT-M DEPARTMENT OF COMMERCE International Trade Administration Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Advance Notification of Sunset Reviews AGENCY: Import Administration, International Trade Administration, Department of Commerce. ACTION: Notice of Upcoming Sunset Reviews. Background Every five years, pursuant to section 751(c) of the Tariff Act of 1930, as amended, the Department of Commerce (“the Department”) and the International Trade Commission automatically initiate and conduct a review to determine whether revocation of a countervailing or antidumping duty order or termination of an investigation suspended under section 704 or 734 would be likely to lead to continuation or recurrence of dumping or a countervailable subsidy (as the case may be) and of material injury. Upcoming Sunset Reviews for August 2008 The following Sunset Reviews are scheduled for initiation in August 2008 and will appear in that month's Notice of Initiation of Five-year Sunset Reviews. Antidumping Duty Proceedings Department Contact Certain Cut-to-Length Carbon Steel from the PRC (A-570-849) (Second Review) Juanita Chen

(202)482-1904 Countervailing Duty Proceedings No Sunset Review of countervailing duty proceedings are scheduled for initiation in August 2008. Suspended Investigations Certain Cut-to-Length Carbon Steel from Russia (A-821-808) (Second Review) Sally Gannon

(202)482-0162 Certain Cut-to-Length Carbon Steel from Ukraine (A-823-808) (Second Review) Judith Rudman

(202)482-0192 The Department's procedures for the conduct of Sunset Reviews are set forth in 19 CFR 351.218. Guidance on methodological or analytical issues relevant to the Department's conduct of Sunset Reviews is set forth in the Department's Policy Bulletin 98.3--Policies Regarding the Conduct of Five-year (“Sunset”) Reviews of Antidumping and Countervailing Duty Orders; Policy Bulletin, 63 FR 18871 (April 16, 1998) . The Notice of Initiation of Five-year (“Sunset”) Reviews provides further information regarding what is required of all parties to participate in Sunset Reviews. Pursuant to 19 CFR 351.103(c), the Department will maintain and make available a service list for these proceedings. To facilitate the timely preparation of the service list(s), it is requested that those seeking recognition as interested parties to a proceeding contact the Department in writing within 10 days of the publication of the Notice of Initiation. Please note that if the Department receives a Notice of Intent to Participate from a member of the domestic industry within 15 days of the date of initiation, the review will continue. Thereafter, any interested party wishing to participate in the Sunset Review must provide substantive comments in response to the notice of initiation no later than 30 days after the date of initiation. This notice is not required by statute but is published as a service to the international trading community. Dated: June 18, 2008. Stephen J. Claeys, Deputy Assistant Secretary for Import Administration. [FR Doc. E8-14905 Filed 6-30-08; 8:45 am] BILLING CODE 3510-DS-S DEPARTMENT OF COMMERCE International Trade Administration Applications for Duty-Free Entry of Scientific Instruments Pursuant to Section 6(c) of the Educational, Scientific and Cultural Materials Importation Act of 1966 (Pub. L. 89-651, as amended by Pub. L. 106-36; 80 Stat. 897; 15 CFR part 301), we invite comments on the question of whether instruments of equivalent scientific value, for the purposes for which the instruments shown below are intended to be used, are being manufactured in the United States. Comments must comply with 15 CFR 301.5(a)(3) and

(4)of the regulations and be postmarked on or before July 21, 2008. Address written comments to Statutory Import Programs Staff, Room 2104, U.S. Department of Commerce, Washington, DC 20230. Applications may be examined between 8:30 a.m. and 5 p.m. at the U.S. Department of Commerce in Room 2104. Docket Number: 08-027. Applicant: The Ohio State University, Materials Science and Engineering, 2041 College Rd., Columbus, OH 43210. Instrument: Electron Microscope, Model Helios 600. Manufacturer: FEI Company/Philips Electron Optics, the Netherlands. Intended Use: The instrument is intended to be used to study different types of solid state materials. It will be used for general morphological and structural studies of ceramics and metals, including high-temperature superconductors, high-temperature metal alloys, corrosion mitigation coatings, evaporated metal films, silicongermanium and II-V infra-red detectors, quantum dots, geological materials, polymers and possibly some biological samples. A unique characteristic of this instrument is that it is a Dual Beam instrument, i.e., this instrument is a combined Focused Ion Beam

(FIB)and Scanning Electron Microscope. Application accepted by Commissioner of Customs: June 5, 2008. Docket Number: 08-029. Applicant: Vanderbilt University, Center for Structural Biology, 465 21st Ave. South, MRB III, Suite 5140, Nashville, TN 37232-8725. Instrument: Electron Microscope, Model Tecnai G 2 F20 TWIN. Manufacturer: FEI Company, the Netherlands. Intended Use: The instrument is intended to be used to study purified biological macromolecular complexes. The instrument will be used to examine the three dimensional structures of these complexes. Application accepted by Commissioner of Customs: June 13, 2008. Docket Number: 08-030. Applicant: University of Washington, 117 Fluke Hall, Nanotech User Facility, Center for Nanotechnology, Seattle, WA 98195. Instrument: Electron Microscope, Model Tecnai G 2 F20 S-TWIN. Manufacturer: FEI Company, the Netherlands. Intended Use: The instrument is intended to be used to examine biological, biomimetic, hybrid and polymeric materials as well as more traditional materials such as metals, alloys, ceramics, composites and electronic materials. The instrument will be used to understand the correlations between materials' structures and properties at the highest resolution possible and to investigate the novel interactions and assembles between traditional low-dimensional materials and biological materials. Application accepted by Commissioner of Customs: June 13, 2008. Dated: June 24, 2008. Faye Robinson, Director, Statutory Import Programs Staff. [FR Doc. E8-14759 Filed 6-30-08; 8:45 am] BILLING CODE 3510-DS-M DEPARTMENT OF COMMERCE International Trade Administration Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part AGENCY: Import Administration, International Trade Administration, Department of Commerce. SUMMARY: The Department of Commerce has received requests to conduct administrative reviews of various antidumping and countervailing duty orders and findings with May anniversary dates. In accordance with the Department's regulations, we are initiating those administrative reviews. The Department of Commerce also received requests to revoke two antidumping duty orders in part. EFFECTIVE DATE: July 1, 2008. FOR FURTHER INFORMATION CONTACT: Ronald M. Trentham, Office of AD/CVD Operations, Customs Unit, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230, telephone:

(202)482-6320. SUPPLEMENTARY INFORMATION: Background The Department has received timely requests, in accordance with 19 CFR 351.213(b)(2002), for administrative reviews of various antidumping and countervailing duty orders and findings with May anniversary dates. The Department also received timely requests to revoke in part the antidumping duty orders on ball bearings and parts thereof from Germany with respect to one exporter and ball bearings and parts thereof from Japan with respect to one exporter. Respondent Selection In the event the Department limits the number of respondents for individual examination for administrative reviews, the Department intends to select respondents based on U.S. Customs and Border Protection

(CBP)data for U.S. imports during the period of review (POR). We intend to release the CBP data under Administrative Protective Order

(APO)to all parties having an APO within five days of publication of this initiation notice and to make our decision regarding respondent selection within 20 days of publication of this Federal Register notice. The Department invites comments regarding the CBP data and respondent selection within 10 calendar days of publication of this **Federal Register** notice. INITIATION OF REVIEWS: In accordance with section 19 CFR 351.221(c)(1)(i), we are initiating administrative reviews of the following antidumping and countervailing duty orders and findings. We intend to issue the final results of these reviews not later than May 31, 2009. Antidumping Duty Proceedings Period to be Reviewed BELGIUM: Stainless Steel Plate in Coils A-423-808 5/1/2007 - 4/30/2008 Ugine & ALZ Belgium (U&A Belgium) FRANCE: Ball Bearings and Parts Thereof A-427-801 5/1/2007 - 4/30/2008 ADR S.A. Edwards Ltd., and Edwards High Vacuum Int' l Ltd. SKF France S.A. and SKF Aerospace France S.A.S. GERMANY: Ball Bearings and Parts Thereof A-428-801 5/1/2007 - 4/30/2008 Dolmar GmbH Edwards Ltd., and Edwards High Vacuum Int'l Ltd. Gebrueder Reinfurt GmbH & Co., KG

(GRW)myonic GmbH RWK Frankenjura Industie SKF GmbH SNR Walzlager GmbH The Schaeffler Group including Schaeffler KG ITALY: Ball Bearings and Parts Thereof A-475-801 5/1/2007 - 4/30/2008 Edwards, Ltd., and Edwards High Vacuum Int'l Ltd. SKF Industrie S.p.A. and Somecat S.p.A. The Schaeffler Group including Schaeffler Italia S.p.A. JAPAN: Ball Bearings and Parts Thereof A-588-804 5/1/2007 - 4/30/2008 Aisin Seiki Company Ltd. Asahi Seiko Co., Ltd. (Asahi) Canon, Inc. Edwards, Ltd., and Edwards High Vacuum Int'l Ltd. Japanese Aero Engines Corporation

(JAEC)JTEKT Corporation (JKEKT) Keihin Corporation (Keihin JP) Makino Milling Machine Company Ltd. (Japan) Makita Corporation Mazda Motor Corporation Mitsubishi Heavy Industries, Ltd. Nachi-Fujikoshi Corporation Nippon Pillow Block Company Limited Nissan Motor Company, Ltd. NTN Corporation NSK, Ltd. Sapporo Precision, Inc. Univance Inc. Yamazaki Mazak Trading Corporation SOUTH KOREA: Polyester Staple Fiber A-580-839 5/1/2007 - 4/30/2008 Huvis Corporation TAIWAN: Certain Circular Welded Carbon Steel Pipe and Tubes A-583-008 5/1/2007 - 4/30/2008 Yieh Hsing TAIWAN: Polyester Staple Fiber A-583-833 5/1/2007 - 4/30/2008 Far Eastern Textiles Ltd. Nan Ya Plastics Corporation THE PEOPLE'S REPUBLIC OF CHINA: Pure Magnesium 1 A-570-832 5/1/2007 4/30/2008 Tianjin Magnesium International Co.

(TMI)TURKEY: Welded Carbon Steel Pipe and Tube A-489-501 5/1/2007 - 4/30/2008 Borusan Group (and affiliates, Borusan Mannesmann Boru Sanayi ve Ticaret A.S. and Borusan Istikbal Ticaret T.A.S.) Toscelik Profil ve Sac Endustrisi A.S. UNITED KINGDOM: Ball Bearings and Parts Thereof A-412-801 5/1/2007 - 4/30/2008 Edwards, Ltd., and Edwards High Vacuum Int'l Ltd. NSK Bearings Europe Ltd. Rolls-Royce PLC The Schaeffler Group, including the Barden Corporation

(UK)Ltd. and Schaeffler

(UK)Ltd. SKF

(UK)Limited including SNFA Operations, The Stonehouse Operations, and SKF Aeorspace Countervailing Duty Proceeding Period to be Reviewed BELGIUM: Stainless Steel Plate in Coils C-423-809 1/1/2007 - 12/31/2007 Ugine & ALZ Belgium (U&A Belgium) Suspension Agreements None. 1 If one of the above-named companies does not qualify for a separate rate, all other exporters of Pure Magnesium from the People's Republic of China who have not qualified for a separate rate are deemed to be covered by this review as part of the single PRC entity of which the named exporters are a part. During any administrative review covering all or part of a period falling between the first and second or third and fourth anniversary of the publication of an antidumping duty order under section 351.211 or a determination under section 351.218(f)(4) to continue an order or suspended investigation (after sunset review), the Secretary will determine, if requested by a domestic interested party within 30 days of the date of publication of the notice of initiation of the review and consistent with FAG Italia v.United States, 291 F.3d 806 (Fed. Cir. 2002), as appropriate, whether antidumping duties have been absorbed by an exporter or producer subject to the review if the subject merchandise is sold in the United States through an importer that is affiliated with such exporter or producer. The request must include the name(s) of the exporter or producer for which the inquiry is requested. Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. On January 22, 2008, the Department published *Antidumping and Countervailing Duty Proceedings: Documents Submission Procedures; APO Procedures* (73 FR 3634). Those procedures apply to administrative reviews included in this notice of initiation. Parties wishing to participate in any of these administrative reviews should ensure that they meet the requirements of these procedures ( *e.g.* , the filing of separate letters of appearance as discussed at 19 CFR 351.103(d)). These initiations and this notice are in accordance with section 751(a) of the Tariff Act of 1930, as amended (19 U.S.C. 1675(a)), and 19 CFR 351.221(c)(1)(i). Dated: June 19, 2008. Stephen J. Claeys, Deputy Assistant Secretary for Import Administration. [FR Doc. E8-14909 Filed 6-30-04; 8:45 am] BILLING CODE 3510-DS-S DEPARTMENT OF COMMERCE International Trade Administration Initiation of Five-year (“Sunset”) Review AGENCY: Import Administration, International Trade Administration, Department of Commerce. SUMMARY: In accordance with section 751(c) of the Tariff Act of 1930, as amended (“the Act”), the Department of Commerce (“the Department”) is automatically initiating a five-year review (“Sunset Review”) of the antidumping and countervailing duty orders listed below. The International Trade Commission (“the Commission”) is publishing concurrently with this notice its notice of *Institution of Five-year Review* which covers the same orders. EFFECTIVE DATE: July 1, 2008. FOR FURTHER INFORMATION CONTACT: The Department official identified in the *Initiation of Review* section below at AD/CVD Operations, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street & Constitution Ave., NW, Washington, DC 20230. For information from the Commission contact Mary Messer, Office of Investigations, U.S. International Trade Commission at

(202)205-3193. SUPPLEMENTARY INFORMATION: Background The Department's procedures for the conduct of Sunset Reviews are set forth in its *Procedures for Conducting Five-year (“Sunset”) Reviews of Antidumping and Countervailing Duty Orders* , 63 FR 13516 (March 20, 1998) and 70 FR 62061 (October 28, 2005). Guidance on methodological or analytical issues relevant to the Department's conduct of Sunset Reviews is set forth in the Department's Policy Bulletin 98.3 - *Policies Regarding the Conduct of Five-year (“Sunset”) Reviews of Antidumping and Countervailing Duty Orders: Policy Bulletin* , 63 FR 18871 (April 16, 1998). Initiation of Review In accordance with 19 CFR 351.218(c), we are initiating the Sunset Review of the following antidumping and countervailing duty orders: DOC Case No. ITC Case No. Country Product Department Contact A-552-801 731-TA-1012 Vietnam Frozen Fish Fillets Alex Villanueva

(202)482-3208 A-570-848 731-TA-752 (Second Review) PRC Freshwater Crawfish Tail Meat Lyn Johnson

(202)482-5287 C-580-851 701-TA-431 Korea Dynamic Random Access Memory Semiconductors Nancy Decker

(202)482-0196 Filing Information As a courtesy, we are making information related to Sunset proceedings, including copies of the pertinent statute and Department's regulations, the Department schedule for Sunset Reviews, a listing of past revocations and continuations, and current service lists, available to the public on the Department's sunset Internet Web site at the following address: "http://ia.ita.doc.gov/sunset/.” All submissions in these Sunset Reviews must be filed in accordance with the Department's regulations regarding format, translation, service, and certification of documents. These rules can be found at 19 CFR 351.303. Pursuant to 19 CFR 351.103 (c), the Department will maintain and make available a service list for these proceedings. To facilitate the timely preparation of the service list(s), it is requested that those seeking recognition as interested parties to a proceeding contact the Department in writing within 10 days of the publication of the Notice of Initiation. Because deadlines in Sunset Reviews can be very short, we urge interested parties to apply for access to proprietary information under administrative protective order (“APO”) immediately following publication in the **Federal Register** of this notice of initiation by filing a notice of intent to participate. The Department's regulations on submission of proprietary information and eligibility to receive access to business proprietary information under APO can be found at 19 CFR 351.304-306. Information Required from Interested Parties Domestic interested parties defined in section 771(9)(C), (D), (E), (F), and

(G)of the Act and 19 CFR 351.102(b)) wishing to participate in a Sunset Review must respond not later than 15 days after the date of publication in the **Federal Register** of this notice of initiation by filing a notice of intent to participate. The required contents of the notice of intent to participate are set forth at 19 CFR 351.218(d)(1)(ii). In accordance with the Department's regulations, if we do not receive a notice of intent to participate from at least one domestic interested party by the 15-day deadline, the Department will automatically revoke the order without further review. *See* 19 CFR 351.218(d)(1)(iii). If we receive an order-specific notice of intent to participate from a domestic interested party, the Department's regulations provide that *all parties* wishing to participate in the Sunset Review must file complete substantive responses not later than 30 days after the date of publication in the **Federal Register** of this notice of initiation. The required contents of a substantive response, on an order-specific basis, are set forth at 19 CFR 351.218(d)(3). Note that certain information requirements differ for respondent and domestic parties. Also, note that the Department's information requirements are distinct from the Commission's information requirements. Please consult the Department's regulations for information regarding the Department's conduct of Sunset Reviews. 1 Please consult the Department's regulations at 19 CFR Part 351 for definitions of terms and for other general information concerning antidumping and countervailing duty proceedings at the Department. 1 In comments made on the interim final sunset regulations, a number of parties stated that the proposed five-day period for rebuttals to substantive responses to a notice of initiation was insufficient. This requirement was retained in the final sunset regulations at 19 CFR 351.218(d)(4). As provided in 19 CFR 351.302(b), however, the Department will consider individual requests to extend that five-day deadline based upon a showing of good cause. This notice of initiation is being published in accordance with section 751(c) of the Act and 19 CFR 351.218 (c). Dated: June 18, 2008. Stephen J. Claeys, Deputy Assistant Secretary for Import Administration. [FR Doc. E8-14910 Filed 6-30-04; 8:45 am] BILLING CODE 3510-DS-S DEPARTMENT OF COMMERCE International Trade Administration Quarterly Update to Annual Listing of Foreign Government Subsidies on Articles of Cheese Subject to an In-Quota Rate of Duty AGENCY: Import Administration, International Trade Administration, Department of Commerce. EFFECTIVE DATE: July 1, 2008. FOR FURTHER INFORMATION CONTACT: Gayle Longest, AD/CVD Operations, Office 3, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Ave., NW, Washington, DC 20230, telephone:

(202)482-3338. SUPPLEMENTARY INFORMATION: Section 702 of the Trade Agreements Act of 1979 (as amended) (“the Act”) requires the Department of Commerce (“the Department”) to determine, inconsultation with the Secretary of Agriculture, whether any foreign government is providing a subsidy with respect to any article of cheese subject to an in-quota rate of duty, as defined in section 702(h) of the Act, and to publish an annual list and quarterly updates to the type and amount of those subsidies. We hereby provide the Department’s quarterly update of subsidies on articles of cheese that were imported during the period January 1, 2008 through March 31, 2008. The Department has developed, in consultation with the Secretary of Agriculture, information on subsidies (as defined in section 702(h) of the Act) being provided either directly or indirectly by foreign governments on articles of cheese subject to an in-quota rate of duty. The appendix to this notice lists the country, the subsidy program or programs, and the gross and net amounts of each subsidy for which information is currently available. The Department will incorporate additional programs which are found to constitute subsidies, and additional information on the subsidy programs listed, as the information is developed. The Department encourages any person having information on foreign government subsidy programs which benefit articles of cheese subject to an in-quota rate of duty to submit such information in writing to the Assistant Secretary for Import Administration, U.S. Department of Commerce, 14th Street and Constitution Ave., NW, Washington, DC 20230. This determination and notice are in accordance with section 702(a) of the Act. Dated: June 25, 2008. Ronald K. Lorentzen Deputy Assistant Secretary for Import Administration APPENDIX SUBSIDY PROGRAMS ON CHEESE SUBJECT TO AN IN-QUOTA RATE OF DUTY Country Program(s) Gross 1 Subsidy ($/lb) Net 2 Subsidy($/lb) 27 European Union Member States 3 European Union Restitution Payments $ 0.00 $0.00 Canada Export Assistance on Certain Types of Cheese $ 0.35 $ 0.35 Norway Indirect

(Milk)Subsidy $ 0.00 $ 0.00 *Consumer Subsidy* *$ 0.00* *$ 0.00* Total $ 0.00 $ 0.00 Switzerland Deficiency Payments $ 0.00 $ 0.00 1 Defined in 19 U.S.C. 1677(5). 2 Defined in 19 U.S.C. 1677(6). 3 The 27 member states of the European Union are: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, the United Kingdom. [FR Doc. E8-14912 Filed 6-30-08; 8:45 am] BILLING CODE 3510-DS-S DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XI74 Magnuson-Stevens Act Provisions; General Provisions for Domestic Fisheries; Application for Exempted Fishing Permits AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Notice; request for comments. SUMMARY: The Assistant Regional Administrator for Sustainable Fisheries, Northeast Region, NMFS has made a preliminary determination that the subject exempted fishing permit

(EFP)application contains all the required information and warrants further consideration. Therefore, NMFS announces that the Assistant Regional Administrator proposes to recommend that an EFP be issued that would allow one commercial fishing vessel to conduct fishing operations that are otherwise restricted by the regulations governing the fisheries of the Northeastern United States. The EFP, which would enable the applicants to investigate the bycatch variability of different groundfish trawl codend configurations with a small mesh cover, would allow for exemptions for one vessel from the Northeast

(NE)Multispecies and Monkfish Fishery Management Programs, as follows: NE multispecies Gulf of Maine

(GOM)minimum mesh size. The EFP would also allow temporary exemptions from the following regulations, per the stipulations detailed in this document: NE multispecies minimum fish sizes; NE multispecies possession restrictions; monkfish minimum fish sizes; and monkfish possession restrictions. Regulations under the Magnuson-Stevens Fishery Conservation and Management Act require publication of this notification to provide interested parties the opportunity to comment on applications for proposed EFPs. DATES: Comments must be received on or before July 16, 2008. ADDRESSES: Written comments should be sent to Patricia A. Kurkul, Regional Administrator, NMFS, Northeast Regional Office, 1 Blackburn Drive, Gloucester, MA 01930. Mark the outside of the envelope “Comments on the Codend Small-Mesh Study.” Comments may also be sent via facsimile

(fax)to

(978)281-9135, or submitted via e-mail to the following address: *DA8-146@noaa.gov* . FOR FURTHER INFORMATION CONTACT: Edward Stern, Fishery Management Specialist,

(978)281-9177, fax

(978)281-9135. SUPPLEMENTARY INFORMATION: A complete application for an EFP for this project was submitted on June 3, 2008, by Steve Eayrs of the Gulf of Maine Research Institute

(GMRI)for the F/V Skipper (Permit #250573). This project is funded by Jane's Trust and the Maine

(ME)Sea Grant Program. The primary goal of this EFP is to determine the optimal trawl configuration to reduce undersized bycatch. At present, fishermen from the Port Clyde Draggermen's Association

(PCDA)voluntarily remove the chafing net from their groundfish trawls in the belief that the chafing net masks codend meshes and increases the retention of undersized bycatch. This EFP will help quantify the effectiveness of this modification for three common codend mesh sizes: 6.5-inch (16.5-cm) square; 6.5-inch (16.5-cm) diamond; and 7-inch (17.8-cm) diamond mesh. This EFP would be issued to GMRI and Captain Glen Libby of the F/V Skipper to conduct 15 at-sea days of experimental fishing in an area north of the Cashes Ledge Habitat Closure Area and east of the Jeffery's Bank Habitat Closure Area (see Table 1). Fishing would not overlap with any GOM Rolling Closures. As a condition of this EFP, this vessel would complete no more than 78 tows, fishing 6 tows per day, each 1 hour in duration. Each tow would test one of the four possible trawl configurations: 6.5-inch (16.5-cm) diamond, with and without chafing gear; 6.5-inch (16.5-cm) square, without chafing gear; and 7-inch (17.8-cm) diamond, without chafing gear. A small-mesh 1.75 to 2.25-inch (4.4 to 5.7-cm) cover would be installed around the codend of each of these nets, supported by a hoop to prevent direct masking of the codend meshes. This small-mesh cover would provide information to determine which mesh configuration effects the greatest reduction in undersized bycatch. Table 1: Corner Coordinates for Experimental Fishing Area by F/V Skipper Point Latitude Longitude 1 44°00′ N 68°50′ W 2 44°00′ N 69°40′ W 3 43°20′ N 69°40′ W 4 43°20′ N 68°50′ W 5 44°00′ N 68°50′ W The data collection would include 48 complete tows, with additional tows (not to exceed 30), during which a camera would be installed to observe codend geometry and fish behavior. The camera system could upset the geometry and performance of the codend, so the researchers opted not to install the camera during any of the primary tows. The additional 7 days and 30 tows for camera work would also allow flexibility for any potential gear, weather, or other unforeseen problems during the first 8 days of testing. The researchers intend to complete this project before October 1, 2008. The applicants have asked for an exemption from the minimum GOM regulated mesh size specified at 50 CFR 648.80(a)(3)(i), so that they may install a small-mesh cover net around the codend to sample the variability in bycatch released from each of the four codend configurations. The applicants have also asked for temporary exemptions from the following regulations: NE multispecies minimum fish sizes (§ 648.83); NE multispecies possession restrictions (§ 648.86), monkfish minimum fish sizes(§ 648.93); and monkfish possession restrictions (§ 648.94). These exemptions are necessary to allow sampling of undersized fish and fish in excess of the possession limit; however, these exemptions would not permit the landing of fish outside of regular A days-at-sea

(DAS)possession limits. These exemptions are only for the time period when trained technicians or crew are measuring, weighing, or sampling fish that would otherwise be immediately discarded. During the 15 at-sea days of comparative fishing trials, the F/V Skipper would use A DAS and would be subject to all day and trip possession limits, with the exemptions listed above. All fish caught would be weighed, and as many fish as possible would be measured. As a condition of this EFP, all undersized fish or fish that cannot legally be landed (e.g., in excess of possession limits) would be returned to the sea as quickly as practicable after measurement. The overall catch estimates expected for the remainder of this project under this EFP can be found in Table 2. The applicants anticipate a total harvest of 19,500 lb (8,845 kg), and an additional 6,283 lb (2,850 kg) of discards. The estimated GOM cod catch per day for the proposed number of DAS during this EFP would be 27 percent of the current daily possession limit of 800 lb (363 kg). All legal-sized fish, within the possession limit, would be sold. Table 2: Estimated Catch and Discards by Species lb

(kg)Species Harvest Discards Haddock 3,250(1,474) 1,083(491) Cod 3,250(1,474) 1,083(491) Grey Sole 3,250(1,474) 1,083(491) American Plaice 3,250(1,474) 1,083(491) Monkfish 3,250(1,474) 1,083(491) Pollock 1,300(590) 433(196) Hake & other 1,950(885) 650(295) Skate sp. 0 1,300(590) Dogfish 0 1,300(590) Undersized and unregulated sp. 0 2,600(1,179) The applicants may request minor modifications and extensions to the EFP throughout the course of research. EFP modifications and extensions may be granted without further public notice if they are deemed essential to facilitate completion of the proposed research and result in only a minimal change in the scope or impacts of the initially approved EFP request. In accordance with NOAA Administrative Order 216-6, a Categorical Exclusion or other appropriate NEPA document would be completed prior to the issuance of the EFP. Further review and consultation may be necessary before a final determination is made to issue the EFP. After publication of this document in the **Federal Register** , the EFP, if approved, may become effective following the public comment period. Authority: 16 U.S.C. 1801 *et seq.* Dated: June 25, 2008. Emily H. Menashes Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service. [FR Doc. E8-14834 Filed 6-30-08; 8:45 am] BILLING CODE 3510-22-S DEPARTMENT OF DEFENSE Office of the Secretary [Transmittal Nos. 08-68] 36(b)(1) Arms Sales Notification AGENCY: Department of Defense, Defense Security Cooperation Agency. ACTION: Notice. SUMMARY: The Department of Defense is publishing the unclassified text of a section 36(b)(1) arms sales notification. This is published to fulfill the requirements of section 155 of Public Law 104-164 dated 21 July 1996. FOR FURTHER INFORMATION CONTACT: Ms. B. English, DSCA/DBO/CFM,

(703)601-3740. The following is a copy of a letter to the Speaker of the House of Representatives, Transmittals 08-68 with attached transmittal, and policy justification. June 23, 2008. Patricia L. Toppings, OSD Federal Register Liaison Officer, Department of Defense. BILLING CODE 5001-06-M EN01JY08.078 EN01JY08.079 EN01JY08.080 [FR Doc. E8-14775 Filed 6-30-08; 8:45 am] BILLING CODE 5001-06-C DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION [OMB Control No. 9000-0141] Federal Acquisition Regulation; Submission for OMB Review; Buy American Act—Construction AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Notice of request for comments regarding an extension to an existing OMB clearance (9000-0141). SUMMARY: Under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Federal Acquisition Regulation

(FAR)Secretariat will be submitting to the Office of Management and Budget

(OMB)a request to review and approve an extension of a currently approved information requirement concerning Buy American Act—Construction (Grimberg Decision). A request for public comments was published in the **Federal Register** at 73 FR 14780, March 19, 2008. No comments were received. Public comments are particularly invited on: Whether this collection of information is necessary for the proper performance of functions of the FAR, and whether it will have practical utility; whether our estimate of the public burden of this collection of information is accurate, and based on valid assumptions and methodology; ways to enhance the quality, utility, and clarity of the information to be collected; and ways in which we can minimize the burden of the collection of information on those who are to respond, through the use of appropriate technological collection techniques or other forms of information technology. DATES: Submit comments on or before July 31, 2008. FOR FURTHER INFORMATION CONTACT Ms. Meredith Murphy, Contract Policy Division, GSA, at

(202)208-6925. ADDRESSES: Submit comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to: FAR Desk Officer, OMB, Room 10102, NEOB, Washington, DC 20503, and a copy to the General Services Administration, FAR Secretariat (VPR), 1800 F Street, NW, Room 4035, Washington, DC 20405. SUPPLEMENTARY INFORMATION: A. Purpose The clauses at FAR 52.225-9, Buy American Act—Construction Materials, and FAR 52.225-11, Buy American Act—Construction Materials under Trade Agreements, prove that offerors/contractors requesting to use foreign construction material, other than construction material eligible under a trade agreement shall provide adequate information for Government evaluation of the request. These regulations implement the Buy American Act for construction (41 U.S.C. 10a - 10d). B. Annual Reporting Burden *Respondents:* 500. *Responses Per Respondent:* 2. *Annual Responses:* 1,000. *Hours Per Response:* 2.5. *Total Burden Hours:* 2,500. *Obtaining Copies of Proposals:* Requesters may obtain a copy of the information collection documents from the General Services Administration, FAR Secretariat (VPR), Room 4035, Washington, DC 20405, telephone

(202)501-4755. Please cite OMB Control No. 9000-0141, Buy American Act—Construction (Grimberg Decision) in all correspondence. Dated: May 20, 2008. Al Matera, Director, Office of Acquisition Policy. [FR Doc. E8-14870 Filed 6-30-08; 8:45 am] BILLING CODE 6820-EP-S DEPARTMENT OF DEFENSE Department of the Navy Record of Decision for the Development of the Westside of Marine Corps Base Quantico, Including the 2005 Base Realignment and Closure Action AGENCY: Department of the Navy, DoD. ACTION: Notice of Record of Decision. SUMMARY: Pursuant to Section 102(2)(c) of the National Environmental Policy Act

(NEPA)of 1969, 42 U.S.C. Section 4332(2)(c), the regulations of the Council on Environmental Quality's

(CEQ)for Implementing the Procedural Provisions of (40 CFR parts 1500-1508), the Department of the Navy NEPA regulation (32 CFR part 775), and the Marine Corps Environmental Compliance and Protection Manual, which is Marine Corps Order P5090.2A (MCO P5090.2A), the Department of the Navy announces its decision to develop the area west of Interstate 95 (Westside) at Marine Corps Base Quantico (MCB Quantico), Virginia. This action will include implementation of the 2005 Base Realignment and Closure

(BRAC)action at MCB Quantico. The development of Westside and implementation of BRAC 2005 at MCB Quantico will be accomplished as set out in the Preferred Alternative and described in the Final Environmental Impact Statement (Final EIS) of April 2008. FOR FURTHER INFORMATION CONTACT: Mr. Jeff Gardner, NREA Branch (B046), 3250 Catlin Avenue, Marine Corps Base, Quantico, VA 22134-0855, telephone: 703-432-6770, and e-mail: *jeff.gardner@usmc.mil* . SUPPLEMENTARY INFORMATION: In 2005, the Secretary of Defense and the Defense Base Closure and Realignment Commission recommended that certain realignment actions occur at MCB Quantico. The President and Congress approved these recommendations, which became law on November 9, 2005. These recommendations must now be implemented as provided for in the Defense Base Closure and Realignment Act of 1990 (Pub. L. 101-510), as amended, no later than September 15, 2011. The actions directed at MCB Quantico are the collocation of Military Department Investigation Agencies Headquarters with the Counterintelligence Field Activity, and the Defense Security Service at MCB Quantico. These realignment actions will add approximately 3,000 personnel to work at MCB Quantico by 2011. Projected personnel growth in Marine Corps units currently on Mainside, requirements to consolidate personnel located elsewhere, replacement of inadequate facilities on Mainside, and an expectation that other federal and Marine Corps initiatives will continue to identify MCB Quantico as a site for relocation, combined with limited redevelopment potential on Mainside, comprise the additional need to develop Westside. *Proposed Action.* The Marine Corps proposes development of the Westside of MCB Quantico including the 2005 BRAC action at MCB Quantico. The development would entail construction of new facilities in two undeveloped areas west of I-95. These areas, the Russell Road Area and the MCB-1 Area, would accommodate the collocation of Military Department Investigation Agencies with the Department of Defense Counterintelligence and Security Agency at MCB Quantico as directed by the 2005 BRAC law. They would also provide space for adequate facilities to support Marine Corps units currently at MCB Quantico, as well as potentially other federal and Marine Corps initiatives that may identify MCB Quantico as a site for relocation. The components of the Proposed Action include construction and operation of new facilities with the necessary infrastructure, road improvements, and security measures to support new facilities. *Alternatives Considered:* The Final EIS assesses two action Alternatives, A and B, that respectively provide development to support only the BRAC Action involving 3,000 personnel, or development to support both the BRAC Action and an additional 2,000 personnel that would relocate to the Westside. Both Alternatives A and B include the two development location options for the BRAC component that were identified in the 2006 *Quantico Land Use Plan, I-95 West:* (BRAC Option 1 (Russell Road) and BRAC Option 2 (MCB-1)). The following four options to implement the Proposed Action are evaluated by the Final EIS. Alternative B BRAC Option 1 (Russell Road) is the Marine Corps Preferred Alternative. *Alternative A, BRAC Action.* Alternative A would add only the development required to accommodate those personnel (approximately 3,000) associated with the BRAC 2005 action. About 70 acres would be required for the facilities. About 735,000 square feet of space and provision of parking and necessary supporting infrastructure would be constructed. Road widening and intersection improvements would be required throughout the Russell Road/MCB-1 corridor, from the intersection of Russell Road with U.S. Route 1 to the Southern Russell Road Site and/or to the MCB-1 Area. Alternative A BRAC Option 1 (Russell Road) would site the entire BRAC development in the Southern Russell Road Site, south of Telegraph Road and just east of the intersection of Russell Road with Telegraph Road. Alternative A BRAC Option 2 (MCB-1) would site the entire BRAC development in the Northern MCB-1 Site along Hotpatch Road. *Alternative B, 5,000 Personnel Including BRAC.* Alternative B would add 5,000 personnel to work in the Westside, including 3,000 BRAC and 2,000 non-BRAC personnel. The non-BRAC personnel include approximately 1,000 personnel currently working elsewhere at MCB Quantico. Total space needed for BRAC and non-BRAC components is estimated to be approximately 148 acres and 1,300,000 square feet of interior space. Road widening and intersection improvements would be required throughout the Russell Road/MCB-1 corridor, from the intersection of Russell Road with U.S. Route 1 to the Southern Russell Road Site and/or to the MCB-1 Area. Alternative B BRAC Option 1 (Russell Road) (The Preferred Alternative) would site the entire BRAC development in the Southern Russell Road Site; the remainder of the development for the additional 2,000 personnel would be sited in the MCB-1 Area, including approximately 300 personnel potentially at the Weapons Training Battalion Site. Alternative B BRAC Option 2 (MCB-1) would site the entire BRAC development in the MCB-1 Site along Hotpatch Road. The remaining development for 2,000 personnel could be completely sited in other parcels of the MCB-1 Area, or completely sited in the Southern Russell Road Site, or split between the two areas in some combination. Development for 300 personnel would be considered for the Weapons Training Battalion Site. *No Action Alternative.* The No Action Alternative would maintain the status quo. The No Action Alternative would not permit the implementation of the BRAC-directed action and would not be consistent with current law. *Environmentally Preferred Alternative.* The No Action Alternative maintains the status quo and therefore does not impact the existing environment. It is the environmentally preferred alternative. However, it does not meet the purpose and need of the action, and does not comply with BRAC law. Therefore, a further environmental comparison of the two action alternatives, which meet purpose and need, is provided. Alternative A would disturb a smaller quantity of environmental resources and consequently would be environmentally preferred to Alternative B. In terms of satisfying the BRAC requirement, either BRAC Option 1 (Russell Road) or BRAC Option 2 (MCB-1) is equally environmentally preferred depending upon the environmental resource of concern. Option 1 under either alternative potentially disturbs a greater quantity of wetlands, which can be mitigated, however. Option 2 entails more roadway construction under Alternative A and results in more traffic congestion on Base under both Alternatives A and B by placing a higher density of personnel in one general area than Option 1. Option 2 also places more personnel within the radii of potentially disturbing sound contours from training exercises. Other impacts are similar for Options 1 and 2. *Environmental Impacts:* Environmental impacts associated with the Preferred Alternative, Alternative B BRAC Option 1 (Russell Road), are discussed below. *Water Resources.* The widening of Russell Road will cross Chopawamsic Creek, but would avoid all other wetlands or Waters of the U.S. The Marine Corps would obtain any required permits under the Virginia/U.S. Army Corps of Engineers Joint Permit Application process. Implementation of stormwater and erosion and sedimentation best management measures would reduce impacts to water quality. *Biological Resources.* The Preferred Alternative would directly impact an estimated 148 acres of primarily forested habitat. The Preferred Alternative would occupy approximately two percent of the total 6,895 forested acres in which the Russell Road and MCB-1 Areas are located and would be near roads that already act as a barrier to wildlife. Therefore impacts to forest habitat would be minimal. Impacts to migratory birds would also be minimal. Proposed site development would avoid areas containing the federally-threatened small whorled pogonia or its designated protection zone. No other threatened or endangered species are expected in the proposed development areas. Consistent with U.S. Fish and Wildlife Service recommendations, widening of Russell Road would occur on the opposite side of most recently identified small whorled pogonia colonies. Through informal consultation, the U.S. Fish and Wildlife agreed the road widening is not likely to adversely affect the small whorled pogonia and/or its associated habitat as long as the widening of Russell Road occurred as recommended. Build out of the construction site has the potential, through the importation of aggregate and other construction materials, as well as landscaping and natural re-vegetation processes to introduce invasive or non-native species. Mitigation measures will be employed to prevent any such introduction of invasive or non-native species and all landscape plantings will be in accordance with the approved plant list described in the Base Exterior Architecture Plan. *Air Quality:* MCBQ is located in an air quality control region that is in moderate nonattainment for ozone and in nonattainment for particulate matter with diameter less than or equal to 2.5 micrometers (PM 2.5 ). It is also in an ozone transport region. Federal actions located in nonattainment and maintenance areas are required to demonstrate compliance with the general conformity guidelines. The Final EIS has a completed General Conformity Rule applicability analysis for the ozone precursor pollutants nitrogen oxides and volatile organic compounds, for PM 2.5 , and for the PM 2.5 precursor pollutant sulfur dioxide to analyze impacts to air quality. It determined that annual project emissions are well below *de minimis* values and are not regionally significant; therefore, a further conformity determination is not required and impacts from these pollutants are not significant. A Record of Non-Applicability was included in the Final EIS. *Noise:* The proposed development areas could be impacted by noise from nearby training ranges that will increase in the future with the introduction of new aircraft and increased ordnance. Reports from noise studies indicate that in the future much of the MCB-1 Area and approximately 10 acres in the western portion of the Southern Russell Road Site are projected to be within a zone of moderate noise impact. Noise attenuation measures would be employed to meet noise standards, most of which are already designed into the construction to meet security requirements. Temporary noise associated with construction and any increase in noise levels from traffic would not be expected to cause impacts off Base. *Transportation.* Traffic studies conducted in conjunction with the EIS show that most secondary intersections within the project area currently operate at acceptable levels; major access points that serve the Base typically perform at unacceptable levels during peak commuter periods. Anticipated growth within the region and the corresponding increase in vehicular traffic are predicted to further degrade the operation of most intersections within the area. This degradation is expected to occur with or without implementation of the proposed development of the area west of I-95, unless improvements to those intersections are made. The EIS analysis projects levels of service considered unacceptable at intersections that provide access from U.S. Route 1 and I-95, as well as within the Westside at proposed development sites, unless roadway improvement measures are implemented, including those proposed as mitigation in this document. In general, impacts within the Westside are less if the development is spread between the Southern Russell Road Site and MCB-1 Area, as occurs for the Preferred Alternative. *Socioeconomics.* Implementation of the Preferred Alternative could increase local residents employed at MCB Quantico by approximately 2,800 over time, and also would add associated additional family members to the region. The additional population would be expected to add students to the region's schools and could contribute to any need for additional services in the region. The projected additional residents represent a small percent of projected regional growth and impacts to the region are not expected to be significant. Implementation of the Preferred Alternative is not expected to have disproportionately high and adverse human health or environmental effects on minority, low-income or younger segments of the local population. *Land Use:* Proposed alternatives are consistent with MCBQ land use plans; however, some land currently used for training and recreational hunting would become unavailable and routes to training areas currently passing through the development sites could require realignments. Traffic on MCB-1 Road passes through the explosive safety arcs for the adjacent ammunition supply point and would necessitate an adjustment of ammunition storage. A project is planned to accomplish this by 2011. *Mitigation:* The Marine Corps has identified potential mitigation measures for any impacts to wetlands, surface water, invasive species, and federally-threatened species, control of fugitive emissions to air, potential noise exposure, and for traffic generated by the alternatives that could cause unacceptable levels of service at nearby intersections or exceed safety limits associated with the Ammunition Supply Point. Implementation of mitigation will be monitored by the Marine Corps construction management teams involved with each project. *Wetland Impacts Mitigation.* The Virginia/USACE Joint Permit Application process would be followed and best management practices for erosion and sediment control will be implemented during and following construction. Use of wetlands bank credits may be used by MCB Quantico to mitigate the potential wetland losses. *Surface Water Measures.* Stormwater management plans and best management practices would be employed to control runoff. In addition, a stormwater construction permit issued by the Virginia Department of Conservation and Recreation is required for all land disturbing projects greater than or equal to one acre of disturbance. *Invasive Species Measures.* In accordance with Executive Order 13112 (Invasive Species), and as discussed in detail in the FEIS, during development of the sites, recommended measures to reduce the spread of invasive species would be implemented as practicable. *Threatened Species Measures.* In accordance with U.S. Fish and Wildlife Service recommendation, road widening would only occur on the west side of Russell Road. *Fugitive Dust Control Measures.* Fugitive dust from construction would be kept to a minimum by using control methods in accordance with the Regulations for the Control and Abatement of Air Pollution (9 VAC 5-50-60 *et seq* ). *Noise Impacts Measures.* For facilities sited in a zone of moderate noise impacts, Noise Level Reduction

(NLR)measures will be included in the design of administrative facilities to reduce noise and impulse vibrations. *Ammunition Safety and Overpressure Zone Measures.* The ammunition supply point operations building will be moved to avoid a hazard to passing vehicles. Development designs will consider the overpressure zone when a specific location for buildings has been determined and the distance can be measured to identify design requirements. *Potential Traffic Improvement Measures.* The following roadway improvements will be funded and implemented by the Marine Corps to mitigate impacts caused by the Preferred Alternative:

(1)Russell Road will be widened to 4 lanes from the Russell Road/Telegraph Road intersection east to approximately 300 feet past the northbound entrance ramp to I-95 (I-95 overpass support structures will not be altered);

(2)a connector road will be constructed between Telegraph Road and Russell Road with traffic signals installed at each end;

(3)the existing Chopawamsic Creek bridge will be rehabilitated;

(4)an additional 2-lane bridge will be constructed over Chopawamsic Creek adjacent to the existing bridge;

(5)the I-95 southbound exit ramp will have an additional lane added (westbound) and a traffic signal installed;

(6)the I-95 northbound exit ramp will have an additional lane added (westbound) and a traffic signal installed;

(7)a traffic signal will be installed on Russell Road adjacent to the northbound entrance ramp to I-95 from Russell Road;

(8)Ponderosa Gate will be improved; and

(9)the U.S. Route 1 ramps to and from Russell Road are under study in conjunction with gate improvements to Mainside to improve level of service. Additional roadway improvements to the west of Ponderosa Gate will be identified when development there and resultant traffic volumes warrant. The EIS identified off-Base improvements at the U.S. Route 1/VA 637 and VA 610/Onville road intersections that would be under the purview of the Commonwealth of Virginia; the Marine Corps will cooperate with the Commonwealth as appropriate if these improvements are implemented. The Defense Access Roads

(DAR)Program is the only authority the Marine Corps has to address these recommended improvements and the Marine Corps will submit requests for consideration under this program if they meet DAR criteria. In the next update of the Base Transportation Management Plan the Marine Corps will identify strategies to reduce single-occupancy vehicle trips during peak hours. This plan will also encourage carpooling and staggered work hours where these do not impair accomplishment of the defense mission. The Base will cooperate with regional mass transit initiatives. State and/or local governments have jurisdiction over off-Base roads and intersections and would determine whether improvements identified off-Base in the EIS should be implemented. *Response To Comments Received Regarding the Final EIS:* Comments on the Final EIS were received from the Commonwealth of Virginia. They noted the Virginia Department of Transportation

(VDOT)concerns with the statement in the Final EIS that state and/or local governments are the action proponents for off-Base road improvements and the inference that these had been approved and funded by State or local governments. VDOT also requested commitments to carpooling, staggered work hours, regional mass transit initiatives, and a transportation demand management plan focused on reducing single-occupancy vehicle trips during peak hours. The Marine Corps has addressed these comments in the preceding section. *Conclusions:* After careful consideration of the purpose and need for the proposed action, the analysis contained in the EIS and the comments received on the EIS from federal, state, and local agencies, non-governmental organizations, and individual members of the public, I have decided to proceed with the Preferred Alternative, Alternative B BRAC Option 1 (Russell Road) for development of Westside and implementation of BRAC 2005 at MCB Quantico, Virginia. Consistent with this decision and the Proposed Action and analyses described in the Final EIS, at the sites identified in the Preferred Alternative, the Marine Corps will implement the Preferred Alternative and address all mitigation measures. Dated: June 24, 2008. BJ Penn, Assistant Secretary of the Navy (Installations and Environment). [FR Doc. E8-14854 Filed 6-30-08; 8:45 am] BILLING CODE 3810-FF-P DEFENSE NUCLEAR FACILITIES SAFETY BOARD No FEAR Act AGENCY: Defense Nuclear Facilities Safety Board. ACTION: Notice. SUMMARY: The Defense Nuclear Facilities Safety Board (Board) is providing notice to its employees, former employees, and applicants for federal employment about the rights and remedies available to them under the Federal antidiscrimination, whistleblower protection, and retaliation laws. This notice fulfills the Board's initial notification obligation under the Notification and Federal Employees Antidiscrimination and Retaliation Act (No FEAR Act), as implemented by Office of Personnel Management

(OPM)regulations at 5 CFR part 724. DATES: This notice is effective July 1, 2008. FOR FURTHER INFORMATION CONTACT: Richard A. Azzaro, General Counsel, Defense Nuclear Facilities Safety Board, 625 Indiana Avenue, NW., Suite 700, Washington, DC 20004. Telephone:

(202)694-7062. FAX:

(202)208-6518. SUPPLEMENTARY INFORMATION: On May 15, 2002, Congress enacted the “Notification and Federal Employee Antidiscrimination and Retaliation Act of 2002,” which is now known as the No FEAR Act. See Pub. L. 107-174, codified at 5 U.S.C. 2301 note. As stated in the full title of the Act, the Act is intended to “require that federal agencies be accountable for violations of antidiscrimination and whistleblower protection laws.” In support of this purpose, Congress found that: Agencies cannot be run effectively if those agencies practice or tolerate discrimination. Pub. L. 107-174, section 101(1). The Act also requires the Board to provide this notice to federal employees, former federal employees and applicants for federal employment to inform them of the rights and protections available under Federal antidiscrimination and whistleblower protection laws. Antidiscrimination Laws A federal agency cannot discriminate against an employee or applicant with respect to the terms, conditions or privileges of employment on the basis of race, color, religion, sex, national origin, age, disability, marital status, or political affiliation. Discrimination on these bases is prohibited by one or more of the following statutes: 5 U.S.C. 2302(b)(1), 29 U.S.C. 206(d), 29 U.S.C. 631, 29 U.S.C. 633a, 29 U.S.C. 791 and 42 U.S.C. 2000e-16. If you believe that you have been the victim of unlawful discrimination on the basis of race, color, religion, sex, national origin, age, disability, marital status, or political affiliation, you must contact an Equal Employment Opportunity

(EEO)counselor within 45 calendar days of the alleged discriminatory action, or, in the case of a personnel action, within 45 calendar days of the effective date of the action, before you can file a formal complaint of discrimination with the Board. See, e.g., 29 CFR 1614. If you believe that you have been the victim of unlawful discrimination on the basis of age, you must either contact an EEO counselor as noted above or give notice of intent to sue to the Equal Employment Opportunity Commission

(EEOC)within 180 calendar days of the alleged discriminatory action. If you are alleging discrimination based on marital status or political affiliation, you may file a written complaint with the U.S. Office of Special Counsel

(OSC)(see contact information below). In the alternative (or in some cases, in addition), you may pursue a discrimination complaint by filing a grievance through the Agency's administrative or negotiated grievance procedures, if such procedures apply and are available. Whistleblower Protection Laws A federal employee with authority to take, direct others to take, recommend or approve any personnel action must not use that authority to take or fail to take, or threaten to take or fail to take, a personnel action against an employee or applicant because of disclosure of information by that individual that is reasonably believed to evidence violations of law, rule or regulation; gross mismanagement; gross waste of funds; an abuse of authority; or a substantial and specific danger to public health or safety, unless disclosure of such information is specifically prohibited by law and such information is specifically required by Executive Order to be kept secret in the interest of national defense or the conduct of foreign affairs. Retaliation against an employee or applicant for making a protected disclosure is prohibited by 5 U.S.C. 2302(b)(8). If you believe that you have been the victim of whistleblower retaliation, you may file a written complaint (Form OSC-11) with the U.S. Office of Special Counsel

(OSC)at 1730 M Street, NW., Suite 218, Washington, DC 20036-4505 or online through the OSC Web site: *http://www.osc.gov* . Retaliation for Engaging in Protected Activity A federal agency cannot retaliate against an employee or applicant because that individual exercises his or her rights under any of the Federal antidiscrimination or whistleblower protection laws listed above. If you believe that you are the victim of retaliation for engaging in protected activity, you must follow, as appropriate, the procedures described in Antidiscrimination Laws and Whistleblower Protection Laws or, if applicable, administrative or negotiated grievance procedures in order to pursue any legal remedy. Disciplinary Actions Under the existing laws, each agency retains the right, where appropriate, to discipline a federal employee for conduct that is inconsistent with Federal Antidiscrimination and Whistleblower Protection Laws up to and including removal. If OSC has initiated an investigation under 5 U.S.C. 1214, however, according to 5 U.S.C. 1214(f), agencies must seek approval from the Special Counsel to discipline employees for, among other activities, engaging in prohibited retaliation. Nothing in the No FEAR Act alters existing laws or permits an agency to take unfounded disciplinary action against a federal employee or to violate the procedural rights of a federal employee who has been accused of discrimination. Additional Information For further information regarding the No FEAR Act regulations, refer to 5 CFR part 724, as well as the Board's EEO Director or Counselors. Additional information regarding Federal antidiscrimination, whistleblower protection and retaliation laws can be found at the EEOC Web site *http://www.eeoc.gov* and the OSC Web site *http://www.osc.gov* . Existing Rights Unchanged Pursuant to section 205 of the No FEAR Act, neither the Act nor this notice creates, expands or reduces any rights otherwise available to any employee, former employee or applicant under the laws of the United States, including the provisions of law specified in 5 U.S.C. 2302(d). A.J. Eggenberger, Chairman. [FR Doc. E8-14848 Filed 6-30-08; 8:45 am] BILLING CODE 3670-01-P DEPARTMENT OF EDUCATION DEPARTMENT OF THE TREASURY OFFICE OF MANAGEMENT AND BUDGET Federal Family Education Loan Program (FFELP) AGENCY: Department of Education, Department of the Treasury, Office of Management and Budget. ACTION: Notice of terms and conditions of purchase of loans under the Ensuring Continued Access to Student Loans Act of 2008. SUMMARY: Under section 459A of the Higher Education Act of 1965, as amended (“HEA”), as enacted within the Ensuring Continued Access to Student Loans Act of 2008 (Pub. L. 110-227), the Department of Education (“Department”) has the authority to purchase, or enter into forward commitments to purchase, Federal Family Education Loan Program (“FFELP”) loans made under sections 428 (subsidized Stafford loans), 428B (PLUS loans), or 428H (unsubsidized Stafford loans) of the HEA, on such terms as the Secretary of Education (“Secretary”), the Secretary of the Treasury, and the Director of the Office of Management and Budget (collectively, “Secretaries and Director”) jointly determine are “in the best interest of the United States” and “shall not result in any net cost to the Federal Government (including the cost of servicing the loans purchased).” This notice

(a)establishes the terms and conditions that will govern the loan purchases made under section 459A of the HEA,

(b)outlines the methodology and factors that have been considered in evaluating the price at which the Department will purchase loans made under section 428, 428B, or 428H of the HEA, and

(c)describes how the use of those factors and methodology will ensure that the loan purchases do not result in any net cost to the Federal Government. The Secretaries and Director concur in the publication of this notice and have jointly determined that the programs described in this notice are in the best interest of the United States and shall not result in any net cost to the Federal Government (including the cost of servicing the loans purchased). DATES: *Effective Date:* The terms and conditions governing the Loan Purchase Commitment Program and the terms and conditions governing the Loan Participation Purchase Program are effective July 1, 2008. FOR FURTHER INFORMATION CONTACT: Kristie Hansen, U.S. Department of Education, Office of Federal Student Aid, Union Center Plaza, 830 First Street, NE., Room 113F1, Washington, DC 20202. Telephone:

(202)377-3309 or by *e-mail: Kristie.Hansen@ed.gov* . If you use a telecommunications device for the deaf (TDD), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339. Individuals with disabilities can obtain this document in an alternative format ( *e.g.* , Braille, large print, audiotape, or computer diskette) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT . SUPPLEMENTARY INFORMATION: Introduction The purchasing of loans is intended to encourage eligible FFELP lenders to provide students and parents access to Stafford and PLUS loans for the 2008-2009 academic year. To accomplish this objective, the Department is offering lenders the opportunity to participate in a Loan Purchase Commitment Program (“Purchase Program”) and a Loan Participation Purchase Program (“Participation Program”) (collectively, “Programs”). Under the Loan Purchase Commitment Program, the Department may purchase eligible loans that are held by eligible lenders. To participate in the Purchase Program, each eligible lender must enter into a Master Loan Sale Agreement with the Department and deliver to the Department or its agent the fully executed master promissory note (or all electronic records evidencing the same) evidencing each eligible loan that the eligible lender wishes to sell to the Department and any and all other documents and computerized records relating to such eligible loans. Under the Loan Participation Purchase Program, the Department may purchase participation interests in eligible loans that are held by an eligible lender acting as a sponsor under a Master Participation Agreement. To participate in the Participation Program, each sponsor must enter into a Master Participation Agreement with the Department and a third-party custodian acceptable to the Department and must have provided appropriate notice to the Department of the intent to participate in the Loan Purchase Commitment Program. 1 1 Lenders that qualify as “eligible not-for-profit holders” for a higher special allowance rate may sell participation interests in their loans under this program without loss of eligibility for that rate. An entity qualifies for that rate only if the entity is the “sole beneficial owner of such loan.” 20 U.S.C. 1085(p)(2)(C). Courts treat a participation interest in a loan as a beneficial ownership of a loan. The Department becomes a beneficial owner of a loan in which it purchases a participation interest, and the lender then holds a junior beneficial ownership interest. In light of other statutory provisions and the congressional intent they evidence, the Department interprets the HEA to disqualify an otherwise-eligible not-for-profit holder only if a for-profit entity acquires beneficial ownership of a loan. See 20 U.S.C. 1085(p)(2)(B), (E), (3). Terms and Conditions Pursuant to section 459A of the HEA, the Secretaries and Director establish the terms and conditions that will govern the Loan Purchase Commitment Program (“Loan Purchase Commitment Program Terms and Conditions,” attached as Appendix B to this notice) and the terms and conditions that will govern the Loan Participation Purchase Program (“Loan Participation Purchase Program Terms and Conditions,” attached as Appendix C to this notice). The Loan Purchase Commitment Program Terms and Conditions and the Loan Participation Purchase Program Terms and Conditions are collectively referred to as the “Terms and Conditions.” (The Notice of Intent to Participate, referenced in the Terms and Conditions, is attached as Appendix D to this notice.) Outline of Methodology and Factors in Determining Prices In accordance with Public Law 110-227, the goal in structuring the Purchase Program and the Participation Program described in this notice is to maximize student loan availability while ensuring loan purchases result in no net costs to the Federal Government. These programs will offer temporary liquidity to FFELP lenders at prices that will encourage their continued participation in the FFELP. This notice responds, in particular, to the requirement in section 459A of the HEA for an outline of the methodology and factors considered in evaluating the price at which loans may be purchased, and describes how the use of such methodology and consideration of such factors will ensure that no net cost to the Federal Government results from the loan purchases under these programs. *Servicing and Financing Costs* . In determining the prices described in this notice, the Secretary and the Secretary of the Treasury analyzed the costs incurred in making FFELP loans by large and small lenders, for-profit and not-for-profit lenders, and national and regional lenders based on publicly available data and consultations with a number of lenders and financial market analysts. This analysis examined lender returns in the context of loan servicing and financing expenses associated with obtaining funding to pay program costs and finance actual loan disbursements. • The rate of lender returns on FFELP loans in the in-school and grace periods are effectively set by section 438 of the HEA at the commercial paper

(CP)rate plus 1.19 percent or CP plus 119 basis points for for-profit lenders (a basis point equals one one-hundredth of a percent). 20 U.S.C. 1087-1(b)(2)(I)(ii) and (b)(2)(I)(vi)(I)(bb). For eligible not-for-profit holders, the HEA provides a return of CP plus 134 basis points. 20 U.S.C. 1087-1(b)(2)(I)(ii) and (b)(2)(I)(vi)(II)(bb). (These return levels reflect the net of borrower interest payments and Federal interest subsidies.) Returns are different for PLUS loans, which make up a relatively small portion of overall FFELP volume. These PLUS return levels were reflected in the cost neutrality calculations but, for simplicity, are not detailed in this notice. • Lenders reported that loan servicing costs generally average between 30 basis points and 60 basis points per dollar loaned, with larger, more efficient lenders typically averaging closer to 30 basis points and small or not-for-profit lenders averaging closer to 60 basis points. Lenders pay the Department a 1 percent fee on each loan they make. 20 U.S.C. 1087-1(d)(2)(B). In addition, lenders must repay excess interest payments as required by section 438 of the HEA. 20 U.S.C. 1087-1(b)(2)(v). Because the student borrowers of most loans subject to the Purchase Program and the Participation Program will be in school and not making payments on their loans during the 2008-2009 academic year, lenders may need to obtain funding to make these statutorily-required payments to the Department. Financing costs ( *i.e.* , interest expenses incurred to obtain capital from deposits or from private capital markets) typically total 15 basis points for every dollar loaned. • Subtracting estimated servicing and financing costs from the lender return levels established in the HEA leaves lenders with estimated pre-tax returns of CP plus 44-74 basis points for for-profit lenders and CP plus 59-89 basis points for lenders that are eligible not-for-profit holders. Lenders finance loan disbursements from these returns. If lenders sell participation interests in their loans under the Participation Program, they are charged CP plus 50 basis points, leaving a net pre-tax return of −6 basis points to 24 basis points for for-profit lenders. If lenders can obtain private financing at a lower interest rate, their net pre-tax return would be higher. Based on this background information, the Secretaries and Director determined that setting the price paid by lenders on a participation interest in a loan at the principal of that loan and the commercial paper rate plus 50 basis points would offer most lenders sufficient opportunity to continue their participation in the FFELP. Setting a higher price risks limiting participation to only the largest lenders, while offering a lower price would be overly generous, especially for those same large lenders. *Origination and Deconversion Costs* . In addition to servicing and financing costs, lenders incur administrative costs to originate loans and remove or “deconvert” loans from their servicing systems. In determining the proper price to reimburse lenders for these costs, the Department and the Department of the Treasury analyzed information from lenders and servicers. The Department and the Department of the Treasury consulted with lenders, who provided them with their estimated origination and deconversion costs. Larger, more efficient lenders indicated that their origination costs ranged between $20-$30 per loan while these costs for smaller lenders were $75 per loan. Lenders indicated that their estimated deconversion costs ( *i.e.* the costs resulting from the process of taking a loan from one lender's servicing system and transferring it to another servicing system) ranged from $20-$50 per loan. To ensure the Participation Program is open to more than just the largest lenders, the Secretaries and Director used these estimates to establish a flat $75 fee paid on each loan sold to the Department to cover all servicing, origination, and deconversion costs. This assumes the lower end of the origination cost range and the higher end of the deconversion costs range. Pricing structures on many private servicing contracts tend to have costs that differ greatly for different services, with high origination costs and relatively low deconversion costs, or at times, the converse. Notwithstanding these differences, the Secretaries and Director are reasonably certain that the $75 fee accounts for these variations while ensuring adequate participation in the Participation Program. Analysis of Cost Neutrality The cost-neutrality analysis used credit subsidy cost estimation procedures established under the Federal Credit Reform Act of 1990 (Pub. L. 101-508) and OMB Circular A-11. These procedures entail performing various analyses, projecting cash flows to and from the Government, and discounting those cash flows to the point of disbursement; the analysis also used the Credit Subsidy Calculator (“OMB calculator”), developed by the Office of Management and Budget to estimate credit subsidy costs for all Federal credit programs, as the discounting tool. 2 The results of the analysis were subsidy rates that reflect the Federal costs associated with a loan; these costs are expressed as a percentage of the credit extended by the loan. For example, a subsidy rate of 10.0 percent indicates a Federal cost of $10 on a $100 loan. 2 The OMB calculator takes projected future cash flows from the Department's student loan cost estimation model and produces discounted subsidy rates reflecting the net present value of all future Federal costs associated with loans made in a given fiscal year. Values are calculated using a “basket of zeros” methodology under which each cash flow is discounted using the interest rate of a zero-coupon Treasury bond with the same maturity as that cash flow. To ensure comparability across various Federal credit programs, this methodology is incorporated into the calculator and used government-wide to develop estimates of the Federal costs of credit programs. The metric to determine cost neutrality was that costs under the new Programs should not exceed costs expected under the FFELP had the loan purchase authority in section 459A of the HEA not been enacted. Thus all costs were compared to estimates in the 2009 President's Budget for the FFELP, after adjustments were made for enacted legislation (other than the loan purchase authority provided by Pub. L. 110-227), including administrative costs. Student loan cost estimates were developed to assess the Federal cost incurred for loans financed for students in five categories: Students attending proprietary schools, students attending two-year schools, freshmen/sophomores at four-year schools, juniors/seniors at four-year schools, and students in graduate programs. Risk categories have separate assumptions based on historical patterns—for example, the likelihood of default or the likelihood of statutory deferments or discharge benefits—of borrowers in each category. The analysis also considered risk factors that are particular to the new programs, such as the likelihood that lenders involved in loan participation agreements file for bankruptcy protection. This discussion outlines the analysis of the new Purchase Program and Participation Program with respect to the following critical aspects affecting the Federal cost: ○ Administrative costs; ○ Borrower behavior; ○ Lender behavior; and ○ Various risk factors. *Administrative Costs* . Under the Federal Credit Reform Act, Federal administrative costs are not included in credit subsidy cost calculations. However, to capture the full cost of the Purchase Program and Participation Program, section 459A of the HEA requires the determination of cost neutrality to include total costs, including Federal administrative costs that are subject to appropriation, and thus administrative costs were estimated and included in the cost-neutrality analysis. Administrative cash flows primarily involve servicing costs associated with loans purchased by the Department. These costs extend for up to 40 years, because servicing must continue until the last loan is paid in full. Administrative costs also include start-up costs to enhance the Department's systems to accommodate the purchase of participation interests and any put FFELP loans. Other start-up costs include legal and technical advisory contracts and changes to Department accounting, reporting, and program compliance systems and processes. For the new programs, the Secretaries and Director estimated that start-up costs would be $15.7 million and servicing costs would vary, according to the amount of volume in the program. Estimates for start-up costs were derived from conversations with the Department's existing service contract providers, while servicing cost estimates were derived from costs currently incurred with the Department's Federal Direct Loan servicing contract. *Borrower Behavior* . Given the base FFELP serves as the foundation of the new programs, and the characteristics of the base program are unchanged, there is no reason to believe that the Purchase Program and Participation Program outlined in this notice will affect borrower behavior. Thus, this cost analysis uses the same borrower behavior assumptions as were used in preparing the 2009 President's Budget to gauge the effect on program costs of borrower-based activities such as loan repayment, use of statutory benefits such as deferments and loan discharges, and default rates and timing. These assumptions are based on a wide range of data sources, including the National Student Loan Data System, the Department's operational and financial systems, and a group of surveys conducted by the National Center for Education Statistics such as the 2004 National Postsecondary Student Aid Survey, the 1994 National Education Longitudinal Study, and the 1996 Beginning Postsecondary Student Survey. *Lender Behavior* . A key factor in assessing whether the Purchase Program and Participation Program would operate in a cost-neutral manner was lender behavior: Specifically, how many lenders would participate in each program and how many loans would they eventually choose to sell to the Department. The Secretaries and Director considered alternative scenarios of market conditions and lender behavior to determine whether each program could be considered cost-neutral. In one scenario, the Secretaries and Director assumed that market conditions would not improve and that FFELP lenders would put or sell participation interests to the Department in 100 percent of all FFELP loans made for the 2008-09 academic year. At the end of the participation period, FFELP lenders would also put 50 percent of those loans to the Department. The Secretaries and Director assumed that the loan volume would be $65 billion and that the total portfolio would be similar to the expected 2008-2009 school year of student loans under the FFELP before enactment of the loan purchase authority in Public Law 110-227. 3 Further, the loans purchased at the end of the participation period would be representative of the total loan volume. Under this scenario, we determined that costs for both the Purchase Program and the Participation Program were less expensive to the Government than for the baseline subsidy costs for FFELP loans costs for the FFELP baseline in this period. (Please see *Table 2* , located in Appendix A, for a summary of the analysis for this scenario, which also includes the risk factors discussed in this notice.) 3 This loan volume assumption is the full FFELP non-consolidation estimate for the 2008-2009 academic year (as presented in the 2009 President's Budget) and is adjusted to include increases to unsubsidized Stafford Loan limits provided for in Pub. L. 110-227. The Secretaries and Director also considered other scenarios. In those scenarios, the Secretaries and Director sorted the expected FFELP volume under the Purchase Program and Participation Program into three categories: Loans made by lenders and sold to the Department; loans made by lenders on which the lenders first sold participation interests to the Department and then, on September 30, 2009, sold the loans themselves to the Department; and loans made by lenders on which participation interests were sold to the Department but then redeemed by the lender, for a cash payment, eliminating the Department's participation interest. In general, the Secretaries and Director derived volume allocations under particular scenarios by making assumptions about near-term market conditions, likely lender behavior based on type of lending institution and operational capability, and projecting lender demand for any particular option under those conditions. One of these scenarios, considered to be one of the most costly to the Government, would be that market conditions improve significantly over the next year, and that lenders sell a greater proportion of higher cost loans to the Government (in a process often termed “cherry-picking”). A Congressional Budget Office analysis, and other analyses, of the FFELP portfolio have found that certain loans are more profitable for FFELP lenders than others. In particular, borrowers with small balances provide relatively little margin income relative to the fixed costs lenders face to service those loans. Some borrowers, including those that attended schools with higher than average default rates, are more likely to become delinquent and, consequently, present higher expected default costs, and greater losses of margin income due to default. The Terms and Conditions seek to reduce the impact of these risk factors. For example, program guidelines requiring lenders to sell all 2008-09 Stafford loans held for a specific borrower, combined with the administrative complexity and expense of identifying and deconverting only less profitable loans, make it less likely that lenders will choose to sell only poorly-performing loans to the Department. Nevertheless, if financial markets improve to the point where lenders can finance most loans privately, they might still sell those least profitable loans to the Department. In this situation, borrowers with very low balances will present relatively high servicing costs to the Department per dollar of outstanding balance. Under the scenario described in the preceding paragraph, the analysis estimates 4 percent of FFELP volume ($65 billion in the 2008-2009 academic year) will be loans made by lenders and sold to the Department; 32 percent of volume ($21 billion) would be loans for which participation interests, and then the loans themselves, would be sold to the Department; and 32 percent ($21 billion) would be loans for which participation interests were sold, but then redeemed. 4 Cost estimates assuming these volume allocations and risk adjustments for this scenario still compared favorably with the costs for the base FFELP. (Please see *Table 3* , located in Appendix A, for a summary of the analysis for this scenario and the risk factors discussed in the following sections.) 4 The loan volume assumption in this scenario was developed through conversations with a variety of lending institutions. Depository lending institutions indicated that they would use their own capital to originate new student loans rather than take advantage of the participation agreement structure. Non-depository institutions indicated they would use participation agreements. For the top 100 lenders in FY 2007, which together accounted for over 80 percent of FFELP non-consolidation volume, 33 percent of volume was originated by depository institutions and 67 percent by non-depository institutions. (Figures for non-depository institutions include loans made by depository institutions acting as eligible lender trustees.) Lenders currently have $50 billion in warehouses and substantial additional loans securitized in rollover accounts that will require long-term refinancing. These inventory stocks may provide lenders with an incentive to put loans. Representatives of depository institutions indicated they may increase volume to ensure students have access to loans, but may not want to maintain this additional volume on their books. In consideration of these factors, estimates assumed all 2008-2009 FFELP non-consolidation loan volume originated by depository institutions over the level originated for 2007-2008 and 50 percent of 2008-2009 loans originated by non-depository institutions and included in the Loan Participation Purchase Program will be put. Estimates further assumed that all loans of $1,000 or less would be put first, with the balance up to the total amount put made up of loans of over $1,000. It should also be noted that, in addition to the examples discussed herein that represent certain abnormal market and lender behavior conditions, all other alternatives under which the Purchase Program and Participation Program were analyzed were less expensive than base FFELP costs. *Risk Factors* . Analyzing whether the Purchase Program and Participation Program would operate in a cost-neutral manner requires that projected costs account for the presence of various risks and cost factors that must be assumed since the programs will not operate entirely like the base FFELP, nor without operational risk. In addition to cherry-picking, the Secretaries' and Director's estimates included adjustments for four other factors: that lenders involved in loan participation agreements file for bankruptcy protection (“bankruptcy remoteness”); that lenders redeem their participation agreements early, reducing Federal earnings from the participation interests acquired (“interest adjustments”); that unforeseen problems undermine the Department's ability to effectively oversee and administer the Purchase Program and Participation Program (“operational risk”); and that some of the loans purchased by the Department would be those where the Department would otherwise reject a claim under the FFELP program (“claim rejects”). The Terms and Conditions for each program seek to reduce the impact of these risk factors. None of these factors is likely to lead to significant additional Federal costs. For example, the requirement that lenders sell participation interests that total at least $50 million will limit involvement to large financial institutions that, in general, are financially stable and not likely to proceed to bankruptcy. Additionally, upon filing for bankruptcy, the yield owed by the lender to the Department increases from principal of that loan and the commercial paper rate plus 50 basis points, to principal of that loan and the commercial paper rate plus 300 basis points. However, to ensure estimates reflect a conservative assessment of possible Federal costs, the Secretaries and Director added cost adjustments to incorporate each risk factor in all of the scenarios noted in the preceding paragraphs. The adjustments were based on an assessment of private-sector behavior and program data as follows: • *Bankruptcy remoteness* . The Government might face legal risks if a lender declares bankruptcy while holding rights to loans under the participation agreement. The Secretaries and Director believe that the structure to be utilized under the Participation Program offers sufficient bankruptcy protection, in that legal title of these participated loans will be placed in a custodial facility, and that the participation agreement vests the Government with a valid security interest under the Uniform Commercial Code. Nonetheless, a bankruptcy court might tie up control of the loans until the claims of other creditors are settled. This risk is more present if markets remain distressed during the next one to two years as the likelihood of bankruptcy is higher; however, the risk never goes to zero entirely. For the scenario in Table 2 below (where the market conditions do not improve), the analysis assumes an increase in cost of 15 basis points. For the scenario in Table 3, where market conditions do improve, the analysis assumes an increase in cost of 5 basis points. Assumptions are based on an estimated one-year default rate of lenders and potential recoveries on default. • *Interest adjustments* . If financial market conditions significantly improve between now and the end of September 2009, lenders that took advantage of the participation agreements might opt to buy their loans out early and finance them privately through more favorable rates. While this outcome is highly desirable from a policy perspective, it would deprive the Department of some of the margin income it might expect from the participation agreement under a scenario where lenders opt to maintain their loans in the participation agreements until the last possible moment. The cost neutrality analysis below assumes a 20 basis point increase in the cost for interest that the Department does not realize, based on the expected placement of FFELP loans in the participation interest program, and the difference between the commercial paper rate plus 50 basis points lenders must pay the Department and the cost of Government borrowing. • *Operational risk* . Operational risk is in general a major concern in all credit activities in both the public and private sectors, and has been a major focus in recent efforts to overhaul bank regulations. (Operational risk is limited in this analysis to that related to funding and management of the participation or loan purchase agreements.) In the new Purchase Program and Participation Program, operational risk might result from imperfect controls of ineligible lending, servicing errors, technology failures, and the risk of fraud. While the Department has made every effort to mitigate operational risk, the emergency nature and accelerated implementation timeframe for these Programs make operational risk more of a concern than in established Department programs. For the low risk scenario, the analysis below assumes a 10 basis point increase in cost, reflecting risks other than credit or market risk, as banks are currently required to finance on average about eight percent of their assets with capital. For the high scenario, we raised the factor related to operational risk by 70 basis points to equal a total of 0.80 percent. We estimated this worst-case scenario using survey data from bank regulators implementing an overhaul of bank regulations. The largest United States banking organizations will be subject to a new system of capital requirements which includes an explicit charge for operational risk. Under that regulation banks must develop models generating a probability distribution of losses for operational risk, and hold capital equal to the 99.9th percentile of that estimated probability distribution. Banks were surveyed to measure the anticipated impact of the regulation. Using the best available models of operational risk, the banks reported that operational risk would account for roughly ten percent of their required capital. As banks currently finance on average about eight percent of their assets with capital, worst-case scenario operational risk losses can thus be estimated at about one percent of total assets. Also, while we do not believe that this program has, or necessarily will, face such a level of operational risk, we developed the high scenario to ensure that the program is cost neutral, even under extreme and unlikely circumstances. • *Claim rejects.* This risk factor takes into account the costs associated with the purchase of loans that would not typically qualify for the federal guarantee in the FFEL program due to improper origination or servicing. The 6 basis point increase in cost is based on a historical rejected claim rate of 1 percent of volume, and assumes that these loans would have higher loss rates than the average portfolio. Cost estimates reflecting these factors, for each of the market condition and lender behavior scenarios discussed elsewhere in this notice, were calculated and included, as illustrated in *Tables 2* and *3.* As those analyses show, even with these risk adjustments, the estimated costs of the loans included in the Purchase Program and Participation Program remained lower than those for standard FFELP loans. *Conclusion.* After taking into account alternative market and lender behavior scenarios and appropriate risk factors, the Secretaries and Director determine that the Purchase Program and Participation Program are in the best interest of the United States and will result in no net cost to the Federal Government (including the cost of servicing the loans purchased). *Applicable Program Regulations:* 34 CFR part 682. Electronic Access to This Document You may view this document, as well as all other Department of Education documents published in the **Federal Register** , in text or Adobe Portable Document Format

(PDF)on the Internet at the following site: *http://www.ed.gov/news/fedregister/index.html.* To use PDF you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about using PDF, call the U.S. Government Printing Office (GPO), toll free, at 1-888-293-6498; or in the Washington, DC, area at

(202)512-1530. You may also view this document in PDF at the following site: *http://www.ifap.ed.gov.* Note: The official version of this document is the document published in the **Federal Register** . Free Internet access to the official edition of the **Federal Register** and the Code of Federal Regulations is available on GPO Access at: *http://www.gpoaccess.gov/nara/index.html.* (Catalog of Federal Domestic Assistance Number 84.032 Federal Family Education Loan Program) Program Authority: 20 U.S.C. 1087i-1. Dated: June 25, 2008. Margaret Spellings, Secretary of Education. Dated: June 25, 2008. Henry M. Paulson, Jr., Secretary of the Treasury. Dated: June 25, 2008. Jim Nussle, Director, Office of Management and Budget. BILLING CODE 4000-01-P EN01JY08.049 EN01JY08.050 EN01JY08.051 EN01JY08.052 EN01JY08.053 EN01JY08.054 EN01JY08.055 EN01JY08.056 EN01JY08.057 EN01JY08.058 EN01JY08.059 EN01JY08.060 EN01JY08.061 EN01JY08.062 EN01JY08.063 EN01JY08.064 EN01JY08.065 EN01JY08.066 EN01JY08.067 EN01JY08.068 EN01JY08.069 EN01JY08.070 EN01JY08.071 EN01JY08.072 [FR Doc. E8-14820 Filed 6-30-08; 8:45 am] BILLING CODE 4000-01-C DEPARTMENT OF EDUCATION The Historically Black Colleges and Universities Capital Financing Advisory Board AGENCY: Department of Education, The Historically Black Colleges and Universities Capital Financing Advisory Board. ACTION: Notice of an open meeting. SUMMARY: This notice sets forth the schedule and proposed agenda of an upcoming open meeting of the Historically Black Colleges and Universities Capital Financing Advisory Board. The notice also describes the functions of the Board. Notice of this meeting is required by Section 10(a)(2) of the Federal Advisory Committee Act and is intended to notify the public of their opportunity to attend. DATES: Friday, July 11, 2008. *Time:* 9 a.m.-11 a.m. ADDRESSES: Wyndham Grand Resort, Pelican Room, 6000 Rio Mar Boulevard, Rio Grande, Puerto Rico 00745. FOR FURTHER INFORMATION CONTACT: Don E. Watson, Executive Director, Historically Black College and University Capital Financing Program, 1990 K Street, NW., Room 6130, Washington, DC 20006; telephone:

(202)219-7037; fax:

(202)502-7852; e-mail: *donald.watson@ed.gov.* Individuals who use a telecommunications device for the deaf

(TDD)may call the Federal Information Relay Service

(FRS)at 1-800-877-8339, Monday through Friday between the hours of 8 a.m. and 8 p.m., Eastern Standard Time. SUPPLEMENTARY INFORMATION: The Historically Black College and University Capital Financing Advisory Board (Board) is authorized by Title III, Part D, Section 347 of the Higher Education Act of 1965, as amended in 1998 (20 U.S.C. 1066f). The Board is established within the Department of Education to provide advice and counsel to the Secretary and the designated bonding authority as to the most effective and efficient means of implementing construction financing on historically black college and university campuses and to advise Congress regarding the progress made in implementing the program. Specifically, the Board will provide advice as to the capital needs of Historically Black Colleges and Universities, how those needs can be met through the program, and what additional steps might be taken to improve the operation and implementation of the construction financing program. The purpose of this meeting is to review current program activities, provide guidance for 2008 activities, to make recommendations to the Secretary on the current capital needs of Historically Black Colleges and Universities, and to share additional steps in which the HBCU Capital Financing Program might improve its operation. Individuals who will need accommodations for a disability in order to attend the meeting (e.g., interpreting services, assistance listening devices, or materials in alternative format) should notify Don Watson at

(202)219-7037, no later than July 1, 2008. We will attempt to meet requests for accommodations after this date but cannot guarantee their availability. The meeting site is accessible to individuals with disabilities. An opportunity for public comment is available on Friday, July 11, 2008 between 10:30 a.m.-11 a.m. Those members of the public interested in submitting written comments may do so by submitting them to the attention of Don E. Watson, 1990 K Street, NW., Washington, DC, by Monday, July 7, 2008. Records are kept of all Board proceedings and are available for public inspection at the Office of The Historically Black College and University Capital Financing Advisory Board (Board), 1990 K Street, NW., Washington, DC 20006, from the hours of 9 a.m. to 5 p.m., Eastern Standard Time, Monday through Friday (EST). *Electronic Access to This Document:* You may view this document, as well as all other documents of this Department published in the **Federal Register** , in text or Adobe Portable Document Format

(PDF)on the Internet at the following site: *http://www.ed.gov/news/federegister.* To use PDF you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about using PDF, call the U.S. Government Printing Office (GPO), toll free at 1-888-293-6498; or in the Washington, DC, area at

(202)512-1530. Note: The official version of this document is the document published in the **Federal Register** . Free Internet access to the official edition of the **Federal Register** and the Code of Federal Regulations is available on GPO Access at: *http://www.gpoaccess.gov/nara/index.html.* Sara Martinez Tucker, Under Secretary of Education. [FR Doc. E8-14930 Filed 6-30-08; 8:45 am] BILLING CODE 4000-01-P DEPARTMENT OF ENERGY Proposed Agency Information Collection AGENCY: U.S. Department of Energy. ACTION: Notice and Request for Comments. SUMMARY: The Department of Energy

(DOE)invites public comment on a proposed collection of information that DOE is developing for submission to the Office of Management and Budget

(OMB)pursuant to the Paperwork Reduction Act of 1995. Comments are invited on:

(a)Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility;

(b)the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;

(c)ways to enhance the quality, utility, and clarity of the information to be collected; and

(d)ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. DATES: Comments must be filed by September 2, 2008. If you anticipate difficulty in submitting comments within that period, contact the person listed in Addresses as soon as possible. ADDRESSES: Send comments to Alice Lippert. Written comments may be sent to Office of Electricity Delivery and Energy Reliability (Attn: Comments on Refinery Disruption and Incident Report), OE-30, Forrestal Building, U.S. Department of Energy, Washington, DC 20585 or by fax at 202-586-2623, or by e-mail at *Alice.Lippert@hq.doe.gov.* To ensure receipt of the comments by the due date, submission by FAX or e-mail to is recommended. Alternatively, Alice Lippert may be contacted by telephone at 202-586-9600. FOR FURTHER INFORMATION CONTACT: Requests for additional information should be directed to Alice Lippert using the contact information listed above. SUPPLEMENTARY INFORMATION: This information collection request contains:

(1)*OMB No.:* New.

(2)*Information Collection Request Title:* Refinery Disruption and Incident Report.

(3)*Type of Review:* New.

(4)*Purpose:* (4)(I). Background; (4)(II). Current Actions; (4)(III). Request for Comments. (4)(I). Background Section 202(b) of the Department of Energy Organization Act ((DOE Act), Pub. L. 95-91, 42 U.S.C. 7132(b)) and Secretary of Energy Delegation Orders 00-002.00 and 00-001.10 provides the Office of Electricity Delivery and Energy reliability the authority to:

(1)Implement section 13 of the Federal Energy Administration Act of 1974 (Pub. L. 93-275) (15 U.S.C. 772), to collect, assemble, evaluate and analyze energy information;

(2)Implement section 11 of the Energy Supply and Environmental Coordination Act of 1974 (ESECA) (Pub. L. 93-319, 15 U.S.C. 796), to request, acquire and collect such energy information as the Secretary of Energy determines to be necessary to assist in the formulation of energy policy or to carry out the purposes of ESECA, and to exercise all energy information reporting authorities provided in section 11;

(3)Carry out the responsibilities assigned to the Secretary of Energy in Homeland Security Presidential Directive (HSPD)-5 (Management of Domestic Incidents) and the National Response Framework adopted pursuant to HSPD-5 with respect to energy supply and distribution and related activities;

(4)Carry out the responsibilities assigned to the Secretary of Energy in HSPD-7 (Critical Infrastructure Identification, Prioritization, and Protection) with respect to energy supply and distribution and related activities;

(5)Carry out the responsibilities assigned to the Secretary of Energy in HSPD-8 (National Preparedness) with respect to energy supply and distribution and related activities; and

(6)Formulate and establish enforcement policy, initiate and conduct investigations, conduct conferences, administrative hearings and public hearings, prepare required reports, issue orders, and take such other action as may be necessary or appropriate to perform any of the above functions. The DOE, as part of its effort to comply with the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. Chapter 35), provides the general public and other Federal agencies with opportunities to comment on collections of energy information. Any comments received help the DOE to prepare data requests that maximize the utility of the information collected, and to assess the impact of collection requirements on the public. Also, the DOE will later seek approval by the Office of Management and Budget

(OMB)under section 3507(a) of the Paperwork Reduction Act of 1995. The purpose of the “Refinery Disruption and Incident Report” would be to provide the Department of Energy with the information necessary to alert it to the existence and severity of a problem with a refinery and its ability to supply the market with petroleum products; the report would also provide contact information should it be necessary for the Department to discuss and address the situation. The report would be filed during an emergency, when certain conditions were met, indicating that a serious problem were occurring at a refinery. OE proposes to collect information on refinery disruptions and incidents when there is

(1)an emergency shutdown of a refinery; or

(2)an emergency shutdown of a major unit, processes, or system at a refinery with potential for significant production disruption; or

(3)a physical or cyber attack that causes major interruptions to critical refinery facilities, systems or operations. OE proposes to collect “Emergency Alert” information within one hour that indicates when the disruption or incident began, and if it is over, when it ended. In addition, OE proposes to collect information within one hour on the type of disruption or incident and whether the there is any anticipated loss of production of transportation fuels or heating oil as a result of the problem. If there is no production impact, then the one hour Emergency Alert filing is all that is required of a refinery. OE proposes to collect more information on the disruption or incident within six hours of the occurrence, if there is a projected production impact. OE proposes to collect detailed data on the actions taken as a result of the problem, including the units or processed affected by the disruption or incident and the estimated loss of production in barrels per day of gasoline, gasoline blending stocks, jet fuel, and distillate fuel, including heating oil. OE also proposes to collect detailed information (in a narrative format) regarding: Why the refinery reduced runs or shut down, supply impacts, feedstock deficiencies, storage issues, and distribution problems. The frame for the report would include operators of all petroleum refineries with a crude distillation capacity of at least 50,000 barrels per day that are located in the 50 States, District of Columbia, Puerto Rico, the Virgin Islands, Guam, and other U.S. possessions. Filing of the report would be mandatory pursuant to Section 13 of the Federal Energy Administration Act of 1974 (Pub. L. 93-275) (15 U.S.C. 772), Section 202(b) of the Department of Energy Organization Act ((DOE Act), Pub. L. 95-91, 42 U.S.C. 7132(b)) and Secretary of Energy Delegation Orders 00-002.00 and 00-001.10, when a disruption or incident meets certain criteria or conditions indicating the situation is significant. This is an emergency report, without any set schedule, that will only be filed when criteria for filing are met. When the criteria are met, it is critical that the report is filed in a timely manner, so the Department of Energy, if necessary, can make policy decisions and take actions to quickly address a petroleum product supply emergency. The information collected on the report would be used by the Department to perform due diligence on policy recommendations concerning emergency actions. The Department needs accurate information and assessments of impacts and the expected duration of emergency disruptions and incidents at refineries to provide the most effective regulatory relief and restoration assistance. Information collected on refinery disruptions and incidents will be shared with DOE policy-makers and may be shared with relevant federal and state officials who have emergency authorities to waive certain regulations in order to expedite recovery or mitigate the adverse effects of the disruption. Information that is not protected on Schedule 1 may also be published in OE's Emergency Situation Reports, which provide public information on the status of the energy infrastructure in the United States. All information collected related to actions taken, units or processes affected by the disruption or incident, the estimated losses of production, and any additional information provided in the narrative will be considered protected data. The protected data will be kept confidential and not disclosed to the public to the extent that it satisfies the criteria for exemption under the Freedom of Information Act (FOIA), 5 U.S.C. 552, the DOE regulations, 10 CFR 1004.11, implementing the FOIA, and the Trade Secrets Act, 18 U.S.C. 1905. The Department of Energy

(DOE)will protect the information in accordance with its confidentiality and security policies and procedures. Information on refinery disruptions and incidents and the possible effects on petroleum product supplies are essential to the mission of the DOE in general and to Energy Information Administration and OE, in particular. Data on refinery outages are limited from commercial sources. Consideration of a proposal for OE to collect information on refinery disruptions and incidents was necessitated by requesters citing the important roles that petroleum product supplies and prices have in the U.S. economy and the potential significant effects of refinery disruptions and incidents. The survey will not collect information on planned, scheduled outages. Public and private analysts must rely on commercially available sources of information for such information, to the extent that it is available. (4)(II). Current Actions OE is considering collecting refinery disruption and incident information only during an emergency which meets certain defined conditions. The conditions are: A. Emergency shutdown of refinery; or B. Emergency shutdown of a major unit, process, or system at the refinery with potential for significant production disruption; or C. Physical or cyber attack that causes major interruptions or impacts to critical refinery facilities, systems, or operations. The information to be reported would include: The date and time of the disruption or incident, its duration, the type of incident, actions taken by the refinery, units or processes affected, and the estimated production impact. The report also asks the respondent to provide a narrative description of the disruption or incident and details on supply impacts, feedstock deficiencies, storage issues or distribution problems, including pipeline, waterborne transport, railroad, or truck loading issues to or from the refinery. At this time, OE is soliciting public comments on this proposal. OE then plans to request approval from the Office of Management and Budget

(OMB)for the new emergency report to collect data on refinery disruptions and incidents. (4)(III). Request for Comments A. Is the proposed collection of information necessary for the proper performance of the functions of the agency and does the information have practical utility? Practical utility is defined as the actual usefulness of information, taking into account its accuracy, adequacy, reliability, timeliness, and the agency's ability to process the information it collects. B. What enhancements can be made to the quality, utility, and clarity of the information to be collected and disseminated? C. How soon after a disruption or incident would one expect refiners to be able to provide a meaningful estimate of a potential loss in production of transportation fuels and heating oil? D. Given the availability of public and subscription information regarding refinery disruptions and incidents, please provide detailed reasons why actions taken by a refinery, unit- and process-level information, and estimates of production impacts collected from a refinery should not be considered as public information and releasable to the public in identifiable form. Put another way, why should OE treat such information as protected from public release and consider the information as trade secrets? E. What, if any, issues or potential questions should OE address in this proposed emergency report and instructions for collecting information on significant disruptions and incidents affecting refinery operations? F. The “Refinery Disruption and Incident Report” is expected to take one hour to fill out per response. The estimated burden includes the total time necessary to provide the requested information. In your opinion, how accurate is this estimate? Will a respondent incur any start-up costs for reporting, or any recurring annual costs for operation, maintenance, and purchase of services associated with the information collection? G. What additional actions could be taken to minimize the burden of this collection of information? Such actions may involve the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. H. Does any other Federal, State, or local agency or any private organization collect similar information? If so, specify the agency/organization, the data element(s), the methods of collection, and what additional value would be derived from OE undertaking a collection of that information. Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of the collection of the information on refinery disruptions and incidents. They also will become a matter of public record.

(5)*Respondents:* 100 Respondents—100 refinery operators (number not expected to change over the next three years);

(6)*Estimated Number of Burden Hours:* OE estimates the annual reporting burden to be 485 hours. OE estimates the respondent burden on the Emergency Report for Schedule 1 to be about six minutes. OE estimates the respondent burden on the Status Report (Schedule 1 & Schedule 2) to be about 1 hour per response. OE estimates the respondent burden on the Final Report (Schedule 1 & Schedule 2) to be about 1 hour per response. OE estimates 150 Emergency Report filings with no production impact and 200 Emergency Report filing with a production impact. The 200 Emergency Report filings with production impact will require Status Reports and Final Reports to be filed. OE assumes about 50 respondents will file two Status Reports. Statutory Authority: Section 3507(h)(1) of the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. Chapter 35), Section 202(b) of the Department of Energy Organization Act ((DOE Act), Pub. L. 95-91, 42 U.S.C. 7132(b)), Secretary of Energy Delegation Orders 00-002.00 and 00-001.10, Section 13 of the Federal Energy Administration Act of 1974 (Pub. L. 93-275) (15 U.S.C. 772), and Section 11 of the Energy Supply and Environmental Coordination Act of 1974 (ESECA) (Pub. L. 93-319, 15 U.S.C. 796) Issued in Washington, DC on June 25th, 2008. Kevin M. Kolevar, Assistant Secretary of Energy, Office of Electricity Delivery and Energy Reliability, Infrastructure Security and Energy Restoration Division. [FR Doc. E8-14886 Filed 6-30-08; 8:45 am] BILLING CODE 6450-01-P DEPARTMENT OF ENERGY Energy Information Administration Agency Information Collection Activities: Submission for OMB Review; Comment Request AGENCY: Energy Information Administration (EIA), Department of Energy (DOE). ACTION: Agency Information Collection Activities: Submission for OMB Review; Comment Request. SUMMARY: The EIA has submitted the energy information collection, “Generic Clearance of Questionnaire Testing, Evaluating, and Research,” Form EIA-882T, to the Office of Management and Budget

(OMB)for review and a three-year extension under section 3507(h)(1) of the Paperwork Reduction Act of 1995 (Pub. L. 104-13) (44 U.S.C. 3501 *et seq.* ). DATES: Comments must be filed by July 31, 2008. If you anticipate that you will be submitting comments but find it difficult to do so within that period, you should contact the OMB Desk Officer for DOE listed below as soon as possible. ADDRESSES: Send comments to Nathan Frey, OMB Desk Officer for DOE, Office of Information and Regulatory Affairs, Office of Management and Budget. To ensure receipt of the comments by the due date, submission by Fax (202-395-7285) or e-mail ( *Nathan_J._Frey@omb.eop.gov* ) is recommended. The mailing address is 726 Jackson Place, NW., Washington, DC 20503. The OMB DOE Desk Officer may be telephoned at

(202)395-7345. (A copy of your comments should also be provided to EIA's Statistics and Methods Group at the address below.) FOR FURTHER INFORMATION CONTACT: Requests for additional information should be directed to Grace Sutherland. To ensure receipt of the comments by the due date, submission by Fax (202-586-5271) or e-mail ( *grace.sutherland@eia.doe.gov* ) is recommended. The mailing address is Statistics and Methods Group (EI-70), Forrestal Building, U.S. Department of Energy, Washington, DC 20585-0670. Ms. Sutherland may be contacted by telephone at

(202)586-6264. SUPPLEMENTARY INFORMATION: This section contains the following information about the energy information collection submitted to OMB for review:

(1)The collection numbers and title;

(2)the sponsor (i.e., the Department of Energy component);

(3)the current OMB docket number (if applicable);

(4)the type of request (i.e., new, revision, extension, or reinstatement);

(5)response obligation (i.e., mandatory, voluntary, or required to obtain or retain benefits);

(6)a description of the need for and proposed use of the information;

(7)a categorical description of the likely respondents; and

(8)an estimate of the total annual reporting burden (i.e., the estimated number of likely respondents times the proposed frequency of response per year times the average hours per response). 1. EIA-882T, “Generic Clearance for Questionnaire Testing and Research”. 2. Energy Information Administration. 3. OMB Number 1905-0186. 4. Three-year approval requested. 5. Voluntary. 6. The EIA-882T is used to conduct pretest/pilot surveys (face-to-face interviews, telephone interviews, mail questionnaires, electronic questionnaires), focus groups, and cognitive interviews. Data are used to modify questionnaires to improve the quality of data. Samples of potential respondents to proposed surveys are selected to participate. 7. Individuals or households; Business or other for-profit; Not-for profit institutions; Farms; Federal Government; and State, Local or Tribal Government. 8. 1000 hours ( 4,000 respondents × 1 response per year × .25 hours per response). Statutory Authority: Section 3507(h)(1) of the Paperwork Reduction Act of 1995 (Pub. L. No. 104-13, 44 U.S.C. Chapter 35). Issued in Washington, DC, June 24, 2008. Stephanie Brown, Director, Statistics and Methods Group, Energy Information Administration. [FR Doc. E8-14862 Filed 6-30-08; 8:45 am] BILLING CODE 6450-01-P ENVIRONMENTAL PROTECTION AGENCY [FRL-8687-4] Notice of Proposed Administrative Settlement Pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act AGENCY: Environmental Protection Agency. ACTION: Notice; request for public comment. SUMMARY: In accordance with Section 122(i) of the Comprehensive Environmental Response, Compensation, and Liability Act, as amended (“CERCLA”), 42 U.S.C. 9622(i), notice is hereby given of a proposed administrative settlement concerning the Tobin and Jacks Superfund Site, with a number of parties (“Settling Parties”), and the United States Environmental Protection Agency (“EPA”) The settlement requires the Settling Parties to pay a total of $405,180.31 to the EPA in reimbursement of Past Response Costs. The settlement includes a covenant not to sue under section 107 of CERCLA, 42 U.S.C 9607. For thirty

(30)days following the date of publication of this notice, the Agency will receive written comments relating to the settlement. The Agency will consider all comments received and may withdraw or withhold its consent to the proposed settlement if comments received disclose facts or considerations which indicate that the settlement is inappropriate, improper, or inadequate. The Agency's response to any comments received will be available for public inspection at 1445 Ross Avenue, Dallas, Texas 75202-2733. DATES: Comments must be submitted on or before July 31, 2008. ADDRESSES: The proposed settlement is available for public inspection at 1445 Ross Avenue, Dallas, Texas 75202-2733. A copy of the proposed settlement may be requested from Barbara J. Aldridge (6SF-TE), U.S. Environmental Protection Agency, Region 6, 1445 Ross Avenue, Dallas, Texas 75202-2733 at

(214)665-2712. Comments should reference the Tobin and Jacks Superfund Site, Dallas, Texas, and EPA Docket Number 06-06-07, and should be addressed to Gloria Moran at the address listed below. FOR FURTHER INFORMATION CONTACT: Gloria Moran (6RC-S), U.S. Environmental Protection Agency, 1445 Ross Avenue, Dallas, Texas 75202-2733, or call

(214)665-3193. Dated: June 25, 2008. Lawrence E. Starfield, Acting Regional Administrator, Region 6. [FR Doc. E8-14906 Filed 6-30-08; 8:45 am] BILLING CODE 6560-50-M ENVIRONMENTAL PROTECTION AGENCY [FRL-8686-8] Science Advisory Board Staff Office; Notification of a Public Teleconference of the Science Advisory Board Drinking Water Committee AGENCY: Environmental Protection Agency (EPA). ACTION: Notice. SUMMARY: The Environmental Protection Agency

(EPA)Science Advisory Board

(SAB)Staff Office announces a public teleconference of the SAB Drinking Water Committee

(DWC)to discuss and finalize its draft advisory report regarding EPA's draft third Drinking Water Contaminant Candidate List 3 (CCL 3). DATES: The public teleconference on August 13, 2008 will begin at 12:30 p.m. and end no later than 3:30 p.m. (Eastern Time). ADDRESSES: The August 13, 2008, meeting will be conducted by telephone only. FOR FURTHER INFORMATION CONTACT: Any member of the public wishing to obtain general information concerning this public teleconference, including call-in phone number, should contact Dr. Resha M. Putzrath, Designated Federal Officer (DFO), EPA Science Advisory Board (1400F), U.S. Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460; via telephone/voice mail

(202)343-9978; fax:

(202)233-0643; or e-mail at *putzrath.resha@epa.gov.* General information concerning the EPA Science Advisory Board can be found on the SAB Web site at *http://www.epa.gov/sab.* SUPPLEMENTARY INFORMATION: Pursuant to FACA, Public Law 92-463, notice is hereby given that the EPA SAB Drinking Water Committee will hold a public teleconference to discuss and finalize its report concerning EPA's draft Drinking Water Contaminant Candidate List 3 (CCL 3). The SAB was established by 42 U.S.C. 4365 to provide independent scientific and technical advice to the Administrator on the technical basis for Agency positions and regulations. The SAB is a Federal Advisory Committee chartered under the Federal Advisory Committee Act (FACA), as amended, 5 U.S.C., App. The SAB will comply with the provisions of FACA and all appropriate SAB Staff Office procedural policies. *Background:* The 1996 Safe Drinking Water Act amendments

(SDWA)require EPA to

(1)publish every five years a list of currently unregulated contaminants in drinking water that may pose risks (the Contaminant Candidate List or “CCL”), and

(2)make determinations on whether or not to regulate at least five contaminants from that list on a staggered five year cycle. SDWA requires EPA to publish a new list of contaminants that are known or anticipated to occur in public water systems every five years. The draft CCL 3 was published on February 21, 2008 (73 FR 9628) and includes 93 chemicals or chemical groups and 11 microbiological contaminants. The EPA sought comment from the SAB DWC on the draft CCL 3, the approach used to develop the list, and the specific contaminants. The DWC held a public, face-to-face meeting to review the draft CCL 3 on April 23-24, 2008 (announced in 73 FR 12999). At that meeting, the DWC discussed the charge questions, sought clarification from EPA staff, and began to draft comments and recommendations. Materials and public comments from the April meeting are posted on the SAB Web site at *http://yosemite.epa.gov/sab/SABPRODUCT.NSF/MeetingCal/C990CC0808123428852573C4007A5B6F?OpenDocument.* The purpose of the teleconference on August 13 is for the DWC to discuss and finalize the draft advisory report. *Availability of Meeting Materials:* The meeting agenda and draft advisory report will be posted on the SAB Web site at *http://www.epa.gov/sab* under the calendar entry for that date in advance of the meeting. The draft CCL 3 can be found at *http://www.epa.gov/safewater/ccl/index.html.* *Procedures for Providing Public Input:* Interested members of the public may submit relevant written or oral information for the Drinking Water Committee to consider throughout the advisory process. *Oral Statements:* In general, individuals or groups requesting an oral presentation at a public SAB teleconference will be limited to three minutes per speaker, with no more than a total of one-half hour for all speakers. To be placed on the public speaker list, interested parties should contact Dr. Resha M. Putzrath, DFO, in writing (via e-mail), by August 4, 2008, at the contact information noted above. *Written Statements:* Written statements should be received in the SAB Staff Office by August 4, 2008, so that the information may be made available to the SAB DWC for their consideration prior to the teleconference. Written statements should be supplied to the DFO via e-mail to *putzrath.resha@epa.gov* (acceptable file format: Adobe Acrobat PDF, WordPerfect, MS Word, MS PowerPoint, or Rich Text files in IBM-PC/Windows 98/2000/XP format). *Accessibility:* For information on access or services for individuals with disabilities, please contact Dr. Resha M. Putzrath at

(202)343-9978 or *putzrath.resha@epa.gov.* To request accommodation of a disability, please contact Dr. Putzrath, preferably at least ten days prior to the meeting, to give EPA as much time as possible to process your request. Dated: June 24, 2008. Anthony F. Maciorowski, Deputy Director, EPA Science Advisory Board Staff Office. [FR Doc. E8-14881 Filed 6-30-08; 8:45 am] BILLING CODE 6560-50-P FEDERAL RESERVE SYSTEM Proposed Agency Information Collection Activities; Comment Request AGENCY: Board of Governors of the Federal Reserve System. SUMMARY: Background On June 15, 1984, the Office of Management and Budget

(OMB)delegated to the Board of Governors of the Federal Reserve System (Board) its approval authority under the Paperwork Reduction Act (PRA), as per 5 CFR 1320.16, to approve of and assign OMB control numbers to collection of information requests and requirements conducted or sponsored by the Board under conditions set forth in 5 CFR 1320 Appendix A.1. Board-approved collections of information are incorporated into the official OMB inventory of currently approved collections of information. Copies of the Paperwork Reduction Act Submission, supporting statements and approved collection of information instruments are placed into OMB's public docket files. The Federal Reserve may not conduct or sponsor, and the respondent is not required to respond to, an information collection that has been extended, revised, or implemented on or after October 1, 1995, unless it displays a currently valid OMB control number. Request for Comment on Information Collection Proposals The following information collections, which are being handled under this delegated authority, have received initial Board approval and are hereby published for comment. At the end of the comment period, the proposed information collections, along with an analysis of comments and recommendations received, will be submitted to the Board for final approval under OMB delegated authority. Comments are invited on the following: a. Whether the proposed collection of information is necessary for the proper performance of the Federal Reserve's functions, including whether the information has practical utility; b. The accuracy of the Federal Reserve's estimate of the burden of the proposed information collection, including the validity of the methodology and assumptions used; c. Ways to enhance the quality, utility, and clarity of the information to be collected; and d. Ways to minimize the burden of information collection on respondents, including through the use of automated collection techniques or other forms of information technology. DATES: Comments must be submitted on or before September 2, 2008. ADDRESSES: You may submit comments, identified by FR K-2; FR Y-3F; or FR 2248, by any of the following methods: • *Agency Web Site: http://www.federalreserve.gov* . Follow the instructions for submitting comments at *http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm* . • *Federal eRulemaking Portal: http://www.regulations.gov* . Follow the instructions for submitting comments. • *E-mail: regs.comments@federalreserve.gov* . Include docket number in the subject line of the message. • *Fax:* 202/452-3819 or 202/452-3102. • *Mail:* Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, NW., Washington, DC 20551. All public comments are available from the Board's Web site at *http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm* as submitted, unless modified for technical reasons. Accordingly, your comments will not be edited to remove any identifying or contact information. Public comments may also be viewed electronically or in paper form in Room MP-500 of the Board's Martin Building (20th and C Streets, NW.,) between 9 a.m. and 5 p.m. on weekdays. Additionally, commenters should send a copy of their comments to the OMB Desk Officer by mail to the Office of Information and Regulatory Affairs, U.S. Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street, NW., Washington, DC 20503 or by fax to 202-395-6974. FOR FURTHER INFORMATION CONTACT: A copy of the PRA OMB submission including, the proposed reporting form and instructions, supporting statement, and other documentation will be placed into OMB's public docket files, once approved. These documents will also be made available on the Federal Reserve Board's public Web site at: *http://www.federalreserve.gov/boarddocs/reportforms/review.cfm* or may be requested from the agency clearance officer, whose name appears below. Michelle Shore, Federal Reserve Board Clearance Officer (202-452-3829), Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, DC 20551. Telecommunications Device for the Deaf

(TDD)users may contact (202-263-4869), Board of Governors of the Federal Reserve System, Washington, DC 20551. Proposal To Approve Under OMB Delegated Authority the Extension for Three Years, With Revision, of the Following Reports 1. *Report title:* International Applications and Prior Notifications Under Subpart B of Regulation K. *Agency form number:* FR K-2. *OMB control number:* 7100-0284. *Frequency:* On occasion. *Reporters:* Foreign banks. *Annual reporting hours:* 630 hours. *Estimated average hours per response:* 35 hours. *Number of respondents:* 18. *General description of report:* This information collection is mandatory (12 U.S.C. 3105, 3107, and 3108). The applying or notifying organization has the opportunity to request confidentiality for information that it believes will qualify for a Freedom of Information Act exemption. *Abstract:* Foreign banks are required to obtain the prior approval of the Federal Reserve to establish a branch, agency, or representative office; to acquire ownership or control of a commercial lending company in the United States; or to change the status of any existing office in the United States. The Federal Reserve uses the information, in part, to fulfill its statutory obligation to supervise foreign banking organizations with offices in the United States. *Current actions:* The Federal Reserve proposes to replace the existing confidentiality paragraph in the General Instructions and respondents would be required to make a certification regarding information contained in the application. In addition, the Federal Reserve proposes to revise wording in one of the questions related to the proposed office in Attachments A and B. The change would reflect an amendment to Regulation K that specifically requires U.S. branches, agencies, and other offices (including representative offices) of foreign banks to comply with the Bank Secrecy Act and related regulations. Finally, the Federal Reserve proposes to request an e-mail address on the cover page of FR K-2. 2. *Report title:* Application for a Foreign Organization to Acquire a Bank Holding Company. *Agency form number:* FR Y-3F. *OMB control number:* 7100-0119. *Frequency:* On occasion. *Reporters:* Any company organized under the laws of a foreign country seeking to acquire a U.S. subsidiary bank or bank holding company. *Annual reporting hours:* 580 hours. *Estimated average hours per response:* Initial application, 90 hours; subsequent application, 70 hours. *Number of respondents:* Initial application, 1; subsequent application, 7. *General description of report:* This information collection is required to obtain or retain a benefit under sections 3(a), 3(c), and 5(a) through 5(c) of the Bank Holding Company Act (12 U.S.C. §§ 1842(a) and

(c)and 1844(a) through (c)). The information provided in the application is not confidential unless the applicant specifically requests confidentiality and the Federal Reserve approves the request. *Abstract:* Under the Bank Holding Company Act (BHCA), submission of this application is required for any company organized under the laws of a foreign country seeking to acquire a U.S. subsidiary bank or bank holding company. Applicants must provide financial and managerial information, discuss the competitive effects of the proposed transaction, and discuss how the proposed transaction would enhance the convenience and needs of the community to be served. The Federal Reserve uses the information, in part, to fulfill its supervisory responsibilities with respect to foreign banking organizations in the United States. *Current actions:* The Federal Reserve proposes to replace the existing confidentiality paragraph in the General Information and Instructions. In addition, respondents would be required to make a certification regarding information contained in the application. Finally, the Federal Reserve proposes to request an e-mail address on the cover page of FR Y-3F. There are certain additional proposed changes that are intended to make initial filings more reflective of the proposed transaction and thereby reduce the need for subsequent information requests, which delay the Federal Reserve's consideration of an application and create additional burden for applicants. 3. *Report title:* Domestic Finance Company Report of Consolidated Assets and Liabilities *Agency form number:* FR 2248. *OMB control number:* 7100-0005. *Frequency:* Monthly, quarterly, and semi-annually. *Reporters:* Domestic finance companies and mortgage companies. *Annual reporting hours:* 317 hours. *Estimated average hours per response:* Monthly, 18 minutes; quarterly, 27 minutes; semi-annually, 10 minutes. *Number of respondents:* 70. *General description of report:* This information collection is voluntary (12 U.S.C. 225(a)). Individual respondent data are confidential under section (b)(4) of the Freedom of Information Act (5 U.S.C. 552). *Abstract:* The monthly FR 2248 report collects balance sheet data on major categories of consumer and business credit receivables, major short-term liabilities, and securitized assets. For quarter-end months (March, June, September, and December), additional asset and liability items are collected to provide a full balance sheet. If the need arises, a special addendum may be used, no more than semi-annually, for timely information on questions of immediate concern to the Federal Reserve. *Current actions:* The Federal Reserve proposes to split current data item 6, All other assets and accounts and notes receivable, into three separate data items: Cash and cash equivalents (proposed data item 6.A), Securities held (proposed data item 6.B), and All other assets (proposed data item 6.C). These three new data items would result in improved cash and cash equivalents data. In addition, the Federal Reserve proposes to reduce the current authorized panel size from 80 finance companies to 70. These changes would be effective October 31, 2008. Board of Governors of the Federal Reserve System, June 26, 2008. Jennifer J. Johnson, Secretary of the Board. [FR Doc. E8-14847 Filed 6-30-08; 8:45 am] BILLING CODE 6210-01-P FEDERAL RESERVE SYSTEM Sunshine Act Meeting AGENCY HOLDING THE MEETING: Board of Governors of the Federal Reserve System. TIME AND DATE: 11:30 a.m., Monday, July 7, 2008. PLACE: Marriner S. Eccles Federal Reserve Board Building, 20th and C Streets, N.W., Washington, D.C. 20551. STATUS: Closed. MATTERS TO BE CONSIDERED: 1. Personnel actions (appointments, promotions, assignments, reassignments, and salary actions) involving individual Federal Reserve System employees. 2. Any items carried forward from a previously announced meeting. FOR FURTHER INFORMATION CONTACT: Michelle Smith, Director, or Dave Skidmore, Assistant to the Board, Office of Board Members at 202-452-2955. SUPPLEMENTARY INFORMATION: You may call 202-452-3206 beginning at approximately 5 p.m. two business days before the meeting for a recorded announcement of bank and bank holding company applications scheduled for the meeting; or you may contact the Board's Web site at *http://www.federalreserve.gov* for an electronic announcement that not only lists applications, but also indicates procedural and other information about the meeting. Board of Governors of the Federal Reserve System, June 27, 2008. Robert deV. Frierson, Deputy Secretary of the Board. [FR Doc. 08-1403 Filed 6-27-08; 12:53 pm]

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