Unknown. Final rule

63,388 words·~288 min read·/register/2008/07/10/08-1425

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-2008-07-10.xml --- 73 133 Thursday, July 10, 2008 Contents Agricultural Agricultural Marketing Service NOTICES United States Standards for Grades of Beet Greens, 39646 E8-15644 Agriculture Agriculture Department See Agricultural Marketing Service Centers Centers for Disease Control and Prevention NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, E8-15630 39702-39704 E8-15749 Children Children and Families Administration NOTICES Single-Source Program Expansion Supplement, 39704 E8-15633 Commerce Commerce Department See International Trade Administration See National Oceanic and Atmospheric Administration See Patent and Trademark Office Defense Defense Department NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 39678-39679 E8-15742 E8-15744 Drug Drug Enforcement Administration RULES Elimination of Exemptions: Chemical Mixtures Containing the List I Chemicals Ephedrine and/or Pseudoephedrine, 39611-39614 E8-15704 Election Election Assistance Commission NOTICES Proposed Guidelines Regarding Help America Vote Act

(HAVA)Section 254(a)(11), 39679-39680 E8-15690 Employment Employment and Training Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39724-39725 E8-15712 Employment Employment Standards Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39725-39726 E8-15725 Energy Energy Department See Federal Energy Regulatory Commission NOTICES Decisions Regarding Waivers: Commercial Package Air Conditioner and Heat Pump Test Procedures; Residential Central Air Conditioner and Heat Pump Test Procedures, 39680-39684 E8-15705 Energy Conservation Program for Consumer Products: Publication of the Petition for Waiver of Whirlpool Corp. From Residential Refrigerator and Refrigerator-Freezer Test Procedures, 39684-39688 E8-15748 EPA Environmental Protection Agency NOTICES 2007 Interim Report of the U.S. EPA Global Change Research Program Assessment of the Impacts of Global Change on Regional U.S. Air Quality: A Preliminary Synthesis of Climate Change Impacts on O3, 39695-39696 E8-15727 Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39696 E8-15724 Proposed Past Cost Administrative Settlement: New Carlisle Well Contamination Site, New Carlisle, Clark County, OH, 39696-39697 E8-15723 Executive Executive Office of the President See Management and Budget Office FAA Federal Aviation Administration RULES Airworthiness Directives: Agusta S.p.A. Model AB 139 and AW 139 Helicopters, 39572-39574 E8-14720 Airbus Model A300 and A300-600 Series Airplanes, 39580-39583 E8-15265 Bell Helicopter Textron Canada Model 206A, 206B, 206L, 206L-1, 206L-3, and 206L-4 Helicopters, 39577-39578 E8-14736 Bell Helicopter Textron Canada Model 206L, L-1, L-3, L 4, and 407 Helicopters, 39570-39572 E8-14719 Bell Helicopter Textron Canada Model 222, 222B, 222U, 230 and 430 Helicopters, 39569-39570 E8-14718 Boeing Model 747 100, et al., 39579-39580 E8-14972 Cirrus Design Corporation Model SR20 and SR22 Airplanes, 39583-39585 E8-15474 Lycoming Engines, Fuel Injected Reciprocating Engines, 39574-39577 E8-14734 PROPOSED RULES Airworthiness Directives: Dassault Model Mystere Falcon 50 Airplanes, 39628-39630 E8-15714 Pratt & Whitney

(PW)JT9D-7 Series Turbofan Engines, 39627-39628 E8-15682 FCC Federal Communications Commission RULES Third Periodic Review of the Commission's Rules and Policies Affecting the Conversion To Digital Television, 39623-39624 E8-15763 Federal Energy Federal Energy Regulatory Commission NOTICES Combined Notice of Filings, 39688-39690 E8-15609 E8-15612 Environmental Assessment; Availability: Ketchikan Public Utilities, 39690-39691 E8-15701 Upper Peninsula Power Co., 39691 E8-15700 Environmental Assessment; Intent: Empire Pipeline, Inc. and Empire State Pipeline, 39691-39693 E8-15703 Filings: Union Electric Company, dba AmerenUE, 39693-39694 E8-15702 Records Governing Off-the-Record Communications, 39694-39695 E8-15699 Federal Reserve Federal Reserve System NOTICES Change in Bank Control Notices; Acquisition of Shares of Bank or Bank Holding Companies, 39697 E8-15688 Change in Bank Control Notices, Acquisition of Shares of Bank or Bank Holding Companies; Correction, 39697 E8-15689 Meetings; Sunshine Act, 39697-39698 08-1427 Proposals to Engage in Permissible Nonbanking Activities or to Acquire Companies Engaged in Permissible Nonbanking Activities, 39698 E8-15687 FTC Federal Trade Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39698-39701 E8-15659 E8-15660 Fish Fish and Wildlife Service RULES Endangered and Threatened Wildlife and Plants: Preble's Meadow Jumping Mouse, 39790-39838 E8-15141 PROPOSED RULES Endangered and Threatened Wildlife and Plants; 90-Day Finding on a Petition to Reclassify: The Delta Smelt (Hypomesus transpacificus) from Threatened to Endangered, 39639-39643 E8-15747 NOTICES Fish and Wildlife Service and Confederated Salish and Kootenai Tribes Sign Annual Funding Agreement, 39713-39714 E8-15685 Meetings: Wind Turbine Guidelines Advisory Committee, 39714-39715 E8-15665 Food Food and Drug Administration RULES Applications for Approval to Market a New Drug; Complete Response Letter; Amendments to Unapproved Applications, 39588-39611 E8-15608 NOTICES Draft Guidance; Industry on Voluntary Third-Party Certification Programs for Foods and Feeds; Availability, 39704-39705 E8-15715 Voluntary Third-Party Certification Programs for Imported Aquacultured Shrimp; Notice of Pilot Program, 39705-39708 E8-15713 GSA General Services Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39678-39679 E8-15742 E8-15744 Health Health and Human Services Department See Centers for Disease Control and Prevention See Children and Families Administration See Food and Drug Administration See Indian Health Service Housing Housing and Urban Development Department NOTICES Federal Property Suitable as Facilities to Assist the Homeless, 39712 E8-15652 Funding Availability for the Continuum of Care Homeless Assistance Program, 39840-39855 E8-15664 OIG Fraud Alert; Bulletin on Charging Excess Rent in the Housing Choice Voucher Program, 39712-39713 E8-15663 Indian Indian Affairs Bureau NOTICES Environmental Impact Statements; Availability, etc.: Cowlitz Indian Tribes Proposed 151.87-Acre Fee-to-Trust Transfer, Reservation Proclamation, and Casino-Resort Project; Clark County, WA, 39715 E8-15741 Indian Indian Health Service NOTICES Division of Nursing, Office of Public Health Nursing, 39708-39712 E8-15773 Interior Interior Department See Fish and Wildlife Service See Indian Affairs Bureau See Land Management Bureau IRS Internal Revenue Service RULES Escrow Accounts, Trusts, and Other Funds Used During Deferred Exchanges of Like-Kind Property, 39614-39623 E8-15739 PROPOSED RULES Reasonable Good Faith Interpretation of Required Minimum Distribution Rules by Governmental Plans, 39630-39632 E8-15740 International International Trade Administration RULES Implementation of Tariff Rate Quota Established Under the Tax Relief and Health Care Act

(2006)Imports of Certain Cotton Shirting Fabric, 39585-39587 E8-15754 NOTICES Antidumping: Non-Malleable Cast Iron Pipe Fittings from the Peoples Republic of China, 39656-39657 E8-15738 Antidumping Duty: Carbon and Certain Alloy Steel Wire Rod from Canada, 39646-39650 E8-15753 Chlorinated Isocyanurates from Spain, 39650-39655 E8-15736 Forged Stainless Steel Flanges from India, 39655 E8-15734 Heavy Forged Hand Tools from the Peoples Republic of China, 39655-39656 E8-15731 Silicon Metal from the Peoples Republic of China, 39656 E8-15746 Countervailing Duty: Circular Welded Austenitic Stainless Pressure Pipe from the Peoples Republic of China, 39657-39667 E8-15733 Raw Flexible Magnets from the People's Republic of China, 39667-39668 E8-15735 Exporters’ Textile Advisory Committee; Solicitation for Members, 39668-39669 E8-15755 Extension of Time Limit for Final Results of Changed Circumstances Review: Frozen Fish Fillets from Vietnam, 39669 E8-15760 Final Determination of Sales at Less Than Fair Value: Raw Flexible Magnets from Taiwan, 39673-39675 E8-15743 Raw Flexible Magnets from the Peoples Republic of China, 39669-39672 E8-15732 Security and Prosperity Partnership of North America; Request for Public Comment: Industry Involvement in Providing Information to the Trilateral Committee on Transborder Data Flows work program, 39675 E8-15626 International International Trade Commission NOTICES Investigations: Buffer Systems and Components Used in Container Processing Lines, 39717 E8-15634 Computer Systems, Printers and Scanners, 39717-39718 E8-15721 Denim Fabric; Use in Agoa Countries (During Fiscal Year 2007), 39718 E8-15718 Personal Computers and Digital Display Devices, 39718-39719 E8-15719 Rubber Antidegradants, Antidegradant Intermediates, and Products Containing the Same, 39719-39720 E8-15607 Justice Justice Department See Drug Enforcement Administration See Justice Programs Office NOTICES Consent Decree: State of Colorado v. ASARCO Inc., et al., 39720-39721 E8-15648 State of Colorado v. ASARCO Incorporated et al.; Newmont USA Ltd and Resurrection Mining Co., 39720 E8-15647 United States and the State of Illinois v. Hamilton Sundstrand Corp., 39721 E8-15645 Privacy Act; Systems of Records, 39722-39724 E8-15672 Justice Justice Programs Office PROPOSED RULES Public Safety Officers’ Benefits Program, 39632-39639 E8-15730 Labor Labor Department See Employment and Training Administration See Employment Standards Administration Land Land Management Bureau NOTICES Filing of Plats of Survey: Eastern States, 39716 E8-15692 Meetings: Southeast Oregon Resource Advisory Council, 39716 E8-15761 Wyoming: Notice of Proposed Reinstatement of Terminated Oil and Gas Lease, 39716 E8-15623 Management Management and Budget Office NOTICES Public Availability of Fiscal Year 2007 Agency Inventories Under the Federal Activities Inventory Reform Act, 39736-39737 E8-15737 Maritime Maritime Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39777-39778 E8-15654 Requested Administrative Waiver of the Coastwise Trade Laws, E8-15655 39778-39779 E8-15657 E8-15658 NASA National Aeronautics and Space Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39678-39679 E8-15742 E8-15744 National Highway National Highway Traffic Safety Administration NOTICES Decision of Inconsequential Noncompliance Chrysler, LLC, 39779-39780 E8-15662 NOAA National Oceanic and Atmospheric Administration RULES Fisheries off West Coast States; Pacific Coast Groundfish Fishery: Suspension of the Primary Pacific Whiting Season, 39625-39626 E8-15716 Fisheries of the Exclusive Economic Zone Off Alaska: Northern Rockfish in the Western Regulatory Area of the Gulf of Alaska, 39626 08-1425 Fisheries of the Northeastern United States; Atlantic Sea Scallop Fishery: Framework Adjustment 19; Announcing OMB Approval of Information Collection, 39587-39588 E8-15610 Fisheries of the Northeastern United States; Northeast Multispecies Fishery; Adjustment to the Total Allowable Catch of Georges Bank Yellowtail Flounder from the United States/Canada Management Area (Fishing Year 2008), 39624-39625 E8-15717 PROPOSED RULES Fisheries of the Northeastern United States: Monkfish Fishery, 39643-39645 E8-15613 NOTICES Marine Mammals; Issuance of Permit Amendments, 39675-39676 E8-15605 Meetings: Caribbean Fishery Management Council, 39676 E8-15656 Taking and Importing of Marine Mammals, 39676-39677 E8-15604 National Science National Science Foundation NOTICES Permits Issued Under the Antarctic Conservation Act of 1978, 39726 E8-15694 Privacy Act; Systems of Records, 39726-39727 E8-15693 Nuclear Nuclear Regulatory Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39727-39728 E8-15678 Applications: Lost Creek ISR, LLC, 39728-39731 E8-15695 Draft Regulatory Guide; Issuance, Availability, 39731-39732 E8-15674 Environmental Assessment; Availability, etc.: Glaxosmithkline Biologicals-Hamilton Facility in Hamilton, MT, 39732-39734 E8-15675 Environmental Assessment; Availablility, etc.: Department of Defense, Defense Intelligence Agency, Redstone Arsenal, AL, 39734-39735 E8-15673 Issuance and Availability of Regulatory Guide 10.6 (Revision 2), 39735-39736 E8-15677 Meetings: The ACRS Subcommittee on Plant Operations & Fire Protection, 39736 E8-15691 Office Office of Management and Budget See Management and Budget Office Patent Patent and Trademark Office NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, E8-15679 39677-39678 E8-15681 Pipeline Pipeline and Hazardous Materials Safety Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39780-39785 E8-15653 SEC Securities and Exchange Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39737-39741 E8-15640 E8-15641 E8-15642 E8-15643 E8-15676 E8-15683 Self-Regulatory Organizations; Proposed Rule Changes: American Stock Exchange LLC, 39741-39746 E8-15636 E8-15637 E8-15638 Boston Stock Exchange, Inc., 39746-39747 E8-15625 Chicago Board Options Exchange, Inc., 39747-39749 E8-15628 E8-15635 Chicago Stock Exchange, Inc, 39749-39751 E8-15639 Financial Industry Regulatory Authority Inc., 39751-39753 E8-15696 International Securities Exchange, LLC, 39754-39755 E8-15650 NASDAQ Stock Market LLC, 39755-39758 E8-15624 E8-15651 National Securities Clearing Corp., 39758-39764 E8-15706 E8-15707 New York Stock Exchange LLC, 39764-39765 E8-15697 NYSE Arca, Inc., 39765-39769 E8-15621 E8-15649 Philadelphia Stock Exchange, Inc., 39769-39776 E8-15698 The NASDAQ Stock Market LLC, 39776 E8-15627 Suspension of trading— VMT Scientific, Inc., 39776-39777 08-1428 SBA Small Business Administration NOTICES Disaster Declarations: Massachusetts, 39777 E8-15750 Transportation Transportation Department See Federal Aviation Administration See Maritime Administration See National Highway Traffic Safety Administration See Pipeline and Hazardous Materials Safety Administration Treasury Treasury Department See Internal Revenue Service Veterans Veterans Affairs Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39785-39787 E8-15615 E8-15616 E8-15619 Separate Parts In This Issue Part II Interior Department, Fish and Wildlife Service, 39790-39838 E8-15141 Part III Housing and Urban Development Department, 39840-39855 E8-15664 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. 73 133 Thursday, July 10, 2008 Rules and Regulations DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2008-0039; Directorate Identifier 2006-SW-13-AD; Amendment 39-15596; AD 2008-14-01] RIN 2120-AA64 Airworthiness Directives; Bell Helicopter Textron Canada Model 222, 222B, 222U, 230 and 430 Helicopters AGENCY: Federal Aviation Administration, DOT. ACTION: Final rule. SUMMARY: This amendment adopts a new airworthiness directive

(AD)for Bell Helicopter Textron Canada

(BHTC)Model 222, 222B, 222U, 230 and 430 helicopters that requires rewiring and testing the fuel valve switch on each engine and testing the ignitor system. This amendment is prompted by an in-flight incident in which a fuel valve switch failed, causing the fuel valve to inadvertently close. The actions specified by this AD are intended to prevent interruption of the fuel supply caused by failure of the fuel switch, which could result in loss of engine power and subsequent loss of control of the helicopter. DATES: Effective August 14, 2008. The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of August 14, 2008. ADDRESSES: You may get the service information identified in this AD from Bell Helicopter Textron Canada, 12,800 Rue de l'Avenir, Mirabel, Quebec J7J1R4, telephone

(450)437-2862 or

(800)363-8023, fax

(450)433-0272. *Examining the Docket:* You may examine the docket that contains this AD, any comments, and other information on the Internet at *http://www.regulations.gov* , or at the Docket Operations office, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC. FOR FURTHER INFORMATION CONTACT: George Schwab, Aviation Safety Engineer, FAA, Rotorcraft Directorate, Safety Management Group, Fort Worth, Texas 76193-0110, telephone

(817)222-5114, fax

(817)222-5961. SUPPLEMENTARY INFORMATION: A proposal to amend 14 CFR part 39 to include an AD for the specified model helicopters was published in the **Federal Register** on January 23, 2008 (73 FR 3889). That action proposed to require, within 50 hours time-in-service (TIS), rewiring the switches that control the operation of the No. 1 and No. 2 engines' fuel valves, and testing the switches and the ignitor system. Transport Canada, the airworthiness authority for Canada, notified the FAA that an unsafe condition may exist on BHTC Model 222, 222B, 222U, 230 and 430 helicopters. Transport Canada advises of an investigation into an incident involving a BHTC Model 222 helicopter, in which the fuel shut-off switch, part number (P/N) 10648BH1-1, failed during flight causing the fuel valve to close and the engine to shut down. Review of the Service Difficulty Report database identified two other incidents of switch failure. Bell Helicopter Textron has issued the following technical bulletins, all dated June 11, 2003, which specify rewiring the fuel valve switch: Technical bulletin Helicopter models affected No. 222-03-171 Model 222 and 222B helicopters. No. 222U-03-96 Model 222U helicopters. No. 230-03-35 Model 230 helicopters. No. 430-03-33 Model 430 helicopters. Transport Canada classified these technical bulletins as mandatory and issued AD No. CF-2006-03, dated February 28, 2006, to ensure the continued airworthiness of these helicopters in Canada. That AD requires compliance no later than May 3, 2006. This AD requires compliance within 50 hours TIS. These helicopter models are manufactured in Canada and are type certificated for operation in the United States under the provisions of 14 CFR 21.29 and the applicable bilateral agreement. Pursuant to the applicable bilateral agreement, Transport Canada has kept the FAA informed of the situation described above. The FAA has examined the findings of Transport Canada, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States. Interested persons have been afforded an opportunity to participate in the making of this amendment. No comments were received on the proposal or the FAA's determination of the cost to the public. The FAA has determined that air safety and the public interest require the adoption of the rule as proposed. The FAA estimates that this AD will affect 165 helicopters of U.S. registry, and the required actions will take approximately four work hours per helicopter to rewire the 2 fuel valve switches, and test those switches and the ignitor system, at an average labor rate of $80 per work hour. Based on these figures, we estimate the total cost impact of the AD on U.S. operators to be $52,800 ($320 per helicopter). Regulatory Findings We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared an economic evaluation of the estimated costs to comply with this AD. See the AD docket to examine the economic evaluation. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. Section 39.13 is amended by adding a new airworthiness directive to read as follows: **2008-14-01 Bell Helicopter Textron Canada:** Amendment 39-15596. Docket No. FAA-2008-0039; Directorate Identifier 2006-SW-13-AD. *Applicability:* The following model helicopters, certificated in any category: Model No. Serial Nos. 222 47006 through 47089. 222B 47131 through 47156. 222U 47501 through 47574. 230 23001 through 23038. 430 49001 through 49101. *Compliance:* Required within 50 hours time-in-service, unless accomplished previously. To prevent interruption of the fuel supply caused by failure of the fuel switch, which could result in loss of engine power and subsequent loss of control of the helicopter, accomplish the following:

(a)Rewire the No. 1 and No. 2 engines' fuel valve switch, part number 10648BH1-1, and test the fuel valve switches and the ignitor system, in accordance with the Accomplishment Instructions in Bell Helicopter Textron Technical Bulletin

(TB)No. 222-03-171, Part 1, applicable to Model 222 helicopters, serial number (S/N) 47006-47038, and Part 2, applicable to Model 222 helicopters, S/N 47039-47089, and Model 222B helicopters, S/N 47131-47156; TB No. 222U-03-96, applicable to Model 222U helicopters; TB No. 230-03-35, applicable to Model 230 helicopters; and TB No. 430-03-33, applicable to Model 430 helicopters. All of the technical bulletins are dated June 11, 2003.

(b)To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Contact the Manager, Safety Management Group, ATTN: George Schwab, Aviation Safety Engineer, Rotorcraft Directorate, FAA, Fort Worth, Texas 76193-0110, telephone

(817)222-5114, fax

(817)222-5961, for information about previously approved alternative methods of compliance.

(c)The rewiring and testing shall be done in accordance with the specified portions of Bell Helicopter Textron Technical Bulletin No. 222-03-171, No. 222U-03-96, No. 230-03-35, and No. 430-03-33, all dated June 11, 2003. The Director of the Federal Register approved this incorporation by reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies may be obtained from Bell Helicopter Textron Canada, 12,800 Rue de l'Avenir, Mirabel, Quebec J7J1R4, telephone

(450)437-2862 or

(800)363-8023, fax

(450)433-0272. Copies may be inspected at the FAA, Office of the Regional Counsel, Southwest Region, 2601 Meacham Blvd., Room 663, Fort Worth, Texas or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.*

(d)This amendment becomes effective on August 14, 2008. Note: The subject of this AD is addressed in Transport Canada (Canada) AD CF-2006-03, dated February 28, 2006. Issued in Fort Worth, Texas, on June 12, 2008. Lance T. Gant, Acting Manager, Rotorcraft Directorate, Aircraft Certification Service. [FR Doc. E8-14718 Filed 7-9-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2008-0258; Directorate Identifier 2007-SW-22-AD; Amendment 39-15601; AD 2008-14-06] RIN 2120-AA64 Airworthiness Directives; Bell Helicopter Textron Canada Model 206L, L-1, L-3, L-4, and 407 Helicopters AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: We are adopting a new airworthiness directive

(AD)for the specified Bell Helicopter Textron Canada

(BHTC)helicopters. This AD results from mandatory continuing airworthiness information

(MCAI)originated by an aviation authority to identify and correct an unsafe condition on an aviation product. The Aviation Authority of Canada with whom we have a bilateral agreement states in the MCAI: “Horizontal stabilizers part numbers 206-023-119-167 and 407-023-801-109 may have manufacturing flaws on the inside surface of the upper and/or lower skin at the tailboom attachment inserts. These flaws may result in cracking of the skin and failure of the horizontal stabilizer.” The manufacturer's service information states that in addition to cracks, the horizontal stabilizer may have deformation or debonding around and between the inserts. We are issuing this AD to require actions to correct the unsafe condition on these products. DATES: This AD becomes effective on August 14, 2008. The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of August 14, 2008. ADDRESSES: You may examine the AD docket on the Internet at *http://regulations.gov* or in person at the Docket Operations office, U.S. Department of Transportation, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC between 9 a.m. and 5 p.m. Monday through Friday, except Federal holidays. You may get the service information identified in this AD from Bell Helicopter Textron Canada, 12,800 Rue de l'Avenir, Mirabel, Quebec J7J1R4, telephone

(450)437-2862 or

(800)363-8023, fax

(450)433-0272. *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)647-5527) 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: Sharon Miles, Aviation Safety Engineer, FAA, Rotorcraft Directorate, Regulations and Guidance Group, Fort Worth, Texas 76193-0111, telephone

(817)222-5122, 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 BHTC Model Bell Helicopter Textron Canada Models 206L, L-1, L-3, L-4, and 407 helicopters on February 28, 2008. That NPRM was published in the **Federal Register** on March 7, 2008 (73 FR 12303). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states: “Horizontal stabilizers part numbers 206-023-119-167 and 407-023-801-109 may have manufacturing flaws on the inside surface of the upper and/or lower skin at the tailboom attachment inserts. These flaws may result in cracking of the skin and failure of the horizontal stabilizer.” The manufacturer's service information states that in addition to cracks, the horizontal stabilizer may have deformation or debonding around and between the inserts. You may obtain further information by examining the MCAI and any related service information in the AD docket. 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 correcting a typographical error in the preamble. Under the heading, “Relevant Service Information,” we have corrected the name of the manufacturer issuing the service bulletins to BHTC rather than Transport Canada. This change will neither increase the economic burden on any operator nor increase the scope of the AD. Relevant Service Information BHTC has issued Alert Service Bulletin No. 206L-06-141 and No. 407-06-72, both dated September 12, 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 We have reviewed the MCAI and related service information and, in general, agree with their substance. However, we have changed the alternate compliance time from May 9, 2007, to within 30 days, and we have not mandated replacing the horizontal stabilizer by a certain date. In making this change, we do not intend to differ substantively from the information provided in the MCAI. Differences are highlighted in the “Differences Between the FAA AD and the MCAI” section in the proposed AD. Costs of Compliance We estimate this AD will affect 59 horizontal stabilizers (27-206L and 32-407 models) on about 1156 products of U.S. registry and will take about: • 2.5 work hours to determine if the affected part is installed on the helicopter, • 4 work hours to perform the initial and 600-hour recurring inspection, and • 8 work hours to remove and replace an affected part. The average labor rate is $80 per work-hour and required parts cost about $20,173 for the Model 206L series and $25,669 for the Model 407 helicopters. Based on these figures, we estimate the cost of the AD on U.S. operators to be $1,663,519, assuming the entire fleet is examined for the affected part; 59 helicopters with the affected parts undergo the initial inspection; 30 helicopters with the affected part undergo one recurring 600-hour inspection; and all 59 affected parts are replaced. 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 product(s) 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. Therefore, 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, 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: **2008-14-06 Bell Helicopter Textron Canada:** Amendment 39-15601, Docket No. FAA-2008-0258; Directorate Identifier 2007-SW-22-AD. Effective Date

(a)This airworthiness directive

(AD)becomes effective on August 14, 2008. Other Affected ADs

(b)None. Applicability

(c)This AD applies to Models 206L, 206L-1, 206L-3, and 206L-4 helicopters with horizontal stabilizer, part number (P/N) 206-023-119-167, and Model 407 helicopters with horizontal stabilizer, P/N 407-023-801-109, installed, certificated in any category. Reason

(d)The mandatory continuing airworthiness information

(MCAI)states: “Horizontal stabilizers part numbers 206-023-119-167 and 407-023-801-109 may have manufacturing flaws on the inside surface of the upper and/or lower skin at the tailboom attachment inserts. These flaws may result in cracking of the skin and failure of the horizontal stabilizer.” The manufacturer's service information states that in addition to cracks, the horizontal stabilizer may have deformation or debonding around and between the inserts. This AD requires actions that are intended to address all these unsafe conditions. Actions and Compliance

(e)Within the next 100 hours time-in-service

(TIS)or 30 days, whichever occurs first, unless done previously.

(1)Determine whether you have an affected serial numbered horizontal stabilizer installed by removing the elevators from the horizontal stabilizer. Access the horizontal stabilizer identification tag containing the horizontal stabilizer serial number as shown in Figure 1 and remove the elevators by following the Accomplishment Instructions, Part I, of Bell Helicopter Textron Canada

(BHTC)Alert Service Bulletin

(ASB)No. 206L-06-141, dated September 12, 2006, applicable to the Model 206L series helicopter (206L ASB) or BHTC ASB No. 407-06-72, dated September 12, 2006, applicable to the Model 407 helicopters (407 ASB).

(2)If the serial number on the identification tag is a serial number listed in Table 1 of the 206L ASB or 407 ASB, inspect the horizontal stabilizer as follows:

(i)Using a 10× or higher magnifying glass, inspect the horizontal stabilizer for a crack or deformation around the areas of the inserts. Also, using a tap test method, inspect for debonding between the inserts by following the Accomplishment Instructions, Part II, of either the 206L ASB or 407 ASB, as applicable.

(ii)If you find a crack, deformation, or debonding, replace the horizontal stabilizer with an airworthy horizontal stabilizer that does not have a serial number listed in Table 1 of the 206L ASB or 407 ASB. Replace the horizontal stabilizer by following the Accomplishment Instructions, Part III, of either the 206L ASB or the 407 ASB, as applicable.

(iii)If you do not find a crack, deformation, or debonding, thereafter, at intervals not to exceed 600 hours TIS or during each annual inspection, whichever occurs first, repeat the inspection required by paragraph (e)(2)(i) of this AD.

(f)Replacing any horizontal stabilizer containing a serial number listed in Table 1 of 206L ASB or 407 ASB with a horizontal stabilizer that does not contain such a serial number by following the Accomplishment Instructions, Part III, of either the 206L ASB or 407 ASB, as applicable, constitutes terminating actions for the requirements of this AD. Differences Between This AD and the MCAI AD

(g)The MCAI requires compliance “within the next 100 hours air time but no later than 9 May 2007.” This AD requires compliance within the next 100 hours TIS or 30 days, whichever occurs first, unless done previously. Also, the MCAI requires replacing the horizontal stabilizer by September 30, 2008, and we have not mandated a compliance time for replacing the horizontal stabilizer. Other Information

(h)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 Sharon Miles, Aviation Safety Engineer, FAA, Rotorcraft Directorate, Regulations and Guidance Group, Fort Worth, Texas 76193-0111, telephone

(817)222-5122, fax

(817)222-5961. Related Information

(i)MCAI Transport Canada AD No. CF-2007-03, dated March 27, 2007, contains related information. Air Transport Association of America

(ATA)Tracking Code

(j)ATA Code 5510: Horizontal Stabilizer Structure. Material Incorporated by Reference

(k)You must use the specified portions of Bell Helicopter Textron Canada Alert Service Bulletin No. 206L-06-141 or No. 407-06-72, both dated September 12, 2006, 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 Bell Helicopter Textron Canada, 12,800 Rue de l'Avenir, Mirabel, Quebec J7J1R4, telephone

(450)437-2862 or

(800)363-8023, fax

(450)433-0272.

(3)You may review copies at the FAA, Office of the Regional Counsel, Southwest Region, 2601 Meacham Blvd., Fort Worth, Texas 76193; 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 Fort Worth, Texas on June 19, 2008. Judy I. Carl, Acting Manager, Rotorcraft Directorate, Aircraft Certification Service. [FR Doc. E8-14719 Filed 7-9-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2008-0256; Directorate Identifier 2007-SW-01-AD; Amendment 39-15597; AD 2008-14-02] RIN 2120-AA64 Airworthiness Directives; Agusta S.p.A. Model AB 139 and AW 139 Helicopters AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: We are adopting a new airworthiness directive

(AD)for Agusta S.p.A. Model AB 139 and AW 139 helicopters. This AD results from mandatory continuing airworthiness information

(MCAI)issued by the European Aviation Safety Agency (EASA), the Technical Agent for Italy, with which we have a bilateral agreement, which indicates that the Agusta AB 139's and AW 139's Fuselage Frame 5700 middle section is prone to fatigue damage. The actions are intended to detect cracks in the fuselage frame structure and to prevent structural failure in this area. DATES: This AD becomes effective on August 14, 2008. The incorporation by reference of certain publications is approved by the Director of the Federal Register as of August 14, 2008. ADDRESSES: You may examine the AD docket on the Internet at *http://regulations.gov* or in person at the Docket Operations office, U.S. Department of Transportation, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC between 9 a.m. and 5 p.m. Monday through Friday, except Federal holidays. You may get the service information identified in this AD from Agusta, 21017 Cascina Costa di Samarate

(VA)Italy, Via Giovanni Agusta 520, telephone 39

(0331)229111, fax 39

(0331)229605-222595. *Examining the AD Docket:* The AD docket contains the 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: Sharon Miles, Aviation Safety Engineer, FAA, Rotorcraft Directorate, Regulations and Guidance Group, Fort Worth, Texas 76193-0111, telephone

(817)222-5122, fax

(817)222-5961. 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 Agusta S.p.A. Model AB 139 and AW 139 helicopters. That NPRM was published in the **Federal Register** on March 7, 2008 (73 FR 12299). That NPRM proposed to require repetitive inspections of the fuselage frame structure for a crack, and if a crack is found, repairing the crack before further flight in accordance with an FAA-approved procedure. You may obtain further information by examining the MCAI and any related service information in the AD docket. 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 this AD. Relevant Service Information Agusta S.p.A. has issued Bollettino Tecnico No. 139-018, Revision B, dated October 18, 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 This AD differs from the MCAI in that the MCAI states “When damage or cracks are found, before next flight, contact the TC Holder for further instructions.” This AD requires repairing the crack before further flight in accordance with an FAA-approved procedure if a crack is found. Also, this AD requires that the inspection be performed based on “hours time-in-service” rather than “flight hours,” as stated in the MCAI. 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 1 work-hour per helicopter to comply with the initial and each subsequent recurring inspection required by this AD. The average labor rate is $80 per work-hour. Assuming that 3 recurring inspections will be performed on each of the affected helicopters every year after the initial inspection, and that 2 of the affected helicopters will require repairs to the fuselage middle frame section at $10,000 per repair during the service life of these helicopters, we estimate the cost of this AD as follows: • Initial Inspection Costs: 1 × 80 × 17 = $1360. • Subsequent Recurring Inspection Costs over the next 20 years: 1 × 3 × 20 × 80 × 17 = $81,600. • Repair Costs: 2 × 10,000 = $20,000. Based on these figures, we estimate the cost of this AD on U.S. operators to be $102,960, or $6,056 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 helicopters 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. Therefore, 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, 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: **2008-14-02 Agusta S.p.A.:** Amendment 39-15597. Docket No. FAA-2008-0256; Directorate Identifier 2007-SW-01-AD. Effective Date

(a)This airworthiness directive

(AD)becomes effective on August 14, 2008. Other Affected ADs

(b)None. Applicability

(c)This AD applies to Agusta S.p.A. Model AB 139 and AW 139 helicopters, certificated in any category. Reason

(d)This AD results from mandatory continuing airworthiness information

(MCAI)issued by the European Aviation Safety Agency (EASA), the Technical Agent for Italy, with which we have a bilateral agreement, which indicates that the Agusta AB/AW 139's Fuselage Frame 5700 middle section is prone to fatigue damage. These fatigue cracks constitute an unsafe condition. The actions are intended to detect cracks in the fuselage frame structure and to prevent structural failure in this area. Actions and Compliance

(e)Required as indicated, unless already done.

(1)Within the next 10 hours time-in-service (TIS), or upon accumulating 100 hours TIS since new, whichever occurs later, inspect the fuselage frame 5700 middle section in accordance with the Compliance Instructions, pargraphs 1. through 4., of Agusta Bollettino Tecnico No. 139-018, Revision B, dated October 18, 2006;

(2)Thereafter, at intervals not exceeding 100 hours TIS, repeat the inspection as required by paragraph (e)(1) of this AD.

(3)If a crack is found, before further flight, repair the crack in accordance with an FAA-approved procedure. Differences Between This AD and the MCAI AD

(f)This AD differs from the MCAI as follows:

(1)The MCAI states “When damage or cracks are found, before next flight, contact the TC Holder for further instructions.” If a crack is found, this AD requires repairing the crack before further flight in accordance with an FAA-approved procedure.

(2)This AD requires that the inspection be performed based on “hours time-in-service” not “flight hours.” Other Information

(g)Alternative Methods of Compliance (AMOCs): The Manager, Safety Management Group, FAA, FAA, ATTN: Sharon Miles, Aviation Safety Engineer, FAA, Rotorcraft Directorate, Regulations and Guidance Group, Fort Worth, Texas 76193-0111, telephone

(817)222-5122, fax

(817)222-5961, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Related Information

(h)European Aviation Safety Agency

(EASA)Airworthiness Directive No. 2006-0357, dated November 29, 2006, contains related information. Air Transport Association of America

(ATA)Tracking Code

(i)ATA Code 5700: Fuselage frame middle section. Material Incorporated by Reference

(j)You must use the specified portions of Agusta Bollettino Tecnico No. 139-018, Revision B, dated October 18, 2006, to do the actions required.

(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 Agusta, 21017 Cascina Costa di Samarate

(VA)Italy, Via Giovanni Agusta 520, telephone 39

(0331)229111, fax 39

(0331)229605-222595.

(202)741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html* . Issued in Fort Worth, Texas on June 19, 2008. Judy Carl, Acting Manager, Rotorcraft Directorate, Aircraft Certification Service. [FR Doc. E8-14720 Filed 7-9-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-0218; Directorate Identifier 92-ANE-56-AD; Amendment 39-15602; AD 2008-14-07] RIN 2120-AA64 Airworthiness Directives; Lycoming Engines, Fuel Injected Reciprocating Engines AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is superseding an existing airworthiness directive

(AD)for certain fuel injected reciprocating engines manufactured by Lycoming Engines. That AD currently requires inspection, and replacement if necessary, of externally mounted fuel injector fuel lines. This AD requires the same actions but adds additional engine models and clarifies certain compliance time wording. This AD also exempts engines that have a Maintenance and Overhaul Manual with an Airworthiness Limitations Section that requires inspection and replacement, if necessary, of externally mounted fuel injector lines. This AD results from Lycoming Engines revising their Mandatory Service Bulletin to add new engine models requiring inspection, and from the need to clarify a repetitive inspection compliance time. We are issuing this AD to prevent failure of the fuel injector fuel lines that would allow fuel to spray into the engine compartment, resulting in an engine fire. DATES: This AD becomes effective August 14, 2008. The Director of the Federal Register approved the incorporation by reference of certain publications listed in the regulations as of August 14, 2008. ADDRESSES: You can get the service information identified in this AD from Lycoming Engines, 652 Oliver Street, Williamsport, PA 17701, or go to *http://www.lycoming.textron.com* . The Docket Operations office is located at Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue, SE., West Building Ground Floor, Room W12-140, Washington, DC 20590-0001. FOR FURTHER INFORMATION CONTACT: Norm Perenson, Aerospace Engineer, New York Aircraft Certification Office, FAA, Engine & Propeller Directorate, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; e-mail: *Norman.perenson@faa.gov* ; telephone

(516)228-7337; fax

(516)794-5531. SUPPLEMENTARY INFORMATION: The FAA proposed to amend 14 CFR part 39 by superseding AD 2002-26-01, Amendment 39-12986 (67 FR 78965, December 27, 2002), with a proposed AD. The proposed AD applies to certain fuel injected reciprocating engines manufactured by Lycoming Engines. We published the proposed AD in the **Federal Register** on January 2, 2008 (73 FR 87). That action proposed to: • Require the same actions as AD 2002-26-01; and • Add additional engine models, clarify certain compliance time wording; and • Exempt engines that have a Maintenance and Overhaul Manual with an Airworthiness Limitations Section that requires inspection and replacement, if necessary, of externally mounted fuel injector lines. Examining the AD Docket You may examine the AD docket on the Internet at *http://www.regulations.gov* ; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone

(800)647-5527) is provided in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comments received. One commenter, a private citizen, states that in the proposed AD, we wish to exempt engines that have a maintenance manual that deals with this subject. He asks how the mechanic is to know if an engine has a maintenance manual, if the mechanic does not have access to that manual, unless we list the specific engines that are not applicable to the proposed AD. He states that we should either make the AD applicable to fuel injected Lycoming Engines and then list the applicable and nonapplicable engines, or do not change the AD. We do not agree. If the engine has an “I” in the prefix of the engine model and the engine has external fuel lines, the fuel lines require inspection. For engines that have a Maintenance Manual, the required inspection will be described in the Airworthiness Limitations Section

(ALS)in the engine's Maintenance Manual. For engines that do not have a Maintenance Manual, the required inspection will be described in this AD and Lycoming Mandatory Service Bulletin No. 342E. The mechanic is required to have the Instructions for Continued Airworthiness when performing maintenance (refer to 14 CFR 43.13). Having the manual or access to the manual, of an airplane or engine undergoing maintenance is just as important as having the proper tools to perform the maintenance on an aircraft or engine. We added language in paragraph

(e)to clarify that engine models with an ALS are not included in Table 1 and therefore are exempted from compliance with this AD. One commenter, a private citizen, states that the proposed AD should be expanded to include any other certified engines utilizing the same fuel injection setup and parts as the Lycoming engines. One example is the Jacobs R-755 engine that can be converted to a fuel injection system via Supplemental Type Certificate held by Radial Engines, LTD. This installation uses a modified IO-720 fuel injection system, including the same fuel injection lines that are the subject of the AD. We do not agree. The unsafe condition for this AD is the lack of proper maintenance of the fuel injector lines and support clamps. The unsafe condition is not a problem with the design or manufacture of fuel injector lines. Some of the clamps are difficult to install on the fuel injector lines and then to the engine, resulting in support clamps being omitted during field overhaul or repair. The support clamps dampen fuel line vibration due to the impact of cooling air and vibration from the aircraft/engine. When the lines and clamps are accessible and support clamp installation is easier, as in the case of the Jacobs R-755 engine, the clamps are properly installed and there has not been a reported problem. Since there has not been a reported problem with the fuel injector lines on the R-755 engine, or any other engine, there is no reason to include any other engine in the AD. We did not change the AD. Conclusion We have carefully reviewed the available data, including the comments received, and determined that air safety and the public interest require adopting the AD as proposed. Costs of Compliance We estimate that 17,740 engines installed on aircraft of U.S. registry will be affected by this AD. We also estimate that it will take about 1 work-hour to inspect and replace all lines on a four-cylinder engine, 1.5 work-hours to inspect and replace all lines on a six-cylinder engine, and 2 work-hours to inspect and replace all lines on an eight-cylinder engine. We also estimate that the average labor rate is $80 per work-hour. Required parts will cost about $484 for a four-cylinder engine, $726 for a six-cylinder engine, and $968 for an eight-cylinder engine. Based on these figures, the total cost per airplane of the AD to U.S. operators is estimated as follows: • $564 for a four-cylinder engine. • $846 for a six-cylinder engine. • $1,128 for an eight-cylinder engine. We estimate the total cost to U.S. operators to be $11,062,860. Special Flight Permits Paragraph Removed Paragraph

(e)of the superseded AD, AD 2002-26-01, contains a paragraph pertaining to special flight permits. Even though this final rule does not contain a similar paragraph, we have made no changes with regard to the use of special flight permits to operate the airplane to a repair facility to do the work required by this AD. In July 2002, we published a new Part 39 that contains a general authority regarding special flight permits and airworthiness directives. See Docket No. FAA-2004-8460, Amendment 39-9474 (69 FR 47998, July 22, 2002). Thus, when we now supersede ADs we will not include a specific paragraph on special flight permits unless we want to limit the use of that general authority granted in section 39.23. 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 have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that 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 summary of the costs to comply with this AD and placed it in the AD Docket. You may get a copy of this summary at the address listed under ADDRESSES . 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 Federal Aviation Administration 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 removing Amendment 39-12986 (67 FR 78965, December 27, 2002), and by adding a new airworthiness directive, Amendment 39-15602, to read as follows: **2008-14-07 Lycoming Engines (formerly Textron Lycoming Division, AVCO Corporation):** Amendment 39-15602. Docket No. FAA-2007-0218; Directorate Identifier 92-ANE-56-AD. Effective Date

(a)This airworthiness directive

(AD)becomes effective August 14, 2008. Affected ADs

(b)This AD supersedes AD 2002-26-01, Amendment 39-12986. Applicability

(c)This AD applies to fuel injected reciprocating engines manufactured by Lycoming Engines that incorporate externally mounted fuel injection lines (engines with an “I” in the prefix of the engine model designation) as listed in the following Table 1: Table 1.—Engine Models Affected Engine Model AEIO-320 -D1B, -D2B, -E1B, -E2B. AIO-320 -A1B, -BIB, -C1B. IO-320 -B1A, -B1C, -C1A, -D1A, -D1B, -E1A, -E1B, -E2A, -E2B. LIO-320 -B1A, -C1A. AEIO-360 -A1A, -A1B, -A1B6, -A1D, -A1E, -A1E6, -B1F, -B2F, -B1G6, -B1H, -B4A, -H1A, -H1B. AIO-360 -A1A, -A1B, -B1B. HIO-360 -A1A, -A1B, -B1A, -C1A, -C1B, -D1A, -E1AD, -E1BD, -F1AD, -G1A. IO-360 -A1A, -A1B, -A1B6, -A1B6D, -A1C, -A1D, -A1D6, -A2A, -A2B, -A3B6, -A3B6D, -B1B, -B1D, -B1E, -B1F, -B1G6, -B2F, -B2F6, -B4A, -C1A, -C1B, -C1C, -C1C6, -C1D6, -C1E6, -C1F, -C1G6, -C2G6, -F1A, -J1A6D, -M1B, -L2A, -M1A. IVO-360 -A1A. LIO-360 -C1E6. TIO-360 -A1B, -C1A6D. IGO-480 -A1B6. AEIO-540 -D4A5, -D4B5, -D4D5, -L1B5, -L1B5D, -L1D5. IGO-540 -B1A, -B1C. IO-540 -A1A5, -AA1A5, -AA1B5, -AB1A5, -AC1A5, -AE1A5, -B1A5, -B1C5, -C1B5, -C4B5, -C4D5D, -D4A5, -E1A5, -E1B5, -G1A5, -G1B5, -G1C5, -G1D5, -G1E5, -G1F5, -J4A5, -V4A5D, -K1A5, -K1A5D, -K1B5, -K1C5, -K1D5, -K1E5, -K1E5D, -K1F5, -K1H5, -K1J5, -K1F5D, -K1G5, -K1G5D, -K1H5, -K1J5D, -K1K5, -K1E5, -K1E5D, -K1F5, -K1J5, -L1C5, -M1A5, -M1B5D, -M1C5, -N1A5, -P1A5, -R1A5, -S1A5, -T4A5D, -T4B5, -T4B5D, -T4C5D, -V4A5, -V4A5D, -W1A5, -W1A5D, -W3A5D. IVO-540 -A1A. LTIO-540 -F2BD, -J2B, -J2BD, -N2BD, -R2AD, -U2A, -V2AD, -W2A. TIO-540 -A1A, -A1B, -A2A, -A2B, -A2C, -AE1A5, -AE2A, -AH1A, -AA1AD, -AF1A, -AF1B, -AG1A, -AB1AD, -AB1BD, -AH1A, -AJ1A, -AK1A, -C1A, -E1A, -G1A, -F2BD, -J2B, -J2BD, -N2BD, -R2AD, -S1AD, -U2A, -V2AD, -W2A. TIVO-540 -A2A. IO-720 -A1A, -A1B, -D1B, -D1BD, -D1C, -D1CD, -B1B, -B1BD, -C1B. Engine models in Table 1 are installed on, but not limited to, Piper PA-24 Comanche, PA-30 and PA-39 Twin Comanche, PA-28 Arrow, and PA-23 Aztec; Beech 23 Musketeer; Mooney 20, and Cessna 177 Cardinal airplanes.

(d)This AD is not applicable to engines having internally mounted fuel injection lines, which are not accessible.

(e)This AD is not applicable to engines that have a Maintenance and Overhaul Manual with an Airworthiness Limitations Section that requires inspection of externally mounted fuel injector lines. Those engines models are not included in Table 1 of this AD. Unsafe Condition

(f)This AD results from Lycoming Engines revising their Mandatory Service Bulletin

(MSB)to add new engine models requiring inspection, and from the need to clarify a repetitive inspection compliance time. We are issuing this AD to prevent failure of the fuel injector fuel lines that would allow fuel to spray into the engine compartment, resulting in an engine fire. Compliance

(g)You are responsible for having the actions required by this AD performed within the compliance times specified unless the actions have already been done. Engines That Have Had Initial Inspections

(h)For engines that have had initial inspections in accordance with Textron Lycoming MSB No. 342, dated March 24, 1972; Textron Lycoming MSB No. 342A, dated May 26, 1992; Textron Lycoming MSB No. 342B, dated October 22, 1993; Supplement No. 1 to MSB No. 342B, dated April 27, 1999; Textron Lycoming MSB No. 342C, dated April 28, 2000; Textron Lycoming MSB No. 342D, dated July 10, 2001; and Lycoming Engines MSB No. 342E, dated May 18, 2004, inspect in accordance with paragraph

(j)of this AD. Engines That Have Not Had Initial Inspections

(i)For engines that have not had initial inspections previously done in accordance with Textron Lycoming MSB No. 342, dated March 24, 1972; Textron Lycoming MSB No. 342A, dated May 26, 1992; Textron Lycoming MSB No. 342B, dated October 22, 1993; Supplement No. 1 to MSB No. 342B, dated April 27, 1999; Textron Lycoming MSB No. 342C, dated April 28, 2000; Textron Lycoming MSB No. 342D, dated July 10, 2001; or Lycoming Engines MSD No. 342E, dated May 18, 2004, inspect as follows:

(1)For engines that have not yet had any fuel line maintenance done, or have not had any fuel line maintenance done since new or since the last overhaul, inspect in accordance with paragraph

(k)of this AD within 50 hours time-in-service

(TIS)after the effective date of this AD.

(2)For all other engines, inspect in accordance with paragraph

(k)of this AD within 10 hours TIS after the effective date of this AD. Repetitive Inspections

(j)Thereafter, inspect at intervals of 100 hours TIS (not to exceed 110 hours), at each engine overhaul, and after any maintenance has been done on the engine where any clamp (or clamps) on a fuel injector line (or lines) has been disconnected, moved, or loosened, in accordance with paragraph

(k)of this AD. Inspection Criteria

(k)Inspect the fuel injector fuel lines and clamps between the fuel manifold and the fuel injector nozzles, and replace as necessary any fuel injector fuel line and clamp that does not meet all conditions specified in Lycoming Engines MSB No. 342E, dated May 18, 2004. Alternative Methods of Compliance

(l)The Manager, New York Aircraft Certification Office, FAA, has the authority to approve alternative methods of compliance for this AD if requested using the procedures found in 14 CFR 39.19. Related Information

(m)FAA Special Airworthiness Information Bulletin No. NE-07-49, dated September 20, 2007, is not mandatory, but has additional information on this subject.

(n)Contact Norm Perenson, Aerospace Engineer, New York Aircraft Certification Office, FAA, Engine & Propeller Directorate, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; e-mail: *Norman.perenson@faa.gov;* telephone

(516)228-7337; fax

(516)794-5531, for more information about this AD. Material Incorporated by Reference

(o)You must use Lycoming Engines Mandatory Service Bulletin No. 342E, dated May 18, 2004, to perform the actions required by this AD. The Director of the Federal Register approved the incorporation by reference of this service bulletin in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact Lycoming Engines, 652 Oliver Street, Williamsport, PA 17701, or go to *http://www.lycoming.textron.com* for a copy of this service information. You may review copies at the FAA, New England Region, 12 New England Executive Park, Burlington, MA; 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 Burlington, Massachusetts, on June 24, 2008. Peter A. White, Assistant Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. E8-14734 Filed 7-9-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2008-0040; Directorate Identifier 2007-SW-13-AD; Amendment 39-15598; AD 2008-14-03] RIN 2120-AA64 Airworthiness Directives; Bell Helicopter Textron Canada Model 206A, 206B, 206L, 206L-1, 206L-3, and 206L-4 Helicopters AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: We are adopting a new airworthiness directive

(AD)for the specified Bell Helicopter Textron Canada

(BHTC)Model 206A, 206B, 206L, 206L-1, 206L-3, and 206L-4 helicopters. This AD results from mandatory continuing airworthiness information

(MCAI)originated by an aviation authority to identify and correct an unsafe condition on an aviation product. The aviation authority of Canada, with which we have a bilateral agreement, states in the MCAI: “It has been determined that some helicopters have been fitted with a CRES steel fitting, part number (P/N) 407-030-750-103, and the installation of the tailboom attachment bolt does not meet the design criteria.” We are issuing this AD to require actions that are intended to address the unsafe condition that results from an improper installation of the tailboom attachment bolt in the upper left-hand tailboom attachment CRES steel fitting. DATES: This AD becomes effective on August 14, 2008. The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of August 14, 2008. ADDRESSES: You may examine the AD docket on the Internet at *http://regulations.gov* or in person at the Docket Operations office, U.S. Department of Transportation, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC between 9 a.m. and 5 p.m. Monday through Friday, except Federal holidays. You may get the service information identified in this AD from BHTC, 12,800 Rue de l'Avenir, Mirabel, Quebec J7J1R4, telephone

(450)437-2862 or

(800)363-8023, fax

(450)433-0272. *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: Sharon Miles, Aviation Safety Engineer, FAA, Rotorcraft Directorate, Regulations and Policy Group, Fort Worth, Texas 76193-0111, telephone

(817)222-5122, 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 3887). That NPRM proposed to correct an unsafe condition for the specified products which results from an improper installation of the tailboom attachment bolt in the upper left hand tailboom attachment CRES steel fitting. The MCAI states: “It has been determined that some helicopters have been fitted with a CRES steel fitting, part number (P/N) 407-030-750-103, and the installation of the tailboom attachment bolt does not meet the design criteria.” 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. Relevant Service Information BHTC has issued Alert Service Bulletin No. 206-06-110 and No. 206L-06-140, both dated September 7, 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 differences between this AD and the MCAI AD. Costs of Compliance We estimate that this AD will affect about 2,206 helicopters (1,471 Model 206A and 206B helicopters and 735 Model 206L helicopters) of U.S. registry. We also estimate that it will take about .5 work-hour per helicopter to determine if a tailboom attachment bolt must be replaced and, if so, 1 additional work hour to replace the tailboom attachment bolt. The average labor rate is $80 per work-hour. Required parts will cost about $133 for Model 206L series helicopters, and $71 for Model 206A and 206B series helicopters. Based on these figures, we estimate the cost of this AD on U.S. operators to be $466,916, or $253 for each Model 206L series helicopter and $191 for each Model 206A and 206B series 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 product(s) 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. Therefore, 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, 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: **2008-14-03 Bell Helicopter Textron Canada:** Amendment 39-15598. Docket No. FAA-2008-0040; Directorate Identifier 2007-SW-13-AD. Effective Date

(a)This airworthiness directive

(AD)becomes effective on August 14, 2008. Other Affected ADs

(b)None. Applicability

(c)This AD applies to Model 206A, 206B, 206L, 206L-1, 206L-3, and 206L-4 helicopters, with an upper left-hand tailboom attachment CRES steel fitting, part number (P/N) 407-030-750-103, installed, certificated in any category. Reason

(d)The mandatory continuing airworthiness information

(MCAI)states: “It has been determined that some helicopters have been fitted with a CRES steel fitting, part number (P/N) 407-030-750-103, and the installation of the tailboom attachment bolt does not meet the design criteria.” We have determined that an improper installation of the tailboom attachment bolt in the upper left-hand tailboom attachment CRES steel fitting, P/N 407-030-750-103, creates an unsafe condition. Actions and Compliance

(e)Within the next 50 hours time-in-service (TIS), unless already done, do the following:

(1)For those helicopters with an upper left-hand CRES tailboom attachment fitting, P/N 407-030-750-103, determine if the correct number and type of washers are installed, the tailboom attachment bolt is oriented in the correct direction, and the correct number of bolt threads are exposed in accordance with the NOTES on Figure 1 of the applicable Alert Service Bulletin

(ASB)in the following Table I. Table I Model ASB No. and date 206A, 206B 206-06-110, dated September 7, 2006. 206L, L-1, L-3, L-4 206L-06-140, dated September 7, 2006.

(i)If the correct number and type of washers are installed, the tailboom attachment bolt is oriented in the correct direction, and the correct number of tailboom attachment bolt threads is exposed, do a torque inspection of the nut.

(A)If the torque is below the minimum required amount, replace the tailboom attachment bolt in accordance with the Accomplishment Instructions, Part II, step 1 of the applicable ASB listed in Table I of this AD.

(B)If the torque is above the maximum amount, adjust the torque to within the allowable range.

(ii)If an incorrect number or type of washer is installed or the tailboom attachment bolt is oriented in the wrong direction, reconfigure as necessary to meet the requirements of the NOTES on Figure 1 of the applicable ASB listed in Table I of this AD.

(iii)If there is less than 1 tailboom attachment bolt thread exposed, adjust the number of washers and retorque the nut so that between 1 and 3 tailboom attachment bolt threads are exposed at the proper nut torque.

(iv)If more than 3 tailboom attachment bolt threads are exposed, replace the attachment bolt in accordance with the Accomplishment Instructions, Part II, step 1 of the applicable ASB listed in Table 1 of this AD.

(2)If a tailboom attachment bolt must be replaced based on a requirement of this AD, at 100 hours TIS after the tailboom attachment bolt is replaced, do a torque inspection of the nut. Differences Between This AD and the MCAI AD

(f)None. Other Information

(g)Alternative Methods of Compliance (AMOCs): The Manager, Safety Management Group, Rotorcraft Directorate, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Send information to FAA, Rotorcraft Directorate, Regulations and Policy Group, ATTN: Sharon Miles, Aerospace Engineer; Fort Worth, Texas 76193-0111, telephone

(817)222-5122, fax

(817)222-5961. Related Information

(h)MCAI Transport Canada Airworthiness Directive CF-2007-01, dated January 19, 2007, contains related information. Air Transport Association of America

(ATA)Tracking Code

(i)Air Transport Association of America

(ATA)Code 5340, Fuselage Main, Attach Fittings. Material Incorporated by Reference

(j)You must use the specified portions of Bell Helicopter Textron Alert Service Bulletin No. 206-06-110 or No. 206L-06-140, both dated September 7, 2006, 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 Bell Helicopter Textron Canada, 12,800 Rue de l'Avenir, Mirabel, Quebec J7J1R4, telephone

(450)437-2862 or

(800)363-8023, fax

(450)433-0272.

(3)You may review copies at the FAA, Office of the Regional Counsel, Southwest Region, 2601 Meacham Blvd., Room 663, Fort Worth, Texas or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call

(202)741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html* . Issued in Fort Worth, Texas on June 12, 2008. Lance T. Gant, Acting Manager, Rotorcraft Directorate, Aircraft Certification Service. [FR Doc. E8-14736 Filed 7-9-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2008-0166; Directorate Identifier 2007-NM-329-AD; Amendment 39-15603; AD 2008-14-08] RIN 2120-AA64 Airworthiness Directives; Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP Series Airplanes AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule. SUMMARY: We are adopting a new airworthiness directive

(AD)for all Boeing Model 747 airplanes listed above. This AD requires repetitive inspections for broken or missing fasteners in the single-row hinge fasteners of the forward and aft cargo doors, and related investigative/corrective actions. This AD results from reports of broken and missing fasteners in the hinges of the forward and aft cargo doors in both the body hinge segments and the door hinge segments. We are issuing this AD to detect and correct broken or missing fasteners in the hinge segments with a single fastener row, which could lead to opening of the cargo door during flight and result in rapid decompression of the airplane. DATES: This AD is effective August 14, 2008. The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of August 14, 2008. ADDRESSES: For service information identified in this AD, contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207. Examining the AD Docket You may examine the AD docket on the Internet at *http://www.regulations.gov* ; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The address for the Docket Office (telephone 800-647-5527) is the 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: Ivan Li, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)917-6437; fax

(425)917-6590. SUPPLEMENTARY INFORMATION: Discussion We issued a notice of proposed rulemaking

(NPRM)to amend 14 CFR part 39 to include an airworthiness directive

(AD)that would apply to all Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP series airplanes. That NPRM was published in the **Federal Register** on February 13, 2008 (73 FR 8248). That NPRM proposed to require repetitive inspections for broken or missing fasteners in the single-row hinge fasteners of the forward and aft cargo doors, and related investigative/corrective actions. Comments We gave the public the opportunity to participate in developing this AD. We considered the comments received. Request To Cite Corrected Service Bulletin Japan Airlines

(JAL)states that it informed Boeing of an error in Boeing Alert Service Bulletin 747-52A2287, dated October 25, 2007, which we referred to as the appropriate source of service information for doing the actions proposed in the NPRM. JAL found an error in torque values and fastener quantities in Figures 9, 25, and 26 of that service bulletin. Therefore, JAL requests that we delay issuance of the AD until Boeing revises its service information with the corrected values and quantities. Boeing states that it has revised the service bulletin and recommends that the AD refer to Revision 1. We agree with the commenter. Boeing has issued Service Bulletin 747-52A2287, Revision 1, dated April 17, 2008, which contains the corrected torque values and fastener quantities. Revision 1 of the service bulletin also corrects errors in certain part numbers and station locations. We have revised paragraph

(f)of the AD to refer to Revision 1 and to remove the actions to take if there is one or more fasteners missing from a hinge segment. That information is included in Revision 1 of the service bulletin. We have also added a new paragraph

(g)to the AD to give credit to operators who accomplished the required actions in accordance with the original issue of the service bulletin. We have re-identified subsequent paragraphs accordingly. Conclusion We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting the AD with the changes described previously. We also determined that these changes will not increase the economic burden on any operator or increase the scope of the AD. Costs of Compliance We estimate that this AD affects 165 airplanes of U.S. registry. The “Estimated Costs” table provides the estimated costs for U.S. operators to comply with this AD. Estimated Costs Action Work hours Average labor rate per hour Cost per product Number of U.S.-registered airplanes Fleet cost Detailed inspection 3 $80 $240, per inspection cycle 165 $39,600, per inspection cycle. Torque application (for any hinge segment with no broken or missing fastener) 7 $80 $560, per inspection cycle Up to 165 Up to $92,400, per inspection cycle. 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 This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:

(1)Is not a “significant regulatory action” under Executive Order 12866,

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

(3)Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. You can find our regulatory evaluation and the estimated costs of compliance in the AD Docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **2008-14-08 Boeing:** Amendment 39-15603. Docket No. FAA-2008-0166; Directorate Identifier 2007-NM-329-AD. Effective Date

(a)This airworthiness directive

(AD)is effective August 14, 2008. Affected ADs

(b)None. Applicability

(c)This AD applies to all Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP series airplanes, certificated in any category. Unsafe Condition

(d)This AD results from reports of broken and missing fasteners in the hinges of the forward and aft cargo doors in both the body hinge segments and the door hinge segments. We are issuing this AD to detect and correct broken or missing fasteners in the hinge segments with a single fastener row, which could lead to opening of the cargo door during flight and result in rapid decompression of the airplane. Compliance

(e)Comply with this AD within the compliance times specified, unless already done. Repetitive Inspection and Related Investigative/Corrective Actions

(f)Before the accumulation of 7,200 total flight cycles or within 3,000 flight cycles after the effective date of this AD, whichever occurs later: Do a detailed inspection for broken or missing fasteners of the single-row hinge fasteners of the forward and aft cargo door hinge segments, and do all applicable related investigative (torque application) and corrective actions by accomplishing all the actions specified in the Accomplishment Instructions of Boeing Service Bulletin 747-52A2287, Revision 1, dated April 17, 2008. Do all applicable related investigative and corrective actions before further flight. Repeat the inspection thereafter at intervals not to exceed 6,000 flight cycles. Actions Accomplished According to Earlier Revision of Service Bulletin

(g)Actions accomplished before the effective date of this AD in accordance with Boeing Alert Service Bulletin 747-52A2287, dated October 25, 2007, are acceptable for compliance with the corresponding actions of this AD. Alternative Methods of Compliance (AMOCs) (h)(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, ATTN: Ivan Li, Aerospace Engineer, Airframe Branch, ANM-120S, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)917-6437; fax

(425)917-6590; has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19.

(2)To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. 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.

(3)An AMOC that provides an acceptable level of safety may be used for any repair required by this AD, if it is approved by an Authorized Representative for the Boeing Commercial Airplanes Delegation Option Authorization Organization who has been authorized by the Manager, Seattle ACO, to make those findings. For a repair method to be approved, the repair must meet the certification basis of the airplane, and the approval must specifically refer to this AD. Material Incorporated by Reference

(i)You must use Boeing Service Bulletin 747-52A2287, Revision 1, dated April 17, 2008, to do the actions required by this AD, unless the AD specifies otherwise.

(1)The Director of the Federal Register approved the incorporation by reference of this service information under 5 U.S.C. 552(a) and 1 CFR part 51.

(2)For service information identified in this AD, contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207.

(3)You may review copies of the service information incorporated by reference at the FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html* . Issued in Renton, Washington, on June 24, 2008. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E8-14972 Filed 7-9-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2008-0222; Directorate Identifier 2007-NM-300-AD; Amendment 39-15604; AD 2008-14-09] RIN 2120-AA64 Airworthiness Directives; Airbus Model A300 and A300-600 Series 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)originated 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: Due to several crack findings in the area of wing centre box lower aft corner at FR47, this area of structure has been subjected to accomplishment of several inspection Service Bulletins rendered mandatory in accordance with Airworthiness Limitation Items requirement for A300 aircraft and Airworthiness Directive

(AD)F-2004-159 for A300-600 aircraft [which corresponds to FAA AD 2005-23-08]. This AD is published * * * in order to control or correct the development of cracks, which could affect the structural integrity of the aircraft. We are issuing this AD to require actions to correct the unsafe condition on these products. DATES: This AD becomes effective August 14, 2008. The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of August 14, 2008. ADDRESSES: You may examine the AD docket on the Internet at *http://www.regulations.gov* or in person at the U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC. FOR FURTHER INFORMATION CONTACT: Dan Rodina, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)227-2125; fax

(425)227-1149. 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 February 29, 2008 (73 FR 11067). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states: Due to several crack findings in the area of wing centre box lower aft corner at FR47, this area of structure has been subjected to accomplishment of several inspection Service Bulletins [SBs] rendered mandatory in accordance with Airworthiness Limitation Items requirement for A300 aircraft and Airworthiness Directive

(AD)F-2004-159 for A300-600 aircraft [which corresponds to FAA AD 2005-23-08]. This AD is published in order to render mandatory an inspection subsequent to accomplishment of repair SB A300-53-0282 or A300[-53]-0291 or A300-57-6069 in the affected area. The SB A300-53-0381, A300-53-0383 and A300-57-6102 define the various configurations for the mandatory [repetitive] inspections to be conducted in order to control or correct the development of cracks [in the center wing box at FR47], which could affect the structural integrity of the aircraft. The inspections include x-ray, high frequency eddy current, visual, and ultrasonic inspections. Corrective actions include contacting Airbus if any cracking is found, repairing if any cracking is found, and doing other specified actions. The other specified actions include contacting Airbus for oversizing fastener holes, oversizing fastener holes, installing new fasteners, and installing new plugs. You may obtain further information by examining the MCAI in the AD docket. Comments We gave the public the opportunity to participate in developing this AD. We considered the comment received. Request To Revise Cost Air Transport Association (ATA), on behalf of its member, American Airlines, states that the cost estimate of $1,760 specified in the NPRM is far too low. ATA states that Airbus Service Bulletin A300-57-6102, dated January 12, 2007 (which is referred to as an appropriate source of service information for doing certain actions specified in the NPRM), specifies that an accomplishment kit costs $1,650 for one wing and that the labor requirement for inspecting one wing is 19 hours. ATA notes that costs will double for airplanes on which Airbus A300-57-6102 is accomplished on both wings. We agree that the cost estimate is too low. We have revised the labor hours in the Costs of Compliance section of this AD to reflect the 38 hours necessary to inspect both wings. However, we do not agree to add the cost of the kits necessary to do applicable corrective actions. The information in the Costs of Compliance section is limited to the cost of actions actually required by the AD. It does not consider the costs of “on-condition” actions (e.g., “repair, as applicable”) because, regardless of AD direction, those actions would be required to correct an unsafe condition identified in an airplane and ensure operation of that airplane in an airworthy condition, as required by the Federal Aviation Regulations. New Service Information Airbus has issued Service Bulletins A300-53-0381, A300-53-0383, and A300-57-6102, all including Appendix 1, all Revision 01, all dated May 27, 2008 (we referred to the original issues of the service bulletins as the appropriate source of service information for accomplishing the actions specified in the NPRM). Revision 01 of the service bulletins specify that no more action is needed on airplanes on which actions specified in the original issues have been done. Revision 01 of the service bulletins updates the Effectivity section and clarifies the unit of measurement for the values of certain tables in the Compliance section of the service bulletins. We have revised this final rule to refer to Revision 01 of the service bulletins. We have not restated paragraph (f)(1)(ii) of the NPRM in this AD because Revision 01 of the service bulletins addresses the unit of measurement for the specified tables. We have also added paragraph (f)(5) of this AD to give credit for actions done in accordance with the original issues of the service bulletins. Revision to Airplane Model Reference For clarity, we have revised the airplane model references in paragraphs (c)(1), (c)(2), (c)(3) of this AD by adding the word “airplanes” to the model designations as published in the most recent type certificate data sheet for the affected models. Conclusion We reviewed the available data, including the comment received, and determined that air safety and the public interest require adopting the AD with the changes described previously. We determined that these changes will not increase the economic burden on any operator or increase the scope of the AD. 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 our FAA policies. Any such differences are highlighted in a NOTE within the AD. Costs of Compliance We estimate that this AD will affect 107 products of U.S. registry. We also estimate that it will take about 38 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 to the U.S. operators to be $325,280, or $3,040 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 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 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 Operations office 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 Operations 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: **2008-14-09 Airbus:** Amendment 39-15604. Docket No. FAA-2008-0222; Directorate Identifier 2007-NM-300-AD. Effective Date

(a)This airworthiness directive

(AD)becomes effective August 14, 2008. Affected ADs

(b)None. Applicability

(c)This AD applies to Airbus Model A300 and A300-600 series airplanes, certificated in any category, as listed in paragraphs (c)(1), (c)(2), and (c)(3) of this AD.

(1)Airbus Model A300 B2-1C, B2-203 and B2K-3C airplanes, all serial numbers that have been repaired in accordance with Airbus Service Bulletin A300-53-0282.

(2)Airbus Model A300 B4-103, B4-203, and B4-2C airplanes, all serial numbers that have been repaired in accordance with Airbus Service Bulletin A300-53-0291.

(3)Airbus Model A300 B4-601, B4-603, B4-605R, B4-620, B4-622, B4-622R, C4-605R Variant F, and F4-605R airplanes, all serial numbers that have been repaired in accordance with Airbus Service Bulletin A300-57-6069. Subject

(d)Air Transport Association

(ATA)of America Codes 53 and 57: Fuselage and Wings. Reason

(e)The mandatory continuing airworthiness information

(MCAI)states: Due to several crack findings in the area of wing centre box lower aft corner at FR47, this area of structure has been subjected to accomplishment of several inspection Service Bulletins [SBs] rendered mandatory in accordance with Airworthiness Limitation Items requirement for A300 aircraft and Airworthiness Directive

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

(1)Except as provided by paragraphs (f)(1)(i), (f)(1)(ii), (f)(1)(iii), and (f)(1)(iv) of this AD, at the threshold defined in paragraph 1.E., “Compliance,” of the applicable service bulletin listed in Table 1 of this AD and according to the Accomplishment Instructions of the applicable service bulletin, perform all applicable inspections and, before further flight, perform all applicable other specified actions, of FR47 forward fitting vertical splice (including crack stop hole), crack stop hole (depending on crack's length and position), center wing box lower panel, and reinforced parts (internal angle, lower external splice and external fitting). Table 1.—Airbus Service Bulletins Service Bulletin Revision Date A300-53-0381 01 May 27, 2008. A300-53-0383 01 May 27, 2008. A300-57-6102 01 May 27, 2008.

(i)Where the tables in paragraph 1.E., “Compliance,” of the service bulletins listed in Table 1 of this AD contain compliance times in both flight cycles and flight hours, this AD requires that the corresponding actions be done at the earlier of the flight cycle and flight hour compliance times.

(ii)Where any table in paragraph 1.E., “Compliance,” of the service bulletins listed in Table 1 of this AD specifies exact measurements in the rows of the table for LA, use the ranges specified in Table 2 of this AD. Table 2.—Ranges for LA Where row of the table specifies— Use— LA = 0 LA = 0. LA = 10 0 < LA ≤ 10 mm. LA = 15 10 mm < LA ≤ 15 mm. LA = 20 15 mm < LA ≤ 20 mm.

(iii)Where in paragraph 1.E., “Compliance,” of the service bulletins listed in Table 1 of this AD the service bulletins specify a compliance time after receipt of the service bulletin, this AD requires compliance within the specified compliance time after the effective date of this AD.

(iv)Where any table in paragraph 1.E., “Compliance,” of the service bulletins listed in Table 1 of this AD specifies measurements of LA > 40 mm, this AD requires that the corresponding action be done if LA ≥ 40 mm.

(2)If any crack is detected during any inspection required by paragraph (f)(1) of this AD, before further flight, contact Airbus and repair.

(3)Repeat the actions specified in paragraph (f)(1) of this AD at the intervals defined in paragraph 1.E., “Compliance,” of the applicable service bulletin listed in Table 1 of this AD and according to the Accomplishment Instructions of the applicable service bulletin, except as provided by paragraphs (f)(1)(i), (f)(1)(ii), and (f)(1)(iv) of this AD.

(4)Within 30 days after doing the inspection required by paragraph (f)(1) of this AD or within 30 days after the effective date of this AD, whichever occurs later, report the first inspection results, whatever they may be, to Airbus as specified in the applicable service bulletin listed in Table 1 of this AD.

(5)Actions accomplished before the effective date of this AD according to the applicable service bulletin specified in Table 3 of this AD are considered acceptable for compliance with the corresponding action specified in this AD. Table 3.—Credit Service Bulletins Airbus Service Bulletin Date A300-53-0381 Jan. 15, 2007. A300-53-0383 Jan. 11, 2007. A300-57-6102 Jan. 12, 2007. FAA AD Differences Note: This AD differs from the MCAI and/or service information as follows: The MCAI and service bulletin did not provide adequate descriptions for certain compliance requirements. We have clarified the compliance requirements in paragraphs (f)(1)(i), (f)(1)(ii), (f)(1)(iii), and (f)(1)(iv) of this AD. Other FAA AD Provisions

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

(1)Alternative Methods of Compliance (AMOCs): The Manager, International Branch, ANM-116, Transport Airplane Directorate, 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: Dan Rodina, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)227-2125; fax

(425)227-1149. 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, 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 European Aviation Safety Agency

(EASA)Airworthiness Directive 2007-0150, dated May 22, 2007 [corrected May 23, 2007], and the Airbus service bulletins listed in Table 1 of this AD, for related information. Material Incorporated by Reference

(i)You must use the applicable service information specified in Table 4 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 Airbus, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France.

(3)You may review copies at the FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington; 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* . Table 4.—Material Incorporated by Reference Airbus Service Bulletin Revision Date A300-53-0381, including Appendix 1 01 May 27, 2008. A300-53-0383, including Appendix 1 01 May 27, 2008. A300-57-6102, including Appendix 1 01 May 27, 2008. Issued in Renton, Washington, on June 26, 2008. Dionne Palermo, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E8-15265 Filed 7-9-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28245; Directorate Identifier 2007-CE-047-AD; Amendment 39-15608; AD 2008-14-13] RIN 2120-AA64 Airworthiness Directives; Cirrus Design Corporation Model SR20 and SR22 Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: We are adopting a new airworthiness directive

(AD)for certain Cirrus Design Corporation

(CDC)Models SR20 and SR22 airplanes. This AD requires you to replace the cabin door rod ends with new parts including a redesigned non-binding hinge pin that replaces the existing pin at the upper door hinge. This AD results from two known occurrences of in-flight cabin door separation (one total separation and one retained by the door strut). The rod ends, a component of the door hinges, may fail and result in a door separation from the airplane while in flight. We are issuing this AD to prevent in-flight failure of the cabin door, which could result in door separation from the airplane. DATES: This AD becomes effective on August 14, 2008. On August 14, 2008, the Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD. ADDRESSES: For service information identified in this AD, contact Cirrus Design Corporation, 4515 Taylor Circle, Duluth, Minnesota 55811; telephone:

(218)727-2737; Internet address: *www.cirrusdesign.com* . To view the AD docket, go to U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590, or on the Internet at *http://www.regulations.gov* . The docket number is FAA-2007-28245; Directorate Identifier 2007-CE-047-AD. FOR FURTHER INFORMATION CONTACT: Wess Rouse, Aerospace Engineer, Chicago Aircraft Certification Office (ACO), 2300 East Devon Avenue, Room 107, Des Plaines, Illinois 60018; telephone:

(847)294-8113; fax:

(847)294-7834. SUPPLEMENTARY INFORMATION: Discussion On March 26, 2008, we issued a proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an AD that would apply to certain SR20 and SR22 airplanes. This proposal was published in the **Federal Register** as a supplemental notice of proposed rulemaking

(NPRM)on April 2, 2008 (73 FR 17935). The NPRM proposed to replace the cabin door rod ends with new parts including a redesigned non-binding hinge pin that replaces the existing pin at the upper door hinge. Comments We provided the public the opportunity to participate in developing this AD. We received no comments on the proposal or on the determination of the cost to the public. Conclusion We have carefully reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed except for minor editorial corrections. We have determined that these minor corrections: • Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and • Do not add any additional burden upon the public than was already proposed in the NPRM. Costs of Compliance We estimate that the AD affects 2,308 airplanes in the U.S. registry. The costs vary from 3.5 work-hours to incorporate Cirrus Kit 70186-004 and 2.5 work-hours to incorporate Cirrus Kit 70186-005. Parts cost for either kit is $270. For the purposes of this AD, we will use 3.5 work-hours for all airplanes. Based on this, the cost of this AD is: Labor cost Parts cost Total cost per airplane Total fleet cost 3.5 work-hours × $80 per hour = $280 $270 $550 $1,269,400 Note: CDC will provide warranty credit to the extent noted in CDC Service Bulletin 2X-52-07 R4, dated January 24, 2008. 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 AD. Regulatory Findings We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that 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 a summary of the costs to comply with this AD (and other information as included in the Regulatory Evaluation) and placed it in the AD Docket. You may get a copy of this summary by sending a request to us at the address listed under ADDRESSES . Include “Docket No. FAA-2007-28245; Directorate Identifier 2007-CE-047-AD” in your request. 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 Federal Aviation Administration amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. FAA amends § 39.13 by adding the following new AD: **2008-14-13 Cirrus Design Corporation:** Amendment 39-15608; Docket No. FAA-2007-28245; Directorate Identifier 2007-CE-047-AD. Effective Date

(a)This AD becomes effective on August 14, 2008. Affected ADs

(b)None. Applicability

(c)This AD applies to the following airplane models and serial numbers that are certificated in any category: Models Serial Nos. SR20 1423 through 1906. SR22 0795 and 0820 through 2912. Unsafe Condition

(d)This AD results from two known occurrences of in-flight cabin door separation (one total separation and one retained by the door strut). We are issuing this AD to prevent in-flight failure of the cabin door, which could result in door separation from the airplane. Compliance

(e)Unless already done, within the next 50 hours time-in-service

(TIS)after August 14, 2008 (the effective date of this AD) or within 180 days after August 14, 2008 (the effective date of this AD), whichever occurs first, following Cirrus Design Corporation Service Bulletin SB 2X-52-07 R4, dated January 24, 2008, do one of the following:

(1)If threaded sleeve is installed at the cabin door rod end, install cabin door rod end Kit 70186-004.

(2)If threaded sleeve is not installed at the cabin door rod end, install cabin door rod end Kit 70186-005. Alternative Methods of Compliance (AMOCs)

(f)The Manager, Chicago 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: Wess Rouse, Aerospace Engineer, Chicago ACO, 2300 East Devon Avenue, Room 107, Des Plaines, Illinois 60018; telephone:

(847)294-8113; fax:

(847)294-7834. 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. Related Information

(g)To get copies of the service information referenced in this AD, contact Cirrus Design Corporation, 4515 Taylor Circle, Duluth, Minnesota 55811, telephone:

(218)788-3000. To view the AD docket, go to the U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590, or on the Internet at *http://dms.dot.gov* . The docket number is Docket No. FAA-2007-28245; Directorate Identifier 2007-CE-047-AD. Material Incorporated by Reference

(h)You must use Cirrus Design Corporation Service Bulletin SB 2X-52-07 R4, dated January 24, 2008, to do the actions required by this AD, unless the AD specifies otherwise.

(1)The Director of the Federal Register approved the incorporation by reference of this service information under 5 U.S.C. 552(a) and 1 CFR part 51.

(2)For service information identified in this AD, contact Cirrus Design Corporation, 4515 Taylor Circle, Duluth, Minnesota 55811; telephone:

(218)727-2737; Internet address: *www.cirrusdesign.com* .

(3)You may review copies at the FAA, Central Region, Office of the Regional Counsel, 901 Locust, 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/code_of_federal_regulations/ibr_locations.html* . Issued in Kansas City, Missouri, on July 1, 2008. John Colomy, Acting Manager, Small Airplane Directorate, Aircraft Certification Service. [FR Doc. E8-15474 Filed 7-9-08; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF COMMERCE International Trade Administration 15 CFR Part 336 Docket No.: 070712324-8763-02 RIN 0625-AA74 Imports of Certain Cotton Shirting Fabric: Implementation of Tariff Rate Quota Established Under the Tax Relief and Health Care Act of 2006 AGENCY: Department of Commerce, International Trade Administration. ACTION: Final Rule. SUMMARY: The Department of Commerce (“the Department”) publishes this final rule to adopt, without change, an interim final rule that implemented tariff rate quotas (“TRQ”) for a limited quantity of certain cotton shirting fabrics pursuant to Section 406 of the Tax Relief and Health Care Act of 2006 (“the Act”), which President Bush signed into law on December 20, 2006 (Pub. L. 109-432). Section 406(b)(1) of the Act authorizes the Secretary of Commerce to issue licenses to eligible manufacturers under headings 9902.52.08 through 9902.52.19 of the Harmonized Tariff Schedule of the United States, specifying the restrictions under each such license on the quantity of cotton woven fabrics that may be entered each year by or on behalf of the manufacturer. DATES: This final rule is effective July 10, 2008. ADDRESSES: FOR FURTHER INFORMATION CONTACT: Laurie Mease, Office of Textiles and Apparel, U.S. Department of Commerce,

(202)482-3400. SUPPLEMENTARY INFORMATION: A. Background President Bush signed the Tax Relief and Health Care Act of 2006 into law on December 20, 2006 (Pub. L. 109-432). Section 406(b)(1) of the Act authorizes the Secretary of Commerce to issue licenses to eligible manufacturers under headings 9902.52.08 through 9902.52.19 of the Harmonized Tariff Schedule of the United States, specifying the restrictions under each such license on the quantity of cotton woven fabrics that may be entered each year by or on behalf of the manufacturer. The Act creates an annual tariff rate quota providing for temporary reductions through December 31, 2009 in the import duties of cotton woven fabrics suitable for making cotton shirts (new Harmonized Tariff Schedule of the United States

(HTS)headings 9902.52.08, 9902.52.09, 9902.52.10, 9902.52.11, 9902.52.12, 9902.52.13, 9902.52.14, 9902.52.15, 9902.52.16, 9902.52.17, 9902.52.18, and 9902.52.19). The reduction in duty is limited to 85 percent of the total square meter equivalents of all imported woven fabrics of cotton containing 85 percent or more by weight of cotton used by manufacturers in cutting and sewing men's and boys' cotton shirts in the United States and purchased by such manufacturers during calendar year 2000. The Act requires that the Secretary of Commerce must issue licenses and ensure that the tariff rate quotas are fairly allocated to eligible manufacturers under such headings 9902.52.08 through 9902.52.19. On July 24, 2007, the Department published an interim final rule that established eligibility criteria and application requirements to receive an allocation under the TRQ. S **ee Imports of Certain Cotton Shirting Fabric: Implementation of Tariff Rate Quota Established Under the Tax Relief and Health Care Act of 200** 6, 72 FR 40235 (July 24, 2007). The interim regulations were effective upon publication to prevent costs incurred by TRQ recipients that would have, in effect, nullified duty benefits, particularly for those TRQ recipients who had small shipments. The Department intends to make its determination regarding allocation of the tariff rate quota no later than December 31 of the year preceding the tariff rate quota year. Commerce anticipates publishing a **Federal Register** Notice

(FRN)each September soliciting license applications for the following calendar year. Applications will be due within 30 days of the FRN's publication and licenses will be issued to eligible manufacturers within 60 days of the application deadline. The tariff rate quota licenses will be issued to eligible manufacturers on the basis of the percentage of each manufacturer's quantity of imported woven fabrics described under HTS headings 9902.52.08 through 9902.52.19 during calendar year 2000, compared to the imports of such fabric by all manufacturers that qualify for a tariff rate quota allocation. Pursuant to statutory requirements, the tariff rate quota allocation will be limited to persons (including firms, corporations, or other legal entities) who cut and sew men's and boys' cotton shirts in the United States and who, during calendar year 2000, were manufacturers cutting and sewing men's and boys' cotton shirts in the United States from imported woven fabrics of cotton containing 85 percent or more by weight of cotton of the kind described in HTS headings 9902.52.08 through 9902.52.19 purchased by such manufacturers during calendar year 2000. Any manufacturer who becomes a successor-of-interest to a manufacturer of the cotton woven shirts described in HTS headings 9902.52.08 through 9902.52.19 during 2000 because of a reorganization or otherwise, shall be eligible to apply for a TRQ. In order to receive a license, eligible manufactures must submit ITA Form 4156P entitled “Affidavit for Application for TRQ License Cotton Shirting Fabric Tariff Rate Quota” containing the following information:

(1)Company name, address, contact telephone number, e-mail address, federal tax identification number, name of person submitting the application, and title, or capacity in which the person is acting for the applicant.

(2)The name and address of each plant and/or contractor location in the United States where men's and boys' cotton shirts of imported woven fabric of the kind described in HTS headings 9902.52.08 through 9902.52.19 was cut and sewn in calendar year 2000.

(3)The date of purchase shall be

(a)the invoice date if the manufacturer is not the importer of record; and

(b)the date of entry if the manufacturer is the importer of record.

(4)The quantity of imported woven fabrics of cotton containing 85 percent or more by weight of cotton purchased during calendar year 2000 for use in the cutting and sewing of men's and boys' shirts in the United States. At the conclusion of the application the applicant must attest that “all information contained in the application is complete and correct and no false claims, statements or representations have been made.” Applicants should be aware that, generally, pursuant to 31 U.S.C. §3729 persons providing false or fraudulent claims, and pursuant to 18 U.S.C. §1001, persons making materially false statements or representations, are subject to civil or criminal penalties, respectively. All applications must be notarized by a licensed public notary. Any business confidential information provided in an application must be marked “business confidential.” Such information will be kept confidential and protected from disclosure to the full extent permitted by law. The applicant must retain records substantiating the information provided in the application for a period of 3 years. Such records must be made available upon request by an appropriate government official. Conditions of License Use The importer of record of fabric entered or withdrawn from warehouse for consumption under a license must be the Licensee or an importer authorized by the Licensee to act on its behalf. A Licensee may only authorize an importer to import fabric under the license on its behalf by making such authorization in writing or by electronic notice to the importer and providing a copy of such authorization to the Department. The authorization must include the unique number of the license, must specify the type of fabric imported by micron count, and must be in the possession of the importer at the time of filing the entry summary or warehouse withdrawal for consumption (Customs Form 7501) or its electronic equivalent. The authorization also must include the unique PIN assigned by the licensee to the importer. A copy of the authorization and PIN assigned to each importer must be provided to the Department by fax

(202)482-0858 or by mail to the Office of Textiles and Apparel, Room 3001, United States Department of Commerce, Washington, D.C. 20230. This authorization may only be withdrawn by notifying the importer, in writing or by electronic notice, with a copy provided to the Department. The Licensee also must advise the Department of each authorized importer's Importer of Record Identification Number. The Licensee should inform its authorized importers that if they enter an amount less than the exact amount requested and authorized by the Import Approval, the importer must annotate the Import Approval form and send a copy to the Department and to the Licensee. This annotation will be used to correct the record of use of the license. Failure to provide such information could disrupt the orderly use of the license. Imports in excess of the amount of import approval are not authorized. Public Comments While the interim regulations became effective on July 24, 2007, the Department of Commerce solicited comments on the interim regulations and expressed particular interest in comments concerning any impact the regulations might have on small or medium sized businesses. The public comment period closed on September 24, 2007. The Department did not receive any comments on the interim regulations. Action Being Taken by the Department of Commerce The Department of Commerce is adopting without change the interim final rule that became effective July 24, 2007. Title 15, Part 336 of the Code of Federal Regulations sets forth regulations regarding the issuance and effect of licenses for the allocation of certain cotton shirting fabrics under the tariff rate quotas established by Section 406 of the Act. Classification Executive Order 12866: This rule has been determined to be not significant under EO 12866. Paperwork Reduction Act: These regulations contain information collection requirements subject to the Paperwork Reduction Act (PRA). The information collection requirements have been approved by the Office of Management and Budget

(OMB)under Control Number 0625-0260. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA unless that collection of information displays a current valid OMB control number. The information collected will be used by the Department to allocate the tariff rate quota among manufacturers. Responses to the collection of information are required for a manufacturer to receive allocation of the tariff rate quota. Records substantiating information provided in an application must be retained. It is estimated that the annual burden for the collection will average one hour per application. This includes the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Office of Management and Budget, Washington, DC, 20503 (Attention: ITA Desk Officer). Dated: July 3, 2008. David Spooner, Assistant Secretary for Import Administration. List of Subjects in 15 CFR Part 336 Imports, Quotas, Reporting and Record-keeping, Tariffs, Textiles. For reasons stated in the preamble, the Interim Final Rule, which was published on July 24, 2007 at 72 FR 40235, is adopted as final without change. [FR Doc. E8-15754 Filed 7-9-08; 8:45 am] BILLING CODE 3510-DS-S DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 15 CFR Part 902 50 CFR Part 648 [Docket No. 070817467-8744-03] RIN 0648-AV90 Fisheries of the Northeastern United States; Atlantic Sea Scallop Fishery; Framework Adjustment 19; Announcing OMB Approval of Information Collection AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Final rule; effective date of OMB control numbers. SUMMARY: The National Marine Fisheries Service

(NMFS)announces that the Office of Management and Budget

(OMB)has approved the following collection of information pursuant to the Paperwork Reduction Act of 1995: OMB 0648-0546, “Northeast Region Observer Providers Requirements.” This rule publishes the OMB control number for these collections and makes effective the collection-of-information requirements published in a final rule to implement measures included in Framework Adjustment 19 (Framework 19) to the Atlantic Sea Scallop Fishery Management Plan (FMP). DATES: This final rule is effective August 11, 2008. The amendments to 50 CFR 648.11(h)(5)(vii)(G) through (J), and the collection-of-information requirements published on May 29, 2008 (73 FR 30790), are effective August 11, 2008. ADDRESSES: An environmental assessment

(EA)was prepared for Framework 19 that describes the action and other alternatives considered, and provides a thorough analysis of the impacts of the measures and alternatives. Copies of Framework 19, the EA, and the Initial Regulatory Flexibility Analysis (IRFA), are available upon request from Paul J. Howard, Executive Director, New England Fishery Management Council (Council), 50 Water Street, Newburyport, MA 01950. The Final Regulatory Flexibility Analysis

(FRFA)was published in the Classification section of the final rule (73 FR 30790, May 29, 2008). Copies of the FRFA are available upon request from the Regional Administrator at the address listed in the next paragraph. Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this final rule may be submitted to the Regional Administrator at 1 Blackburn Drive, Gloucester, MA 01930 and by e-mail to *David_Rostker@omb.eop.gov* , or fax to

(202)395-7285. FOR FURTHER INFORMATION CONTACT: Jamie Goen, Fishery Policy Analyst, phone 978-281-9220; fax 978-281-9135. SUPPLEMENTARY INFORMATION: On May 29, 2008 (73 FR 30790), NMFS published a final rule to implement measures included in Framework Adjustment 19 (Framework 19) to the Atlantic Sea Scallop Fishery Management Plan (FMP), which was developed by the Council. Framework 19 included, in part, adjustments to the industry-funded observer program for the scallop fishery, which included a collection of information associated with regulations at 50 CFR 648.11(h)(5)(vii)(G) through (J). OMB's approval of NMFS PRA submission on the collection of information did not happen in time to publish their determination with the final rule on Framework 19. The PRA and its implementing regulations require Federal agencies to display OMB control numbers and inform respondents of their legal significance after OMB has approved an Agency's information collection. An agency may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number, and no person is required to respond to a collection of information unless it displays a currently valid OMB control number. In accordance with the requirements of the PRA and its implementing regulations, NMFS notifies the public that the following information collection has been approved by OMB following the Agency's submission of an information collection request (ICR): OMB Control Number: 0648-0546. OMB Approval Date: 06/03/08. Expiration Date: 06/30/2011. Title: Northeast Region Observer Providers Requirements. This notice announces approval of the information collection listed above, publishes the OMB control number, and announces the effectiveness of the implementing regulations in 50 CFR 648.11(h)(5)(vii)(G) through (J). Classification NMFS determined that Framework 19 was necessary for the conservation and management of the Atlantic sea scallop fishery and was consistent with the Magnuson-Stevens Act and other applicable law. This rule announces OMB approval of a collection of information pursuant to the PRA and the effectiveness of regulations that were published in the final rule for Framework 19 dated May 29, 2008. Therefore, NMFS has also determined that this rule is necessary for the conservation and management of the Atlantic sea scallop fishery and is consistent with the Magnuson-Stevens Act and other applicable law. This final rule has been determined to be not significant for purposes of Executive Order 12866. This rule contains a collection-of-information requirement subject to the PRA. The collection of this information was approved by OMB on June 3, 2008, under OMB Control Number 0648-0546. Public reporting burden for these collections of information are estimated to average as follows: 1. Service provider observer contact information reports, OMB # 0648-0546—5 min per response; 2. Service provider observer availability reports, OMB # 0648-0546—1 min per response; 3. Copies of service provider outreach materials, OMB # 0648-0546—30 min per response; 4. Copies of service provider contracts, OMB # 0648-0546 —30 min per response. More detail on these collections of information is available in the final rule for Framework 19 (73 FR 30790, May 29, 2008) and on the following website listing OMB approved PRA submissions: *http://www.cio.noaa.gov/itmanagement/prasubs.html* . Send comments regarding these burden estimates or any other aspect of this data collection, including suggestions for reducing the burden, to NMFS (see ADDRESSES ) and by e-mail to *David_Rostker@omb.eop.gov* , or fax to 202-395-7285. NMFS, pursuant to Section 604 of the Regulatory Flexibility Act (RFA), included a final regulatory flexibility analysis

(FRFA)in the classification section of the Framework 19 final rule. This final rule only announces OMB approval of a collection of information and effectiveness of regulations contained in the Framework 19 final rule and analyses. Therefore, the FRFA is not repeated here. The FRFA described the economic impact the Framework 19 final rule will have on small entities. It incorporated the economic impacts and analysis summarized in the IRFA for the proposed rule to implement Framework 19, the comments and responses in the Framework 19 final rule, and the corresponding economic analyses prepared for Framework 19 (e.g., the EA and the RIR). A copy of the IRFA, the RIR, and the EA for Framework 19 is available upon request (see ADDRESSES ). List of Subjects in 15 CFR Part 902 Reporting and recordkeeping. Dated: July 2, 2008. John Oliver, Deputy Assistant Administrator For Operations, National Marine Fisheries Service. For the reasons stated in the preamble, 15 CFR part 902 is amended as follows: PART 902—NOAA INFORMATION COLLECTION REQUIREMENTS UNDER THE PAPERWORK REDUCTION ACT: OMB CONTROL NUMBERS 1. The authority citation for part 902 continues to read as follows: Authority: 44 U.S.C. 3501 *et seq.* 2. In § 902.1, the table in paragraph

(b)under “50 CFR” is amended by revising the existing entry for § 648.11 to read as follows: § 902.1 OMB control numbers assigned pursuant to the Paperwork Reduction Act.

(b)Display. CFR part or section where the information collection requirement is located Current OMB control number (All numbers begin with 0648-) * * * * * 50 CFR * * * * * 648.11 -0202,-0546, and -0555 * * * * * [FR Doc. E8-15610 Filed 7-9-08; 8:45 am] BILLING CODE 3510-22-S DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Parts 312, 314, 600, and 601 [Docket No. FDA-2004-N-0510] (formerly Docket No. 2004N-0267) Applications for Approval to Market a New Drug; Complete Response Letter; Amendments to Unapproved Applications AGENCY: Food and Drug Administration, HHS. ACTION: Final rule. SUMMARY: The Food and Drug Administration

(FDA)is amending its regulations on new drug applications

(NDAs)and abbreviated new drug applications (ANDAs) for approval to market new drugs and generic drugs (drugs for which approval is sought in an ANDA). The final rule discontinues FDA's use of approvable letters and not approvable letters when taking action on marketing applications. Instead, we will send applicants a complete response letter to indicate that the review cycle for an application is complete and that the application is not ready for approval. We are also revising the regulations on extending the review cycle due to the submission of an amendment to an unapproved application and starting a new review cycle after the resubmission of an application following receipt of a complete response letter. In addition, we are adding to the regulations on biologics license applications

(BLAs)provisions on the issuance of complete response letters to BLA applicants. We are taking these actions to implement the user fee performance goals referenced in the Prescription Drug User Fee Amendments of 2002 (PDUFA III) that address procedures and establish target timeframes for reviewing human drug applications. DATES: This rule is effective August 11, 2008. FOR FURTHER INFORMATION CONTACT: Brian L. Pendleton, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, rm. 6304, Silver Spring, MD 20993, 301-796-3504; or Stephen Ripley, Center for Biologics Evaluation and Research (HFM-17), Food and Drug Administration, 1401 Rockville Pike, suite 200N, Rockville, MD 20852-1448, 301-827-6210. SUPPLEMENTARY INFORMATION: Table of Contents I. Background A. The Proposed Rule B. Changes to the Proposed Rule II. Summary of the Final Rule A. Complete Response Letters B. Resubmissions C. Amendments to Unapproved Applications III. Comments on the Proposed Rule A. General Comments B. Definitions (Proposed § 314.3(b)) C. Timeframes for Review (Proposed § 314.100) D. Complete Response Letters (Proposed § 314.110) E. Complete Response Letters for BLAs F. Miscellaneous Provisions Related to Complete Response Letters G. Amendments to NDAs (Proposed § 314.60) H. Amendments to ANDAs (Proposed § 314.96) IV. Analysis of Economic Impacts A. Impact of the Final Rule B. Summary of Impacts C. Comments D. Conclusion V. Environmental Impact VI. Paperwork Reduction Act of 1995 VII. Federalism I. Background In the **Federal Register** of July 20, 2004 (69 FR 43351), we published a proposed rule to replace approvable and not approvable letters with complete response letters and to make other changes to our regulations on NDAs, ANDAs, and BLAs. Previous § 314.110 (21 CFR 314.110) set forth provisions on the issuance of and response to approvable letters; § 314.120 (21 CFR 314.120) addressed the issuance of and response to not approvable letters. The proposed rule proposed to replace those provisions with a revised § 314.110 regarding the issuance of complete response letters upon completion of our review of NDAs and ANDAs. A. The Proposed Rule The preamble to the proposed rule stated that the Center for Drug Evaluation and Research

(CDER)and the Center for Biologics Evaluation and Research

(CBER)agreed to revise their regulations and procedures to provide for the issuance of complete response letters as part of our prescription drug user fee performance goals. We first made the commitment regarding complete response letters as part of the user fee performance goals established in conjunction with the enactment of the Food and Drug Administration Modernization Act of 1997 (Public Law 105-115) (the user fee provisions of this act are known as “PDUFA II”). We repeated this commitment in the performance goals developed in conjunction with the enactment of the Prescription Drug User Fee Amendments of 2002 (PDUFA III), set forth in title V, subtitle A, of the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (Public Law 107-188). Section 502 of PDUFA III states that user fees will be dedicated to expediting the drug development process and the process for review of human drug applications in accordance with the new performance goals, which are set forth in an enclosure to letters from Tommy Thompson, Secretary of Health and Human Services, to the Chairman of the House Committee on Energy and Commerce and the Ranking Member of the Senate Committee on Health, Education, Labor, and Pensions (June 4, 2002) (Goals Letter). The proposed rule stated that, because there are no provisions on action letters in the biological product regulations, CBER had only to change its standard operating procedures to incorporate the issuance of a complete response letter at the end of a review cycle for a biological product. We noted that although CBER had already done this, we proposed to add a regulation (proposed § 601.3) on the issuance of complete response letters concerning BLAs and BLA supplements. As we stated in the proposed rule, our intent in replacing approvable and not approvable letters with complete response letters is to adopt a more consistent and neutral mechanism to convey that we cannot approve an application in its present form. We believe that issuance of complete response letters will provide a more consistent approach to informing sponsors of changes that must be made before an application can be approved, with no implication as to the ultimate approvability of the application. The proposed rule stated our intent to incorporate into the regulations for NDAs the terminology based on the user fee performance goals regarding class 1 and class 2 resubmissions to original NDAs and efficacy supplements. In addition, we proposed to revise our regulations on amendments to unapproved applications, efficacy supplements, and resubmissions to be consistent with user fee performance goals for these amendments. B. Changes to the Proposed Rule We received 11 comments on the proposed rule. Several comments expressed support for the adoption of complete response letters and for several of the proposed changes to incorporate user fee goals into the regulations. However, some comments objected to certain portions of the proposed rule, including the following: • The codification of different initial review cycles for human drug applications and supplements to such applications (proposed § 314.100); • The absence of a provision to allow applicants to request an extension of time in which to submit a resubmission following receipt of a complete response letter (proposed § 314.110(c)); • The review cycle applicable to a resubmission of a supplement other than an efficacy supplement (proposed § 314.110(b)(1)(iii)); • FDA's discretion to defer review of an amendment until the next review cycle (proposed § 314.60(b)). We address all of the comments in section III of this document. After considering the comments, we have concluded that it is appropriate to make several revisions to the proposed rule. The final rule deletes the reference in proposed § 314.100(a)(2) to the adjustment of the initial review cycle for human drug applications and supplements to such applications. Adjustment of the initial review cycle to fewer or greater than 180 days for human drug applications and supplements, accepted by mutual agreement between industry and FDA under the agency's user fee performance goals, is provided for under the adjustment by mutual agreement provision in revised § 314.100(c) (see the response to comment 7 in section III.C.1 of this document). The final rule also revises § 314.110(c) to allow applicants an extension of time in which to resubmit an application, to avoid having the applicant's failure to resubmit within 1 year be regarded as a request to withdraw the application. This revision addresses some comments' concerns that 1 year might not be enough time in which to resubmit an application after receipt of a complete response letter. The final rule also revises § 314.110(b)(1)(iii) to state that resubmission of an NDA supplement other than an efficacy supplement constitutes an agreement by the applicant to start a new review cycle, beginning on the date we receive the resubmission, that is the same length as the initial review cycle for the supplement (excluding any extension due to a major amendment of the initial supplement). In addition to these revisions, the final rule includes other changes to the proposed rule in response to comments. Several comments objected to the regulations in proposed § 314.60(b) that give FDA the option to defer review of different types of amendments until the subsequent review cycle. However, we have determined that we need to have the ability to defer review of amendments to the next review cycle under appropriate circumstances. Although our policy, as reflected in guidance, is to try to review most amendments during the initial review cycle, there are circumstances under which deferral is necessary and appropriate, as discussed in section III.G.1 of this document. On our own initiative, we also have revised § 314.60(b) to correct an inadvertent omission of a user fee performance goal regarding major amendments to manufacturing supplements. Revised § 314.60(b)(4) now specifies that submission of a major amendment to a manufacturing supplement submitted within 2 months of the end of the initial review cycle constitutes an agreement to extend the cycle by 2 months. Also on our own initiative, we have revised the proposed rule to clarify the definition of “efficacy supplement” in § 314.3(b) (21 CFR 314.3(b)), to state the correct address to which requests for a hearing on the denial of approval of an NDA or ANDA must be submitted in § 314.110(b)(3), and to state the correct addresses to which NDAs and ANDAs must be submitted in § 314.440(a)(1) and (a)(2) (21 CFR 314.440(a)(1) and (a)(2)), respectively. II. Summary of the Final Rule A. Complete Response Letters We are revising our regulations to substitute complete response letters for approvable and not approvable letters at the completion of the review cycle for an NDA or ANDA. Under revised § 314.110, we will send a complete response letter if we determine that we will not approve an NDA or ANDA in its present form for one or more reasons. A complete response letter usually will describe all of the specific deficiencies that the agency has identified in an application. Table 1 of this document summarizes the changes to our regulations that we are making related to the adoption of complete response letters: **Table 1.—Summary of Changes Regarding Substitution of Complete Response Letters for Approvable and Not Approvable Letters** Previous Regulations Revised Regulations (changes to proposed rule in italics) *Approvable Letter for NDA* • States that NDA is basically approvable if certain issues are resolved. • Indicates that NDA substantially meets requirements of part 314 and FDA can approve it if applicant submits additional information or agrees to specific conditions (e.g., labeling changes). *Approvable Letter for ANDA* • Indicates that ANDA substantially meets requirements of part 314 and is approvable if minor deficiencies are corrected. • Describes deficiencies and states when applicant must respond. *Not Approvable Letter for NDA or ANDA* • States that NDA cannot be approved for one of reasons in § 314.125 or ANDA cannot be approved for one of reasons in § 314.127. • Describes deficiencies in NDA or ANDA. *Complete Response Letter* • States that FDA will not approve NDA or ANDA in its present form. • Describes all specific deficiencies that FDA has identified in the application (except when the agency determines that data submitted are inadequate to support approval and issues a complete response letter without first conducting required inspection and/or reviewing labeling). Deficiencies could be minor (e.g., requiring labeling changes) or major (e.g., requiring additional clinical trials). • Reflects complete review of data in NDA or ANDA and any amendments FDA has reviewed. • When possible, recommends actions applicant might take to place application in condition for approval. For products for which approval of a BLA is required for marketing, we are adopting a new regulation, § 601.3, which states that we will send an applicant a complete response letter if we determine that we will not approve a BLA or BLA supplement in its present form. B. Resubmissions We are revising our regulations on the extension of the review period due to resubmission of an NDA or ANDA after receipt of a complete response letter. A class 2 resubmission of an NDA following receipt of a complete response letter starts a new 6-month review cycle. A class 1 resubmission of an NDA starts a new 2-month review cycle. These provisions on class 1 and class 2 resubmissions also apply to efficacy supplements to NDAs. For other types of NDA supplements, resubmission starts a new review cycle the same length as the initial review cycle of the supplement under § 314.100(a), excluding any extension due to a major amendment of the initial supplement. A “major” resubmission of an ANDA following receipt of a complete response letter starts a new 6-month review cycle. A “minor” resubmission of an ANDA starts a new review cycle of an unspecified length; under current FDA guidance, a minor resubmission usually starts a new review cycle of between 30 to 60 days. The changes to our regulations on applicants' responses to action letters are summarized in the following Table 2. **Table 2.—Summary of Changes to Regulations Regarding Applicant's Response to Agency Action Letters** Previous Regulations Revised Regulations (changes to proposed rule in italics) *Applicant's Response to Approvable Letter or Not Approvable Letter for NDA (or NDA Supplement)* Within 10 days of date of letter, NDA applicant must do one of following: • Amend application or notify FDA of intent to file amendment. • Withdraw application. • Request opportunity for hearing. • Agree to extend review period to decide which of above actions to take. *Response to Approvable Letter for ANDA (or ANDA Supplement)* • Correct deficiencies by specified date or FDA will refuse to approve ANDA or ANDA supplement. • Request opportunity for hearing within 10 days. *Response to Not Approvable Letter for ANDA (or ANDA supplement)* • Same as for NDAs except that 10-day period does not apply (with exception of request for opportunity for hearing). • FDA may regard failure to respond within 180 days as request to withdraw. *NDA or ANDA Applicant's Response to Complete Response Letter* Review period is extended until applicant takes one of following actions: • Resubmit NDA or ANDA, addressing identified deficiencies. —Class 1 resubmission of NDA or efficacy supplement starts new 2-month review cycle —Class 2 resubmission of NDA or efficacy supplement starts new 6-month cycle —Resubmission of NDA supplement other than efficacy supplement starts new cycle *same length as initial review cycle for supplement (excluding any extension due to major amendment)* —Major resubmission of ANDA or ANDA supplement starts new 6-month cycle —Minor resubmission of ANDA or ANDA supplement starts new cycle of variable length • Withdraw NDA or ANDA. • Request opportunity for hearing. FDA may consider failure to take action within 1 year to be request to withdraw, *unless applicant has requested extension of time in which to resubmit* . C. Amendments to Unapproved Applications We are also revising our regulations in § 314.60 on extending the review cycle following the submission of an amendment to an unapproved NDA. Under revised § 314.60(b)(1), submission of a major amendment within 3 months of the end of the initial review cycle constitutes an agreement to extend the review cycle by 3 months. Under § 314.60(b)(2), submission of a major amendment more than 3 months before the end of the initial review cycle will not extend the cycle; nor will the initial review cycle for a nonmajor amendment be extended under § 314.60(b)(3). These provisions apply to amendments to original applications, efficacy supplements, and resubmissions of applications and efficacy supplements. Under § 314.60(b)(4), submission of a major amendment to a manufacturing supplement within 2 months of the end of the initial review cycle constitutes an agreement to extend the review cycle by 2 months. Under § 314.60(b)(5), submission of an amendment to a supplement other than an efficacy or manufacturing supplement will not extend the review cycle. For all of these amendments, we may, at our discretion, defer review of the amendment until the subsequent review cycle, rather than extend the initial cycle or review the amendment during the initial cycle. Table 3 of this document summarizes the changes to our regulations on amendments submitted before an action letter. **Table 3.—Summary of Changes to Regulations on Amendments Submitted Before Action Letter** Previous Regulations Revised Regulations (changes to proposed rule in italics) *Amendments to Unapproved NDAs and NDA Supplements* • Submission of major amendment constitutes agreement to extend deadline for FDA decision. • FDA may not extend review period more than 180 days. • Submission of nonmajor amendment will not extend review period. *Amendments to Unapproved ANDAs and ANDA Supplements* • Submission of amendment containing significant data or information constitutes agreement to extend review period up to 180 days. • Same for amendments to unapproved ANDA supplements. *Amendments to Unapproved NDAs, Efficacy Supplements, and Resubmissions of NDAs and Efficacy Supplements* • Submission of major amendment within 3 months of end of initial review cycle may extend cycle by 3 months; FDA may instead defer review to subsequent cycle. • Initial review cycle may be extended only once for major amendment. • Submission of major amendment more than 3 months before end of initial review cycle will not extend cycle; FDA may instead defer review. • Submission of nonmajor amendment will not extend review cycle; FDA may instead defer review. *Amendments to Unapproved Manufacturing Supplements* • *Submission of major amendment within 2 months of end of initial review cycle may extend cycle by 2 months; FDA may instead defer review* . *Amendments to Unapproved NDA Supplements Other Than Efficacy* and Manufacturing *Supplements* • Submission of any amendment will not extend initial review cycle; FDA may instead defer review. *Amendments to Unapproved ANDAs* • Unchanged. III. Comments on the Proposed Rule We received written comments from 6 drug manufacturers; 4 associations representing the drug, biologic, and medical device industries; and an individual (11 comments in all). A summary of the comments received and our responses follow. A. General Comments (Comment 1) One comment stated that throughout the proposed rule the word “response” is used without identifying whose response. As an example, the comment cites proposed § 314.101(f)(1)(ii), under which we would issue a notice of opportunity for hearing if an applicant asked us to provide it an opportunity for a hearing on an application “in response to a complete response letter.” To clarify whose response is being referenced in a particular provision, the comment recommended that the provision always identify the respondent (e.g., use “an applicant's response to a complete response letter” in the above example). (Response) We do not believe that it is necessary to revise § 314.101(f)(1)(ii) as requested because only an applicant (not FDA) can respond to a complete response letter as defined in § 314.3(b). We reviewed the other provisions in the proposed rule to ensure that the language does not suggest that the agency might respond to a complete response letter and that the use of the term “response” is not otherwise confusing. We conclude that it is unnecessary to revise the regulations in parts 314, 600, and 601 (21 CFR parts 314, 600, and 601) to identify who is responding to a complete response letter, as it is always the applicant who is responding. (Comment 2) One comment encouraged us to consider an approval process whereby once we issue an approval letter, the applicant may begin marketing upon notification of approval and not have to address any additional regulatory hurdles, other than perhaps waiting for the exclusivity period of a previously approved drug to end. (Response) The comment is beyond the scope of this rulemaking. With the exception of § 314.430 on public disclosure of information in applications, this rule does not address approval or post-approval regulatory matters. B. Definitions (Proposed § 314.3(b)) 1. Class 1 and Class 2 Resubmissions Proposed § 314.3(b) would have defined “Class 1 resubmission” as the resubmission of an application, following receipt of a complete response letter, that contains final printed labeling, draft labeling, certain safety updates, stability updates to support provisional or final dating periods, commitments to perform Phase 4 studies (including proposals for such studies), assay validation data, final release testing on the last lots used to support approval, minor reanalyses of previously submitted data, and other comparatively minor information. (Comment 3) Two comments stated that the proposed definition of class 1 resubmission lists items that qualify a resubmission as class 1 and concludes the list with the conjunction “and,” implying that a class 1 resubmission contains all of the listed items. The comments recommended that a class 1 resubmission be defined as a resubmission that “contains one or more of the following” listed items. (Response) We agree that this change is appropriate and have revised the definition of class 1 resubmission accordingly. Also, on our own initiative, but in a similar spirit of clarifying what was proposed, we are further revising the definition of class 1 resubmission to state that it includes not only the resubmission of an application but also the resubmission of an efficacy supplement. We are making a corresponding revision to the definition of “Class 2 resubmission” in § 314.3. This makes these definitions consistent with the provisions on class 1 and class 2 resubmissions of applications and efficacy supplements in § 314.110(b)(1)(i) and (b)(1)(ii). In addition, because we now refer to Phase 4 studies as “postmarketing” studies (see 21 CFR 314.81(b)(2)(viii)), we are revising the definition of class 1 resubmission accordingly. (Comment 4) One comment asked how we intended to ensure consistency across review divisions regarding the classification of resubmissions. (Response) We believe that the definition of class 1 resubmission provides adequate information on the types of resubmissions that are regarded as class 1 resubmissions and, by omission, the types of resubmissions that are regarded as class 2 resubmissions. For several years, CDER review divisions have been applying these definitions in reviewing resubmissions of applications that are subject to user fees. Nevertheless, CDER will provide training and information to help ensure that the final rule is applied consistently among the review divisions. 2. Complete Response Letter Proposed § 314.3(b) would have defined “complete response letter” as a written communication to an applicant from FDA usually identifying all of the deficiencies in an application or abbreviated application that must be satisfactorily addressed before it can be approved. (Comment 5) One comment stated that absent unusual circumstances, a complete response letter should clearly define the specific deficiencies in an application to avoid presentation of new issues at a later date and minimize the potential for cycles of complete response letters. Two comments stated that specifying that a complete response letter “usually” identifies all of the deficiencies in an application is contrary to the plain meaning of “complete response” because any response that does not identify all of the deficiencies in an application is not complete. The comments stated that the use of vague language makes the regulation impossible to interpret and leaves the regulatory process open to inconsistencies across divisions. The comments stated that the user fee goals do not include similarly vague language but instead reflect FDA's commitment to review and act on certain percentages of applications within specified timeframes. The comments noted that the user fee goals state that the term “review and act on” means the issuance of a complete action letter after the complete review of a filed complete application. The comments acknowledged that, for drug products, we might issue a complete response letter without first conducting inspections or reviewing labeling (under proposed § 314.110(a)(3)), but the comments requested that we revise the definition of complete response letter to specify which aspects of a complete review might be postponed while allowing the agency to issue a complete response letter. One of the comments suggested that the definition specify that we may issue a complete response letter “without first conducting required inspections and/or reviewing proposed product labeling when FDA determines that the data submitted are inadequate to support approval as described in § 314.110(a)(3).” (Response) We do not agree that the definition of complete response letter should be revised as suggested. The statement that a complete response letter “usually” identifies all of the deficiencies in an application is appropriate because § 314.110(a)(1) states that a complete response letter will describe all of the deficiencies “except as stated in paragraph (a)(3) * * *” In turn, paragraph (a)(3) states that if we determine that the data submitted are inadequate to support approval, we might issue a complete response letter without first conducting required inspections and/or reviewing proposed product labeling. Those are the only circumstances under which the complete response letter would not describe all of the known deficiencies in an application. We do not believe that it is necessary for the definition of complete response letter to specify which particular aspects of a complete review might be postponed. However, we believe that it is necessary to revise the definition of complete response letter to make clear that a complete response letter is a communication “usually describing all of the deficiencies that the agency has identified in an application or abbreviated application that must be satisfactorily addressed before it can be approved” (§ 314.3(b)). This addresses the possibility that an applicant's response to a deficiency that we have identified in an application might reveal other deficiencies that we had not identified and which we accordingly had been unable to describe in the complete response letter. Although we seek to identify all deficiencies during the initial review period, we sometimes become aware of deficiencies only during a subsequent review period. It would be inconsistent with section 505(d) of the Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 355(d)) and FDA regulations to approve an application despite an applicant's failure to address deficiencies solely because those deficiencies were identified only after issuance of a complete response letter, and we do not intend to allow this result. (Comment 6) One comment recommended that we add to the definition of complete response letter the following statement: “Where appropriate, a complete response letter will describe the actions necessary to place the application in condition for approval.” (Response) Because this statement appears in revised § 314.110(a)(4), we do not believe that it is necessary to add this statement to the definition of complete response letter in § 314.3. 3. Efficacy Supplement Proposed § 314.3(b) would have defined “efficacy supplement” as a supplement to an approved application proposing to make one or more of the following changes to product labeling: 1. Add or modify an indication for use; 2. Revise the dose or dose regimen; 3. Provide for a new route of administration; 4. Make a comparative efficacy claim naming another drug product; 5. Significantly alter the intended patient population; 6. Change the marketing status from prescription to over-the-counter use; 7. Complete the traditional approval of a product originally approved under subpart H of this part; or 8. Incorporate other information based on at least one adequate and well-controlled clinical study. On our own initiative, we are making three changes to the proposed definition of efficacy supplement. First, we are revising the definition to state that an efficacy supplement means a supplement to an approved application proposing “to make one or more related changes from among the following changes to product labeling * * *”. This change makes the definition consistent with our user fee “bundling” policy, which allows certain related changes (such as a change in indication and a related change in dose regimen) to be made in the same supplement with only one fee (see the FDA guidance for industry entitled “Submitting Separate Marketing Applications and Clinical Data for Purposes of Assessing User Fees”). The second change that we are making to the definition of efficacy supplement is to replace the term “indication for use” (in the first listed change) with the term “indication or claim.” The definition of “human drug application” in section 735(1) of the act (21 U.S.C. 379g(1)) includes the term “indication for a use.” As part of our user fee assessment policy, we have interpreted the term “indication for a use” more broadly than the term “indication,” as the latter term is commonly used (i.e., to mean a claim that a drug is effective for a particular use, for purposes of complying with the requirements on the content and format of labeling for prescription drugs in 21 CFR 201.57(c). This change clarifies that an efficacy supplement can be submitted to add or modify an indication or claim. The third change that we are making to the definition of efficacy supplement concerns efficacy supplements that involve the traditional approval of a product that was originally approved under part 314, subpart H, regarding accelerated approval for drugs for serious or life-threatening illnesses. It is possible that an efficacy supplement might be intended to provide evidence of effectiveness for the traditional approval of a subpart H drug but not actually complete the traditional approval of the drug. Therefore, we are revising the definition of efficacy supplement to clarify that such a supplement can be submitted to provide for the traditional approval of a product originally approved under subpart H or to provide evidence of effectiveness necessary for traditional approval of such a product. C. Timeframes for Review (Proposed § 314.100) 1. Initial Review Cycle Proposed § 314.100(a)(1) stated that, except as provided in § 314.100(a)(2), within 180 days of receipt of an NDA or ANDA, we will review the application and send the applicant an approval letter or a complete response letter; this 180-day period is called the initial review cycle. Proposed § 314.100(a)(2) stated that, for drug applications that are human drug applications, as defined in section 735(1)(A) and

(B)of the act, or supplements to such applications, as defined in section 735(2) of the act, the initial review cycle will be adjusted to be consistent with the agency's user fee performance goals for reviewing such applications and supplements. (Comment 7) One comment objected to proposed § 314.100(a)(2), stating that although the user fee goals recognize that we typically do not meet the 180-day statutory review deadline, this should not be memorialized in a regulation. The comment stated that even though the statutory review period is regarded mainly as aspirational, it is important to maintain it within the regulations. (Response) We agree with the comment that a specific provision solely addressing the adjustment of the initial review cycle for human drug applications and supplements to these applications is not necessary. Therefore, we have deleted proposed § 314.100(a)(2). However, we note that, since the enactment of the Prescription Drug User Fee Act of 1992 (PDUFA) (Public Law 102-571), there has been a mutual understanding between industry and the agency that the review cycle for an application or supplement subject to user fees may be adjusted (either shortened or lengthened) in accordance with the user fee performance goals. Previous § 314.100(c) provided for an extension of the review cycle by mutual agreement between FDA and an applicant (as well as an extension as a result of a major amendment under §§ 314.60 or 314.96). Consistent with the long-standing approach to applications subject to user fees, we have revised § 314.100(c) to state that the initial review cycle may be adjusted by mutual agreement between FDA and an applicant or as provided in §§ 314.60 and 314.96. Correspondingly, the final rule also deletes proposed § 314.101(f)(2). Current § 314.101(f)(1) states that within 180 days after the date of filing, plus the period of time the review period was extended (if any), FDA will either approve the application or issue a notice of opportunity for hearing. Proposed § 314.101(f)(2) stated that, for human drug applications and supplements, the 180-day period after the date of filing would be adjusted to be consistent with the user fee performance goals. Proposed § 314.101(f)(2) is not needed because § 314.101(f)(1) encompasses extension of the review period beyond 180 days as well as circumstances under which FDA might approve an application in less than 180 days, regardless of whether such actions are the result of conformance to user fee performance goals. 2. Withdrawal and Later Submission Proposed § 314.100(b) stated that at any time before approval, an applicant may withdraw an application under § 314.65 (21 CFR 314.65) or an abbreviated application under § 314.99 (21 CFR 314.99) and later submit it again for consideration. (Comment 8) Two comments stated that § 314.100(b) should be revised to address the withdrawal of an application after receipt of a complete response letter. The comments stated that if a complete response letter is followed by withdrawal of the application, the subsequent submission of “the same” application would also constitute a “resubmission.” The comments suggested adding the following to § 314.100(b): “Except when preceded by a complete response letter, applications withdrawn prior to approval that are submitted again for the same product are not considered resubmissions as defined in § 314.3(b) of this part.” (Response) We do not agree with the comments because we regard an application that is withdrawn at any time before approval and submitted again for the same product as an original application, rather than a resubmission. The final rule defines “original application” (in § 314.3(b)) as a pending application for which FDA has never issued a complete response letter or approval letter, or an application that was submitted again after FDA had refused to file it or after it was withdrawn without being approved. Under the proposed rule, a “resubmission” was defined (in proposed § 314.110(b)(1)) as “submission by the applicant of all materials needed to fully address all deficiencies identified in the complete response letter.” Consistent with our approach to applications that are withdrawn before approval and later submitted again, we have added the following statement to the definition of resubmission: “An application or abbreviated application for which FDA issued a complete response letter, but which was withdrawn before approval and later submitted again, is not a resubmission.” For clarity, we are moving the definition of resubmission to § 314.3 from § 314.110(b)(1). D. Complete Response Letters (Proposed § 314.110) 1. Content of Complete Response Letters Proposed § 314.110(a) would have required us to send an applicant a complete response letter if we determined that we will not approve the application or abbreviated application in its present form for one or more of the reasons given in § 314.125 or § 314.127, respectively. (Comment 9) One comment stated that it concurred with our view that the complete response letter should be a neutral mechanism to convey that an application cannot be approved in its present form. The comment agreed that use of the complete response letter will ensure consistency in how sponsors are informed of changes needed for approval, without implying anything about ultimate approvability. One comment stated that use of the complete response letter will provide a more efficient mechanism for application review. (Response) As stated in the preamble to the proposed rule, we agree that the use of complete response letters will provide a more neutral and consistent mechanism than the use of approvable and not approvable letters to convey that an application cannot be approved in its present form. a. *Specific deficiencies* . Under proposed § 314.110(a)(1), a complete response letter would have described all of the specific deficiencies in an application or abbreviated application, except as stated in § 314.110(a)(3). (Comment 10) One comment stated that we should clearly identify and define the specific deficiencies in an application when drafting a complete response letter, adding that one purpose of the complete response letter is to minimize paperwork and delays between an applicant and the agency. (Response) We agree with the comment. The intent of § 314.110(a)(1) is that we will identify and describe all of the known deficiencies (except as provided in § 314.110(a)(3)) to enable applicants to provide appropriate responses. However, consistent with our response to comment 5, we have revised § 314.110(a)(1) to state that a complete response letter will describe all of the specific deficiencies that we have identified in an application at the time we issue the complete response letter. This change reflects the possibility that we might become aware of certain deficiencies only during a subsequent review period, such as while reviewing an applicant's response to a previously identified deficiency. (Comment 11) One comment asked that we clarify what mechanisms of communication we will use during the review cycle to convey to sponsors potential deficiencies that we have discovered to enable sponsors to address these deficiencies as quickly as possible. The comment stated that there would be few, if any, applications that would completely satisfy FDA reviewers in the first review cycle. (Response) Because this comment concerns communication before issuance of the complete response letter, it is beyond the scope of this rulemaking. Nevertheless, it is worth noting that the user fee goals include mechanisms to improve communications about potential deficiencies during the review cycle. For example, the Goals Letter

(2002)states that it is the intention of CDER and CBER to notify a sponsor of deficiencies in an application when each discipline has finished its initial review of its section of the pending application. In addition, the Goals Letter states that the review division and the safety group assigned to the review of a particular application will try to communicate their comments on a proposed risk management tool and plan, as well as on protocols for observational studies, as early in the review process as possible. b. *Complete review of data* . Proposed § 314.110(a)(2) stated that a complete response letter reflects our complete review of the data submitted in an original application or abbreviated application (or, where appropriate, a resubmission) and any amendments for which the review cycle was extended. It further stated that the complete response letter will identify any amendments for which the review cycle was not extended that we have not yet reviewed. (Comment 12) Two comments stated that it was unclear whether complete review of the data includes review of information submitted in major amendments submitted more than 3 months before the end of the initial cycle or nonmajor amendments (which do not trigger extensions under the user fee goals or the proposed rule). The comments stated that the regulation should not define the scope of material included in a complete response letter as “amendments for which the review cycle was extended.” (Response) We agree that § 314.110(a)(2) should include any amendments that we have reviewed, whether or not they resulted in an extension of the review cycle. Therefore, we are revising § 314.110(a)(2) to state that a complete response letter reflects our complete review of the data submitted in an original application or abbreviated application (or, where appropriate, a resubmission) and any amendments that we have reviewed. Correspondingly, we are also revising § 314.110(a)(2) to state that the complete response letter will identify any amendments that we have not yet reviewed. c. *Determination that data are inadequate* . Under proposed § 314.110(a)(3), if we determined, after an application is filed or an abbreviated application is received, that the data submitted are inadequate to support approval, we might issue a complete response letter without first conducting required inspections and/or reviewing proposed product labeling. (Comment 13) One comment maintained that stating that we “might” issue a complete response letter without conducting required inspections and/or reviewing labeling adds ambiguity to agency actions. The comment stated that if we determine that the data are inadequate during the first half of the review cycle, it might be acceptable for us to issue a complete response letter without conducting inspections or reviewing labeling; however, a complete response letter sent toward the end of the cycle should thoroughly evaluate all components of the NDA. The comment stated that leaving to the review divisions the decision on whether we issue a complete response letter before we conduct inspections and review the labeling would unintentionally encourage inconsistency. The comment recommended that we revise § 314.110(a)(3) to state that if we determine “early in the review cycle” or “within the first half of the review cycle” that the data are inadequate, we might issue a complete response letter without conducting inspections or a labeling review. (Response) We understand the comment's concern about possible uncertainty as to the timing of a decision to issue a complete response letter without conducting an inspection or labeling review. However, it is possible that we might not determine until later in the review cycle that the data in the application are inadequate. Therefore, we believe that it is not appropriate to specify in § 314.110(a)(3) a time after which we could no longer conclude that the data submitted are inadequate to support approval. (Comment 14) One comment stated no objection to this proposal under the circumstances described but maintained that the complete response letter should indicate the status of each review team (labeling, chemistry and manufacturing, microbiology, bioequivalence, and/or clinical reviews and inspection status). (Response) Rather than having the complete response letter state the status of each review team, we believe that it is appropriate for the letter to specify what portions, if any, of the review are incomplete, as review of a portion of an application may require input from more than one review team, and it is the status of the portion of a review, not the status of the review team, that is most relevant. This is the approach that we currently use in issuing approvable and not approvable letters. (Comment 15) One comment asked us to comment on the future of CDER's Pre-Approval Inspection Program and how it would be incorporated into the proposed new review scheme. (Response) Inspection of the facilities used in the manufacture of a proposed drug product is an essential part of the application review process. The Pre-Approval Inspection Program will not be affected by this rulemaking. d. *Actions to place application in condition for approval* . Proposed § 314.110(a)(4) stated, “Where appropriate,” a complete response letter will describe the actions necessary to place the application or abbreviated application in condition for approval. (Comment 16) One comment stated that we should delete “Where appropriate” from § 314.110(a)(4). The comment stated that a complete response letter should describe the actions and/or specify the data needed to place the application in condition for approval. One comment stated that we should specify precisely the amendments or procedures we will require as an appropriate reply to a complete response letter so that an applicant does not have to guess what is necessary to remedy the deficiencies cited in the letter. The comment stated that this would help applicants address FDA concerns more effectively. (Response) We agree with the comments that the complete response letter should provide an applicant with information, whenever possible, on what the applicant could do to obtain approval. However, there may be times when what the applicant has submitted to the agency simply does not permit us to specify what the applicant would need to do to put the application in a position for approval. The intent of § 314.110(a)(4) is for us to provide the applicant with sufficient detail on what actions might be necessary to resolve the deficiencies cited in the complete response letter. Providing clear guidance to applicants in the complete response letter will be helpful both to applicants and the agency. However, at the time of issuance of the complete response letter, we may not have enough information to be certain about precisely what actions, including possibly conducting studies and/or submitting data, may ultimately be necessary to place an application in condition for approval. For example, we might have determined that there is a problem with the formulation of a proposed drug product but not be able to tell the applicant what it could do to resolve the problem, except in a general sense. Because of such potential circumstances, we have replaced “Where appropriate” with “When possible” in § 314.110(a)(4). In addition, we recognize that although it is appropriate for us to recommend actions that an applicant might take to place its application in condition for approval, we cannot require an applicant to take specific actions—and only those actions—to obtain approval. There might be multiple acceptable approaches that an applicant could take to remedy a deficiency in its application, and we might lack information that would affect our views on what actions an applicant should take. Therefore, we have revised § 314.110(a)(4) to state that, when possible, a complete response letter will, rather than describe the actions necessary to place an application or abbreviated application in condition for approval, “recommend actions that the applicant might take to place the application or abbreviated application in condition for approval.” 2. Responses to Complete Response Letters Under proposed § 314.110(b)(1) to (b)(3), an applicant was required to take one of three actions after receiving a complete response letter: Resubmit the application, withdraw the application, or request an opportunity for a hearing on whether there are grounds for denying approval of the application. a. *Resubmission* . Under proposed § 314.110(b)(1), an applicant could, in response to a complete response letter, resubmit the application or abbreviated application, addressing all deficiencies identified in the complete response letter. Proposed § 314.110(b)(1) further stated that, for purposes of § 314.110, a resubmission would mean submission by the applicant of all materials needed to fully address all deficiencies identified in the complete response letter. As stated in our response to comment 8, we are relocating the definition of resubmission to § 314.3 from § 314.110(b)(1) and adding a sentence clarifying that an application or abbreviated application for which we issued a complete response letter, but which was withdrawn before approval and later submitted again, is not a resubmission. i. *Resubmission of an NDA supplement other than an efficacy supplement* . Under proposed § 314.110(b)(1)(iii), a resubmission of an NDA supplement other than an efficacy supplement would constitute an agreement by the applicant to start a new 6-month review cycle beginning on the date we receive the resubmission. (Comment 17) Three comments objected to the proposed 6-month cycle for resubmissions of other-than-efficacy supplements. One comment stated that it seemed unreasonable that a resubmission not requiring clinical data would require an additional 6 months for review. Two comments stated that because one of our user fee goals is to act on 90 percent of manufacturing supplements that require prior approval within 4 months, a 6-month review time for a resubmission of such a supplement would be longer than the review time for the original supplement. The comments stated that this is inappropriate because many of these resubmissions need only include data necessary to answer questions from the initial cycle and do not require as much review time as the initial supplement. The comments recommended that we revise § 314.110(b)(1)(iii) to state that the length of the review cycle for the resubmission of an other-than-efficacy supplement will not exceed that for the original supplement. The comments further recommended that we establish a “Type 1/Type 2” scheme for resubmissions of prior approval chemistry and manufacturing supplements that would be similar to the approach for resubmissions of original applications and efficacy supplements, but with a 2-month review cycle for Type 1 resubmissions and a 4-month cycle for Type 2 resubmissions. (Response) We agree with the comments that the review cycle for the resubmission of a supplement that is not an efficacy supplement should be the same as the initial review cycle for the original supplement. Therefore, we have revised § 314.110(b)(1)(iii) to state that a resubmission of an NDA supplement other than an efficacy supplement constitutes an agreement by the applicant to start a new review cycle the same length as the initial review cycle for the supplement (excluding any extension due to a major amendment), beginning on the date FDA receives the resubmission. Under § 314.100(a), the initial review cycle for a supplement other than an efficacy supplement is 180 days, unless it is adjusted by mutual agreement or as a result of a major amendment under § 314.100(c). Under revised § 314.110(b)(1)(iii), because the initial review cycle for a manufacturing supplement requiring prior approval is 4 months under the user fee goals, the review cycle for a resubmission of a manufacturing supplement would be 4 months (it would not be increased to reflect any extension of the initial review cycle for the manufacturing supplement resulting from a major amendment of the initial supplement). Given this change to § 314.110(b)(1)(iii), we believe that establishing a separate “Type 1/Type 2” classification scheme for resubmissions of prior approval chemistry and manufacturing supplements is not needed to ensure appropriate review cycles for these resubmissions and would create unnecessary administrative burdens. ii. *Minor resubmission of an ANDA* . Proposed § 314.110(b)(1)(v) stated that a minor resubmission of an ANDA constitutes an agreement by the applicant to start a new review cycle beginning on the date we receive the resubmission. (Comment 18) One comment opposed this provision, stating that the failure to specify the length of the new review cycle would seriously hinder an applicant's ability to predict the approval date for its application, resulting in substantial commercial disadvantage. The comment stated that any delay in the onset of launch preparation due to an unpredictable approval date could harm the manufacturer's ability to prepare for the initial marketing of their products. The comment maintained that without a target date for completion of review, an applicant would be forced to follow up with FDA continually, contrary to requests by CDER's Office of Generic Drugs that applicants follow up only at the targeted time. The comment claimed that the statement in the preamble that the review cycle for a minor resubmission of an ANDA might last “from 30 days to a few months” was contrary to the guidance on “Major, Minor and Telephone Amendments to Abbreviated New Drug Applications” (ANDA amendments guidance), which purportedly was revised to produce more minor amendments and fewer major amendments to move applications through the review process more quickly. The comment maintained that without a definition of “a few months,” performance standards would be reduced as much as 50 percent or more, and the distinction between major and minor amendments would blur. The comment also disagreed with the statement in the preamble that the proposed revisions for ANDA resubmissions are “similar” to those for NDA resubmissions. The comment stated that user fee goals apparently are being implemented at the expense of generic drug manufacturers by reducing the transparency of the review process and extending review times for minor resubmissions. The comment asked that we revise § 314.110(b)(1)(v) to state that minor resubmissions of ANDAs are reviewed 30 to 60 days from receipt. The comment also stated that we should assess the issuance and classification of all complete response letters to uphold the intent to reduce ANDA approval times and resolve more deficiencies by telephone rather than complete a response letter. (Response) We do not agree that the provision on minor resubmissions of ANDAs will interfere with generic drug manufacturers' ability to market their products in a timely manner. Under the ANDA amendments guidance, which the Office of Generic Drugs applies to major and minor resubmissions of ANDAs, we attempt to review minor resubmissions within 30 to 60 days, although not all can be reviewed within 60 days. In accordance with the ANDA amendments guidance, we will continue to work closely with ANDA sponsors to provide them with sufficient information about our review of ANDA resubmissions to enable sponsors to plan for the marketing of approved products. We agree with the comment that resolving deficiencies by telephone rather than by complete response letter benefits both applicants and the agency, and we will seek to do so where appropriate in accordance with the ANDA amendments guidance. b. *Request for a hearing* . Under proposed § 314.110(b)(3), after receiving a complete response letter, an applicant could ask us to provide it with an opportunity for a hearing on the question of whether there are grounds for denying approval of the NDA or ANDA. On our own initiative, we have revised § 314.110(b)(3) to update the information on the address to which requests for a hearing on the denial of approval of an NDA or ANDA must be submitted, as a result of the recent relocation of certain CDER offices. (Comment 19) One comment stated that we should consider having an independent evaluator within FDA attend the hearings to confirm or negate grounds for denying approval. The comment also asked whether these hearings would be open public hearings. (Response) With respect to the nature of hearings on the denial of approval of applications, § 314.201 states that parts 10 through 16 (21 CFR parts 10 through 16) apply to these hearings. These hearings are not open public hearings; appearance and participation are governed by § 12.40 through § 12.45. We do not believe that an independent evaluator is needed for hearings on grounds for denial of approval. Section 314.200(f) provides for separation of functions between CDER and the Commissioner of Food and Drugs (the Commissioner) upon receipt of a request for a hearing. CDER prepares an analysis of the request and a proposed order ruling on the issue and submits them to the Commissioner for review and decision. When CDER recommends denial of a hearing on all issues, no CDER representative will participate or advise in the review and decision by the Commissioner. When CDER recommends that a hearing be granted on one or more issues, separation of functions terminates as to those issues. The Commissioner may modify the text of those issues but may not deny a hearing on those issues. Separation of functions continues with respect to issues on which CDER has recommended denial of a hearing. The Commissioner will neither evaluate nor rule on CDER's recommendation on such issues, and such issues will not be included in the notice of hearing. Participants in the hearing may make a motion to the presiding officer for the inclusion of any such issue in the hearing. Under § 12.60, the presiding officer of any hearing will be the Commissioner, a member of the Commissioner's office to whom responsibility for the matter has been delegated, or an administrative law judge qualified under 5 U.S.C. 3105. Separation of functions on all issues resumes upon issuance of a notice of a hearing. We believe that these provisions provide an adequate means of ensuring that the Commissioner makes an independent assessment of the evidence for and against approval of an application. Therefore, no independent evaluator is needed. 3. Failure to Take Action Under proposed § 314.110(c), an applicant would be considered to agree to extend the review period under section 505(c)(1) of the act until it takes any of the actions listed in § 314.110(b) (i.e., resubmission of the application, withdrawal, or request for a hearing). Proposed § 314.110(c) further stated that for an NDA, we might consider an applicant's failure to take any of these actions within 1 year after receiving a complete response letter to be a request by the applicant to withdraw the NDA (for an ANDA, the specified period was 6 months). (Comment 20) Several comments objected to the elimination of the opportunity, available in previous §§ 314.110(a)(5) and 314.120(a)(5), for an applicant to notify us within 10 days of receipt of an action letter that it agrees to an extension of the review period so that it can determine how to respond further. One comment stated that it was not clear whether any sponsor communication with us regarding an intent to resubmit or amend an application would cancel or postpone the proposed 1-year timeframe. The comment stated that if an applicant believed that it must resubmit within 1 year to avoid automatic withdrawal, the result could be a less-than-complete resubmission. Three comments stated that the absence of a resubmission within 1 year of receipt of a complete response letter cannot reasonably be characterized as failure to take action. Several comments stated that it might take several months for an applicant to reach agreement with us on what studies are needed for approval and then more time to conduct the studies and submit the results. The comments suggested several ways to revise the regulations to allow applicants to request an extension of the review period. One comment stated that we should expand the first option in § 314.110(b) (resubmission) to permit a sponsor to resubmit its application addressing all deficiencies or state its intent to do so (if the sponsor estimates that it will take more than 1 year to address all deficiencies). Several comments recommended revisions to § 314.110(c). One comment stated that § 314.110(c) should be revised to clarify that additional time for resubmission will be granted if the applicant is diligently working to address all deficiencies. The comment stated that inaction for 1 year should be regarded as a request to withdraw the application if the applicant has not communicated an intent to resubmit or submitted evidence of progress being made toward the completion of work needed to address all deficiencies. One comment stated that § 314.110(c) should be revised to allow an applicant to notify us, within a specified time, of its intent to resubmit or to agree to a specified extension of time to reflect an agreed-upon action plan to address deficiencies; absent such notification, we could consider the application withdrawn if it was not resubmitted within 1 year. The comment further stated that if an additional study was required, we should allow an extension beyond the 1-year period. Two comments recommended that § 314.110(c) be revised in one of two ways. One approach would be to add an option for the applicant to notify us, within a specified time after receipt of a complete response letter, of an intent to resubmit. If the application is not resubmitted within 1 year, the applicant would be required to provide annual confirmation of its intent to resubmit; if the applicant provided no such notification, we could consider the application withdrawn. The alternative approach would require us to notify the applicant requesting a reply within a specified time regarding its intention to resubmit; failure to respond within the specified time would constitute a request for withdrawal. One comment recommended that applicants be given the option to state their intention to address deficiencies as well as how and when this will be done. The comment suggested that we would use the target date as the closing date for the application. If the applicant later determined that it could not meet this deadline, it could seek another extension, which we could grant or deny at our discretion. (Response) We agree that proposed § 314.110(c) should be revised to allow applicants to request an extension of time in which to submit a resubmission. We acknowledge that in some circumstances it might take more than 1 year after issuance of a complete response letter for an applicant to reach agreement with us on what clinical studies might be needed, to conduct any required studies, and to provide the results in a resubmission. Therefore, we are revising § 314.110(c) (renumbered as § 314.110(c)(1)) to state that, for an NDA or ANDA, we may consider an applicant's failure to take any of the actions in § 314.110(b) within 1 year after issuance of a complete response letter to be a request by the applicant to withdraw the application, unless the applicant has requested an extension of time in which to resubmit the application. Section 314.110(c) further states that we will grant any reasonable request for such an extension. In addition, § 314.110(c) states that we may consider an applicant's failure to resubmit the application within the extended time period or to request an additional extension to be a request by the applicant to withdraw the application. Although, as stated in the proposed rule, ANDA resubmissions usually do not involve generation of clinical data, for consistency we have decided to apply the 1-year period (subject to extension) to ANDA resubmissions as well as NDA resubmissions. In addition, we have revised § 314.110(c)(1) to state that the applicant's 1-year deadline for taking action begins “after issuance of a complete response letter” rather than “after [the applicant] receiv[es]” the complete response letter. This change provides certainty as to the start of the 1-year period. In addition, on our own initiative we have revised the first sentence of § 314.110(c)(1) to make clear that this paragraph addresses extension of the review period (until any of the actions listed in § 314.110(b) are taken) for an NDA under section 505(c)(1) of the act or an ANDA under section (j)(5)(A) of the act (the proposed rule inadvertently referred only to section 505(c)(1) for NDA applicants). (Comment 21) Two comments stated that because deeming an application withdrawn is optional under proposed § 314.110(c), differences between and within centers might create an uneven playing field in which some applications are withdrawn while similarly situated applications are not. The comments stated that the decision to withdraw should rest with the applicant. (Response) We believe that it is reasonable and within the scope of our authority to consider an applicant's failure to take any significant action within a reasonable period of time to be a request to withdraw the application. Nevertheless, we do not believe that § 314.110(c) should require us to deem an application to be withdrawn under these circumstances. Although we agree with the comments that there should not be significant differences across CDER regarding this matter, decisions on whether to regard an applicant's failure to take action as a request to withdraw the application will reflect the circumstances surrounding each particular application. (Comment 22) One comment stated that we should notify an applicant before deeming an application withdrawn within 1 year for failure to take action under § 314.110(c), and applicants should have reasonable time to respond. (Response) We agree that it is appropriate for us to notify an applicant that we intend to regard an application as withdrawn for failure to take action. Therefore, we are adding § 314.110(c)(2), which states that if we consider an applicant's failure to take action in accordance with § 314.110(c)(1) to be a request to withdraw the application, we will notify the applicant in writing. Section 314.110(c)(2) further states that the applicant will have 30 days from the date of the notification to explain why the application should not be withdrawn and request an extension of time in which to resubmit the application. Additionally, § 314.110(c)(2) states that we will grant any reasonable request for an extension. Finally, § 314.110(c)(2) states that if the applicant does not respond to the notification within 30 days, the application will be deemed to be withdrawn. E. Complete Response Letters for BLAs To incorporate the use of complete response letters into the biologics regulations, the proposed rule added a definition of complete response letter to § 600.3 and added § 601.3 regarding complete response letters. We received comments on these proposed regulations as well as on the lack of regulations on other matters related to BLAs. 1. General (Comment 23) One comment stated that although we proposed many changes to § 314.110 regarding complete response letters for NDAs and ANDAs, we proposed only select changes for the corresponding regulations for BLAs in § 601.3. The comment specifically noted the lack of a definition of resubmission in § 601.3 and the fact that NDA and ANDA applicants have three options for responding to a complete response letter under § 314.110(b) while BLA applicants have only two options under § 601.3(b). The comment recommended that we revise § 601.3 to include the topics in § 314.110 or explain the brevity of the biologics regulations. One comment recommended that we revise the biologics regulations to be consistent with the procedures and timeframes for review of resubmissions and amendments of drug applications in part 314. (Response) BLAs have long been reviewed under procedures and timelines that differ from those for NDAs and ANDAs. In addition, the biologics regulations are less prescriptive and detailed than the NDA and ANDA regulations, and we have relied on guidance documents to specify many of the procedures under which we review BLAs. With respect to the biologics regulations, the proposed rule primarily was intended to codify CBER's practice of issuing complete response letters for BLAs. A comprehensive revision of the regulations on the review of BLAs was not intended, and we do not believe it is necessary. It also should be noted that although many of the procedures and timeframes in the NDA regulations reflect user fee goals and resources, many of the biological products subject to the licensing regulations in part 601 are not subject to user fees. For these reasons, we will not, at this time, establish more detailed regulations on amendments to BLAs or resubmissions of BLAs following issuance of a complete response letter. With respect to the two examples of inconsistency noted by one comment, we are adding a definition of resubmission to the biologics regulations at § 600.3 (see the response to comment 27), and we have concluded that it is not necessary that § 601.3(b) specify the right to request a hearing because that right is stated elsewhere in the biologics regulations (see the response to comment 26). 2. Definitions (Proposed § 600.3) Proposed § 600.3(jj) would have defined “complete response letter” as a written communication to an applicant from FDA usually identifying all of the deficiencies in a BLA or BLA supplement that must be satisfactorily addressed before it can be approved. (Comment 24) Three comments objected to the definition of complete response letter for essentially the same reasons that two of those comments provided for objecting to the definition of complete response letter for NDAs and ANDAs in § 314.3(b). Specifically, the comments maintained that stating that a complete response letter “usually” identifies all of the deficiencies in a BLA that must be satisfactorily addressed is contrary to the plain meaning of “complete response,” makes the regulation too vague and open to varying interpretation across review divisions, and is inconsistent with statements in the user fee goals. One comment stated that according to CBER's Standard Operating Procedures and Policies

(SOPP)8405, “Complete Review and Issuance of Action Letters,” the complete response letter will summarize all of the deficiencies remaining in a BLA. The comments stated that there might be circumstances when it would be reasonable for us to postpone certain aspects of a complete review; these circumstances, which are set forth in SOPP 8405, are limited to testing of submitted product lots, pre-licensing inspections, and evaluation of final printed labeling. Two comments recommended that the definition of complete response letter for BLAs specifically note those aspects of a complete review that may be postponed while allowing the agency to issue the letter. One of those comments specifically recommended defining a complete response letter as “a written communication to the applicant from FDA identifying all of the specific deficiencies in a biologics license application or supplement that must be satisfactorily addressed before it can be approved. A complete response letter may be issued without conducting testing of submitted product lots, required inspections, or evaluation of final printed labeling or suitable alternative.” One comment recommended that the definition state that a complete response letter identifies all deficiencies in a BLA “except when such communication is issued without conducting testing of submitted product lots, required inspections, or evaluation of final printed labeling.” The comment recommended that the preamble to the final rule state that “evaluation of final printed labeling” does not include the communication of deficiencies pertaining to intended use or product claims. The comment stated that early communication and resolution of such items are critical to efficient review, and deficiencies in these areas might require additional studies. (Response) We agree with the comments that, generally, a complete response letter will identify all of the deficiencies in a BLA. Consistent with our response to comment 5, we have revised the definition of complete response letter in § 600.3 to state that a complete response letter is a communication “usually describing all of the deficiencies that the agency has identified in a biologics license application or supplement that must be satisfactorily addressed before it can be approved.” (The definition of complete response letter is set forth in § 600.3(ll), rather than § 600.3(jj) as proposed, because two other definitions have been added to § 600.3 since the issuance of the proposed rule.) We also agree with the comments that exceptions to this general rule include when the complete response letter concerns a BLA with respect to which we have not conducted required inspections, tested product lots, and/or reviewed proposed product labeling. Therefore, we are revising § 601.3(a) (rather than the definition of complete response letter in § 600.3) to state in § 601.3(a)(1) that a complete response letter will describe all of the deficiencies that the agency has identified in a BLA or BLA supplement, except as stated in § 601.3(a)(2). Section 601.3(a)(2) states that if we determine, after a BLA or BLA supplement is filed, that the data are inadequate to support approval, we might issue a complete response letter without first conducting required inspections, testing submitted product lots, and/or reviewing proposed product labeling. The provision refers to proposed product labeling rather than the suggested final printed labeling because we generally review the latter only after an applicant has addressed any major deficiencies in an application. (Comment 25) One comment stated that the definition of complete response letter should include the statement, “Where appropriate, a complete response letter will describe the actions necessary to place the application in condition for approval.” (Response) Consistent with § 314.110(a)(4) (see our response to comment 16), we have added the following statement in § 601.3(a)(3) (rather than to the definition of complete response letter in § 600.3): “When possible, a complete response letter will recommend actions that the applicant might take to place its biologics license application or supplement in condition for approval.” 3. Complete Response Letter (Proposed § 601.3) a. *Complete response letter* . Proposed § 601.3(a) stated that we would send the BLA applicant or BLA supplement applicant a complete response letter if we determined that we would not approve the application or supplement in its present form. As stated in our response to comment 24, we have added § 601.3(a)(1) stating that a complete response letter will describe all of the deficiencies that the agency has identified in a BLA or BLA supplement, except as stated in § 601.3(a)(2). As discussed in our response to comment 25, we also are adding § 601.3(a)(3) stating that, when possible, a complete response letter will recommend actions that the applicant might take to place its BLA or BLA supplement in condition for approval. b. *Applicant actions* . i. *General* . Under proposed § 601.3(b), after receiving a complete response letter, the biologics license applicant or supplement applicant was required to either resubmit the application or supplement or withdraw it. (Comment 26) One comment stated that although NDA and ANDA applicants have three options following receipt of a complete response letter (resubmit the application, withdraw it, or request a hearing), BLA applicants have only two options (resubmit or withdraw the application). The comment recommended that we either revise § 601.3 or explain this omission from the biologics regulations. (Response) We do not believe that it is necessary to include, in § 601.3, a reference to the option to request a hearing. Under § 601.4(b) (21 CFR 601.4(b)), if we determine that an establishment or product that is the subject of a BLA does not meet the requirements for approval, we will deny the BLA and inform the applicant of the grounds for, and of an opportunity for a hearing on, the decision. Section 601.4(b) further states that if the applicant requests, we will issue a notice of opportunity for a hearing on the matter pursuant to § 12.21(b). Because the right to request a hearing regarding a denial of approval is set forth in § 601.4(b), we do not believe that it is necessary to revise § 601.3 as requested. ii. *Resubmission* . Under proposed § 601.3(b)(1), after receiving a complete response letter, a BLA applicant or supplement applicant could resubmit the application or supplement, addressing all deficiencies identified in the complete response letter. (Comment 27) Two comments stated that describing a resubmission without any qualifying language appears to require resubmission of the original application or supplement (as opposed to a resubmission limited to responses to the deficiencies listed in the complete response letter). Three comments recommended that the biologics regulations include a definition of resubmission. (Response) We agree that the regulations should define “resubmission.” Therefore, we have added a definition of resubmission in § 600.3(mm), stating that a resubmission is a submission by the biologics license applicant or supplement applicant of all materials needed to fully address all deficiencies identified in the complete response letter. This parallels the definition of resubmission in § 314.3(b). (Comment 28) Two comments stated that the biologics regulations (like the drug regulations) should clarify that applications withdrawn prior to approval that are submitted again for the same product are not considered resubmissions. (Response) We agree. Therefore, consistent with the definition of resubmission in § 314.3(b) for NDAs and ANDAs (see the response to comment 8), the definition of resubmission in § 600.3(mm) includes the statement, “A biologics license application or supplement for which FDA issued a complete response letter, but which was withdrawn before approval and later submitted again, is not a resubmission.” c. *Failure to take action* . Under proposed § 601.3(c), we could consider a BLA applicant or BLA supplement applicant's failure to either resubmit or withdraw the application or supplement within 1 year after receiving a complete response letter to be a request by the applicant to withdraw the application or supplement. (Comment 29) As with proposed § 314.110(c) concerning complete response letters to NDA and ANDA applicants, several comments objected to the lack of an option in § 601.3(c) to seek an extension of time in which to resubmit an application or supplement. Two comments stated that the absence of a resubmission within 1 year of receipt of a complete response letter cannot reasonably be characterized as failure to take action. Three comments stated that it might take at least several months for an applicant to reach agreement with us on what studies are needed for approval and then more time to conduct the studies and submit the results. One comment maintained that although the preamble to the proposed rule stated that § 601.3 is intended to incorporate current CBER policy, § 601.3(c) does not reflect current policy and does not afford applicants the opportunity to notify us of their intent to resubmit an application to prevent us from considering it withdrawn. Four comments suggested revisions to § 601.3(c). One comment recommended that it be revised to state as follows: “FDA may consider a biologics license applicant or supplement applicant's failure to resubmit, amend the application to request an extension of time to respond, or withdraw the application or supplement within 1 year after receiving a complete response letter to be a request by the applicant to withdraw the application or supplement.” One comment recommended that the first option in proposed § 601.3(b) be revised to permit sponsors to resubmit the BLA or supplement addressing all deficiencies or state their intention to do so (if they conclude that it will take more than 1 year to address all deficiencies). Two comments recommended that § 601.3(c) be revised in one of two ways. One approach would be to add an option for the BLA or BLA supplement applicant to notify us, within a specified time after receipt of a complete response letter, of an intent to resubmit. If the resubmission is not submitted within 1 year, the applicant would be required to provide annual confirmation of its intent to resubmit; if the applicant provides no such notification, we could consider the application or supplement withdrawn. The alternative approach would require us to notify the applicant requesting a reply within a specified time regarding its intention to resubmit; failure to respond within the specified time would constitute a request for withdrawal. (Response) For the reasons stated in the discussion of § 314.110(c) (see the response to comments 20 and 22), we agree that § 601.3(c) should be revised to, among other things, allow applicants to seek an extension of time in which to resubmit an application (beyond 1 year after issuance of the complete response letter), and to notify applicants when we decide to consider an applicant's failure to take action as required under § 601.3 to be a request to withdraw the application. Therefore, we are revising § 601.3(c) to state, in § 601.3(c)(1), that we may consider a BLA applicant or BLA supplement applicant's failure to either resubmit or withdraw the application or supplement within 1 year after issuance of a complete response letter to be a request by the applicant to withdraw the application or supplement, unless the applicant has requested an extension of time in which to resubmit the application or supplement. Section 601.3(c)(1) further states that we will grant any reasonable request for such an extension. Finally, § 601.3(c)(1) states that we may consider an applicant's failure to resubmit the application or supplement within the extended time period or to request an additional extension to be a request by the applicant to withdraw the application. We also are adding § 601.3(c)(2), which states that if we consider an applicant's failure to take action in accordance with § 601.3(c)(1) to be a request to withdraw the application, we will notify the applicant in writing. Section 601.3(c)(2) further states that the applicant will have 30 days from the date of the notification to explain why the application or supplement should not be withdrawn and request an extension of time in which to resubmit the application or supplement, and we will grant any reasonable request for an extension. Finally, § 601.3(c)(2) states that if the applicant does not respond to the notification within 30 days, the application or supplement will be deemed to be withdrawn. As with revised § 314.110(c)(1), we are substituting the phrase “after issuance of a complete response letter” for the phrase “after receiving a complete response letter” to provide certainty about the start of the 1-year period. F. Miscellaneous Provisions Related to Complete Response Letters 1. Content and Format of Applications (Proposed § 314.50) Proposed § 314.50(d)(5)(vi)(b) would have required NDA applicants to submit safety update reports 4 months after the initial submission, in a resubmission following receipt of a complete response letter, and at other times as requested by us. Previous § 314.50(d)(5)(vi)(b) had required the submission of safety updates 4 months after the initial submission, after receiving an approvable letter, and when otherwise requested by us. (Comment 30) One comment stated that in most cases, a sponsor would receive the complete response letter toward the end of the initial cycle, normally well after it had submitted the traditional 4-month safety update. The comment stated that the amount of data needed in a resubmission could be substantial if there are many ongoing studies. Therefore, the comment requested that we include in the preamble to the final rule general guidance on whether there would be any difference in expectations on the content of the safety update provided in the resubmission. (Response) We will expect applicants to provide the same type of data and other information in safety updates included in a resubmission as we did with safety updates included in a resubmission following receipt of a not approvable letter. Not approvable letters set forth in detail the information that we expected applicants to include in the safety update. As the comment suggests, this could include substantial information regarding any ongoing clinical studies. We will expect applicants to provide the same level of information in a resubmission following receipt of a complete response letter. 2. Withdrawal by the Applicant of an Unapproved Application (Proposed § 314.65) Proposed § 314.65 stated in part that if, by the time we received notice of an applicant's request to withdraw an unapproved application, we had identified any deficiencies in the application, we would list such deficiencies in the letter we sent the applicant acknowledging the withdrawal. (Comment 31) One comment stated that all communications before the issuance of approval or tentative approval should remain confidential. Therefore, the comment recommended that the following statement be added to § 314.65: “This communication, like all communications prior to approval or tentative approval, will not be publicly disclosed.” (Response) We agree with the comment that the letter to an applicant acknowledging the withdrawal of its application is a confidential communication. However, we do not believe that it is necessary to add to § 314.65 the language suggested by the comment. The confidential nature of such communications is already addressed in § 314.430. 3. Public Disclosure of Existence of Applications (Proposed § 314.430) Proposed § 314.430(b) stated that we would not publicly disclose the existence of an application or abbreviated application before an approval letter was sent to the applicant under § 314.105 or a tentative approval letter was sent to the applicant under § 314.107, unless the existence of the application or abbreviated application had been previously publicly disclosed or acknowledged. Previous § 314.430(b) stated that we would not make such a disclosure before issuance of an approvable letter. In the proposed rule, we acknowledged that our proposed change might result in later disclosure than sometimes occurred under the previous regulation with respect to those applications for which we issued approvable letters. But we stated that the proposed change was consistent with our presumption that, before approval, the existence of an application is confidential commercial information under § 20.61 (21 CFR 20.61). However, we invited comment on whether it would be appropriate for us to disclose the existence of an application following issuance of a complete response letter and, if so, under what conditions. (Comment 32) Six comments agreed with the proposal to not disclose the existence of an NDA or ANDA before we send an approval letter or tentative approval letter unless the existence of the application has been previously publicly disclosed or acknowledged. Two comments stated that it was appropriate to continue our current policy on disclosure; one comment stated that this was consistent with the presumption that the existence of an application is confidential commercial information. One comment specifically opposed the alternative approach we suggested in the proposed rule, under which we could disclose the existence of an NDA or ANDA following issuance of a complete response letter unless the applicant notified us by a specified date that the applicant had not publicly disclosed or acknowledged the application's existence. The comment stated that such disclosure could be harmful, particularly in the generic drug sector, to any competitive advantage that a sponsor might have in a race to product launch. The comment also agreed with the statement in the proposed rule that requiring applicants to notify us to prevent our disclosing the existence of their applications would create the potential for error and would be burdensome. One comment preferred the alternative approach suggested in the proposed rule. One comment, although opposed to routine disclosure of the existence of an application following issuance of a complete response letter, appeared to suggest that we revise the regulation to state that we could make such a disclosure provided the applicant asked us to do so within 10 days of receipt of the complete response letter. The comment stated that this would place the onus on the applicant to request disclosure and would prevent inadvertent disclosure by the agency prior to approval. (Response) We believe that it is appropriate to not publicly disclose the existence of an NDA or ANDA (unless the existence has already been disclosed or acknowledged) until we have issued an approval letter or tentative approval letter for that application. As we stated in the preamble to the proposed rule, this is consistent with our long-standing presumption that before approval or tentative approval, the existence of an application is confidential commercial information. In addition, we believe that this approach is preferable to one that would require applicants to notify us, after issuance of a complete response letter, that they object to disclosure. As we stated in the preamble to the proposed rule, such a notification system would create the potential for inadvertent disclosure and pose administrative burdens for applicants and the agency. Similarly, we do not believe that it is appropriate to codify a procedure under which an applicant could notify us that we may disclose the existence of its application. An applicant may publicly disclose the existence of its application at any time. 4. Addresses for Applications and Abbreviated Applications (Proposed § 314.440) The proposed rule would have revised § 314.440(a)(1) to state that, except as provided in § 314.440(a)(4), an application under § 314.50 or § 314.54 submitted for filing should be directed to the Central Document Room, 12229 Wilkins Ave., Rockville, MD 20852-1833. The proposed rule correctly revised the title of the office to which applications must be submitted under § 314.440(a)(1) from “Document and Records Section” to “Central Document Room,” but it inadvertently changed the address for the office. The final rule states the correct address to which these applications must be submitted as follows: Central Document Room, 5901-B Ammendale Rd., Beltsville, MD 20705-1266. In addition, on our own initiative we are revising § 314.440(a)(2) concerning addresses for ANDAs to specify the current address for the Office of Generic Drugs and to update related information. G. Amendments to NDAs (Proposed § 314.60) We proposed several revisions to § 314.60 concerning amendments to unapproved NDAs. Previous § 314.60 stated in part that submission of a major amendment ordinarily would extend the application's review period only for the time necessary to review the new information, but not more than 180 days; submission of an amendment that was not a major amendment would not extend the review period. We proposed to revise § 314.60 to, among other things, specify how long the review cycle would be extended for several types of amendments. In addition, proposed § 314.60(b) would allow us to defer all of these amendments to the next review cycle. 1. General (Comment 33) Several comments objected to the proposal to give us discretion to defer review of these amendments. One comment stated that unilateral deferrals by FDA are inappropriate and requested that we explain the conditions under which reviews would be deferred. Two comments stated that the user fee goals do not suggest that we should have an unlimited option to unilaterally defer review of amendments. The comments maintained that the user fee goal concerning extension of the review cycle for a major amendment submitted within 3 months of the end of the review cycle was intended to encourage a single, contiguous review leading to a complete response. These comments recognized, however, that deferral might sometimes result in more efficient review and effective use of resources. Therefore, the comments recommended that the regulations list the specific conditions under which we could defer review of amendments. One comment stated that the regulations should emphasize that we will ordinarily strive to complete full review of an application, including amendments, by the user fee goal date. The comment maintained that deferral of review is only appropriate if an amendment is submitted so late in the cycle that it cannot be reviewed by the goal date or contribute to an approval decision because there are other major deficiencies that cannot be addressed in the initial cycle. (Response) We do not agree with the comments concerning our discretion to defer review of amendments. We believe that it is necessary for the efficient review of applications for us to have the ability to defer review of amendments where appropriate. Our current policy on the review of amendments is set forth in our guidance document entitled “Good Review Management Principles and Practices for PDUFA Products” (the GRMP guidance). The GRMP guidance states that during the initial review cycle, we ordinarily review all amendments that we ask the applicant to make during the review and any amendments previously agreed upon (e.g., during the pre-NDA/BLA meeting). The guidance further states that we might review substantial amendments submitted late in the review cycle during a subsequent cycle, depending, in part, on other identified deficiencies. As for all other amendments, the guidance states that we attempt to review them during the first review cycle but might not be able to do so or might decide not to do so in some circumstances (e.g., when the content of such an amendment does not address a known deficiency in the application). The GRMP guidance notes that under the user fee goals, submission of a major amendment during the last 3 months of a review may trigger a 3-month extension of the review clock. The guidance states that we decide whether to extend the review clock based on consideration of a variety of factors, including content of the amendment, FDA workload and resources, and the existence of other known deficiencies possibly affecting approval that have not been addressed by the amendment. The guidance states that the underlying principle guiding our decision is to consider the most efficient path toward completion of a comprehensive review that addresses the deficiencies in an application and leads toward a first cycle approval when possible. As the GRMP guidance states, although we strive to review amendments during the initial review cycle for an application, there are circumstances under which this is not possible or would not be an efficient use of resources. Although the GRMP guidance specifies some of the circumstances in which deferral of review of an amendment to the next review cycle might be appropriate, we do not believe that we can codify in the regulations all of the circumstances under which we might defer review of an amendment. Therefore, we conclude that § 314.60 must provide us with the discretion to defer review of various types of amendments until the subsequent review cycle, when appropriate. (Comment 34) Two comments stated that § 314.60 should require us to provide written notification to the applicant when we defer an amendment to the next cycle because deferral is essentially an action decision. The comments stated that such notification should describe the deficiencies that preclude approval. (Response) We agree with the comments that we should provide written notification to an applicant when we defer review of an amendment to the subsequent review cycle. We currently provide such notice in our approvable and not approvable letters. Therefore, we have added a new § 314.60(b)(7) stating as follows: “When FDA defers review of an amendment until the subsequent review cycle, the agency will notify the applicant of the deferral in the complete response letter sent to the applicant under § 314.110.” We do not believe that it is necessary to codify in the regulations that we will provide a reason for the deferral. Usually, the reasons for deferral are general in nature (e.g., the amendment contains substantial new information or does not address a known deficiency). We would be willing to discuss the reasons for deferral after the applicant receives the complete response letter. 2. Major Amendment Within 3 Months of the End of the Cycle (Proposed § 314.60(b)(1)) Under proposed § 314.60(b)(1), submission of a major amendment to an original application, efficacy supplement, or resubmission of an application or efficacy supplement within 3 months of the end of the initial review cycle constituted an agreement by the applicant under section 505(c) of the act to extend the initial review cycle by 3 months. Proposed § 314.60(b)(1) further stated that we might instead defer review of the amendment until the subsequent review cycle. Proposed § 314.60(b)(1) also stated that the initial review cycle for an original application, efficacy supplement, or resubmission of an application or efficacy supplement may be extended only once due to the submission of a major amendment. It further stated that we might, at our discretion, review any subsequent major amendment during the initial review cycle (as extended) or defer review to the subsequent cycle. On our own initiative, we are revising § 314.60(b)(1) with respect to amendments to resubmissions. Unlike applications and supplements (21 CFR 314.71(c)), resubmissions are not subject to the “initial review cycle” provision in § 314.100(a); they just have a “review cycle.” Therefore, we are adding to § 314.60(b)(1) a statement clarifying that, for references to a resubmission of an application or efficacy supplement in § 314.60(b), the timeframe for reviewing the resubmission is the “review cycle” rather than the “initial review cycle.” (Comment 35) One comment stated that, for clarity, the regulations should include a definition of “major amendment.” (Response) We do not believe that it is necessary to include a definition of major amendment in the regulations. Previous § 314.60(a) did not define a major amendment; it only gave an example of a major amendment (i.e., “an amendment that contains significant new data from a previously unreported study or detailed new analyses of previously submitted data”). Because we are uncertain that we can define major amendment in a way that encompasses all types of amendments that should be treated as major amendments, we decline to add a definition to the regulations. (Comment 36) Two comments recommended not codifying the 3-month extension for a major amendment submitted within 3 months of the end of the initial review cycle because, although this is consistent with current user fee goals, those goals could change as a result of future negotiations on user fees. The comments stated that the timeframes agreed upon in the user fee negotiations historically have taken precedence over existing regulatory timeframes, as was recognized in proposed § 314.100(a)(2). The comments stated that if we believed it was necessary to codify user fee goals on extensions, we should revise § 314.60(b) to state that for human drug applications, any extension of review due to a major amendment will be consistent with the user fee goals, similar to proposed § 314.100(a)(2). (Response) As stated in the preamble to the proposed rule, we are revising § 314.60 to state that submission of a major amendment within 3 months of the end of the review cycle will extend the review cycle by 3 months because we want to make the regulation consistent with the current user fee goal on these amendments. At present, we do not anticipate a change in this goal. If this goal does in fact change as a result of a future user fee agreement, we could issue a proposed rule proposing to make the regulation match the user fee goal on this matter. (Comment 37) Four comments specifically addressed the provision in proposed § 314.60(b)(1) allowing deferral of review of a major amendment submitted within 3 months of the end of the initial review cycle. One comment stated that the option to defer review was arbitrary and inconsistent with the user fee goals. The comment stated that neither the proposed codified provision nor the preamble gave examples of when it might be appropriate to defer review. The comment claimed that because the overwhelming majority of these amendments are submitted in response to FDA requests, it would be unreasonable to penalize applicants by deferring review of the amendments. The comment also stated that early communication of information and data requests in accordance with GRMP principles will ordinarily result in receipt of responses early in the initial cycle, giving us more time to complete our review by the goal date. Therefore, the comment recommended that § 314.60(b)(1) be revised to state that the agency will make every effort to complete its review of the full application, including amendments, by the user fee goal date. The comment maintained that review of these major amendments should only be deferred when the amount of new information and the timing of the submission make it impossible to review the amendment in the initial cycle. One comment recommended revising § 314.60(b)(1) to state that we would not be required to review a major amendment that pertains to one section of the application if we have previously identified deficiencies in another section that prevent first-cycle approval. Two comments recommended revising § 314.60(b)(1) to state that we may defer review of a major amendment submitted within the last 3 months of the initial cycle that meets any of the following criteria:

(1)It amends technical sections of an application in which we have identified deficiencies that prohibit approval during the initial cycle and that do not contain information needed to put the application in condition for approval;

(2)it amends a technical section other than sections in which we have identified deficiencies preventing approval, where review of the amendment will not result in approval during the current cycle; or

(3)it is an amendment for which, under the user fee goals, we could not extend the review cycle (e.g., a second major amendment submitted within the last 3 months of the initial cycle). (Response) We do not agree with any of the proposed revisions to § 314.60(b)(1). As stated in the GRMP guidance, we usually seek to review amendments, including major amendments, during the initial review cycle. However, we do not believe that it is necessary to codify this intent in § 314.60(b)(1) or elsewhere in this section. As stated in our response to comment 33, we do not believe that we can codify all of the circumstances under which it might be appropriate to defer review of major amendments. In addition, we do not agree with the claim that the overwhelming majority of amendments are submitted in response to agency requests, and the comment provides no evidence supporting this statement. For these reasons, we believe that it is appropriate to include in § 314.60(b)(1) a statement that we can defer review of a major amendment submitted within 3 months of the end of the initial review cycle rather than extend the cycle by 3 months. (Comment 38) One comment stated that § 314.60(b)(1) also should specify that we would not be required to review a second major amendment submitted within 3 months of the goal date with no accompanying extension of the review clock. (Response) We do not agree with the suggested change. Proposed § 314.60(b)(1) stated that the initial review cycle may be extended only once due to the submission of a major amendment, and any subsequent major amendment would either be reviewed during the initial review cycle or deferred. We believe that it is appropriate that § 314.60(b)(1) include these provisions to make clear that we will not extend the review cycle for a second major amendment. 3. Major Amendment More Than 3 Months Before the End of the Cycle (Proposed § 314.60(b)(2)) Under proposed § 314.60(b)(2), submission of a major amendment to an original application, efficacy supplement, or resubmission of an application or efficacy supplement more than 3 months before the end of the initial review cycle would not have extended the cycle. Proposed § 314.60(b)(2) further stated that we might, at our discretion, review such an amendment during the initial review cycle or defer review until the subsequent review cycle. (Comment 39) One comment stated that the deferral provision in § 314.60(b)(2) would have the unintended effect of widening differences among review divisions regarding when review of these major amendments is deferred and would seem to discourage the possibility of dialogue on the merits of submission of a major amendment. Two comments stated that, because the user fee goals do not address major amendments submitted more than 3 months before the end of the review period, the implication is that review can be accommodated during the initial cycle. One comment stated that we should not defer the review of major amendments submitted well in advance of the goal date, so this option should be deleted from the rule. One comment recommended that § 314.60(b)(2) state that we will ordinarily make every effort to complete our review of an application or efficacy supplement, including any amendments submitted more than 3 months before the end of the initial cycle, by the user fee goal date. Several comments stated that the regulation should specify the criteria under which we could defer review of these major amendments. Two comments recommended that § 314.60(b)(2) state that we may defer review of a major amendment submitted more than 3 months before the end of the initial cycle when we have already identified at least one major deficiency (such as a failed pivotal trial) that is not addressed by the amendment and is unlikely to be addressed during the current cycle due to a need for significant additional research or development. (Response) We do not agree with any of the proposed revisions to § 314.60(b)(2). For the reasons stated in our response to comment 33, we do not believe that we can codify all of the circumstances under which it might be appropriate to defer review of these major amendments. Consequently, we have retained the provision in § 314.60(b)(2) giving us the discretion to defer review of these amendments to the next review cycle. 4. Nonmajor Amendment (Proposed § 314.60(b)(3)) Under proposed § 314.60(b)(3), the submission of an amendment to an original application, efficacy supplement, or resubmission of an application or efficacy supplement that is not a major amendment would not have extended the initial review cycle. Proposed § 314.60(b)(3) further stated that we might, at our discretion, review such an amendment during the initial review cycle or defer review until the subsequent review cycle. (Comment 40) One comment stated that § 314.60(b)(3) would have the unintended effect of widening differences in interpretation among review divisions regarding these nonmajor amendments. The comment added that § 314.60(b)(3) seemed contrary to § 314.102(b), which encourages reviewers to communicate promptly to applicants easily correctable deficiencies so that the deficiencies can be corrected through amendments before the review period ends. One comment stated that by their very nature, these amendments are less complex and require less time to review, which provides even more reason to expect that they be reviewed in the initial cycle. Therefore, the comment maintained that § 314.60(b)(3) should state that we will ordinarily review all nonmajor amendments by the user fee goal date. Several comments stated that § 314.60(b)(3) should set forth the criteria for deferral of review. One comment recommended that § 314.60(b)(3) state that we could defer review of a nonmajor amendment that is submitted close to the end of the cycle and which could not contribute to an approval decision because other major deficiencies cannot be satisfactorily addressed. One comment suggested that the regulation state that we could defer review if a nonmajor amendment is submitted late in the review cycle (such as 1 to 2 months before the end) or if the amendment does not provide information that addresses easily correctable deficiencies, provided other major deficiencies prevent approval at the end of the initial cycle. Similarly, two comments recommended that § 314.60(b)(3) state that we may defer review of a nonmajor amendment that is received within 1 month of the end of the initial cycle or that does not contain information adequate to put the application in condition for approval during the current cycle. One comment recommended stating that we could defer review of a nonmajor amendment that is received late in the review cycle (e.g., within weeks of the goal date) when review of the amendment is not expected to impact the outcome of the application review. (Response) We do not agree with any of the proposed revisions to § 314.60(b)(3). For the reasons stated in our response to comment 33, we do not believe that we can codify all of the circumstances under which it might be appropriate to defer review of these nonmajor amendments. Consequently, we have retained the provision in § 314.60(b)(3) giving us the discretion to defer review of these amendments to the next review cycle. 5. Amendment to Supplement Other Than Efficacy Supplement (Proposed § 314.60(b)(4)) Under proposed § 314.60(b)(4), submission of an amendment to a supplement other than an efficacy supplement would not have extended the initial review cycle. Proposed § 314.60(b)(4) further stated that we might, at our discretion, review such an amendment during the initial review cycle or defer review until the subsequent review cycle. On our own initiative, we have revised § 314.60(b)(4) to ensure that the regulation is consistent with the user fee performance goal regarding major amendments to manufacturing supplements. In PDUFA III, industry and the agency agreed that submission of a major amendment to a manufacturing supplement submitted within 2 months of the goal date would extend the goal date for acting on the supplement by 2 months, and that there can be only one such extension per review cycle. Although industry and the agency have been acting in accordance with this user fee goal since the enactment of PDUFA III in 2002, we inadvertently failed to incorporate this practice into the proposed rule issued in 2004. Consequently, we have revised § 314.60(b)(4) to state that submission of a major amendment to a manufacturing supplement within 2 months of the end of the initial review cycle constitutes an agreement by the applicant under section 505(c) of the act to extend the initial review cycle by 2 months. Consistent with the approach to major amendments in § 314.60(b)(2), revised § 314.60(b)(4) further states: FDA may instead defer review of a major amendment to a manufacturing supplement until the subsequent review cycle; if we extend the initial review cycle, the division responsible for reviewing the supplement will notify the applicant of the extension; the initial review cycle for a manufacturing supplement may be extended only once due to submission of a major amendment; and we may, at our discretion, review any subsequent major amendment during the initial review cycle (as extended) or defer review until the subsequent review cycle. In accordance with the change to § 314.60(b)(4), revised § 314.60(b)(5) states that submission of an amendment to a supplement other than an efficacy or manufacturing supplement will not extend the initial review cycle, and we have discretion to review or defer review of such an amendment. Proposed § 314.60(b)(5) has been renumbered as § 314.60(b)(6). (Comment 41) One comment recommended that we revise proposed § 314.60(b)(4) to state that we might consider deferring review of other-than-efficacy supplements that are received late in the review cycle (e.g., within weeks of the goal date) when their review is not expected to impact the outcome of the application review. Two comments stated that the regulation should permit us to defer review of any other-than-efficacy supplement that either is received within 1 month of the end of the initial cycle or contains information that is inadequate to put the application in condition for approval during the current cycle. (Response) We do not agree with either of the suggested revisions to proposed § 314.60(b)(4) (now § 314.60(b)(5)). For the reasons stated in our response to comment 33, we do not believe that we can codify all of the circumstances under which it might be appropriate to defer review of amendments to supplements other than efficacy or manufacturing supplements. Consequently, we have retained the provision in § 314.60(b)(5) giving us the discretion to defer review of these amendments to the next review cycle. 6. Contents of Major Amendment (Proposed § 314.60(b)(5)) Under proposed § 314.60(b)(5) (now § 314.60(b)(6)), a major amendment could not include data to support an indication for a use that was not included in the original application, supplement, or resubmission. (Comment 42) One comment stated that it would be unfair in most cases to expect us to meet the goal date for review of an application if a major amendment was submitted for a completely new indication in the middle of the initial review cycle. However, the comment stated that sometimes we request additional data or safety updates, which can lead to the expansion or modification of an indication (e.g., submission of long-term safety data supporting chronic use). The comment added that there might be a significant public health reason to allow the submission of a major amendment to support a new indication. Therefore, the comment recommended that § 314.60(b)(6) be modified to allow exceptions when data to support a new or expanded indication are either requested by us or submitted with our prior concurrence. (Response) We agree with the comment that it is appropriate to allow a major amendment to include data to support a slightly modified indication (e.g., increasing or decreasing the age range, increasing the severity of the disease) but not a completely new indication, regardless of whether the data supporting the new indication were submitted at the applicant's initiative or at our request. Therefore, we have revised § 314.60(b)(6) to state as follows: “A major amendment may not include data to support an indication or claim that was not included in the original application, supplement, or resubmission, but it may include data to support a minor modification of an indication or claim that was included in the original application, supplement, or resubmission.” In addition, for the reasons stated in section III.B.3 of this document regarding § 314.3, we are substituting the phrase “indication or claim” for “indication for a use.” H. Amendments to ANDAs (Proposed § 314.96) Proposed § 314.96(a)(2) stated that submission of an amendment containing significant data or information before the end of the initial review cycle constitutes an agreement between FDA and the applicant to extend the initial review cycle only for the time necessary to review the significant data or information and for no more than 180 days. (Comment 43) One comment objected to proposed § 314.96(a)(2) and recommended several changes. First, the comment stated that it appeared that the only proposed change to § 314.96 was the removal of the condition that the cycle will be extended only for the time necessary to review the data. The comment maintained that this was not consistent with the intent to reduce ANDA approval times as stated in the ANDA amendments guidance. Second, the comment stated that § 314.96(a)(2) does not provide a definition of “significant.” The comment recommended that the term “major amendment” be substituted for “amendment containing significant data or information” in § 314.96(a)(2). Third, the comment stated that § 314.96 lacks a provision regarding the submission of an amendment that contains data or information not considered significant. Finally, the comment stated that, in contrast to the provisions on major and nonmajor amendments to NDAs in § 314.60, it appeared that any amendment of an ANDA submitted at any time during the initial cycle constitutes an agreement to extend the review cycle by 6 months. The comment maintained that the provisions on NDA amendments that take into consideration the timing and content of amendments were fair and appropriate and recommended that a similar approach be taken with ANDA amendments. To address all of these concerns, the comment recommended that § 314.96 be revised to state as follows: “The submission of a major amendment to an original ANDA at any time within the initial review cycle constitutes an agreement between the FDA and the applicant to extend the cycle only by the time necessary to review the data, and for no more than 180 days. A major amendment is defined as any new or revised information or data that, if it were to be submitted post-approval, would be categorized as a Prior Approval Supplement as defined in 314.70(b). The submission of a minor amendment to an original ANDA within 3 months of the end of the initial review cycle constitutes an agreement between the FDA and the applicant to extend the cycle by 30 to 60 days. The submission of a minor amendment more than 3 months before the close of the initial review cycle would not extend the review cycle. A minor amendment is defined as any new or revised information that, if it were to be submitted post-approval, would be categorized as a Changes Being Effected or Changes Being Effected in 30 Days supplement as defined in 314.70(c).” (Response) Contrary to the comment, revised § 314.96(a)(2) retains the provision in previous § 314.96(a)(2) that the submission of an amendment to an ANDA containing significant data or information before the end of the review cycle constitutes an agreement to extend the review cycle “only for the time necessary to review the significant data or information and for no more than 180 days.” We do not agree with the comment's recommended changes to § 314.96. We do not believe that it is necessary to add a definition of major amendment in § 314.96. The ANDA amendments guidance does not provide a definition of major amendment but provides a listing of types of amendments that we regard as major amendments. These include, but are not limited to, amendments relating to the manufacture of a new batch of drug product, a new bioequivalence study that is unrelated to the manufacture of a new batch of the drug product, and new analytical methods and validation data. We believe that the guidance provides adequate information to applicants about the types of amendments that we regard as “containing significant data or information” under § 314.96(a)(2). We do not agree with the comment's suggested definition of major amendment because the matters that are the subject of supplements submitted under § 314.70 do not necessarily correlate with matters that are the subject of amendments submitted under § 314.96, and the regulatory environment in which we review supplements differs from that in which we review amendments (e.g., we have much more information about a drug product after approval than we do before approval). For these reasons, we conclude that it is appropriate to retain the flexibility provided in § 314.96(a)(2) concerning what constitutes an amendment containing significant data or other information. We also do not believe that it is necessary to include provisions on “minor” amendments to ANDAs in § 314.96. The ANDA amendments guidance states that, except for those amendments that are classified as “major” or “telephone,” amendments will be designated as “minor,” and the guidance provides examples of minor amendments (e.g., deficiencies in a drug master file, problems regarding good manufacturing practices). (According to the guidance, an amendment can be classified as a “telephone” amendment at the agency's discretion if the amendment would otherwise be classified as “minor” but the deficiencies are of a limited number or complexity (e.g., a need for clarification of data already submitted, a request for a postapproval commitment).) The guidance states that we attempt to review minor amendments within 30 to 60 days but notes that we cannot review all of these amendments within 60 days. We believe that the comment's proposed definition of minor amendment is not appropriate for the reasons we stated for not adopting the proposed definition of major amendment. In addition, we decline to adopt the specific provisions on minor amendments suggested by the comment. The regulations in previous § 314.94 on amendments to pending ANDAs did not address minor amendments and did not parallel the provisions in § 314.60 on NDA amendments. Because ANDA amendments often differ in subject matter from NDA amendments, we do not believe it is necessary that the provisions on the content and timing of ANDA amendments match those for NDA amendments. We believe that the ANDA amendments guidance provides adequate information to ANDA applicants on minor amendments, and we do not find it necessary to codify our policy in the regulations at this time. IV. Analysis of Impacts FDA has examined the impacts of the final rule under Executive Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). 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 agency believes that this final rule is not a significant regulatory action under the Executive Order. The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because our economic analysis and comments submitted in response to the proposed rule show that the provisions of this final rule either codify existing practice or bring about changes that impose no significant burdens, the agency certifies that the final rule will not have a significant economic impact on a substantial number of small entities. Section 202(a) of the Unfunded Mandates Reform Act requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $127 million, using the most current

(2006)Implicit Price Deflator for the Gross Domestic Product. FDA does not expect this final rule to result in any 1-year expenditure that would meet or exceed this amount. A. Impact of the Final Rule As described in sections II and III of this document, the final rule makes the following changes:

(1)For NDAs and ANDAs, replaces the two types of action letters currently used (approvable and not approvable letters) with complete response letters;

(2)for BLAs, incorporates into the regulations an existing policy on complete response letters;

(3)incorporates into the regulations the terminology and procedures used in the user fee performance goals regarding NDA resubmissions; and

(4)revises regulations governing extension of the initial review cycle in response to major amendments to unapproved applications, supplements, and resubmissions. For NDAs (with respect to resubmissions and amendments) and BLAs, the final rule codifies current agency practices. For ANDAs, the final rule revises regulations to be consistent with current practice or, where appropriate, with the provisions governing NDAs. The most significant impact of the final rule is on efficacy supplements to approved NDAs and on resubmissions of applications and efficacy supplements. The impact of specific provisions of the final rule on NDAs, ANDAs, efficacy supplements, manufacturing supplements, and resubmissions is described in greater detail in the following paragraphs. 1. Complete Response Letter We are amending our regulations to replace approvable and not approvable letters with complete response letters. Both approvable and not approvable letters indicated that an NDA or ANDA was not approvable in its current form, and that changes were necessary or that we required additional information. A complete response letter describes the deficiencies in an NDA or ANDA and, when possible, recommends actions that the applicant might take to place the application in condition for approval. In the past, some drug manufacturers expressed concern that a not approvable letter sent an unintended message that a marketing application would never be approved, which could adversely affect a company's ability to raise capital. Thus, in addition to allowing us to meet our commitments under the user fee performance goals, this regulatory change addresses industry comments by adopting a more neutral mechanism to convey that an NDA or ANDA cannot be approved in its current form. (We had already adopted a policy of issuing complete response letters for BLAs, and the final rule simply codifies this policy.) Because this regulatory change is primarily administrative in nature and is being made in response to the user fee performance goals, it is expected to have little or no economic impact. 2. Resubmissions We also are making regulatory changes to implement the user fee performance goals and to codify new terminology associated with the resubmission of drug marketing applications. A Class 2 resubmission—incorporating major changes or a significant amount of additional data—would start a new 6-month review cycle, whereas a Class 1 resubmission—incorporating minor changes or a limited amount of additional data—would begin a new 2-month review cycle. These changes will codify agency practices regarding NDA resubmissions in place since 1998. We are applying the Class 1 and Class 2 provisions to resubmissions of efficacy supplements as well. We agreed to make this policy change in PDUFA III because efficacy supplements, like original NDAs, contain varying amounts of data requiring different review times. We began to implement this change in October 2002. The application of the Class 1 and Class 2 provisions to resubmissions of efficacy supplements represents a regulatory change because under PDUFA II, all resubmissions of efficacy supplements would start a new 6-month review cycle. Under the final rule, a Class 1 resubmission of an efficacy supplement will extend the review cycle by only 2 months, rather than 6 months as occurred under PDUFA II. Review times for Class 2 efficacy supplement resubmissions will be largely unaffected by this change. Based on data from 1996 to 2000 (the most recent 5-year period for which complete data were available), an average of 16 efficacy supplements (approximately 40 percent) resubmitted annually would be reviewed in 2 months rather than the current 6 months. The final rule generally maintains current agency practice with respect to the review of other types of NDA supplements, i.e., for chemistry, manufacturing, or labeling changes. For ANDA resubmissions, the rule codifies the current practice of 6-month review. 3. Amendments to Unapproved Drug Marketing Applications We also are revising our regulations on extending the initial review cycle following the submission of an amendment to an unapproved drug marketing application. The previous regulations stated that, for unapproved NDAs and efficacy supplements, submission of a major amendment extended the review cycle for the amount of time necessary to review the new information but not by more than 180 days. The final rule generally extends the review cycle by 3 months if a major amendment to an application, efficacy supplement, or resubmission of an application or efficacy supplement is submitted within 3 months of the end of the initial review cycle. (The final rule states that we may defer review until a subsequent review cycle.) If a major amendment is submitted more than 3 months before the end of the initial review cycle, the review cycle will not be extended (but FDA, in its discretion, may review the amendment during the initial review cycle or defer it until the subsequent review cycle). These changes codify the practice for NDAs that has been in place since 1998. However, we have only recently begun to apply this policy to efficacy supplements. Before October 2002, under the user fee performance goals, we did not extend the review cycle for a major amendment to an efficacy supplement. Therefore, as with the change regarding resubmissions of efficacy supplements, we believe that it is appropriate to treat the change regarding amendments to unapproved efficacy supplements as a regulatory change for purposes of this analysis. These provisions of the final rule might slightly increase review times for efficacy supplements for which at least one major amendment was received within 3 months of the end of the initial review cycle. Based on data from 1996 to 2000, these regulatory changes could affect as many as 11 percent of all efficacy supplements filed, or an average of 15 per year. The effect of this change is dependent on the timing of future filings and the number of instances in which we exercise our review discretion. The final rule also codifies our practice of extending the initial review cycle for a manufacturing supplement by 2 months when a major amendment is submitted within 2 months of the end of the initial review cycle. As with major amendments to efficacy supplements, before October 2002, we did not extend the review cycle for a major amendment for a manufacturing supplement, so we are treating this codification as a regulatory change. This change regarding manufacturing supplements might slightly increase review times for these supplements for which at least one major amendment was received within 2 months of the end of the initial review cycle. Based on data from 1996 to 2000, this regulatory change could affect as many as 6 percent of all manufacturing supplements filed, or an average of 76 per year. The effect of this change is dependent on the timing of future filings and the number of instances in which we exercise our review discretion. With respect to amendments to ANDAs, the changes to the regulations codify our current approach. B. Summary of Impacts Based on the preceding analysis, the changes to provisions governing resubmissions could result in reduced review times for up to 40 percent of efficacy supplements resubmitted annually. However, the provisions governing major amendments could slightly increase review times for up to 11 percent of efficacy supplements and 6 percent of manufacturing supplements (for which at least one major amendment was received during the initial review cycle) filed annually. The full impact of this rule would be affected by the number of future submissions and the extent to which we exercise our discretion to defer review until the next cycle. ANDAs will not be significantly affected by the changes to regulations. C. Comments We received one comment on the analysis of economic impacts in the proposed rule. The comment noted that we did not perform a cost-benefit analysis because the proposed rule was not expected to cause expenditure of $100 million or more. The comment stated that this would be a concern only if the rule brought about negative implications, but the comment stated that, if anything, the rule will bring economic enhancement. The comment maintained that:

(1)More meaningful and direct communications will allow companies to market drugs and vaccines better;

(2)the time to marketing might be shortened; and

(3)more efficient application procedures will help companies optimize their earnings goals. We agree with the comment that the rule will not have a negative economic impact on applicants seeking approval of drug and biological products. D. Conclusion Because this final rule generally amends previous regulations governing applications for approval to market new drugs and generic drugs to reflect user fee terminology and performance goals that have already been incorporated into FDA policies (except with respect to complete response letters, as noted above), we certify that the rule will not have a significant economic impact on a substantial number of small entities. Therefore, no further analysis is required under the Regulatory Flexibility Act. V. Environmental Impact We have determined under 21 CFR 25.30(h) that this action is of a class of actions that do not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required. VI. Paperwork Reduction Act of 1995 This final rule does not contain new information collection provisions that are subject to review by the Office of Management and Budget

(OMB)under the Paperwork Reduction Act of 1995 (the PRA) (44 U.S.C. 3501-3520). The final rule substitutes complete response letters for approvable and not approvable letters (in previous §§ 314.110 and 314.120, respectively) when we take action on marketing applications. The final rule retains the provisions requiring the recipient of the action letter (a complete response letter under the final rule) to amend the application (i.e., resubmit it), withdraw it, or ask us to provide an opportunity for a hearing on whether there are grounds for denying approval of the application. The final rule also revises the regulations (§§ 314.60, 314.96, 314.110, and 314.120) on extending the review cycle due to the submission of amendments before we issue an action letter and due to resubmissions, but does not change the information required in such amendments and resubmissions. OMB already has approved the information collection discussed earlier concerning responses to action letters under OMB control number 0910-0001, which expires on May 31, 2011. The final rule also establishes regulations on the issuance of complete response letters to biologics license applicants and supplement applicants. The final rule codifies current agency practice on the issuance of complete response letters to these applicants and on applicant actions in response to these letters (resubmission or withdrawal of the application or supplement). OMB has already approved the information collection concerning responses to complete response letters for BLAs and BLA supplements under OMB control number 0910-0338, which expires on June 30, 2010. We conclude that this final rule contains no new collection of information. Therefore, OMB clearance under the PRA is not required. VII. Federalism FDA has analyzed this final rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the rule does not contain policies that have substantial direct effects 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. Accordingly, we have concluded that the rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required. List of Subjects 21 CFR Part 312 Drugs, Exports, Imports, Investigations, Labeling, Medical research, Reporting and recordkeeping requirements, Safety. 21 CFR Part 314 Administrative practice and procedure, Confidential business information, Drugs, Reporting and recordkeeping requirements. 21 CFR Part 600 Biologics, Reporting and recordkeeping requirements. 21 CFR Part 601 Administrative practice and procedure, Biologics, Confidential business information. Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR parts 312, 314, 600, and 601 are amended as follows: PART 312—INVESTIGATIONAL NEW DRUG APPLICATION 1. The authority citation for 21 CFR part 312 continues to read as follows: Authority: 21 U.S.C. 321, 331, 351, 352, 353, 355, 356, 371, 381, 382, 383, 393; 42 U.S.C. 262. 2. Section 312.84 is amended in paragraph

(c)by revising the first sentence to read as follows: § 312.84 Risk-benefit analysis in review of marketing applications for drugs to treat life-threatening and severely-debilitating illnesses.

(c)If FDA concludes that the data presented are not sufficient for marketing approval, FDA will issue a complete response letter under § 314.110 of this chapter or the biological product licensing procedures. * * * PART 314—APPLICATIONS FOR FDA APPROVAL TO MARKET A NEW DRUG 3. The authority citation for 21 CFR part 314 is revised to read as follows: Authority: 21 U.S.C. 321, 331, 351, 352, 353, 355, 356, 356a, 356b, 356c, 371, 374, 379e. 4. Section 314.3 is amended in paragraph

(b)by removing the definitions for “Approvable letter” and “Not approvable letter” and by adding the following definitions in alphabetical order: § 314.3 Definitions

(b)* * * *Class 1 resubmission* means the resubmission of an application or efficacy supplement, following receipt of a complete response letter, that contains one or more of the following: Final printed labeling, draft labeling, certain safety updates, stability updates to support provisional or final dating periods, commitments to perform postmarketing studies (including proposals for such studies), assay validation data, final release testing on the last lots used to support approval, minor reanalyses of previously submitted data, and other comparatively minor information. *Class 2 resubmission* means the resubmission of an application or efficacy supplement, following receipt of a complete response letter, that includes any item not specified in the definition of “Class 1 resubmission,” including any item that would require presentation to an advisory committee. *Complete response letter* means a written communication to an applicant from FDA usually describing all of the deficiencies that the agency has identified in an application or abbreviated application that must be satisfactorily addressed before it can be approved. *Efficacy supplement* means a supplement to an approved application proposing to make one or more related changes from among the following changes to product labeling:

(1)Add or modify an indication or claim;

(2)Revise the dose or dose regimen;

(3)Provide for a new route of administration;

(4)Make a comparative efficacy claim naming another drug product;

(5)Significantly alter the intended patient population;

(6)Change the marketing status from prescription to over-the-counter use;

(7)Provide for, or provide evidence of effectiveness necessary for, the traditional approval of a product originally approved under subpart H of part 314; or

(8)Incorporate other information based on at least one adequate and well-controlled clinical study. *Original application* means a pending application for which FDA has never issued a complete response letter or approval letter, or an application that was submitted again after FDA had refused to file it or after it was withdrawn without being approved. *Resubmission* means submission by the applicant of all materials needed to fully address all deficiencies identified in the complete response letter. An application or abbreviated application for which FDA issued a complete response letter, but which was withdrawn before approval and later submitted again, is not a resubmission. § 314.50 [Amended] 5. Section 314.50 is amended in paragraph (d)(5)(vi)( *b* ) in the fourth sentence by removing the phrase “following receipt of an approvable letter” and by adding in its place the phrase “in a resubmission following receipt of a complete response letter”. 6. Section 314.60 is amended as follows: a. By revising the section heading; b. By revising paragraph (a); c. By redesignating paragraphs

(b)and

(c)as paragraphs

(c)and (d), respectively; d. By adding new paragraph (b); and e. By revising newly redesignated paragraphs (c)(1)(iii) and (c)(1)(iv), and the first sentence of paragraph (c)(2), to read as follows: § 314.60 Amendments to an unapproved application, supplement, or resubmission.

(a)FDA generally assumes that when an original application, supplement to an approved application, or resubmission of an application or supplement is submitted to the agency for review, the applicant believes that the agency can approve the application, supplement, or resubmission as submitted. However, the applicant may submit an amendment to an application that has been filed under § 314.101 but is not yet approved. (b)(1) Submission of a major amendment to an original application, efficacy supplement, or resubmission of an application or efficacy supplement within 3 months of the end of the initial review cycle constitutes an agreement by the applicant under section 505(c) of the act to extend the initial review cycle by 3 months. (For references to a resubmission of an application or efficacy supplement in paragraph

(b)of this section, the timeframe for reviewing the resubmission is the “review cycle” rather than the “initial review cycle.”) FDA may instead defer review of the amendment until the subsequent review cycle. If the agency extends the initial review cycle for an original application, efficacy supplement, or resubmission under this paragraph, the division responsible for reviewing the application, supplement, or resubmission will notify the applicant of the extension. The initial review cycle for an original application, efficacy supplement, or resubmission of an application or efficacy supplement may be extended only once due to submission of a major amendment. FDA may, at its discretion, review any subsequent major amendment during the initial review cycle (as extended) or defer review until the subsequent review cycle.

(2)Submission of a major amendment to an original application, efficacy supplement, or resubmission of an application or efficacy supplement more than 3 months before the end of the initial review cycle will not extend the cycle. FDA may, at its discretion, review such an amendment during the initial review cycle or defer review until the subsequent review cycle.

(3)Submission of an amendment to an original application, efficacy supplement, or resubmission of an application or efficacy supplement that is not a major amendment will not extend the initial review cycle. FDA may, at its discretion, review such an amendment during the initial review cycle or defer review until the subsequent review cycle.

(4)Submission of a major amendment to a manufacturing supplement within 2 months of the end of the initial review cycle constitutes an agreement by the applicant under section 505(c) of the act to extend the initial review cycle by 2 months. FDA may instead defer review of the amendment until the subsequent review cycle. If the agency extends the initial review cycle for a manufacturing supplement under this paragraph, the division responsible for reviewing the supplement will notify the applicant of the extension. The initial review cycle for a manufacturing supplement may be extended only once due to submission of a major amendment. FDA may, at its discretion, review any subsequent major amendment during the initial review cycle (as extended) or defer review until the subsequent review cycle.

(5)Submission of an amendment to a supplement other than an efficacy or manufacturing supplement will not extend the initial review cycle. FDA may, at its discretion, review such an amendment during the initial review cycle or defer review until the subsequent review cycle.

(6)A major amendment may not include data to support an indication or claim that was not included in the original application, supplement, or resubmission, but it may include data to support a minor modification of an indication or claim that was included in the original application, supplement, or resubmission.

(7)When FDA defers review of an amendment until the subsequent review cycle, the agency will notify the applicant of the deferral in the complete response letter sent to the applicant under § 314.110 of this part. (c)(1) * * *

(iii)The applicant has not obtained a right of reference to the investigation described in paragraph (c)(1)(ii) of this section; and

(iv)The report of the investigation described in paragraph (c)(1)(ii) of this section would be essential to the approval of the unapproved application.

(2)The submission of an amendment described in paragraph (c)(1) of this section will cause the unapproved application to be deemed to be withdrawn by the applicant under § 314.65 on the date of receipt by FDA of the amendment. * * * 7. Section 314.65 is amended by revising the second sentence to read as follows: § 314.65 Withdrawal by the applicant of an unapproved application. * * * If, by the time it receives such notice, the agency has identified any deficiencies in the application, we will list such deficiencies in the letter we send the applicant acknowledging the withdrawal. * * * § 314.71 [Amended] 8. Section 314.71 is amended in paragraph

(c)by adding the phrase “except as specified otherwise in this part” at the end of the sentence. 9. Section 314.96 is amended by revising paragraph (a)(2) and by removing paragraph (a)(3) to read as follows: § 314.96 Amendments to an unapproved abbreviated application.

(a)* * *

(2)Submission of an amendment containing significant data or information before the end of the initial review cycle constitutes an agreement between FDA and the applicant to extend the initial review cycle only for the time necessary to review the significant data or information and for no more than 180 days. 10. Section 314.100 is revised to read as follows: § 314.100 Timeframes for reviewing applications and abbreviated applications.

(a)Except as provided in paragraph

(c)of this section, within 180 days of receipt of an application for a new drug under section 505(b) of the act or an abbreviated application for a new drug under section 505(j) of the act, FDA will review it and send the applicant either an approval letter under § 314.105 or a complete response letter under § 314.110. This 180-day period is called the “initial review cycle.”

(b)At any time before approval, an applicant may withdraw an application under § 314.65 or an abbreviated application under § 314.99 and later submit it again for consideration.

(c)The initial review cycle may be adjusted by mutual agreement between FDA and an applicant or as provided in §§ 314.60 and 314.96, as the result of a major amendment. 11. Section 314.101 is amended by revising paragraph (f)(1)(ii) and by revising the last sentence of paragraph (f)(2) to read as follows: § 314.101 Filing an application and receiving an abbreviated new drug application. (f)(1) * * *

(ii)Issue a notice of opportunity for a hearing if the applicant asked FDA to provide it an opportunity for a hearing on an application in response to a complete response letter.

(2)* * * If FDA disapproves the abbreviated new drug application, FDA will issue a notice of opportunity for hearing if the applicant asked FDA to provide it an opportunity for a hearing on an abbreviated new drug application in response to a complete response letter. 12. Section 314.102 is amended in the last sentence in paragraph

(b)by removing the phrase “an action” and adding in its place the phrase “a complete response” and by revising paragraph

(d)to read as follows: § 314.102 Communications between FDA and applicants.

(d)*End-of-review conference* . At the conclusion of FDA's review of an NDA as designated by the issuance of a complete response letter, FDA will provide the applicant with an opportunity to meet with agency reviewing officials. The purpose of the meeting will be to discuss what further steps need to be taken by the applicant before the application can be approved. Requests for such meetings must be directed to the director of the division responsible for reviewing the application. § 314.103 [Amended] 13. Section 314.103 is amended in paragraph (c)(1) in the first sentence by removing the phrase “an approvable or not approvable” and adding in its place the phrase “a complete response” and by removing the phrase “or § 314.120, respectively”. § 314.105 [Amended] 14. Section 314.105 is amended in paragraph

(b)in the first sentence by removing the phrase “(rather than an approvable letter under § 314.110)”. 15. Section 314.107 is amended by adding a new sentence at the beginning of paragraph (b)(3)(v) to read as follows: § 314.107 Effective date of approval of a 505(b)(2) application or abbreviated new drug application under section 505(j) of the act.

(b)* * *

(3)* * *

(v)FDA will issue a tentative approval letter when tentative approval is appropriate in accordance with paragraph (b)(3) of this section. * * * 16. Section 314.110 is revised to read as follows: § 314.110 Complete response letter to the applicant.

(a)*Complete response letter* . FDA will send the applicant a complete response letter if the agency determines that we will not approve the application or abbreviated application in its present form for one or more of the reasons given in § 314.125 or § 314.127, respectively.

(1)*Description of specific deficiencies* . A complete response letter will describe all of the specific deficiencies that the agency has identified in an application or abbreviated application, except as stated in paragraph (a)(3) of this section.

(2)*Complete review of data* . A complete response letter reflects FDA's complete review of the data submitted in an original application or abbreviated application (or, where appropriate, a resubmission) and any amendments that the agency has reviewed. The complete response letter will identify any amendments that the agency has not yet reviewed.

(3)*Inadequate data* . If FDA determines, after an application is filed or an abbreviated application is received, that the data submitted are inadequate to support approval, the agency might issue a complete response letter without first conducting required inspections and/or reviewing proposed product labeling.

(4)*Recommendation of actions for approval* . When possible, a complete response letter will recommend actions that the applicant might take to place the application or abbreviated application in condition for approval.

(b)*Applicant actions* . After receiving a complete response letter, the applicant must take one of following actions:

(1)*Resubmission* . Resubmit the application or abbreviated application, addressing all deficiencies identified in the complete response letter.

(i)A resubmission of an application or efficacy supplement that FDA classifies as a Class 1 resubmission constitutes an agreement by the applicant to start a new 2-month review cycle beginning on the date FDA receives the resubmission.

(ii)A resubmission of an application or efficacy supplement that FDA classifies as a Class 2 resubmission constitutes an agreement by the applicant to start a new 6-month review cycle beginning on the date FDA receives the resubmission.

(iii)A resubmission of an NDA supplement other than an efficacy supplement constitutes an agreement by the applicant to start a new review cycle the same length as the initial review cycle for the supplement (excluding any extension due to a major amendment of the initial supplement), beginning on the date FDA receives the resubmission.

(iv)A major resubmission of an abbreviated application constitutes an agreement by the applicant to start a new 6-month review cycle beginning on the date FDA receives the resubmission.

(v)A minor resubmission of an abbreviated application constitutes an agreement by the applicant to start a new review cycle beginning on the date FDA receives the resubmission.

(2)*Withdrawal* . Withdraw the application or abbreviated application. A decision to withdraw an application or abbreviated application is without prejudice to a subsequent submission.

(3)*Request opportunity for hearing* . Ask the agency to provide the applicant an opportunity for a hearing on the question of whether there are grounds for denying approval of the application or abbreviated application under section 505(d) or (j)(4) of the act, respectively. The applicant must submit the request to the Associate Director for Policy, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Silver Spring, MD 20993. Within 60 days of the date of the request for an opportunity for a hearing, or within a different time period to which FDA and the applicant agree, the agency will either approve the application or abbreviated application under § 314.105, or refuse to approve the application under § 314.125 or abbreviated application under § 314.127 and give the applicant written notice of an opportunity for a hearing under § 314.200 and section 505(c)(1)(B) or (j)(5)(c) of the act on the question of whether there are grounds for denying approval of the application or abbreviated application under section 505(d) or (j)(4) of the act, respectively.

(c)*Failure to take action* .

(1)An applicant agrees to extend the review period under section 505(c)(1) or (j)(5)(A) of the act until it takes any of the actions listed in paragraph

(b)of this section. For an application or abbreviated application, FDA may consider an applicant's failure to take any of such actions within 1 year after issuance of a complete response letter to be a request by the applicant to withdraw the application, unless the applicant has requested an extension of time in which to resubmit the application. FDA will grant any reasonable request for such an extension. FDA may consider an applicant's failure to resubmit the application within the extended time period or to request an additional extension to be a request by the applicant to withdraw the application.

(2)If FDA considers an applicant's failure to take action in accordance with paragraph (c)(1) of this section to be a request to withdraw the application, the agency will notify the applicant in writing. The applicant will have 30 days from the date of the notification to explain why the application should not be withdrawn and to request an extension of time in which to resubmit the application. FDA will grant any reasonable request for an extension. If the applicant does not respond to the notification within 30 days, the application will be deemed to be withdrawn. § 314.120 [Removed and Reserved] 17. Section 314.120 is removed and reserved. § 314.125 [Amended] 18. Section 314.125 is amended in paragraph (a)(1) by removing the phrase “an approvable or a not approvable” and adding in its place the phrase “a complete response”, and by removing the phrase “or § 314.120”. § 314.430 [Amended] 19. Section 314.430 is amended in paragraph

(b)in the first sentence by removing the phrase “approvable letter is sent to the applicant under § 314.110” and adding in its place the phrase “approval letter is sent to the applicant under § 314.105 or tentative approval letter is sent to the applicant under § 314.107”; and by removing the last sentence. 20. Section 314.440 is amended as follows: a. In paragraph (a)(1) by removing the phrase “Document and Records Section” and by adding in its place the phrase “Central Document Room”; b. In paragraph (a)(3) by removing the phrase “or § 314.120”; c. In the introductory text of paragraph

(b)by removing the phrase “or § 314.120”; and d. By revising paragraph (a)(2) to read as follows: § 314.440 Addresses for applications and abbreviated applications.

(a)* * *

(2)Except as provided in paragraph (a)(4) of this section, an abbreviated application under § 314.94, and amendments, supplements, and resubmissions should be directed to the Office of Generic Drugs (HFD-600), Center for Drug Evaluation and Research, Food and Drug Administration, Metro Park North II, 7500 Standish Place, rm. 150, Rockville, MD 20855. This includes items sent by parcel post or overnight courier service. Correspondence not associated with an abbreviated application should be addressed specifically to the intended office or division and to the person as follows: Office of Generic Drugs, Center for Drug Evaluation and Research, Food and Drug Administration, Attn: [insert name of person], Metro Park North II, HFD-[insert mail code of office or division], 7500 Standish Place, rm. 150, Rockville, MD 20855. The mail code for the Office of Generic Drugs is HFD-600, the mail codes for the Divisions of Chemistry I, II, and III are HFD-620, HFD-640, and HFD-630, respectively, and the mail code for the Division of Bioequivalence is HFD-650. PART 600—BIOLOGICAL PRODUCTS: GENERAL 21. The authority citation for 21 CFR part 600 continues to read as follows: Authority: 21 U.S.C. 321, 351, 352, 353, 355, 360, 360i, 371, 374; 42 U.S.C. 216, 262, 263, 263a, 264, 300aa-25. 22. Section 600.3 is amended by adding new paragraphs

(ll)and

(mm)to read as follows: § 600.3 Definitions.

(ll)*Complete response letter* means a written communication to an applicant from FDA usually describing all of the deficiencies that the agency has identified in a biologics license application or supplement that must be satisfactorily addressed before it can be approved.

(mm)*Resubmission* means a submission by the biologics license applicant or supplement applicant of all materials needed to fully address all deficiencies identified in the complete response letter. A biologics license application or supplement for which FDA issued a complete response letter, but which was withdrawn before approval and later submitted again, is not a resubmission. PART 601—LICENSING 23. The authority citation for 21 CFR part 601 continues to read as follows: Authority: 15 U.S.C. 1451-1561; 21 U.S.C. 321, 351, 352, 353, 355, 356b, 360, 360c-360f, 360h-360j, 371, 374, 379e, 381; 42 U.S.C. 216, 241, 262, 263, 264; sec. 122, Pub. L. 105-115, 111 Stat. 2322 (21 U.S.C. 355 note). § 601.3 [Added] 24. Section 601.3 is added to subpart A to read as follows: § 601.3 Complete response letter to the applicant.

(a)*Complete response letter* . The Food and Drug Administration will send the biologics license applicant or supplement applicant a complete response letter if the agency determines that it will not approve the biologics license application or supplement in its present form.

(1)*Description of specific deficiencies* . A complete response letter will describe all of the deficiencies that the agency has identified in a biologics license application or supplement, except as stated in paragraph (a)(2) of this section.

(2)*Inadequate data* . If FDA determines, after a biologics license application or supplement is filed, that the data submitted are inadequate to support approval, the agency might issue a complete response letter without first conducting required inspections, testing submitted product lots, and/or reviewing proposed product labeling.

(3)*Recommendation of actions for approval* . When possible, a complete response letter will recommend actions that the applicant might take to place its biologics license application or supplement in condition for approval.

(b)*Applicant actions* . After receiving a complete response letter, the biologics license applicant or supplement applicant must take either of the following actions:

(1)*Resubmission* . Resubmit the application or supplement, addressing all deficiencies identified in the complete response letter.

(2)*Withdrawal* . Withdraw the application or supplement. A decision to withdraw the application or supplement is without prejudice to a subsequent submission.

(c)*Failure to take action* .

(1)FDA may consider a biologics license applicant or supplement applicant's failure to either resubmit or withdraw the application or supplement within 1 year after issuance of a complete response letter to be a request by the applicant to withdraw the application or supplement, unless the applicant has requested an extension of time in which to resubmit the application or supplement. FDA will grant any reasonable request for such an extension. FDA may consider an applicant's failure to resubmit the application or supplement within the extended time period or request an additional extension to be a request by the applicant to withdraw the application.

(2)If FDA considers an applicant's failure to take action in accordance with paragraph (c)(1) of this section to be a request to withdraw the application, the agency will notify the applicant in writing. The applicant will have 30 days from the date of the notification to explain why the application or supplement should not be withdrawn and to request an extension of time in which to resubmit the application or supplement. FDA will grant any reasonable request for an extension. If the applicant does not respond to the notification within 30 days, the application or supplement will be deemed to be withdrawn. Dated: June 26, 2008. Jeffrey Shuren, Associate Commissioner for Policy and Planning. [FR Doc. E8-15608 Filed 7-9-08; 8:45 am] BILLING CODE 4160-01-S DEPARTMENT OF JUSTICE Drug Enforcement Administration 21 CFR Part 1310 [Docket No. DEA-284F] RIN 1117-AB11 Elimination of Exemptions for Chemical Mixtures Containing the List I Chemicals Ephedrine and/or Pseudoephedrine AGENCY: Drug Enforcement Administration (DEA), Department of Justice. ACTION: Final rule. SUMMARY: The Drug Enforcement Administration

(DEA)is finalizing, without change, the Interim Rule with Request for Comment published in the **Federal Register** on July 25, 2007 (72 FR 40738). The Interim Rule removed the Controlled Substances Act

(CSA)exemptions for chemical mixtures containing ephedrine and/or pseudoephedrine with concentration limits at or below five percent. Upon the effective date of the Interim Rule, all ephedrine and pseudoephedrine chemical mixtures, regardless of concentration and form, became subject to the regulatory provisions of the CSA. DEA regulated the importation, exportation, manufacture, and distribution of these chemical mixtures by requiring persons who handle these chemical mixtures to register with DEA, maintain certain records common to business practice, and file certain reports, regarding these chemical mixtures. No comments to the Interim Rule were received. This Final Rule finalizes the Interim Rule without change. EFFECTIVE DATE: August 11, 2008. FOR FURTHER INFORMATION CONTACT: Christine A. Sannerud, PhD, Chief, Drug & Chemical Evaluation Section, Office of Diversion Control, Drug Enforcement Administration, Washington, DC 20537, telephone

(202)307-7183, fax

(202)353-1263, or e-mail *ode@dea.usdoj.gov.* SUPPLEMENTARY INFORMATION: Background On July 25, 2007 (72 FR 40738), the Drug Enforcement Administration

(DEA)published an Interim Rule with Request for Comment removing the Controlled Substances Act

(CSA)exemptions for chemical mixtures containing ephedrine and/or pseudoephedrine with concentration limits at or below five percent. Those chemical mixtures included dietary supplements containing the List I chemicals ephedrine or pseudoephedrine, which are regulated as chemical mixtures under the CSA. DEA had previously exempted these products from CSA regulatory control if the total concentration of the ephedrine and/or pseudoephedrine was at or below five percent, in an effort to reduce the regulatory burden on the dietary and nutritional supplement industry (68 FR 23195, May 1, 2003). However, on February 11, 2004, the Food and Drug Administration

(FDA)issued a Final Rule (69 FR 6787) declaring dietary supplements containing ephedrine alkaloids adulterated under the Federal Food, Drug, and Cosmetic Act (the FFD&C Act) because these dietary supplements present an unreasonable risk of illness or injury. Effective April 12, 2004, the FDA rule prohibited the sale of dietary supplements containing ephedrine alkaloids such as ephedra (also known as Ma Huang, sida cordifolia and pinellia). The effect of the FDA rule was to ban the lawful marketing of these products. DEA notes that the FDA ban addresses only the marketing of dietary supplements containing ephedrine alkaloids. The raw materials used to manufacture these dietary supplements are not restricted by the FDA ban. Accordingly, to control those materials, DEA needed to address the importation, exportation, manufacture, or distribution of chemical mixtures with concentration limits of ephedrine and/or pseudoephedrine at or below five percent. As there yet may be legitimate uses for chemical mixtures with concentration limits at or below five percent, the importation, exportation, manufacture, and distribution of these chemical mixtures (for purposes other than use in dietary supplements containing ephedrine alkaloids) are not prohibited by either FDA's ban regarding the marketing of such dietary supplements or by DEA law and regulations. Accordingly, as discussed in the Interim Rule (72 FR 40738, July 25, 2007), DEA removed the exempt status of chemical mixtures containing ephedrine and/or pseudoephedrine with concentration limits at or below five percent. DEA recognizes that ephedra materials containing ephedrine and/or pseudoephedrine are used legitimately by practitioners of Traditional Chinese Medicine. This rulemaking does not restrict the utilization of such material for such legitimate purposes. This rulemaking will simply require importers and suppliers of such material to comply with DEA recordkeeping, registration, quota and import/export requirements. Elimination of Exemption for Plant Material The Interim Rule also removed the exemption for DEA chemical mixture regulations for certain plant materials. Specifically, the ephedrine alkaloids, including, among others, ephedrine, pseudoephedrine, norephedrine, N-methylephedrine, norpseudoephedrine, N-methylpseudoephedrine, are chemical stimulants that occur naturally in some botanicals, but can be synthetically derived. The ingredient sources of the ephedrine alkaloids include raw botanicals (i.e., plants) and extracts from botanicals. Ma Huang, Ephedra, Chinese Ephedra, and epitonin are several names used for botanical ingredients, primarily from Ephedra sinica Stapf, Ephedra equisetina Bunge, Ephedra intermedia var. tibetica Stapf and Ephedra distachya Linne (the Ephedras), that are sources of ephedrine alkaloids (including ephedrine and pseudoephedrine.) Other plant sources that contain such ephedrine alkaloids include Sida cordifolia L. and Pinellia ternata (Thunb.) Makino. Common names that have been used for the various plants that contain ephedrine alkaloids include sea grape, yellow horse, joint fir, popotillo, and country mallow. As DEA discussed in its Interim Rule, although the proportions of the various ephedrine alkaloids in botanical species vary from one species to another, in most species used commercially, ephedrine is typically the predominant alkaloid in the raw material. In addition to chemical mixtures from synthetic sources, the Interim Rule removed the exemption for those plant sources that contain the ephedrine alkaloids, ephedrine and/or pseudoephedrine. The names desert herb, Squaw tea, Brigham tea, and Mormon tea refer to North American species of ephedra that do not contain ephedrine alkaloids but have been misused to identify ephedrine alkaloid containing ingredients. The Interim Rule did not pertain to species of ephedra that do not contain ephedrine and/or pseudoephedrine. Combat Methamphetamine Epidemic Act of 2005 On March 9, 2006, the President signed the Combat Methamphetamine Epidemic Act of 2005 (CMEA), which is Title VII of the USA PATRIOT Improvement and Reauthorization Act of 2005. The CMEA mandates that DEA limit the domestic production and importation of materials containing ephedrine and pseudoephedrine (including ephedra) to quantities necessary for medical, scientific and other legitimate purposes (21 U.S.C. 826 and 952(a)(1) as amended). As DEA discussed extensively in the Interim Rule, DEA is concerned about the illicit use of ephedra type material in the clandestine production of methamphetamine. While the legitimate market for dietary supplements containing such material has been cut by FDA's recent action, DEA observed an increasing number of requests for importation of below-five percent ephedrine and/or pseudoephedrine material. While there may be legitimate uses for these chemical mixtures, in light of FDA's action, DEA had become increasingly concerned about the intended purpose of such material, especially given that such material has been seized in clandestine drug laboratories. Action Taken by the Interim Rule The Interim Rule published by DEA July 25, 2007 (72 FR 40738) removed the exemption for chemical mixtures having a total concentration of ephedrine and/or pseudoephedrine of five percent (or less). By removing these exemptions, all chemical mixtures containing ephedrine and/or pseudoephedrine became regulated chemical mixtures subject to control under the CSA, including registration, recordkeeping, reporting, and security controls. The rule also removed the exemption for the category of products consisting of harvested plant material meeting the definition of chemical mixture, even when the plant material is unaltered from its natural state, (i.e., ephedra) that contains ephedrine, N-methylephedrine, N-methylpseudoephedrine, norpseudoephedrine, phenylpropanolamine, and/or pseudoephedrine. The Interim Rule did not prohibit the importation, exportation, manufacture, or distribution of chemical mixtures containing ephedrine or pseudoephedrine in concentrations less than or equal to five percent. Rather, DEA regulated the importation, exportation, manufacture, and distribution of these chemical mixtures by requiring persons who handle these chemical mixtures to register with DEA, maintain certain records common to business practice, and file certain reports, regarding these chemical mixtures. Chemical mixtures containing the List I chemicals ephedrine and pseudoephedrine are still available for use. Comments Received DEA did not receive any comments to its Interim Rule with Request for Comment (72 FR 40738, July 25, 2007) eliminating the exemption for chemical mixtures with concentration limits of the List I chemicals ephedrine and/or pseudoephedrine of less than or equal to five percent. Therefore, DEA is hereby finalizing that Interim Rule without change. Provisions Specifically Applying to Regulated Chemical Mixtures Containing These List I Chemicals Effective August 24, 2007, any chemical mixture that contains ephedrine or pseudoephedrine is treated as a List I chemical. Transactions that meet or exceed the cumulative monthly threshold for the listed chemical, set forth at 21 CFR 1310.04, became regulated transactions. Persons interested in handling a regulated mixture must comply with the following: *Registration.* Any person who manufactures, distributes, imports or exports a regulated mixture, or proposes to engage in such activities, with respect to a regulated mixture containing a List I chemical, shall obtain a registration pursuant to the CSA (21 U.S.C. 822). Regulations describing registration for List I chemical handlers are set forth in 21 CFR part 1309. Separate registration is required for manufacture, distribution, importing, and exporting. A separate registration is required for each principal place of business at one general physical location where List I chemicals are manufactured, distributed, imported, or exported by a person (21 CFR 1309.23). Effective August 24, 2007, any person manufacturing, distributing, importing, or exporting any amount of a regulated mixture became subject to the registration requirement under the CSA. Recognizing that it is not possible for DEA to immediately issue registrations to all applicants, DEA established in 21 CFR 1310.09 a temporary exemption from the registration requirement for persons desiring to engage in activities with regulated mixtures, provided that DEA received a properly completed application for registration on or before August 24, 2007. The temporary exemption for such persons will remain in effect until DEA takes final action on their application for registration. The temporary exemption applies solely to the registration requirement; all other chemical control requirements, including recordkeeping and reporting, were effective on August 24, 2007. Additionally, the temporary exemption does not suspend applicable federal criminal laws relating to the regulated mixture, nor does it supersede state or local laws or regulations. All handlers of a regulated mixture must comply with applicable state and local requirements in addition to the CSA regulatory controls. *Records and Reports.* The CSA (21 U.S.C. 830) requires certain records to be kept and reports to be made involving listed chemicals. Regulations describing recordkeeping and reporting requirements are set forth in 21 CFR part 1310. A record must be made and maintained for two years after the date of a regulated transaction involving a List I chemical. Only a distribution, receipt, sale, importation, exportation, brokerage, or trade of a regulated mixture above the established threshold is a regulated transaction (21 CFR 1300.02(b)(28)). Each regulated bulk manufacturer of a regulated mixture shall submit manufacturing, inventory, and use data on an annual basis (21 CFR 1310.05(d)). Bulk manufacturers producing the mixture solely for internal consumption, *e.g.* formulating a nonregulated mixture, are not required to submit this information. Existing standard industry reports containing the required information are acceptable, provided the information is readily retrievable from the report. *Further, 21 CFR 1310.05(a) requires that each regulated person shall report to DEA:*

(1)Any regulated transaction involving an extraordinary quantity of a listed chemical, an uncommon method of payment or delivery, or any other circumstance that the regulated person believes may indicate that the listed chemical will be used in violation of the CSA;

(2)any proposed regulated transaction with a person whose description or other identifying characteristics the Administration has previously furnished to the regulated person;

(3)any unusual or excessive loss or disappearance of a listed chemical under the control of the regulated person, and any in-transit loss in which the regulated person is the supplier; and

(4)any domestic regulated transaction in a tableting or encapsulating machine. 21 CFR 1310.03(c) requires that regulated persons who engage in a transaction with a nonregulated person or who engage in an export transaction that involves ephedrine or pseudoephedrine, including drug products containing these chemicals, and uses or attempts to use the Postal Service or any private or commercial carrier must file monthly reports of each such transaction. *Imports/Exports.* All imports/exports and brokered transactions of regulated mixtures containing ephedrine and/or pseudoephedrine shall comply with the CSA (21 U.S.C. 952, 957 and 971). Regulations for importation and exportation of List I chemicals are described in 21 CFR part 1313. Separate registration is necessary for each activity (21 CFR 1309.22). *Security.* Regulated persons must provide effective controls and procedures to guard against theft and diversion of regulated mixtures through physical means or human or electronic monitoring. Regulated persons must store the regulated mixtures in containers sealed so that tampering will be evident; if the mixture cannot be stored in a sealed container, access to the chemicals must be controlled (21 CFR 1309.71). *Administrative Inspection.* Places, including factories, warehouses, or other establishments and conveyances, where regulated persons may lawfully hold, manufacture, or distribute, dispense, administer, or otherwise dispose of a regulated mixture or where records relating to those activities are maintained, are controlled premises as defined in 21 CFR 1316.02(c). The CSA (21 U.S.C. 880) allows for administrative inspections of these controlled premises as provided in 21 CFR part 1316 subpart A. Regulatory Certifications Regulatory Flexibility Act The Deputy Administrator hereby certifies that this rulemaking has been drafted in accordance with the Regulatory Flexibility Act (5 U.S.C. 601-612) and by approving it certifies that this rule will not have a significant economic impact on a substantial number of small entities. This rule finalizes, without change, an Interim Rule with Request for Comment eliminating the exemption for chemical mixtures containing ephedrine and/or pseudoephedrine with concentration limits at or below five percent. DEA did not receive any comments to that Interim Rule. Executive Order 12866 The Deputy Administrator certifies that this rulemaking has been drafted in accordance with the principles in Executive Order 12866. It has been determined that this rule is not a “significant regulatory action” under Executive Order 12866, section 3(f), Regulatory Planning and Review, and accordingly this rule has not been reviewed by the Office of Management and Budget (OMB). This rule finalizes, without change, an Interim Rule eliminating the exemption for chemical mixtures containing ephedrine or pseudoephedrine with concentration limits at or below five percent. DEA did not receive any comments to its Interim Rule. Executive Order 12988 This regulation meets the applicable standards set forth in Sections 3(a) and 3(b)(2) of Executive Order 12988. Executive Order 13132 This rulemaking does not preempt or modify any provision of state law; nor does it impose enforcement responsibilities on any state; nor does it diminish the power of any state to enforce its own laws. Accordingly, this rulemaking does not have federalism implications warranting the application of Executive Order 13132. Unfunded Mandates Reform Act of 1995 This rule will not result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $120,000,000 or more (adjusted for inflation) in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995. Paperwork Reduction Act With publication of the Interim Rule (72 FR 40738, July 25, 2007), DEA eliminated the current exemption for chemical mixtures with concentration limits of the List I chemicals ephedrine and/or pseudoephedrine of less than or equal to five percent. This means that all chemical mixtures containing the List I chemicals ephedrine and/or pseudoephedrine are regulated chemical mixtures, regardless of concentration limits. Due to this change in the regulations, all persons who import, export, manufacture, or distribute chemical mixtures containing these two List I chemicals were required to register with DEA. They were also required to file reports regarding certain transactions, should certain criteria be met. As the impact of this regulation was minimal, DEA made minor revisions to the OMB information collections entitled “Application for Registration Under Domestic Chemical Diversion Control Act of 1993 and Renewal Application for Registration under Domestic Chemical Diversion Control Act of 1993” (OMB control number 1117-0031, DEA Form 510), “Report of Mail Order Transactions” (OMB control number 1117-0033), and “Import/Export Declaration for List I and List II Chemicals” (OMB control number 1117-0023). DEA did not receive any comments regarding the number of persons who may be affected by this regulation. With publication of the Interim Rule, DEA received approval from the OMB to revise these information collections as discussed above. Congressional Review Act This Rule is not a major rule as defined by Section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996 (Congressional Review Act). This Rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets. List of Subjects In 21 CFR Part 1310 Drug traffic control, Exports, Imports, List I and List II chemicals, Reporting and recordkeeping requirements. Adoption as Final Rule The Interim Rule amending part 1310 of Title 21 of the Code of Federal Regulations, which published in the **Federal Register** on July 25, 2007, at 72 FR 40738, is hereby adopted as a Final Rule without change. Dated: June 27, 2008. Michele M. Leonhart, Deputy Administrator. [FR Doc. E8-15704 Filed 7-9-08; 8:45 am] BILLING CODE 4410-09-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9413] RIN 1545-BD19 Escrow Accounts, Trusts, and Other Funds Used During Deferred Exchanges of Like-Kind Property AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final regulations. SUMMARY: This document contains final regulations under section 468B of the Internal Revenue Code (Code). The regulations provide rules regarding the taxation of income earned on escrow accounts, trusts, and other funds used during deferred like-kind exchanges of property, and final regulations under section 7872 regarding below-market loans to facilitators of these exchanges. The regulations affect taxpayers that engage in deferred like-kind exchanges and escrow holders, trustees, qualified intermediaries, and others that hold funds during deferred like-kind exchanges. DATES: *Effective Date:* These regulations are effective *July 10, 2008* . *Applicability Dates:* For dates of applicability, see §§ 1.468B-6(f), 1.7872-5(d), and 1.7872-16(g). FOR FURTHER INFORMATION CONTACT: Concerning the final regulations under section 468B, Jeffrey T. Rodrick,

(202)622-4930; concerning the final regulations under section 7872, David B. Silber,

(202)622-3930 (not toll-free numbers). SUPPLEMENTARY INFORMATION: Background This document contains amendments to the Income Tax Regulations (26 CFR part 1) regarding the taxation of qualified escrow accounts, qualified trusts, and other escrow accounts, trusts, or funds used during section 1031 deferred exchanges of like-kind property, and of below-market loans to facilitators of these exchanges, under sections 468B(g) and 7872. On February 7, 2006, a partial withdrawal of notice of proposed rulemaking, a notice of proposed rulemaking, and notice of public hearing were published in the **Federal Register** (REG-209619-93 and REG-113365-04, 71 FR 6231). A public hearing was held on June 6, 2006. A revised Initial Regulatory Flexibility Analysis

(IRFA)for REG-113365-04 was published in the **Federal Register** on March 20, 2007 (72 FR 13055). Written and electronic comments responding to the notice of proposed rulemaking and the revised IRFA were received. After consideration of all the comments, the proposed regulations are adopted as amended by this Treasury decision. The comments and amendments are discussed below. Explanation of Provisions and Summary of Comments 1. Definitions The proposed regulations define *exchange funds* as relinquished property, cash, or cash equivalent that secures an obligation of the transferee to transfer replacement property, or proceeds from a transfer of relinquished property. A commentator suggested that the definition of exchange funds as relinquished property, cash, or cash equivalent that secures an obligation of the transferee to transfer replacement property should be deleted as confusing and unnecessary, because it is irrelevant whether amounts held in a qualified account or fund secure or are intended to secure the obligations of the transferee. The final regulations do not adopt this comment. This definition of exchange funds is necessary because it encompasses transactions contemplated in § 1.1031(k)-1(g)(3) in which, for example, a transferee of the relinquished property pays a deposit before the property is transferred, or a transferee of the relinquished property agrees to transfer replacement property and deposits funds to secure the obligations of the transferee (see § 1.468B-6(e), *Example 1* ). The definition is an alternative to the definition of exchange funds as proceeds from a transfer of relinquished property, and does not create a requirement that exchange funds must secure the obligations of a transferee. The proposed regulations define *transactional expenses* as the usual and customary expenses paid or incurred in connection with a deferred exchange, including the cost of land surveys, appraisals, title examinations, termite inspections, transfer taxes and recording fees. A commentator suggested that transactional expenses should be defined by reference to § 1.1031(k)-1(g)(7), which provides that “transactional items” are those items that relate to the disposition of the relinquished property or to the acquisition of replacement property and appear under local standards in the typical closing statements as the responsibility of a buyer or seller, such as commissions, prorated taxes, recording or transfer taxes, and title company fees. Therefore, for consistency, the final regulations provide that *transactional expenses* means transactional items described in § 1.1031(k)-1(g)(7)(ii). The final regulations retain special rules to determine whether fees paid to an exchange facilitator are transactional expenses. 2. Taxable Year of Receipt of Income The proposed regulations omit an example in proposed regulations issued in 1999 that concluded that interest on a taxpayer's exchange funds is taxable in the year earned or credited rather than in a later year when the interest is paid. A commentator requested that the final regulations include a similar example. An example in the final regulations has been revised to illustrate this result. Commentators suggested that the example in § 1.7872-16 of the proposed regulations conflicts with the constructive receipt rules of § 1.1031(k)-1(g)(6) because it posits that amounts are paid as compensation to the exchange facilitator, and are retransferred as imputed interest to the taxpayer, before the end of the exchange period. The final regulations do not adopt this comment. The example illustrates the mechanics of section 7872 in imputing interest and treating a corresponding amount as deemed compensation in the case of a compensation-related loan. This treatment is not inconsistent with § 1.1031(k)-1(g), which merely provides rules of administrative convenience under which, if certain requirements are satisfied, a taxpayer is deemed not to actually or constructively receive exchange funds or to have an agency relationship with an exchange facilitator solely for purposes of obtaining nonrecognition treatment under section 1031. For other taxation purposes, such as determining the timing for including earnings or imputed amounts in income, general tax principles apply, including timing principles under sections 7872 and 451. See § 1.1031(k)-1(n). 3. Earnings Attributable to Exchange Funds The proposed regulations provide that exchange funds are treated, generally, as loaned by a taxpayer to an exchange facilitator, and the exchange facilitator takes into account all items of income, deduction, and credit. If, however, the escrow agreement, trust agreement, or exchange agreement specifies that all the earnings attributable to exchange funds are payable to the taxpayer, the exchange funds are not treated as loaned from the taxpayer to the exchange facilitator, and the taxpayer takes into account all items of income, deduction, and credit attributable to the exchange funds. If an exchange facilitator commingles taxpayers' exchange funds (whether or not a taxpayer's funds are held in a separate account) all earnings attributable to a taxpayer's exchange funds are treated as paid to the taxpayer if all of the earnings of the commingled funds, allocable on a pro rata basis to a taxpayer, are paid to the taxpayer. a. Separately Identified Accounts Commentators noted that many exchange facilitators have a corporate relationship with the institution in which the exchange facilitator deposits exchange funds on behalf of taxpayers and questioned whether, in addition to the stated earnings of the account in which the exchange funds are deposited, a portion of the earnings the depository institution receives in the ordinary course of investing customer deposits as part of its trade or business operations should be treated as earnings attributable to exchange funds if the depository institution is part of the same corporate group as the exchange facilitator. One group of commentators noted that it is common business practice for a depository institution in the same corporate group as an exchange facilitator to credit a portion of its revenues to the exchange facilitator based on the amount of exchange funds deposited by the exchange facilitator with the depository institution, and suggested that these types of internal credits should be treated as earnings attributable to exchange funds. However, other commentators argued that these internal credits are similar to payments a depository institution may make to an unrelated exchange facilitator for depositing funds with the depository institution and therefore, should not be treated as earnings attributable to exchange funds solely because the exchange facilitator is related to the depository institution. Some commentators noted that an exchange facilitator that maintains a master account that includes individual sub-accounts in taxpayers' names and taxpayer identification numbers

(TIN)may earn additional interest in excess of the interest paid on the sub-accounts, based on the amounts the exchange facilitator deposits. To clarify what constitutes earnings attributable to the exchange funds, one commentator recommended that the final regulations provide that if exchange funds are held in a segregated account for the benefit of the taxpayer, only the earnings on the segregated account will be considered earnings attributable to the exchange funds. The commentator suggested that this rule would provide a simple, clear definition. In response to these comments, the final regulations provide that, if exchange funds are held with a depository institution in an account (including a sub-account) that is separately identified with a taxpayer's name and TIN, only the earnings on the account are treated as earnings attributable to the exchange funds. The final regulations provide examples to illustrate the application of this rule to exchange facilitators related to depository institutions and to master/sub-account arrangements. b. Commingled Accounts A commentator opined that the proposed rules for allocating earnings in a commingled account are confusing because the rules apply “whether or not the taxpayer's funds are in a segregated account.” The commentator stated that, as a result, it is unclear whether all funds an exchange facilitator deposits in a specific depository institution constitute one commingled account, even if the funds are maintained in separate accounts and derive from financial transactions unrelated to exchange funds. The final regulations clarify that separate accounts maintained in the names and TINs of unrelated taxpayers do not constitute a commingled account. c. Administrative Fees Commentators suggested that fees paid by a bank to a related exchange facilitator should be treated as earnings attributable to exchange funds. Other commentators stated that these fees are compensation for administrative services provided and are not earnings attributable to the funds. The final regulations do not treat these fees as earnings attributable to exchange funds. Fees for administrative services provided by exchange facilitators to depository institutions represent compensation for services provided by the exchange facilitator as opposed to earnings on the exchange funds. 4. Loan Treatment a. Characterization as Loan Commentators opined that exchange funds should not be treated as loaned from the taxpayer to the exchange facilitator because an exchange facilitator's relationship with the taxpayer is primarily that of a fiduciary. A commentator suggested that exchange facilitators are similar to mortgage or payroll processing servicers that maintain interest-bearing escrow accounts. The commentator also argued that the receipt of exchange funds by an exchange facilitator is not a compensation-related loan because the amount of interest required to be imputed would be higher for a greater amount of funds or longer exchange period, although the exchange facilitator would provide no additional services. Another commentator noted that other transactions in which payment is made before services are provided, such as pre-payments to contractors, are not treated as loans. The commentator asserted that the transaction between an exchange facilitator and its customer is an installment sale rather than a loan. Other commentators argued that treating exchange funds as loaned is inconsistent with the regulations under section 1031, which generally require that a taxpayer must not have any benefit of the exchange funds during the exchange period to avoid actual or constructive receipt. Other commentators agreed that an exchange facilitator's use of exchange funds properly may be characterized as a compensation-related loan. The final regulations retain the general rule that money held by an exchange facilitator in a deferred exchange is treated as loaned by the taxpayer to the exchange facilitator. When an exchange facilitator benefits from the use of the taxpayer's exchange funds, characterizing the exchange funds as having been loaned from the taxpayer to the exchange facilitator is consistent with the substance of the transaction and with the definition of loan in the legislative history of section 7872. See H.R. Rep. 98-861 at 1018 (1984). b. Application of Section 7872 Under the proposed regulations, an exchange facilitator loan must be tested under section 7872 to determine whether it is a below-market loan for purposes of that section. The proposed regulations further provide that a taxpayer must use a special 182-day applicable Federal rate

(AFR)to test whether an exchange facilitator loan is a below-market loan. If an exchange facilitator loan is a below-market loan, the loan is treated as a compensation-related loan that is not exempt from section 7872 as a loan without significant tax effect. Commentators opined that these transactions should not be subject to section 7872 for reasons including the lack of a significant tax effect, exceptions provided under sections 483 and 1274 for short-term loans, the general exemption from section 7872 for certain accounts or withdrawable shares with a bank, the costs of complying with section 7872, and the lack of a tax avoidance purpose. One suggestion submitted by commentators to mitigate the impact of section 7872 on smaller transactions was the adoption of a rule that would exempt certain exchange facilitator loans from section 7872. The final regulations include an exemption from section 7872 for exchange facilitator loans of $2 million or less while preserving the application of section 7872 for larger transactions. This exemption amount may be increased in future published guidance. The exemption is limited to loans that are 6 months or less in duration. c. Special AFR One group of commentators believed that the special AFR in the proposed regulations is unreasonably high and suggested a more appropriate test rate would be a demand deposit rate. Other commentators suggested that the special AFR rate in the proposed regulations was appropriate. For purposes of section 7872, the test rate allowed under section 1274(d)(1)(D) must be calculated by reference to United States Treasury obligations, not demand deposit rates. See footnote 5 of H.R. Conf. Rep. No. 99-250 at 15 (1985). However, in response to these comments, the final regulations use a 91-day rate, which is the investment rate on a 13-week (generally, 91-day) Treasury bill determined on the issue date that is the same as the date the exchange facilitator loan is made or, if the two dates are not the same, the issue date that most closely precedes the date that the exchange facilitator loan is made. This rate is based on semi-annual compounding and may be found at *http://www.treasurydirect.gov/RI/OFBills.* Also, in recognition that the short-term AFR may be lower than the 91-day rate, the final regulations provide that taxpayers must apply the lower of the 91-day rate or the short-term AFR when testing or imputing payments on an exchange facilitator loan under section 7872. 5. Effective/Applicability Date Commentators requested that the final regulations apply to exchange agreements entered into, rather than transfers of property made, after the publication of final regulations. Alternatively, commentators requested that the applicability of the final regulations be deferred to allow exchange facilitators sufficient time to make changes to accounting, control, and reporting systems and to revise exchange agreements to comply with the final regulations. In response to these comments, the final regulations apply to transfers of relinquished property made, and to exchange facilitator loans issued, on or after October 8, 2008. For transfers of relinquished property made by taxpayers after August 16, 1986, but before October 8, 2008, the IRS will not challenge a reasonable, consistently applied method of taxation for earnings attributable to exchange funds. 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. A final regulatory flexibility analysis has been prepared for this final regulation under 5 U.S.C. 604. The analysis is set forth below under the heading “Final Regulatory Flexibility Analysis.” Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking that preceded these final regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Final Regulatory Flexibility Analysis Succinct Statement of the Need for, and Objectives of, the Final Regulations These final regulations are issued under the authority of sections 7805, 468B(g), and 7872. Section 468B(g) provides that nothing in any provision of law shall be construed as providing that an escrow account, settlement fund, or similar fund is not subject to current income tax and that the Secretary shall prescribe regulations providing for the taxation of such accounts or funds whether as a grantor trust or otherwise. The final regulations provide that exchange funds are treated, generally, as loaned by a taxpayer to an exchange facilitator, and the exchange facilitator takes into account all items of income, deduction, and credit. If, however, the escrow agreement, trust agreement, or exchange agreement specifies that all the earnings attributable to exchange funds are payable to the taxpayer, the exchange funds are not treated as loaned from the taxpayer to the exchange facilitator, and the taxpayer takes into account all items of income, deduction, and credit attributable to the exchange funds. The final regulations are intended to provide greater certainty, enhance administrability, and ensure consistent treatment of taxpayers. The final regulations contain amendments to ease the economic impact of the final regulations on small businesses. Summary of Significant Issues Raised by Public Comments in Response to the Initial Regulatory Flexibility Analysis, Assessment of Issues, and Statement of Changes Made to the Proposed Regulations as a Result of Comments a. Administrative Burden Resulting From Loan Characterization Under the final regulations, if exchange funds are treated as loaned by the taxpayer to an exchange facilitator, interest generally is imputed to the taxpayer under section 7872 unless the exchange facilitator pays sufficient interest. If a loan between the taxpayer and the exchange facilitator does not provide for sufficient interest and the loan is not otherwise exempt from section 7872, interest income is imputed to the taxpayer. Therefore, exchange facilitators must keep records of the amount of income paid to a taxpayer and may be required to report the income on Forms 1099. The revised IRFA estimated that most small businesses subject to the proposed regulations currently maintain records of the amount of income paid to the taxpayer and report the payments on Forms 1099. The revised IRFA concluded that the proposed regulations should not increase significantly the compliance burden associated with keeping records and reporting income paid to the taxpayer, based on the expectation that the proposed regulations may have the effect of increasing the amount exchange facilitators report, but not result in a significant increase in the number of forms generated. The revised IRFA requested additional comments to assist in quantifying any additional recordkeeping burdens and accounting costs that may result. A commentator responded that the proposed regulations impose new and different reporting requirements than those that currently apply to qualified intermediaries

(QI)because QIs must determine if the regulations apply to a particular transaction and may be required to report imputed interest. The commentator provided a study (updated in a follow-up submission) that concludes that the incremental workload to comply with the proposed regulations is substantial and the software needed to comply with the recordkeeping requirements is not available at a cost affordable to many small businesses. The study offers suggestions to mitigate these effects that include providing an exception to section 7872 for certain transactions, revising the special AFR, and including a transition period. The final regulations incorporate all of these suggestions. The study also suggested that the average daily balance calculations required under the proposed regulations create substantial administrative burdens and should be deleted. The final regulations do not adopt this comment. The final regulations do not require average daily balance calculations, but provide an example utilizing an average daily balance calculation as only one acceptable method to determine the earnings of a commingled account that are attributable to a taxpayer's exchange funds. No other comments were received quantifying a compliance burden resulting from the proposed regulations. A commentator advised that the amount of additional time or expense that would result from the application of the proposed regulations could not be quantified yet. However, commentators requested that the applicability of the final regulations be delayed to allow exchange facilitators sufficient time to make required changes to accounting, control, and reporting systems and to revise exchange agreements. In response to these comments, the final regulations apply to transfers of relinquished property made, and to exchange facilitator loans issued, on or after October 8, 2008. b. Economic Impact of Loan Characterization Commentators on the proposed regulations asserted that the loan characterization rules will cause a large number of small businesses to suffer a substantial revenue loss and to fail or reduce their workforces. They claimed that small business QIs would be disproportionately affected because these QIs predominantly apply a business model that would place them at a disadvantage under the proposed regulations. Commentators stated that if businesses are required to impute interest on exchange funds, taxpayers will demand that this interest be paid to them. To compensate for this loss of revenue, these commentators claim that small businesses will be required to change their business practices to pay all income to the taxpayer and to charge higher fees, while large, bank-affiliated QIs generally will be unaffected. The revised IRFA requested specific comments to assist in quantifying the number of businesses that would change their business model as a result of the proposed regulations and the effect a change in business model would have on revenues or profits. No comments quantifying this effect were received. The revised IRFA also requested specific comments on the appropriateness and nature of a rule that would reduce the economic impact of the regulations on small businesses by exempting certain exchange transactions most likely to be engaged in by small businesses from loan treatment. For this purpose, the revised IRFA requested information on the average duration of exchange transactions and the average dollar amount of exchange funds. A commentator responded that in its QI business 76 percent of exchange transactions closed within 60 days and 80 percent of exchange transactions involved less than $250,000 of exchange funds. This commentator advocated rules that would exempt from section 7872 transactions that either involved exchange funds of less than $250,000 or remained open for less than 60 days. Another commentator cited the minimal revenue impact of allowing interest retained by a QI to escape income inclusion to the taxpayer as a reason supporting exempting certain deferred like-kind exchange transactions. Because compensation paid to a QI must be capitalized as an acquisition cost of the replacement property, the commentator asserted that there is only a timing mismatch for the taxpayer if current exclusion is not allowed, and that given the relatively short time period during which interest accrues in typical section 1031 transactions, any revenue impact of the proposed regulations would be outweighed by the increased compliance burden on taxpayers. This commentator suggested that two separate rules, one which exempts transactions of a certain amount ($1 million) and another which exempts transactions of short duration (less than 90 days), are necessary because the available data suggests that there is no correlation between the size of the deposited exchange funds and the length of time the funds stay on deposit. This commentator also requested that any exemption amounts be adjusted for inflation. In response to these comments, the final regulations provide an exemption from section 7872 for exchange transactions in which the amount of exchange funds treated as loaned does not exceed $2 million and the funds are held for 6 months or less. This exemption amount may be increased in future published guidance. Based upon comments received the $2 million amount is expected to exempt from the application of section 7872 most deferred exchange transactions handled by small business exchange facilitators. c. Special AFR The proposed regulations provide a special AFR, equal to the investment rate on a 182-day Treasury bill, to test whether an exchange facilitator loan pays sufficient interest as required by section 7872. The special AFR was expected to result in fewer transactions requiring the imputation of interest to taxpayers than the short-term AFR, thus reducing the economic impact on small businesses. However, comments on the proposed regulations claimed that the special AFR is unrealistically high and inappropriate for these transactions. In order to determine an appropriate rate for testing exchange facilitator loans for sufficient interest, the revised IRFA requested specific comments identifying the rate of return typically earned by small business QIs on exchange funds and the interest rate QIs typically pay to taxpayers, and solicited suggestions for an appropriate rate. A commentator responded that the rate of return earned by a QI will vary depending on the total amount of funds the QI aggregates, the market in which the QI operates, the QI's reputation and relationship with a depository institution, and the QI's choice of investment vehicle. Thus, the commentator advised that it is difficult to ascertain the rate of return earned by a small business QI on exchange funds. The commentator stated that quantifying the interest rate that QIs typically pay to taxpayers likewise is difficult because many factors influence it. Another commentator responding to the revised IRFA argued that the 182-day rate is inappropriate to test whether exchange facilitator loans bear sufficient interest under section 7872 because exchange funds held by a depository institution are demand deposits and rarely are held for 180 days. This commentator identified three potential alternative rates to the 182-day rate for a special AFR:

(1)A rate based on national demand deposit rates;

(2)a rate that is 10 percent of an established rate such as the Federal Funds rate; and

(3)an average of the minimum demand deposit savings rates offered by several banks in a QI's home office region. Although this commentator recognized the administrative burdens of publishing one of these alternative rates, the commentator believed these alternatives more readily reflected the economic reality of exchange fund transactions than the 182-day rate. In response to these comments and comments on the proposed regulations, in lieu of the 182-day rate, the final regulations provide a special AFR that is the investment rate on a 13-week (generally, 91-day) Treasury bill. In addition, because the short-term AFR may be lower than the 91-day rate, the final regulations provide that taxpayers must apply the lower of the 91-day rate or the short-term AFR when testing for sufficient interest under section 7872. d. Earnings Attributable to Exchange Funds The proposed regulations provide that a taxpayer's exchange funds are not treated as loaned if all the earnings attributable to the exchange funds are paid to the taxpayer but do not define the term “earnings attributable to the exchange funds.” Commentators have asserted that the lack of specificity results in disparate treatment of bank-affiliated QIs and independent QIs because of their different business models and places the independent QIs, many of which are small businesses, at an economic disadvantage. Commentators advised that a portion of the earnings of a depository institution may be credited to an exchange facilitator based on the total amount of exchange funds the exchange facilitator deposits when the exchange facilitator and the depository institution (generally large businesses) are part of the same corporate group. The commentators opined that the proposed regulations do not, but should, treat this credit as earnings attributable to the exchange funds on which it is calculated. Another commentator noted that depository institutions also may pay fees to unrelated exchange facilitators, including small businesses, for depositing exchange funds. Furthermore, other commentators described a business model used by some independent QIs, including some small businesses, in which a QI deposits the exchange funds of multiple taxpayers in sub-accounts under a master account that earns interest in addition to the interest credited to the sub-accounts. The amount of the additional interest credited to the QI is based on the total amount of exchange funds the QI deposits. Commentators have expressed concern that the proposed regulations treat this additional interest as earnings attributable to the individual taxpayers' exchange funds, but do not similarly treat earnings credited to a related QI based on total amount deposited. The commentators claim that as a result of this treatment independent QIs will be forced to pay the additional interest that is attributable to exchange funds to taxpayers to avoid loan treatment, and thus will be required to correspondingly raise fees to compensate for lost profits. They assert that because bank-affiliated QIs earn profits by means of credits that are not attributed to exchange funds, bank-affiliated QIs will not be required to raise fees, creating an economic disparity between similarly situated bank-affiliated QIs and independent QIs. In response to these comments, the final regulations provide a definitive test for determining earnings attributable to a taxpayer's exchange funds when an exchange facilitator holds all of the taxpayer's exchange funds in a separately identified account (or sub-account) under that taxpayer's name and TIN. Under this rule, the earnings attributable to the taxpayer's exchange funds include only the earnings on the separately identified account. This rule equalizes the treatment of independent, small business exchange facilitators and large exchange facilitators by providing that neither earnings of a depository institution that are credited to a related exchange facilitator nor the additional interest paid in connection with a master account are treated as earnings attributable to exchange funds when a taxpayer's exchange funds are held in a separately identified account (or sub-account). Description and Estimate of the Number of Small Businesses to Which the Final Regulations Will Apply The final regulations affect exchange facilitators that hold exchange funds for taxpayers engaging in deferred exchanges of like-kind property. The revised IRFA concludes that the applicable size standard for determining what constitutes a small business for purposes of the proposed regulations is $2 million in annual gross receipts, the SBA's definition of a small business for North American Industry Classification System (NAICS) code 531390, and estimates that there are approximately 325 businesses (mostly QIs) that are full-time exchange facilitators. The revised IRFA requested additional information on the number of small businesses engaged in the QI industry, and requested specific comments from QIs engaged exclusively in that business indicating whether their annual gross receipts are $2 million or less, or more than $2 million. A commentator advised that the number of QIs is very large, but many QIs do not identify themselves as such or engage in that business full-time. The commentator reported that the annual gross receipts of its QI business are well below $2 million. Another commentator opined that the information requested could not be quantified. No other comments were received on the number of small businesses in the industry or the general appropriateness of the size standard. Therefore, the estimate of approximately 325 businesses that are full-time exchange facilitators, the applicable size standard for determining what constitutes a small business with respect to these regulations of $2 million in annual gross receipts, and the conclusion that a significant portion of the QI industry consists of small businesses under this standard, are unchanged. Description of Compliance Requirements and Estimate of the Classes of Small Businesses That Will Be Subject to the Compliance Requirements As discussed, under current law exchange facilitators must keep records of the amount of income paid to taxpayers and may be required to report the income on Forms 1099. The final regulations provide that if the exchange funds are treated as loaned from the taxpayer to the QI and the loan is a below-market loan that does not qualify for an exemption from section 7872, income is deemed transferred to the exchange facilitator as compensation and retransferred to the taxpayer as interest. The exchange facilitator has income from the imputed compensation and an offsetting deduction for the interest deemed paid to the taxpayer. The final regulations provide an exemption from section 7872 for exchange facilitator loans that do not exceed $2 million and provide that this exemption amount may be increased in future published guidance. Based on available data, this exemption from section 7872 is expected to apply to the majority of exchange transactions engaged in by small business exchange facilitators. Additionally, the final regulations revise the special AFR that determines whether a loan pays sufficient interest, which should reduce the number of transactions in which interest is imputed. Therefore, for most small businesses the final regulations are not expected to increase significantly the compliance burden associated with keeping records and reporting income paid to the taxpayer. Actions To Minimize the Significant Economic Impact on Small Businesses and Reasons for Selecting Alternatives Reflected in the Final Regulations and for Rejecting Other Significant Alternatives The final regulations provide a reasonable balance between the statutory requirements of sections 468B and 7872, the economic impact of a strict application of those provisions, and the need to provide clear and administrable rules. The inclusion of a $2 million exemption from section 7872, the adjustment of the special AFR, and the delayed applicability date reflect a judgment that the revenue effects are small and are outweighed by the compliance burden and other economic impacts of the regulations on small businesses. Drafting Information The principal authors of these regulations are Jeffrey T. Rodrick of the Office of Associate Chief Counsel (Income Tax & Accounting) and David B. Silber of the Office of Associate Chief Counsel (Financial Institutions & Products). However, other personnel from the IRS and the Treasury Department participated in their development. List of Subjects in 26 CFR Part 1 Income Taxes, Reporting and recordkeeping requirements. Adoption of Amendments to the Regulations Accordingly, 26 CFR part 1 is amended as follows: PART 1—INCOME TAXES **Paragraph 1.** The authority citation for part 1 continues to read, in part, as follows: Authority: 26 U.S.C. 7805 * * * Section 1.468B-6 also issued under 26 U.S.C. 468B(g). * * * Section 1.7872-5 also issued under 26 U.S.C. 7872. * * * Section 1.7872-16 also issued under 26 U.S.C. 7872. * * * **Par. 2.** Section 1.468B-0 is amended by adding entries for § 1.468B-6 to read as follows: § 1.468B-0 Table of contents. § 1.468B-6 Escrow accounts, trusts, and other funds used during deferred exchanges of like-kind property under section 1031(a)(3).

(a)Scope.

(b)Definitions.

(1)In general.

(2)Exchange funds.

(3)Exchange facilitator.

(4)Transactional expenses.

(i)In general.

(ii)Special rule for certain fees for exchange facilitator services.

(c)Taxation of exchange funds.

(1)Exchange funds generally treated as loaned to an exchange facilitator.

(2)Exchange funds not treated as loaned to an exchange facilitator.

(i)Scope.

(ii)Earnings attributable to the taxpayer's exchange funds.

(A)Separately identified account.

(B)Allocation of earnings in commingled accounts.

(C)Transactional expenses.

(iii)Treatment of the taxpayer.

(d)Information reporting requirements.

(e)Examples.

(f)Effective/applicability dates.

(1)In general.

(2)Transition rule. **Par. 3.** Section 1.468B-6 is added to read as follows: § 1.468B-6 Escrow accounts, trusts, and other funds used during deferred exchanges of like-kind property under section 1031(a)(3).

(a)*Scope* . This section provides rules under section 468B(g) relating to the current taxation of escrow accounts, trusts, and other funds used during deferred exchanges.

(b)*Definitions* . The definitions in this paragraph

(b)apply for purposes of this section.

(1)*In general. Deferred exchange, escrow agreement, escrow holder, exchange agreement, qualified escrow account, qualified intermediary, qualified trust, relinquished property, replacement property, taxpayer, trust agreement* , and *trustee* have the same meanings as in § 1.1031(k)-1; deferred exchange also includes any exchange intended to qualify as a deferred exchange, and qualified intermediary also includes any person or entity intended by a taxpayer to be a qualified intermediary within the meaning of § 1.1031(k)-1(g)(4).

(2)*Exchange funds. Exchange funds* means relinquished property, cash, or cash equivalent that secures an obligation of a transferee to transfer replacement property, or proceeds from a transfer of relinquished property, held in a qualified escrow account, qualified trust, or other escrow account, trust, or fund in a deferred exchange.

(3)*Exchange facilitator. Exchange facilitator* means a qualified intermediary, transferee, escrow holder, trustee, or other party that holds exchange funds for a taxpayer in a deferred exchange pursuant to an escrow agreement, trust agreement, or exchange agreement.

(4)*Transactional expenses* —(i) *In general* . Except as provided in paragraph (b)(4)(ii) of this section, *transactional expenses* means transactional items within the meaning of § 1.1031(k)-1(g)(7)(ii).

(ii)*Special rule for certain fees for exchange facilitator services* . The fee for the services of an exchange facilitator is not a transactional expense unless the escrow agreement, trust agreement, or exchange agreement, as applicable, provides that—

(A)The amount of the fee payable to the exchange facilitator is fixed on or before the date of the transfer of the relinquished property by the taxpayer (either by stating the fee as a fixed dollar amount in the agreement or determining the fee by a formula, the result of which is known on or before the transfer of the relinquished property by the taxpayer); and

(B)The amount of the fee is payable by the taxpayer regardless of whether the earnings attributable to the exchange funds are sufficient to pay the fee.

(c)*Taxation of exchange funds* —(1) *Exchange funds generally treated as loaned to an exchange facilitator* . Except as provided in paragraph (c)(2) of this section, exchange funds are treated as loaned from a taxpayer to an exchange facilitator (exchange facilitator loan). If a transaction is treated as an exchange facilitator loan under this paragraph (c)(1), the exchange facilitator must take into account all items of income, deduction, and credit (including capital gains and losses) attributable to the exchange funds. See § 1.7872-16 to determine if an exchange facilitator loan is a below-market loan for purposes of section 7872 and § 1.7872-5(b)(16) to determine if an exchange facilitator loan is exempt from section 7872.

(2)*Exchange funds not treated as loaned to an exchange facilitator* —(i) *Scope* . This paragraph (c)(2) applies if, in accordance with an escrow agreement, trust agreement, or exchange agreement, as applicable, all the earnings attributable to a taxpayer's exchange funds are paid to the taxpayer.

(ii)*Earnings attributable to the taxpayer's exchange funds* —(A) *Separately identified account* . If an exchange facilitator holds all of the taxpayer's exchange funds in a separately identified account, the earnings credited to that account are deemed to be all the earnings attributable to the taxpayer's exchange funds for purposes of paragraph (c)(2)(i) of this section. In general, a separately identified account is an account established under the taxpayer's name and taxpayer identification number with a depository institution. For purposes of paragraph (c)(2)(i) of this section, a sub-account will be treated as a separately identified account if the master account under which the sub-account is created is established with a depository institution, the depository institution identifies the sub-account by the taxpayer's name and taxpayer identification number, and the depository institution specifically credits earnings to the sub-account.

(B)*Allocation of earnings in commingled accounts* . If an exchange facilitator commingles (for investment or otherwise) the taxpayer's exchange funds with other funds or assets, all the earnings attributable to the taxpayer's exchange funds are paid to the taxpayer if all of the earnings attributable to the commingled funds or assets that are allocable on a pro-rata basis (using a reasonable method that takes into account the time that the exchange funds are in the commingled account, actual rate or rates of return, and the respective account balances) to the taxpayer's exchange funds either are paid to the taxpayer or are treated as paid to the taxpayer under paragraph (c)(2)(ii)(C) of this section.

(C)*Transactional expenses* . Any payment from the taxpayer's exchange funds, or from the earnings attributable to the taxpayer's exchange funds, for a transactional expense of the taxpayer (as defined in paragraph (b)(4) of this section) is treated as first paid to the taxpayer and then paid by the taxpayer to the recipient.

(iii)*Treatment of the taxpayer* . If this paragraph (c)(2) applies, exchange funds are not treated as loaned from a taxpayer to an exchange facilitator. The taxpayer must take into account all items of income, deduction, and credit (including capital gains and losses) attributable to the exchange funds.

(d)*Information reporting requirements* . A payor (as defined in § 1.6041-1) must report the income attributable to exchange funds to the extent required by the information reporting provisions of subpart B, Part III, subchapter A, chapter 61, Subtitle F of the Internal Revenue Code, and the regulations under those provisions. See § 1.6041-1(f) for rules relating to the amount to be reported when fees, expenses or commissions owed by a payee to a third party are deducted from a payment.

(e)*Examples* . The provisions of this section are illustrated by the following examples in which T is a taxpayer that uses a calendar taxable year and the cash receipts and disbursements method of accounting. The examples are as follows: Example 1. *All earnings attributable to exchange funds paid to taxpayer* .

(i)T enters into a deferred exchange with R. The sales agreement provides that T will transfer property (the relinquished property) to R and R will transfer replacement property to T. R's obligation to transfer replacement property to T is secured by cash equal to the fair market value of the relinquished property, which R will deposit into a qualified escrow account that T establishes with B, a depository institution. T enters into an escrow agreement with B that provides that all the earnings attributable to the exchange funds will be paid to T.

(ii)On November 1, 2008, T transfers property to R and R deposits $2,100,000 in T's qualified escrow account with B. Between November 1 and December 31, 2008, B credits T's account with $14,000 of interest. During January 2009, B credits T's account with $7000 of interest. On February 1, 2009, R transfers replacement property worth $2,100,000 to T and B pays $2,100,000 from the qualified escrow account to R. Additionally, on February 1, 2009, B pays the $21,000 of interest to T.

(iii)Under paragraph

(b)of this section, the $2,100,000 deposited with B constitutes exchange funds and B is an exchange facilitator. Because all the earnings attributable to the exchange funds are paid to T in accordance with the escrow agreement, paragraph (c)(2) of this section applies. The exchange funds are not treated as loaned from T to B. T must take into account in computing T's income tax liability for 2008 the $14,000 of earnings credited to the qualified escrow account in 2008 and for 2009 the $7,000 of earnings credited to the qualified escrow account in 2009. Example 2. *Payment of transactional expenses from earnings* .

(i)The facts are the same as in *Example 1* , except that the escrow agreement provides that, prior to paying the earnings to T, B may deduct any amounts B has paid to third parties for T's transactional expenses. B pays a third party $350 on behalf of T for a survey of the replacement property. After deducting $350 from the earnings attributable to T's qualified escrow account, B pays T the remainder ($20,650) of the earnings.

(ii)Under paragraph (b)(4) of this section, the cost of the survey is a transactional expense. Under paragraph (c)(2)(ii)(C) of this section, the $350 that B pays for the survey is treated as first paid to T and then from T to the third party. Therefore, all the earnings attributable to T's exchange funds are paid or treated as paid to T in accordance with the escrow agreement, and paragraph (c)(2) of this section applies. The exchange funds are not treated as loaned from T to B, and T must take into account in computing T's income tax liability the $21,000 of earnings credited to the qualified escrow account. Example 3. *Earnings retained by exchange facilitator as compensation for services* .

(i)The facts are the same as in *Example 1* , except that the escrow agreement provides that B also may deduct any outstanding fees owed by T for B's services in facilitating the deferred exchange. In accordance with paragraph (b)(4)(ii) of this section, the escrow agreement provides for a fixed fee of $1,200 for B's services, which is payable by T regardless of the amount of earnings attributable to the exchange funds. Because the earnings on the exchange funds in this case exceed $1,200, B retains $1,200 as the unpaid portion of its fee and pays T the remainder ($19,800) of the earnings.

(ii)Under paragraph (b)(4) of this section, B's fee is treated as a transactional expense. Under paragraph (c)(2)(ii)(C) of this section, the $1200 that B retains for its fee is treated as first paid to T and then from T to B. Therefore, all the earnings attributable to T's exchange funds are paid or treated as paid to T in accordance with the escrow agreement, and paragraph (c)(2) of this section applies. The exchange funds are not treated as loaned from T to B, and T must take into account in computing T's income tax liability the $21,000 of earnings credited to the qualified escrow account. Example 4. *Exchange funds deposited by exchange facilitator with related depository institution in account in taxpayer's name* .

(i)The facts are the same as in *Example 1* except that, instead of entering into an escrow agreement, T enters into an exchange agreement with QI, a qualified intermediary. The exchange agreement provides that R will pay $2,100,000 to QI, QI will deposit $2,100,000 into an account with a depository institution under T's name and taxpayer identification number (TIN), and all the earnings attributable to the account will be paid to T.

(ii)On May 1, 2008, T transfers property to QI, QI transfers the property to R, R delivers $2,100,000 to QI, and QI deposits $2,100,000 into a money market account with depository institution B under T's name and TIN. B and QI are members of the same consolidated group of corporations within the meaning of section 1501. Between May 1 and September 1, 2008, the account earns $28,000 of interest at the stated rate established by B. During the period May 1 to September 1, 2008, B invests T's exchange funds and earns $40,000. On September 1, 2008, QI uses $2,100,000 of the funds in the account to purchase replacement property identified by T and transfers the replacement property to T. B pays to T the $28,000 of interest earned on the money market account at the stated rate.

(iii)Under paragraph

(b)of this section, the $2,100,000 QI receives from R for the relinquished property is exchange funds and QI is an exchange facilitator. B is not an exchange facilitator. T has not entered into an escrow agreement, trust agreement, or exchange agreement with B, and QI, not B, holds the exchange funds on behalf of T. Under paragraph (c)(2)(ii)(A) of this section, the $40,000 B earns from investing T's exchange funds are not treated as earnings attributable to T's exchange funds. Because all the earnings attributable to T's exchange funds are paid to T in accordance with the exchange agreement, paragraph (c)(2) of this section applies. The exchange funds are not treated as loaned from T to QI, and T must take into account in computing T's income tax liability for 2008 the $28,000 of interest earned on the money market account. Example 5. *Earnings of related depository institution credited to exchange facilitator* .

(i)The facts are the same as in *Example 4* , except that at the end of each taxable year, B credits a portion of its earnings on deposits to QI. The amount credited is based on the total amount of exchange funds QI has deposited with B during the year. At the end of the 2008 taxable year, B credits $152,500 of B's earnings to QI.

(ii)Under paragraph (c)(2)(ii)(A) of this section, no part of the $152,500 credited by B to QI is earnings attributable to T's exchange funds. Therefore, all of the earnings attributable to the exchange funds are paid to T in accordance with the exchange agreement, and paragraph (c)(2) of this section applies. The exchange funds are not treated as loaned from T to QI, and T must take into account in computing T's income tax liability for 2008 the $28,000 of interest earned on T's account. Example 6. *Exchange funds deposited by exchange facilitator with unrelated depository institution in sub-account in taxpayer's name* .

(i)The facts are the same as in *Example 4* , except that QI and B are unrelated and the money market account in which QI deposits the $2,100,000 received from T is a sub-account within a master account QI maintains with B in QI's name and TIN. The master account includes other sub-accounts, each in the name and TIN of a taxpayer that has entered into an exchange agreement with QI, into which QI deposits each taxpayer's exchange funds. Each month, B transfers to QI's master account an additional amount of interest based upon the average daily balance of all exchange funds within the master account during the month. At the end of the 2008 taxable year, B has credited $152,500 of additional interest to QI.

(i)The facts are the same as in *Example 4* , except that at the end of each taxable year, B pays a marketing fee to QI for using B as its depository institution for exchange funds. The amount of the fee is based on the total amount of exchange funds QI has deposited with B during the year.

(ii)Under paragraph (c)(2)(ii)(A) of this section, no part of the marketing fee that B pays to QI is earnings attributable to T's exchange funds. Therefore, all of the earnings attributable to the exchange funds are paid to T in accordance with the exchange agreement, and paragraph (c)(2) of this section applies. The exchange funds are not treated as loaned from T to QI, and T must take into account in computing T's income tax liability for 2008 the $28,000 of interest earned on T's account. Example 8. *Stated rate of interest on account less than earnings attributable to exchange funds* .

(i)The facts are the same as in *Example 4* , except that the exchange agreement provides only that QI will pay T a stated rate of interest. QI invests the exchange funds and earns $40,000. The exchange funds earn $28,000 at the stated rate of interest, and QI pays the $28,000 to T.

(ii)Paragraph (c)(1) of this section applies and the exchange funds are treated as loaned from T to QI. QI must take into account in computing QI's income tax liability all items of income, deduction, and credit (including capital gains and losses) attributable to the exchange funds. Paragraph (c)(2) of this section does not apply because QI does not pay all the earnings attributable to the exchange funds to T. See §§ 1.7872-5 and 1.7872-16 for rules relating to exchange facilitator loans. Example 9. *All earnings attributable to commingled exchange funds paid to taxpayer* .

(i)The facts are the same as in *Example 4* , except that the exchange agreement does not specify how the $2,100,000 QI receives from R must be invested.

(ii)On May 1, 2008, QI deposits the $2,100,000 with B in a pre-existing interest-bearing account under QI's name and TIN. The account has a total balance of $5,275,000 immediately thereafter. On the last day of each month between May and September, 2008, the account earns interest as follows: $17,583 in May, $17,642 in June, $18,756 in July, and $17,472 in August. On July 11, 2008, QI deposits $500,000 in the account. On August 15, 2008, QI withdraws $1,175,000 from the account.

(iii)QI calculates T's pro-rata share of the earnings allocable to the $2,100,000 based on the actual return, the average daily principal balances, and a 30-day month convention, as follows: Month Account's avg. daily bal. T's avg. daily bal. T's share* (percent) Monthly interest T's end. bal.** May $5,275,000 $2,100,000 39.8 $17,583 $2,106,998 June 5,292,583 2,106,998 39.8 17,642 2,114,020 July 5,643,558 2,114,020 37.5 18,756 2,121,054 August 5,035,647 2,121,054 42.1 17,472 2,128,410 * T's Average Daily Balance ÷ Account's Average Daily Balance. ** T's beginning balance + [(T's share) (Monthly Interest)].

(iv)On September 1, 2008, QI uses $2,100,000 of the funds to purchase replacement property identified by T and transfers the property to T. QI pays $28,410, the earnings of the account allocated to T's exchange funds, to T.

(v)Because QI uses a reasonable method to calculate the pro-rata share of account earnings allocable to T's exchange funds in accordance with paragraph (c)(2)(ii)(B) of this section, and pays all those earnings to T, paragraph (c)(2) of this section applies. The exchange funds are not treated as loaned from T to QI. T must take into account in computing T's income tax liability for 2008 the $28,410 of earnings attributable to T's exchange funds.

(f)*Effective/applicability dates* —(1) *In general* . This section applies to transfers of relinquished property made by taxpayers on or after October 8, 2008.

(2)*Transition rule* . With respect to transfers of relinquished property made by taxpayers after August 16, 1986, but before October 8, 2008, the Internal Revenue Service will not challenge a reasonable, consistently applied method of taxation for income attributable to exchange funds. **Par. 4.** Section 1.1031(k)-1 is amended by adding a sentence at the end of paragraph (h)(2) to read as follows: § 1.1031(k)-1 Treatment of deferred exchanges.

(h)* * *

(2)* * * For rules under section 468B(g) relating to the current taxation of qualified escrow accounts, qualified trusts, and other escrow accounts, trusts, and funds used during deferred exchanges of like-kind property, see § 1.468B-6. **Par. 5.** Section 1.7872-5 is added to read as follows: § 1.7872-5 Exempted loans.

(a)*In general* —(1) *General rule* . Except as provided in paragraph (a)(2) of this section, notwithstanding any other provision of section 7872 and the regulations under that section, section 7872 does not apply to the loans listed in paragraph

(b)of this section because the interest arrangements do not have a significant effect on the Federal tax liability of the borrower or the lender.

(2)*No exemption for tax avoidance loans* . If a taxpayer structures a transaction to be a loan described in paragraph

(b)of this section and one of the principal purposes of so structuring the transaction is the avoidance of Federal tax, then the transaction will be recharacterized as a tax avoidance loan as defined in section 7872(c)(1)(D).

(b)*List of exemptions* . Except as provided in paragraph

(a)of this section, the following transactions are exempt from section 7872:

(1)through

(15)[Reserved]. For further guidance, see § 1.7872-5T(b)(1) through (15).

(16)An exchange facilitator loan (within the meaning of § 1.468B-6(c)(1)) if the amount of the exchange funds (as defined in § 1.468B-6(b)(2)) treated as loaned does not exceed $2,000,000 and the duration of the loan is 6 months or less. The Commissioner may increase this $2,000,000 loan exemption amount in published guidance of general applicability, see § 601.601(d)(2) of this chapter.

(c)[Reserved]. For further guidance, see § 1.7872-5T(c).

(d)*Effective/applicability date* . This section applies to exchange facilitator loans issued on or after October 8, 2008. **Par. 6.** Section 1.7872-16 is added to read as follows: § 1.7872-16 Loans to an exchange facilitator under § 1.468B-6.

(a)*Exchange facilitator loans* . This section provides rules in applying section 7872 to an exchange facilitator loan (within the meaning of § 1.468B-6(c)(1)). For purposes of this section, the terms *deferred exchange, exchange agreement, exchange facilitator, exchange funds, qualified intermediary, replacement property* , and *taxpayer* have the same meanings as in § 1.468B-6(b).

(b)*Treatment as demand loans* . For purposes of section 7872, except as provided in paragraph

(d)of this section, an exchange facilitator loan is a demand loan.

(c)*Treatment as compensation-related loans* . If an exchange facilitator loan is a below-market loan, the loan is a compensation-related loan under section 7872(c)(1)(B).

(d)*Applicable Federal rate

(AFR)for exchange facilitator loans* . For purposes of section 7872, in the case of an exchange facilitator loan, the applicable Federal rate is the lower of the short-term AFR in effect under section 1274(d)(1) (as of the day on which the loan is made), compounded semiannually, or the 91-day rate. For purposes of the preceding sentence, the 91-day rate is equal to the investment rate on a 13-week (generally 91-day) Treasury bill with an issue date that is the same as the date that the exchange facilitator loan is made or, if the two dates are not the same, with an issue date that most closely precedes the date that the exchange facilitator loan is made.

(e)*Use of approximate method permitted* . The taxpayer and exchange facilitator may use the approximate method to determine the amount of forgone interest on any exchange facilitator loan.

(f)*Exemption for certain below-market exchange facilitator loans* . If an exchange facilitator loan is a below-market loan, the loan is not eligible for the exemptions from section 7872 listed under § 1.7872-5T. However, the loan may be eligible for the exemption from section 7872 under § 1.7872-5(b)(16) (relating to exchange facilitator loans in which the amount treated as loaned does not exceed $2,000,000).

(g)*Effective/applicability date* . This section applies to exchange facilitator loans issued on or after October 8, 2008.

(h)*Example* . The provisions of this section are illustrated by the following example: Example.

(i)T enters into a deferred exchange with QI, a qualified intermediary. The exchange is governed by an exchange agreement. The exchange funds held by QI pursuant to the exchange agreement are treated as loaned to QI under § 1.468B-6(c)(1). The loan between T and QI is an exchange facilitator loan. The exchange agreement between T and QI provides that no earnings will be paid to T. On December 1, 2008, T transfers property to QI, QI transfers the property to a purchaser for $2,100,000, and QI deposits $2,100,000 in a money market account. On March 1, 2009, QI uses $2,100,000 of the funds in the account to purchase replacement property identified by T, and transfers the replacement property to T. The amount loaned for purposes of section 7872 is $2,100,000 and the loan is outstanding for three months. For purposes of section 7872, under paragraph

(d)of this section, T uses the 91-day rate, which is 4 percent, compounded semi-annually. T uses the approximate method for purposes of section 7872.

(ii)Under paragraphs

(b)and

(c)of this section, the loan from T to QI is a compensation-related demand loan. Because there is no interest payable on the loan from T to QI, the loan is a below-market loan under section 7872. The loan is not exempt under § 1.7872-5(b)(16) because the amount treated as loaned exceeds $2,000,000. Under section 7872(e)(2), the amount of forgone interest on the loan for 2008 is $7000 ($2,100,000*.04/2*1/6). Under section 7872(e)(2), the amount of forgone interest for 2009 is $14,000 ($2,100,000*.04/2*2/6). The $7000 for 2008 is deemed transferred as compensation by T to QI and retransferred as interest by QI to T on December 31, 2008. The $14,000 for 2009 is deemed transferred as compensation by T to QI and retransferred as interest by QI to T on March 1, 2009. Linda E. Stiff, Deputy Commissioner for Services and Enforcement. Approved: July 2, 2008. Eric Solomon, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. E8-15739 Filed 7-9-08; 8:45 am] BILLING CODE 4830-01-P FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 73 [MB Docket No. 07-91; FCC 08-141] Third Periodic Review of the Commission's Rules and Policies Affecting the Conversion to Digital Television AGENCY: Federal Communications Commission. ACTION: Final rule. SUMMARY: In this document, the Commission provides clarification in connection with two issues addressed in the Report and Order. The Commission will address other issues raised in Petitions for Reconsideration in a future order. The Commission adopted a Report and Order in the Third DTV Periodic Review of the progress of the DTV transition. MSTV and NAB filed a joint petition for reconsideration requesting clarification of two issues in connection with the Order. DATES: Effective July 10, 2008. ADDRESSES: Federal Communications Commission, 445 12th Street, SW., Washington, DC 20554. FOR FURTHER INFORMATION CONTACT: For additional information, please contact Kim Matthews, *Kim.Matthews@fcc.gov,* 202-418-2120. SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order in MB Docket No. 07-91, FCC 08-141, adopted May 29, 2008 and released May 29, 2008. The full text of this document is available for public inspection and copying during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street, SW., CY-A257, Washington, DC 20554. These documents will also be available via ECFS ( *http://www.fcc.gov/cgb/ecfs/* ). (Documents will be available electronically in ASCII, Word 97, and/or Adobe Acrobat.) The complete text may be purchased from the Commission's copy contractor, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. To request this document in accessible formats (computer diskettes, large print, audio recording, and Braille), send an e-mail to *fcc504@fcc.gov* or call the Commission's Consumer and Governmental Affairs Bureau at

(202)418-0530 (voice),

(202)418-0432 (TTY). Summary of the Order 1. In this Order, the Commission provides clarification in connection with two issues addressed in the Report and Order in the Third DTV Periodic Review proceeding. The Commission will address other issues raised in Petitions for Reconsideration in a future order. On December 22, 2007, the Commission adopted a Report and Order in the Third DTV Periodic Review, 73 FR 5634, January 30, 2008, of the progress of the DTV transition. MSTV and NAB filed a joint petition for reconsideration requesting clarification of two issues in connection with the Order. *See* Petition for Reconsideration and Clarification of the Association for Maximum Service Television, Inc. and the National Association of Broadcasters, filed February 29, 2008 (MSTV/NAB Petition). 2. First, MSTV/NAB sought clarification that where more than one of the Commission's viewer notification obligations adopted in the Order is triggered, a station may comply with the Commission's requirements through use of a consolidated notification that includes all of the elements required in each of the viewer notification obligations. There was nothing in the Third DTV Periodic to indicate that separate notifications are required by a station that is obligated to inform its viewers of changes in its analog or digital service during the same time frame. Stations must notify viewers in the following circumstances:

(1)When the station is seeking an extension of time to construct post-transition facilities and will not be serving on February 18, 2009 at least the same population that receives the station's current analog TV and DTV service ( *see Third DTV Periodic Report and Order,* 23 FCC Rcd at 3033, ¶ 80);

(2)when the station will not be serving on February 18, 2009 at least the same population that receives its current analog TV and DTV service and is seeking STA approval to use one of the provisions for a phased transition ( *see id.* at 3037-38, ¶ 91);

(3)when the station will permanently reduce or terminate analog service thirty days or less prior to the transition deadline ( *see id.* at 3044, ¶ 106);

(4)when the station is seeking approval for longer term (significantly more than 30 days) reduction or termination of analog service before the transition date ( *see id.* at 3050, ¶ 117); and

(5)where a station on channels 52-58 seeks to flash cut and to terminate analog or digital service on its out-of-core channel ( *see id.* at 3057-58, ¶ 132). In addition, stations seeking to permanently reduce or terminate analog service within 90 days of the transition date have a more streamlined viewer notification procedure ( *see id.* at 3058, ¶ 134). No one filed an opposition to this MSTV/NAB request for clarification. We hereby clarify that we will permit use of such a consolidated notification in circumstances in which the Commission approves service adjustments that overlap in time. Indeed, we believe it could be confusing for viewers to hear multiple notifications that seem to conflict. Stations that prefer to have separate notifications for separate service adjustments may take that approach, as well, provided they offer clear information to viewers. We remind stations that Viewer Notification requirements are in addition to and not instead of the consumer education requirements that apply to all full power broadcasters. *See In the Matter of DTV Consumer Education Initiative,* Report and Order, 23 FCC Rcd 4134

(2008)(“ *DTV Consumer Education Order* ”), recon. order adopted April 23, 2008 (FCC 08-119). *See also Third DTV Periodic Report and Order,* 23 FCC Rcd at 3033, ¶ 80, 3037-38, ¶ 91, 3044, ¶ 106, 3057-58, ¶ 132, and 3058, ¶ 134. 3. Second, MSTV/NAB ask that the Commission acknowledge that real-time updates to the Event Information Table

(EIT)are permissive and not required under the new PSIP standard adopted in the Order. No party opposed this request for clarification. John Willkie, doing business as EtherGuide Systems, filed a partial Opposition to the MSTV/NAB Petition. *See* Opposition to Petitions for Reconsideration filed by Harris Corporation (Harris), Association for Maximum Service Television

(MSTV)and National Association of Broadcasters (NAB), and Cohen, Dippell and Everist, P.C.

(CDE)and Clarification of the Association for Maximum Service Television, Inc. and the National Association of Broadcasters, filed March 10, 2008. Mr. Willkie disputed MSTV's and Harris Corporation's contention that PSIP automation equipment is not currently available and other issues raised in the Petitions for Reconsideration filed by MSTV/NAB, Harris and CDE. Willkie acknowledged that the Third DTV Periodic did not require automation systems to comply with the PSIP requirements but opined that use of automation systems would, as a practical matter, facilitate compliance. *Id.* at 1-3. He also advocated Commission waivers for stations that were unable to obtain automation equipment. *Id.* at 6. While we encourage stations to update the EIT as rapidly as possible when overages or other circumstances result in changes to scheduled programs, our rules and policies do not require that updates be accomplished in real-time. The rule adopted in the Third DTV Periodic incorporates by reference the ATSC PSIP Standard A/65C which does not require real-time updates. *See Third DTV Periodic Report and Order,* 23 FCC Rcd at 3079, ¶ 185; 47 CFR 73.682(d). Because real-time updates are not required, there is no need to address the alternative request in MSTV/NAB's petition for reconsideration for an extension of the effective date for compliance with the rule. See MSTV/NAB Petition at 2-3. *See also* Harris Corporation, Petition for Reconsideration, filed February 29, 2008 (requesting one year extension of time). The adoption of the revised PSIP standard will become effective 120 days following **Federal Register** publication of the *Third DTV Periodic Report and Order,* subject to OMB approval by that date. *See Third DTV Periodic Report and Order,* 23 FCC Rcd at 3088-3089, ¶ 210. The *Third DTV Periodic Report and Order* was published in the **Federal Register** on January 30, 2008. *See* 75 FR 5634, January 30, 2008. OMB approved the PSIP information collection on March 4, 2008 (OMB control number 3060-1104). Thus, the new PSIP rule will become effective May 29, 2008. If and when the ATSC PSIP Standard A/65C mandates real-time updates to the EIT, we may revisit this issue. 4. Accordingly, *It is ordered* that, pursuant to sections 1, 4(i), 4(j), 7, 301, 303 and 405 of the Communications Act, 47 U.S.C. 151, 154(i) and (j), 157, 301, 303, and 305, and §§ 1.2 and 1.106 of the Commission's rules, 47 CFR 1.2 and 1.106, this Order on Clarification is adopted. 5. The Commission will not send a copy of this Report & Order pursuant to the Congressional Review Act, *see* 5 U.S.C. 801(a)(1)(A), because the Report and Order is simply clarifying rules that were previously adopted in the Third Periodic Review of the Commission's rules and Policies Affection the Conversion to Digital Television, FCC 07-228. List of Subjects in 47 CFR Part 73 Television. Federal Communications Commission. Marlene H. Dortch, Secretary. [FR Doc. E8-15763 Filed 7-9-08; 8:45 am] BILLING CODE 6712-01-P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 648 [Docket No. 071004577-8124-02] RIN 0648-XI94 Fisheries of the Northeastern United States; Northeast Multispecies Fishery; Adjustment to the Total Allowable Catch of Georges Bank Yellowtail Flounder from the United States/Canada Management Area for Fishing Year 2008 AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Inseason action; temporary rule adjusting specifications. SUMMARY: NMFS announces that the Total Allowable Catch

(TAC)in the U.S./Canada Management Area for Georges Bank

(GB)yellowtail flounder was exceeded for fishing year

(FY)2007, requiring an adjustment of the GB yellowtail flounder TAC for FY 2008. This action complies with the Fishery Management Plan for the Northeast Multispecies Fishery

(FMP)and is intended to continue the rebuilding program for yellowtail flounder in the FMP by taking into account previous overages of the yellowtail flounder quota. DATES: Effective August 11, 2008, through April 30, 2009. FOR FURTHER INFORMATION CONTACT: Douglas Potts, Fishery Policy Analyst,

(978)281-9341. SUPPLEMENTARY INFORMATION: A temporary rule specifying the TACs for Eastern GB cod, Eastern GB haddock, and GB yellowtail flounder in the U.S./Canada Management Area was published in the **Federal Register** on March 28, 2008 (73 FR 16571). That action established the FY 2008 TACs of GB cod, haddock, and yellowtail flounder at 667 mt, 8,050 mt, and 1,950 mt, respectively, and specified that, should an analysis of the catch by U.S. vessels indicate that an overage occurred during FY 2007, the pertinent TAC would be adjusted downward in order to be consistent with the FMP and the U.S./Canada Management Understanding. The regulations state, at § 648.85(a)(2)(ii), that: “Any overages of the GB cod, haddock, or yellowtail flounder TACs that occur in a given fishing year will be subtracted from the respective TAC in the following fishing year.” The March 28, 2008, temporary rule also specified that the public would be notified of such an adjustment through publication in the **Federal Register** and through a letter to permit holders. Based upon vessel reports, dealer reports, and other information available as of June 6, 2008, the total estimated catch of GB yellowtail flounder in the U.S./Canada Management Area during FY 2007 was 981.3 mt. This exceeds the FY 2007 GB yellowtail flounder TAC of 900 mt by 81.3 mt. Therefore, an overage of 81.3 mt of GB yellowtail flounder is being deducted from the FY 2008 U.S./Canada GB yellowtail flounder TAC through this action. This results in an adjusted TAC of 1,868.7 mt for FY 2008. The Eastern GB cod and haddock TACs were not exceeded in FY 2007. Therefore, these TACs are not adjusted. The TACs for Eastern GB cod and Eastern GB haddock remain 667 mt and 8,050 mt, respectively. Classification This action is required by 50 CFR part 648 and is exempt from review under Executive Order 12866. Pursuant to 5 U.S.C. 553(b)(B), the Assistant Administrator finds good cause to waive prior notice and opportunity for public comment, as notice and comment would be unnecessary. The regulations under § 648.85(a)(2)(ii), which were subject to prior public comment, require any overage of the TAC for GB yellowtail flounder be deducted from the TAC in the following fishing year. Accordingly, the action being taken by this temporary rule is non-discretionary. Since this is a non-discretionary action, based on numerous records solely in the possession of NMFS, public comment would not serve to inform the agency calculation of the overage and its deduction from the appropriate TAC. The rate of harvest of GB yellowtail flounder by groundfish vessels and scallop vessels fishing in the Scallop Access Areas in the U.S./Canada Management Area as reported from Vessel Monitoring Systems is updated weekly on the internet at *http://www.nero.noaa.gov* . Accordingly, the public is able to obtain information that would provide at least some advanced notice of a potential action as a result of a GB yellowtail flounder TAC being exceeded during FY 2007. Further, the potential that one or more of the FY 2007 TACs for the U.S./Canada stocks could be exceeded was considered and open to public comment during the proposed rule stage of the temporary rule setting the U.S./Canada TACs for FY 2008. Therefore, any negative effect the waiving of public comment may have on the public is mitigated by these factors. Authority: 16 U.S.C. 1801 *et seq.* Dated: July 3, 2008. Emily H. Menashes, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries. [FR Doc. E8-15717 Filed 7-9-08; 8:45 am] BILLING CODE 3510-22-S DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 660 RIN 0648-XI87 [Docket No. 080408542-8615-01] Fisheries off West Coast States; Pacific Coast Groundfish Fishery; Suspension of the Primary Pacific Whiting Season for the Shore-based Sector South of 42° North Latitude AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Fishing restrictions; request for comments. SUMMARY: NMFS announces the suspension of the primary season for Pacific whiting (whiting) fishery for the shore-based sector south of 42° N. lat. at noon local time (l.t.) May 21, 2008. “Per trip” limits for whiting were reinstated until 0001 hours June 15, 2008, at which time the primary season for the shore-based sector opened coastwide. This action is authorized by regulations implementing the Pacific Coast Groundfish Fishery Management Plan (FMP), which governs the groundfish fishery off Washington, Oregon, and California. This action is intended to keep the harvest of whiting at the 2008 allocation levels. DATES: Effective from noon l.t. May 21, 2008, until 0001 hours June 15, 2008. Comments will be accepted through August 8, 2008. ADDRESSES: You may submit comments, identified by RIN 0648-XI87 by any of the following methods: • Electronic Submissions: Submit all electronic public comments via the Federal eRulemaking Portal *http:// www.regulations.gov* . • Fax: 206-526-6736, Attn: Becky Renko. • Mail: D. Robert Lohn, Administrator, Northwest Region, NMFS, 7600 Sand Point Way NE, Seattle, WA 98115-0070, Attn: Becky Renko. FOR FURTHER INFORMATION CONTACT: Becky Renko at 206-526-6110. SUPPLEMENTARY INFORMATION: The regulations at 50 CFR 660.323(a) established separate allocations for the catcher/processor, mothership, and shore-based sectors of the whiting fishery. The 2008 commercial Optimum Yield

(OY)for Pacific whiting is 232,545 mt. This is calculated by deducting the 35,000-mt tribal allocation and 2,000-mt for research catch and bycatch in non-groundfish fisheries from the 269,545 mt total catch OY. Each sector receives a portion of the commercial OY, with the catcher/processors getting 34 percent (79,065 mt), motherships getting 24 percent (55,810 mt), and the shore-based sector getting 42 percent (97,669 mt). The regulations further divide the shore-based allocation so that no more than 5 percent (4,883 mt) of the shore-based allocation may be taken in waters off the State of California before the primary season begins north of 42° N. lat. The primary season for the shore-based sector is the period or periods when the large-scale target fishery is conducted, and when “per trip” limits are not in effect. Because whiting migrate from south to north during the fishing year, the shore-based primary whiting season begins earlier south of 42° N. lat. than north. For 2008: the primary season for the shore-based sector between 42°-40°30′ N. lat. began on April 1; south of 40°30′ N. lat., the primary season began on April 15; and the fishery north of 42° N. lat. is scheduled to begin June 15. Because the 4,883 mt allocation for the early season fishery off California was estimated to be reached, NMFS is announcing the suspension of the primary whiting season south of 42° N. lat. Regulations at 50 CFR 660.323 (b)(4) allow this action to be taken. The 20,000-lb (9,072 kg) trip limit that was in place before the start of the southern primary season was reinstated remained in effect until the primary June 15. A trip limit of 10,000 lb (4,536 kg) of whiting is in effect year-round (unless landings of whiting are prohibited) for vessels that fish in the Eureka area shoreward of the 100-fm(183-m) contour at any time during a fishing trip. This smaller limit is intended to minimize incidental catch of Chinook salmon, which are more likely to be caught shallower than 100 fm (183 m) in the Eureka area. To prevent an allocation from being exceeded, regulations at 50 CFR 660.323

(e)allow closure of the commercial whiting fisheries by actual notice to the fishery participants. Actual notice includes e-mail, internet, phone, fax, letter or press release. NMFS provided actual notice by e-mail, internet, and fax on May 20, 2008. NMFS Action This action announces achievement of the shore-based sector allocation specified at 50 CFR 660.323(a) for the fishery south of 42° N. lat. The best available information on May 20, 2008, indicated that 4,521 metric tons

(mt)of whiting was taken through May 19, 2008 and that the 4,883 mt shore-based allocation for the early season fishery south of 42° N. lat would be reached by noon May 21, 2008. For the reasons stated here and in accordance with the regulations at 50 CFR 660.323(b)(4), NMFS herein announces: Effective noon l.t. May 21, 2008 until 0001 l.t., June 15, 2008, the primary whiting season south of 42° N. lat is suspended. No more than 20,000-lb (9,072 kg) of whiting may be taken and retained, possessed or landed by a catcher vessel participating in the shore-based sector of the whiting fishery. If a vessel fishes shoreward of the 100 fm (183 m) contour in the Eureka area (43°-40° 30′ N. lat.) at any time during a fishing trip, the 10,000-lb (4,536 kg) trip limit applies. Classification This action is authorized by the regulations implementing the groundfish FMP. The determination to take these actions is based on the most recent data available. The aggregate data upon which the determinations are based are available for public inspection at the office of the Regional Administrator (see ADDRESSES ) during business hours. The Assistant Administrator for Fisheries (AA), NMFS, finds good cause to waive the requirement to provide prior notice and opportunity for comment on this action pursuant to 5 U.S.C. 553 (3)(b)(B), because providing prior notice and opportunity would be impracticable. It would be impracticable because if this restriction were delayedin order to provide notice and comment, it would allow the allocation for the shore-based fishery south of 42° N. lat. to be exceeded. Similarly, the AA finds good cause to waive the 30-day delay in effectiveness requirement of 5 U.S.C. 553 (d)(3), as such a delay would cause the fishery south of 42° N. lat. to exceed its allocation. Allowing the early season fishery to continue would result in a disproportionate shift in effort, which could result in greater impacts on Endangered Species Act listed Chinook salmon and overfished groundfish species that had been considered when the 2008 Pacific Coast groundfish harvest specifications were established. This action is taken under the authority of 50 CFR 660.323(b)(4), and is exempt from review under Executive Order 12866. Authority: 16 U.S.C. 1801 *et seq.* Dated: July 7, 2008. Emily H. Menashes, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service. [FR Doc. E8-15716 Filed 7-9-08; 8:45 am] BILLING CODE 3510-22-S DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 679 [Docket No. 071106671-8010-02] RIN 0648-XI93 Fisheries of the Exclusive Economic Zone Off Alaska; Northern Rockfish in the Western Regulatory Area of the Gulf of Alaska AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Temporary rule; closure. SUMMARY: NMFS is prohibiting directed fishing for northern rockfish in the Western Regulatory Area of the Gulf of Alaska (GOA). This action is necessary to prevent exceeding the 2008 total allowable catch

(TAC)of northern rockfish in the Western Regulatory Area of the GOA. DATES: Effective 1200 hrs, Alaska local time (A.l.t.), July 7, 2008, through 2400 hrs, A.l.t., December 31, 2008. FOR FURTHER INFORMATION CONTACT: Jennifer Hogan, 907-586-7228. SUPPLEMENTARY INFORMATION: NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska

(FMP)prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679. The 2008 TAC of northern rockfish in the Western Regulatory Area of the GOA is 2,141 metric tons

(mt)as established by the 2008 and 2009 harvest specifications for groundfish of the GOA (73 FR 10562, February 27, 2008). In accordance with § 679.20(d)(1)(i), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the 2008 TAC of northern rockfish in the Western Regulatory Area of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 2,121 mt, and is setting aside the remaining 20 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for northern rockfish in the Western Regulatory Area of the GOA. After the effective date of this closure the maximum retainable amounts at § 679.20(e) and

(f)apply at any time during a trip. Classification This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of northern rockfish in the Western Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of July 2, 2008. The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment. This action is required by § 679.20 and is exempt from review under Executive Order 12866. Authority: 16 U.S.C. 1801 *et seq.* Dated: July 3, 2008. Emily H. Menashes Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service. [FR Doc. 08-1425 Filed 7-3-08; 2:32 pm]

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