This rule is issued under Marketing Agreement No. 84 and Marketing Order No. 905, both as amended (7 CFR part 905), regulating the handling of oranges, grapefruit, tangerines, and tangelos grown in Florida, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

The Department of Agriculture (USDA) is issuing this rule in conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, Florida citrus handlers are subject to assessments. Funds to administer the order are derived from such assessments. It is intended that the assessment rate as issued herein will be applicable to all assessable oranges, grapefruit, tangerines, and tangelos grown in Florida, beginning August 1, 2007, and continue until amended, suspended, or terminated. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

This rule decreases the assessment rate established for the Committee for the 2007-08 and subsequent fiscal periods from $0.008 per 4/5 bushel carton to $0.0072 per 4/5 bushel carton of oranges, grapefruit, tangerines, and tangelos grown in Florida.

The Florida citrus marketing order provides authority for the Committee, with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the Committee are producers and handlers of oranges, grapefruit, tangerines, and tangelos. They are familiar with the Committee's needs and with the costs for goods and services in their local area and are thus in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.

For the 2005-06 and subsequent fiscal periods, the Committee recommended, and USDA approved, a decreased assessment rate that would continue in effect from fiscal period to fiscal period unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other information available to USDA.

The Committee met on May 29, 2007, and unanimously recommended 2007-08 expenditures of $275,000 and an assessment rate of $0.0072 per 4/5 bushel of oranges, grapefruit, tangerines, and tangelos grown in Florida. In comparison, last year's budgeted expenditures were $241,000. The assessment rate of $0.0072 is $0.0008 lower than the rate currently in effect. This reduction was recommended because the Committee experienced an unanticipated increase in shipments for the 2006-07 fiscal period and had revenues greater than expenses. In addition, the industry has continued to recover from the hurricane damage sustained during the 2004-05 and 2005-06 seasons, which is expected to have a positive affect on total production.

The major expenditures recommended by the Committee for the 2007-08 fiscal year include $112,000 for salaries, $25,000 for Manifest Department-Florida Department of Agriculture and Customer Services (FDACS), $17,800 for retirement plan, and $14,550 for insurance and bonds. Budgeted expenses for these items in 2006-07 were $110,000, $25,000, $17,250, and $14,550, respectively.

The assessment rate recommended by the Committee was derived by dividing anticipated expenses by expected shipments of oranges, grapefruit, tangerines, and tangelos. Florida citrus shipments for the year are estimated at 30 million 4/5 bushels which should provide $216,000 in assessment income. Income derived from handler assessments, along with interest income and funds from the Committee's authorized reserve will be adequate to cover budgeted expenses. Funds in the reserve (currently approximately $60,000) will be kept within the maximum permitted by the order of not to exceed one half of one fiscal period's expenses as stated in § 905.42(a).

The assessment rate established in this rule will continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other available information.

Although this assessment rate is in effect for an indefinite period, the Committee will continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Committee meetings are available from the Committee or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA will evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking will be undertaken as necessary. The Committee's 2007-08 budget and those for subsequent fiscal periods will be reviewed and, as appropriate, approved by USDA.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has considered the economic impact of this rule on small entities. Accordingly, AMS has prepared this initial regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.

There are approximately 8,000 producers of oranges, grapefruit, tangerines, and tangelos in the production area and approximately 55 handlers subject to regulation under the marketing order. Small agricultural producers are defined by the Small Business Administration (SBA) as those having annual receipts less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $6,500,000 (13 CFR 121.201).

Based on industry and Committee data, the average annual f.o.b. price for fresh Florida citrus during the 2005-06 season was approximately $11.50 per 4/5-bushel carton, and total fresh shipments were approximately 29.1 million cartons. Using the average f.o.b. price, at least 70 percent of the Florida citrus handlers could be considered small businesses under SBA's definition. In addition, based on production and producer prices reported by the National Agricultural Statistics Service, and the total number of Florida citrus producers, the average annual producer revenue is approximately $55,540. Therefore, the majority of handlers and producers of Florida citrus may be classified as small entities.

This rule decreases the assessment rate established for the Committee and collected from handlers for the 2007-08 and subsequent fiscal periods from $0.008 to $0.0072 per 4/5 bushel carton of oranges, grapefruit, tangerines, and tangelos. The Committee unanimously recommended 2007-08 expenditures of $275,000 and an assessment rate of $0.0072 per 4/5 bushel carton. The assessment rate of $0.0072 is $0.0008 lower than the 2006-07 rate. The quantity of assessable oranges, grapefruit, tangerines, and tangelos for the 2007-08 season is estimated at 30 million 4/5 bushel cartons. Thus, the $0.0072 rate should provide $216,000 in assessment income. Income derived from handler assessments, along with interest income and funds from the Committee's authorized reserve, will be adequate to cover budgeted expenses.

The major expenditures recommended by the Committee for the 2007-08 fiscal year include $112,000 for salaries, $25,000 for Manifest Department-FDACS, $17,800 for retirement plan, and $14,550 for insurance and bonds. Budgeted expenses for these items in 2006-07 were $110,000, $25,000, $17,250, and $14,550, respectively.

The reduction in the assessment rate was recommended by the Committee as a result of an unanticipated increase in shipments for the 2006-07 fiscal period, which produced revenues that were greater than expenses. In addition, the industry has continued to recover from the hurricane damage sustained during the 2004-05 and 2005-06 seasons, which is expected to have a positive impact on production.

The Committee reviewed and unanimously recommended 2007-08 expenditures of $275,000. Prior to arriving at this budget, the Committee considered information from various sources including the Committee's Budget Subcommittee. Alternative expenditure levels were discussed by this group, based on different estimates of assessable cartons and budget expenses. The assessment rate of $0.0072 per 4/5 bushel carton of assessable oranges, grapefruit, tangerines, and tangelos was then determined by dividing the total recommended budget by the quantity of assessable Florida citrus, estimated at 30 million 4/5 bushel cartons for the 2007-08 season, taking into consideration the availability of reserve funds and interest income. This is approximately $59,000 under anticipated expenses, which the Committee determined to be acceptable.

A review of historical information and preliminary information pertaining to the upcoming fiscal period indicates that the producer price for the 2007-08 season could range between $1.83 and $9.76 per 4/5 bushel of oranges, grapefruit, tangerines, and tangelos. Therefore, the estimated assessment revenue for the 2007-08 fiscal period as a percentage of total producer revenue could range between .07 and .39 percent.

This action decreases the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to producers. However, decreasing the assessment rate reduces the burden on handlers, and may reduce the burden on producers. In addition, the Committee's meeting was widely publicized throughout the Florida citrus industry and all interested persons were invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the May 29, 2007, meeting was a public meeting and all entities, both large and small, were able to express views on this issue. Finally, interested persons are invited to submit comments on this interim final rule, including the regulatory and informational impacts of this action on small businesses.

This action imposes no additional reporting or recordkeeping requirements on either small or large Florida citrus handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

The AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html. Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

After consideration of all relevant material presented, including the information and recommendation submitted by the Committee and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.

Pursuant to 5 U.S.C. 553, it is also found and determined upon good cause that it is impracticable, unnecessary, and contrary to the public interest to give preliminary notice prior to putting this rule into effect, and that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register because: (1) The 2007-08 fiscal period begins August 1, 2007, and the marketing order requires that the rate of assessment for each fiscal period apply to all assessable Florida citrus handled during such fiscal period; (2) this action decreases the assessment rate for assessable Florida citrus beginning with the 2007-08 fiscal year; (3) handlers are aware of this action, which was unanimously recommended by the Committee at a public meeting and is similar to other assessment rate actions issued in past years; and (4) this interim final rule provides a 60-day comment period, and all comments timely received will be considered prior to finalization of this rule.

This rule is issued under the Mango Promotion, Research, and Information Order [7 CFR Part 1206]. The Order is authorized under the Commodity Promotion, Research, and Information Act of 1996 (Act) [7 U.S.C. 7411-7425].

The Office of Management and Budget has waived the review process required by Executive Order 12866 for this action.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. The rule is not intended to have a retroactive effect and will not affect or preempt any other State or Federal law authorizing promotion or research relating to an agricultural commodity.

The Act provides that any person subject to an order may file a written petition with the Department of Agriculture (Department) if they believe that the order, any provision of the order, or any obligation imposed in connection with the order, is not established in accordance with law. In any petition, the person may request a modification of the order or an exemption from the order. The petitioner is afforded the opportunity for a hearing on the petition. After a hearing, the Department would rule on the petition. The Act provides that the district court of the United States in any district in which the petitioner resides or conducts business shall have the jurisdiction to review the Department's ruling on the petition, provided a complaint is filed not later than 20 days after the date of the entry of the ruling.

In accordance with the Regulatory Flexibility Act (RFA) [5 U.S.C. 601 et seq. ], the Agricultural Marketing Service (AMS) has examined the economic impact of this rule on small entities that would be affected by this rule. The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened.

The Small Business Administration defines, in 13 CFR Part 121, small agricultural producers as those having annual receipts of no more than $750,000 and small agricultural service firms as having receipts of no more than $6,500,000 million. First handlers, importers, wholesalers, and retailers would be considered agricultural service firms. There are approximately 5 first handlers and 55 importers subject to and assessed under the Order. The majority of these first handlers and importers would be considered small businesses while wholesalers and retailers would not.

First handlers and importers who market or import less than 500,000 pounds of mangos annually are exempt from the Order. Mangos that are exported out of the United States also are exempt from assessment. In addition, domestic producers, foreign producers, wholesalers, and retailers are not subject to or assessed under the Order, but such individuals are eligible to serve on the Board along with importers and first handlers.

The Mango Promotion, Research, and Information Order, which became effective November 4, 2004, is authorized under the Commodity Promotion, Research, and Information Act of 1996 (Act) [7 U.S.C. 7411-7425]. Pursuant to Section 515 (b) of the Act, the Order provides for the establishment of a Board comprised of eight importers, one first handler, two domestic producers, seven foreign producers, and two non-voting wholesalers and/or retailers. The Board is responsible for carrying out promotion, research, and information activities intended to develop, maintain, and increase the demand of mangos in the United States. Appointments to the Board are made by the Secretary of Agriculture from a slate of nominated candidates.

Section 515(b)(5) of the Act provides that members and alternates of a board shall serve three-year terms of office and may serve a maximum of two consecutive three-year terms, except members and alternates appointed to the initial Board may serve terms of two, three, or four years. Currently the Order states that the importer, first handler, domestic producers, and foreign producers each may serve a three-year term of office and may serve a maximum of two consecutive three-year terms, except members appointed to the initial Board serve staggered terms of two, three and four years. However, the Order provides one-year terms of office for wholesaler and/or retailer members, and such members may serve a maximum of three consecutive one-year terms.

At its February 2007 meeting, the Board reviewed the term of office for the two wholesaler and/or retailer positions. After considerable discussion and review of alternatives, the Board approved a proposal for recommendation to the Department to modify from a one year to a two year term of office for the wholesaler and/or retailer positions. Upon review of the Board's proposal, the Department determined that the current term of office provision for the two wholesaler and/or retailer positions was not in conformance with the Act. Accordingly, this rule modifies the Order's term of office provision to provide for wholesaler and/or retailer positions terms of three years with a maximum of two consecutive three-year terms.

The amendment will bring the Order in conformance with the Act. Additionally, the overall impact of the amendment will be favorable for first handlers and importers because the amendment will provide greater Board continuity, align the wholesaler and/or retailer positions terms of office with other Board positions, and reduce the administrative burden of conducting nominations on an annual basis for these positions.

In accordance with the Office of Management and Budget (OMB) regulation [5 CFR Part 1320] which implements the Paperwork Reduction Act of 1995 [44 U.S.C. Chapter 35], the information collection requirements under the Paperwork Reduction Act of 1995 [44 U.S.C. 3501 et seq. ], there are no new requirements contained in this rule. The information collection requirements have been previously approved by the Office of Management and Budget (OMB) under OMB control number 0581-0093.

There are no Federal rules that duplicate, overlap, or conflict with this rule.

The Order became effective November 3, 2004, and is authorized under the Commodity Promotion, Research, and Information Act of 1996 [7 U.S.C. 7411-7425], and is administered by the Board. The Order provides for a 20-member Board consisting of eight importers, one first handler, two domestic producers, seven foreign producers, and two non-voting wholesalers and/or retailers.

Under the Order, the Board administers a nationally coordinated program of promotion, research, and information designed to strengthen the position of mangos in the marketplace and to develop, maintain, and expand the demand for mangos in the United States. The program is financed by an assessment of 1/2 cent per pound on first handlers and importers who market or import 500,000 pounds or more of mangos annually. Under the Order, first handlers remit assessments directly to the Board, and assessments paid by importers are collected and remitted by the United States Customs Service.

Section 515(b)(5) of the Act provides that members and alternates of a board shall serve three-year terms of office and may serve a maximum of two consecutive three-year terms, except members and alternates appointed to the initial board may serve terms of two, three, or four years. Currently, with the exception of the initial Board, the Order provides a three-year term of office for first handler, importer, domestic producer, and foreign producer members, and these members may serve a maximum of two consecutive three-year terms. First handlers, importers, domestic producers, and foreign producers who were appointed to the initial Board were assigned to serve staggered terms of office of two, three, and four years—ending December 31, 2007, 2008, 2009. Members serving an initial term of two or four years are eligible to serve a second term of three years. The terms of office for first handler, importer, domestic producer, and foreign producer positions are consistent with the Act.

For the two wholesaler and/or retailer Board positions, the Order currently provides a one-year term of office and members may serve a maximum of three consecutive one-year terms. Wholesaler and/or retailer members appointed to the initial Board were appointed to serve a term of office of one year with the term ending December 31, 2007. The term of office and the term limit for the wholesaler and/or retailer positions are not in conformance with the Act. Thus, this rule will modify the Order to bring it in conformance with the Act. Also, the amendment will be favorable for first handlers and importers because the amendment will provide greater Board continuity, align the wholesaler and/or retailer positions terms of office with other Board positions, and reduce the administrative burden of conducting nominations on an annual basis for these positions.

Nominations and appointments to the Board are conducted pursuant to § 1206.30 establishment and membership, § 1206.31 nominations and appointments, and § 1206.32 term of office. Appointments to the Board are made by the Secretary of Agriculture from a slate of nominated candidates. Nominations for the importer, first handler, domestic producer, and foreign producer positions are made by the respective industry organizations or individuals. Nominations for the wholesaler and/or retailer positions are made by the Board. Nominations for Board positions for terms ending December 31, 2007, will be based on the amendment contained in this rule. The term of office for such appointments will commence January 1, 2008.

Pursuant to 5 U.S.C. 553, it is found and determined upon good cause that it is impracticable, unnecessary, and contrary to the public interest to give preliminary notice prior to putting this rule into effect and good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register because this rule will allow the upcoming nominations and appointments to be conducted based on the changes to the term of office provision of this rule. The new term of office begins on January 1, 2008. In addition and for the same reasons, a 30-day period is provided for interested persons to comment on this rule.

This document provides for corrections to 7 CFR part 1209 and 7 CFR part 1210 to reflect changes to the HTS codes for imported mushrooms and watermelons.

On March 28, 2003, Boeing applied for an FAA type certificate for its new Boeing Model 787-8 passenger airplane. The Boeing Model 787-8 airplane will be an all-new, two-engine jet transport airplane with a two-aisle cabin. The maximum takeoff weight will be 476,000 pounds, with a maximum passenger count of 381 passengers.

Under provisions of 14 Code of Federal Regulations (CFR) 21.17, Boeing must show that Boeing Model 787-8 airplanes (hereafter referred to as “787”) meet the applicable provisions of 14 CFR part 25, as amended by Amendments 25-1 through 25-117, except §§ 25.809(a) and 25.812, which will remain at Amendment 25-115. If the Administrator finds that the applicable airworthiness regulations do not contain adequate or appropriate safety standards for the 787 because of a novel or unusual design feature, special conditions are prescribed under provisions of 14 CFR 21.16.

In addition to the applicable airworthiness regulations and special conditions, the 787 must comply with the fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of part 36. In addition, the FAA must issue a finding of regulatory adequacy pursuant to section 611 of Public Law 92-574, the “Noise Control Act of 1972”.

The FAA issues special conditions, as defined in § 11.19, under § 11.38 and they become part of the type certification basis under § 21.17(a)(2).

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same or similar novel or unusual design feature, the special conditions would also apply to the other model under § 21.101.

The 787 will incorporate a number of novel or unusual design features. Because of rapid improvements in airplane technology, the applicable airworthiness regulations do not contain adequate or appropriate safety standards for these design features. These special conditions for the 787 contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

Most of these special conditions are identical or nearly identical to those previously required for type certification of the Model 777 series airplanes.

Most of these special conditions were derived initially from standardized requirements developed by the Aviation Rulemaking Advisory Committee (ARAC), comprised of representatives of the FAA, Europe's Joint Aviation Authorities (now replaced by the European Aviation Safety Agency), and industry. In the case of some of these requirements, a draft notice of proposed rulemaking has been prepared but no final rule has yet been promulgated.

Additional special conditions will be issued for other novel or unusual design features of the 787 in the near future.

The 787 is equipped with systems that affect the airplane's structural performance, either directly or as a result of failure or malfunction. That is, the airplane's systems affect how it responds in maneuver and gust conditions, and thereby affect its structural capability. These systems may also affect the aeroelastic stability of the airplane. Such systems represent a novel and unusual feature when compared to the technology envisioned in the current airworthiness standards. Special conditions are needed to require consideration of the effects of systems on the structural capability and aeroelastic stability of the airplane, both in the normal and in the failed state.

These special conditions require that the airplane meet the structural requirements of subparts C and D of 14 CFR part 25 when the airplane systems are fully operative. The special conditions also require that the airplane meet these requirements considering failure conditions. In some cases, reduced margins are allowed for failure conditions based on system reliability.

With a response-command type of flight control system and no direct coupling from cockpit controller to control surface, such as on the 787, the pilot is not aware of the actual surface deflection position during flight maneuvers. This feature of this design is novel and unusual when compared to the state of technology envisioned in the airworthiness standards for transport category airplanes. These special conditions are meant to contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards. Some unusual flight conditions, arising from atmospheric conditions or airplane or engine failures or both, may result in full or nearly full surface deflection. Unless the flight crew is made aware of excessive deflection or impending control surface deflection limiting, piloted or auto-flight system control of the airplane might be inadvertently continued in a way that would cause loss of control or other unsafe handling or performance situations.

These special conditions require that suitable annunciation be provided to the flightcrew when a flight condition exists in which nearly full control surface deflection occurs. Suitability of such an annunciation must take into account that some pilot-demanded maneuvers, such as a rapid roll, are necessarily associated with intended full or nearly full control surface deflection. Simple alerting systems which would function in both intended and unexpected control-limiting situations must be properly balanced between providing needed crew awareness and avoiding nuisance warnings.

The 787 will use electrical and electronic systems which perform critical functions. These systems may be vulnerable to high-intensity radiated fields (HIRF) external to the airplane. There is no specific regulation that addresses requirements for protection of electrical and electronic systems from HIRF. Increased power levels from radio frequency transmitter and use of sensitive avionics/electronics and electrical systems to command and control the airplane have made it necessary to provide adequate protection.

To ensure that a level of safety is achieved that is equivalent to that intended by the regulations incorporated by reference, special conditions are needed for the 787. These special conditions require that avionics/electronics and electrical systems that perform critical functions be designed and installed to preclude component damage and interruption of function because of HIRF.

High-power radio frequency transmitters for radio, radar, television, and satellite communications can adversely affect operations of airplane electrical and electronic systems. Therefore, immunity of critical avionics/electronics and electrical systems to HIRF must be established. Based on surveys and analysis of existing HIRF emitters, adequate protection from HIRF exists if airplane system immunity is demonstrated when exposed to the HIRF environments in either paragraph (a) OR (b) below:

(a) A minimum environment of 100 volts rms (root-mean-square) per meter electric field strength from 10 KHz to 18 GHz.

(1) System elements and their associated wiring harnesses must be exposed to this environment without benefit of airframe shielding.

(2) Demonstration of this level of protection is established through system tests and analysis.

(b) An environment external to the airframe of the field strengths shown in the table below for the frequency ranges indicated. Immunity to both peak and average field strength components from the table must be demonstrated.

The environment levels identified above are the result of an FAA review of existing studies on the subject of HIRF and of the work of the Electromagnetic Effects Harmonization Working Group of ARAC.

The 787 will have high-bypass engines with a chord-swept fan 112 inches in diameter. Engines of this size were not envisioned when § 25.361, pertaining to loads imposed by engine seizure, was adopted in 1965. Worst case engine seizure events become increasingly more severe with increasing engine size because of the higher inertia of the rotating components.

Section 25.361(b)(1) requires that for turbine engine installations, the engine mounts and supporting structures must be designed to withstand a “limit engine torque load imposed by sudden engine stoppage due to malfunction or structural failure.” Limit loads are expected to occur about once in the lifetime of any airplane. Section 25.306 requires that supporting structures be able to support limit loads without detrimental permanent deformation, meaning that supporting structures should remain serviceable after a limit load event.

Since adoption of § 25.361(b)(1), the size, configuration, and failure modes of jet engines have changed considerably. Current engines are much larger and are designed with large bypass fans. In the event of a structural failure, these engines are capable of producing much higher transient loads on the engine mounts and supporting structures.

As a result, modern high bypass engines are subject to certain rare-but-severe engine seizure events. Service history shows that such events occur far less frequently than limit load events. Although it is important for the airplane to be able to support such rare loads safely without failure, it is unrealistic to expect that no permanent deformation will occur.

Given this situation, ARAC has proposed a design standard for today's large engines. For the commonly-occurring deceleration events, the proposed standard requires engine mounts and structures to support maximum torques without detrimental permanent deformation. For the rare-but-severe engine seizure events such as loss of any fan, compressor, or turbine blade, the proposed standard requires engine mounts and structures to support maximum torques without failure, but allows for some deformation in the structure.

The FAA concludes that modern large engines, including those on the 787, are novel and unusual compared to those envisioned when § 25.361(b)(1) was adopted and thus warrant special conditions. These special conditions contain design criteria recommended by ARAC.

The 787 is equipped with an electronic flight control system that provides control of the aircraft through pilot inputs to the flight computer. Current part 25 airworthiness regulations account for “control laws,” for which aileron deflection is proportional to control stick deflection. They do not address any nonlinearities  1 or other effects on aileron actuation that may be caused by electronic flight controls. Therefore, the FAA considers the flight control system to be a novel and unusual feature compared to those envisioned when current regulations were adopted. Since this type of system may affect flight loads, and therefore the structural capability of the airplane, special conditions are needed to address these effects.

These special conditions differ from current requirements in that they require that the roll maneuver result from defined movements of the cockpit roll control as opposed to defined aileron deflections. Also, these special conditions require an additional load condition at design maneuvering speed (V A ), in which the cockpit roll control is returned to neutral following the initial roll input.

These special conditions differ from similar special conditions applied to previous designs. These special conditions are limited to the roll axis only, whereas previous special conditions also included pitch and yaw axes. Special conditions are no longer needed for the yaw axis because § 25.351 was revised at Amendment 25-91 to take into account effects of an electronic flight control system. No special conditions are needed for the pitch axis because the applicant's proposed method for the pitch maneuver takes into account effects of an electronic flight control system.

Notice of Proposed Special Conditions No. 25-06-15-SC for the 787 was published in the Federal Register on March 12, 2007 (72 FR 10941). Only one comment was received and it addressed proposed Special Conditions No. 5.

Requested change: The commenter, an individual, stated that the paragraph dealing with § 25.349(a) in the proposed special conditions is a little confusing. Paragraphs (c) and (d) of the proposed special conditions both refer to “paragraph (2)”. But there are no numbered paragraphs in proposed Special Conditions No. 5. The commenter thought that the reference was to paragraph (2) of § 25.349(a), but since § 25.349(a) is superseded by the special conditions, the commenter suggested that this may cause confusion.

FAA response: The reference to paragraph (2) in the proposed special conditions was an error and we thank the commenter for pointing it out. The reference should have been “paragraph (b).” We have revised the final special conditions accordingly. Otherwise, all special conditions are adopted as proposed.

As discussed above, these special conditions are applicable to the 787. Should Boeing apply at a later date for a change to the type certificate to include another model on the same type certificate incorporating the same novel or unusual design features, these special conditions would apply to that model as well.

This action affects only certain novel or unusual design features of the 787. It is not a rule of general applicability.

The Boeing Model 787-8 airplane is equipped with systems which affect the airplane's structural performance either directly or as a result of failure or malfunction. The influence of these systems and their failure conditions must be taken into account when showing compliance with requirements of subparts C and D of part 25 of Title 14 of the Code of Federal Regulations. The following criteria must be used for showing compliance with these special conditions for airplanes equipped with flight control systems, autopilots, stability augmentation systems, load alleviation systems, flutter control systems, fuel management systems, and other systems that either directly or as a result of failure or malfunction affect structural performance. If these special conditions are used for other systems, it may be necessary to adapt the criteria to the specific system.

(a) The criteria defined here address only direct structural consequences of system responses and performances. They cannot be considered in isolation but should be included in the overall safety evaluation of the airplane. They may in some instances duplicate standards already established for this evaluation. These criteria are only applicable to structure whose failure could prevent continued safe flight and landing. Specific criteria defining acceptable limits on handling characteristics or stability requirements when operating in the system degraded or inoperative mode are not provided in these special conditions.

(b) Depending on the specific characteristics of the airplane, additional studies may be required that go beyond the criteria provided in these special conditions in order to demonstrate capability of the airplane to meet other realistic conditions such as alternative gust conditions or maneuvers for an airplane equipped with a load alleviation system.

(c) The following definitions are applicable to these special conditions.

(1) Structural performance: Capability of the airplane to meet the structural requirements of part 25.

(2) Flight limitations: Limitations that can be applied to the airplane flight conditions following an in-flight failure occurrence and that are included in the flight manual (speed limitations or avoidance of severe weather conditions, for example).

(3) Operational limitations: Limitations, including flight limitations, that can be applied to the airplane operating conditions before dispatch (fuel, payload, and master minimum equipment list limitations, for example).

(4) Probabilistic terms: Terms (probable, improbable, extremely improbable) used in these special conditions which are the same as those probabilistic terms used in § 25.1309.

(5) Failure condition: Term that is the same as that used in § 25.1309. The term failure condition in these special conditions, however, applies only to system failure conditions that affect structural performance of the airplane. Examples are system failure conditions that induce loads, change the response of the airplane to inputs such as gusts or pilot actions, or lower flutter margins.

(d) General. The following criteria will be used in determining the influence of a system and its failure conditions on the airplane structure.

(e) System fully operative. With the system fully operative, the following apply:

(1) Limit loads must be derived in all normal operating configurations of the system from all the limit conditions specified in subpart C of 14 CFR part 25 (or used in lieu of those specified in subpart C), taking into account any special behavior of such a system or associated functions or any effect on the structural performance of the airplane that may occur up to the limit loads. In particular, any significant degree of nonlinearity in rate of displacement of control surface or thresholds, or any other system nonlinearities, must be accounted for in a realistic or conservative way when deriving limit loads from limit conditions.

(2) The airplane must meet the strength requirements of part 25 for static strength and residual strength, using the specified factors to derive ultimate loads from the limit loads defined above. The effect of nonlinearities must be investigated beyond limit conditions to ensure the behavior of the system presents no anomaly compared to the behavior below limit conditions. However, conditions beyond limit conditions need not be considered if the applicant demonstrates that the airplane has design features that will not allow it to exceed those limit conditions.

(3) The airplane must meet the aeroelastic stability requirements of § 25.629.

(f) System in the failure condition. For any system failure condition not shown to be extremely improbable, the following apply:

(1) Establishing loads at the time of failure. Starting from 1-g level flight conditions, a realistic scenario, including pilot corrective actions, must be established to determine loads occurring at the time of failure and immediately after failure.

(i) For static strength substantiation, these loads, multiplied by an appropriate factor of safety related to probability of occurrence of the failure, are ultimate loads to be considered for design. The factor of safety (FS) is defined in Figure 1.

(ii) For residual strength substantiation, the airplane must be able to withstand two thirds of the ultimate loads defined in subparagraph (f)(1)(i) of these special conditions. for pressurized cabins, these loads must be combined with the normal operating differential pressure.

(iii) Freedom from aeroelastic instability must be shown up to the speeds defined in § 25.629(b)(2). for failure conditions that result in speeds beyond design cruise speed or design cruise mach number (V c /M c ), freedom from aeroelastic instability must be shown to increased speeds, so that the margins intended by § 25.629(b)(2) are maintained.

(iv) Failures of the system that result in forced structural vibrations (oscillatory failures) must not produce loads that could result in detrimental deformation of primary structure.

(2) Establishing loads in the system failed state for the continuation of the flight. For the continuation of flight of the airplane in the system failed state and considering any appropriate reconfiguration and flight limitations, the following apply:

(i) Loads derived from the following conditions (or used in lieu of the following conditions) at speeds up to V c /M c , or the speed limitation prescribed for the remainder of the flight, must be determined:

(A) The limit symmetrical maneuvering conditions specified in § 25.331 and § 25.345.

(B) The limit gust and turbulence conditions specified in § 25.341 and § 25.345.

(C) The limit rolling conditions specified in § 25.349 and the limit unsymmetrical conditions specified in § 25.367 and § 25.427(b) and (c).

(D) The limit yaw maneuvering conditions specified in § 25.351.

(E) The limit ground loading conditions specified in § 25.473 and § 25.491.

(ii) For static strength substantiation, each part of the structure must be able to withstand the loads in paragraph (f)(2)(i) of these special conditions multiplied by a factor of safety depending on the probability of being in this failure state. The factor of safety is defined in Figure 2.

(iii) for residual strength substantiation, the airplane must be able to withstand two thirds of the ultimate loads defined in paragraph (f)(2)(ii) of these special conditions. For pressurized cabins, these loads must be combined with the normal operating differential pressure.

(iv) If the loads induced by the failure condition have a significant effect on fatigue or damage tolerance then the effects of these loads must be taken into account.

(v) Freedom from aeroelastic instability must be shown up to a speed determined from Figure 3. Flutter clearance speeds V′ and V″ may be based on the speed limitation specified for the remainder of the flight using the margins defined by § 25.629(b).

(vi) Freedom from aeroelastic instability must also be shown up to V ′ in Figure 3 above, for any probable system failure condition combined with any damage required or selected for investigation by § 25.571(b).

(3) Consideration of certain failure conditions may be required by other sections of 14 CFR part 25 regardless of calculated system reliability. Where analysis shows the probability of these failure conditions to be less than 10 −9 , criteria other than those specified in this paragraph may be used for structural substantiation to show continued safe flight and landing.

(g) Failure indications. For system failure detection and indication, the following apply.

(1) The system must be checked for failure conditions, not extremely improbable, that degrade the structural capability of the airplane below the level required by part 25 or significantly reduce the reliability of the remaining system. As far as reasonably practicable, the flightcrew must be made aware of these failures before flight. Certain elements of the control system, such as mechanical and hydraulic components, may use special periodic inspections, and electronic components may use daily checks, instead of detection and indication systems to achieve the objective of this requirement. Such certification maintenance inspections or daily checks must be limited to components on which faults are not readily detectable by normal detection and indication systems and where service history shows that inspections will provide an adequate level of safety.

(2) The existence of any failure condition, not extremely improbable, during flight that could significantly affect the structural capability of the airplane and for which the associated reduction in airworthiness can be minimized by suitable flight limitations, must be signaled to the flightcrew. For example, failure conditions that result in a factor of safety between the airplane strength and the loads of subpart C below 1.25, or flutter margins below V ″ , must be signaled to the crew during flight.

(h) Dispatch with known failure conditions. If the airplane is to be dispatched in a known system failure condition that affects structural performance, or affects the reliability of the remaining system to maintain structural performance, then the provisions of these special conditions must be met, including the provisions of paragraph (e) for the dispatched condition, and paragraph (f) for subsequent failures. Expected operational limitations may be taken into account in establishing Pj as the probability of failure occurrence for determining the safety margin in Figure 1. Flight limitations and expected operational limitations may be taken into account in establishing Qj as the combined probability of being in the dispatched failure condition and the subsequent failure condition for the safety margins in Figures 2 and 3. These limitations must be such that the probability of being in this combined failure state and then subsequently encountering limit load conditions is extremely improbable. No reduction in these safety margins is allowed if the subsequent system failure rate is greater than 10 −3 per hour.

In addition to compliance with §§ 25.143, 25.671, and 25.672, the following special conditions apply.

(a) The system design must ensure that the flightcrew is made suitably aware whenever the primary control means nears the limit of control authority. This indication should direct the pilot to take appropriate action to avoid the unsafe condition in accordance with appropriate airplane flight manual (AFM) instructions. Depending on the application, suitable annunciations may include cockpit control position, annunciator light, or surface position indicators. Furthermore, this requirement applies at limits of control authority, not necessarily at limits of any individual surface travel.

(b) Suitability of such a display or alerting must take into account that some pilot-demanded maneuvers are necessarily associated with intended full performance, which may require full surface deflection. Therefore, simple alerting systems, which would function in both intended or unexpected control-limiting situations, must be properly balanced between needed crew awareness and nuisance factors. A monitoring system which might compare airplane motion, surface deflection, and pilot demand could be useful for eliminating nuisance alerting.

(a) Protection from Unwanted Effects of High-intensity Radiated fields. Each electrical and electronic system which performs critical functions must be designed and installed to ensure that the operation and operational capabilities of these systems to perform critical functions are not adversely affected when the airplane is exposed to high intensity radiated fields external to the airplane.

(b) For the purposes of these Special Conditions, the following definition applies. Critical Functions: Functions whose failure would contribute to or cause a failure condition that would prevent continued safe flight and landing of the airplane.

In lieu of § 25.361(b) the Boeing Model 787-8 must comply with the following special conditions.

(a) For turbine engine installations, the engine mounts, pylons, and adjacent supporting airframe structure must be designed to withstand 1g level flight loads acting simultaneously with the maximum limit torque loads imposed by each of the following:

(1) Sudden engine deceleration due to a malfunction which could result in a temporary loss of power or thrust.

(2) The maximum acceleration of the engine.

(b) For auxiliary power unit installations, the power unit mounts and adjacent supporting airframe structure must be designed to withstand 1g level flight loads acting simultaneously with the maximum limit torque loads imposed by each of the following:

(1) Sudden auxiliary power unit deceleration due to malfunction or structural failure.

(2) The maximum acceleration of the power unit.

(c) For engine supporting structure, an ultimate loading condition must be considered that combines 1g flight loads with the transient dynamic loads resulting from each of the following:

(1) Loss of any fan, compressor, or turbine blade.

(2) Where applicable to a specific engine design, any other engine structural failure that results in higher loads.

(d) The ultimate loads developed from the conditions specified in paragraphs (c)(1) and (c)(2) are to be multiplied by a factor of 1.0 when applied to engine mounts and pylons and multiplied by a factor of 1.25 when applied to adjacent supporting airframe structure.

In lieu of compliance to § 25.349(a), the Boeing Model 787-8 must comply with the following special conditions.

The following conditions, speeds, and cockpit roll control motions (except as the motions may be limited by pilot effort) must be considered in combination with an airplane load factor of zero and of two-thirds of the positive maneuvering factor used in design. In determining the resulting control surface deflections, the torsional flexibility of the wing must be considered in accordance with § 25.301(b):

(a) Conditions corresponding to steady rolling velocities must be investigated. In addition, conditions corresponding to maximum angular acceleration must be investigated for airplanes with engines or other weight concentrations outboard of the fuselage. For the angular acceleration conditions, zero rolling velocity may be assumed in the absence of a rational time history investigation of the maneuver.

(b) At V A , sudden movement of the cockpit roll control up the limit is assumed. The position of the cockpit roll control must be maintained until a steady roll rate is achieved and then must be returned suddenly to the neutral position.

(c) At V C , the cockpit roll control must be moved suddenly and maintained so as to achieve a roll rate not less than that obtained in paragraph (b).

(d) At V D , the cockpit roll control must be moved suddenly and maintained so as to achieve a roll rate not less than one third of that obtained in paragraph (b).

You may examine the airworthiness directive (AD) docket on the Internet at http://dms.dot.gov or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Operations office (telephone (800) 647-5527) is located on the ground floor of the West Building at the street address stated in the ADDRESSES section.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to certain Boeing Model 747-100, 747-100B, 747-200B, 747-200C, 747-200F, 747-300, 747SR, and 747SP series airplanes. That NPRM was published in the Federal Register on March 6, 2007 (72 FR 9877). That NPRM proposed to require repetitive high frequency eddy current inspections for cracks of the fuselage skin at stringer 5 left and right between stations 340 and 350, and corrective actions if necessary.

We provided the public the opportunity to participate in the development of this AD. We have considered the comments received.

Boeing concurs with the NPRM.

Air Transport Association (ATA) on behalf of its member United Parcel Service (UPS), requests that we allow the use of an alternate method of repair. UPS notes that “Boeing Alert Service Bulletin 747-53A2542 allows operators to install a repair in accordance with the Boeing 747-100/200/300 Structural Repair Manual (SRM) 53-30-03, provided that the repair is removed and replaced with the Boeing Service Bulletin 747-53-2272 modification prior to the threshold of AD 90-06-06.” (We referred to Service Bulletin 747-53-2272, Revision 17, dated November 18, 1999; and Revision 18, dated May 16, 2002; as appropriate sources of service information for doing the terminating action specified in paragraph (g) of the NPRM.) UPS believes that this option is beneficial to operators, in that it would allow operators to effect repairs (if necessary) in an expedient manner, and that this is especially important given that the proposed initial inspection compliance time of 250 cycles may not be sufficient to allow accomplishing the initial inspection in a normal C-check environment. UPS believes that the NPRM should be re-formatted to more clearly specify inspection, repair, and terminating action requirements. Therefore, UPS requests that paragraph (f) be modified to include a standard repair per Boeing 747-100/200/300 SRM 53-30-03 as an acceptable alternative for repairing the crack(s), for airplanes which have not reached the incorporation threshold of AD 90-06-06 (20,000 flights is one incorporation threshold described by AD 90-06-06). The SRM repair would then be removed and replaced by the permanent repair per Service Bulletin 747-53-2272, Revision 18 or earlier, prior to reaching 20,000 total aircraft cycles (flights). Further, to clarify the inspection, repair and terminating action requirements, UPS provides a revised paragraph (f) and suggests new paragraphs (g) and (h), which would lead to re-identifying subsequent existing paragraphs.

We agree with UPS that the described SRM repair option is beneficial to operators and should be allowed. However, this option is already allowed. Paragraph (f) of the AD requires doing applicable corrective actions in accordance with Boeing Alert Service Bulletin 747-53A2542, dated February 16, 2006. The corrective actions described in the alert service bulletin permit operators to choose the option of doing the SRM repair followed by eventual replacement with the permanent repair described in Boeing Service Bulletin 747-53-2272, Revision 18, dated May 16, 2002. Therefore, we have determined that the option described by UPS is already available to the operators, and no change is needed to the AD in this regard.

We have revised this action to clarify the effects of AD 90-06-06, amendment 39-6490 (55 FR 8374, March 7, 1990) on the repetitive inspection requirements of paragraph (f) of this AD. We have moved the reference to AD 90-06-06 from paragraph (b) to new paragraph (g) of this AD, and reidentified existing paragraphs (g) and (h) of this AD accordingly.

We have changed paragraph (g) of the AD to specify that the actions required in that paragraph must be done in accordance with a method approved by the Manager, Seattle Aircraft Certification Office, FAA, and that Boeing Service Bulletin 747-53-2272, Revision 18, dated May 16, 2002, and earlier revisions, are one approved method of compliance for doing the required actions. After the effective date of this AD, no revision of Service Bulletin 747-53-2272 other than Revision 18 is acceptable as an approved method of compliance. Further, as described above, we have re-identified existing paragraph (g) as paragraph (h) of this AD.

We have revised this action to clarify the appropriate procedure for notifying the principal inspector before using any approved AMOC on any airplane to which the AMOC applies.

We have carefully reviewed the available data, including the comments received, and determined that air safety and the public interest require adopting the AD with the changes described previously. We have determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD.

There are about 281 airplanes of the affected design in the worldwide fleet. This AD will affect about 92 airplanes of U.S. registry. The required inspection will take about 4 work hours per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the inspection for U.S. operators is $29,440, or $320 per airplane, per inspection cycle.

For Group 2 airplanes (about 4 of U.S. registry), the mandatory terminating action for the repetitive inspections will take about 1,240 work hours, at an average labor rate of $80 per work hour. The manufacturer states that it will supply required parts to the operators at no cost. Based on these figures, the estimated cost of the terminating action for U.S. operators is $396,800, or $99,200 per airplane.

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

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

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

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

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

We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation.

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the Federal Register on May 30, 2007 (72 FR 29895). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states:

We gave the public the opportunity to participate in developing this AD. We have considered the comment received.

One commenter requested that we allow a dye-penetrant inspection as an option to the eddy current inspection.

Without specific procedures and proposed intervals, the FAA is not able to approve dye-penetrant inspection as an approved method for this AD. The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community and Pilatus (the design organization approval holder) only approved using an eddy current procedure for this inspection. Pilatus has only established procedures to detect cracks in the affected areas using the eddy current method. The FAA will not change the AD to allow for dye-penetrant inspections in place of eddy current as called out for in the NPRM per the Pilatus service bulletin (SB) without having specific procedures and intervals that we can coordinate with EASA and Pilatus. An operator may propose these procedures and intervals to the FAA using the alternative method of compliance (AMOC) process specified in 14 CFR 39.19 and the AD. The AMOC proposal must provide the complete method of inspection that the operator believes will provide an acceptable level of safety as that proposed in the AD. The FAA will then coordinate the proposed AMOC with Pilatus and EASA to determine if the method provides an acceptable level of safety. If so, an AMOC can be granted for the FAA issued AD.

We are making no changes to the final rule AD action based on this comment.

We reviewed the available data, including the comment received, and determined that air safety and the public interest require adopting the AD as proposed.

We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information.

We might also have required different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a NOTE within the AD.

We estimate that this AD will affect 50 products of U.S. registry. We also estimate that it will take about 7 work-hours per product to comply with basic requirements of this AD. The average labor rate is $80 per work-hour. Based on these figures, we estimate the cost of this AD to the U.S. operators to be $28,000 or $560 per product.

In addition, we estimate that any necessary follow-on actions would take about 15 work-hours and require parts costing $2,500, for a cost of $3,700 per fitting or $7,400 per product if both fittings are replaced. We have no way of determining the number of products that may need these actions.

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 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 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 AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

Examining the Docket

You may examine the airworthiness directive (AD) docket on the Internet at http://dms.dot.gov or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Operations office (telephone (800) 647-5527) is located on the ground floor of the West Building at the street address stated in the ADDRESSES section.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to all Boeing Model 747 airplanes. That NPRM was published in the Federal Register on December 8, 2006 (71 FR 71099). That NPRM proposed to require an inspection of the No. 2 and No. 3 windows on the left and right sides of the airplane to determine their part numbers, and related investigative and corrective actions if necessary.

We provided the public the opportunity to participate in the development of this AD. We have considered the comments received.

Boeing supports the NPRM, and British Airways supports the intent of the NPRM.

Qantas Airways states that the compliance times given in calendar time (units of years) in Tables 1, 2, and 3 of Boeing Alert Service Bulletin 747-56A2012, dated August 24, 2006, are not relevant for windows installed after the issue date of the service bulletin. As an example, the commenter states that a window installed on an airplane 5 years from now will have already surpassed the compliance time at the time of installation. Qantas Airways, therefore, requests that the calendar times in Tables 1, 2, and 3 of the service bulletin be revised as follows: “Within 2 (or 3) years after the date on this service bulletin, or after the window was installed, whichever occurs last.” Qantas Airways asserts that this change will ensure that the inspection of newly installed windows is controlled by calendar and flight-hour constraints.

We agree to clarify the compliance time for newly installed windows. If a discrepant window is replaced with a new window, then the initial detailed inspection of the new window must be accomplished within either 5,500 or 22,000 flight hours after installing the window, depending on the window part number. The inspection must be repeated at the interval stated in Table 2 or 3, as applicable, of the Boeing service bulletin. We have revised paragraph (g) of this AD to clarify the compliance time.

GKN Aerospace states that it manufactures some of the affected windows identified in Boeing Alert Service Bulletin 747-56A2012, dated August 24, 2006. GKN Aerospace states that it is concerned about the potential removal rates of in-service airplanes to address the unsafe condition; therefore, it is working to certify an improved window design that incorporates a new, improved interlayer, which is less susceptible to the cracking experienced with the existing windows. We infer the commenter would like us to include a terminating action in this AD.

We agree that improving the window design to prevent cracking is a preferable solution than requiring long-term repetitive inspections. In the preamble of the NPRM, we stated that we considered this action to be an interim action. When a final action is identified, we may consider further rulemaking. We have not changed this AD in this regard.

Boeing Aerospace Operations Engineering and Logistics Services requests that we allow operators to skip the window identification procedure and accomplish the rest of the service bulletin as though the part number could not be identified. The commenter states that since some airplanes are equipped with unique No. 2 and No. 3 windows, the window identification cannot be accomplished according to Part 1 of the Boeing Alert Service Bulletin 747-56A2012, dated August 24, 2006, or the replacement according to Part 2, step 4 of the service bulletin.

We do not agree to delete the inspection to determine the part numbers of the windows. Operators who inspect and determine that the affected windows are not installed on an airplane are not required to accomplish the related investigative and corrective actions. Therefore, accomplishing the inspection to determine the window part numbers may relieve some operators of the on-condition requirements. However, under the provisions of paragraph (h) of this AD, we may consider requests for approval of an alternative method of compliance (AMOC) if sufficient data are submitted to substantiate that such a design change would provide an acceptable level of safety. We have not changed this AD in this regard.

British Airways states that the compliance times in Tables 2 and 3 of Boeing Alert Service Bulletin 747-56A2012, dated August 24, 2006, should be revised as follows:

• For part numbers (P/Ns) 65B27042-( ) and 65B27043-( ), the initial inspection should be extended from 5,500 flight hours to 9,000 flight hours.

• For P/Ns 65B27046-( ) and 65B27047-( ), the initial inspection should be reduced from 22,000 flight hours to 15,000 flight hours, and the repetitive interval should be reduced from 7,500 flight hours to 3,000 flight hours (to match the repetitive interval for P/Ns 65B27042-( ) and 65B27043-( )).

British Airways asserts that, based on its experience, the longer compliance times for P/Ns 65B27046-( ) and 65B27047-( ), are not justified. British Airways also asserts that requiring different repetitive intervals for different windows does not make sense since many airlines use a mix of windows on their airplanes.

We acknowledge British Airways' comments but disagree with revising the compliance times as proposed by the commenter. In developing the compliance time for this AD action, we considered not only the safety implications of the identified unsafe condition, but the recommendations of the manufacturer, known service experience, average utilization rate of the affected fleet, and the availability of required parts. British Airways refers to its service experience but does not provide any data to support its comment. We invite British Airways to submit, to Boeing, any data it has that supports its comments related to changing certain compliance times. We would consider further rulemaking should such data support changing the compliance times of this AD. To further delay this AD would be inappropriate considering the need to correct a known safety problem in a timely manner. Further, operators are always permitted to accomplish the requirements of an AD at an earlier time than the required compliance time; therefore, an operator may choose to inspect P/Ns 65B27046-( ) and 65B27047-( ) at repetitive intervals of 3,000 flight hours. We have determined that the compliance times recommended in the service bulletin are appropriate for addressing the unsafe condition and we have not changed this AD in this regard.

British Airways states that the grace period of 1,000 flight hours after the date on the service bulletin is obsolete, since this time period will have been exceeded by the time we issued an AD. We infer that the commenter would like us to delete the grace period from Tables 2 and 3 of Boeing Alert Service Bulletin 747-56A2012, dated August 24, 2006.

We disagree with deleting the grace period. We would like to point out that in paragraph (g) of the NPRM, which is retained in this AD, we stated that the compliance times given in the service bulletin are to be counted from the effective date of this AD, not from the date on the service bulletin. We have not changed this AD in this regard.

British Airways requests that we delete the word “or” where the service bulletin compliance times are restated in the “Relevant Service Information” section of the NPRM. As justification, the commenter states that using the word “or” gives an operator the choice of choosing between two compliance times.

We disagree with revising this AD, since the “Relevant Service Information” section is not retained in a final rule. We have reviewed the NPRM and find that the wording used throughout the NPRM is consistent with the service bulletin. Further, where we restated the service bulletin compliance times in the NPRM, the lead-in statements clearly specify doing the proposed actions at the earlier of the compliance times; therefore, the compliance time cannot be chosen at an operator's discretion. We have not changed this AD in this regard.

• British Airways requests that we make the following changes to the “Costs of Compliance” section:

• Add the cost of replacing a cracked window. The commenter states that the “Costs of Compliance” section is wrong because it does not estimate the cost of replacing a cracked window.

• Include the cost of having to remove an airplane from service 40% more frequently to accomplish the repetitive actions.

• Revise the estimated work hours. The commenter asserts that it should take 1/2 hour to inspect a window to determine its part number, and that the inspection for cracks would require 2 people and would take 1 hour.

We do not agree to revise the “Cost of Compliance” section as the commenter proposes. The economic analysis of an AD is limited to the cost of actions that are actually required. The economic analysis does not consider the costs of conditional actions, such as repairing a crack detected during a required inspection (“repair, if necessary”). Such conditional repairs would be required—regardless of AD direction—to correct an unsafe condition identified in an airplane and to ensure that the airplane is operated in an airworthy condition, as required by the Federal Aviation Regulations. Furthermore, we do not consider it appropriate to attribute the costs associated with aircraft “down time” to the AD. Also, we have determined the cost of compliance from information contained in the manufacturer's service information. We recognize that individual operators might incur costs less than or more than our estimate. It is impossible to estimate such individual variations. We have not changed this AD in this regard.

British Airways submitted several comments on the accuracy and clarity of Boeing Alert Service Bulletin 747-56A2012, dated August 24, 2006. We infer that the commenter would like us delay issuance of the AD until the service bulletin is revised to incorporate its comments.

We acknowledge the value of the information submitted by the commenter. British Airways' comments will be of benefit to any future revisions of the service bulletin. In this case, however, the service bulletin is acceptable for ensuring that the unsafe condition is addressed. Therefore, we do not agree to delay this action until the service bulletin has been revised. To do so would be inappropriate, since we have determined that an unsafe condition exists, and that inspections must be conducted to ensure continued safety. We have not changed this AD in this regard.

We have revised this action to clarify the appropriate procedure for notifying the principal inspector before using any approved AMOC on any airplane to which the AMOC applies.

We have carefully reviewed the available data, including the comments received, and determined that air safety and the public interest require adopting the AD with the change described previously. We have determined that this change will neither increase the economic burden on any operator nor increase the scope of the AD.

There are about 949 airplanes of the affected design in the worldwide fleet. This AD affects about 153 airplanes of U.S. registry. The required inspection to determine the window part numbers takes about 4 work hours per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the AD for U.S. operators is $48,960, or $320 per airplane.

The detailed inspection, if necessary, takes about 1 work hour per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the detailed inspection for U.S. operators is $80 per airplane, per inspection cycle, if necessary.

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

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

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

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

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

We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation.

Background

Under existing regulations, all cooperatives to which subchapter T applies (Subchapter T cooperatives) are required to make income tax returns. Except in the case of farmers' cooperatives, the regulations require that the return be made on Form 1120. In the case of farmers' cooperatives, the regulations require that the return be made on Form 990-C.

Most taxpayers required to make an income tax return on Form 1120 must file their return on or before the 15th day of the third month following the close of the taxpayer's taxable year (2 1/2 month deadline). Some Subchapter T cooperatives that make their returns on Form 1120 are required to file by the 2 1/2 month deadline, but others are not required to file their returns until the 15th day of the ninth month following the close of the taxpayer's taxable year (8 1/2 month deadline). Because the Form 1120 does not distinguish between Subchapter T cooperatives that must file by the 2 1/2 month deadline and those that must file by the 8 1/2 month deadline, the IRS has difficulty determining which filing deadline applies and deciding whether to assert delinquency and failure to pay penalties in the case of returns filed after the 2 1/2 month deadline.

On July 29, 2005, a notice of proposed rulemaking was published in the Federal Register (REG-149436-04, 70 FR 43811). The proposed regulations in this notice of proposed rulemaking would require all Subchapter T cooperatives to make their income tax returns on Form 1120-C, “U.S. Income Tax Return for Cooperative Associations,” or such other form as may be designated by the Commissioner.

One telephone comment was received in response to the notice of proposed rulemaking. The comment suggested that the new form might have a negative effect on consolidated filing. No public hearing was requested or held.

After consideration of the comment, the proposed regulations are adopted as revised by this Treasury decision. The final regulations retain the requirement that Subchapter T cooperatives file their returns on Form 1120-C. The information that Subchapter T cooperatives will be required to provide on new Form 1120-C will assist taxpayers and the IRS in determining the appropriate filing deadline. Having that information will reduce the burden on taxpayers and will help the IRS avoid asserting penalties in inappropriate cases. Having all Subchapter T cooperatives make their income tax returns on Form 1120-C will also eliminate confusion over which form to file and will promote efficiency in addressing income tax issues common to Subchapter T cooperatives.

The IRS and Treasury Department believe that this requirement will not have a negative effect on consolidated filing. Subchapter T cooperatives may continue to file returns on behalf of consolidated groups by indicating their filing status on Form 1120-C and complying with the regulations under section 1502 of the Internal Revenue Code (Code).

This requirement to use Form 1120-C was proposed to be effective for taxable years ending on or after December 31, 2006. Because the regulations were not finalized before the end of 2006, the final regulations delay the proposed effective date. The final regulations apply beginning with the first taxable year ending on or after December 31, 2007. Cooperatives may rely on the regulations as proposed, however, and file returns on Form 1120-C for taxable years ending on or after December 31, 2006, and before December 31, 2007.

The following publications are removed as of July 30, 2007: Announcement 84-26, 1984-11 IRB 42. Announcement 84-37, 1984-17 IRB 32.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because the regulation does not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking preceding this regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small businesses.

The principal author of these regulations is Matthew P. Howard, Office of Assistant Chief Counsel (Procedure & Administration).

On June 2, 2006, proposed revisions to the regulations under section 1248(a) of the Code (REG-135866-02) were published in the Federal Register (71 FR 31985-01). On August 14, 2006, two corrections to those proposed regulations were published in the Federal Register (71 FR 46415 and 71 FR 46416). Two written comments were received. A public hearing was not requested and none was held. After consideration of the written comments and other comments, the June 2, 2006, proposed regulations are adopted as amended by this Treasury decision.

With respect to attribution of earnings and profits to stock of an acquiring corporation held by a non-exchanging shareholder, § 1.1248-8(b)(4) of the proposed regulations provides a rule by cross-reference to § 1.1248-2 or § 1.1248-3 (whichever is applicable) and § 1.1248-8(b)(6) (as applicable). A commentator asserted that the proposed regulations did not adequately explain which earnings and profits were attributed to the stock of the non-exchanging shareholder. This commentator thought that the rule was better explained in the preamble to the proposed regulations, which states that generally the earnings and profits attributable to stock of an acquiring corporation held by a non-exchanging shareholder immediately prior to a restructuring transaction continue to be attributed to such stock, and the earnings and profits of the acquired corporation accumulated prior to the restructuring transaction attributable to the stock of an acquired corporation are not attributed to the non-exchanging shareholder's stock in the acquiring corporation. In order to clarify the regulations, this language from the preamble to the proposed regulations is included in § 1.1248-8(b)(4) of the final regulations.

Under § 1.1248-1(a)(4) of the proposed regulations, the partners in a foreign partnership shall be treated as selling or exchanging their proportionate share of stock of a corporation sold or exchanged by the foreign partnership. The proposed regulations also apply section 1248(a) in cases where the stock in a corporation that is sold or exchanged is held through tiers of foreign partnerships. This treatment is necessary to reflect properly each partner's share of the corporation's earnings and profits as a dividend.

A commentator noted that § 1.1248-1(a)(4) of the proposed regulations could be read to apply to the sale by a partner of its interest in a partnership holding the stock of a corporation. The Treasury Department and the IRS did not intend that interpretation because it would be contrary to section 1248(g)(2)(B). An amount that is received by a partner in exchange for all or part of its partnership interest is treated as ordinary income under section 751(a) and (c) to the extent attributable to stock in a foreign corporation as described in section 1248. Section 1248(g)(2)(B) provides that section 1248 will not apply if any other provision of the Code treats an amount as ordinary income. Accordingly, § 1.1248-1(a)(4) in the final regulations is revised to clarify that a foreign partnership is treated as an aggregate for this purpose only when a foreign partnership sells or exchanges stock of a corporation. Finally, a commentator requested that the final regulations allow a taxpayer to elect to apply the rule in § 1.1248-1(a)(4) to taxable years ending before the effective date of the final regulations. The Treasury Department and the IRS regard this rule as a clarification of existing law, but recognize that some practitioners have expressed the view that prior law was not entirely clear. Accordingly, the final regulations allow taxpayers to apply the rule in § 1.1248-1(a)(4) to open years provided that the taxpayer consistently applies the rule in all such years. A partner makes this election by treating its distributive share of gain attributable to a sale of shares in a controlled foreign corporation as gain recognized on a sale or exchange of stock in a foreign corporation within the meaning of section 1248(a).

In order to clarify the application of § 1.1248-8, the definition of controlled foreign corporation at § 1.1248-8(b)(1)(iii) has been revised to provide that a controlled foreign corporation includes corporations described in either section 953(c)(1)(B) or section 957.

A commentator requested the addition of an example to § 1.367(b)-4(d) to clarify that earnings and profits attributable to certain lower-tier subsidiaries are not taken into account in determining the all earnings and profits amount attributable to transactions described in § 1.367(b)-3. In response to this comment, such an example is included in § 1.367(b)-4(d) of the final regulations.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of 5 U.S.C. chapter 5 does not apply to these regulations, and, because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act, 5 U.S.C. chapter 6, does not apply. Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking preceding this regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small businesses.

The principal author of the final regulations is Michael I. Gilman of the Office of Associate Chief Counsel (International). However, other personnel from the Treasury Department and the IRS participated in their development.

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:

This action applies to Holy Cross Services Corporation (Saint Mary's Campus), Notre Dame, Indiana.

EPA is approving revisions to Indiana's PM SIP for the three boilers located in St. Joseph County, Notre Dame, Indiana. The revisions address Title 326 of the Indiana Administrative Code (IAC), Rule 6.5-7, Section 13, to clarify and amend existing PM emission limits. They also change the source name from St. Mary's to Holy Cross Services Corporation (Saint Mary's Campus).

Indiana held public hearings on these revisions February 2, and June 1, 2005; June 7, and August 2, 2006.

On March 22, 2006 (71 FR 14383), EPA published a direct final rule approving revisions to the Indiana SIP in 326 IAC 6.5-7 to relocate and recodify PM emission limits for all sources in St. Joseph County, Indiana. Today's action revises 326 IAC 6.5-7, Section 13, which contains particulate emission limits for the boilers at St. Mary's College in Notre Dame, Indiana, to reflect current operating conditions and ownership by Holy Cross Services Corporation of those boilers.

Currently, SIP rule 326 IAC 6.5-7-13 identifies St. Mary's College as the owner, operator and permittee of the subject boilers. It also incorrectly lists boiler number 1 as 100% natural gas-fired, and boilers number 2 and 3 as coal-fired. According to Indiana, however, boilers numbers 1 and 2 are actually gas-fired, with the capability of burning number 2 fuel oil as a back-up, while boiler number 3 exclusively burns natural gas. The revised rule corrects this error. It also tightens the applicable PM limits for the two boilers that have oil-burning capability (boilers number 1 and 2): from 0.110 lbs/MMBTU (12.90 tons/year) to 0.014 lbs/MMBTU (3.9 tons/year).

Finally, the SIP revision amends 326 IAC 6.5-7-13 by correctly identifying the owner, operator and permittee of the St. Mary's boilers as Holy Cross Services.

EPA is approving source-specific revisions to Indiana's PM SIP in 326 IAC 6.5-7 to change the name of the owner, operator and permittee of the three boilers at St. Mary's College to Holy Cross Services Corporation (Saint Mary's Campus), and to revise the PM limits to reflect current operating conditions of the boilers at St. Mary's College.

We are publishing this action without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comments. However, in the proposed rules section of this Federal Register publication, we are publishing a separate document that will serve as the proposal to approve the state plan if relevant adverse written comments are filed. This rule will be effective September 28, 2007 without further notice unless we receive relevant adverse written comments by August 29, 2007. If we receive such comments, we will withdraw this action before the effective date by publishing a subsequent document that will withdraw the final action. All public comments received will then be addressed in a subsequent final rule based on the proposed action. The EPA will not institute a second comment period. Any parties interested in commenting on this action should do so at this time. If we do not receive any comments, this action will be effective September 28, 2007.

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.

Because it is not a “significant regulatory action” under Executive Order 12866 or a “significant energy action,” 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 approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule 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 rule approves pre-existing requirements under state law and 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 rule 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 (59 FR 22951, 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 approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act (CAA).

This rule 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 approves a state rule implementing a Federal Standard.

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 rule 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. section 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 September 28, 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).)

Throughout this document wherever, any reference to “we,” “us,” or “our” is used, we mean EPA.

On April 4, 2006, the State of Texas submitted a revision to the Texas SIP. The submittal consists of new regulations to implement the NO X Annual and SO 2 CAIR programs in the state. The affected state regulations that we are approving today as part of the Texas CAIR NO X Annual Abbreviated SIP are 30 TAC, Chapter 101, Subchapter H, Division 7, sections 101.503, 101.504(a)(1), 101.504(b), 101.506(a)(1), 101.506(b)(1), 101.506(c)-(f), and 101.508. EPA is taking a direct final action to approve the State's NO X annual allocation methodology for Phase 1 (the control periods 2009 through 2014) and the State's methodology for allocating the compliance supplement pool (CSP) in the CAIR NO X annual trading program, as an abbreviated revision to the Texas SIP. EPA is approving the Texas abbreviated SIP revision as meeting 40 CFR 51.123(p)(1) and (p)(2). We will be taking action on the remaining parts of the Texas NO X Annual and SO 2 CAIR SIP revision submittal at a later date and in future Federal Register s. Texas is not subject to the CAIR NO X ozone season trading program. Please see the Technical Support Document (TSD) for further information. The TSD is available as specified in the section of this document identified as ADDRESSES .

The provisions of the Texas CAIR NO X Annual Federal Implementation Plan (FIP) at 40 CFR 52.2283 require owners and operators of NO X sources located in Texas to meet the Federal NO X annual trading program found at 40 CFR part 97. This Federal trading program's rules include provisions at 40 CFR 97.144(a) and (b) that if EPA approves the Texas abbreviated SIP revision for NO X annual and CSP allocation methodologies, then the Federal NO X annual and CSP allocation methodologies no longer apply. Instead, if EPA approves the Texas NO X annual allocation methodology into the Texas SIP, then EPA under 40 CFR 52.2283 and 97.144(a) will not make allocations for the CAIR NO X sources in Texas but will use the Texas SIP rules for allocating annual NO X allowances to sources in Texas for Phase 1 of CAIR (2009-2014). The Texas NO X methodology for allocating the CSP in the CAIR NO X Annual Trading Program will be used to allocate allowances from the CSP, instead of the federal methodology for allocating allowances from the CSP. EPA under 40 CFR 52.2283 and 97.144(b) will not make allocations for the CSP for CAIR NO X sources in Texas and will record the allocations of the Texas CSP made under the approved SIP revision.

If EPA's direct final action approving the Texas abbreviated SIP becomes effective, then EPA is not required to take any rulemaking action to change the Federal CAIR NO X annual trading program in 40 CFR part 97 or to change the Texas CAIR FIP for NO X annual emissions in 40 CFR 52.2283. Rather EPA, by ministerial action, simply notes in Appendix A, 1 and 2, to Subpart EE of 40 CFR part 97, that Texas has an approved SIP revision for NO X annual allowances for Phase 1 and for NO X allowance allocations from the Texas CSP. Since the Federal CAIR NO X annual trading program's rules at 40 CFR part 97 provide for automatic revision of the Texas CAIR FIP for annual NO X emissions upon approval of such an abbreviated SIP revision, the Texas rules for annual NO X allowances would apply, rather than the Federal rules, upon the effective date of approval.

We are publishing this rule without prior proposal because we view this as a noncontroversial amendment and anticipate no relevant adverse comments. However, in the proposed rules section of this Federal Register publication, we are publishing a separate document that will serve as the proposal to approve the SIP revision if relevant adverse comments are received. This rule will be effective on September 28, 2007 without further notice unless we receive relevant adverse comment by August 29, 2007. If we receive relevant adverse comments, we will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. We will address all public comments in a subsequent final rule based on the proposed rule. We will not institute a second comment period on this action. Any parties interested in commenting must do so now. Please note that if we receive adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, we may adopt as final those provisions of the rule that are not the subject of an adverse comment.

EPA promulgated the CAIR on May 12, 2005 (70 FR 25162). In this rule, EPA determined that 28 States and the District of Columbia contribute significantly to nonattainment and interfere with maintenance of the national ambient air quality standards (NAAQS) for fine particles (PM 2.5 ) and/or 8-hour ozone in downwind States in the eastern part of the country. As a result, EPA required those upwind States to revise their SIPs to include control measures that reduce emissions of SO 2 , which is a precursor to PM 2.5 formation, and/or NO X , which is a precursor to both ozone and PM 2.5 formation. For jurisdictions that contribute significantly to downwind PM 2.5 nonattainment, CAIR sets annual State-wide emission reduction requirements ( i.e. , budgets) for SO 2 and annual State-wide emission reduction requirements for NO X . Similarly, for jurisdictions that contribute significantly to 8-hour ozone nonattainment, CAIR sets statewide emission reduction requirements for NO X for the ozone season (defined at 40 CFR 97.302 as May 1st to September 30th). Under CAIR, States may implement these emission budgets by participating in the EPA-administered cap-and-trade programs or by adopting and submitting for EPA approval any other control measures.

EPA found that Texas significantly contributed to nonattainment of the PM 2.5 standard in Illinois, resulting in Texas being subject to the SO 2 and annual NO X requirements of CAIR. There are no punitive consequences for Texas failing to submit SO 2 and NO X Annual CAIR SIPs.

CAIR sets forth what must be included in SIPs to address the requirements of section 110(a)(2)(D) of the Act with regard to interstate transport for the 8-hour ozone and PM 2.5 NAAQS. EPA made national findings, effective May 25, 2005, that the affected States had failed to submit SIPs meeting the requirements of section 110(a)(2)(D). The SIPs were due in July 2000, 3 years after the promulgation of the 8-hour ozone and PM 2.5 NAAQS. These May 25, 2005, findings started a 2-year clock for EPA to promulgate a FIP to address the requirements of section 110(a)(2)(D). Under CAA section 110(c)(1), EPA may issue a FIP anytime after such findings are made and must do so within two years unless a SIP revision correcting the deficiency is approved by EPA before the FIP is promulgated.

On April 28, 2006, EPA promulgated FIPs for all States covered by CAIR in order to ensure the emissions reductions required by CAIR are achieved on schedule. See 40 CFR 52.35 and 52.36. Each CAIR State is subject to the FIP until the State fully adopts, and EPA approves, a SIP revision meeting the requirements of CAIR. The CAIR FIPs require certain EGUs to participate in the EPA-administered CAIR SO 2 , NO X annual, and NO X ozone-season trading programs, as appropriate, found at 40 CFR part 97. The CAIR FIPs' SO 2 , NO X annual, and NO X ozone season trading programs impose essentially the same requirements as, and are integrated with, the respective CAIR SIP trading programs. The integration of the CAIR FIP and SIP trading programs means that these trading programs will work together to create effectively a single trading program for each regulated pollutant (SO 2 , NO X annual, and NO X ozone season) in all States covered by the CAIR FIPs' or SIPs' trading program for that pollutant. The CAIR FIPs also allow States to submit abbreviated SIP revisions that, if approved by EPA, will automatically replace or supplement the corresponding CAIR FIP provisions (e.g., the methodology for allocating NO X allowances to sources in the state), while the CAIR FIPs remain in place for all other provisions. See 40 CFR 51.123(p)(1)-(3), 71 FR 25328 and 25339 (April 28, 2006).

On April 28, 2006, EPA published two more CAIR-related final rules that added the States of Delaware and New Jersey to the list of States subject to CAIR for PM 2.5 and announced EPA's final decisions on reconsideration of five issues without making any substantive changes to the CAIR requirements. On December 13, 2006, EPA published minor, non-substantive revisions that serve to clarify CAIR and the CAIR FIP.

CAIR establishes State-wide emission budgets for SO 2 and NO X and is to be implemented in two phases. The first phase of NO X reductions starts in 2009 and continues through 2014, while the first phase of SO 2 reductions starts in 2010 and continues through 2014. The second phase of reductions for both NO X and SO 2 starts in 2015 and continues thereafter. CAIR requires States to implement the budgets by either: (1) Requiring EGUs to participate in the EPA-administered cap-and-trade programs: or, (2) adopting other control measures of the State's choosing and demonstrating that such control measures will result in compliance with the applicable State SO 2 and NO X budgets.

The May 12, 2005 and April 28, 2006 CAIR rules provide model rules that States must adopt (with certain limited changes, if desired) if they want to participate in the EPA-administered trading programs. The December 13, 2006, revisions to CAIR and the CAIR FIPs were non-substantive and, therefore, do not affect EPA's evaluation of a State's SIP revision.

With two exceptions, only States that choose to meet the requirements of CAIR through methods that exclusively regulate EGUs are allowed to participate in the EPA-administered trading programs. One exception is for States that adopt the opt-in provisions of the model rules to allow non-EGUs individually to opt into the EPA-administered trading programs. The other exception is for States that include all non-EGUs from their NO X SIP Call trading programs in their CAIR NO X ozone season trading programs. Texas was not subject to the NO X SIP Call and is not subject to the NO X ozone season requirements of CAIR; therefore, the second exception is not applicable.

States have the flexibility to choose the type of control measures they will use to meet the requirements of CAIR. EPA anticipates that most States will choose to meet the CAIR requirements by selecting an option that requires EGUs to participate in the EPA-administered CAIR cap-and-trade programs. For such States, EPA has provided two approaches for submitting and obtaining approval for CAIR SIP revisions. States may submit full SIP revisions that adopt the model CAIR cap-and-trade rules. If approved, these SIP revisions will fully replace the CAIR FIPs. Alternatively, States may submit abbreviated SIP revisions. The provisions in the abbreviated SIP revision, if approved into a State's SIP, will not replace that State's CAIR FIP; however, the requirements for the CAIR FIPs at 40 CFR part 52 incorporate the provisions of the Federal CAIR trading programs in 40 CFR part 97. The Federal CAIR trading programs in 40 CFR part 97 provide that whenever EPA approves an abbreviated SIP revision, the provisions in the abbreviated SIP revision will be used in place of or in conjunction with, as appropriate, the corresponding provisions in 40 CFR part 97 of the State's CAIR FIP ( e.g. , the NO X allowance allocation methodology).

A State submitting an abbreviated SIP revision, may submit limited SIP revisions to tailor the CAIR FIP's cap-and-trade programs to the state submitting the revision. An abbreviated SIP revision may establish certain applicability and allowance allocation provisions instead of or in conjunction with the corresponding provisions in the CAIR FIP's rules in that State. Specifically, an abbreviated SIP revision may:

(1) Include NO X SIP Call trading sources that are not EGUs under CAIR in the CAIR FIP's NO X ozone season trading program;

(2) Provide for allocation of NO X annual or ozone season allowances by the State, rather than the Administrator, and using a methodology chosen by the State;

(3) Provide for allocation of NO X annual allowances from the CSP by the State, rather than by the Administrator, and using the State's choice of allowed, alternative methodologies; or

(4) Allow units that are not otherwise CAIR units to opt individually into the CAIR FIP's cap-and-trade programs under the opt-in provisions in the CAIR FIP's rules.

Abbreviated SIP revisions can be submitted in lieu of, or as part of, CAIR full SIP revisions. States may want to designate part of their full SIP as an abbreviated SIP for EPA to act on first when the timing of the State's submission might not provide EPA with sufficient time to approve the full SIP prior to the deadline for recording NO X allocations. This will help ensure that the elements of the trading programs where flexibility is allowed are implemented according to the State's decisions. Submission of an abbreviated SIP revision does not preclude future submission of a CAIR full SIP revision. In this case, Texas asked EPA to process the submittal as an abbreviated SIP revision while the Texas Legislature considered changes in the State's CAIR authority. Texas anticipates submitting a revised NO X and SO 2 CAIR SIP later for full approval by EPA.

The CAIR NO X annual budget for Texas was developed from historical heat input data for EGUs. Using these data, EPA calculated annual regional heat input values, which were multiplied by 0.15 lb/mmBtu, for phase 1, and 0.125 lb/mmBtu, for phase 2, to obtain regional NO X budgets for 2009-2014 and for 2015 and thereafter, respectively. EPA derived the Texas NO X annual budget from the regional budgets using Texas heat input data adjusted by fuel factors.

The CAIR SIP requirements and the Texas CAIR NO X annual FIP establish the budgets for Texas as 181,014 tons of NO X annual emissions for 2009-2014 and 150,845 tons of NO X annual emissions in 2015 and thereafter. Texas's submitted rules at 30 TAC, Chapter 101, Subchapter H, Division 7, section 101.503(a) establish that the Texas NO X annual budgets are as listed in 40 CFR 51.123 and 96.140 (181,014 tons in 2009-2014 and 150,845 tons in 2015 and thereafter). The Texas abbreviated SIP revision, being approved today, does not affect these budgets, which are total amounts of allowances available for allocation for each year under the EPA-administered cap-and-trade programs under the Texas CAIR NO X Annual FIP. In short, the Texas abbreviated SIP revision only affects allocations of NO X annual allowances under the established budget for 2009-2014.

The CAIR NO X annual FIPs for the States largely mirror the structure of the NO X SIP Call model-trading rule in 40 CFR part 96 subparts A through I. While the provisions of the NO X annual FIPs are similar, there are some differences. For example, the NO X Annual FIPs provide for a CSP, which is discussed below and under which allowances may be awarded for early reductions of NO X annual emissions.

EPA used the CAIR model trading rules as the basis for the SO 2 , NO X annual, and NO X ozone season trading programs incorporated by reference into the States' CAIR FIPs. The CAIR FIPs' trading programs' rules are virtually identical to the CAIR model trading rules, with changes made to account for federal rather than state implementation. The CAIR model SO 2 , NO X annual trading, and NO X ozone season trading rules and the respective CAIR FIPs' trading programs are designed to work together as integrated SO 2 , NO X annual, and NO X ozone season trading programs.

Texas is subject to the CAIR FIP for PM 2.5 . This PM 2.5 CAIR FIP for Texas, 40 CFR 52.2283 and 52.2284, requires owners or operators of each NO X and SO 2 source located in Texas to meet the requirements of the Federal CAIR NO X Annual and SO 2 Trading Programs in 40 CFR part 97. Consistent with the flexibility given to States, States may submit abbreviated SIP revisions that will replace or supplement, as appropriate, certain provisions of its CAIR FIP's trading programs. The August 4, 2006, submission from Texas is such an abbreviated SIP revision and is for the NO X annual trading program.

In general, the CAIR FIPs' trading programs apply to any stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired combustion turbine serving at any time, since the later of November 15, 1990 or the start-up of the unit's combustion chamber, a generator with nameplate capacity of more than 25 MWe producing electricity for sale. Because Texas was not included in the NO X SIP Call trading program and is not subject to the NO X ozone season provisions of CAIR, Texas does not have or need the option of expanding the applicability provisions of the CAIR NO X Ozone Season Trading Program.

Under the NO X allowance allocation methodology in the CAIR model trading rules and in the CAIR FIPs' NO X annual trading program, NO X annual allowances are allocated to units that have operated for five years, based on heat input data from a three-year period that are adjusted for fuel type by using fuel factors of 1.0 for coal, 0.6 for oil, and 0.4 for other fuels. The CAIR model trading rules and the CAIR FIPs' NO X annual trading program also provide a new unit set-aside from which units without five years of operation are allocated allowances based on the units' prior year emissions.

The CAIR FIPs' provisions provide States with the flexibility to establish a different NO X allowance allocation methodology that will be used to allocate allowances to sources in a State if certain requirements are met concerning the timing of submission of units' allocations to the Administrator for recordation and the total amount of allowances allocated for each control period. In adopting alternative NO X allowance allocation methodologies, States have flexibility with regard to:

(1) The cost to recipients of the allowances, which may be distributed for free or auctioned;

(2) The frequency of allocations;

(3) The basis for allocating allowances, which may be distributed, for example, based on historical heat input or electric and thermal output; and

(4) The use of allowance set-asides and, if used, their size.

Consistent with the flexibility given to States in their CAIR FIPs' provisions, Texas has chosen to replace the provisions of the Texas CAIR NO X Annual FIP concerning the allocation of NO X annual allowances for Phase 1 (2009-2014) with its own methodology. The Texas Commission on Environmental Quality was directed by House Bill 2481 of the 79th Texas Legislature to establish regulations that will allocate NO X allowances at no cost to the CAIR subject units in Texas. Accordingly, the TCEQ has adopted provisions establishing the annual NO X allocation methodology at 30 TAC, Chapter 101, Subchapter H, Division 7, sections 101.503, 101.504, and 101.506.

Section 101.503(a) establishes that the Texas NO X Annual budgets are as listed in 40 CFR 96.140 (181,014 tons in 2009-2014 and 150,845 tons in 2015 and thereafter). Additionally, section 101.503(b) establishes that the Texas NO X Annual Trading Program will have a new unit set-aside of 9.5 percent of the NO X trading budget for both Phase 1 and Phase 2 of CAIR. (We are not taking action today on the Phase 2 allowance allocation methodology. Please see the TSD for further information.)

Section 101.504 establishes the dates by which the TCEQ Executive Director must submit NO X annual allocations to EPA for recordation in CAIR compliance accounts. Per section 101.504(a)(1), the TCEQ Executive Director will submit NO X allowances for units commencing operation before January 1, 2001 (referred to as existing units), by October 31, 2006 for the 2009-2014 control periods. Allocations for these existing units will be distributed proportionally based on the unit's share of the total baseline heat input according to section 101.506(c). The baseline heat input, calculated per section 101.506(b)(1), for each unit is the average of the three highest amounts of the unit's adjusted control period heat input for 2000-2004. A unit's adjusted control period heat input is found by multiplying the control period heat input by a fuel-adjustment factor as follows: 0.90 if the unit is coal-fired during the year; 0.50 if the unit is natural gas-fired during the year; and 0.30 if the unit is not coal or natural gas-fired during the year. Section 101.506(f) provides that a unit's control period heat input, and a unit's status as coal-fired or natural gas-fired for a calendar year must be determine in accordance with the monitoring, recordkeeping, and reporting requirements of 40 CFR part 75 to the extent the unit was otherwise subject to the requirements of part 75 for the year. Or, if a unit was not otherwise subject to part 75, the best available data reported to the TCEQ Executive Director can be used.

Under section 101.504(b), the TCEQ Executive Director will submit NO X allowances for units commencing operation on or after January 1, 2001 (referred to as new units), by October 31 of the applicable control period, beginning in 2009. Section 101.506(b)(1) specifies that for each control period in 2009-2014, allowances for new units are allocated from the 9.5 percent new unit set-aside. The new unit set aside allocation methodology is outlined in section 101.506(d). For the first control period in which a CAIR NO X unit commences commercial operation, such unit will not receive a NO X allocation from the new unit set-aside. The CAIR designated representative of a new unit must submit a written request for new unit allowances by July 1 of the first control period for which the allowance is requested and after the date that the unit commences commercial operation. The request for allowances from the new unit set-aside cannot exceed the unit's total tons of NO X emissions as reported to EPA for the calendar year immediately preceding such control period. The TCEQ Executive Director will review all requests for allowances from the new unit set-aside and distribute proportionally based on a unit's share of the total requested allowances. If allowances remain in the new unit set-aside after the TCEQ Executive Director has made allocations to the new units, the Executive Director will proportionally allocate the remaining allowances to existing units according to the provisions of section 101.506(e). Like the requirements for the existing units, the Texas allocation methodology at 101.506(f) requires that the part 75 monitoring, recordkeeping, and reporting requirements be used to determine a unit's total tons of NO X emissions during a calendar year to the extent the unit was otherwise subject to part 75. Or, if a unit was not otherwise subject to part 75, the best available data reported to the TCEQ Executive Director can be used.

The CSP provides an incentive for early reductions in NO X annual emissions. The CSP consists of 200,000 CAIR NO X annual allowances of vintage 2009 for the entire CAIR region, and a State's share of the CSP is based upon the State's share of the projected emission reductions under CAIR; Texas's share of the CSP is 772 NO X allowances. States may distribute CSP allowances, one allowance for each ton of early reduction, to sources that make NO X reductions during 2007 or 2008 beyond what is required by any applicable State or Federal emission limitation. States also may distribute CSP allowances based upon a demonstration of need for an extension of the 2009 deadline for implementing emission controls.

The CAIR and the Texas CAIR NO X Annual FIP's provisions allocate 772 NO X allowances to the Texas CSP (40 CFR 51.123 and 97.143) and establish specific methodologies for allocations of CSP allowances. States may choose an allowed, alternative CSP allocation methodology to be used to allocate CSP allowances to sources in those States.

Consistent with the flexibility given to States in the CAIR FIPs, Texas has chosen to modify the provisions of the Texas CAIR NO X Annual FIP concerning the allocation of allowances from the CSP. The Texas rules distribute CSP allowances using an allocation methodology that is substantively identical to the provisions in 40 CFR 96.143. The provisions for the allocation of CSP allowances in the Texas program are found at section 101.508 of 30 TAC Chapter 101. Section 101.508 authorizes the Texas Commission on Environmental Quality Executive Director to allocate for the control period in 2009 up to the amount of CSP allowances designated for Texas in 40 CFR 96.143 (772 tons of NO X ). The CSP allowances may be allocated, upon request by a CAIR unit's designated representative, to (1) A unit that has made early NO X emission reductions in 2007 and 2008, or (2) to a CAIR unit whose compliance during the 2009 control period would create an undue risk to the reliability of electricity supply during such control period. In each instance, the CAIR designated representative of a CAIR unit must submit a written request for CSP allowances to the TCEQ Executive Director by July 1, 2009. The TCEQ Executive Director will determine allocations of the CSP and submit this information to EPA by November 30, 2009.

The opt-in provisions of the CAIR and the States FIPs' provisions allow for certain non-EGUs ( i.e., boilers, combustion turbines, and other stationary fossil-fuel-fired devices) that do not meet the applicability criteria for a CAIR trading program to participate voluntarily in ( i.e., opt into) the CAIR trading programs. A non-EGU may opt into one or more of the CAIR trading programs. In order to qualify to opt into a CAIR trading program, a unit must vent all emissions through a stack and be able to meet monitoring, recordkeeping, and reporting requirements of 40 CFR part 75. The owners and operators seeking to opt a unit into a CAIR trading program must apply for a CAIR opt-in permit. If the unit is issued a CAIR opt-in permit, the unit becomes a CAIR unit, is allocated allowances, and must meet the same allowance holding and emissions monitoring and reporting requirements as other units subject to that CAIR trading program. The opt-in provisions provide for two methodologies for allocating allowances for opt-in units, one methodology that applies to opt-in units in general and a second methodology that allocates allowances only to opt-in units that the owners and operators intend to repower before January 1, 2015.

States have several options concerning the opt-in provisions. The rules for each of the States' CAIR FIPs' trading programs include opt-in provisions that are essentially the same as those in the respective CAIR SIP model rules, except that the States' CAIR FIPs' opt-in provisions become effective in a State only if the State's abbreviated SIP revision adopts the opt-in provisions. The State may adopt the opt-in provisions entirely or may adopt them but exclude one of the allowance allocation methodologies. The State also has the option of not adopting any opt- in provisions in the abbreviated SIP revision and thereby providing for its CAIR FIP's trading programs to be implemented in the State without the ability for units to opt into the programs.

Consistent with the flexibility given to States in the FIPs' provisions, Texas has chosen not to allow non-EGUs to participate in the Texas CAIR FIP NO X annual trading program. Texas is not subject to the CAIR NO X ozone season FIP so the opt-in provisions for the CAIR FIP NO X ozone season trading program are not applicable. We are not taking any action today on the Texas CAIR SO 2 SIP submittal.

EPA is approving a revision to the Texas SIP, the Texas CAIR NO X Annual Abbreviated SIP revision, submitted on August 4, 2006, by the State of Texas (Texas regulations, 30 TAC, Chapter 101, Subchapter H, Division 7, sections 101.503, 101.504(a)(1), 101.504(b), 101.506(a)(1), 101.506(b)(1), and 101.506(c)-(f), and 101.508. Texas is covered by the PM 2.5 CAIR FIP, which requires participation in the EPA-administered CAIR FIP cap-and-trade programs for SO 2 and NO X annual emissions. Under this abbreviated SIP revision and consistent with the flexibility given to Texas in its CAIR NO X Annual FIP's provisions, the Texas provisions for allocating allowances under the Texas CAIR FIP's NO X annual trading program for Phase 1 (2009-2014) of CAIR are approved as part of the Texas SIP. In addition, Texas provisions that establish a methodology for allocating NO X allowances in the CSP are approved as part of the Texas SIP. The abbreviated SIP revision meets the applicable requirements in 40 CFR 51.123(p)(1) and (2) with regard to NO X annual emissions and NO X CSP allocations. EPA is not making any changes to the Texas CAIR NO X Annual FIP's provisions, except to the extent that if EPA's direct final action on the Texas abbreviated SIP revision becomes effective, then EPA, by ministerial action, will note in Appendix A, 1 and 2, to Subpart EE of part 97, that Texas has an approved SIP revision for NO X annual allowance allocations for Phase 1 and for NO X allowance allocations from the Texas CSP.

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 and because this action will not have a significant, adverse effect on the supply, distribution, or use of energy, 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 approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule 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 rule approves pre-existing requirements under state law and 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 rule 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 approves a state rule implementing a Federal standard and indicates that approval will result in ministerial changes to the appropriate appendices of the CAIR FIP's trading rules and does not alter the relationship or the distribution of power and responsibilities established in the Act. The EPA interprets Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), as applying only to those regulatory actions that concern health or safety risks such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This rule is not subject to Executive Order 13045 because it would approve a State program. Executive Order 12898 (59 FR 7629, February 16, 1994) establishes federal executive policy on environmental justice. Because this rule merely approves a state rule implementing a Federal standard, EPA lacks the discretionary authority to modify today's regulatory decision on the basis of environmental justice considerations.

In reviewing SIP submissions, EPA's role is to approve State choices, provided that they meet the criteria of the Act. 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 Act. 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 rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).