Section 7(a) of the Federal Home Loan Bank Act (Bank Act) (12 U.S.C. 1427(a)) authorizes the Finance Board to appoint directors to the board of each Bank. Under section 7(a), the individuals appointed to serve as Bank directors may not “during such Bank director's term of office, serve as an officer of any Federal Home Loan Bank or a director or officer of any member of a Bank, or hold shares, or any other financial interest in, any member of a Bank.” In the past, the Finance Board generally has applied this statutory restriction on a case-by-case basis. In order to ensure that this prohibition is applied consistently and to provide guidance to the Banks as they identify well qualified individuals as appointive director candidates, the Finance Board published a proposed rule intended to clarify the types of financial interests an appointive Bank director may maintain in a member of the Bank on whose board the director serves. See 72 FR 15627 (Apr. 2, 2007). The Finance Board requested comments from the public and established a 45-day comment period, which expired on May 17, 2007.

The key features of the proposed rule include:

• Incorporating long-standing policy that a financial interest in a Bank member acquired through ownership of shares of a diversified mutual fund is a permissible holding for an appointive director.

• Extending the rationale for permitting mutual funds investments to other types of vehicles and accounts that share certain of the same key features as mutual funds and thus are unlikely to pose a risk of conflict of interest for an appointive director.

• Establishing a threshold under which a financial interest in a holding company that controls one or more members of the Bank on whose board the director serves is a permissible interest if the assets of all such members constitute less than 25 percent of the assets of the holding company, on a consolidated basis.

• Asking whether the rule should extend this rationale to service as a director or officer of a holding company that controls one or more members of the Bank on whose board an appointive director serves.

• Incorporating long-standing policy that loans from or deposits in a member are not a financial interest in the member if the transaction occurs in the normal course of business and on terms that are no more favorable than those available under like circumstances to members of the public.

• Establishing a threshold under which a contractual relationship with a member is a permissible interest if the money paid to a director in a calendar year is 10 percent or less of the director's adjusted gross income in that year. 1

• Attributing the financial interests of an appointive director's spouse and minor children to the director for purposes of determining compliance.

• Making other technical and conforming changes to part 915.

In response to the proposed rule, the Finance Board received three comments—two from Banks and one from a trade association. One Bank recommended against finalizing the rule because pending legislation would delete the provision prohibiting an appointive director from holding a financial interest in a member. The other Bank urged the Finance Board to increase the threshold for permissible financial interests in a holding company that controls Bank members from 25 to 50 percent and to apply the same standard to service as an officer or director of such a holding company. The trade association supported finalizing the proposed rule as written.

As stated in the proposed rule, the Finance Board believes that the changes to the regulations are warranted because they provide needed guidance to the Banks and to prospective appointive directors as to the types of relationships with members that are permissible under the current law. The possibility that the law may be amended at some point in the future is not a sufficient reason to decline to proceed with a rule that provides additional clarity to the persons most directly affected by the current law. The final rule also responds to the comments relating to the use of the 25 percent threshold by increasing that percentage, although not as much as suggested by the comment, and by applying it to determine whether service as an officer or director of a holding company is permissible. Other issues raised by the comment letters are described in the discussion of the final rule.

With the exception of the provisions concerning holding companies, discussed in detail below, the Finance Board is adopting the proposed rule as written, with minor technical changes. The Finance Board also is designating the new text as § 915.10(e), rather than § 915.10(f), in order to replace the temporary provision concerning appointments to director positions that were vacant as of January 1, 2007.

One of the commenters urged the Finance Board not to extend these prohibitions to securities issued by a holding company or to persons who serve solely as an officer or director of the holding company, and who do not serve as an officer or director of the member institution, noting that the statute does not refer to holding companies. Alternatively, the commenter suggested that the Finance Board apply these prohibitions only to those holding companies whose subsidiary members constituted 50 percent or more of the consolidated assets of the holding company. This commenter also suggested that the Finance Board use a single standard for evaluating both investments in securities issued by a holding company and service as an officer or director of a holding company.

As was discussed in the preamble to the proposed rule, the Finance Board has long applied these provisions to holding companies of at least some members, and the current practice is to bar any person who serves as an officer or director of a holding company from also serving as an appointive director. The intent of the proposed rule was to adopt a workable standard that would distinguish those holding companies that are very closely associated with their member (such as a one bank holding company), and thus should be subject to the prohibitions in section 7(a), from those where the connection is considerably more remote, which should not be subject to those prohibitions. Accordingly, the Finance Board has declined to adopt the suggestion that the rule apply only to financial interests in, or service with, the members of a Bank.

The proposed rule would have established a safe harbor for ownership of securities issued by a holding company that controls members if the assets of all members of the Bank the holding company controls constitute less than 25 percent of the total assets of the holding company, on a consolidated basis. The Finance Board has considered the comment suggesting that the threshold be raised and has decided to increase the proposed threshold from 25 to 35 percent of the consolidated assets of the holding company. The Finance Board believes that a limit of 35 percent remains consistent with the previously stated rationale that an investment in such a holding company is predominantly an investment in something other than a member of the Bank. The Finance Board is not prepared, however, to increase the threshold to the 50 percent of assets limit suggested by the commenter, principally because such a high threshold would not be consistent with the above stated rationale.

In the proposed rule, the Finance Board also sought comments with respect to application of these prohibitions to an appointive director's service as an officer or director of a holding company that controls a member of the director's Bank. At the time of the proposed rule, the Finance Board's policy was to prohibit an appointive director from serving as a director or officer of a holding company that controls a member of the director's Bank. The Finance Board proposed no regulatory amendments on this matter, but sought comment on whether it should apply a single standard for both investments in holding company securities and for other types of relationships, such as service as a director or officer of a holding company or contractual relationships with, or receipt of income from, such a company. The only comment received on this issue urged the Finance Board to apply a single standard for assessing all relationships that an appointive director may have with the holding company for a member. The Finance Board is persuaded that a single standard is the better approach and thus has revised the final rule to apply the same 35 percent of assets test in determining whether an appointive director's service as an officer or director of a holding company is permissible, as is used in determining whether a director's investments in securities issued by a holding company are permissible.

With respect to the 35 percent of assets test, the Finance Board emphasizes that this is an ongoing requirement for any appointive director, and is not simply to be applied on a “snapshot basis” at a particular point in time. Accordingly, it is possible that during the course of a person's service as an appointive director an investment in securities issued by a holding company that had been permissible at the outset may cease to be permissible if the assets of the members grow beyond the 35 percent threshold. The same also would be true with respect to a person's service as an officer or director of a holding company. The Finance Board expects that the individual appointive directors and their respective Banks will monitor the assets of the particular members and holding companies to ensure that the directors remain in compliance with this requirement. In a similar fashion, the Finance Board expects that any appointive directors with any such financial interests, i.e., investments in members or their holding companies, whether directly or through various vehicles or accounts permitted under this rule, service as an officer or director of a holding company, or contractual relationships with a member or its holding company, will fully disclose those interests to the Finance Board prior to their initial appointment and as part of the annual certification process, as well as to their respective boards of directors. That disclosure requirement is embodied in the final rule through § 915.10(e) (with respect to the Finance Board) and in § 915.11(a)(4) (with respect to the board).

The appointive director application form is part of the information collection entitled “Federal Home Loan Bank Directors.” Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ), the Office of Management and Budget (OMB) has assigned control number 3069-0002, which is due to expire on November 30, 2007. The Finance Board and the Banks use the information contained in the application form to determine whether prospective appointive Bank directors satisfy the statutory and regulatory eligibility requirements and are well qualified to serve as a Bank director. Only individuals meeting these requirements may serve as Bank directors. See 12 U.S.C. 1427. This rule does not make substantive or material modifications to the “Federal Home Loan Bank Directors” information collection. Consequently, the Finance Board has not submitted any information to OMB for review.

The rule applies only to the Banks and to individuals who may be willing to serve as Bank appointive directors. Neither the Banks nor individuals come within the meaning of “small entities” as defined in the Regulatory Flexibility Act (RFA). See 5 U.S.C. 601(6). Thus, in accordance with section 605(b) of the RFA, 5 U.S.C. 605(b), the Finance Board hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities.

Reports of left engine hydraulic tube assembly failures prompted us to issue AD 2006-02-51, Amendment 39-14459 (71 FR 5581, February 2, 2006). AD 2006-02-51 required repetitive inspection of the hydraulic tube assembly, correction of the symptomatic clamp to hydraulic tube chafing on the left-hand nacelle, and reporting results to the FAA.

After we issued AD 2006-02-51, we continued to receive additional reports of failures of the hydraulic pump outlet tube, including failures on the right engine on certain HBC Model 390 airplanes. This prompted us to supersede AD 2006-02-51 with AD 2006-26-08, Amendment 39-14866 (71 FR 78051, December 28, 2006).

AD 2006-26-08 currently requires you to repetitively inspect the hydraulic pump outlet tube on both engines and immediately replace the tube if damage is found. AD 2006-26-08 also requires you to incorporate an airplane flight manual (AFM) change that limits operation of an engine with its associated firewall hydraulic shutoff valve closed. If an engine is operated with its firewall hydraulic shutoff valve closed, you must replace the hydraulic pump outlet tube.

We issued AD 2006-26-08 as an interim action while we worked with the type certificate holder to develop a design change. We continued to receive additional reports of failures of the hydraulic pump outlet tube.

HBC has now developed kits that incorporate design changes for the hydraulic pump outlet tubes and dampener supports.

Failure of the hydraulic pump outlet tubes, if not prevented, could cause flammable fluid leakage in the engine nacelle. Such leakage could result in a fire. There is also a risk of loss of hydraulic system functions including normal gear extensions, speed brakes, roll spoilers, lift dump, and normal brakes.

We reviewed Hawker Beechcraft Mandatory Service Bulletin No. 29-3800, issued May 2007. The service information specifies the following actions:

• Incorporating Kit No. 390-5804-0001, which replaces the pulse dampener brackets with stiffer brackets and a spacer on both engines; and

• Incorporating Kit No. 390-5805-0001, which replaces the hydraulic pump outlet tubes with integral firesleeve hoses.

Raytheon Mandatory Service Bulletin No. SB 29-3771, dated January 2006; and Raytheon Safety Communique No. 267, dated January 2006, will be retained for this AD until both kits referenced above are incorporated.

We are issuing this AD because we evaluated all the information and determined the unsafe condition described previously is likely to exist or develop on other products of the same type design. This AD retains the actions of AD 2006-26-08 and requires incorporating Kit No. 390-5804-0001 and Kit No. 390-5805-0001. Upon incorporating the kits required by this AD, the repetitive inspections and replacement retained from AD 2006-26-08 are no longer necessary. The AFM limitation is still required.

We continue to work with HBC in analyzing the design of the hydraulic system of the Model 390 airplanes. Based on this analysis, we may take future rulemaking action, which could eliminate the need for the current AFM limitation.

In preparing this rule, we contacted type clubs and aircraft operators to get technical information and information on operational and economic impacts. We did not receive any information through these contacts. If received, we would have included a discussion of any information that may have influenced this action in the rulemaking docket.

Since an unsafe condition exists that requires the immediate adoption of this AD, we determined that notice and opportunity for public comment before issuing this AD are impracticable, and that good cause exists for making this amendment effective in fewer than 30 days.

This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and an opportunity for public comment. We invite you to send any written relevant data, views, or arguments regarding this AD. Send your comments to an address listed under the ADDRESSES section. Include the docket number “FAA-2007-28251; Directorate Identifier 2007-CE-049-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the AD. We will consider all comments received by the closing date and may amend the AD in light of those comments.

We will post all comments we receive, without change, to http://dms.dot.gov , including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive concerning this AD.

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.

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

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

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

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

You may examine the AD docket that contains the AD, the regulatory evaluation, any comments received, and other information on the Internet at http://dms.dot.gov ; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Office (telephone (800) 647-5227) is located at the street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

On April 27, 2007, the FAA issued Emergency AD 2007-09-51 (EAD) for the specified MDHI model helicopters. The EAD requires, before further flight, removing each affected tail rotor blade assembly and, using a bright light, inspecting the bore of the tail rotor blade root fitting. If the blade assembly does not have a smooth radius, the AD requires replacing it. The AD also requires identifying each airworthy tail rotor blade assembly with the applicable model of helicopter. That action was prompted by a report of an accident after the loss of a tail rotor blade. This condition, if not corrected, could result in the failure of a tail rotor blade and subsequent loss of control of the helicopter.

MDHI has issued Service Bulletin No. SB369H-247, SB369D-204, SB369E-099, and SB369F-084, dated April 26, 2007 (SB), which describes procedures for inspecting the tail rotor blade assembly. The SB states that reports from the field have shown that there are tail rotor blades in operation with a machining defect. The SB further states that these blades have a sharp transition in the tapered end of the root fitting bore that can cause the tail rotor blade root fitting to fail.

Since the unsafe condition described is likely to exist or develop on other MDHI model helicopters of these same type designs, the FAA issued EAD 2007-09-51 to prevent the failure of a tail rotor blade and subsequent loss of control of the helicopter. This AD requires the following, before further flight:

• Remove each affected tail rotor blade assembly. Using a bright light, inspect the bore of the tail rotor blade root fitting.

• Replace each blade assembly that does not have a smooth radius.

• Identify the airworthy tail rotor blade assembly with the applicable model of helicopter.

Since it was found that immediate corrective action was required, notice and opportunity for prior public comment thereon were impracticable and contrary to the public interest. Good cause existed to make the AD effective immediately by individual letters issued on April 27, 2007, to all known U.S. owners and operators of MD Helicopters, Inc., Model 369 (Army YOH-6A), 369A (Army OH-6A), 369H, 369HM, 369HS, 369HE, 369D, 369E, 369F, and 369FF helicopters. These conditions still exist, and the AD is hereby published in the Federal Register as an amendment to 14 CFR 39.13 to make it effective to all persons.

The FAA estimates that this AD will affect 980 helicopters of U.S. registry and will require about:

• 0.1 work hour to identify a blade,

• 2 work hours to remove, inspect, install and balance the tail rotor blade assemblies on each helicopter,

• $80 per work hour labor rate, and

• $8,862 for each replacement blade plus hardware.

This AD is a final rule that involves requirements that affect flight safety and was not preceded by notice and an opportunity for public comment; however, we invite you to submit any written data, views, or arguments regarding this AD. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2007-28449; Directorate Identifier 2007-SW-18-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the AD. We will consider all comments received by the closing date and may amend the AD in light of those comments.

We will post all comments we receive, without change, to http://dms.dot.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this AD. Using the search function of our docket Web site, you can find and read the comments to any of our dockets, including the name of the individual who sent the comment. You may review the DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78), or you may visit http://dms.dot.gov.

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 DMS to examine the economic evaluation.

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.

The FAA published this direct final rule with a request for comments in the Federal Register on May 16, 2007 (72 FR 27415). The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit such an adverse comment, were received within the comment period, the regulation would become effective on July 5, 2007. No adverse comments were received, and thus this notice confirms that this direct final rule will become effective on that date.

The FAA published this direct final rule with a request for comments in the Federal Register on May 16, 2007 (72 FR 27413). The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit such an adverse comment, were received within the comment period, the regulation would become effective on July 5, 2007. No adverse comments were received, and thus this notice confirms that this direct final rule will become effective on that date. Additionally the name is changed to Manhattan Regional Airport.

The FAA published this direct final rule with a request for comments in the Federal Register on May 16, 2007 (72 FR 27416). The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit such an adverse comment, were received within the comment period, the regulation would become effective on July 5, 2007. No adverse comments were received, and thus this notice confirms that this direct final rule will become effective on that date.

The FAA published this direct final rule with a request for comments in the Federal Register on May 16, 2007 (72 FR 27412). The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit such an adverse comment, were received within the comment period, the regulation would become effective on July 5, 2007. No adverse comments were received, and thus this notice confirms that this direct final rule will become effective on that date.

Background

It is the policy of the United States Government to facilitate U.S. exports to legitimate civilian end-users in the People's Republic of China (PRC), while preventing exports that would enhance the military capability of the PRC. Consistent with this policy, the Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) by revising and clarifying United States licensing requirements and licensing policy on exports and reexports of goods and technology to the PRC.

As the PRC has increased its participation in the global economy, bilateral trade has grown rapidly, and the PRC has emerged as a major market for U.S. exports and investment. This greatly expanded economic relationship is beneficial for both nations, and has increased the prosperity of both the American and Chinese people. The United States therefore seeks to encourage and facilitate exports to legitimate civil end-users in the PRC. At the same time, the United States has a longstanding policy of not permitting exports that would make a direct and significant contribution to the PRC's military capability. Moreover, the United States has an interest in restricting exports of certain dual-use products and technologies that would not otherwise need an export license, if those items are destined for a “military end-use” in the PRC.

BIS is therefore amending the EAR to revise and clarify U.S. licensing requirements and licensing policy on exports and reexports of items to the PRC, and to establish a new authorization that is intended to facilitate exports to validated civilian end-users in the PRC. On July 6, 2006, BIS published a proposed rule and requested public comments (71 FR 38313). On October 19, 2006, the original comment period deadline of November 3, 2006 was extended until December 4, 2006 (71 FR 61692). The detailed rationale for the proposed rule's provisions is provided in the preamble to the proposed rule and is not repeated here. In general, however, this rule proposes certain revisions and clarifications to licensing requirements and policies with regard to the PRC to more precisely reflect U.S. foreign policy and national security interests.

To strengthen efforts to prevent U.S. exports to the PRC that would enhance the PRC's military capabilities, this rule revises the licensing review policy for items controlled on the Commerce Control List for reasons of national security. Specifically, this rule amends section 742.4(b)(7) to make clear that the overall policy of the United States for exports to the PRC of these items is to approve exports for civil end-uses but generally to deny exports that will make a direct and significant contribution to Chinese military capabilities. BIS makes further revisions to the EAR to clarify that it will review license applications to export or reexport to the PRC items controlled for chemical and biological weapons proliferation, nuclear nonproliferation, and missile technology under sections 742.2, 742.3 and 742.5, respectively, of the EAR, in accordance with the licensing policies in both paragraph (b) of the applicable section and with the revised licensing policy in paragraph 742.4(b)(7) of the EAR, which provides a presumption of denial for license applications to export, reexport, or transfer items that would make a direct and significant contribution to the PRC's military capabilities such as, but not limited to, the major weapons systems described in new Supplement No. 7 to Part 742 of the EAR.

This rule also implements a new control on exports to the PRC of certain CCL items that otherwise do not require a license to the PRC when the exporter has knowledge, as defined in section 772.1 of the EAR, that such items are destined for “military end-use” in the PRC or is informed that such items are destined for such an end-use. The list of items subject to this “military end-use” restriction covers approximately 20 products and associated technologies, as described in the entries of 31 full or partial Export Control Classification Numbers (ECCNs). The list was based on a review of public comments and a careful interagency review of items listed on the CCL that currently do not require a license for export to the PRC but have the potential to advance the military capabilities of the PRC. Applications to export, reexport, or transfer items controlled pursuant to the “military end-use” control will be reviewed on a case-by-case basis to determine whether the export, reexport, or transfer will make a material contribution to the military capabilities of the PRC and would result in advancing the country's military activities contrary to the national security interests of the United States. Other end-use controls in part 744 of the EAR continue to apply.

To facilitate legitimate exports to civilian end-users, BIS establishes in this rule a new authorization Validated End-User. The authorization will allow the export, reexport, and transfer of eligible items to specified end-users in an eligible destination, initially the PRC. Validated end-users will be those entities that meet a number of criteria, including a demonstrated record of engaging only in civil end-use activities. This rule outlines clear procedures to request Validated End-User authorization, the procedures and timelines to be used by an interagency committee established to consider such requests, and the criteria for evaluating requests.

To strengthen implementation of the April 2004 end-use visit understanding between the Vice Minister of Commerce of the PRC and the U.S. Under Secretary of Commerce for Industry and Security, this rule requires exporters to obtain PRC End-User Statements from the Ministry of Commerce of the PRC for all exports of items on the CCL requiring a license to the PRC over a specific value, which for most exports will be a new, higher threshold of $50,000. BIS anticipates that this change will facilitate BIS's ability to conduct end-use checks on exports or reexports of controlled goods and technologies to the PRC, consistent with the existing end-use visit understanding with the Government of the PRC, without resulting in an overall annual increase in the number of such statements required from U.S. exporters. The facilitation of end-use checks should, in turn, facilitate increased U.S. exports to the PRC.

BIS received 57 public comments, amounting to more than 1000 pages of comments on the proposed rule. Summaries of those comments and BIS responses appear below by topic. Similar comments are consolidated.

Comment 1: A number of commenters asserted that the “material contribution to military capability” standard used in the proposed rule with respect to BIS's review of license applications involving items controlled for national security is too broad. In addition, certain commenters stated that the concept of “material contribution to military capability” is largely subjective, and best left to military experts in the Government. Moreover, they asserted that the proposed definition of “military end-use” goes far beyond even the broad scope of the “material contribution to military capability” standard used elsewhere in the proposed rule and that it is unlikely that this problem can be resolved by revising that definition.

Response: BIS has considered the public comments received regarding the appropriate license review standard to apply to license applications involving items controlled for national security (NS) reasons. BIS had proposed revising section 742.4(b)(7) of the EAR to establish a policy of reviewing applications involving items controlled for NS reasons to determine if the items would make a “material contribution” to the PRC's military capabilities. This proposal would have changed the review standard in the EAR, in place since 1983, which provided that BIS would conduct an extended review or deny applications to export or reexport items that would make a “direct and significant contribution” to a series of listed PRC military activities. Having reviewed public comments, BIS and its interagency partners have decided to maintain the “direct and significant” standard and not to adopt a new “material contribution” standard. BIS agreed with commenters that the “material contribution” standard was too broad for a review of NS-controlled items. Although the “direct and significant” standard is being retained, BIS has decided to apply it to PRC military capabilities as a whole, rather than a limited list of military activities. To update and better inform exporters of this license application review policy, and to add clarity to the term “military capabilities,” BIS is adding new Supplement No. 7 to Part 742 of the EAR, which provides an illustrative list of weapons systems that could constitute PRC military capabilities. BIS developed this illustrative list in conjunction with its interagency partners.

Comment 2: Many commenters claimed that, due to widespread foreign availability, including production of such items in the PRC, the export, reexport, or transfer to the PRC of the listed items to which the proposed “military end-use” license requirement for the PRC would apply (set forth in Supplement No. 2 to Part 744) would not make an impact on the military capability of the PRC. Some of those commenters claimed that many of the items subject to the new “military end-use” license requirement have been exempted from most export restrictions and national security controls because they were deemed not useful for “military end-use” purposes.

Response: BIS reviewed each comment received regarding the list of ECCNs proposed for the new “military end-use” control. In response to these comments, BIS conducted a thorough review and analysis of each proposed ECCN, considering the following factors: (1) The military applicability of each item; (2) the relative foreign availability of each item; and (3) the level of U.S. commercial exports of each item to the PRC. Each ECCN was evaluated individually against all three criteria, with no one criterion being solely determinative. Greatest weight was given to the military applicability of each item, based on an evaluation of the contribution the items covered by the ECCN could make to a military capability if used in a “military end-use,” as defined in this final rule. With regard to foreign availability, indigenous availability within the PRC was given greater weight than evidence of foreign availability from countries that cooperate with the United States in multilateral export control regimes, though all evidence of foreign availability was considered. When BIS found significant evidence of foreign availability and a high level of commercial exports, but limited military applicability, the ECCN was removed from the proposed list. When BIS found limited evidence of foreign availability and significant military applicability, the item remained on the proposed list, even if it was a major commercial export. As a result of this analysis, BIS determined that it was appropriate to reduce the number of ECCNs subject to the “military end-use” licensing requirement from 47 to 31 full and partial ECCNs. For certain items, the list in Supplement No. 2 to part 744 includes particular commodities, as well as the software and technology associated with such commodities. Thus, the resulting list of full and partial ECCNs covers approximately 20 distinct product areas, including items such as aircraft and aircraft engines, underwater systems, lasers, depleted uranium, certain composite materials, airborne communications systems and inertial navigation systems, and certain highly specialized telecommunications equipment useful for electronic warfare, space communications, or air defense. The final list published with this rule clearly identifies those items that have the potential to contribute to the military end-uses that this final rule is intended to control, consistent with overall U.S. policy toward the PRC.

Comment 3: A number of commenters asserted that imposing the “military end-use” control on 47 ECCNs would have a commercial impact that extended beyond these items. Several commenters noted that, as proposed, the “military end-use” control extended to items classified under ECCNs 5A992 and 5D992, items that have never been controlled for export or reexport to the PRC. At the same time, items with higher-level encryption functionality would be eligible for export to the PRC under License Exception ENC. The commenters asserted that this would create an incentive for exporters to add cryptography to their items in order to be exempt from the “military end-use” licensing requirement.

Response: As noted in response to Comment 2, this final rule has been amended such that ECCNs 5A992 and 5D992 are no longer subject to the “military end-use” control. As a result, any such incentive that might have been present is no longer present.

Comment 4: A number of commenters asserted that the “military end-use” license requirement will be unilateral because some European members of the Wassenaar Arrangement have stated that they do not plan to implement the Wassenaar Arrangement Statement of Understanding on Control of Non-Listed Dual-Use Items to the PRC.

Response: The United States is committed to maintaining and implementing trade controls decided on a multilateral basis with like minded countries, such as other member countries of the Wassenaar Arrangement. To that end, this rule is consistent with U.S. commitments as a Participating State in the Wassenaar Arrangement. At the December 2003 Wassenaar Arrangement Plenary, Wassenaar Arrangement members agreed in a Statement of Understanding on Control of Non-Listed Dual-Use Items to adopt and implement measures controlling exports of dual-use items destined for “military end-use” in a country subject to a United Nations or relevant regional arms embargo. Commenters are correct that some Wassenaar Arrangement members have stated that they would not implement similar “military end-use” controls on dual-use exports to the PRC. However, other Wassenaar Arrangement members have said that they would consider such controls. The revisions made by this final rule are intended to align U.S. export controls with overall U.S. national security and foreign policy interests, consistent with our multilateral commitments but also recognizing the unique nature of U.S. military and security interests in the Asia-Pacific region.

Comment 5: Some commenters asserted that the “military end-use” license requirement will be burdensome to U.S. exporters and would be difficult to comply with, as proposed, because the definition of “military end-use” was overly broad and vague. They argued that the breadth of the definition would result in encompassing more items and transactions than those that potentially could enhance the military capabilities of the PRC. Some commenters argued that terms such as “deployment” and “support” were too vague to be readily understood by exporters screening their transactions, while other commenters noted that the definition of “military end-use” did not use well-understood terms from the EAR.

Response: To address the commenters' argument that the definition of “military end-use,” as proposed, may have been insufficiently precise, BIS, in conjunction with its interagency partners, has revised the definition of “military end-use” in section 744.21(f) of the EAR to add additional clarity and specificity. The revised definition draws extensively on the definition of military end-use already contained in section 744.17 of the EAR, which restricts certain exports and reexports of general purpose microprocessors for “military end-use” and to “military end-users.” Like the proposed rule, this final rule continues to define “military end-use” as including incorporation into a military item described on the U.S. Munitions List, International Munitions List, and items listed under ECCNs ending in “A018” on the CCL. However, it clarifies that “military end-use” also means for the “use”, “development,” or “production” (each as defined in part 772 of the EAR) of such items, and that it means for the “deployment” only of those items covered under ECCN 9A991 as described in Supplement No. 2 to Part 744. In addition, for purposes of this “military end-use” control, in a new note to section 744.21(f), BIS has provided definitions for “operation,” “installation,” “maintenance,” and “deployment.” These are terms not previously defined in the EAR, and BIS intends such definitions to clarify the scope of the military end-use control.

Comment 6: Some commenters asserted that the license application review standard related to the “military end-use” control also was overly broad and vague. They argued that this, too, would result in the rule encompassing more items and transactions than those that potentially could enhance the military capabilities of the PRC. They pointed out that the “military end-use” control would apply to items previously removed from control by agreement of various multilateral regimes, and commented that the concept of “material contribution” was imprecise.

Response: In response to comments received, BIS reviewed the breadth and clarity of the license review standard set forth in proposed section 744.21(e). This section provided that license applications involving the “military end-use” control would be reviewed on a case-by-case basis to determine whether they would make a “material contribution” to the military capabilities of the PRC and would result in advancing the country's military activities contrary to U.S. national security interests. This final rule reflects BIS's continued belief that this standard is the appropriate basis through which it will review such license applications. Items subject to the “military end-use” control were determined to be more sensitive when destined for a “military end-use” than when they are simply controlled for national security reasons, and therefore BIS determined that they are more appropriately subject to a different licensing review standard, consistent with U.S. foreign and related export control policies for the PRC. (BIS's consideration of “material contribution” is also discussed in response to Comment 1.) In addition, in reviewing public comments, BIS determined that the license review standard set forth in the proposed rule did not specify how BIS would treat a license application if it were determined that the criteria set forth in the standard were satisfied. In this final rule, BIS is revising the proposed license review standard to specify that when it is determined that these criteria are met, the license application will be denied.

Comment 7: A number of commenters stated that U.S. exporters, especially those exporting to distributors, would experience an undue burden and an increase in liability because they do not always have accurate information on the specific end-use of their products. Commenters further stated that it is difficult to know about customers' intentions with respect to resale, especially after reincorporation into a new product. They argued that the lack of clarity as to the expected degree of due diligence for complying with the “military end-use” control would exacerbate this problem, particularly because knowledge of a “military end-use” is determined using the existing standard of knowledge in the EAR instead of an actual and positive knowledge standard. In this context, some commenters also argued that the high costs of compliance U.S. exporters would experience would place them at a competitive disadvantage in the PRC market.

Response: BIS has reviewed the comments received regarding the knowledge standard set forth in the proposed “military end-use” control. Applying the EAR's existing knowledge standard provides exporters and reexporters with a familiar standard for screening or evaluating intended exports, reexports or transfers of items subject to the “military end-use” control. Under the EAR, exporters and reexporters already are responsible for ensuring that they do not, without a license, knowingly export or reexport any item subject to the EAR to an end-user or end-use that is restricted by part 744 of the EAR. The term “knowledge” used throughout part 744 (as defined in section 772.1 of the EAR) encompasses both actual knowledge and reason to know. Therefore, BIS believes that most exporters and reexporters already have screening procedures or internal controls in place to address the ramifications of having or gaining knowledge of an unauthorized end-use. The comments received did not provide evidence to support assertions that exporters will incur high costs of compliance related to the new “military end-use” control, nor was evidence provided to demonstrate that compliance burdens would be any greater than those currently required by provisions in part 744 of the EAR, which require exporters to apply for licenses based on their “knowledge” of the intended end-user or end-use of an item. Moreover, because this final rule reduces the number of ECCNs subject to the “military end-use” licensing requirement and further clarifies the definition of “military end-use,” BIS believes that the overall scope of the control has narrowed in a way that will minimize any additional burden of complying with these requirements.

Comment 8: Some commenters recommended that a better approach to the “military end-use” control would be for BIS to publish a list, similar to the Unverified List or Entity List in the EAR, which would name specific prohibited military end-users in the PRC. Commenters argued that such a publication would shift the burden from the U.S. exporters to the U.S. Government.

Response: BIS agrees that the EAR should provide exporters with as much clarity as possible regarding specific end-users of concern and end-users that merit greater scrutiny, as well as end-users that have been validated as legitimate civilian customers. As a result of this rule, BIS anticipates publishing the names of validated end-users. Another proposed rule, published on June 5, 2007 (72 FR 31005), would expand the criteria by which BIS could place end-users on the Entity List to include military end-users, thereby alerting exporters to the need for licenses. Yet even as BIS takes steps to identify for exporters customers of concern as well as legitimate civilian customers, BIS believes it remains critical for exporters to know their customers and perform due diligence to ensure that certain items destined for a “military end-use” in the PRC are reviewed by BIS. With regard to the suggestion that BIS publish a list of military end-users, it is important to recall that this rule controls certain items based on their end-use, not on the end-user. The control depends on the circumstances of how the item will be used, not necessarily by whom it will be used. Therefore, BIS does not believe that a special list of military end-users in the PRC is appropriate for this rule. BIS has other end-user controls and other lists to identify end-users of concern.

Comment 9: One commenter suggested that BIS clarify the relationship between existing License Exceptions available for the PRC and the proposed military end-use control.

Response: BIS has revised section 744.21(c) to state more clearly that certain provisions of License Exception GOV are available for items requiring a license as a result of the military end-use control. Absent such a license requirement or another relevant license requirement set forth elsewhere in the EAR ( e.g. , for a proliferation end-use restricted under part 744), items listed in Supplement No. 2 to Part 744 would be exported to the PRC without a license.

Comment 10: Some commenters stated that because the “military end-use” control will have a significant impact, it should have been determined to be a “major rule” for purposes related to requirements of the Congressional Review Act (CRA) and that BIS's analysis of the projected impact of the rule should be made public.

Response: Under the CRA, the OMB determines whether a rule is a “major rule.” OMB has determined, without regard to whether the proposed rule may have been major, that this final rule is not major because its annual effect on the economy is well below the $100 million threshold provided in the CRA.

BIS's analysis for this final rule demonstrates that the changes to the EAR (End-User Statement (EUS) requirement; Validated End-User (VEU) authorization; and “military end-use” control) that have the potential to have an annual effect on the economy will actually have little overall effect.

The EUS requirement will result in little, if any additional cost to U.S. exporters. EUSs are now required for all license exports exceeding $50,000 in value (except for computers subject to the provisions of section 748.10(b)(3) or to items classified under ECCN 6A003). While this changes the distribution of license applications requiring EUSs, the higher dollar threshold triggering the need for an EUS will keep the overall number of license applications that require EUSs about the same as it was before this revision. The VEU authorization will actually reduce costs of U.S. exporters because it will eliminate the need for individual export licenses to specified customers in the PRC. Eliminating export license applications could save U.S. exporters as much as several million dollars annually. While the rule does establish reporting requirements on U.S. companies that export without a license under the VEU authorization, these requirements are not appreciably more than existing recordkeeping requirements and should be far less than the cost of license applications avoided by the U.S. exporters.

Finally, the “military end-use” control established by this rule covers a small set of items. U.S. exporters should already be screening these exports, as well as all items subject to the EAR (items numbering in the thousands) for reasons of control that are set forth in part 744 of the EAR (including weapons of mass destruction end-uses and involvement of persons denied export privileges). The most direct potential cost of the “military end-use” control would be export license applications now required when previously they were not. Based on existing data, this control could result in additional export licenses for approximately $5,000,000 worth of goods annually, with a cost, using a very high estimate, of $500,000. Commenters did not provide data to allow BIS to evaluate what increased compliance costs, if any, entities would incur with this additional screening requirement.

Thus, the overall annual effect on the economy of this rulemaking, using a very high estimate, will not be more than about several million dollars, which is well below the $100 million threshold required for a major rule.

Comment 11: Two commenters asserted that BIS does not have the statutory authority to promulgate this regulation. In particular, one commenter asserted that BIS does not have authority to amend the EAR to impose unilateral national security controls on exports to China.

Response: Although the EAA has been in lapse since August 21, 2001, BIS amends the EAR under the authority conferred by Executive Order 13222 of August 17, 2001, as extended most recently by the Notice of August 3, 2006 (71 FR 44551 (Aug. 7, 2006)). Therein, the President, by reason of the expiration of the EAA, invoked his authority, including authority under the International Emergency Economic Powers Act, to continue in effect the system of controls that had been maintained under the EAA. In addition, as noted in response to Comment 4, BIS is imposing this “military end-use” control consistent with U.S. commitments as a Participating State in the Wassenaar Arrangement, under the Arrangement's policy of national discretion in implementation. Moreover, other Participating States are considering their own measures to implement those commitments.

Comment 12: Two commenters asserted that, in drafting the final version of this rule, BIS should include a provision for contract sanctity in order to avoid adverse effects on existing business contracts. In particular, one commenter stated that BIS should allow exports under open, unshipped orders or contracts and allow companies to continue to satisfy warranty obligations for spare parts, service and maintenance, as well as non-warranty obligations for machines that are already installed.

Response: BIS recognizes that exporters and reexporters may have ongoing contractual obligations to service items previously shipped to the PRC. This is the case whenever BIS issues a rule that imposes a new license requirement. Accordingly, BIS has a practice of including contract sanctity language in the Saving Clause section of such rules, and has included such language in this rule. This language provides that there is a thirty-day delay between publication of this rule and the rule's effective date.

Comment 13: Many commenters stated that an expansion of the End-User Certificate (EUC) requirement to encompass items that require a license for any reason to the PRC and exceed $5,000 would pose a substantial burden for exporters and reexporters because it would increase the number of EUCs required for exports of items to the PRC. Currently, they argued, U.S. exporters experience delays in obtaining EUCs from the PRC's Ministry of Commerce (MOFCOM). They further argued that having to obtain additional EUCs from MOFCOM would protract these delays because MOFCOM does not have sufficient resources to accommodate such an increase in requests. In this context, some commenters also asserted that BIS should not implement the expanded EUC requirement until the government of the PRC agrees to provide the certificates in a timely manner.

Response: As an initial matter, BIS notes that to conform with nomenclature that is recognized by MOFCOM, BIS is amending the EAR to label documents previously described as PRC End-User Certificates as End-User Statements (EUSs). This change was implemented in response to commenters' requests that BIS increase its coordination and cooperation with MOFCOM regarding EUSs. In this rule, this amendment to the EAR is being made in sections 748.9, 748.10 and 748.12.

Like the proposed rule, this final rule continues to provide in section 748.10(a) that it applies to transactions involving items controlled for reasons of national security that are destined for any country identified in section 748.9(b)(2) of the EAR and that, in the case of the PRC, it applies to transactions involving all items that require a license to the PRC for any reason. Based on public comments, however, BIS has reassessed the value threshold at which an EUS will be required for the PRC. As compared to the proposed rule, this final rule, in section 748.10(b)(4), increases the threshold at which an EUS will be required for most items from $5,000 to $50,000. In recent years, exporters and reexporters to the PRC have obtained between 500 and 600 EUSs each year. BIS selected the $50,000 threshold so that the number of EUSs obtained would remain approximately the same, thereby addressing commenters' concerns regarding the burden of obtaining an increased number of EUSs and the burden on MOFCOM of processing an increased number of requests for EUSs. While some exporters (those that export items controlled for reasons other than national security, especially in the chemical sector) will face a new requirement to obtain EUSs, other exporters (those exporting items controlled for reasons of national security valued under $50,000) will have a reduced burden. In raising this threshold, BIS has acted to provide some relief from burdens commenters state that exporters experience with paperwork and the EUS requirement for applicable transactions above $5,000. The new $50,000 threshold will not apply to items classified under ECCN 6A003 (cameras) or to exports to the PRC of computers subject to section 748.10(b)(3). BIS's analysis of licensing data revealed that nearly all transactions for items controlled under ECCN 6A003 are valued at below $50,000. Because BIS believes there is a continued national security need to require EUSs to conduct end-use checks on the sensitive commodities covered by ECCN 6A003, BIS left the $5,000 threshold in place for these commodities. Items classified under ECCN 6A003 are controlled for national security reasons; as a result, this action does not result in imposing a new requirement but simply maintains an existing one. Excluding computers subject to section 748.10(b)(3) from the $50,000 threshold also maintains an existing requirement. As to any delay in the PRC's implementation of this new EUS requirement, as noted above, the U.S. Government and the Government of the PRC continue a dialogue to address obstacles that may impede the timely processing of requests for EUSs.

Comment 14: Some commenters argued that the $5,000 threshold for the EUC requirement is too low.

Response: As noted in response to Comment 13, above, BIS is raising the EUC threshold for most items to $50,000. The response to Comment 13 provides BIS's rationale for raising this threshold.

Comment 15: Commenters also argued that the expansion of the EUC requirement would protract delays in export licensing because of the lack of sufficient U.S. Government personnel in the PRC to conduct end-use visits and because the Department of Commerce would use the expanded EUC requirement as a basis to increase the number of end-use visits in the PRC.

Response: As noted in the response to Comment 13, BIS does not expect this final rule to result in any significant increase in the number of EUSs required per year. The application of the EUS requirement to items other than those controlled for NS reasons is intended to broaden the variety of situations in which end-use visits may be performed (to include end-use visits concerning items controlled for chemical or biological weapons proliferation reasons, for example). The increased dollar threshold is intended to substantially minimize any increase in the overall number of such visits.

Comment 16: Some commenters stated that the issuance of EUCs depends on the cooperation of senior officials of the government of the PRC. These commenters contend that expanding this requirement would harm the bilateral economic relationship, as well as significant political, military, and foreign policy relationships, between the United States and the PRC, thereby disrupting the necessary cooperation.

Response: As noted in the response to Comment 13, this final rule will require EUSs in circumstances where they were not previously required, but because of the higher dollar threshold this amendment to the EAR is not expected to result in an overall increase in the number of EUSs required. The fact that the Governments of the United States and the PRC are currently engaged in productive dialogue to facilitate end-use visits counters the notion that the changes to the EUS requirement would harm the bilateral relationship.

Comment 17: Some commenters stated that the consequence of the expanded EUC requirement would be a decrease in the volume of U.S. exports to the PRC because customers in the PRC would look to non-U.S. suppliers that do not maintain a similar requirement. They argue that this outcome would be contrary to the purpose of facilitating end-use visits and increased U.S. exports to the PRC, which was explained in the proposed rule.

Response: As explained in the response to Comment 13, the effect of the change to the EUS requirement is not expected to result in a great impact either in terms of costs to the exporter or reexporter or in terms of compliance burden. As a result, BIS does not anticipate that this amendment to the EAR would cause customers in the PRC to turn to non-U.S. suppliers.

Comment 18: Some commenters argued that BIS should exempt companies that are granted Validated End-User status from the EUC requirement.

Response: Section 748.10 of the EAR requires that EUSs be obtained in situations in which a license is required. As Validated End-User authorization eliminates a license requirement, eligible items exported, reexported or transferred under that authorization will not need EUSs.

Comment 19: One commenter stated that the proposed rule should be clarified to indicate whether the expanded EUC requirement covered exports of technology.

Response: Section 748.9(a)(7) provides that exports and reexports of software and technology are exempt from support documentation requirements; BIS proposed no change to this exemption and has made none in this final rule.

Comment 20: One commenter asserted that the EUC requirement constitutes a non-tariff barrier to trade with the PRC. Another commenter asserted that, given the difficulty of obtaining EUCs and the inconsistent information and lack of transparency of MOFCOM in issuing EUCs, U.S. exporters may be required to increase their Foreign Corrupt Practices Act (FCPA) compliance costs to ensure that no prohibited payments are made.

Response: The need for an EUS has been a long standing requirement in the Export Administration Regulations. As noted in response to Comment 13, this final rule merely widens the scope of circumstances in which an EUS is required without increasing the number of EUSs that must be obtained. In addition, BIS notes that the requirement for U.S. exporters to obtain an EUS stems from the Chinese determination that EUSs are required for end-use checks. BIS does not agree that EUSs pose a non-tariff barrier to trade, and without concrete information has no basis to assess possible FCPA-compliance issues raised by this commenter.

Comment 21: Some commenters asserted that the expansion of the EUS requirement implicates requirements of the Paperwork Reduction Act of 1955 (44 U.S.C. 3501 et seq. ) (PRA).

Response: The impact of the revision of the EUS requirement has been addressed above in the response to Comment 13. BIS prepared a PRA package in connection with the EUS element of this rule.

Comment 22: Several commenters claimed that the VEU authorization may benefit exporters that have a small customer base, but would not benefit exporters that sell to a large number of customers in the PRC that will in turn act as resellers, distributors, or retailers of those products in the Chinese market to a wide variety of customers.

Response: VEU authorization is intended to facilitate exports by removing the requirement for an individual license for end-users that meet the criteria for VEU authorization. BIS has set no limit on how many customers may apply to receive exports under VEU authorization, and has not precluded resellers from receiving VEU status.

Comment 23: Some commenters asserted that the VEU authorization presents an additional administrative burden because of the associated VEU certification, recordkeeping and reporting requirements, which are similar to the requirements associated with Special Comprehensive Licenses (SCLs).

Response: Authorization VEU is voluntary and therefore does not present an additional administrative burden for any entity that does not choose to avail itself of the authorization. Exporters or customers who believe the VEU requirements are too burdensome may continue to apply for individual licenses if they so choose. Nevertheless, following our review of comments, in this final rule, BIS has established procedures for applying for VEU status that were designed to be as straightforward and present as little burden as possible, consistent with the requirements of national security. VEU status would provide significant benefits for end-users, as well as entities that export or reexport to validated end-users. In addition, BIS believes that the requirements for recordkeeping and reporting associated with VEU status are less burdensome than those currently in effect for other authorizations such as special licenses that are available under the EAR to companies that meet specified criteria.

Comment 24: Several commenters claimed that the VEU authorization would be burdensome because it would require a complex internal control commitment from Chinese customers or end-users. Those end-users would require assistance from exporters or reexporters in order to request the authorization.

Response: End-users will wish to evaluate the benefit of holding a VEU authorization, and exporters, similarly, will want to consider for themselves the benefits of working with their customers to apply for such authorization. As noted in response to Comment 23, VEU authorization is entirely voluntary, but those that meet its criteria will be afforded the significant benefit of receiving certain items without the need for an individual license for each transaction. Also as noted in response to Comment 23, BIS has established procedures for applying for VEU status that were designed to be as straightforward and present as little burden as possible, consistent with the requirements of national security. BIS offers assistance for exporters and end-users in complying with the EAR, and anticipates conducting additional outreach to clarify the procedures and benefits of the VEU authorization.

Comment 25: Several commenters questioned whether the VEU authorization offers a benefit. They asserted that U.S. exporters would go through an administratively burdensome and costly process of preparing and submitting a request for VEU authorization only to have their Chinese customers made public on the BIS Web site. This would result in the exporters losing competitive advantage as their competitors would have access to their customers.

Response: See responses to Comments 23 and 24. In developing the VEU authorization, BIS reviewed an extensive amount of licensing data, which indicated that many Chinese end-users are served by multiple U.S. exporters, all of whom would benefit if the end-user were to be granted VEU status. BIS believes that identifying Chinese customers as validated end-users will help to expand high-technology trade and U.S. exports by making clear to all potential U.S. exporters that there is a universe of end-users in the PRC that may receive certain items on the CCL without the administrative burden of receiving an individual license.

Comment 26: Several commenters stated that BIS should ensure that no violations of Section 12(c) of the Export Administration Act of 1979, as amended (EAA), occur when BIS publishes information related to the VEU authorization or information about end-users who are granted VEU authorization.

Response: BIS agrees that it is critical to protect information covered by Section 12(c) of the EAA. BIS conscientiously protects all proprietary information, and will continue to ensure that the requirements of Section 12(c) are met in its administration of VEU authorization.

Comment 27: Some commenters asserted that VEU authorization would present problems for companies in the PRC unwilling to submit to U.S. legal jurisdiction because of possible penalties under the laws of the PRC. They argued that the Government of the PRC might discourage companies from applying for VEU authorization, and further claimed that MOFCOM would refuse to allow end-use checks to be conducted on such companies.

Response: BIS designed the VEU authorization program to correspond to existing requirements of the EAR and to impose as little additional burden as possible on exporters, reexporters and Chinese end-users that currently use individual licenses or SCLs. BIS notes that Chinese end-users currently receiving items under individual licenses or SCLs are already (and have long been) required by the EAR to maintain certain records and to comply with certain license conditions. These activities are similar to the activities required of validated end-users in section 748.15 of the EAR. Hence, the VEU program will not substantially add compliance responsibilities for companies in China whose activities are subject to the EAR. BIS will continue to explain the VEU authorization to the Government of the PRC, and to encourage that Government's cooperation with the program. However, it is important to note that decisions regarding export licenses and export authorizations for items subject to the EAR are made solely by the United States Government.

Comment 28: Some commenters asserted that the potential benefit or usefulness of VEU authorization is reduced because vetted end-users would not be allowed to receive all products and technology under all ECCNs under the EAR.

Response: Authorization VEU is not intended to eliminate the requirement that exporters or others comply with applicable provisions of law or the EAR. By statute, BIS must require a license for items controlled for missile technology or crime control reasons that will be exported or reexported to the PRC. While BIS recognizes that entities designated as validated end-users would like to be exempt from all EAR licensing requirements, BIS has designed the VEU authorization to ensure that exports under VEU are relevant to the validated end-user's business. It would not be appropriate, for example, to permit exports under authorization VEU of semiconductor manufacturing equipment to a chemical factory, or of aircraft parts to a plant producing computers. For that reason, BIS will require applicants for VEU authorization to identify those ECCNs that they wish to receive under the authorization, and will decide whether those items are appropriate based on the circumstances of the case.

Comment 29: Many commenters asserted that there would be negative consequences for companies who apply for and do not receive VEU authorization, implicitly creating a “black list,” thus posing a risk of application that most U.S. exporters would be unwilling to take. Commenters further stated that BIS should make clear that applying for and not obtaining VEU authorization would not be considered a “red flag” for a transaction. In addition, one commenter stated that BIS should delete language regarding possible “other actions,” in addition to removal from the VEU list, as a penalty for non-compliance with VEU requirements.

Response: Based on these comments, BIS has specifically noted in the chapeau to section 748.15 that if an application for VEU authorization for a particular end-user is not granted, no new license requirement is triggered and the end-user is not rendered ineligible for license approvals from BIS. Moreover, VEU status is pertinent only to transactions in which licenses would otherwise be required. Accordingly, lack of approval of a VEU request would neither add to nor take away from the licensing requirements applicable to exports or reexports to an end-user that is not validated. Actions taken in the context of VEU authorization, including non-compliance with VEU requirements, that violate the EAA, the EAR, or any order, license, or authorization issued thereunder may form the basis for enforcement action.

Comment 30: Many commenters claimed that the selection process for granting VEU authorization is unclear and the evaluation factors are too extensive and ill-defined. The commenters further stated that providing illustrative examples of evaluation factors, such as an example of the factor “party's relationships with U.S. and foreign companies,” might increase exporters' understanding of the VEU process. Several commenters further asserted that a published model VEU request would provide U.S. exporters and potential VEUs guidance on BIS's expectations.

Response: BIS agrees that it is important to be explicit about the type of criteria that BIS and its interagency partners will consider in evaluating VEU candidates, as well as the process that BIS and its interagency partners will use in making such determinations. As a result, in this final rule, BIS has attempted to explain in great detail how VEU authorizations will be administered by the U.S. Government. Section 748.15(a)(1) provides that BIS will accept applications from exporters, reexporters, or end-users and identifies the address to which such applications must be submitted. Section 748.15(a)(2) of this rule specifies that, in determining which end-users will be approved for VEU status, BIS will consider a range of information, including such factors as: the entity's record of exclusive engagement in civil end-use activities; the entity's compliance with U.S. export controls; the need for an on-site review prior to approval; the entity's capability of complying with the requirements of authorization VEU; the entity's agreement to on-site reviews to ensure adherence to the conditions of the VEU authorization by representatives of the U. S. Government; and the entity's relationships with United States and foreign companies. Section 748.15(a)(2) also specifies that when evaluating the eligibility of an end-user, agencies will consider the status of export controls and the support and adherence to multilateral export control regimes of the government of the eligible destination. In addition, new Supplement No. 8 to Part 748 provides details as to the specific information that must be submitted to BIS in a VEU authorization request. Finally, new Supplement No. 9 to Part 748 provides details as to the decision-making process of the End-User Review Committee (ERC), including timeframes for decision-making. The ERC is composed of representatives of the Departments State, Defense, Energy, and Commerce and other agencies, as appropriate. All of these changes are intended to address public comments encouraging BIS to explain the VEU authorization process in as much detail as possible. In addition, BIS plans to conduct extensive outreach to explain to exporters and potential VEU candidates the procedures and requirements for applying for this authorization, and will consider sample or model requests as part of this outreach and education.

Comment 31: Some commenters stated that BIS should identify a time limit for approving or rejecting VEU requests.

Response: BIS agrees that it is important to establish specific time deadlines for approving or rejecting VEU applications. Supplement No. 9 to Part 748, paragraph 4, provides that the ERC will make determinations whether to grant VEU authorization to each VEU candidate no later than 30 calendar days after the candidate's complete application is circulated to all ERC agencies. Prior to or during its review of an application, BIS or the Committee may determine that it is appropriate to request additional information from the applicant or potential validated end-user. When BIS or the ERC requests such information, the 30-day clock is put on hold while the ERC is waiting for additional information.

Comment 32: One commenter stated that BIS should: expressly limit audits associated with VEU authorization to activities that occur under the authorization; not extend such audits to other areas of compliance; identify which U.S. Government agency would conduct VEU visits; and specify how frequently such visits will occur. In this context, the commenter stated that visits should occur no more than three times per year, and that advance notice should be provided—preferably 14 days in advance of the visit.

Response: In this rule, based on public comments, BIS clarifies that reviews for purposes of administering and enforcing the provisions of authorization VEU are not financial audits, as the term may have been interpreted. As BIS implements the VEU authorization, BIS will continue to consider the recommendation that reviews should occur no more than three times per year and with 14 days advance notice. Visits will be conducted and led by personnel of the Commerce Department, in coordination with the U.S. Embassy, and may include representatives of other U.S. Government agencies, as appropriate.

Comment 33: Some commenters stated that BIS should clarify whether BIS's reference to “items” in the VEU authorization includes technology and hardware.

Response: As stated in section 772.1 of the EAR, “item” means “commodities, software, and technology.” As such, commodities, software, and technology are eligible items under authorization VEU.

Comment 34: Some commenters stated that BIS should clarify whether the knowledge standard set forth in the EAR applies to exporters' actions under the VEU authorization.

Response: As provided in section 764.2(e) of the EAR, no person may take certain actions with respect to any item subject to the EAR with knowledge that a violation of the EAA, EAR, or any order, license or authorization issued thereunder, has occurred, is about to occur, or is intended to occur in connection with the item. The term “knowledge” is defined in section 772.1. Authorization VEU is an authorization covered by section 764.2(e), and the knowledge standard set forth in section 772.1 applies to actions under the VEU authorization.

Comment 35: Some commenters recommended that BIS extend the VEU authorization program to other destinations such as India and Taiwan.

Response: The United States Government believes that authorization VEU could be a valuable tool to facilitate exports to civilian end-users in other destinations, and is actively considering making additional destinations eligible for authorization VEU.

Comment 36: Some commenters advised that the VEU authorization should apply to subsidiaries, subcontractors, and multiple facilities of the same end-user.

Response: BIS agrees that it may be appropriate for VEU authorization to cover multiple facilities of the same end-user. Such entities are free to request authorization for multiple locations or facilities. If so, pursuant to the requirements of Supplement No. 9 to Part 748, paragraph 1, they must provide with their applications the physical addresses of each location in the eligible destination. BIS will consider requests to cover multiple facilities according to the criteria and procedures listed in new Supplements 8 and 9 to Part 748. In particular, as described in Supplement No. 8 to Part 748, BIS requires that VEU applications provide an overview of the structure, ownership and business of the prospective validated end-user, which should include subsidiaries and joint-venture projects. Applicants must also provide the physical address(es) of the location(s) where the item(s) will be used, if this address is different from the address of the prospective validated end-user.

Comment 37: Some commenters requested that BIS allow a more permissive VEU certification process for subsidiaries of U.S. companies.

Response: BIS believes that it is important to maintain the same procedure for all applicants for VEU authorization. Subsidiaries of U.S. companies are certainly eligible to apply for VEU authorization; their applications will be reviewed against the criteria listed in section 748.15(a)(2).

Comment 38: One commenter suggested that the U.S. Government, on its own, identify companies to be granted VEU status.

Response: BIS agrees that it is important for the U.S. Government to be able to identify possible VEU candidates. As such, Supplement No. 9 to Part 748, paragraph 3, specifies that the ERC will consider candidates for VEU authorization that are identified by the U.S. Government.

Comment 39: Some commenters suggested that end-users under the Special Comprehensive License (SCL) program should be given special consideration in obtaining VEU authorization and that the SCL approval process for end-users should warrant “de facto” authorization for VEU status.

Response: BIS will consider all applicants for VEU status, and status as an SCL consignee or end-user will be taken into account if such consignees or end-users are VEU candidates. The SCL approval process will not, however, be “de facto” VEU authorization because SCL status and VEU authorization are materially different from one another, and consequently the criteria BIS uses to evaluate applicants for SCL status (set forth in Part 752 of the EAR) and VEU authorization (set forth in section 748.15 of the EAR and in Supplement No. 8 to Part 748) are different. Because these differing sets of criteria are tailored toward the distinct and differing features of SCL and VEU status, respectively, BIS has made the decision not to grant special consideration to VEU applications from SCL end-users or consignees. Such applications will be evaluated on the basis of the criteria set forth in section 748.15 and Supplement No. 8 to Part 748 of the EAR.

Comment 40: One commenter argued that there is a significant disconnect between the VEU authorization and BIS's deemed exports licensing policy. This commenter urged that BIS allow authorization VEU to cover exports of technology to foreign national employees of authorized companies normally employed inside the United States, if the employees are nationals of a country eligible for VEU status. Similarly, another commenter argued that BIS should confirm in this final rule that authorization VEU will allow the release of technology to PRC nationals in the United States if the PRC national is a full-time employee of an entity with approved VEU status.

Response: If a validated end-user is approved to receive specific eligible technology, part of that VEU authorization is the authorization for Chinese employees of that validated end-user to receive the same technology, including through a transfer inside the United States.

Comment 41: One commenter argued that BIS should clarify the impact of this rule on deemed exports. In particular, this commenter stated that this rule should not apply to technical information that flows between affiliated entities, particularly with respect to Chinese subsidiaries of U.S. parent corporations.

Response: Under the new “military end-use” control, a license is now required for any deemed export covered by section 744.21 of the EAR. In addition, the revised licensing policy for items controlled for national security reasons will apply to license applications involving deemed exports. The intersection between the VEU authorization and transfers of technology inside the United States is discussed above in response to Comment 39. Under the current regulations, the deemed export rule does not regulate the flow of information between exporters in the U.S. and affiliated entities overseas that the commenter describes as a deemed export transaction. The deemed export rule regulates the transfer of controlled technology to foreign nationals working in the United States. Under the EAR, unless a License Exception applies, an export license is required if technology that requires a license is to be released to an affiliated entity overseas.

Comment 42: Some commenters stated that BIS should publish in Chinese the names of entities that receive VEU authorization. These commenters also recommended that the Entity List and Unverified Parties List be published in Chinese.

Response: BIS agrees that it is important to provide as much information as possible to exporters and reexporters regarding U.S. export controls. However, the Federal Register , which officially publishes all U.S. Government regulations, only publishes documents in the English language. In addition, BIS's limited resources do not allow such information to be published on the BIS Web site at this time. BIS will continue to consider this recommendation as part of its outreach effort to educate exporters and customers in the United States and the PRC.

Comment 43: One commenter argued that instead of the VEU authorization, BIS should consider a “gold card” license for certain exporters that would allow those exporters to export a pre-identified range of products to any qualified customer in the PRC.

Response: The VEU accomplishes the same goal as that proposed by the commenter. It allows U.S. exporters to export a pre-identified range of products to qualified customers. For national security reasons, however, the U.S. Government must retain the ability to determine who is a “qualified customer” for controlled items exported by any exporter, no matter how “gold.” The VEU program facilitates civilian high-technology trade, in a way that will be neither overly burdensome nor intrusive. The VEU program creates positive, market-based incentives and rewards for companies that act responsibly with sensitive products. Firms with established civilian credentials and a good record of handling such products will enjoy better access to controlled technology than their competitors, and U.S. exporters will be able to sell more efficiently to their best civilian customers.

Comment 44: Some commenters argued that instead of the VEU authorization, companies in the PRC should be allowed to provide certificates to BIS in which they agree to end-use checks.

Response: A VEU authorization will take the place of individual licenses. Consequently, there are a number of factors to be considered, in addition to willingness to host on-site reviews, in determining whether a customer in the PRC will be approved as a VEU. As set forth in section 748.15, these factors include the entity's record of exclusive engagement in civil end-use activities, the entity's compliance with U.S. export controls, the need for an on-site review prior to approval, and the entity's capability of complying with the requirements of authorization VEU, as well as an agreement to accept on-site reviews. Moreover, on-site reviews by U.S. Government officials are to verify the end-user's compliance with the conditions of the VEU authorization. Thus, VEU on-site reviews are separate and distinct from End-Use Visits as defined in the End-Use Visit Understanding established between the Governments of the U.S. and the PRC.

Comment 45: Some commenters argued that BIS should provide another opportunity for industry to comment on the VEU authorization before it becomes effective.

Response: BIS has considered the 57 public comments received, many of which included statements regarding the VEU authorization. Having thoroughly reviewed these comments, BIS believes it has a basis to move forward with the VEU authorization program. However, BIS accepts comments on an ongoing basis, as noted in the ADDRESSES section of this Action. BIS is always considering how to improve the EAR, and will consider any such comments received as it goes forward with the VEU program.

After considering the public comments and consulting with its interagency partners, BIS is implementing the proposed rule, with the modifications described below.

With respect to the license review policy for items controlled for national security reasons destined for the PRC, the proposed rule provided that there would be a presumption of denial for items that would make a “material contribution” to the military capabilities of the PRC. This amendment would have modified Section 742.4(b)(7) of the EAR, which previously provided that applications involving items destined for the PRC that are controlled for national security reasons received extended review or denial if they would make a “direct and significant contribution” to certain specified aspects of PRC military development. BIS is retaining its “direct and significant contribution” standard in this final rule, but has amended the list of PRC military capabilities. An illustrative list of PRC military capabilities is presented in new Supplement No. 7 to Part 742 of the EAR (Description of Major Weapons Systems).

BIS also is implementing the “military end-use” control set forth in the proposed rule. BIS has reviewed the proposed list of items covered by this new control, which are set forth in Supplement No. 2 to Part 744 of the EAR, and determined that rather than the 47 ECCNs identified in the proposed rule, this final rule will apply the “military end-use” control to items covered under 31 ECCNs, entirely or in part, covering commodities, software, and technology for approximately 20 distinct product groups. All of the 31 full or partial ECCNs included in this final rule were also included in the proposed rule.

With respect to the “military end-use” control, BIS is also changing the definition of “military end-use” that was set forth in Section 744.21(f) of the proposed rule. In this final rule “military end-use” means: incorporation into a military item described on the U.S. Munitions List (USML) (22 CFR part 121, International Traffic in Arms Regulations); incorporation into a military item described on the International Munitions List (IML) (as set out on the Wassenaar Arrangement Web site at http://www.wassenaar.org ); incorporation into items listed under ECCNs ending in “A018” on the CCL in Supplement No. 1 to part 774 of the EAR; or for the “use”, “development”, “production”, or deployment of military items described on the USML or the IML, or items listed under ECCNs ending in “A018” on the CCL. For purposes of section 744.21, deployment applies only to commodities covered under ECCN 9A991 as described in Supplement No. 2 to Part 744 of the EAR. In connection with the definition of “military end-use,” BIS is also amending the EAR to include a note to section 744.21(f) that defines, for purposes of the “military end-use” control, the terms, “operation,” “installation,” “maintenance,” and “deployment.”

BIS is amending the EAR to provide that what were previously described as “End-User Certificates” are now properly termed “End-User Statements” (EUSs) with respect to the PRC. This amendment affects sections 748.9, 748.10 and 748.12. In the proposed rule, BIS originally stated that it planned to expand the requirement for EUSs to items that require a license for any reason to the PRC and exceed a total value of $5,000. In this final rule, BIS has raised the threshold dollar amount for required EUSs for the PRC in section 748.10 of the EAR to $50,000 for most items. The raised threshold will not apply to items classified under ECCN 6A003 (cameras) and exports to the PRC of computers subject to section 748.10(b)(3). The threshold amount for items classified under ECCN 6A003 remains $5,000, as set forth in the proposed rule. Also in this final rule, BIS has raised the threshold dollar amount for required Import Certificates for items controlled for national security reasons to any destination listed in section 748.9(b)(2) from the $5,000 specified in the proposed rule to $50,000. Finally, BIS is amending Supplement No. 4 to Part 748 to provide the correct name of the branch of the Government of the PRC that issues EUSs.

BIS is adding Authorization Validated End-User (VEU) to the EAR, in new section 748.15. With this final rule, BIS amends the EAR to provide detailed information to the exporting community regarding the VEU authorization. Information required to be submitted with VEU authorization applications is set forth in new Supplement No. 8 to Part 748 of the EAR (Information Required for Requests for Validated End-User Authorization). In addition, section 748.15 establishes the End-User Review Committee, which is responsible for making determinations on VEU candidates. New Supplement No. 9 to Part 748 sets forth the membership of the Committee and the procedures that the Committee will follow.

In connection with these amendments to the EAR regarding VEU authorization, BIS is also making conforming changes. BIS is adding new paragraph (3) to section 743.1 (Wassenaar Arrangement), which informs exporters of the Wassenaar Arrangement of reporting requirements related to VEU authorization; new paragraph (b) to section 750.2 (Processing of Classification Requests and Advisory Opinions), which informs exporters of the timeframe in which VEU applications will be considered; and new paragraph (b)(5) to section 758.1 (The Shipper's Export Declaration (SED) or Automated Export System (AES) record), which informs exporters that shipping documentation must be filed with the U.S. Government for all exports under VEU authorization.

Shipments of items removed from eligibility for a License Exception or for export or reexport without a license (NLR) as a result of this regulatory action that were on dock for loading, on lighter, laden aboard an exporting or reexporting carrier, or en route aboard a carrier to a port of export or reexport on June 19, 2007, pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export or reexport without a license (NLR) so long as they are exported or reexported before July 19, 2007. Any such items not actually exported or reexported before midnight on July 19, 2007 require a license in accordance with this rule.

1. This final rule has been determined to be significant for purposes of Executive Order 12866.

2. 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 Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This rule contains collections of information subject to the requirements of the PRA. These collections have been approved by OMB under Control Numbers 0694-0088 (Multi-Purpose Application), which carries a burden hour estimate of 58 minutes to prepare and submit form BIS-748, and 0694-0093, “Import Certificates and End-User Certificates (End-User Statements when referring to the PRC),” which carries a burden of 15 minutes per submission. This rule also contains a revision to the existing collection under Control Number 0694-0088 for recordkeeping, reporting and review requirements, which would be required in connection with authorization Validated End-User and would carry an estimated burden of 30 minutes per submission. An amendment to the existing collection under Control Number 0694-0088 reflecting this revision has been submitted to OMB for approval. This rule is not expected to result in a significant increase in license applications or other documentation submitted to BIS. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing the burden, to David Rostker, Office of Management and Budget (OMB), and to the Regulatory Policy Division, Bureau of Industry and Security, Department of Commerce, as indicated in the ADDRESSES section of this rule.

3. This rule does not contain policies with Federalism implications as that term is defined under Executive Order 13132.

4. The provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking and the opportunity for public participation are inapplicable because this regulation involves a military or foreign affairs function of the United States (5 U.S.C. 553(a)(1)). Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. , are not applicable. This regulation is issued in final form. Although the formal comment period closed on December 4, 2006, public comments on this regulation are welcome on a continuing basis. Comments should be submitted to Sheila Quarterman, Office of Exporter Services, Bureau of Industry and Security, Department of Commerce, P.O. Box 273, Washington, DC 20044.

Electronic Version

The electronic file of this document is available on the date of publication in the Federal Register at http://www.gpoaccess.gov/fr/index.html.

We use the listings in appendix 1 to subpart P of part 404 at the third step of the sequential evaluation process to evaluate claims filed by adults and children for benefits based on disability under the title II and title XVI programs. The listings are in two parts. There are listings for adults (part A) and for children (part B). If you are an individual age 18 or over, we apply the listings in part A when we assess your claim, and we never use the listings in part B. If you are an individual under age 18, we first use the criteria in part B of the listings. Part B contains criteria that apply only to individuals who are under age 18. If the criteria in part B do not apply, we may use the criteria in part A when those criteria give appropriate consideration to the effects of the impairment(s) in children. (See §§ 404.1525 and 416.925.)

In this final rule, we are extending until July 1, 2008, the date on which the listings for the following eight body systems will no longer be effective:

As a result of medical advances in disability evaluation and treatment, and our program experience, we periodically review and update the listings. We intend to publish proposed and final rules to update the listings as expeditiously as possible. However, we will not be able to publish final rules revising the listings for these body systems by July 2, 2007, the current expiration date. Therefore, we are extending the current expiration date for the listings as indicated above.

In final rules published on June 16, 2005 (70 FR 35028), we extended to July 2, 2007, the date on which the listings for the following eight body systems would no longer be effective: Growth Impairment; Special Senses and Speech; Respiratory System; Hematological Disorders; Endocrine System; Neurological; Mental Disorders; and Immune System.

In final rules published on May 05, 2006 (71 FR 26411), we extended to July 2, 2007, the date on which the listings for the Digestive System would no longer be effective.

Not all listings require effective date extensions at this time. The following chart shows the listings that do not require effective date extensions and are not affected by this final rule.

Pursuant to section 702(a)(5) of the Social Security Act, 42 U.S.C. 902(a)(5), we follow the Administrative Procedure Act (APA) rulemaking procedures specified in 5 U.S.C. 553 in the development of regulations. The APA provides exceptions to its notice and public comment procedures when an agency finds there is good cause for dispensing with such procedures on the basis that they are impracticable, unnecessary, or contrary to the public interest. We have determined that, under 5 U.S.C. 553(b)(B), good cause exists for dispensing with the notice and public comment procedures for this rule. Good cause exists because this final rule only extends the date on which these body system listings will no longer be effective. It makes no substantive changes to those listings. The current regulations expressly provide that listings may be extended, as well as revised and promulgated again. Therefore, we have determined that opportunity for prior comment is unnecessary, and we are issuing this regulation as a final rule.

In addition, we find good cause for dispensing with the 30-day delay in the effective date of a substantive rule provided by 5 U.S.C. 553(d)(3). As explained above, we are not making any substantive changes in these body system listings. Without an extension of the expiration dates for these listings, we will lack the medical evaluation criteria needed for assessing impairments in these body systems at the third step of the sequential evaluation process. In order to ensure that we continue to have these listings in our rules, we find that it is in the public interest to make this final rule effective on the date of publication.

We have consulted with the Office of Management and Budget (OMB) and determined that this final rule does not meet the criteria for a significant regulatory action under Executive Order 12866, as amended. Thus, OMB did not review it. We have also determined that this final rule meets the plain language requirement of Executive Order 12866, as amended.

We certify that this final rule does not have a significant economic impact on a substantial number of small entities because it affects only individuals. Therefore, a regulatory flexibility analysis, as provided in the Regulatory Flexibility Act, as amended, is not required.

This final rule imposes no reporting/recordkeeping requirements necessitating clearance by OMB.

In a notice published in the Federal Register of September 1, 1995 (60 FR 45724), FDA announced that a color additive petition (CAP 5C0247) had been filed by the Ebonex Corp., P.O. Box 3247, Melvindale, MI 48122. The petition proposed to amend the color additive regulations to provide for the safe use of bone black as a color additive in cosmetics, including cosmetics intended for use in the eye area. The petitioner subsequently narrowed the proposed uses of bone black to eyeliner, eye shadow, mascara, and face powder.

During its review of the petition, the agency determined that the color additive, bone black, will require batch certification by FDA. The agency intends to give each certified batch of the subject color additive the name D&C Black No. 3. Therefore, this color additive will be identified as D&C Black No. 3.

The requested use of D&C Black No. 3 includes cosmetics for use in the area of the eye. The term “area of the eye” is defined in § 70.3(s) (21 CFR 70.3(s)) as “the area enclosed within the circumference of the supra-orbital ridge and the infra-orbital ridge, including the eyebrow, the skin below the eyebrow, the eyelids and the eyelashes, and conjunctival sac of the eye, the eyeball, and the soft areolar tissue that lies within the perimeter of the infra-orbital ridge.”

Section 70.5(a) (21 CFR 70.5(a)) states that “No listing or certification of a color additive shall be considered to authorize the use of any such color additive in any article intended for use in the area of the eye unless such listing or certification of such color additive specifically provides for such use.”

D&C Black No. 3 is a black pigment made from calcined cattle bones. The bones are heated twice to temperatures in excess of 700°C for at least 6 hours each time. The twice burned char is then washed. The carbon content is approximately 8 percent to 10 percent and most of the remaining composition is tricalcium phosphate (as calcium hydroxyapatite).

As explained under section III.B of this document, D&C Black No. 3 may contain low levels of potentially carcinogenic polycyclic aromatic hydrocarbon (PAH) impurities. To limit the amounts of these impurities in the color additive, FDA is setting a specification for total PAHs and is requiring that D&C Black No. 3 be from a batch of bone black certified by FDA.

To limit the amounts of heavy metals in the color additive, which may be derived from the source of the color and the manufacturing process, the agency also is setting specifications for arsenic and lead. To ensure purity of the color additive, the agency also is setting specifications for carbon, calcium hydroxyapatite, moisture, and silica. To be used lawfully in cosmetics in the United States, all batches of bone black must meet the specifications identified in the regulation.

Under section 721(b)(4) of the Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 379e(b)(4)), the “general safety standard” for color additives, a color additive cannot be listed for a particular use unless a fair evaluation of the data and information available to FDA establishes that the color additive is safe for that use. FDA's color additive regulations (§ 70.3(i)) define safe as “convincing evidence that establishes with reasonable certainty that no harm will result from the intended use of the color additive.”

The anticancer clause of the color additive amendments (section 721(b)(5)(B) of the act), also known as the Delaney clause) provides that for any use of a color additive which will or may result in ingestion of all or part of such additive, the color additive shall be deemed to be unsafe and shall not be listed if the additive is found to induce cancer when ingested by man or animal, or if it is found, after tests which are appropriate for the evaluation of the safety of additives for use in food, to induce cancer in man or animal (section 721(b)(5)(B)(i) of the act). Further, under section 721(b)(5)(B)(ii) of the act, for any use of a color additive which will not result in ingestion of any part of such additive, the color additive shall be deemed to be unsafe and shall not be listed if, after tests which are appropriate for the evaluation of the safety of additives for such use, or after other relevant exposure of man or animal to such additive, it is found to induce cancer in man or animal.

Importantly, however, the Delaney clause applies to the additive itself and not to impurities in the additive. That is, where an additive itself has not been shown to cause cancer, but contains a carcinogenic impurity, the additive is properly evaluated under the general safety standard using risk assessment procedures to determine whether there is a reasonable certainty that no harm will result from the intended use of the additive ( Scott v. FDA , 728 F.2d 322 (6th Cir. 1984)).

Because D&C Black No. 3 is made from cattle bones, one potential safety concern is the risk from using cattle materials in the preparation of bone black that could be infected with the agent that causes Bovine Spongiform Encephalopathy (BSE). To address the potential risk of BSE, FDA prohibits the use of certain cattle materials in human food and cosmetics. FDA also requires that manufacturers and processors of human food and cosmetics that are manufactured from, processed with, or otherwise contain, material from cattle establish and maintain records sufficient to demonstrate that the human food or cosmetic is not manufactured from, processed with, or does not otherwise contain, prohibited cattle materials (21 CFR 189.5 and 700.27). FDA's regulatory measures to prevent BSE contamination of U.S. food and cosmetics ensure that cattle materials that carry the highest risk of transmitting the agent that causes BSE are excluded from being used as a source to produce D&C Black No. 3 for use in cosmetics. Therefore, FDA concludes that D&C Black No. 3 prepared in compliance with these measures is safe with respect to the potential concern from using cattle materials.

Toxicity studies provided by the petitioner, including a dermal irritation study, an ocular irritation study, a delayed-contact hypersensitivity study, and a bioavailability study, demonstrate the color additive itself is safe for the proposed cosmetic uses. However, the color additive has been shown to contain several impurities in trace amounts, including carcinogenic PAHs. To minimize exposure to PAH impurities, the agency is setting a limit for total PAHs in D&C Black No. 3 of not more than 5 milligrams (mg)/kilogram (kg) (5 parts per million). As discussed in the next three paragraphs, the limit for total PAHs for D&C Black No. 3 will provide a reasonable certainty that no harm will result from the intended use of the color additive.

Current data have shown that benzo(a)pyrene (B[ a ]P) is one of the most potent carcinogens of the PAH family. To assess the risk from exposure to PAHs, FDA used toxic equivalency factors (TEFs) to express the comparative toxicity of individual PAHs as fractions of the toxicity of B[ a ]P. This approach expresses the amount of PAHs present in terms of B[ a ]P equivalents and estimates the risk for a mixture of PAHs as if it were comprised of one chemical compound. Under this methodology, B[ a ]P was assigned a TEF of 1. In estimating the exposure of B[ a ]P equivalents from the petitioned uses of the color additive, FDA normalized the residue levels of the individual PAHs to yield a total PAH concentration of approximately 5 mg/kg (the limit for total PAHs set by the regulation). Multiplying the normalized residue level for each PAH by the TEF for that PAH and summing the results yields a B[ a ]P-equivalent PAH concentration of approximately 1.2 mg/kg. Data from a bioavailability study presented in the petition show that B[ a ]P is not absorbed in appreciable amounts from cosmetic matrices (4 percent to 6 percent absorption) (Refs. 1 and 2). However, as a conservative assumption based on the chemical composition of the additive, the agency concluded that up to 50 percent of the total PAHs were likely to be extracted from the additive under typical use conditions, and thus available for absorption by the body (i.e., not bound to the cosmetic formulation).

The agency used data from a carcinogenesis bioassay on B[ a ]P (Ref. 3), to estimate the upper-bound limit of lifetime human risk from exposure to B[ a ]P equivalents resulting from the petitioned uses of the color additive. This bioassay reported treatment-related benign forestomach tumors or esophageal tumors in male rats exposed to B[ a ]P. Using a linear-at-low-dose extrapolation method and tumor incidence data from the bioassay, FDA estimated the carcinogenic unit risk for B[ a ]P to be 1.75 (mg/kg body weight/day) -1 . Using this unit risk and an estimated daily exposure of 5 x 10 -8 mg of B[ a ]P equivalents/kg body weight/day, FDA estimates the upper-bound lifetime human risk from the petitioned uses of the color additive to be 8.8 x 10 -8 (Ref. 1).

Because conservative assumptions were used to estimate exposure, an individual's actual exposure to PAHs is expected to be substantially less than the estimated exposure. The agency concludes that there is reasonable certainty that no harm from exposure to PAHs would result from the petitioned use of the color additive 1 (Ref. 4).

The agency also considered the potential risk from benzaldehyde, benzonitrile, biphenyl, isoquinoline, pyridine and quinoline, which are additional impurities produced in trace amounts in the color additive from the manufacturing process. The agency concludes that none of these substances is present in the color additive at levels that raise any safety concerns, and that no specifications are necessary to control the amount of these substances as impurities in the color additive (Ref. 4).

Based on data in the petition and other relevant considerations discussed previously, FDA concludes that there is a reasonable certainty that no harm will result from the petitioned use of D&C Black No. 3 as a color additive in eyeliner, eye shadow, mascara, and face powder. The agency also concludes that the color additive will achieve its intended technical effect, and thus, is suitable for this use. The agency further concludes that, in accordance with 21 CFR 71.20(b), batch certification of D&C Black No. 3 is necessary to protect the public health because of the need to limit the level of PAH impurities, some of which have been shown to be carcinogenic. Therefore, 21 CFR part 74 should be amended as set forth in this document.

In accordance with § 71.15 (21 CFR 71.15), the petition and the documents that FDA considered and relied upon in reaching its decision to approve the petition will be made available for inspection at the Center for Food Safety and Applied Nutrition by appointment with the information contact person (see FOR FURTHER INFORMATION CONTACT ). As provided in § 71.15, the agency will delete from the documents any materials that are not available for public disclosure before making the documents available for inspection.

The agency has carefully considered the potential environmental effects of this action. FDA has concluded that the action will not have a significant impact on the human environment, and that an environmental impact statement is not required. The agency's finding of no significant impact and the evidence supporting that finding, contained in an environmental assessment, may be seen in the Division of Dockets Management (see ADDRESSES ) between 9 a.m. and 4 p.m., Monday through Friday.

This final rule contains no collection of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.

This rule is effective as shown in the “ DATES ” section of this document; except as to any provisions that may be stayed by the filing of proper objections. Any person who will be adversely affected by this regulation may file with the Division of Dockets Management (see ADDRESSES ) written or electronic objections. Each objection shall be separately numbered, and each numbered objection shall specify with particularity the provisions of the regulation to which objection is made and the grounds for the objection. Each numbered objection on which a hearing is requested shall specifically so state. Failure to request a hearing for any particular objection shall constitute a waiver of the right to a hearing on that objection. Each numbered objection for which a hearing is requested shall include a detailed description and analysis of the specific factual information intended to be presented in support of the objection in the event that a hearing is held. Failure to include such a description and analysis for any particular objection shall constitute a waiver of the right to a hearing on the objection. Three copies of all documents are to be submitted and are to be identified with the docket number found in brackets in the heading of this document. Any objections received in response to the regulation may be seen in the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday. FDA will publish notice of the objections that the agency has received or lack thereof in the Federal Register .

The following references have been placed on display in the Division of Dockets Management (see ADDRESSES ) and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday.

In the Federal Register of May 25, 2005 (70 FR 29949), FDA issued an interim final rule on Human Cells, Tissues, and Cellular and Tissue-Based Products; Donor Screening and Testing, and Related Labeling (hereinafter referred to as the interim final rule). These regulations became effective upon the date of publication in the Federal Register . We issued the interim rule to assure that the changes became effective concurrently with the Eligibility Determination for Donors of Human Cells, Tissues, and Cellular and Tissue-Based Products final rule (69 FR 29786, May 25, 2004) and the Current Good Tissue Practice for Human Cell, Tissue, and Cellular and Tissue-Based Product Establishments; Inspection and Enforcement final rule (69 FR 68612, November 24, 2004) on May 25, 2005. In this way, establishments were not required to take steps to comply with the provisions in part 1271 (21 CFR part 1271) that were replaced by the changes set out in the interim final rule, and certain HCT/Ps would continue to be available.

We received several comments on the interim final rule. To make it easier to identify comments and our responses, the word “Comment,” in parentheses, will appear before the comment's description, and the word “Response,” in parentheses, will appear before our response. We have also numbered each comment to help distinguish between different comments. The number assigned to each comment is purely for organizational purposes and does not signify the comment's value or importance or the order in which it was received.

(Comment 1) A comment appreciated and applauded the change to § 1271.370(b)(4) to allow labeling with warning(s) to accompany the HCT/P when the HCT/P container is too small to accommodate the warning(s) on the label. Another comment expressed concern that the accompanying labeling could be ignored or lost.

(Response) We acknowledge and appreciate the supportive comment. This requirement addresses the situation where it is not physically possible to include warnings directly on the HCT/P label, either because the container is too small or the HCT/P is cryopreserved, which may interfere with adherence of label materials. In these situations, the warnings must accompany the HCT/P.

We acknowledge the comment's concern that it is better to provide information on the HCT/P's label. However, we permit other important information, such as the summary of records, to accompany the HCT/P; such important information is not present on the HCT/P label. We believe that consignees are generally careful to make sure information accompanying HCT/Ps is not ignored or lost, and we believe that the accompanying information will be available. Necessity compels this authorization for certain information to accompany an HCT/P when it is not possible to include it on the label, and we conclude that it is adequate to provide such information in accompanying documents when it is necessary to do so.

(Comment 2) A comment noted that § 1271.55(a)(1) requirements (i.e., affixing a distinct identification code to the HCT/P container) were clearly designed to maintain donor anonymity. However, the comment asked if fertility clinics could write in information about the recipient (e.g., name, account number) because by the time a donor's HCT/P is collected, a specific recipient has already been identified. The comment stated that fertility clinics, for example, never collect anonymously donated oocytes without already having a recipient identified and ready to receive the donation.

(Response) The requirements in § 1271.55(a)(1) are focused on protecting the identity of the donor in the interest of confidentiality. We note that this provision prescribes how an establishment must label the HCT/P before releasing it for distribution, but does not prohibit the addition of the recipient's name once the donor eligibility determination is completed and the reproductive HCT/P is released for distribution. For an oocyte donation, the release determination is likely to be completed very soon after collection.

(Comment 3) A few comments suggested changes to the timing of the specimen collection in § 1271.80(b). In particular, a comment noted that § 1271.80(b)(1) permits testing on oocyte donors up to 30 days before recovery, while § 1271.80 seems to maintain a 7-day testing window for semen donors, whose spermatozoa will combine with the oocytes to create an embryo for a gestational carrier cycle, and stated that both these donors should have a 30-day testing window.

Another comment stated that testing donors of sperm, oocytes, and embryos at the time of donation is “superior” but noted that the American Association of Tissue Banks guidelines for accredited tissue banks recommend that all donors be tested within 7 days of collection. The comment recommended that FDA go back to 7-day testing. One comment recommended that any individual intending to cryopreserve his/her HCT/P be tested 7 to 10 days prior to cryopreservation or within a short period after cryopreservation.

(Response) The interim final rule modified the timing of blood specimen collection for oocyte donors to permit the determination of donor eligibility before the donor's conditioning regimen begins. We did not change the timing of blood specimen collection for semen donors, because they do not undergo any conditioning regimen.

Collecting blood specimens from donors of semen, oocytes, and embryos at the time of donation is sometimes impractical because of the time it takes to obtain the test results. We have made exceptions to the requirement for testing within 7 days in situations where the donor has to undergo conditioning in advance. This is also the case where the recipient undergoes myeloablative treatment and there is a need to determine the eligibility of the donor before the recipient's treatment. Establishments are welcome to establish more restrictive testing criteria as noted in the American Association of Tissue Banks standards.

(Comment 4) A comment responded to FDA's solicitation for comments on the effectiveness of § 1271.90(a)(4), (a new exception from the donor-eligibility determination requirement for certain cryopreserved embryos) to enhance the availability of embryos, and the potential benefits, risks, and any other direct or indirect effects of this change. The comment pointed out that cryopreserved embryos (and HCT/Ps) are often exposed to liquid nitrogen, and research articles have reported that hepatitis B and bovine hepatitis virus can be transmitted through liquid nitrogen contamination. Therefore, cryopreserved embryos from untested semen and oocyte donors, commingling with cryopreserved embryos from tested donors, may place recipients, cryostorage centers, and assisted reproductive technology facilities at risk. Simply having warning(s) appear on the label of the cryopreserved HCT/P specimen from an untested donor, under revised §§ 1271.90(b)(2) and (b)(3), or having the warning(s) accompany such HCT/Ps, under revised § 1271.370(b)(4), would not eliminate the risks and may even result in an increased number of tort cases.

(Response) We decline to require separate storage for tested and untested HCT/Ps, though establishments may choose to utilize physically separated areas for tested and untested HCT/Ps. To reduce risk of contamination/cross-contamination from HCT/Ps that are untested or determined ineligible because of a reactive screening test, reproductive establishments could verify or validate that the cryocontainers (vials or straws) meet specifications and are not subject to breakage at the temperatures and conditions at which they are stored. Verification could be accomplished by the establishment that uses the cryocontainers or by the vendor that supplies the cryocontainers.

(Comment 5) A comment recommended a quarantine period of 6 months for any reproductive HCT/P from directed donors and anonymous donors, including anonymous donors whose identity might be disclosed. The comment also recommended mandatory retesting of oocyte donors (for donated embryos created using a donor oocyte) and embryo donors (semen and oocyte donors) prior to transfer of the donated HCT/P.

(Response) In the Eligibility Determination for Donors of Human Cells, Tissues, and Cellular and Tissue-Based Products final rule (69 FR 29786 at 29800), we explained why quarantine and retesting are required for anonymous semen donors but not for other reproductive donors. We considered comments concerning decreased pregnancy success rates for cryopreserved semen from directed donors and for cryopreserved embryos. In addition, techniques for the successful cryopreservation of oocytes are still being developed. Accordingly, we have declined to increase quarantine requirements for oocyte and embryo donations.

(Comment 6) A comment requested clarification on the use of the warning “FOR AUTOLOGOUS USE ONLY” under § 1271.90(b)(1), and particularly, FDA's definition of “autologous” for certain circumstances related to in vitro fertilization.

(Response) We define “autologous” in § 1271.3(a) as meaning the implantation, transplantation, infusion, or transfer of human cells or tissue back into the individual from whom the cells or tissue were recovered. Transfer of an embryo into the woman who contributed the oocytes would not be considered autologous because the embryo is formed by gametes from two individuals. This means that in the circumstances related to in vitro fertilization, use of a label “FOR AUTOLOGOUS USE ONLY” would not be appropriate for labeling a cryopreserved embryo. Other labeling requirements listed in § 1271.90(b) would apply based on the test status of the gamete donors.

(Comment 7) We received several comments that, although they relate to significant issues, are not relevant to the interim final rule. These comments concerned: (1) A request that donors with a curable communicable disease be eligible to donate reproductive HCT/Ps after receiving treatment and retesting negative for the communicable disease; (2) the definition of “responsible person” under § 1271.3(t); (3) certification or registration requirements, other than those applicable under the Clinical Laboratory Improvement Amendments of 1988 (42 U.S.C. 263a), for a clinical laboratory to perform donor screening; and (4) issues associated with the storage of embryos and other HCT/Ps, but unrelated to the potential for transmission of communicable disease (e.g., abandonment, legal responsibility, and nonpayment).

(Response) These comments are on matters outside the scope of the interim final rule and this final rule. Relevant communicable disease agent or disease was addressed in previously finalized portions of part 1271, subpart C. The definitions in § 1271.3 were not discussed or addressed in the interim final rule. Registration requirements applicable to testing laboratories are addressed in part 1271, subparts A and B, and certification requirements are discussed in part 1271, subpart C. FDA expects that the contractual agreement between the cryostorage facility and the individual(s) storing the HCT/P will address financial and legal issues unrelated to the potential for communicable disease transmission.

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 analysis of costs and benefits of available regulatory alternatives contained in the interim final rule (70 FR 29949 at 29951) is adopted without change in this final rule. By now reaffirming that interim final rule, FDA has not imposed any new requirements. Therefore, there are no additional costs and benefits associated with this final rule.

The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because this final rule does not make any changes to the interim final rule or our analysis included therein, 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 of 1995 requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before issuing “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 $122 million, using the most current (2005) 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.

This final rule contains no collections of information. Therefore, clearance by OMB under the Paperwork Reduction Act of 1995 is not required.

The agency has determined under 21 CFR 25.30(i) and (j) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

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, the agency has 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.

The U.S. Department of State designates U.S. government, academic, and private sector entities to conduct educational and cultural exchange programs pursuant to a broad grant of authority provided by the Mutual Educational and Cultural Exchange Act of 1961, as amended (Fulbright-Hays Act), 22 U.S.C. 2451 et seq. ; the Immigration and Nationality Act, 8 U.S.C. 1101(a)(15)(J); the Foreign Affairs Reform and Restructuring Act of 1998, Public Law 105-277; the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) of 1996, Public Law 104-208, as amended; Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT ACT) (Pub. L. 107-56), Sec. 416; the Enhanced Border Security and Visa Entry Reform Act of 2002, Public Law 107-173; and other statutory enactments, Reorganization Plans, and Executive Orders. Under those authorities, designated program sponsors facilitate the entry into the United States of more than 300,000 exchange participants each year, of which approximately 27,000 are trainees.

The former United States Information Agency (USIA) and, as of October 1, 1999, its successor, the U.S. Department of State, have promulgated regulations governing the Exchange Visitor Program. Those regulations appear at 22 CFR part 62. Regulations specifically governing training programs appear at 22 CFR 62.22. These regulations largely have remained unchanged since 1993, when the USIA undertook a major regulatory reform of the Exchange Visitor Program. Since then, the Department and the Government Accountability Office (GAO) have reviewed the implementation of these regulations. While training programs overall have been highly successful in meeting the goals of the Fulbright-Hays Act, both the Department and the GAO have found there have been occasions where training programs were being misused by some sponsors (e.g.; trainees were actually being used as “employees” and the J visa was being used in lieu of the H visa or as a stepping stone for another longer-term non-immigrant or immigrant classification that may have been unavailable at the time of visa application).

In particular, the GAO Report (“Stronger Action Needed to Improve Oversight and Assess Risks of the Summer Work Travel and Trainee Categories of the Exchange Visitor Program,” Report GAO-06-106, October 2005) found that “the potential exists for the Trainee Program to be misused as an employment program. Regulations strictly prohibit the use of the trainee category for ordinary employment purposes, stating in particular that sponsors must not place trainee participants in positions that are filled or would be filled by full-time or part-time employees.” (GAO Report, p. 20). The Department agrees with the GAO on this point. At the same time, the Department recognizes that work is an essential component of on-the-job training, and that in many respects there are no conceptual or legal distinctions between an employee and a trainee. These two perspectives are not inconsistent. While a trainee is performing work as a component of his/her training experience, the work is only a part of the learning program that is designed to enhance the trainee's skills in his/her occupational specialty through exposure to American techniques, methodologies, and expertise.

By the same token, the Fulbright-Hays Act and the Exchange Visitor Program regulations were not meant to supply U.S. employers with employees under the guise of being trainees. The legislative and regulatory intent was, and continues to be, that trainees enter the United States, are exposed to American techniques, methodologies, and expertise, gain a better understanding of American culture and society, and then return to their homelands to share that learning with their countrymen. Trainees (and the new sub-category Interns) are not meant to fill positions that are or could be occupied by American workers on a full- or part-time or temporary or permanent basis. Thus, the new regulations contain provisions that will permit the Department more closely to monitor training programs to ensure that they are consistent with the purposes and intent of the Fulbright-Hays Act and are not subject to abuses similar to those it and the GAO found with respect to certain training programs.

Also, the 1993 overhaul of the Exchange Visitor Program regulations included a provision governing training programs that distinguished among training in “specialized” occupations, “non-specialized” occupations, and “unskilled” occupations. Time has proven that the distinctions among these three occupational categories are conceptually artificial and do not adequately describe the types of training that the Department desires to promote in the national interest. In that regard, the Department has concluded that it is more the amount of prior experience that the trainee has acquired, rather than some artificial categorization of the type of training, that should be determinative as to whether the trainee should be permitted to enter the United States for further training. Accordingly, the regulations will require that to be eligible to participate in a training program, trainees must have either (1) a degree or professional certificate from a post-secondary academic institution outside the United States and at least one year of prior related work experience in their occupational field acquired outside the United States or (2) five years of work experience outside the United States in their occupational field. This provision ensures that prospective participants have an established connection with their home country at the time of application for participation in a training program.

In order to ensure that trainees and interns are sufficiently fluent in English to benefit from and comprehend fully the training being undertaken, the regulations require that they have verifiable English language skills sufficient to function on a day-to-day basis in the training environment. Trainees' and interns' English language skills must be verified by a recognized English language test, by signed documentation from an academic institution or English language school, or through a documented interview conducted by program sponsors or a third party in person, by videoconferencing, or by web camera.

The Department will designate training and internship programs in the following occupational categories: Agriculture, Forestry, and Fishing; Arts and Culture; Aviation (subject to the Statement of Policy set forth at 71 Federal Register 3913, January 24, 2006); Construction and Building Trades; Education, Social Sciences, Library Science, Counseling and Social Services; Health Related Occupations; Hospitality and Tourism; Information Media and Communications; Management, Business, Commerce and Finance; Public Administration and Law; and the Sciences, Engineering, Architecture, Mathematics, and Industrial Occupations; and such other occupational categories that the Department may from time to time include in training and internship programs. Regulations are being developed that will establish a subcategory of Student Intern within the College and University Students category (§ 62.23) for use by U.S. post-secondary academic institutions.

The regulations the Department adopted in 1993 required the completion of structured training plans for trainees [22 CFR 62.22(f) and (g)]. The Department's experience since then, however, has shown that the regulations regarding the content and use of such training plans have not been effective and do not adequately assist the Department in determining whether real training is being provided to the trainee or whether a “boilerplate” structured training plan is truly descriptive of what the individual trainee is actually doing in the workplace. Accordingly, the Department is replacing the existing training plan regulations with new regulations for both training and internship placement plans, which are located at 22 CFR 62.22(i), Training/Internship Placement Plan (T/IPP)—Form DS-7002.

The Department also recognizes that foreign nationals who are current students at or recent graduates of degree- or certificate-granting post-secondary academic institutions and who have not yet had the opportunity to acquire experience in their academic field may also be interested in pursuing training in the United States. This sub-set of participants has in the past been the source of discussions regarding eligibility and regulatory compliance as the existing training plan requirements and selection criteria do not readily accommodate the inclusion of this significant portion of the population. The Department has concluded that it is in furtherance of the goals of the Fulbright-Hays Act that such current students and recent graduates be permitted and, indeed, encouraged to enter the United States to participate in the Exchange Visitor Program. Accordingly, these regulations create a new intern sub-category within the regulations governing trainees.

It is imperative that the new internship program be a true learning experience for the participant, one that is an integral part of the on-going education of the participant and one that is in harmony with what the Congress intended when it enacted the Fulbright-Hays Act. To that end, and based upon the requirements for participation in the training program, the new intern regulations require sponsors to permit foreign nationals who (1) are currently enrolled in and pursuing studies at a degree-or certificate-granting post-secondary academic institution or (2) graduated from such an institution no more than 12 months prior to their exchange visitor program begin date to participate in an internship program. Sponsors must ensure that interns have verifiable English language skills sufficient to function on a day-to-day basis in their program environment. Interns may remain in the United States as a participant in a designated internship program for a maximum of 12 months. The training and internship program will also be subject to a number of other sections of the Exchange Visitor Program regulations, including the General Provisions. 22 CFR 62.1 through 62.17.

Training programs in the field of agriculture and in the “Hospitality and Tourism” occupational category will be limited to 12 months. The Department is of the view that 12 months is sufficient time to train a person in these occupational fields or categories, especially in light of the fact that, before entering the United States to participate in a training program, trainees must already have either (1) a degree or professional certificate from a foreign post-secondary academic institution and at least one year of prior related work experience in their occupational field acquired outside the United States or (2) five years of work experience outside the United States in their occupational field. However, the new regulations also provide that the duration of a training program in the field of agriculture may be up to 18 months if at least six months of the program is classroom participation and studies. Moreover, the Department also recognizes there are training programs in the field of agriculture or in the “Hospitality and Tourism” occupational category that are, in reality, management programs ( e.g. , hotel or restaurant management, turf grass management). Such management programs may last up to 18 months. The new regulations give the Department the flexibility to classify such programs under the occupational code of “Management, Business, Commerce, and Finance,” as opposed to “Agriculture” or “Hospitality and Tourism” occupational codes. Training programs in all other occupational categories will have a maximum duration of 18 months.

The new regulations also provide that trainees may return to the United States for additional training. Should a trainee wish to enter the United States for advanced training or for training in a different field, they may do so as long as they meet the selection criteria and have been absent from the United States for no less than two years after the completion of their initial training program.

The new regulations substantially change the former provisions dealing with the obligations of program sponsors and any third parties—either domestic or overseas—with whom sponsors contract to assist them in recruiting, selecting, screening, orienting, placing, training, or evaluating foreign nationals who participate in training and internship programs. The regulations require sponsors to enter into a written agreement with third parties outlining the full relationship between the parties on all matters involving the Exchange Visitor Program. Third parties must provide a Dun & Bradstreet identification number. At the recommendation of industry comments, the Department is also changing its regulations to require sponsors to screen and vet all third parties.

Sponsors often contract with third parties operating outside the United States to recruit, select, or screen program participants. The regulations require sponsors to vet such third parties to ensure that they are legitimate businesses in the context of their home country.

A wide range of U.S. businesses and governmental or non-governmental entities host participants in training and internship programs on behalf of sponsors. These regulations set baseline standards to which sponsors are required to adhere to ensure that such host organizations are legitimate entities, are appropriately registered or licensed to conduct their activities in their jurisdiction, and possess and maintain the ability and resources to provide structured and guided work-based experience according to individualized T/IPPs. In some instances, sponsors also will be required to conduct a site visit of the host organization's training location. The goal of the sponsor in vetting host organizations is to collect sufficient evidence to support a finding that participants are properly placed with host organizations that meet these standards.

Finally, the regulations prohibit sponsors from placing trainees or interns in unskilled or casual labor positions, in positions that require or involve child care or elder care, or in any kind of position that involves patient care or contact. Further, sponsors must not place trainees or interns in positions that involve more than 20 per cent clerical work during their programs.

The Department received a total of 1,591 comments on the proposed trainee and intern regulations set forth at 22 CFR 62.22 and published in the Federal Register on April 7, 2006. Of this total, 1,332 responses were identical form letters encouraged through writing campaigns directed by either the Alliance for International Educational and Cultural Exchange or by German and French academic institutions and organizations with ties to the Exchange Visitor Program. The remaining 259 responses were from Exchange Visitor Program sponsors and the general public. The commenting parties addressed the following issues:

Section 62.22(d)(2) received 1,580 comments, of which all were opposed to the change and recommended that the Department allow post-secondary students to participate in the Intern category. The Department concurs and has amended the definition of an Intern to include post-secondary students.

Section 62.22(d)(3) received 705 comments, of which all were opposed to the change. Due to the difficulty limiting testing and tying a score to one type of English proficiency test, the Department has eliminated the TOEFL requirement and amends the regulations to require sponsors to conduct a thorough screening of potential trainees or interns, including a documented interview in-person, by videoconference, or by web camera.

Section 62.22(e) and (e)(1) received three comments, of which all were opposed to the change with the opinion that trainees and interns receive stipends and do not need the additional screening. The Department has determined that the financial screening of an applicant and having a Training/Internship Placement Plan in place is critical to a successful program and therefore upholds the requirement as outlined in Section (e).

Section 62.22(f)(1)(ix) received four comments, of which all were opposed to the change which required certification by agricultural programs to meet the Fair Labor Standards Act. The Department adopts this change and has incorporated the certification on the Training/Internship Placement Plan (Form DS-7002).

Section 62.22(f)(2) received 426 comments, of which all were opposed to the change. Several parties, however, recommended allowing a Third Party to conduct the interview. The Department has reviewed the comments and agrees to allow a third party to conduct the initial screening as identified in a third-party agreement with the sponsor.

Section 62.22(f)(2)(v) received 662 comments, of which all were opposed to the three year experience requirement for trainees. The Department has reviewed all comments and has redefined the experience requirements for trainees and interns.

Section 62.22(g)(1) received 389 comments, of which all were opposed to the change, but, however, recommended implementation of careful vetting requirements by sponsors. The Department adopts the requirement for site visits to host organizations; however amends the requirement to host organizations that have not previously participated successfully in the sponsor's training or internship programs and that have fewer than 25 employees or less than three million dollars in annual revenue.

Section 62.22(g)(2) received 377 comments, of which all were opposed to the change and recommended elimination of this requirement. The Department concurs and eliminates this requirement.

Section 62.22(g)(4) received six comments, of which all were opposed to the change and recommended clarification of the arrival date versus program begin date. The Department amends this requirement to require training and internship sponsors to ensure that trainees and interns are appropriately selected, placed, oriented, supervised and evaluated.

Section 62.22(j)(2) received two comments, both of which were opposed to the change and recommended that the Department not define a percentage of time. The Department upholds and adopts this requirement.

Section 62.22(k) received 392 comments, of which all were opposed to the change regarding the duration of training and internship programs in the occupational fields of agriculture and hospitality. The Department is of the view that 12 months is sufficient time to train a person in these occupational fields or categories, especially in light of the fact that, before entering the United States to participate in a training program, trainees must already have either (1) a degree or professional certificate from a foreign post-secondary academic institution and at least one year of prior related work experience in their occupational field acquired outside the United States or (2) five years of work experience outside the United States in their occupational field. Therefore, the Department adopts the duration of program participation as outlined in 62.22(k).

Section 62.22(l) received one favorable comment.

Section 62.22(n) received 22 comments, of which all were opposed to the repeat participation requirement. The Department has taken the comments into consideration and has amended the section to permit interns to participate in additional internship programs as long as they maintain student status or begin a new internship program within 12 months of graduation. Trainees are eligible for additional training programs after a period of at least two years residency outside the United States following their initial training program.

Section 62.22(o) received six comments, of which all were opposed to the change and recommended rewriting this section. The Department has decided not to make any changes to this section at this time.

Section 62.22 received eight comments requesting elimination of the requirement that Internships be directly related to an Intern's field of study. The Department has reviewed the comments and upholds the requirement as defined.

Section 62.22 received ten comments stating that the proposed regulations will negatively impact U.S. students. The Department has reviewed all comments and finds that the new definition of an Intern, as defined in this Interim Final Rule, will help alleviate the negative impact on U.S. students abroad.

Section 62.22 received six comments requesting the reinstatement of “Counseling and Social Services” in the list of occupational categories. The elimination of the occupational categories of Counseling and Social Services in the proposed rule was an oversight and has been reinstated in the Interim Final Rule.

The Department recognizes the concerns regarding eligibility and monitoring of trainees and interns and therefore adopted several of the suggested changes as appropriate.

The Department originally published this rulemaking as a Proposed Rule, with a 60-day comment period (See: 71 Federal Register 177768, April 7, 2006). Some 1,591 comments were received and analyzed and a number of the suggestions made in the comments have been incorporated in this Interim Final Rule. This rule is issued on an interim final basis as an accommodation to the Department's designated sponsor community. This approach will provide the opportunity for straightforward amendment of regulatory language, if necessary, but will also permit this rule to be implemented in a timely manner.

This rulemaking process has been conducted without prejudice to whether it involves a foreign affairs function of the United States exempt from the requirements of 5 U.S.C. 553 and without prejudice to whether the Department may invoke that exemption in other contexts.

This Interim Rule has been found not to be a major rule within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996. It will not have a substantial effect on the States, the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, it has been determined that the Interim Final Rule does not have sufficient federalism implications to warrant application of the consultation provisions of Executive Orders 12372 and 13132.

In its April 7, 2006 promulgation of the Proposed Rule, 71 Federal Register 177768, the Department certified that the proposed changes to the regulations were not expected to have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act, 5 U.S.C. 601 through 612, and Executive Order 13272, section 3(b). By letter dated May 30, 2006, the Office of Advocacy of the Small Business Administration opined that the Department's certification lacked a factual basis in that the Proposed Rule, if adopted as written, could have significant impact on a substantial number of small entities, in particular, nine flight training schools that utilize the J visa.

After receiving and analyzing the aforementioned 1,591 comments and after consultation with affected stakeholders, a number of changes have been made to the proposed regulation. With respect to the flight training schools, the Department has decided to make no changes to existing regulations governing flight training in this Interim Final Rule. Therefore, the changes proposed in this Rule do not impact such schools. After revising the Proposed Rule, the Department again reviewed the regulations being promulgated in this Interim Final Rule in order to determine if they would potentially have a significant economic impact on any other small entities utilizing the J visa. Other than those comments received from flight training sponsors, no other comments asserted potential significant economic impact on small entities. Accordingly, the Department has determined and hereby certifies that the Interim Final Rule is not expected to have an economic impact on a substantial number of small entities.

In cases where a rulemaking involves a foreign affairs function, the rulemaking is not subject to 5 U.S.C. 553, and therefore is not subject to sections 603 and 604 of the Regulatory Flexibility Act, 5 U.S.C. sections 601 through 612, or section 3(b) of Executive Order 13272. In this case, the Department's certification concerning impact on small entities is made without prejudice to whether this rulemaking involves a foreign affairs function of the United States exempt from the Regulatory Flexibility Act and without prejudice to whether the Department may invoke that exemption in any other contexts.

The Department of State does not consider this Interim Final Rule to be a “significant regulatory action” under Executive Order 12866, section 3(f), Regulatory Planning and Review. In addition, the Department is exempt from Executive Order 12866 except to the extent that it is promulgating regulations in conjunction with a domestic agency that are significant regulatory actions. The Department has nevertheless reviewed the Interim Final Rule to ensure its consistency with the regulatory philosophy and principles set forth in that Executive Order.

The Department has reviewed this Interim Final Rule in light of sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.

The information collection requirements contained in this rulemaking (Form DS-7002) have been approved by the Office of Management and Budget pursuant to the Paperwork Reduction Act, 44 U.S.C. Chapter 35, under OMB Control Number 1405-0170, expiration date: 07/31/2009. The Proposed Rule for Trainees and Interns, published 4/07/2006, stated in its PRA section that the Department would develop and publish a new form (Form DS-7002—Training/Internship Placement Plan). This form was designed and developed and a Notice of request for public comment was published. The proposed data collection and Form DS-7002 published in the Federal Register on 06/01/2006. The Notice directed that all comments and questions be directed to OMB. Final approval of the form and data collection was issued on 07/31/2006.

This part 75 is removed as a part of a DoD exercise to remove CFR parts no longer required to be codified. The corresponding DoD Instruction 1300.06 is available at http://www.dtic.mil/whs/directives.

On April 12, 2007, we published a notice of proposed rulemaking (NPRM) entitled Special Local Regulations for Marine Events; York River, Yorktown, VA in the Federal Register (72 FR 18422). We received no letters commenting on the proposed rule. No public meeting was requested, and none was held.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date would be contrary to the public interest since immediate action is needed to ensure the safety of the event participants, spectator craft, and other vessels transiting the event area. However, advance notifications will be made to affected waterway users via marine information broadcasts, local radio stations, and area newspapers.

On July 15, 2007, the Watermen's Museum of Yorktown, VA will sponsor “Watermen's Heritage Festival Workboat Races” on the York River, immediately adjacent and north of the shoreline at Yorktown River Cliffs. The event will consist of approximately 40 traditional Chesapeake Bay deadrise workboats racing along a marked straight line race course in heats of 2 to 4 boats for a distance of approximately 1000 yards. Due to the need for vessel control during the event, the Coast Guard will temporarily restrict vessel traffic in the event area to provide for the safety of participants, spectators and other transiting vessels.

The Coast Guard did not receive comments in response to the Notice of proposed rulemaking (NPRM) published in the Federal Register . Accordingly, the Coast Guard is establishing temporary special local regulations on specified waters of the York River, near Yorktown, Virginia.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

Although this regulation will prevent traffic from transiting a portion of the York River during the event, the effect of this regulation will not be significant due to the limited duration that the regulated area will be in effect and the extensive advance notifications that will be made to the maritime community via the Local Notice to Mariners, marine information broadcasts, area newspapers and local radio stations, so mariners can adjust their plans accordingly. Additionally, the regulated area has been narrowly tailored to impose the least impact on general navigation yet provide the level of safety deemed necessary. Vessel traffic will be able to transit the regulated area at slow speed between heats, when the Coast Guard Patrol Commander deems it is safe to do so. In many cases vessel traffic will be able to transit around the regulated using the marked navigation channel along the York River.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule would not have a significant economic impact on a substantial number of small entities. This rule would affect the following entities, some of which might be small entities: The owners or operators of vessels intending to transit or anchor in the effected portions of the York River during the event.

Although this regulation prevents traffic from transiting a portion of the York River during the event, this rule would not have a significant economic impact on a substantial number of small entities for the following reasons. This rule would be in effect for only a limited period. Vessel traffic will be able to transit the regulated area between heats, when the Coast Guard Patrol Commander deems it is safe to do so. Before the enforcement period, we will issue maritime advisories so mariners can adjust their plans accordingly.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule would cll for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule would not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Commandant Instruction M16475.lD and Department of Homeland Security Management Directive 5100.1, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(h), of the Instruction, from further environmental documentation. Special local regulations issued in conjunction with a regatta or marine parade permit are specifically excluded from further analysis and documentation under that section.

Under figure 2-1, paragraph (34)(h), of the Instruction, an “Environmental Analysis Check List” and a “Categorical Exclusion Determination” are not required for this rule.

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM. The Coast Guard did not receive an Application for Approval of Marine Event for this event until April 20, 2007, thereby making an NPRM impracticable. A delay or cancellation of the fireworks display in order to accommodate a full notice and comment period would be contrary to the pubic interest.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Any delay encountered in this regulation's effective date would be impracticable and contrary to public interest since immediate action is needed to prevent traffic from transiting a portion of Fire Island Pines Harbor, NY and to protect the maritime public from the hazards associated with this fireworks event.

The temporary zone should have minimal negative impact on the public and navigation because it is only effective for a two hour and 15 minute period on a single day. In addition, the area closed by the safety zone is minimal, allowing vessels to transit around the zone in Fire Island Pines Harbor, NY.

The Lesbian and Gay Community Center Fireworks display will be taking place in Fire Island Pines Harbor, NY from 8:30 p.m. to 10:45 p.m. on June 30, 2007. This safety zone is necessary to protect the life and property of the maritime public from the hazards posed by the fireworks display. It will protect the maritime public by prohibiting entry into or movement within this portion of the navigable waters of Fire Island Pines Harbor one hour prior to, during and one hour after the stated event.

This regulation establishes a temporary safety zone on the navigable waters of Fire Island Pines Harbor, NY within a 600-foot radius of the fireworks barge located at approximate position 40°40′10.06″ N, 073°04′26.45″ W. The temporary safety zone will be outlined by temporary marker buoys installed by the event organizers.

This action is intended to prohibit vessel traffic in a portion of Fire Island Pines Harbor, NY to provide for the protection of life and property of the maritime public. The safety zone will be enforced from 8:30 p.m. until 10:45 p.m. on June 30, 2007. Marine traffic may transit safely outside of the safety zone during the event thereby allowing navigation of the rest of Fire Island Pines Harbor except for the portion delineated by this rule.

The Captain of the Port anticipates minimal negative impact on vessel traffic because of this safety zone due to the limited area and duration covered by this regulation. Public notifications will be made prior to the effective period via local notice to mariners and marine information broadcasts.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

This regulation may have some impact on the public, but the potential impact will be minimized for the following reasons: Vessels will only be excluded from the area of the safety zone for 2 hours and fifteen (15) minutes; and vessels will be able to operate in other areas of Fire Island Pines Harbor, NY during the enforcement period.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule will have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule may affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit or anchor in those portions of Fire Island Pines Harbor, NY covered by the safety zone. For the reasons outlined in the Regulatory Evaluation section above, this rule will not have a significant impact on a substantial number of small entities.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

Under subsection 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), the Coast Guard wants to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking. If this rule will affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call Lieutenant D. Miller, Chief, Waterways Management Division, Sector Long Island Sound, at (203) 468-4596.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and will not concern an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Commandant Instruction M16475.1D and Department of Homeland Security Management Directive 5100.1, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of the categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation because the rule establishes a safety zone.

A final “Environmental Analysis Check List” and a final “Categorical Exclusion Determination” will be available in the docket where indicated under ADDRESSES .

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM. The Coast Guard did not receive an Application for Approval of Marine Event for this event until May 16, 2007, thereby making an NPRM impracticable. A delay or cancellation of the fireworks display in order to accommodate a full notice and comment period would be contrary to the public interest.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Any delay encountered in this regulation's effective date would be impracticable and contrary to public interest since immediate action is needed to prevent traffic from transiting a portion of Jones Inlet, Point Lookout, NY and to protect the maritime public from the hazards associated with this fireworks event.

The temporary zone should have minimal negative impact on the public and navigation because it will only be enforced for a two hour period on one of two specific days. In addition, the area closed by the safety zone is minimal, allowing vessels to transit around the zone in Jones Inlet, Point Lookout, NY.

The Salute to Veterans Fireworks display will be taking place off West Marina/Jones Inlet, Point Lookout, NY from 8:30 p.m. to 10:30 p.m. on June 30, 2007. If the fireworks display is cancelled due to inclement weather on June 30, 2007, it will take place during the same hours on July 1, 2007. This safety zone is necessary to protect the life and property of the maritime public from the hazards posed by the fireworks display. It will protect the maritime public by prohibiting entry into or movement within this portion of Jones Inlet prior to, during and after the stated event so as to ensure mariners maintain a safe distance from the fireworks.

This regulation establishes a temporary safety zone on the navigable waters of Jones Inlet, Point Lookout, NY within a 600-foot radius of the launch site located at approximate position 40°35′36.87″ N, 073°35′20.72″ W. The temporary safety zone will be outlined by temporary marker buoys installed by the event organizers.

This action is intended to prohibit vessel traffic in a portion of Jones Inlet, Point Lookout, NY to provide for the protection of life and property of the maritime public. The safety zone will be enforced from 8:30 p.m. until 10:30 p.m. on June 30, 2007. Marine traffic may transit outside of the safety zone during the event thereby allowing navigation of the rest of Jones Inlet except for the portion delineated by this rule.

The Captain of the Port anticipates minimal negative impact on vessel traffic from this safety zone due to the limited area and short duration covered by this regulation. Public notifications will be made prior to the effective period via local notice to mariners and marine information broadcasts.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

We expect the economic impact of this rule will be so minimal that a full Regulatory Evaluation under the regulatory policies and procedures of DHS is unnecessary. This regulation may have some impact on the public, but the potential impact will be minimized for the following reasons: vessels will only be excluded from the area of the safety zone for 2 hours and vessels will be able to operate in other areas of Jones Inlet, Point Lookout, NY during the enforcement period.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule will have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule may affect the following entities, some of which may be small entities: the owners or operators of vessels intending to transit or anchor in those portions of Jones Inlet, Point Lookout, NY covered by the safety zone. For the reasons outlined in the Regulatory Evaluation section above, this rule will not have a significant impact on a substantial number of small entities.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

Under subsection 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 [Pub. L. 104-121], the Coast Guard wants to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking. If this rule will affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call Lieutenant D. Miller, Chief, Waterways Management Division, Sector Long Island Sound, at (203) 468-4596.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and will not concern an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. It has not been designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Commandant Instruction M16475.1D and Department of Homeland Security Management Directive 5100.1, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of the categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34), of the Instruction, from further environmental documentation. This rule falls under the provisions of paragraph (34)(g) because the rule establishes a safety zone.

A final “Environmental Analysis Check List” and a final “Categorical Exclusion Determination” will be available in the docket where indicated under ADDRESSES .

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM. The Coast Guard did not receive an Application for Approval of Marine Event for this event until April 26, 2007, thereby making an NPRM impracticable. A delay or cancellation of the fireworks display in order to accommodate a full notice and comment period would be contrary to the pubic interest.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Any delay encountered in this regulation's effective date would be impracticable and contrary to public interest since immediate action is needed to prevent traffic from transiting a portion of Sag Harbor Bay, NY and to protect the maritime public from the hazards associated with this fireworks event.

The temporary zone should have minimal negative impact on the public and navigation because it will be enforced for a two hour period on only one of two specified days. In addition, the area closed by the safety zone is minimal, allowing vessels to transit around the zone in Sag Harbor Bay, NY.

The Sag Harbor Fireworks display will be taking place on Havens Beach, Sag Harbor Bay, NY from 8:30 p.m. to 10:30 p.m. on July 7, 2007. If the fireworks display is cancelled due to inclement weather on July 7, 2007, it will take place during the same hours on July 8, 2007. This safety zone is necessary to protect the life and property of the maritime public from the hazards posed by the fireworks display. It will protect the maritime public by prohibiting entry into or movement within this portion of Sag Harbor Bay one hour prior to, during and one hour after the stated event.

This regulation establishes a temporary safety zone on the navigable waters of Sag Harbor Bay, NY within a 1200-foot radius of the fireworks launch site located at approximate position 41°00.133′ N, 072°17.267′ W. The temporary safety zone will be outlined by temporary marker buoys installed by the event organizers.

This action is intended to prohibit vessel traffic in a portion of Sag Harbor Bay, NY to provide for the protection of life and property of the maritime public. The safety zone will be enforced from 8:30 p.m. until 10:30 p.m. on July 7, 2007 and, if necessary due to inclement weather, will be enforced from 8:30 p.m. to 10:30 p.m. on July 8, 2007. Marine traffic may transit safely outside of the safety zone during the event thereby allowing navigation of the rest of Sag Harbor Bay except for the portion delineated by this rule.

The Captain of the Port anticipates minimal negative impact on vessel traffic due to this event due to the limited area and duration covered by this safety zone. Public notifications will be made prior to the effective period via local notice to mariners and marine information broadcasts.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

This regulation may have some impact on the public, but the potential impact will be minimized for the following reasons: vessels will only be excluded from the area of the safety zone for 2 hours and vessels will be able to operate in other areas of Sag Harbor Bay, NY during the enforcement period.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule will have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule may affect the following entities, some of which may be small entities: the owners or operators of vessels intending to transit or anchor in those portions of Sag Harbor Bay, NY covered by the safety zone. For the reasons outlined in the Regulatory Evaluation section above, this rule will not have a significant impact on a substantial number of small entities.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

Under subsection 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 [Pub. L. 104-121], the Coast Guard wants to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking. If this rule will affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call Lieutenant D. Miller, Chief, Waterways Management Division, Sector Long Island Sound, at (203) 468-4596.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and will not concern an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. It has not been designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Commandant Instruction M16475.1D and Department of Homeland Security Management Directive 5100.1, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of the categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation, as it establishes a safety zone.

A final “Environmental Analysis Check List” and a final “Categorical Exclusion Determination” will be available in the docket where indicated under ADDRESSES .

Regulatory Information

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(3)(B), the Coast Guard finds that good cause exists for not publishing an NPRM. Logistical details surrounding the event were not finalized and presented to the Coast Guard in time to draft and publish an NPRM. As such, the event would occur before the rulemaking process was complete. Because of the dangers posed by the pyrotechnics used in this fireworks display, this safety zone is necessary to provide for the safety of event participants, spectators, and vessels transiting the event area. Because of these safety concerns, it is in the public interest to have these regulations in effect during the event.

For the same reasons, the Coast Guard finds that good cause exists under 5 U.S.C. 553(d)(3) for making this rule effective less than 30 days after publication in the Federal Register . Any delay in the effective date of this rule would expose mariners to the dangers posed by the pyrotechnics used in this fireworks display.

The Pittsburg Chamber of Commerce will sponsor a fireworks display on July 4, 2007 in the waters of San Francisco Bay on the New York Slough. The fireworks display is meant for entertainment purposes. This safety zone is issued to establish a temporary regulated area in San Francisco Bay around the fireworks launch barge during loading of the pyrotechnics, during the transit of the barge to the display location, and during the fireworks display. This restricted area around the launch barge is necessary to protect spectators, vessels, and other property from the hazards associated with the pyrotechnics on the fireworks barge. The Coast Guard has granted the event sponsor a marine event permit for the fireworks display.

The Coast Guard is establishing a temporary safety zone in the navigable waters of San Francisco Bay near Pier 50 and the New York Slough. During the loading of the fireworks barge, while the barge is being towed to the display location, and until the start of the fireworks display, the temporary safety zone applies to the navigable waters around and under the fireworks barge within a radius of 100 feet. Fifteen minutes prior to and during the twenty minute fireworks display, the area to which the temporary safety zone applies will increase in size to encompass the navigable waters around and under the fireworks barge within a radius of 1,000 feet. Loading of the pyrotechnics onto the fireworks barge is scheduled to commence at 9 a.m. on July 4, 2007, and will take place at Pier 50 in San Francisco. Towing of the barge from Pier 50 to the display location is scheduled to take place between 12 p.m. and 8 p.m. on July 4, 2007. During the fireworks display, scheduled to commence at approximately 9:30 p.m., the fireworks barge will be located approximately 400 feet from Pittsburg Marina on the New York Slough approximate position 38°02.42′ N, 121°52.97′ W.

The effect of the temporary safety zone will be to restrict navigation in the vicinity of the fireworks barge while the fireworks are loaded at Pier 50, during the transit of the fireworks barge, and until the conclusion of the scheduled display. Except for persons or vessels authorized by the Coast Guard Patrol Commander, no person or vessel may enter or remain in the restricted area. These regulations are needed to keep spectators and vessels a safe distance away from the fireworks barge to ensure the safety of participants, spectators, and transiting vessels.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

Although this regulation prevents traffic from transiting a portion of San Francisco Bay during the event, the effect of this regulation will not be significant due to the small size and limited duration of the regulated area. The entities most likely to be affected are pleasure craft engaged in recreational activities and sightseeing. We expect the economic impact of this rule to be so minimal that a full Regulatory Evaluation is unnecessary.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of entities. This rule will affect the following entities, some of which may be small entities: Owners and operators of pleasure craft engaged in recreational activities and sightseeing. This rule will not have a significant economic impact on a substantial number of small entities for several reasons: (i) Vessel traffic can pass safely around the area; (ii) vessels engaged in recreational activities and sightseeing have ample space outside of the effected portion of San Francisco Bay to engage in these activities; (iii) this rule will encompass only a small portion of the waterway for a limited period of time, and; (iv) the maritime public will be advised in advance of this safety zone via publicly broadcasted notice to mariners.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding the rule so they can better evaluate its effects on them and participate in the rulemaking process.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not affect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Commandant Instruction M16475.lD and Department of Homeland Security Management Directive 5100.1, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation. Paragraph (34)(g) is applicable because this rule establishes a safety zone. A final “Environmental Analysis Check List” and a final “Categorical Exclusion Determination” will be available in the docket where indicated under ADDRESSES .

On April 16, 2007, we published a notice of proposed rulemaking (NPRM) entitled “Safety Zone; Town of Marblehead Fourth of July Fireworks Display, Marblehead Harbor, MA” in the Federal Register (72 FR 18933). We did not receive any letters commenting on the proposed rule. No public meeting was requested, and none was held.

As the fireworks display is scheduled to occur on July 4, 2007, any delay encountered in the regulation's effective date would be contrary to the public interest since the safety zone is needed to prevent traffic from transiting a portion of Marblehead Harbor during the fireworks display thus ensuring that the maritime public is protected from any potential harm associated with such an event. Accordingly, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register .

This rule establishes a safety zone on the navigable waters of Marblehead Harbor within a 400 yard radius around the fireworks barge located at approximate position 42°30.567′ N, 070°50.162′ W. The safety zone is in effect from 8:30 p.m. EDT until 10 p.m. EDT on July 4, 2007. The rain date for the fireworks event is from 8:30 p.m. until 10 p.m. EDT on July 5, 2007.

The safety zone temporarily restricts movement within this portion of Marblehead Harbor and is needed to protect the maritime public from the dangers posed by a fireworks display. Marine traffic may transit safely outside of the zone during the effective period. The Captain of the Port does not anticipate any negative impact on vessel traffic due to the event. Public notifications will be made prior to the effective period via marine information broadcasts and Local Notice to Mariners.

The Coast Guard did not receive any comments from the public in response to the NPRM and as a result no changes have been made to this temporary final rule.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

The Coast Guard expects the economic impact of this rule to be so minimal that a full Regulatory Evaluation under of the regulatory policies and procedures of DHS is unnecessary.

Although this rule prevents vessel traffic from transiting a portion of Marblehead Harbor during the effective period, the effects of this regulation will not be significant for several reasons: vessels will be excluded from the proscribed area for only one and one half hours, vessels will be able to operate in the majority of Marblehead Harbor during the effective period, and advance notifications will be made to the local maritime community by marine information broadcasts and Local Notice to Mariners.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

This rule will affect the following entities, some of which may be small entities: the owners or operators of vessels intending to transit or anchor in a portion of Marblehead Harbor from 8:30 p.m. EDT until 10 p.m. EDT on July 4, 2007 or during the same hours on July 5, 2007.

This safety zone will not have a significant economic impact on a substantial number of small entities for the following reasons: this rule will be in effect for only one and one half hours, vessel traffic can safely pass around the zone, and advance notifications will be made to the local maritime community by marine information broadcasts and Local Notice to Mariners.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by State, local or tribal governments, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not pose an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standard.

We have analyzed this rule under Commandant Instruction M16475.1D and Department of Homeland Security Management Directive 5100.1, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(g) of the Instruction, from further environmental documentation. This rule fits the category selected from paragraph (34)(g), as it would establish a safety zone that will be in effect for only one and one-half hours.

This final rule adjusts Copyright Office fees in accordance with the applicable provisions of title 17, United States Code, and the Technical Amendments Act, Pub. L. No. 105-80, 111 Stat. 1529 (1997), codified as 17 U.S.C. 708(b).

In 1997, Congress delegated to the Register of Copyrights authority to adjust fees in accordance with a new procedure. This procedure requires the Register to conduct a study of the costs incurred for fee services, such as the registration of claims, the recordation of documents, and search services. If, after the review and application of all statutory criteria, the Register determines that fees should be adjusted, the Register prepares a proposed fee schedule and submits the schedule and the accompanying economic analysis to Congress. 17 U.S.C. 708(b)(5). The fee proposed in that schedule may be instituted in 120 days unless Congress enacts a law within that 120 day period stating that it does not approve the schedule. Id . Technical Amendments Act, Pub. L. No. 105-80, 111 Stat. 1529 (1997).

The Copyright Office has instituted fee adjustments under the Technical Amendments Act on three separate occasions. The first schedule was adopted in 1999. See 63 FR 43426 (August 13, 1998) and 64 FR 29518 (June 1, 1999). Three years later a second adjustment was made raising many copyright fees, but leaving the basic copyright registration fee at $30. 67 FR 38003 (May 31, 2002). The last fee adjustment was adopted in 2006, in which most statutory fees were again raised due to increase in costs. In this instance, the basic registration fee was increased from $30 to $45. 71 FR 15368 (March 28, 2006) and 71 FR 31089 (June 1, 2006).

In raising the basic registration fee last year to $45, the commentary in the Federal Register notice anticipated establishing a differential fee schedule with lower filing fees for online registration to reflect the efficiencies of the new reengineered processes. 71 FR at 31090. It is intended that the dual fee will not only reflect the reduced costs of processing electronic claims, but will also provide an incentive to potential electronic filers.

On February 21, 2007, a cost study was submitted to Congress proposing to reduce the basic registration fee for copyright claims submitted electronically to $35 and to institute new fees for listing titles of individual works in an application for a collection or collective work. The per title fee for an electronic submission would be $1 and the per title fee for a paper application would be $3. However, the proposed fees for listing titles of individual works in an application for a collection or collective work are not being adopted at this time.

The cost study used to determine the new fees was developed by the Copyright Office based on a model created as part of its business process reengineering initiative. The cost analysis utilized an activity-based costing methodology approved by the Office of Management and Budget in its publication, Managerial Cost Accounting Standards for the Federal Government, Statement of Federal Financial Accounting Standards, No. 4 (July 31, 1995). Cost studies of this type are retrospective, using actual data from a prior fiscal year. However, costing for the proposed fee had to be done prospectively, as an adjunct to the earlier cost study, because electronic registration has not been offered in the past. In developing the new fee, the Copyright Office utilized data from a small-scale testbed for electronic registration and data from prior cost studies relating to the costs of certain paper handling processes which will be eliminated by the new electronic processing systems. On the basis of the information available to the Copyright Office, it concluded that a fee of $35 for the electronic processing of a claim to copyright to be reasonable. The Office is likely to revisit the fee issue once the electronic system has been fully operational for a sufficient period of time so as to yield reliable information on the actual costs involved in providing the service.

The Office is also adopting technical amendments to bring all fees within the fee schedules set forth in § § 201.3 (c) and (e) of title 37 of the CFR. Specifically, the Office is amending § § 201.11(h)(3)(iv)(A), 201. 201.17(k)(3)(iv)(A), 201.27 (g)(2), 201.28(i)(3)(v)(A), 212.3(e)(1), (f)(4), and 212.5(c)(4).

Congress has 120 days from February 21, 2007, to review the statutory fees submitted to it, codified in § 201.3(c). If no legislation is enacted barring adoption of these fees, the $35 proposed fee for registration of copyright claims submitted electronically will be adopted, effective July 1, 2007.

I. EPA's Action

In September 1995, EPA redesignated Raleigh-Durham, North Carolina to attainment for the carbon monoxide National Ambient Air Quality Standard (CO NAAQS) and approved the initial 10-year maintenance plan for the area (60 FR 39258). The initial 10-year maintenance plan included the use of a 2.0% oxygenated fuel program. Subsequently, on October 19, 1995, North Carolina submitted a proposed SIP revision requesting that the oxygenated fuel program for the Raleigh-Durham CO maintenance area be moved from the maintenance plan to the contingency measures portion of the plan. The request was based on a revised vehicle miles traveled (VMT) analysis which demonstrated that the CO NAAQS could be maintained without the continued use of the oxygenated fuel program. EPA analyzed this request and proposed to approve the revision in 1995 (60 FR 56127, November 7, 1995). EPA received no comments on its proposed action.

As required by section 175A(b) of the Clean Air Act (CAA), North Carolina submitted another SIP revision in March 2005 providing for the second 10-year maintenance plan for CO for the Raleigh-Durham area, as well as for the Charlotte and Winston-Salem CO maintenance areas. The second 10-year maintenance plan included a new carbon monoxide emission inventory for 2000 and also established new motor vehicle emission budgets (MVEBs) for CO for 2015. The plan also provided for the oxygenated fuel program for the Raleigh-Durham CO area as a contingency measure rather than as a maintenance plan component. On March 24, 2006, (71 FR 14817) EPA approved, through a direct final rulemaking, the second 10-year CO maintenance plan for the Raleigh-Durham, Charlotte, and Winston-Salem CO maintenance areas. EPA received no comments on the March 2006 direct final rulemaking and it became effective in May 2006.

The March 2006 direct final rulemaking, however, did not explicitly reference any final action by EPA on the movement of the oxygenated fuel program for the Raleigh-Durham area from the maintenance plan to the contingency measures portion of the plan. While not explicitly referenced, it was EPA's intent to take such final action in the March 2006 rulemaking. Therefore, today, EPA is clarifying that in its March 2006 approval of the second 10-year maintenance plan for the Raleigh-Durham CO maintenance area, EPA intended to finalize its 1995 proposed approval of the movement of the oxygenated fuel program for the Raleigh-Durham area from the maintenance plan to the contingency measures portion of the plan.

EPA has determined that today's action falls under the “good cause” exemption in section 553(b)(3)(B) of the Administrative Procedure Act (APA) which, upon finding “good cause,” authorizes agencies to dispense with public participation where public notice and comment procedures are impracticable, unnecessary, or contrary to the public interest. Public notice and comment for this action are unnecessary because today's clarification of EPA's March 24, 2006, rule approving the second 10-year maintenance plan for the Raleigh-Durham CO maintenance area has no substantive impact on that approval and the clarification makes no substantive difference to EPA's analysis as set out in that rule. In addition, EPA can identify no particular reason why the public would be interested in being notified of this clarification since the opportunity to comment on the action to move the oxygenated fuel program for the Raleigh-Durham area from the maintenance plan to the contingency measures portion of the plan was previously provided and no comments were received.

EPA also finds that there is good cause under APA section 553(d)(3) for this clarification to become effective on the date of publication of this action. Section 553(d)(3) of the APA allows an effective date less than 30 days after publication “as otherwise provided by the agency for good cause found and published with the rule.” (5 U.S.C. 553(d)(3)). The purpose of the 30-day waiting period prescribed in APA section 553(d)(3), is to give affected parties a reasonable time to adjust their behavior and prepare before the final rule takes effect. Today's rule, however, does not create any new regulatory requirements such that affected parties would need time to prepare before the rule takes effect. Rather, today's rule simply clarifies that in EPA's March 2006 approval of the second 10-year maintenance plan for the Raleigh-Durham CO maintenance area, EPA intended to finalize its 1995 proposed approval of the movement of the oxygenated fuel program for the Raleigh-Durham area from the maintenance plan to the contingency measures portion of the plan. For these reasons, EPA finds good cause under APA section 553(d)(3), for this clarification to become effective on the date of publication of this action.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely provides clarification that in EPA's March 24, 2006, approval of the second 10-year maintenance plan for the Raleigh-Durham CO maintenance area, EPA intended to finalize its 1995 proposed approval of the movement of the oxygenated fuel program for the Raleigh-Durham area from the maintenance plan to the contingency measures portion of the plan. This clarification has no substantive impact on EPA's March 24, 2006, approval and it imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this action will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq., ) Because this clarification does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

This clarification also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not 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, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely clarifies an approved state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the CAA. This action also is not subject to Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the CAA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq., )

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by August 20, 2007. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2)).

Because EPA received adverse comment, we are withdrawing the direct final rule for “Change in Deadline for Rulemaking to Address the Control of Emissions from New Marine Compression-Ignition Engines at or Above 30 Liters per Cylinder” published on April 27, 2007 (72 FR 20948). We stated in that direct final rule that if we received adverse comment by May 29, 2007, we would publish a timely withdrawal in the Federal Register . We subsequently received adverse comment on that direct final rule. Concurrent with the direct final rule, we published a separate document (72 FR 20977) that will serve as the proposed rule to consider the adoption of the provisions in the direct final rule. We will address the comments in the context of subsequent activity on the proposed rulemaking.

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 2007 Pacific halibut PSC sideboard limit specified for the deep-water species fishery for catcher vessels subject to sideboard limits established under the Central GOA Rockfish Program in the GOA is 22 metric tons as established by the 2007 and 2008 harvest specifications for groundfish of the GOA (72 FR 9676, March 5, 2007; as corrected by 72 FR 13217, March 21, 2007), for the period 1200 hrs, A.l.t., July 1, 2007, through 1200 hrs, A.l.t., July 31, 2007.

In accordance with § 679.82(d)(9)(i)(B), the Administrator, Alaska Region, NMFS, has determined that the 2007 Pacific halibut PSC sideboard limit specified for the deep-water species fishery for catcher vessels subject to sideboard limits established under the Central GOA Rockfish Program in the GOA is insufficient to support directed fishing for the deep-water species fisheries. Consequently, NMFS is prohibiting directed fishing for species that comprise the deep-water species fishery for catcher vessels subject to sideboard limits established under the Central GOA Rockfish Program in the GOA. Section 679.82(d)(4)(iii) lists the species and species groups that comprise the deep-water species fishery as deep-water flatfish, rex sole, and arrowtooth flounder.

After the effective date of this closure the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.

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 the deep-water species fishery for catcher vessels subject to sideboard limits established under the Central GOA Rockfish Program in 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 June 11, 2007.

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 § 679.82 and is exempt from review under Executive Order 12866.