On May 28, 2008, the U.S. Office of Personnel Management (OPM) issued a proposed rule (73 FR 30526) to change the nationwide schedule of nonappropriated fund (NAF) Federal Wage System regular wage surveys at appendix B of part 532 of title 5, Code of Federal Regulations, from a fiscal year cycle to a calendar year cycle. The proposed rule had a 30-day public comment period, during which OPM received no comments.

I certify that these regulations will not have a significant economic impact on a substantial number of small entities because they will affect only Federal agencies and employees.

The Office of Management and Budget has reviewed this final rule in accordance with Executive Order 12866.

This document does not contain proposed information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13.

On June 23, 2008, OPM published at 73 FR 35358 (2008) proposed amendments to the regulations in part 731 of title 5, Code of Federal Regulations (CFR), to require, with limited exceptions, the application of reciprocity in any case where the person previously was investigated at a level that meets or exceeds that required for the new position, was determined suitable under 5 CFR part 731 or fit based on character or conduct criteria equivalent to the suitability factors of 5 CFR 731.202, and meets continuous service requirements described in the regulations. The public comment period on the proposed amendments ended on August 22, 2008. OPM received comments from two Federal agencies or departments, one union, and two individuals. OPM has carefully considered the comments received. Subsequent to publication of the proposed regulations, President George W. Bush signed Executive Order 13467 (June 30, 2008), which established a governance structure to improve Executive branch policies and procedures regarding various background investigations and adjudications. Section 2.1(c) of E.O. 13467 requires that except as otherwise authorized by law, background investigations and adjudications shall be mutually and reciprocally accepted by all agencies. The E.O. requires that, with respect to suitability, agencies may not establish additional investigative or adjudicative requirements without the approval of the Suitability Executive Agent, and such approval shall be limited to circumstances where additional requirements are necessary to address significant needs unique to the agency involved or to protect national security. Section 2.3(b) of the E.O. provides that the Director of the Office of Personnel Management shall serve as the Suitability Executive Agent. The exceptions to reciprocity provided in these regulations are consistent with these provisions.

One commenter opposed accepting background checks on contractor employees who have had their background investigations conducted by their employing company. The commenter believes that the Federal suitability process involves more scrutiny and a private company's background checks may not involve the same extensive checks as does the Federal suitability process. The proposed regulation only applies where a Federal agency has previously determined the contract employee was fit to perform work on the contract based on criteria equivalent to the factors provided at 5 CFR 731.202. There is no requirement or expectation that reciprocity would be granted to investigations or fitness determinations made by private companies on their own employees.

One commenter raised a concern regarding granting reciprocity to a previous investigation and favorable suitability determination without the ability to check whether the individual has performed any acts that might exclude them from employment subsequent to this prior investigation. This commenter raises the example of a person who is arrested for criminal misconduct a year or two subsequent to an investigation and favorable suitability determination by a Federal agency. The commenter argues that when that person applies for employment with a second agency, under the proposed regulations, unless the second agency is aware of the intervening misconduct, it must grant reciprocity to the earlier investigation and favorable suitability determination. In response, we note that the proposed regulations do not change the existing rules governing how the misconduct in the example is identified and addressed. Both under current regulations at 5 CFR 731.104(a)(6) and proposed regulations at 5 CFR 731.104(a)(2), the person in the example would not be subject to a new suitability investigation. Absent a change in risk level, misconduct by an employee subsequent to an investigation and favorable suitability determination can and should be addressed under adverse action procedures provided at 5 CFR part 752. This is true regardless of whether the employee has several years of service with the same agency or has recently transferred to a new agency. There are a variety of ways in which such misconduct can be identified and addressed, including by review of a newly-obtained Declaration for Federal Employment, Optional Form 306.

A related question raised by the same commenter noted that while under the proposed regulations a person will be subject to a new investigation if “an agency obtains new information that calls into question the person's suitability,” nowhere does the proposed regulation define or explain how an agency “obtains new information.” There are a variety of ways by which new information might be obtained. As explained in the supplementary materials to the proposed regulations, new information might be obtained from a newly-executed Declaration for Federal Employment, Optional Form 306. Other sources include responses to questions raised during employment interviews or during reference checks.

One commenter asked whether the intent of § 731.104(d) is to exclude public trust positions from the new reciprocity requirements. This is not the intent of this section. This section has been modified to clarify that the provisions in § 731.104, setting out limitations on when an appointment is subject to a new investigation, do not negate agencies' ability to conduct reinvestigations for public trust positions under other authority as described in § 731.106.

Another commenter stated that there is no means to challenge a decision by OPM or an agency that a new investigation or suitability determination is required because a prior fitness determination was not based on criteria substantially equivalent to the factors provided at 5 CFR 731.202. This commenter urged that such decision be subject to review by the Merit Systems Protection Board (MSPB) or alternatively, by OPM. OPM notes that any suitability action taken based on a new investigation, such as removal, cancellation of eligibility, or debarment, may be appealed to MSPB under § 731.501. Furthermore, creation of new appeal or review rights is outside the scope of this regulation and will not be further addressed here.

One commenter pointed out that § 731.106(c)(2) refers to “investigative types” in reference to 5 CFR 732.202 when that regulation instead uses the term “investigative requirements.” We have changed the language in § 731.106(c)(2) to “investigative requirements” to be consistent with 5 CFR part 732.

Another comment concerned the meaning of § 731.106(e), which provides when the risk level of a position is changed to a higher level or an employee experiences a change to a position with a higher risk level, he or she can remain in that position pending any upgrade in the investigation required. The commenter stated that it was unclear whether it is the original or new position in which the person could remain. This section was modified in the proposed regulations to clarify that the movement to the higher risk position is not limited to promotion but may include reassignment or even demotion. The modification does not otherwise change the meaning of the section. Thus, as is the case under the current regulations, a person may remain in his or her current position if the risk level for that position changes to a higher level, and may encumber any new position to which he or she moved even if that position has a higher risk level than his or her previous position. In either case, any upgrade in investigation required for the new risk level should be initiated within 14 calendar days. If the results of the upgraded investigation warranted action such as removal, that removal would be from the new higher risk level position.

One commenter noted that the OPM issuances referenced in § 731.106(c)(2) are limited to official use only and are not made available to the public. This commenter stated that in the absence of being able to review those issuances, it is impossible to provide comments on § 731.106(c)(2). The very limited modification proposed in § 731.106(c)(2) simply reflects the existing relationship between position risk determination under part 731 and the position sensitivity determinations made under 5 CFR part 732 when identifying the appropriate level of investigation needed for a particular position. It makes no substantive change in the regulatory requirement. This commenter questioned the relationship between risk designation and sensitivity designation and asked for an explanation of a position's sensitivity designation on the nature and content of a suitability investigation. They noted that in Executive Order 13467 (June 30, 2008), the President directed that investigative standards for security clearance and suitability investigations be aligned, to the extent possible. They expressed concern that an investigation designed to determine a public trust employee's suitability may be inappropriately broadened to include lines of investigation appropriate only in a security investigation under part 732. As stated in current regulation at § 731.101(a), suitability determinations made under part 731 are “distinct” from determinations of eligibility for assignment to, or retention in, sensitive national security positions. Although the President has directed agencies to ensure that investigative standards for security clearance and suitability investigations are aligned to avoid duplicative steps, the purpose and basis of the two determinations remain distinct and nothing in the proposed regulations changes that distinction.

One commenter urged that a definition of “core duties” be provided and stated that in the absence of a definition, each agency would be required to define and “codify” the core duties for their organization. Another commenter on this section recommended that OPM define core duties to narrowly limit the exception provided at § 731.202(d) and that OPM review all agency definitions of their core duties and the types of conduct alleged to be incompatible with those duties. Specifically, they urged that any incompatibility with core duties generally be limited to a statutory or regulatory bar such as the legal barrier to the employment of a person with a record of domestic abuse in a gun-carrying position.

Whether an individual's prior conduct is incompatible with the core duties of a position is inherently a case-by-case determination focused not only on the unique duties of the specific position, but also on the specific nature of the prior conduct. Incompatibility is not limited to instances where employment would violate a statutory or regulatory bar but could extend to conduct which clearly is antithetical to the key responsibilities of the new position. For example, prior conduct involving financial fraud may be antithetical to the duties of a bank examiner and, as discussed in the supplementary materials to the proposed regulations, prior criminal misconduct may be antithetical to the duties of a law enforcement official. Core duties will vary from agency to agency and from position to position, and the identification of core duties is properly within the discretion of individual agencies. We do not believe that OPM review of agency identification of core duties and incompatible conduct is appropriate. However, we agree that a general definition of “core duty” would assure more consistent application of the exception provided at § 731.202(d). Accordingly, we have added a definition of “core duty.”

This commenter further recommended that an agency decision under § 731.202(d) that a person's investigative record on file shows conduct that is incompatible with the core duties of the relevant covered position be subject to review by the Merit Systems Protection Board (MSPB) or, alternatively, by OPM. OPM notes that any action taken based on a negative suitability determination, such as removal, cancellation of eligibility, or debarment, may be appealed to the MSPB under § 731.501. Furthermore, creation of new appeal or review rights is outside the scope of this regulation and will not be further addressed here.

One commenter asked whether a suitability action must be based on specific factors listed at § 731.202 or whether such an action can be based on criteria equivalent to those suitability factors. The proposed regulations provide that reciprocity shall be granted a previous investigation and favorable suitability determination based on criteria equivalent to the suitability factors listed at § 731.202 as long as the individual meets the continuous service requirement. However, the requirement stated in § 731.202(b) that any suitability action must be based on the factors listed at § 731.202(b) remains unchanged. This same commenter questioned the legal justification for investigative inquiry into such matters as the grounds for a person's divorce, personal finances, or foreign travel and asks about the relationship of such matters to the factors listed at § 731.202(b). These questions will not be addressed here as they concern the factors listed at § 731.202(b) which are outside the scope of the proposed regulation.

One commenter urged that a statement be added to the regulation to make it clear that an agency will not be held to reciprocity if the prior investigation was not reported to OPM. This same commenter also raised questions about the nature and detail of investigative results to be reported and also expressed concern regarding how quickly the new agency would be able to obtain information regarding any prior investigation, suitability determination, and suitability action. Even if information regarding a prior investigation and adjudication has not yet been reported to OPM, agencies must follow the reciprocity requirements of these regulations. If the information regarding a prior investigation and adjudication is not in OPM's database or is insufficient to make a reciprocity decision, agencies should contact the former or current employing agency to obtain the necessary information to either grant or deny reciprocity consistent with these regulations. If after contacting the former or current employing agency, an agency is unable to determine the investigation on file is at the appropriate level or confirm that the other requirements for reciprocity apply, then necessarily no reciprocity may be granted. For these reasons, we believe the recommended statement is neither appropriate nor necessary.

One commenter recommended changing the provisions governing appeals of suitability actions to the Merit Systems Protection Board (MSPB). They recommended that MSPB be authorized to issue summary judgment without a hearing where the MSPB administrative judge finds there are no material facts in dispute or genuine issues of credibility. We will take this suggestion under advisement for future consideration but it is outside the scope of the current proposed regulation and therefore has not been considered.

Another commenter questioned whether an installation can pass over a selected candidate and proceed to the next preferred candidate when the results of the preliminary suitability determination reveal disqualifying information. Nothing in the proposed regulations alters agency obligations under law to follow proper pass over procedures.

One commenter urged that suitability standards “currently under development” be issued prior to the implementation of these proposed regulations. The suitability factors referenced in the proposed regulations are at 5 CFR 731.202 and are not under development. This same commenter also recommended that appropriate training be provided to all deciding officials, in advance of the implementation of these regulations, so as to ensure the consistency of determinations. Agencies having delegated suitability adjudication authority have been required to use the suitability factors for at least 20 years and agency staff should be well trained in their application.

One commenter stated that language in the supplementary material to the proposed regulations concerning coverage appears inconsistent with the actual regulations. Specifically, the supplementary states that “any proposed changes to these regulations apply only to persons that are in, or in the process of moving into, the competitive service or career Senior Executive Service” and the regulatory language refers to “covered positions,” a term which is defined in the current regulations (final regulations effective June 16, 2008). We agree that there may be some confusion since, under the most recent final regulations, the coverage of part 731 was modified to include certain positions in the excepted service. To clarify, the proposed regulations will apply to persons who are in, or in the process of moving to, a covered position as defined at § 731.101(b).

OPM has made a technical amendment to the Authorities for this part to reflect the President's signing of Executive Order 13467 on June 30, 2008, which designates the OPM Director as Suitability Executive Agent.

The Office of Management and Budget has reviewed the final rule in accordance with Executive Order 12866.

I certify that these regulations will not have significant economic impact on a substantial number of small entities because they will affect Federal agencies, employees, and applicants only.

This regulation will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant preparation of a Federalism Assessment.

This regulation meets the applicable standard set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.

This rule will not result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private section, of $100,000,000 or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This action pertains to agency management, personnel and organization, and does not substantially affect the rights or obligations of non-agency parties and, accordingly, is not a “rule” as that term is used by the Congressional Review Act (Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)). Therefore, the reporting requirement of 5 U.S.C. 801 does not apply.

The Inflation Adjustment Act, 28 U.S.C. 2461 note, requires the OCC, as well as other Federal agencies with CMP authority, periodically to publish regulations adjusting for inflation each CMP authorized by a law that the agency has jurisdiction to administer. The purpose of these adjustments is to maintain the deterrent effect of CMPs and to promote compliance with the law. The Inflation Adjustment Act requires adjustments to be made at least once every four years following the initial adjustment. The OCC's prior adjustment to each CMP was published in the Federal Register on November 10, 2004, 69 FR 65067, and became effective on December 10, 2004.

The Inflation Adjustment Act requires that the adjustment reflect the percentage increase in the Consumer Price Index between June of the calendar year preceding the year in which the adjustment will be made and June of the calendar year in which the amount was last set or adjusted. The Inflation Adjustment Act defines the Consumer Price Index as the Consumer Price Index for all urban consumers (CPI-U) published by the Department of Labor. 1 See 28 U.S.C. 2461 note. In addition, the Inflation Adjustment Act provides rules for rounding off increases, 2 and requires that any increase in a CMP apply only to violations that occur after the date of the adjustment. Finally, section 2 of the Debt Collection Improvement Act amended the Inflation Adjustment Act by limiting the initial adjustment of a CMP pursuant to the Inflation Adjustment Act to no more than 10 percent of the amount set by statute. See 28 U.S.C. 2461 note.

This final rule adjusts the amount for each CMP that the OCC has jurisdiction to impose in accordance with the statutory requirements by revising the table contained in subpart O of 12 CFR part 19. The table identifies the statutes that provide the OCC with CMP authority, describes the different tiers of penalties provided in each statute (as applicable), and sets out the inflation-adjusted maximum penalty that the OCC may impose pursuant to each statutory provision.

The Act requires that we compute the inflation adjustment by comparing the CPI-U for June of the calendar year preceding the adjustment with the CPI-U for June of the year in which the CMPs were last set or adjusted. See 28 U.S.C. 2461 note. The majority of CMPs were adjusted in 2004. For those CMPs, we compared the CPI-U for June 2007 (208.352) with the CPI-U for June 2004 (189.7). This resulted in an inflation adjustment of 9.8 percent. Two penalties were last adjusted in 2000. 3 For those penalties, we compared the CPI-U for June 2007 (208.352) with the CPI-U for June 2000 (172.4). This resulted in an inflation increase of 20.9 percent. Three penalties were last adjusted in 1997. 4 For those penalties, we compared the CPI-U for June 1997 (160.3) with the CPI-U for June 2007 (208.352). This resulted in an inflation increase of 30.0 percent.

We multiplied the amount of each CMP by the appropriate percentage inflation adjustment, added that amount to the current penalty, and rounded the resulting dollar amount up or down according to the rounding requirements of the Act. In some cases, rounding resulted in no adjustment to the CMP. The following table shows both the present CMPs and the inflation adjusted CMPs. The table published in § 19.240(a) is shorter and shows only the adjusted CMPs, not the calculations.

Section 19.240(b) is amended, consistent with the statute, to state that the adjustments made in § 19.240(a) apply only to violations that occur after the effective date of this final rule.

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an airworthiness directive (AD) that would apply to certain Boeing Model 727-200 and 727-200F series airplanes; 737-200, 737-200C, 737-300, and 737-400 series airplanes; 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747SR, and 747SP series airplanes; 757-200 and 757-200PF series airplanes; and 767-200 and 767-300 series airplanes. That NPRM was published in the Federal Register on April 4, 2005 (70 FR 16986). That NPRM proposed to require removing all insulation blankets within the pressurized areas of the affected airplanes and installing a new insulation blanket meeting the requirements of Section 25.856(a) of Title 14 of the Code of Federal Regulations (CFR) (14 CFR 25.856(a)). That NPRM also proposed to allow operators to develop methods for distinguishing between insulation blankets constructed of AN-26 and other materials. In addition, that NPRM proposed a provision that, if the FAA approves such a method, operators would not be required to remove blankets they determine are not constructed of AN-26.

After issuance of the NPRM, we extended the comment period of the NPRM by 60 days due to the extensive scope and significant potential impact of the NPRM. An NPRM, extending the comment period, was published in the Federal Register on June 6, 2005 (70 FR 32738). Subsequently, we decided that more time was necessary for interested parties to continue to evaluate the proposal and to submit additional comments with more specific details concerning issues. An NPRM, reopening the comment period, was published in the Federal Register on November 23, 2005 (70 FR 70749).

We have extended the compliance time of the required replacement from 72 months to 96 months. The revised compliance time should minimize the cost impact on operators by allowing more planning time to comply with the requirements of this AD. We also have revised the cost information and note that there is a substantial change in estimated cost due to increased parts and labor costs, reduced number of airplanes, and assumed service change for the future fleet. In addition, we have deleted the reinstallation requirement of paragraph (h)(2) of the NPRM. The reinstallation requirement would have created an undue burden on operators because not all removals of insulation blankets are done at a heavy maintenance visit with the necessary replacement materials available.

We gave the public the opportunity to participate in developing this AD. We considered the comments received from the 21 commenters. The significant comments are as follows.

Several commenters, such as the Air Transport Association (ATA) on behalf of its members, Boeing, KLM, and Northwest Airlines (NWA), request that we reconsider the NPRM because AN-26 poses a lower safety risk than indicated in the NPRM, and that AN-26 was not considered unsafe during certification.

Boeing states that its in-service events/test data show limited flame spread and no damage to structure/systems due to aged AN-26. Boeing implies that the mitigating actions for the NPRM should be revised to correspond to the low risk presented by the data, which are proportionally associated with the combination of contamination, ignition, and flame propagation.

In addition, Boeing states that the replacement of AN-26 for all locations may not be required due to the isolation of materials from ignition sources or lack of susceptibility to high levels of contamination. NWA agrees with Boeing's conclusion that AN-26 (based on flame propagation characteristics by itself) without contamination is not an unsafe condition (i.e., high-level threat) for airplanes.

Based on our review of the details of the in-service events/test data, we do not agree with Boeing to revise the NPRM to reflect its presented information or with its conclusions about the data. With regard to ignition and propagation, we have examined the incident/event history of fires involving airplanes manufactured between 1981 and 1988 and, in particular, those events that have involved AN-26 thermal/acoustic insulation materials. Results of this examination revealed that flames have propagated on the thermal/acoustic insulation materials initiated from several types of ignition sources such as electrical arc/sparks and lightning strikes. Flight or ground personnel extinguished some of these fires with extinguishing equipment while other fires self-extinguished. It is unknown whether all of these fires would have self-extinguished and how much of the material would have been consumed or if the fire would have spread to other materials. These events took place in several areas of the airplanes, but primarily in inaccessible areas, those that are hidden from view from the passengers and flight crew. The burned areas ranged from a relatively small area (< one ft 2 ) to a large area (40 ft 2 ). Some of these events resulted in significant system and/or structural damage to the airplane.

We also do not agree with the commenters suggestions that an unsafe condition only exists if contamination is present. Data from in-service events and tests, conducted by both Boeing and us, support the conclusion that relatively uncontaminated, in-service AN-26 has ignited and resulted in unacceptable flame propagation behavior. As discussed in the “Background” section of the NPRM, we have concluded that the flammability characteristics of AN-26 are more a factor of fundamental material properties than a factor of contamination.

Contamination, in many cases, can increase the susceptibility to ignition and flame propagation, although, in certain cases, some forms of contamination actually inhibit the propagation of flames. In addition, as discussed in the “FAA's Determination and Requirements of the Proposed AD” section of the NPRM, we issued Flight Standards Information Bulletin for Airworthiness (FSAW) 00-09, “Special Emphasis Inspection on Contamination of Thermal/Acoustic Insulation,” effective September 28, 2000, to ensure that operators have procedures defined in their approved maintenance programs for the inspection for contamination and corrective action. Boeing also has revised service letters alerting operators to methods for preventing and removing contamination. The procedures in these documents serve to mitigate the separate risk associated with contamination.

NWA also comments that AN-26 was not considered unsafe at the time of certification, and that we are changing the flammability test for insulation material 20 years after certification.

We do not agree. Whether or not AN-26 meets the certification flammability requirements that were applicable to the affected airplanes is irrelevant to the determination of an unsafe condition. As mentioned in Amendment No. 25-111 (68 FR 45045, July 31, 2003), prior certification standards did not adequately distinguish between acceptable and unacceptable materials. As a result, we did, in fact, change those standards in Amendment No. 25-111, and the old test methods are no longer applicable to thermal/acoustic insulation. As such, our long-range plan is application of Amendment No. 25-111, where material that met the previous standards will be reduced by attrition as required by the associated 14 CFR Part 91 and Part 121 operational rules.

Furthermore, in response to NWA's observation that we are changing test methods to account for electrical arcing, the arc/spark test is only used to assess whether an unsafe condition exists. It is not used as a certification standard. We have determined that the most common ignition threat is electrical arcing/sparking. When AN-26 is subject to arcs and sparks, it ignites and propagates a fire with characteristics unlike other insulation material we have evaluated. These characteristics create the unsafe condition.

KLM and NWA are concerned that in addition to AN-26, there may be additional materials that should be subject to the requirements of the NPRM. KLM states that it received a list of several thermal/acoustic insulation materials from ORCON, the manufacturer of AN-26, that do not comply with 14 CFR 25.856(a).

As discussed in the NPRM, this AD addresses an identified unsafe condition (i.e., insulation blankets constructed of AN-26, if not removed from the fuselage, could ignite and propagate a fire that is the result of electrical arcing or sparking). AN-26 differs from other films in use, except for metallized polyethyleneteraphthalate (MPET) material which has been addressed in other similar rulemaking, in that it is susceptible to propagation of a fire from a small ignition source. Other films, while not necessarily meeting the requirements of 14 CFR 25.856(a), do not have this susceptibility. It is the susceptibility to small ignition sources that creates the unsafe condition.

ATA states that AN-26 is not as unsafe as MPET. ATA states that investigation results of in-service events and the FAA Technical Center's video recording of the tests of insulation blankets constructed of MPET indicate that propagation characteristics of AN-26 is not a safety threat.

We do not agree with ATA's assertion that AN-26 poses a propagation hazard significantly less than that posed by MPET. We have determined that each material is susceptible to ignition and propagation from a small ignition source and thus presents an unsafe condition. The flame propagation characteristics of MPET in a specific test scenario are not a recognizable standard with which to compare other materials, including AN-26, as MPET has not been deemed the baseline material for safety evaluations. For this same reason, we also do not agree that the comparison of propagation characteristics of AN-26 and MPET should be factored into the development of an appropriate compliance time for the required replacement.

Several commenters, such as ATA, Continental, and NWA, express concern about the lack of service information in order to comply with the AD. ATA notes that paragraph (f) of the NPRM states that the insulation blankets must be replaced “using applicable maintenance manual procedures.” ATA states that such a provision is inadequate, and that the effective date of the AD should be delayed to ensure appropriate service information is available to operators. While preparing for the MPET ADs  1 (hereafter “MPET ADs”), ATA found that the maintenance manual procedures:

• Describe the fabrication of insulation blankets, but provide no instructions for the removal or installation of insulation blankets; and

• Do not adequately address the wholesale replacement of an insulation blanket system nor provide any accounting for assessing or planning the labor or logistical support required to mount the proposed replacement.

In addition, ATA states that having service information with detailed procedures for replacing AN-26 in the flight deck and electronics compartment (areas in which insulation blankets are rarely replaced during the lifetime of an airplane) is necessary to ensure that the electrical systems are not disturbed during the proposed replacement. Without approved service information, ATA also states that the NPRM, in effect, relies on the future development and FAA's approval of operators' equivalent methods, alternative methods of compliance (AMOC), or supplemental type certificates (STCs), or a combination of these methods. ATA points out that it took 9 to 18 months to develop and to get approved 22 STCs for a similar issue (i.e., strengthened flight deck doors).

Continental states that the NPRM does not refer to any approved service information with instructions for inspecting systems that are disturbed during the AN-26 replacement. Without this service information, Continental also states that Boeing, operators, and the FAA will be unable to determine whether there are compliance issues similar to those the FAA previously noted before the issuance of the MPET ADs. Continental concludes that requiring operators to develop their own service information will cause operators and the FAA an undue burden after the AD is released and could cause compliance issues.

As an alternative to extending the effective date of the AD, ATA requests that we consider issuing a supplemental NPRM that proposes a reasonable compliance time once appropriate service information is available. ATA appreciates the reopening/extension of the comment period of the NPRM to evaluate AMOCs; however, ATA notes that the results of the evaluated AMOCs revealed that none of them have a high likelihood of substantially reducing the cost impact of the NPRM. Since no AMOCs have been approved for use, ATA states that any estimate of their economic benefits and impacts would be somewhat speculative. ATA believes that waiting for approved service information will ensure a reasonable cost impact and will ensure the availability of at least one practical method of compliance throughout the compliance time of the AD.

After issuance of the NPRM, we reviewed the following Boeing special attention service bulletins:

The special attention service bulletins describe procedures for an optional one-time general visual inspection to determine if the existing insulation blankets are constructed of AN-26, removal of existing insulation blankets, and installation of new insulation blankets. We have determined that accomplishing the actions specified in those special attention service bulletins is considered an acceptable means of compliance with the requirements of paragraphs (f) and (g) of this AD. Therefore, we have revised paragraphs (f) and (g) of this AD accordingly.

Alternatively, we determined that existing maintenance manual procedures should be sufficient for accessing and replacing AN-26 in the flight deck, as well as the electronic and passenger and cargo compartments. Maintenance manual procedures also provide instructions for restoring disturbed systems and conducting detailed inspections of disturbed wiring. Therefore, we determined that it is possible to do the required replacement in these areas by developing the necessary installation data in conjunction with existing maintenance practices. We also determined that these areas will most likely be accessed during a heavy maintenance check, which would better facilitate replacement of insulation materials; and we have accounted for this in the compliance time.

We also acknowledge that the maintenance manual procedures describe methods for fabricating replacement insulation blankets as well as removal and installation of blankets in several locations throughout the airplane. We also are aware that, through existing maintenance manual procedures, it is possible to utilize existing insulation blankets as templates in conjunction with new thermal/acoustic insulation materials meeting 14 CFR 25.856(a) to create replacement insulation blankets. While some operators may not be equipped or may decide not to manufacture replacement insulation blankets, we are aware that there are resources available in the industry to manufacture and install replacement insulation blankets in almost all locations without specific service information from Boeing.

Furthermore, we are also aware that certain operators and modifiers are developing their own installation data. We support the efforts of these parties to generate potential methods of compliance. However, we have not received any specific proposals to date.

US Airways requests that the NPRM be withdrawn and reissued when approved methods of identifying insulation blankets constructed of AN-26 and service information are available. Boeing, British Airways (BA), Continental, Henderson Projects, FedEx, NWA, and Transport Canada Civil Aviation request that the NPRM be revised to include a method of identifying non-compliant insulation blankets constructed of AN-26. Two commenters specifically request that the first paragraph in the “FAA's Determination and Requirements of the Proposed AD” section of the NPRM be revised to include Boeing's AN-26 visual identification flow chart. Without such a method, the two commenters state that operators will be required to get approval from the FAA before installing replacement insulation blankets, which will cause a significant work overload for all respective parties. Another commenter states that Note 1 of the NPRM is not adequate to identify AN-26 and would like to see color pictures and a description of AN-26. Other commenters state that including such a method will help offset the economic impact on operators. One other commenter states that many original insulation blankets have been replaced with locally fabricated insulation blankets, which do not have visible markings.

We acknowledge that operators need a better method to identify insulation blankets constructed of AN-26. We are aware that ORCON used a variety of methods to part-mark the subject materials, and in some cases, there is no part marking at all. We are also aware that more than one material has been qualified to Boeing's material specification during the timeframe AN-26 was used.

We do not agree, however, to include Boeing's AN-26 visual identification flow chart in the current form in the AD. We have determined that the flow chart does not provide an adequate means of identifying insulation blankets constructed of AN-26 and lacks key characteristics necessary to aid personnel. However, Boeing has provided instructions for identifying insulation blankets constructed of AN-26 in the service information described previously.

ATA requests that we form an Aviation Rulemaking Committee (ARC) to coordinate insulation-related initiatives of large scope that may arise in the future. ATA also requests that we work with manufacturers to coordinate the development and publication of a central repository of data showing:

• Thermal/acoustic insulation materials that have passed current flame propagation test standards; and

• Plans to test in-service materials that have not yet been tested.

We do not agree. We note that data regarding in-service materials are already available from the FAA Technical Center. We have not seen any tendency for aged material to perform differently than new materials. While none of the data suggest that there is a trend toward increased flammability with age, we support further investigation into this issue. However, we do not plan to test additional materials, unless new information surfaces to suggest a need. We do not agree that a central repository of data, whether descriptive or substantiating, is necessary. We have gathered test data for a number of in-service materials, which can be accessed at: http://www.fire.tc.faa.gov/ppt/materials/Flammability_test.zip . These data were obtained by the International Aircraft Materials Fire Test Working Group (IAMFTWG) on a strictly voluntary basis. In general, data are proprietary to the applicant, and we cannot disclose those data to the public. We would support an industry initiative wherein design approval holders voluntarily disclose such information.

We do agree that it is necessary to coordinate insulation-related initiatives; however, we do not agree that it is necessary to form an ARC. We, along with several manufacturers and operators, are a member of the IAMFTWG, which studies improvements to flammability standards, specifically those for non-metallic materials within the pressurized portions of an airplane. The group is divided into several task groups, one of which is the Aging/Contamination Task Group. Members of this task group evaluate in-service parts from operators to study contaminants and to determine materials used by manufacturers and operators, and conduct laboratory tests to artificially age various film materials. However, the IAMFTWG is not an FAA-chartered committee and thus does not make specific rulemaking recommendations, nor can we task it to do so. However, we actively participate in IAMFTWG meetings and intend to utilize information provided by this group to determine how contamination may impact the risk of fire and/or fire propagation and also determine if alternative regulatory action may be appropriate. In addition, the potential for forming a working group on aging and contamination insulation materials was formally presented to the Transport Airplane and Engine Issues Group (TAEIG) of the Aviation Rulemaking Advisory Committee. Based on the minimal feedback from the group members, we determined that such a working group is not necessary, and therefore, we do not plan to initiate any activity beyond that in the IAMFTWG.

NWA proposes that we withdraw the NPRM until we can task industry to develop a reasonable resolution to our insulation flammability concerns (i.e., aging and contamination).

We agree that it may be necessary to conduct studies on the effects of contamination on insulation materials. However, we do not agree to withdraw the NPRM until another industry task group can be formed to address aging and contamination outside of current, ongoing activity. We have concluded that the flammability characteristics of AN-26 are more a factor of fundamental material properties than a factor of aging or contamination. As discussed previously, we extended the comment period of the NPRM in June 2005, as well as reopened the comment period in November 2005. During that time, industry was unable to arrive at a common approach or to propose specific AMOCs that are alluded to in comments that were submitted to the NPRM. Any additional delay for further study would be unacceptable, because doing so would allow the unsafe condition to persist.

BA and Transport Canada Civil Aviation agree with the 72-month compliance time for the replacement required by paragraph (f) of the NPRM.

ABX Air (ABX), ATA, Champion Air, Continental, DHL, FedEx, International Air Transport Association (IATA), KLM, Lufthansa, NWA, UPS, and US Airways request that the 72-month compliance time for the replacement of AN-26 required by paragraph (f) of the NPRM be extended. The commenters propose new compliance times ranging from 96 months to 144 months.

Certain commenters state that such an extension will align with their scheduled maintenance intervals such as a heavy maintenance, 4C-check, C-check (two intervals), or D-check, and will thereby eliminate disruptions in flight schedules. One commenter also states that 72 months would result in an undue maintenance burden. Another commenter states that 72 months would result in unnecessary grounding of airplanes due to the associated cost burden. Others state that such an extension is necessary to offset the economic impact.

Another commenter states a longer compliance time is necessary due to the assertion that AN-26 is not as unsafe as MPET—an insulation subject to an AD with a 60-month compliance time. The commenter notes that investigation results of in service events and FAA Technical Center test data associated with AN-26 indicate that the propagation threat to safety is limited when compared to similar MPET data.

We agree that the 72-month compliance time in paragraph (f) of the NPRM can be extended. Based on the information supplied by the commenters, and in consideration of the impact this type and level of replacement action imposes on the operators and the size of the affected fleet, we have determined that extending the compliance time to 96 months will not adversely affect safety. We acknowledge that our efforts with industry to minimize ignition sources and to reduce contamination on insulation blankets are actions that reduce the risk of fire, and thus are mitigating actions that support the compliance time extension. While these factors partially mitigate the risk and enable us to allow a compliance time that is longer than the 60-month compliance time for the MPET ADs, they do not adequately address the risk of flame propagation without removal or appropriate modification of insulation blankets constructed of AN-26. As a secondary consideration, this extension will allow the required replacement be conducted during a regularly scheduled heavy maintenance visit for the majority of the affected fleet, when the airplanes would be located at a base where special equipment (i.e., special rigs, devices, etc., to facilitate removal and installation of equipment) and trained personnel would be readily available, if necessary. Therefore, we have revised paragraph (f) of this AD to require a compliance time of 96 months.

DHL requests that freighter airplanes be deleted from paragraphs (c)(1) and (c)(2) of the NPRM, because the risk for casualties in the event of a fire is almost zero on those airplanes.

We do not agree with DHL to exclude freighters or those airplanes that have been converted from a passenger to a freighter configuration from the applicability of this AD. AN-26 is primarily used in areas of airplanes that are unoccupied, behind lining materials, and hidden from view. The risk of an in-flight fire and the propagation of a fire in those areas is essentially the same whether the airplane is equipped to fly passengers or cargo. Therefore, we have made no change to the AD in this regard.

After issuance of the NPRM, we determined that Model 757-200CB series airplanes are subject to the identified unsafe condition of this AD. Currently, there are no affected Model 757-200CB series airplanes on the U.S. Register. Because the identified unsafe condition is likely to exist or develop on other products of this same type design that could be registered in the United States in the future, we have revised the applicability of this AD to include Model 757-200CB series airplanes. Since no Model 757-200CB series airplanes are affected by this AD, notice and opportunity for public comment before issuing this AD are unnecessary.

Boeing and NWA request that paragraphs (d) and (f) of the NPRM and the “FAA's Determination and Requirements of the Proposed AD” section of the NPRM be revised to refer to the replacement of the cover film material only, not the entire insulation blanket. Boeing notes that the FAA has only determined that AN-26 cover film is non-compliant with 14 CFR 25.856(a). Boeing states that requiring replacement insulation blankets to be in full compliance under that rule is unnecessary and places an undue hardship on the airlines and the supply chain for replacement insulation blankets. Boeing also states that most replacement insulation blankets are now available in the supply chain, but the availability is strained to meet production needs that started in September 2005.

For comparison, Boeing points out that the MPET ADs only require replacement of films to remedy the unsafe conditions of those ADs—not tapes, threads, felts, hook/loop, etc., which are not part of the safety issue. In addition, Boeing states that requiring the latest materials for treatments or construction of replacement insulation blankets will slow their installation, which will place an additional burden on industry. Boeing states further that incorporating its suggested change of mandating replacement of AN-26 cover film only will also support alternate mitigation approaches to satisfy the safety issue.

We do not agree with the commenters' requests to limit the required replacement to cover film materials only. Operational rules have been implemented that require thermal/acoustic insulation materials installed as replacements to meet the requirements of 14 CFR 25.856(a). As such, there is significant benefit in defining a consistent standard for this AD both from a level of safety perspective and from a practical standpoint in order to avoid confusion. As stated in the preamble of Amendment No. 25-111, the requirement is also applicable to “tapes or hook and loop fasteners that are affixed to the film. Research testing has shown that these details can have a pronounced effect on the flame propagation characteristics of the insulation cover material.”

We do not believe that the supply chain for replacement materials will be unnecessarily strained. The compliance time extension is intended to allow for planning and ensuring availability of necessary materials.

In general, film material is intended to provide a level of protection to the insulation batting or “felt” from contamination and moisture. We have determined that removing the film alone may introduce undesirable effects such as the breakdown of the insulation or batting material due to the effects of moisture or other agents, which have not been evaluated as part of this AD.

We acknowledge, however, that removal and replacement of AN-26 film cover material and associated affixed details such as hook/loop, threads, etc., with materials compliant with the requirements of 14 CFR 25.856(a) may be an option for consideration of an AMOC should an operator elect to pursue this means versus outright replacement of the blanket assembly. We have made no change to the final rule in this regard.

Transport Canada Civil Aviation requests that the criteria for evaluating and approving AMOCs for the replacement in paragraph (f) of the NPRM be included in the final rule to assist industry in developing such AMOCs.

Boeing requests that we define the acceptance criteria in the AD rather than requiring operators to obtain the criteria from the Manager, Seattle Aircraft Certification Office (ACO). Boeing states that this change, as well as airlines' input on implementation and cost impact, will allow industry to develop solutions.

We partially agree. We agree with the commenters that a description of the criteria and test methods for evaluating AMOCs is needed to reduce the flow time and overall implementation costs of the AD. However, we do not agree that a change is necessary to this AD in this regard. We have developed an FAA document that describes criteria and test methods for evaluating AMOCs. You may view this document at http://www.fire.tc.faa.gov/materials/AN_26_AMOC.pdf ; or in the AD docket on the Internet at http://www.regulations.gov.

Boeing requests that the FAA follow Boeing's AMOC plan for “Spray-on Solution,” which it provided to the FAA in September 2004. In addition, Boeing believes that its plan, approach, and schedule for the overall safety issue aligns with the potential risk level that is apparent from incident analysis and testing. Boeing states that the FAA is aware of the development and progress of its spray-on fire retardant solution, and that when approved, it will be an acceptable remedy to the identified fire propagation condition with AN-26.

Other commenters request that a specific AMOC such as Boeing's spray-on-solution be included in the paragraph (f) of the final rule. Some commenters request that the final rule not be issued until there is an approved AMOC relating to spray-on fire retardants or covering material using existing insulation materials.

We acknowledge that Boeing has been in the process of developing a spray-on fire retardant as an AMOC for the replacement required by this AD. We understand that AMOCs can be valuable to assist operators in complying with ADs. However, Boeing has not submitted its modification to us for approval yet. We do not consider it appropriate to delay issuance of this final rule, since we have determined that an unsafe condition exists and that replacement must be conducted to ensure continued safety. We will work with Boeing or other entities to approve its modification when the development is complete and substantiating data are provided.

Boeing and Continental request that paragraph (h)(1) of the NPRM be revised to allow the Boeing Commercial Airplanes Delegated Compliance Organization (BDCO) to approve AMOC requests, in addition to the Manager, Seattle ACO. Continental states that allowing such delegation to the BDCO will enable operators to rapidly respond to day-to-day operational issues and will lessen the operational burden of the required replacement.

We do not agree with Continental to delegate AMOC approvals to the BDCO, nor do we agree with Boeing to revise our AMOC approval process. In some ADs, we have authorized the BDCO to approve AMOCs for certain structural repairs of cracking that are found during routine maintenance or inspections. These repairs warrant “routine” handling. However, we consider the required AN-26 replacement to be complex in nature, and there are potential new and novel approaches for compliance. It is crucial that the FAA be aware of all modifications made to AN-26. It is essential that we have feedback as to the type of modifications being made. Given that possible new relevant issues might be revealed during this process, it is imperative that we have such feedback. We can be assured of this feedback and of the adequacy of the modification methods only by reviewing the modification proposals.

We have determined that standardization and continuity of modification approvals can best be maintained by having one single point of approval for all AMOCs to the requirements of this AD. Since the Manager, Seattle ACO, is accountable for the primary oversight for the actions regarding this AD, it is appropriate to establish and maintain this single point of approval. We have made no change to the AD in response to these comments.

ABX, Boeing, DHL, Florida West International Airways, Lufthansa, and NWA request that paragraph (g) of the NPRM include a provision to exclude areas (i.e., electrical equipment bay, flight deck, adjacent areas, and certain areas behind the smoke barrier) that can be isolated and contained and thus pose a limited fire risk.

Some commenters state that removal of structure or systems to gain access to certain areas may be more detrimental to safety of the airplane. Two commenters also state that some areas containing AN-26 are not accessible after original installation. In addition, the commenters state that their suggested provision will provide for efficient implementation methods and will allow compliance with the NPRM for the entire airplane.

We do not agree with these commenters' rationale to include a provision in paragraph (g) of this AD to exclude certain areas of the airplane. We have evaluated the areas to which the commenters refers and have determined that such areas are accessible. We do acknowledge that certain areas may be easier to access when a major maintenance activity is also occurring in these areas. Proper planning as to the time of blanket replacement to coincide with other major maintenance work, development of proper procedures, and training of maintenance technicians and inspectors will minimize the chance of causing damage to wires or other systems. We will require any operator/modifier that develops its own installation data to include specific instructions to ensure that any displaced wires, systems, and installations are in an airworthy condition after doing the required replacement.

We are not aware of any specific locations on the affected aircraft where AN-26 cannot be accessed after original installation. If there are certain areas that are completely inaccessible, we may consider proposals for AMOCs, in accordance with paragraph (i) of this AD, which include appropriate substantiating data.

Boeing proposes to exclude certain areas up to 20 square feet and has provided test and in-service data intended to support its request. Boeing proposes that an equivalent area to the “foam block” be defined to allow exempt areas. Boeing notes that the “foam block” is defined by the FAA Technical Center as a realistic in-service fire threat taking into account materials and contamination. Boeing states that the crown test with the “foam block” is used by the FAA to determine acceptable flame propagation performance. In addition, Boeing states that the heat released from AN-26 film up to 20 square feet is equivalent to the heat released from a polyurethane foam block.

We do not agree with Boeing that it is appropriate to determine an acceptable amount of square footage of insulation blankets constructed of AN-26 based on the size of the Heptane-soaked “foam block” used during FAA tests. The “foam block” was established as an appropriate ignition source when doing intermediate and full-scale tests and the resultant development of a suitable test standard capable of evaluating improved thermal/acoustic insulation materials (i.e., 14 CFR part 25, Appendix F, Part VI), but does not constitute a standard for an acceptable area of AN-26. We do not agree that heat release characteristics of the “foam block” can be translated to an acceptable area of AN-26. Insulation blankets constructed of AN-26, even in limited amounts, may be ignited via a small ignition source and may propagate flames to other nearby materials and potentially lead to a catastrophic event.

We do not agree that the data, submitted by Boeing, to exclude certain areas (i.e., electrical equipment bay, flight deck, and adjacent areas) up to 20 square feet of AN-26 support its conclusion that leaving AN-26 in place in those areas provides an acceptable level of safety. Those areas are located where potential ignition sources are likely to exist and thus are susceptible to the identified unsafe condition of this AD. We have determined that the data submitted by Boeing and the tests done by the FAA Technical Center support our conclusion that AN-26 is susceptible to ignition and propagation, and has an unacceptable ignition and flame propagation behavior. This AD is intended to eliminate initiation and propagation of an AN-26 fire in areas containing critical equipment where the consequence of a fire would be severe.

ABX states that the NPRM does not have any supporting data to justify total replacement of insulation blankets constructed of AN-26. Based on data it has collected from the Service Difficulty Report (SDR) database, ABX concludes that there is no safety benefit to replacing insulation blankets constructed of AN-26 in areas that have no or minimal ignition sources.

We do not agree with ABX that there are no data to support replacing insulation blankets constructed of AN-26 in the entire airplane. There are several incidents as cited in the NPRM that clearly show the involvement of AN-26 in fire propagation. In addition, we have conducted testing that shows that AN-26 can propagate a fire under realistic conditions, and therefore even materials not near an ignition source can become involved. While we agree that the SDR database does not in itself contain this information, we do, in fact, have sufficient information to conclude that AN-26 throughout the airplane represents an unsafe condition. We have also received a report of burned insulation blankets initiated by chafed wires and a resultant electrical arc which was discovered by maintenance personnel. In addition, potential ignition sources exist throughout the airplane and insulation blankets constructed of AN-26 are located throughout the airplane. As discussed previously, we have determined that insulation blankets constructed of AN-26 in all areas of the affected airplanes must be replaced, unless specific justification for an AMOC is provided.

Lufthansa states that the MPET ADs excluded areas with lower levels of risk for ignition sources.

We find that clarification is necessary. The MPET ADs do not exclude any areas because of perceived lower levels of risk for ignition sources. The preamble of the MPET ADs states that “MPET insulation blankets in all areas of the affected airplanes must be addressed.” It also states that “ * * * most [affected airplanes] do not have MPET insulation blankets in the nose section of the airplane. Also, a number of airplanes do not have MPET insulation blankets in the fuselage, but have MPET insulation blankets only on the air conditioning ducting.” As such, the service information referenced in the MPET ADs identifies certain areas where MPET is not installed, and therefore, those areas are not subject to corrective action. Boeing does not include this specific provision in service information for AN-26, as AN-26 is installed throughout the affected Boeing airplanes. However, we are aware that a number of AMOCs to the MPET ADs, excluding certain areas from replacement, have been approved. For this AD, we have accepted specific exclusion areas, which are identified in the applicable special attention service bulletin described previously for Model 747 and 767 airplanes.

While some of the commenter's proposals to exclude areas of replacement were accompanied by general rationale, the identification of risk mitigating factors and exclusionary details were not specific enough to enable us to approve such proposals other than those identified in the special attention service bulletins. However, we may approve requests for an AMOC under the provisions of paragraph (i) of this AD if operators can show that leaving AN-26 in place is acceptable because other design features prevent ignition and/or propagation of a fire in the specific area requested. Any request to leave AN-26 installed in an airplane must provide justification that the identified unsafe condition has been mitigated, and that an acceptable level of safety is maintained.

ABX, ATA, BA, Boeing, Champion Air, Continental, DHL, IATA, Lufthansa, NWA, and US Airways request that paragraph (h) of the NPRM be deleted or revised for various reasons.

In summary, the commenters state that a requirement to replace insulation blankets constructed of AN-26 that have been removed in a piecemeal fashion would have very little overall safety benefit and would create a significant burden on immediate maintenance actions. In addition, the commenters state that the replacement process should be consistent with the flammability requirements to minimize the impact with airline maintenance processes. They note that we similarly addressed the replacement issue in 14 CFR 25.856 and this existing replacement requirement is sufficient and will apply to in-service airplanes affected by the NPRM.

We partially agree with the commenters' requests. We do not agree that paragraph (h) should be deleted. As stated in the preamble of the NPRM, some international civil aviation authorities have not adopted regulations similar to 14 CFR 91.613(b)(1), 121.312(e)(1), 125.113(c)(1), and 135.170(c)(1) to prohibit insulation blankets constructed of AN-26 from being installed after a certain date. Therefore, we have determined that paragraph (h) of this AD is necessary to inform the international civil aviation authorities of the need to prevent that installation.

However, we do agree to revise paragraph (h)(1) (reidentified as paragraph (h) of this final rule) to eliminate confusion with the regulations noted previously by the commenters. We have revised paragraph (h) of the AD to clarify that insulation blankets constructed of AN-26 may not be installed “as a replacement” unless they have been modified to meet the flame propagation requirements of 14 CFR 25.856(a).

In addition, we do agree with the commenters that the proposed conditions for reinstallation of insulation in paragraph (h)(2) would create an undue burden on operators because, as mentioned by some of the commenters, not all removals of insulation blankets are done at a heavy maintenance visit with the necessary replacement materials available. This may cause unnecessary downtime of airplanes to allow for fabrication and installation of the applicable insulation blanket. In consideration of the comments provided on this issue, we have deleted paragraph (h)(2) of the NPRM.

Boeing requests that we issue a SAIB to inform industry about mitigation approaches for material susceptible to contamination. Boeing suggests that the SAIB reflect certain risks identified in its data and emphasize replacement of significantly contaminated blankets.

We partially agree. We acknowledge that providing information to reduce contamination of insulation blankets in general is needed. However, this information has been provided in FSAW 00-09, as described previously. Therefore, we have determined that no SAIB specific to AN-26 is necessary.

We have slightly revised the wording in paragraph (c)(1) of this AD to reflect currently used compliance language. That is, we have replaced the reference to “an original Airworthiness Certificate” with a reference to “an original standard Airworthiness Certificate.”

We have revised the unsafe condition in this AD to state, “Such insulation blankets could ignite and propagate a fire that is the result of electrical arcing or sparking.” We find that including the word “ignite” further clarifies the unsafe condition of this AD.

This final cost analysis incorporates industry's comments, updated fleet data, and a changed assumption on the future fleet service. This AD affects 669 U.S. registered airplanes (Back Aviation Solutions, Fleet iNET database, January 5, 2007), 41 of which are foreign operated. We estimate compliance cost for the 628 U.S. operated and registered airplanes only. The number of airplanes is reduced from those in the NPRM because of airplane retirements or changes from U.S. to foreign operation. A substantial decrease in estimated cost results from the net change of increasing parts and labor cost, but reduced number of airplanes, and a changed assumption of service for the future fleet.

Boeing commented to the docket that nonrecurring engineering design costs of defining new blanket parts and defining removal and replacement kits were not accounted for in the NPRM. Across the five major models addressed in this AD, Boeing estimates 40,000 part numbers would need to be redefined and replaced. Boeing estimates a minimum of eight hours/part to account for the required engineering, planning, procurement, tooling, and changes in “Instructions for Continued Airworthiness.” ATA also noted non-recurring engineering costs should be accounted for and estimated material costs would be over twice the estimates given in the NPRM. UPS commented that the parts costs for a 757-200PF would be approximately triple the estimate given in the NPRM. In response to these comments, we revised estimates of material cost for all affected airplanes and increased our original estimates by 9.7%. More importantly, to account for non-recurring engineering costs, we then doubled our revised parts cost estimates. This results in an estimate of $30.4 million for non-recurring engineering costs (average of $48,392 per airplane times 628 airplanes). If we estimate the engineering wage rate at $100 per hour, this is close to the value of Boeing's estimate of non-recurring engineering costs: 40,000 × 8 × $100 = $32 million, or $50,955 per airplane.

UPS commented that our labor hour estimate was too low for Model 757-200PF airplanes, but ATA commented that our estimates of labor hours were consistent with operator experience with the MPET ADs. Accordingly, we have not changed our labor hour estimates. ATA estimated labor rates would be up to 30 percent higher than the $65 hourly rate given in the NPRM for this final rule. We increased our wage rate estimate to $80 an hour. FedEx noted that the NPRM did not take into consideration additional out-of-service maintenance time necessary for compliance. ATA provided an estimate of an average of 3.6 days of out-of-service time per airplane and also a cost estimate for out-of-service time. We accept ATA's estimate of 3.6 days of out-of-service time per airplane. We estimate out-of-service cost as the opportunity cost of capital: Airplane value  2 × Proportion of a year the airplane is out of service (3.6/365) × Productive return on capital (0.07). 3

The NPRM overestimated compliance cost by not taking into account the fact that passenger airplanes eventually will be retired from passenger service. This omission was particularly consequential, as the affected airplanes are old, having been delivered into service over the period July 1981 to December 1989. As of January 1, 2009, the youngest airplane in the AD fleet will be 20 years old. Historically, on average airplanes leave passenger service at 25 years, either directly into retirement or for conversion into cargo service. For the purposes of this analysis, we convert all passenger airplanes into cargo airplanes at 25 years. This conversion to cargo service greatly reduces the estimated cost of the AD as our estimate of the direct material and labor costs for cargo airplanes is just 40% of those costs for passenger airplanes. Still, this cost estimate is substantially higher than assuming the airplanes retire at 25 years of service. Given the eight-year compliance period for the final rule, all passenger airplanes in the AD fleet will reach 25 years of passenger service at most three years prior to the end of the compliance period, at which time we assume they will be converted into cargo service.

In the table, “Cost of compliance,” the NPRM cost estimates are modified and expanded in accordance with the above discussion. “Labor hours per airplane” is unchanged, but “Labor cost per airplane” increases because of the increase in the labor hourly rate from $65 to $80. “Parts cost per airplane” has been increased by 9.7% to reflect increased material cost. “Labor costs per airplane” and “Parts costs per airplane” are summed to obtain the column of “Total remove & replace cost per airplane.” This cost is multiplied by the number of airplanes  4 to obtain “U.S. fleet remove & replace cost.” “Out-of-service cost per airplane”  5 is calculated as an opportunity cost of capital and multiplied by the number of airplanes to obtain the following column of “Total out-of-service cost.” “Total out-of-service cost” added to “Total remove & replace cost per airplane” equals “Total Cost.” Since we have no information on these maintenance schedules by operator or airplane model, we assume that an equal number of the affected airplanes will undergo heavy maintenance at the end of each of the eight years from the effective date of the AD. 6 Accordingly, we calculate “Present Value Total Cost” in the table by discounting “Total Cost” by the average (0.7464) of the 7% discount factors for one through eight years. 7 As noted earlier in the preamble, compliance time was increased to 8 years to more closely agree with operators' heavy maintenance schedules.

We estimate the total cost of the final rule to be about $177.7 million, with a present value of about $140.8 million. The $177.7 million total cost is 53 percent of the $334.1 million total cost estimated in the NPRM. Thus, even though our estimated labor rate has increased by 23.1% and we have more than doubled our estimates of parts cost, our estimate of total cost is much lower because of a reduction in the number of affected airplanes and, most importantly, because of the much lower AD costs for cargo airplanes compared to passenger airplanes. 8

Discussion

On June 15, 2006, we issued related AD 2006-13-13, amendment 39-14666 (71 FR 35781, June 22, 2006). (A correction of that AD was published in the Federal Register on July 3, 2006 (71 FR 37980).) That AD applies to all Boeing Model 737 airplanes. That AD requires revising the airplane flight manual (AFM) to advise the flightcrew of improved procedures for pre-flight setup of the cabin pressurization system, as well as improved procedures for interpreting and responding to the cabin altitude/configuration warning horn. That AD resulted from reports that airplanes had failed to pressurize, and that the flightcrews failed to react properly to the cabin altitude warning horn. The actions specified in that AD are intended to prevent failure of the airplane to pressurize and subsequent failure of the flightcrew to recognize and react to a valid cabin altitude warning horn, which could result in incapacitation of the flightcrew due to hypoxia (lack of oxygen in body) and consequent loss of airplane control.

Since we issued AD 2006-13-13, we have received continuing reports of in-service events involving failure of the flightcrew to recognize and react properly to valid cabin altitude warning horns. Therefore, we have determined that a new flightcrew briefing before the first flight of the day and following any change in flight crewmembers, in addition to the existing AFM procedures, is necessary to mitigate the risk of additional events.

We are issuing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the(se) same type design(s). This AD requires revising the AFM to include a new flightcrew briefing that must be done before the first flight of the day and following any change in flightcrew members, and to advise the flightcrew of this additional briefing.

We consider this AD interim action. The manufacturer has advised that it currently is developing a design change in the cabin altitude warning system that will address the unsafe condition identified by this AD. Once this design change is developed, approved, and available, we might consider additional rulemaking.

We are issuing this AD to prevent failure of the flightcrew to recognize and react to a valid cabin altitude warning horn, which could result in incapacitation of the flightcrew due to hypoxia (lack of oxygen in body) and consequent loss of airplane control. This action follows related rulemaking action we took in response to a report resulting from the investigation by the Air Accident Investigation and Aviation Safety Board of Greece into the August 14, 2005, Helios Airways accident near Athens, Greece. This action affects the entire fleet of Boeing Model 737 airplanes (nearly 5,000 airplanes worldwide); these airplanes have a very high utilization rate. Because of our requirement to promote safe flight of civil aircraft and thus the critical need to assure that the flightcrew recognizes and reacts properly to a valid cabin altitude warning horn and the compliance time involved with this action, this AD must be issued immediately.

We acknowledge that a compliance time of 120 days is unusually long for an AFM-change/immediately adopted rule. However, in this case, we have determined that it is necessary to provide sufficient time for operators to adequately prepare to meet the requirements of the AD. This preparation includes obtaining regulatory acceptance (from principal operations inspectors) of the required flightcrew preflight briefing aids, publication of flightcrew briefing aids in sufficient quantities, and familiarization of flightcrews with the AD briefing requirements. The time required to prepare to implement the AD requirements is increased by the size of the affected fleet. We have further determined that a 120-day compliance time will provide an adequate level of safety. Therefore, a compliance time of 120 days has been specified in order to provide operators with sufficient time to accomplish the requirements of this AD.

Because an unsafe condition exists that requires the immediate adoption of this AD, we find that notice and opportunity for prior public comment hereon are impracticable and that good cause exists for making this amendment effective in less than 30 days.

This AD is a final rule that involves requirements affecting flight safety, and we did not provide you with notice and an opportunity to provide your comments before it becomes effective. However, we invite you to send any written data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2008-1166; Directorate Identifier 2008-NM-179-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

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

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.

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

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

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

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

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

You can find our regulatory evaluation and the estimated costs of compliance in the AD Docket.

On Tuesday, September 2, 2008, the FAA proposed to amend part 71 of the Federal Aviation Regulations (14 CFR) part 71 to establish Class E airspace upward from 700 ft. above the surface and from 1,200 ft. above the surface at Kwethluk, AK (73 FR 51252). The action was proposed in order to create Class E airspace sufficient in size to contain aircraft while executing instrument procedures for the Kwethluk Airport. Class E controlled airspace extending upward from 700 ft. and 1,200 ft. above the surface in the Kwethluk Airport area is created by this action.

Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No comments were received. The rule is adopted as proposed.

The area will be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The Class E airspace areas designated as 700/1,200 ft. transition areas are published in paragraph 6005 of FAA Order 7400.9S, Airspace Designations and Reporting Points, signed October 3, 2008, and effective October 31, 2008, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

This amendment to 14 CFR part 71 establishes Class E airspace at the Kwethluk Airport, Alaska. This Class E airspace is created to accommodate aircraft executing new instrument procedures, and will be depicted on aeronautical charts for pilot reference. The intended effect of this rule is to provide adequate controlled airspace for Instrument Flight Rules (IFR) operations at the Kwethluk Airport, Kwethluk, Alaska.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle 1, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.

This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart 1, Section 40103, Sovereignty and use of airspace. Under that section, the FAA is charged with prescribing regulations to ensure the safe and efficient use of the navigable airspace. This regulation is within the scope of that authority because it creates Class E airspace sufficient in size to contain aircraft executing instrument procedures for the Kwethluk Airport and represents the FAA's continuing effort to safely and efficiently use the navigable airspace.

On Tuesday September 2, 2008, the FAA proposed to amend part 71 of the Federal Aviation Regulations (14 CFR part 71) to revise Class E airspace upward from 700 ft. above the surface and from 1,200 ft. above the surface at Ruby, AK (73 FR 51254). The action was proposed in order to create Class E airspace sufficient in size to contain aircraft while executing instrument procedures for the Ruby Airport. Class E controlled airspace extending upward from 700 ft. and 1,200 ft. above the surface in the Ruby Airport area is revised by this action.

Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No comments were received. The rule is adopted as proposed.

The area will be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The Class E airspace areas designated as 700/1,200 ft. transition areas are published in paragraph 6005 of FAA Order 7400.9S, Airspace Designations and Reporting Points , signed October 3, 2008, and effective October 31, 2008, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

This amendment to 14 CFR part 71 revises Class E airspace at the Ruby Airport, Alaska. This Class E airspace is revised to accommodate aircraft executing amended instrument procedures, and will be depicted on aeronautical charts for pilot reference. The intended effect of this rule is to provide adequate controlled airspace for Instrument Flight Rules (IFR) operations at the Ruby Airport, Ruby, Alaska.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle 1, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.

This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart 1, Section 40103, Sovereignty and use of airspace. Under that section, the FAA is charged with prescribing regulations to ensure the safe and efficient use of the navigable airspace. This regulation is within the scope of that authority because it creates Class E airspace sufficient in size to contain aircraft executing instrument procedures for the Ruby Airport and represents the FAA's continuing effort to safely and efficiently use the navigable airspace.

Background

On October 10, 2008 (73 FR 60544), the FAA published a final rule that will grandfather most of the existing operations at the airports. However, carriers will be required, for the first time, to purchase collectively approximately ten percent of the slots at each of the airports. There are no carve-outs or special provisions for new entrants or limited incumbents. This rule will improve the efficiency of the National Airspace System by forcing a market-based mechanism for establishing the value of slots. Under prevailing economic theory, once the true value of slots is assessed, carriers will make financial business decisions that would maximize the slots' use.

In the final rule, the FAA intended the initial reversion of slots for auction to take effect 30 days after the final rule's effective date, which would be January 8, 2009. This was the time period referenced in the final rule as approved by the Office of Management and Budget. The January 13, 2009 date published in the Federal Register reflects an incorrect time period of 35 days following the final rule effective date.

At present, the FAA intends to auction the initial slate of slots on or about January 12, 2009. While the slots revert to the FAA under the rule on January 8, 2009, the FAA is not required to conduct the auction on that date, and no carrier will lose the ability to operate any slot that meets the usage requirements of the John F. Kennedy (JFK) and Newark Liberty (Newark) International Airport Orders before October 25, 2009. Accordingly, this correction notice will have no practical impact on carriers operating at the airports.

Background

On October 10, 2008 (73 FR 60574), the FAA published a final rule that will grandfather most of the existing operations at the LaGuardia airport. However, carriers will be required, for the first time, to purchase collectively approximately nine percent of the slots at the airport. There are no carve-outs or special provisions for new entrants or limited incumbents. The rule will improve the efficiency of the National Airspace System by forcing a market-based mechanism for establishing the value of slots. Under prevailing economic theory, once the true value of slots is assessed, carriers will make financial business decisions that would maximize the slots' use.

In the final rule, the FAA intended the initial reversion of slots for auction to take effect 30 days after the final rule's effective date, which would be January 8, 2009. This was the time period referenced in the final rule as approved by the Office of Management and Budget. The January 13, 2009 date published in the Federal Register reflects an incorrect time period of 35 days following the final rule effective date.

At present, the FAA intends to auction the initial slate of slots on or about January 12, 2009. While the slots revert to the FAA under the rule on January 8, 2009, the FAA is not required to conduct the auction on that date, and no carrier will lose the ability to operate any slot that meets the usage requirements of the LaGuardia Order before March 8, 2009. Accordingly, this correction notice will have no practical impact on carriers operating at the airport.

This rule amends Title 14 of the Code of Federal Regulations, Part 97 (14 CFR part 97), by establishing, amending, suspending, or revoking SIAPS, Takeoff Minimums and/or ODPS. The complete regulators description of each SIAP and its associated Takeoff Minimums or ODP for an identified airport is listed on FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR part 97.20. The applicable FAA Forms are FAA Forms 8260-3, 8260-4, 8260-5, 8260-15A, and 8260-15B when required by an entry on 8260-15A.

The large number of SIAPs, Takeoff Minimums and ODPs, in addition to their complex nature and the need for a special format make publication in the Federal Register expensive and impractical. Furthermore, airmen do not use the regulatory text of the SIAPs, Takeoff Minimums or ODPs, but instead refer to their depiction on charts printed by publishers of aeronautical materials. The advantages of incorporation by reference are realized and publication of the complete description of each SIAP, Takeoff Minimums and ODP listed on FAA forms is unnecessary. This amendment provides the affected CFR sections and specifies the types of SIAPs and the effective dates of the associated Takeoff Minimums and ODPs. This amendment also identifies the airport and its location, the procedure, and the amendment number.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP, Takeoff Minimums and ODP as contained in the transmittal. Some SIAP and Takeoff Minimums and textual ODP amendments may have been issued previously by the FAA in a Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for some SIAP and Takeoff Minimums and ODP amendments may require making them effective in less than 30 days. For the remaining SIAPS and Takeoff Minimums and ODPS, an effective date at least 30 days after publication is provided.

Further, the SIAPs and Takeoff Minimums and ODPS contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPS and Takeoff Minimums and ODPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedures before adopting these SIAPS, Takeoff Minimums and ODPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making some SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

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

We select a representative payee for certain persons eligible for Social Security benefits under title II of the Social Security Act (the Act), special veterans benefits (SVB) under title VIII of the Act, or supplemental security income under title XVI of the Act. See sections 205(j), 807, and 1631(a)(2) of the Act. We select a representative payee if we believe that payment through a payee rather than direct payment of benefits is in the interest of that beneficiary. Subpart U of part 404, subpart F of part 408, and subpart F of part 416 of our regulations explain the procedures we follow when determining whether to make representative payment and in selecting a representative payee under the title II, VIII and XVI programs.

Our current rules at 20 CFR 404.2024 and 416.624 require that, before selecting an individual or organization to act as a person's representative payee, we will investigate the payee applicant to determine the applicant's suitability. Our rule at § 408.624 adopts these investigatory requirements for SVBs by cross-reference to § 404.2024. See sections 205(j)(2), 807(b), and 1631(a)(2)(B) of the Act.

The Act states that to the extent practicable, an investigation shall include a face-to-face interview with a payee applicant. See sections 205(j)(2)(A)(i), 807(b)(1)(A), and 1631(a)(2)(B)(i)(I). Based on this authority, our current rules at §§ 404.2024 and 416.624 indicate that we generally conduct a face-to-face interview with a payee applicant each time they file to become a payee, regardless of whether the payee has previously satisfied the investigation criteria and participated in a face-to-face interview.

The requirement for holding a face-to-face interview may be waived only if conducting the interview is impracticable and would cause undue hardship for the payee applicant such as when a payee applicant would have to travel a great distance to the field office. Our current rules also indicate that we may decide it is impracticable to require subsequent face-to-face interviews for organizational payees that are known by our field office as suitable payees. We base this decision on the organization's past performance, recent contacts, and the organization's knowledge of and compliance with our reporting requirements.

With these final rules, we are eliminating the requirement that we conduct a face-to-face interview before selecting an individual or organization to be a representative payee if we have already conducted a face-to-face interview with that payee and the payee is qualified and currently acting as a payee. However, we retain discretionary authority to require a subsequent face-to-face interview of any payee applicant. We are revising our rules in §§ 404.2024(b) and 416.624(b) to accomplish these changes.

We also have added a new paragraph (c), “Impracticable,” to §§ 404.2024 and 416.624. This new paragraph contains the first three sentences of current §§ 404.2024(b) and 416.624(b), with editorial changes. We are not making substantive changes to this text.

In the notice of proposed rulemaking we published in the Federal Register at 73 FR 12923 (March 11, 2008), we provided the public a 60-day period within which to comment on the proposed changes. That comment period ended on May 12, 2008. We received one comment, from an individual who opposed the proposed changes.

Comment: The commenter noted that because the representative payment program removes the beneficiary's right to manage his own benefit payments, we must act with extreme care when determining the need for a payee and in selecting the person or organization that would best serve as a payee. The commenter believed that in order to protect beneficiary rights, we should require all payee applicants to undergo a face-to-face interview every time they apply to be a payee. Accordingly, the commenter asked that we withdraw our proposal to eliminate such a requirement. In the alternative, the commenter suggested that if we adopt these changes, we should consider reviewing the payee's activities with regard to other beneficiaries before waiving subsequent face-to-face interviews.

Response: Although we share the commenter's concern that payees must manage benefits properly, we do not accept the commenter's suggestion to withdraw this rule. Under our current rules, there are nine criteria that must be met before selecting an individual or organization to act as a representative payee. See §§ 404.2024(a) and 416.624(a). Eight of these criteria remain unchanged. We are changing only our requirement regarding subsequent face-to-face interviews for payees who previously satisfied all of our criteria, including a face-to-face interview, and are qualified and currently acting as payees.

Our rules regarding recovery of misused benefits and potential civil monetary penalties remain unchanged and will continue to protect beneficiaries from payee misuse of benefits. As an added protection, we also retain the discretion to perform a subsequent face-to-face interview if we believe one is necessary. Our final rules specifically note that we base the decision concerning the necessity of a subsequent face-to-face interview on the payee's past performance and the payee's knowledge of and compliance with our reporting requirements. Because the final rules provide that we look at the payee's past performance, they address the commenter's concern that we review the payee's activities with regard to other beneficiaries prior to waiving a subsequent face-to-face interview. Additionally, our existing rules at §§ 404.2024(a)(5) and 416.624(a)(5) require that we determine whether the payee applicant has previously served as a representative payee and whether any previous appointment as a payee was terminated for misuse. Thus, we made no changes from the rules we proposed.

The Office of Management and Budget (OMB) determined that the final rules meet the criteria for a significant regulatory action under Executive Order 12866, as amended. Thus, OMB reviewed these final rules.

We certify that these final rules will not have a significant economic impact on a substantial number of small entities as they affect only individuals. Therefore, a regulatory flexibility analysis as provided in the Regulatory Flexibility Act, as amended, is not required.

These final rules impose no reporting or recordkeeping requirements subject to OMB clearance.

In the Federal Register of November 14, 2005 (70 FR 69102), FDA proposed to amend existing classification regulations to designate a labeling guidance document as the special control for condoms made of natural rubber latex (latex condoms), classified under 21 CFR 884.5300, and latex condoms with spermicidal lubricant containing nonoxynol-9 (N-9), classified under § 884.5310 (21 CFR 884.5310). As proposed, the final rule amends § 884.5300 (21 CFR 884.5300) and designates a guidance document containing labeling recommendations as the special control for latex condoms. However, FDA continues to review the comments it received in response to its general and specific requests for comment on latex condoms with spermicidal lubricant and to evaluate the controls appropriate for condoms with spermicidal lubricant (§ 884.5310). Therefore, FDA is not issuing a final rule on that device at this time. 1

In the following sections of this preamble, FDA addresses the statutory framework, regulatory history, and scientific information related to latex condoms; summarizes the final rule; and responds to the comments on FDA's designation of special controls for the latex condom.

The Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 301 et seq. ), as amended, including the Medical Device Amendments of 1976 (the 1976 amendments) (Public Law 94-295) and the Safe Medical Devices Act of 1990 (SMDA) (Public Law 101-629), established a comprehensive system for the regulation of medical devices intended for human use. Section 513 of the act (21 U.S.C. 360c) established three categories (classes) of devices, depending on the regulatory controls needed to provide reasonable assurance of their safety and effectiveness. The three categories of devices are class I (general controls), class II (special controls), and class III (premarket approval).

FDA refers to devices that were in commercial distribution before May 28, 1976 (the date of enactment of the 1976 amendments), as preamendments devices. Under section 513 of the act, FDA classifies these devices after the agency takes the following steps: (1) receives a recommendation from a device classification panel (an FDA advisory committee); (2) publishes the panel's recommendation for comment, along with a proposed regulation classifying the device; and (3) publishes a final regulation classifying the device. FDA has classified most preamendments devices under these procedures.

FDA refers to devices that were not in commercial distribution before May 28, 1976, as postamendments devices. Postamendments devices are classified automatically by statute (section 513(f) of the act) into class III without any FDA rulemaking process. These devices remain in class III unless FDA does one of the following: (1) reclassifies the device into class I or II; (2) issues an order classifying the device into class I or II in accordance with section 513(f)(2) of the act; or (3) issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the act, to a legally marketed device that has been classified into class I or class II or to a preamendments device of a type that has yet to be initially classified in accordance with section 513(b). The agency determines whether new devices are substantially equivalent to predicate devices by means of premarket notification procedures in section 510(k) of the act (21 U.S.C. 360(k)) and regulations at part 807 (21 CFR part 807).

Under the 1976 amendments, class II devices were defined as devices for which there was insufficient information to show that general controls themselves would provide reasonable assurance of safety and effectiveness, but for which there was sufficient information to establish performance standards to provide such assurance. SMDA broadened the definition of class II devices to mean those devices for which the general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness, but for which there is sufficient information to establish special controls to provide such assurance, including performance standards, postmarket surveillance, patient registries, development and dissemination of guidelines, recommendations, and any other appropriate actions the agency deems necessary (section 513(a)(1)(B) of the act).

Prior to enactment of the 1976 amendments, latex condoms were marketed in the United States for both contraception and prophylaxis, i.e., reducing the risk of sexually transmitted infections (STIs). 3 As a preamendments device, the latex condom was classified along with hundreds of other devices during FDA's original classification proceedings. Based primarily on the recommendations of experts on the Obstetrics and Gynecology Device Classification Panel, FDA classified latex condoms into class II by regulation published in the Federal Register of February 26, 1980 (45 FR 12710). Condoms were identified as “* * * a sheath which completely covers the penis with a closely fitting membrane. The condom is used for contraceptive and for prophylactic purposes (preventing transmission of venereal disease) * * *” (§ 884.5300). This classification regulation does not include condoms with spermicidal lubricant, which are postamendments devices classified under § 884.5300.

At the time that latex condoms were classified into class II, the statutory definition of that class contemplated the establishment of mandatory performance standards for all class II devices, in accordance with section 514(b) of the act (21 U.S.C. 360d(b)). Because of the complex process associated with issuing mandatory performance standards, the agency did not establish a performance standard for condoms or virtually any other class II device before the SMDA in 1990 provided additional options for special controls for class II devices. This rulemaking will for the first time establish a special control for latex condoms.

Latex condoms are also subject to the requirement of premarket notification, a general control requiring a determination of substantial equivalence before they may be marketed, and other general controls, including good manufacturing practices (quality system regulation), registration and listing, adverse event reporting, and the prohibitions on adulteration and misbranding. This device is also subject to labeling requirements applicable to all devices, including a statement of principal intended action(s) and adequate directions for use as described in part 801 (21 CFR part 801).

In addition to the general labeling requirements, latex condoms are subject to specific labeling requirements addressing expiration dating and latex sensitivity (21 CFR 801.435 and 801.437). FDA established expiration dating requirements in response to shelf life studies showing that important latex condom properties can change over time. The expiration dating regulation addresses the risk of latex condom deterioration due to product aging and helps ensure that consumers have information regarding the safe use of latex condoms (62 FR 50501, September 26, 1997). The latex sensitivity labeling requirements were added in response to numerous reports of severe allergic reactions and deaths related to a wide range of medical devices containing natural rubber (62 FR 51021 at 51029, September 30, 1997).

In addition to the history of action regarding latex condoms undertaken under the act, on December 21, 2000, Congress enacted Public Law 106-554, which required that FDA “reexamine existing condom labels” and “determine whether the labels are medically accurate regarding the overall effectiveness or lack of effectiveness of condoms in preventing sexually transmitted diseases, including [human papillomavirus].” In this review, FDA considered the following:

• Physical properties of condoms

• Condom slippage and breakage during actual use

• Plausibility for STI-risk reduction attributable to condoms

• Evaluations of condom effectiveness against STIs by other Federal agencies, and

• Clinical studies of condoms' protection against STIs published in peer-reviewed journals.

As a result of this review of scientific information and of existing latex condom labeling, FDA concluded that existing latex condom labeling was medically accurate in presenting the conclusion that, as an overall matter, condoms are effective in reducing the risk of STIs. To help consumers make appropriate choices for their particular needs, and therefore to ensure the safe and effective use of condoms, FDA proposed to establish a labeling special control to address some additional, more nuanced information about condoms and STIs, as well as to provide information about contraception, and about appropriate directions and precautions for use of latex condoms. The present rulemaking grew out of that initiative.

In the Federal Register of November 14, 2005 (70 FR 69102), FDA issued a proposed rule to amend the classification regulations for condoms (§§ 884.5300 and 884.5310). The proposed regulatory changes were intended to help ensure that latex condoms were used safely and effectively by providing labeling conveying a concise, accurate message that neither exaggerated the degree of protection provided by latex condoms, nor undervalued overall STI-risk reduction provided by latex condom use.

FDA proposed to amend the identification section of the regulations to change the wording “venereal disease” to “sexually transmitted diseases.” FDA also proposed to add classification sections to each of the regulations, segregating the subset of condoms in each classification that were made of latex. Finally, FDA proposed to designate as a special control a guidance document with labeling recommendations for latex condoms, because the agency believed that this control, together with general controls, could reasonably assure the safety and effectiveness of these devices. The draft special controls guidance recommended labeling to inform consumers about the extent of protection provided by latex condoms against unintended pregnancy and against STIs, including labeling that informed consumers that STIs can be transmitted in various ways, including transmission to or from the penis and transmission by other types of sexual contact. The draft guidance recommended that labeling explain that latex condoms can reduce the risk of STIs, such as gonorrhea and chlamydia, that are spread to or from the penis by direct contact with the vagina and genital fluids. It further recommended labeling that indicated that some STIs, such as genital herpes and human papillomavirus (HPV), may also be transmitted by contact with infectious skin or mucosa not covered by the latex condom, and that latex condoms provide less protection against these STIs.

FDA proposed to establish the labeling guidance as a special control, by rulemaking, because it meant that manufacturers would be required to address the issues identified in the guidance. Unlike a regular guidance, which imposes no requirements, where a guidance document has been designated as a special control by a rule, manufacturers must address the issues identified in the guidance, either by following the recommendations in the guidance or by some other means that provides equivalent assurances of safety and effectiveness. At the same time, establishing a guidance document as a special control affords greater flexibility than a rule mandating specific labeling language and can facilitate updating labeling as new scientific information becomes available because the special control permits manufacturers to use any labeling that affords equivalent assurances of safety and effectiveness for latex condoms.

In response to FDA's requests for comment, more than one hundred commenters submitted information and comments to the two dockets (one docket for the proposed rule and one docket for the draft special controls guidance document). Comments were submitted by consumers, health professionals, industry, academia, state and Federal government agencies, as well as professional societies and organizations. The comments included different points of interest and concern. Many comments discussed issues involving latex condoms with spermicidal lubricant containing nonoxynol-9, and as discussed earlier, FDA continues to review those comments. In some cases, commenters filed comments to the dockets for both the rule and for the guidance; in other cases, comments were filed in only one docket. Because of the intertwined nature of the proposed rule and guidance and because of the significant overlap in comments, FDA considered all comments in preparing both the final rule and the intended final special control guidance document. 4

In developing the 2005 proposed rule and draft guidance, to assess the overall effectiveness of latex condoms in preventing transmission of STIs, FDA evaluated a variety of scientific evidence and information about condoms and STIs. In particular, FDA considered the physical properties of a condom, which make it capable of acting as a barrier to the pathogens that cause STIs; evidence regarding condom slippage and breakage during actual use; plausibility for STI-risk reduction attributable to condoms, which draws on information about the different routes of transmission of different STIs; and evidence from good quality epidemiological studies published in peer-reviewed journals evaluating condoms and STI-risk reduction, including evaluations of condom effectiveness against STIs by other Federal agencies.

FDA's evaluation divided common STIs into two groups in relation to their usual routes of sexual transmission. FDA identified as Group I those STIs that are sexually transmitted solely either to or from the head of the penis, an area that is covered when a latex condom is used. Group I STIs include HIV/Acquired Immune Deficiency Syndrome (AIDS), gonorrhea, chlamydia, trichomoniasis, 5 and hepatitis B virus (HBV). FDA identified as Group II those STIs that can be transmitted not only through contact with the head of the penis, but also through contact with infected skin outside the area that is covered when a latex condom is used. Group II STIs include HPV, herpes simplex virus (HSV), syphilis, and chancroid. Considering the means of transmission of STIs and the extensive information on the physical characteristics and performance of condoms, as well as the specific clinical data available, FDA concluded that there was strong support for the conclusion that latex condoms reduce the overall risk of transmission of STIs. FDA also concluded that the degree of risk reduction for different types of STIs varies with their routes of transmission.

As discussed in section III.C, FDA's scientific conclusions were generally supported by the public comments. In preparing this final rule, moreover, FDA ensured that its scientific basis remains sound. Using the same approach as in 2005, analyzing systematic reviews 6 and, when those were not available, analyzing individual clinical studies for STIs, FDA reviewed more recent epidemiological studies and analyses published in peer-reviewed publications from December 2004, the cut-off date for studies considered in developing the proposed rule, through April 30, 2008. Consistent with its findings in 2005, FDA confirmed that latex condoms provide effective protection against all STIs evaluated. FDA findings from its updated review are described in more detail next.

In the 2005 proposal, FDA concluded that latex condoms, when used correctly and consistently, are effective in reducing the risk of transmission of Group I STIs (70 FR 69102 at 69108). No new data undermine this conclusion and some new studies of particular Group I STIs provide additional support for it. Therefore, FDA's conclusion related to the Group I STIs continues to be that latex condoms when used correctly and consistently are effective in reducing the risk of transmission of group I STIs.

Well-designed studies evaluated prior to the proposed rule show the effect of consistent condom use on reducing the risk of HIV infection (70 FR 69102 at 69107 to 69108). One well-designed study conducted a meta-analysis (where results of all studies selected are pooled and analyzed) of studies of HIV-discordant subjects (where HIV status is known at the outset of the study, and an uninfected partner has sex with an infected partner) and found that condoms were 90 to 95 percent effective in reducing the incidence of new infections when used consistently. Another study was a systematic review of longitudinal studies and found that consistent use of condoms results in at least an 80 percent reduction in HIV incidence.

No new systematic reviews of condom effectiveness in reducing the risk of HIV infection have been published since the cut-off for studies considered in formulating FDA's proposed rule. On the basis described in the proposed rule, FDA's conclusion remains that consistent and correct use of latex condoms is highly effective in reducing the risk of HIV infection.

Consistent with the FDA conclusions presented in 2005 (70 FR 69102 at 69108), one systematic review presented in 2006 demonstrated that consistent and correct use of condoms reduces risk of both gonorrhea and chlamydia in men and women (Ref. 9).

As was the case when FDA published its proposed rule, FDA is aware of no systematic reviews of condom effectiveness against HBV infection. Nor were any new epidemiological studies of condom use and HBV infection published during the period of FDA's review for preparation of this final rule. As discussed in the 2005 proposal (70 FR 69102 at 69108), one cross-sectional study showed that correct and consistent condom use was significantly associated with lower prevalence of HBV.

In the 2005 proposal, FDA concluded that latex condoms, when used correctly and consistently, are effective in reducing the risk of transmission of group II STIs. Studies published since December 2004 support, and in the case of HPV, provide additional evidence for, this conclusion, as discussed below.

No new systematic reviews of condoms and HPV infection have been published since December 2004. At the time of the 2005 proposed rule, the clinical data regarding the effect of condom use on reducing the risk of infection with HPV was limited, but two systematic reviews supported the conclusion that correct and consistent use of latex condoms can reduce the rates of genital warts and cervical cancer, the main diseases associated with HPV infection (70 FR 69102 at 69108).

Since December 2004, several individual studies have addressed condom use and HPV infection, not only the incidence of HPV-related disease. Of particular note, a longitudinal study of the association of condom use and risk of genital HPV infection found that women who reported consistent condom use for the eight months prior to HPV testing were less likely to acquire a first-time infection of HPV and that women who reported 100 percent condom use in the prior eight months had no cervical squamous intraepithelial lesions detected on their Pap tests (Ref. 10) (hereinafter referred to as “2006 Winer et al. study”). Another study published since the cut-off for the 2005 proposed rule found a higher prevalence of HPV in women who did not use condoms (Ref. 4). Yet another study published since the 2005 proposed rule demonstrated an association between prolonged HPV infection and less consistent condom use (Ref. 7). These newer studies now support the conclusion that condom use not only reduces the risk of genital warts and cervical cancer, it also reduces the risk of HPV infection itself.

No new systematic reviews of condoms and HSV infection have been published since December 2004. FDA's 2005 conclusions about latex condom effectiveness were based on the 2002 systematic review showing that condom use reduced the risk of HSV-2 infection for women (70 FR 69102 at 69108). A more recent prospective study showed effectiveness of condom use in reducing the risk of HSV infection in men and replicated effectiveness in women (Ref. 8), supporting the findings of the 2002 systematic review and FDA's 2005 conclusions.

As was the case when FDA published its proposed rule, FDA is not aware of any systematic reviews of condom effectiveness against syphilis infection. FDA's 2005 conclusions about latex condom effectiveness were based primarily on the data from two prospective studies, discussed in the preamble to the proposed rule (70 FR 69102 at 69108), that showed condom use provided significant protection against syphilis. More recently, one study evaluated risks of STIs, including syphilis, in female sex workers and found that failure to use a condom was associated with an increased risk of syphilis (Ref. 6). This information continues to support the conclusion made in the 2005 proposal that correct and consistent latex condom use reduces the risk of syphilis.

Chancroid infection is extremely rare in the United States. In 2006, only 33 new cases were reported in the United States. (Ref. 1). As in 2005, when FDA published its proposed rule, FDA knows of no systematic review of condom effectiveness against this STI. No new epidemiological studies of condom use and chancroid infection have been identified. Therefore, FDA's conclusions about latex condom effectiveness toward chancroid remain based on the study discussed in the 2005 proposal that reported that condom use was associated with a significantly reduced risk of genital ulcer disease (presumed to be chancroid) among prostitutes in Kenya (70 FR 69102 at 69108).

In summary, FDA believes that conclusions from the additional studies published in peer-reviewed publications from December 2004 through April 30, 2008, are consistent with FDA's 2005 conclusions about latex condom effectiveness. Newer evidence, such as the systematic review of the effect of condom use on transmission of gonorrhea and chlamydia infections (Ref. 9) and the recent epidemiological studies showing that condom use reduced HPV infection (Refs. 7 and 10), replicate or strengthen the basis for these conclusions.

As described in more detail below, many commenters expressed concern that FDA's proposed language for latex condom labeling was confusing, especially in its efforts to describe two tiers of protection afforded by condoms against STIs. These comments expressed serious concerns that FDA's latex condom labeling proposal was overly complex and would ultimately be misunderstood by the consumer. Many argued that this same confusion and misunderstanding would lead to unmerited negative impressions of latex condoms and—ultimately—to an unfounded decrease in latex condom use. One commenter also submitted a study it had conducted of consumer comprehension of the labeling proposed in the draft guidance, the results of which supported the comments that this labeling was not well understood. (This comment and study are discussed in section III of this document, where FDA discusses and responds to comments in detail.)

In light of these important comments on the labeling recommendations it had proposed, to inform its final rulemaking, FDA conducted a study to see whether typical consumers understand latex condom labeling, testing both the current labeling and the labeling proposed in the 2005 draft guidance document.

FDA contracted for a latex condom label comprehension study. Conducted in November and December 2007, the study was designed to measure and compare consumer understanding of the labeling recommended for latex condoms under FDA's 1998 guidance document, “Latex Condoms for Men, Information for 510(k) Premarket Notifications: Use of Consensus Standards for Abbreviated Submissions,” which is found on currently marketed latex condoms, and the latex condom labeling proposed in the 2005 draft special controls guidance. The study specifically focused on FDA's proposal to include more detailed information in the labeling about the relative degree of protection that condoms provide against different STIs. 7

Participants were recruited from six shopping malls, four retail pharmacies, and three literacy centers in 11 communities throughout the United States. Eight hundred and forty-four (844) participants between the ages of 18 and 54 were divided almost evenly to review either the current or proposed latex condom labeling. Each participant was asked to respond to a set of questions intended to measure his or her understanding of the labeling. When responding to the questions, participants were allowed to look at the labeling provided.

Quotas were established to attain an equal distribution by sex and pre-specified proportions of respondents by age and reading ability. The Rapid Estimate of Adult Literacy in Medicine (REALM) test (Ref. 3) was used to assess reading level, and a threshold score was chosen, which divided the group into normal-literacy (ninth grade reading level and above) and low-literacy (eighth grade reading level and below). Of the 844 subjects, 430 were classified as normal-literate, 405 as low-literate, and nine had no REALM score.

Poorer readers and those with less education (two variables not highly correlated) had lower comprehension scores than those with a higher reading level. However, there were no differences based on age, race, ethnicity, income, or the type of neighborhoods where the respondents resided.

Participants understood the basic message in both the current and proposed labeling that latex condoms help protect against transmission of sexually transmitted infections (>80 percent correct responses). When comparing equivalent questions between the current and proposed latex condom labeling, for every comparison with a significant difference in rates of comprehension, the difference favored the current latex condom labeling over the proposed latex condom labeling. Study participants did not understand the more complex messages about the relative degree of protection provided by condoms against different STIs (<30 percent correct responses).

The study was not designed to determine the reasons for the differences in consumer comprehension of the two labeling versions. However, FDA's proposed labeling was unarguably lengthier, with considerably more information than current labeling. Study analysis suggests that shorter and simpler labeling will more likely result in better consumer comprehension.

In developing this final rule, FDA considered all of the comments, as well as its updated review of scientific evidence and results of the latex condom label comprehension study. FDA concludes that the scientific evidence today continues to fully support the overall effectiveness of latex condoms in reducing the risk of transmission of common STIs. That evidence supports the conclusions that correct and consistent use of latex condoms reduces the risk of transmission of HIV/AIDS and other STIs such as gonorrhea that are sexually transmitted solely by contact with the head of the penis (via genital fluids). Also, the evidence available today provides even more support than was available at the time of publication of the proposed rule for the conclusion that latex condoms are effective in reducing the risk of transmission of other STIs, such as genital herpes and HPV, that can be transmitted not only by contact with the head of the penis, the area covered by a latex condom, but also by contact with infected skin outside the area covered by the latex condom.

In developing the final rule and intended final special control guidance document, FDA not only affirmed the underlying scientific conclusions, but also considered whether the labeling statements recommended in the draft special control guidance document, in particular the statements addressing the effectiveness of latex condoms against the two groups of STIs, were adequately clear. Based on comments that criticized the labeling contained in the draft guidance as, among other things, “misleading,” “overly complex,” “difficult to understand,” and “negative possibly discouraging use,” as discussed in section I, FDA sponsored a latex condom label comprehension study. This study supported commenters who maintained that the labeling contained in the draft guidance was too confusing for consumers, and did not effectively and adequately communicate the effectiveness of latex condoms against these two groups of STIs.

Taking account of the comments and other information described in this preamble, FDA's final rule and intended final special control guidance remain consistent with the proposal but incorporate some changes. The final rule, like the proposal, amends the identification section of § 884.5300 to change the terminology used. As proposed, the final rule also creates new classification sections distinguishing condoms made of natural rubber latex from condoms made of other materials, including natural membrane and synthetic materials. Finally, as proposed, the final rule designates a guidance document containing labeling recommendations as the special control for the subset of condoms made of natural rubber latex, to address issues of safety and effectiveness discussed below and to convey the basic scientific conclusions already described. In response to comments and in consideration of the other information described previously, FDA has simplified the labeling recommended for latex condoms, including the labeling statements regarding the degree of protection afforded by latex condoms against the two groups of STIs. FDA has also updated the recommended directions for use and precautions to help ensure consistent and correct use of latex condoms. Finally, FDA has assigned a new title to the final guidance document designated as a special control by this rule in order to avoid confusion with the draft guidance made available in November 2005, which remains available as the proposed special control for latex condoms with spermicidal lubricant in association with the pending proposal to amend § 884.5310. (See Section I.)

FDA intends to implement this final rule as described in the following paragraphs. The general approach remains consistent with what was set forth in the 2005 proposed rule, but certain time frames have been extended. Specifically, this final rule will be effective 60 days after its date of publication, rather than the 30 days anticipated in the proposed rule. The implementation strategy takes account of the changed effective date of the final rule, while remaining generally consistent with the implementation strategy outlined in the proposed rule.

The proposed rule anticipated that latex condoms legally marketed prior to the effective date of a final rule would have 11 months after the effective date, or a total of 12 months from publication of the final rule, to meet the requirements of special controls. That proposed rule also anticipated that latex condoms that were the subject of pending 510(k) applications on the effective date of any final rule but cleared subsequently would be expected to comply with the requirement of special controls for latex condoms no more than 60 days after the effective date of the final rule.

For the final rule, FDA intends the following implementation strategy. Latex condoms that are the subject of premarket notification submissions (510(k)s) filed on or after the effective date of this rule are expected to comply with the requirement of special controls immediately upon the rule taking effect. Therefore, a firm submitting a 510(k) for a latex condom on or after the effective date of this rule must show that its device meets the recommendations of the special control guidance (as made available after PRA approval) or in some other way provides equivalent assurances of safety and effectiveness.

Latex condoms that are the subject of a 510(k) that is pending on the effective date of this final rule but are subsequently cleared are expected to comply with the requirement of special controls by following the recommendations in the special control guidance (as made available after PRA approval) or providing equivalent assurances of safety and effectiveness on or before 120 days after the date of publication of this final rule.

Latex condoms that were legally marketed prior to the effective date of this final rule are expected to comply with the requirement of special controls by following the recommendations in the special control guidance (as made available after PRA approval) or providing equivalent assurances of safety and effectiveness no more than 13 months after the date of publication of this final rule. As in the proposal, this gives firms marketing these latex condoms 11 months from the effective date of the final rule to achieve compliance, and a total period of 13 months from the date of publication of the final rule, rather than the 12 months from publication defined under the proposal. FDA believes that this period will allow for the production of new labeling to meet the requirement of special controls without leading to product shortages, while promoting the regulatory purpose of ensuring that this new labeling is available to consumers in a timely fashion.

In the 2005 proposed rule, FDA identified several issues associated with the use of latex condoms that required special controls to help provide a reasonable assurance of safety and effectiveness. The issues included the risks of unintended pregnancy and of STI transmission, and the issue of incorrect or inconsistent use, which undermines the effectiveness of the latex condom in protecting against unintended pregnancy and STI transmission.

In the final rule, FDA is designating a guidance document with labeling recommendations as the required special control for latex condoms to address the issues of safety and effectiveness associated with these devices—the risks of unintended pregnancy and of STIs, and the issue of incorrect or inconsistent use.

One of the principal intended actions of latex condoms is contraception. Latex condoms can greatly reduce the risk of unintended pregnancy, but cannot eliminate it. The special controls guidance recommends that the labeling indicate that latex condoms are intended to prevent pregnancy. Labeling should also indicate that latex condoms do not completely eliminate the risk of pregnancy. The guidance also recommends that the package insert contain contraceptive effectiveness information comparing pregnancy rates for latex condoms to rates for other contraceptive options available in the United States including drugs, devices, and methods of permanent sterilization, as well as a statement that consumers who have questions about contraceptive options, particularly because of health reasons for avoiding pregnancy, should contact a health care provider.

The other principal intended action of latex condoms is protection against the transmission of STIs. The intended final special controls guidance recommends that labeling state that latex condoms are intended to prevent HIV infection (AIDS) and other STIs. In addition, the labeling should include a statement that condoms do not completely eliminate the risk of STIs. Labeling should indicate that latex condoms reduce the risk of STIs by providing a barrier against the source of infection. Labeling should indicate that latex condoms are most effective at reducing transmission of STIs such as HIV infection (AIDS) and gonorrhea that are spread by contact with the head of the penis, an area covered when the condom is used. Labeling should also indicate that condoms are less effective against STIs such as HPV and herpes that can also be spread by contact with infected skin that is not covered by the latex condom.

The intended final guidance also recommends labeling that indicates that a health care provider should be contacted if a consumer believes they may have an STI. The intended final special controls guidance further recommends that labeling indicate that for more information on latex condoms or STIs, a health care provider or public health agency should be contacted.

In order to get the most protection from a latex condom, latex condoms must be used correctly every time a consumer has sex. To promote correct use, the intended final special controls guidance recommends that labeling include directions for use and precautions against incorrect use. To promote consistent use, the intended final special controls guidance recommends that labeling state that to get the most protection from a latex condom, a condom be used correctly every time the consumer has sex.

More than 100 commenters submitted information and comments to the two dockets for the proposed rule and draft special controls guidance document. The commenters included consumers, health professionals, industry, academia, State and Federal agencies, professional societies, and organizations. Because of the intertwined nature of the documents and the significant duplication of comments between the dockets for the proposed rule and draft special controls guidance document, FDA is summarizing and responding to the comments to both dockets in this preamble.

In general, the comments stated that FDA had properly described the science regarding latex condom effectiveness, on which FDA based its proposed special control labeling recommendations. None of the comments questioned the importance of accurate latex condom labels. Many comments indicated that consumers deserve to understand how and why condoms work. However, as previously noted, a substantial number of comments stated that the specific labeling recommendations in the draft guidance document were too complex to be effective in conveying this important information to consumers, and could inadvertently lead to misimpression regarding the safety and effectiveness of condoms, particularly for use in reducing the risk of STIs.

In issuing the final rule designating the revised guidance document as a special control, FDA is affirming the safety and effectiveness of condoms for contraception, as well as for reducing the risk of transmission of STIs, including those most common in the United States. In response to comments, and in light of the consumer comprehension studies provided in those comments and described previously, FDA has revised the recommended labeling messages contained in the intended final special control guidance document to simplify them and better communicate the essential information they contain. Following is a summary of the specific comments and the agency's responses.

(Comment 1) One comment stated that FDA should substitute “sexually transmitted infections” wherever it was using “sexually transmitted diseases.” This comment pointed out that the purpose of the latex condom is to prevent the infection; the diseases are the clinical sequellae of the infection.

(Response) FDA agrees with this comment, and notes that the term “sexually transmitted infection” has gained currency in the clinical community. Accordingly, FDA have revised the language in § 884.5300 and the labeling recommendations in the special controls guidance document to use “sexually transmitted infection” or “STI.”

(Comment 2) One commenter disagreed with the decision by FDA to issue labeling guidelines under special controls guidance rather than mandating through regulation specific new language on all condom labeling to address the concerns FDA has identified. The commenter did not agree with giving flexibility to manufacturers on the wording used.

(Response) FDA believes a special control guidance will provide an appropriate level of control over labeling. Unlike a regular guidance, which imposes no requirements, where a guidance document has been designated as a special control by a rule, manufacturers must address the issues identified in the guidance, either by following the recommendations in the guidance or by some other means that provides equivalent assurances of safety and effectiveness. If a manufacturer proposes to use a means other than the labeling recommendations set forth in the intended final special control guidance, the manufacturer will need to establish equivalent assurance of safety and effectiveness of the alternative.

The 2005 proposed rule included a summary of FDA's review of the medical accuracy of latex condom labeling, which included an extensive review of the scientific information related to condoms. As discussed in the proposal, FDA considered the physical properties of condoms, condom slippage and breakage during actual use, the plausibility for STI-reduction attributable to condoms, evaluations of condom protection against STIs by other Federal agencies, and clinical data regarding condom protection against STIs. The follow sections discuss the comments and FDA's responses related to this review.

(Comment 3) Many of the comments commended the proposed rule and draft special controls guidance document as well grounded in the scientific and medical evidence and consistent with the findings from clinical studies in the available literature.

(Response) FDA agrees. In addition to the studies on which the 2005 proposal was based, as described previously, peer-reviewed epidemiological studies published subsequently have also supported the conclusion that latex condom use reduces the risk of STIs.

(Comment 4) One comment challenged FDA's estimate of the rates of condom slippage and breakage in actual use and expressed concerns that some “key points” were missing, including the experience of the user. More specifically, the commenter “would have preferred that most slippage and breakage fall within the 2-4% range with experienced users toward the 2% and lower range and inexperienced users at the higher 4% range and above.” This comment also disagreed with FDA's statement that condom slippage and breakage data support the conclusion that condoms reduce the risk of STI transmission and stated “[s]lippage and breakage data does not support the conclusion that condoms help, rather the opposite.” The commenter stated that the labeling recommendations should reflect that even with perfect use, an individual can become infected when slippage and breakage occurs.

(Response) FDA disagrees that the slippage and breakage data do not support the conclusion that condoms reduce the risk of STI transmission. FDA notes that rates of slippage and breakage during use have been measured for many different commercially available latex condoms, typically ranging between 0.5-2% (70 FR 69102 at 69105). FDA believes that these low rates of condom slippage and breakage, when taken together with studies of condom properties discussed in the proposed rule (see 70 FR 69102 at 69104 to 69105), support the conclusion that latex condoms, when used consistently and correctly, provide a reliable barrier to STI pathogens. FDA concurs with the commenter's point that even with correct and consistent use, slippage and breakage can occur. FDA does not believe, however, that additional wording is necessary to underscore this point regarding perfect use. FDA believes that the labeling recommendations as crafted accurately reflect the overall conclusion that when used correctly and consistently, latex condoms reduce the risk of STI transmission but do not completely eliminate it.

(Comment 5) One comment suggested that FDA's analysis overlooked infectivity. This comment recommended changes to the FDA conclusion about condom effectiveness to reflect this.

(Response) FDA does not believe that discussion of infectivity would benefit consumers in making safe and effective use of latex condoms. While the infectivity of the pathogen is among the factors that affect the baseline risk of acquiring a specific STI, even the most infective STI pathogen cannot penetrate an intact latex condom. Infectivity of the pathogen thus only impacts the net risk of infection despite condom use where the latex condom does not present a barrier to interrupt the potential path of transmission—either because the infected skin is outside the area covered by the condom, or because the condom has failed (a rare event with correct use). In its intended final labeling recommendations, FDA has already described that condoms derive their effectiveness from providing a barrier to the source of infection and that condoms are less effective against STIs that are transmitted by contact with infected skin outside the area covered by the condom (as well as by contact with the head of the penis). Recommended labeling also emphasizes the importance of correct and consistent use to maximize the protection provided by a latex condom, but acknowledges that use of condoms does not completely eliminate the risk of STI transmission. As labeling does not quantify the amount of risk reduction for specific STIs, FDA does not believe that addition of discussion of infectivity would provide useful information beyond the expression of limits and of conditions to optimize benefit already provided.

(Comment 6) One comment challenged FDA's conclusions regarding the degree of risk reduction afforded by latex condoms when the population evaluated in epidemiologic studies from which data were obtained consisted of commercial sex workers (CSWs). This comment stated that “One must use caution when generalizing prostitute studies to the general population.”

(Response) The commenter did not provide additional details or support for his statement, but referenced an epidemiologic study (70 FR 69102 at 69117, reference 31, Kjaer, S.K., E.I. Svare, A.M. Worm, et al.). The authors of that study noted that CSWs are likely to have become sexually active at a younger age compared to other populations, and speculated that early and multiple STIs in this population might lead to a more robust immunologic response among chronically infected compared to other populations. Importantly, however, the authors noted that this latter theory is unproven.

Conducting studies outside the United States, in places and populations where the disease prevalence is high, makes it possible to obtain valid outcomes data from studies that are reasonably sized and would likely be impossible to conduct in lower risk populations in the United States. Despite differences between the study populations and typical U.S. users, FDA believes conclusions from such studies are relevant, because the following fundamental elements that the studies address are identical in the study population and in the expected U.S. user population: (1) Primary study endpoint (presence of infection); (2) pathogen (individual STI); (3) route of transmission (sexual); and (4) prophylaxis (latex condom).

(Comment 7) One comment strongly criticized the June 2000 Workshop convened by the National Institutes of Health (NIH) with other Federal public health agencies and outside experts (70 FR 69102 at 69106), its deliberative process, and the conclusions that were issued afterwards. This comment stated that available evidence today actually supports a stronger statement regarding latex condom effectiveness for STI prevention, especially those STIs transmitted by contact with genital fluids.

(Response) FDA agrees that there is more evidence today on the effectiveness of latex condoms against acquisition of various STIs than was available when the June 2000 workshop was held. This includes additional data that further support the longstanding public health message that latex condoms are highly effective against HIV/AIDS. As described previously in section I, it also encompasses new data now showing that condoms protect against HPV infection as well as the clinical sequellae of HPV infection, genital warts and cervical cancer.

(Comment 8) One comment stated that FDA's labeling proposal was misleading regarding condom use lowering the risk of HPV infection and disease. It cited a 1999 letter from Dr. Richard Klausner, then director of the National Cancer Institute, to the U.S. House of Representatives Commerce Committee stating “the conclusion that condoms are ineffective against HPV infection is based on the results of several long term studies that have failed to show that barrier contraceptives prevent cervical HPV infection, dysplasia or cancer,” as well as the summary report of the June 2000 Workshop on condom effectiveness.

(Response) As discussed in section I, many studies described in the published literature since 2000, including two systematic reviews (discussed in the 2005 proposed rule, 70 FR 69102 at 69108), support the conclusion that correct and consistent latex condom use can reduce the rates of cervical dysplasia and genital warts, diseases associated with HPV infection. Moreover, as discussed in section I.D.1, since December 2004, several individual studies have addressed condom use and HPV infection and demonstrated that use of latex condoms reduces the risk of HPV infection itself. The letter from Dr. Klausner and the HPV conclusions of the June 2000 Workshop report have been superseded by the evidence.

(Comment 9) Another comment stated that FDA's summary of the evidence is misleading where it states “[The Centers for Disease Control and Prevention's] report cited three studies (not included in the June 2000 Workshop report) that showed a statistically significant reduction in risk of HPV infection attributable to condoms, but noted that most studies did not show this effect” (70 FR 69102 at 69107). This comment stated that only one of the three reports identified demonstrated true risk reduction; the other two were not statistically significant because their confidence interval touched on 1.0.

(Response) As noted by the comment, two of the three studies regarding the effect of condom use on HPV infection that were cited had a confidence value with an upper bound of 1.0. FDA's 2005 draft guidance reflected the limited evidence then available regarding the effect of condom use on HPV infection itself, by recommending statements based on the evidence regarding the effect of latex condom use on clinical consequences of HPV infection, cervical cancer and genital warts, which came from studies other than those addressed by the comment. As described in section I.D. of this document, moreover, subsequent to publication of the proposed rule, additional studies of HPV infection have published that have shown statistically significant reduction in HPV infection.

The best-designed study to date evaluating whether latex condoms reduce the risk of HPV infection is the 2006 Winer et al. study published after the 2005 proposed rule was issued (Ref. 10). Compared to previous studies on condoms and HPV infection, the 2006 Winer et al. study had a prospective, longitudinal design which provided critical information on the temporal relationship between condom use and HPV infection. Another asset in this study design is that study subjects provided information on condom use every 2 weeks in order to improve the precision of reported condom use. Also, data were collected using electronic diaries, a method that may yield more truthful reporting on condom use behavior than through ace-to-face interviews. Study inclusion criteria limited participation to women who first had intercourse with a male partner within two weeks before enrollment or during the study. This ensured that HPV infections detected during the study were truly “incident,” that is, truly occurred during the course of the study in a previously uninfected woman. Incident HPV infection, or lack of infection, was then evaluated as it related to 100 percent, 50 to 99 percent, 5 to 49 percent or <5 percent condom use. The adjusted hazard ratio for incident HPV for women whose partners had used condoms 100 percent of the time over the 8 months of the study compared to women whose partners used condoms <5 percent of the time was 0.3, 95 percent confidence interval 0.1 to 0.6 with p-value 0.003. This result is statistically significant. The conclusion of the study was that “among newly sexually active women, consistent condom use by their partners appears to reduce the risk of cervical and vulvovaginal HPV infection.”

FDA believes that the results of the 2006 Winer et al. support the conclusion that consistent latex condom use reduces the risk of cervical and vulvovaginal HPV infection, which is stronger than the conclusion in the 2004 CDC Report to Congress that “condoms may provide some protection in preventing transmission of HPV infections but that protection is partial at best.”

As discussed earlier, in the 2005 proposed rule, FDA identified several issues associated with the use of latex condoms that required special controls to help provide a reasonable assurance of safety and effectiveness. The issues included the risks of unintended pregnancy and of STI transmission, and the issue of incorrect or inconsistent use. FDA proposed to designate a guidance document with labeling recommendations as the required special control for latex condoms, to address the issues of safety and effectiveness associated with these devices. The following sections discuss the comments and FDA's responses related to the labeling recommendations of the special controls guidance document.

(Comment 10) Many comments expressed concerns that FDA had allowed “politics” to influence FDA policy. For example, one comment stated that the proposed rule appeared to “bring politics and morality into what should be a science based process.” Many commenters shared a concern that the proposed labeling would “discourage” the use of condoms and undermine the public's confidence in condoms.

(Response) As discussed in the 2005 proposal, FDA's efforts to improve latex condom labeling and thereby help ensure the safety and effectiveness of condoms grew out of a statutorily mandated review of existing latex condom labeling to determine whether it was medically accurate with respect to the overall effectiveness or lack of effectiveness of condoms in preventing transmission of STIs, including HPV. FDA concluded that latex condoms help protect against all STIs, but better against some than others. More accurate information about the effectiveness of latex condom use with respect to STI transmission can lead to better choices by individuals who seek to protect themselves against these infections and potentially to reduced transfer of STIs. The final rule and intended final special control guidance are based on FDA's scientific evaluation of all available evidence.

(Comment 11) Many comments stated that, although consistent with the evidence, the FDA proposal for latex condom labeling was overly complex and confusing, especially in regards to STIs transmitted through skin to skin contact. Some comments were concerned that the labeling might discourage condom use due to confusion or misunderstanding.

Other comments stated that latex condom labeling needs to be clear and positive. Many comments strongly encouraged FDA to re evaluate its labeling proposal with the objectives of keeping it simple, clear, correct, and specific.

(Response) The labeling recommendations of the draft guidance reflected an attempt to strike a balance between providing more information for the consumer and creating a complex message that might be misunderstood. These and other comments about label comprehension prompted FDA to sponsor a label comprehension study of both current labeling and the labeling recommendations included in the draft guidance. The results of the FDA-sponsored label comprehension study were discussed in section I and contributed to FDA's simplification of the labeling recommended in the intended final special control guidance.

(Comment 12) One commenter submitted the results from its own label comprehension study, conducted in January 2006, to evaluate how well the general public understood FDA's proposed latex condom labeling. This study, using a paper-and-pencil questionnaire, surveyed a convenience sample of 247 men and women between 18 and 30 years of age in Austin, Texas. The study concluded that it is important for condom labeling to provide clear and specific information to users on risk reduction provided by condoms for pregnancy and various sexually transmitted diseases. In general, survey respondents preferred statements that are easy to understand and provide detailed and specific information.

(Response) FDA acknowledges the value of this label comprehension study. However, the use of a small convenience sample, drawn from a highly educated university town, may have limited validity and may also be difficult to generalize because it lacks geographic and educational diversity. These limitations contributed to FDA's decision to conduct its own study. As described previously, in consideration of this study and the numerous comments regarding the complexity and potential for misunderstanding of labeling, as well as FDA's own labeling study, the intended final special controls guidance document contains substantially simplified labeling recommendations.

(Comment 13) Many comments shared the view that FDA would be “misleading and misinforming millions of Americans if the label is changed * * *.” One commenter expressed concern that “the addition of extensive labels to condom packaging may constitute ‘red flags’ to consumers intending to have sex, and that those flags may increase sex without the protection of condoms.”

(Response) FDA's labeling initiative should in no way be construed to mean that condoms do not work. As explained in the preamble to the proposed rule and updated and reaffirmed here, scientific evidence supports the conclusion that latex condoms are effective in reducing the risk of pregnancy and the overall risk of STI transmission, although latex condoms are more effective with regard to some STIs than others. In fact, as described earlier, the data supporting overall latex condom effectiveness in reducing STI transmission are stronger today than ever. In light of comments and consumer comprehension data, FDA has made revisions to the labeling to clarify the wording and reflect this overall conclusion.

(Comment 14) Many comments stated that the FDA proposal lacked balance, with far more emphasis than necessary on what a condom cannot do and not enough emphasis on the benefits of condom use. One comment stated that “[g]iven that many persons prefer sex without condoms and the new labeling clarifying that condoms may not be as effective as desired or imagined, many people may chose [sic] to simply have sex, forego the condom, and take their risks.” In contrast, two comments stated that the FDA condom labeling proposal overstated condom effectiveness, and lacked sufficient balance with too little scientific detail. These two comments stated that the proposal alternates between complexity that makes it difficult to understand and scientific imprecision.

(Response) After consideration of the many comments on this and related risk messaging principles, and based on the results of its label comprehension study, FDA concluded that the labeling in its draft special controls guidance document created an unacceptable level of confusion and misunderstanding. FDA also concluded, consistent with findings from its label comprehension study, that putting more scientific words and phrases into the limited space available for latex condom labeling would only lead to more consumer confusion. The latex condom labeling now recommended in the intended final special control guidance document has focused the message of latex condom intended use and simplified the message on differential effectiveness.

(Comment 15) Some comments acknowledged a need for a two tier message regarding the degree of protection afforded by condoms for different STIs, but stated that the message needed to remain simple. Some comments stated the key message is that although condoms provide less protection against STDs such as genital herpes and human papillomavirus, they do provide some protection.

(Response) FDA acknowledges the challenge of crafting a latex condom message that ensures that consumers not only understand the significant overall clinical benefits of latex condom use, but also understand the differing levels of protection against the various STIs. FDA continues to believe that it is important for condom labeling to provide information about differential effectiveness against STIs. Clearer information about differential risks and benefits of condom use can lead to better choices by individuals who seek to protect themselves by using condoms. In its intended final special controls guidance, FDA has refined the latex condom effectiveness message to convey this information more clearly.

(Comment 16) One comment stated that the FDA proposed labeling for intended use was incomplete because it did not address protection against pregnancy.

(Response) FDA agrees with this comment and the intended final special controls guidance includes pregnancy protection in the primary statement of intended action.

(Comment 17) Several comments commended FDA for recommending inclusion of a table in the labeling with comparative efficacy rates for different barrier contraceptive options. Many comments suggested updating the table and presenting efficacy data on all contraceptive options. Other comments suggested including rates for both ‘typical use’ and ‘perfect use’ so consumers could see the beneficial effect of correct and consistent latex condom use. A few comments suggested that effectiveness be presented as success rates, not failure rates. One comment stated that FDA should not require such a table because it is not useful, would be confusing, and would tend to discourage condom use.

(Response) FDA agrees with the many comments in favor of including information on comparative contraceptive effectiveness. The intended final guidance recommends inclusion of up-to-date contraceptive effectiveness information comparing the percentage of women experiencing unintended pregnancy during 1 year of use of latex condoms with rates experienced during 1 year of use of other contraceptive options available in the United States including drugs, devices, and methods of permanent sterilization. The guidance recommends at minimum inclusion of typical use rates, but this does not preclude inclusion of perfect use rates. To permit manufacturers flexibility to fit contraceptive effectiveness information in their labeling and accommodate new data as it becomes available, the guidance no longer provides a specific recommended table format.

Regarding whether contraceptive effectiveness information should be expressed as “success” or “failure,” FDA notes that contraceptive studies evaluate pregnancy as the primary outcome measure. The statistical hypothesis and analysis is built around the pregnancy rate, and this is not easily transposed to a “success” rate. Therefore, FDA continues to recommend that these data be presented as pregnancy rates associated with the use of condoms or other methods, but does not mandate that the term “failure” be used in labeling.

The agency believes that providing contraceptive effectiveness information will not confuse consumers or discourage condom use. Rather, FDA believes that this information will help consumers to determine whether latex condoms, available without a prescription, will sufficiently address their contraceptive needs, or whether they should seek other options, including those that may require consulting a health care provider. In keeping with this purpose, the intended final guidance also recommends that contraceptive effectiveness information be accompanied by a statement advising consumers to consult a health care provider if they have any questions about contraception, particularly because of health reasons for avoiding pregnancy.

(Comment 18) One comment stated that the labeling in the draft guidance that described the differential effectiveness of condoms against Group I and Group II STIs should include a complete list of the STIs in each group.

(Response) FDA declines to recommend that labeling addressing the degree of STI protection contain a complete list of STIs falling within each group. Based on the results from FDA's label comprehension study, which indicated that the message on this point in the draft guidance was not well understood, the agency is concerned that including such a list might be more confusing than helpful. FDA's intended final special controls guidance recommends a simplified message on this point, which includes examples of each type of STI, and also directs consumers to consult a health care provider or public health agency for more information on condoms or STIs.

(Comment 19) Several commenters expressed concern that latex condom labeling should not lose sight of the primary message that condoms are highly effective against HIV infection, the most serious of all STIs. Some of these comments also emphasized the importance of distinguishing between condom attributes and user behavior, i.e., to emphasize the protective benefit if used properly.

(Response) None of the new studies reviewed by FDA since publication of the 2005 proposed rule uncovered any new information to detract from FDA's earlier finding that condoms are effective against HIV/AIDS, arguably the most serious STI because of its devastating consequences. Consistent with this evidence, FDA's intended final special controls guidance recommends labeling that specifically reflects the conclusion that condoms are effective against HIV/AIDS. Recommended labeling also indicates that to get the most protection from latex condoms, consumers should use them correctly every time they have sex.

(Comment 20) One comment emphasized that user behavior concepts such as correct use and consistent use are true for almost all devices and drugs but do not belong in the statement of intended action. This comment went on to state that precautions to ensure correct and consistent use are important considerations for optimizing effectiveness and should be placed elsewhere on the labeling. This comment also noted that stating that condoms do not eliminate risk is redundant with the statement that condoms help to reduce risk and is therefore unnecessary.

(Response) FDA agrees with this comment in part. FDA's intended final guidance recommends a simple statement of intended action, that latex condoms are intended to prevent pregnancy, HIV/AIDS, and other STIs. Because information about optimal use conditions and their effect on risk reduction also deserves labeling prominence, the intended final special control guidance recommends that a statement emphasizing the importance of correct and consistent use be included in a section on the retail package entitled “Important Information.” In addition, the guidance recommends specific directions and precautions to help ensure such use. With regard to the question of redundancy, FDA believes that it is useful and appropriate that condom labeling explicitly reflect the results of scientific studies, which indicate that risk reduction from condoms is not 100 percent, and therefore continues to recommend a specific statement that condoms do not completely eliminate the risk of pregnancy and STIs.

(Comment 21) One commenter stated that FDA's recommended language for the rear panel of the condom retail package was not accurate because it did not contain the statement that condoms must be used consistently and correctly to provide benefit. This commenter recommended that a new section be included in condom labeling titled “Consequences of Incorrect and Inconsistent Condom Use,” which would include the statement “With the exception of genital herpes and HIV, we have no clinical studies that show any risk reduction from inconsistent condom use * * *.” Elsewhere the same commenter noted that none of the studies in HIV sero-discordant couples asked about correct use. Another commenter made a related point, stating “Although ‘correct and consistent use’ appears almost 15 times [in the preamble to the proposed rule] almost all condom use studies with an STI outcome actually only measured consistent condom use. The word ‘correct’ should be struck from the [rulemaking] document when it occurs in this context.”

(Response) These comments do not disagree with FDA's view that condom labeling should communicate that correct and consistent use are important to obtain the maximum benefit from a latex condom. FDA agrees that the correctness of condom use is more difficult to evaluate in an epidemiologic study than whether or not the condom was used for every act of intercourse. Nevertheless, FDA believes that condom effectiveness is in part a function of correct use, and therefore that labeling should communicate the importance of correct use to achieve best results.

In the intended final special control guidance, both correct and consistent use are addressed in the section called “Important Information” on the rear panel of the recommended labeling, with a recommended statement which reads: “To get the most protection from a latex condom, use one correctly every time you have sex.” In addition, the recommended labeling contains directions for use and precautions to help ensure correct and consistent use, including the reminder to use a new condom for each act of sex. The intended final special control guidance also recommends labeling addressing the degree of STI protection afforded by condoms, which describes that the reduction in risk of STIs afforded by latex condoms results from their ability to provide a barrier against the source of infection, and elaborates on the difference in effectiveness against STIs that are spread by contact with the head of the penis (an area that a condom covers) and those also spread by contact with infected skin not covered by the condom. FDA believes it is understood in this discussion of how condoms achieve their effect that the condom must in fact be used to be effective. FDA believes that the recommended labeling appropriately and accurately communicates the importance of using latex condoms correctly and consistently to obtain their benefits.

(Comment 22) One comment stated that FDA should substitute “risk reduction” for words such as “prevent/prevention” and “protect/protection” to avoid the perception that risk reduction is total (i.e., 100 percent).

(Response) In the intended final special control guidance, FDA recommends an initial statement of the intended action of condoms, which includes an example stating that “Latex condoms are intended to prevent pregnancy, HIV/AIDS, and other sexually transmitted infections.” The agency believes that this is an example of an appropriate, plain language statement of the intended action of a latex condom. FDA agrees, however, that it is important that consumers appreciate that risk reduction offered by condoms is not complete. In language recommended for inclusion on the rear panel of the retail package in a box entitled “Important Information,” the intended final guidance recommends a statement, “Latex condoms do not completely eliminate the risks of pregnancy and sexually transmitted infections.” The guidance also recommends the “Important Information” include a statement characterizing latex condoms as reducing the risk of STI transmission. Although the recommended wording is not identical to the language suggested by the commenter, FDA believes that the recommended labeling clearly conveys that use of a latex condom does not guarantee complete elimination of risks of pregnancy or STIs. Consistent with these statements on the outer package, the recommended package insert also contains a section called “Degree of STI Protection” which describes the relative risk reduction that can be expected for STIs that differ in the way that they are transmitted.

(Comment 23) One comment stated that FDA should recommend latex condom labeling to include a data table showing the amount of risk reduction afforded by condoms for the common STIs. This comment indicated that the table should include estimates for “perfect use” and “typical use,” further suggesting that “typical use” is a synonym for “inconsistent use.” Another comment recommended that latex condom labeling should give information on differential effectiveness in quantitative terms. That is, labeling should present the amount of risk reduction provided by latex condom use, numerically for each STI.

(Response) FDA disagrees with these comments because the data are not sufficiently developed to provide meaningful numbers to consumers.

(Comment 24) One comment recommended the statement “For STIs however such as gonorrhea/chlamydia, which are much more infectious [than HIV], incorrect or inconsistent condom use can very quickly lead to an infection” be included in a new section called “Consequences of Incorrect and Inconsistent Condom Use.”

(Response) FDA does not agree the previous statement should be included in condom labeling because we are not aware of scientific studies supporting the conclusion that “incorrect or inconsistent condom use can very quickly lead to an infection” for certain STIs. The temporal relationship between incorrect or inconsistent condom use and infection has not been measured systematically (with the exception of the 2006 Winer et al. study who evaluated “always,” “inconsistent,” and “almost never” condom use and incident HPV infection). We agree with the commenter's implicit premise that, to get the most protection from a latex condom, one should use a condom correctly every time one has sex and the recommended labeling reflects this accordingly.

(Comment 25) Two comments stated that latex condom labeling should discuss the difference between the degree of risk reduction afforded by a latex condom when used correctly during a single act of penile-vaginal intercourse compared with degree of risk reduction accumulated during typical use over time during many acts of penile-vaginal intercourse. The comments stated that the degree of risk reduction is higher during a single act compared to cumulative risk reduction over many acts of intercourse.

(Response) Although FDA agrees in principle with the concept that risk is lower during a single event compared to overall risk from multiple possible exposures, it is important to note that all of the studies evaluated by FDA looked at cumulative risk over many possible exposures. None of the studies FDA reviewed evaluated latex condom effectiveness against STIs during a single act of intercourse between an uninfected person and an infected partner. FDA does not believe that adding a discussion of hypothetical risk reduction during a single use would improve the latex condom label.

(Comment 26) Several comments stated that the latex condom labeling recommendations in the draft guidance document focused on penile-vaginal sex and do not specifically address oral sex or anal sex. Some commenters suggested that labeling should be revised to specifically indicate that condoms help prevent transmission of STIs between the penis and mouth or rectum. Other comments stated that FDA's draft guidance generically refers to sexual contact without stating that scientific data are only available on risk reduction provided by a condom during penile-vaginal intercourse. One comment suggested that the rule and guidance document need to be “clear * * * that we are talking about the use of the male latex condom as used in vaginal intercourse.” Another indicated that FDA should view condom use “for everything but penile-vaginal sex [as] ‘off-label’.”

(Response) Like the draft guidance, the labeling recommendations in the final guidance document do not specifically address oral or anal sex. This is not a change from the current labeling of condoms and is reflective of the lack of premarket clearance or approval submissions requesting an indication for use specifically for oral or anal sex. Although most of the reliable epidemiological data about latex condoms and STIs come from studies conducted in populations who engage in penile-vaginal intercourse, a meta-analysis evaluated a number of studies that tested behavioral interventions designed to increase condom use during all forms of sexual contact and concluded that there was an overall decrease in STIs from increased condom use (Ref. 2). Other scientific information about the basis of latex condom effectiveness against STIs—which indicates that latex condoms reduce the transmission of STIs to which they provide a physical barrier—is applicable to sexual contact between the penis and mouth or rectum. FDA believes the labeling recommendations reflect the information available.

(Comment 27) One comment stated that the directions for use in the FDA proposal are outdated and include steps for which there is no underlying reason, e.g., squeeze air out of condom tip. This comment pointed to a simplified set of five steps for correct condom use, developed by the Information and Knowledge for Optimal Health (INFO) Project, Johns Hopkins Bloomberg School of Public Health (Ref. 5).

(Response) FDA reviewed the five-step directions for use of condoms recommended by the INFO Project, and some of its approach was adopted in the intended final special control guidance. FDA also included some of its own general recommendations for developing medical device patient labeling, such as recommendations for the use of diagrams.

(Comment 28) One comment suggested modification of the storage precaution, from “Store condoms in a cool, dry place” to “Avoid condom exposure to direct sunlight or storage for prolonged periods at temperatures above 100 F.”

(Response) FDA agrees in principle with this comment and has adopted it in the following slightly revised format in the intended final special controls guidance: “Avoid exposure of the condom to direct sunlight. Store latex condoms in a cool, dry place (below 100° F).” FDA notes that the model language in the guidance may be varied so long as it provides appropriate directions for use and precautions that contribute to ensuring safety and effectiveness of the specific condom in question.

(Comment 29) One comment requested that the directions for use in the labeling be in boldface font.

(Response) FDA does not agree with this comment. Highlighting techniques, such as bold, are used to emphasize important words or phrases, or for headings. Bolding all the directions for use would overdo this highlighting technique, and could decrease the impact of the directions.

(Comment 30) Another comment stated that the directions for use should include another bullet explaining how to properly dispose of a latex condom.

(Response) FDA agrees with this comment and has added a recommendation in the intended final special controls guidance to include in the directions for use a direction on how to properly dispose of a latex condom.

(Comment 31) One comment stated that latex condom labeling should include a recommendation that sexually active persons seek advice from a health care professional and that sexually active persons be vaccinated against HBV and HPV.

(Response) FDA's intended final special controls guidance recommends that latex condom labeling include advice to consumers to contact a health care provider if the consumer believes that he/she may have an STI, as well as directing consumers to contact a health care provider or public health agency for more information on latex condoms or STIs. FDA believes this labeling, which is similar to the first element suggested by the comment, is appropriate in light of the recognition that condoms reduce, but do not eliminate, the risk of STIs. Consumers who believe they are infected with an STI and are using condoms to reduce the risk that they will transmit that STI to their partner should also seek advice from a health care practitioner, because treatment options may be available that will not only benefit the infected person, but will also help to further reduce (or eliminate) the risk of STI transmission. Advising consumers who may already be infected with an STI to complement condom use with seeking advice from a health care practitioner thus helps to ensure the safe and effective use of condoms for STI prevention. Similarly, FDA's recommendation that labeling alert consumers to contact a health care provider or public health agency for more information on latex condoms or STIs complements the labeling recommendations regarding the degree of protection against different types of STIs. This labeling will help ensure safe and effective use of condoms by alerting consumers to additional resources that can expand on the basic information regarding STI transmission provided by the labeling and also help the consumer evaluate their individual circumstances.

However, FDA believes that it would be inappropriate for latex condom labeling to advise all sexually active persons to be vaccinated against HPV and HBV in part because these vaccines are not universally indicated for “all sexually active individuals.” For example, the currently available HPV vaccine is not approved for use in men. The HBV vaccine is indicated only for populations at risk for HBV. A recommendation to be vaccinated against HPV and/or HBV should be offered by a health care professional after consultation with the individual.

(Comment 32) One comment recommended that FDA should work with NIH, CDC, and other research colleagues to monitor the impact of the new labeling and to learn how to better reduce the adverse consequences of sex.

(Response) This comment did not address the substance of the rulemaking or labeling recommendations. If important new evidence becomes available, FDA may reconsider its approach in light of that evidence.

(Comment 33) A few comments commended FDA for its labeling proposal but warned that it should avoid additional educational information about social behaviors or public health programs. These comments stated that this kind of information is not appropriate for latex condom labeling. Another comment asked that references to pregnancy and HIV programs be placed in the labeling.

(Response) FDA believes that the purpose of latex condom labeling is to adequately identify the product and its intended action, with information about the product, including adequate directions for use and any other necessary cautions or warnings, to ensure safe and effective use. As discussed earlier, FDA is including as recommended labeling a statement that consumers should consult a health care practitioner or public health authorities for more information about condoms or STIs. This labeling complements the recommended labeling regarding the degree of protection against different types of STIs, which FDA's label comprehension study and numerous comments indicated needed to be kept simple in order to be well understood. By alerting consumers to additional resources that can expand on the basic information regarding STI transmission provided by the labeling, and also help the consumer evaluate their individual circumstances, the recommended labeling regarding contacting a health care practitioner or public health agency will help to ensure the safe and effective use of latex condoms.

FDA's 2005 proposed rule included specific requests for comments. Several of the specific requests related to latex condoms with spermicidal lubricant containing N-9. As discussed in the introductory paragraph of section I, FDA continues to review the comments it received related to that device. FDA also specifically requested comments on whether its labeling recommendations should include more detailed information on the prevention of genital HPV infection and information on different approaches for prevention of cervical cancer (FDA responded to one comment related to this request in section III.D.8). Finally, FDA specifically requested comment on potential special controls for nonlatex condoms without N-9. FDA received the following comments in response to FDA's requests.

(Comment 34) In response to FDA's specific request related to HPV, one commenter stated that “[c]ondoms can reduce the transmission of seminal fluid carrying the human papillomavirus. Therefore, decreasing the direct effect of these fluids on the cervix may be helpful in decreasing the risk of cervical dysplasia and neoplasia. It would be appropriate for labels to indicate that HPV still can be acquired through direct skin contact in areas not protected by the condom.”

(Response) FDA's labeling recommendations in the intended final special controls guidance document are consistent with this comment. FDA's labeling recommendation is that the package insert indicate that latex condoms reduce the risk of transmitting STIs by providing a barrier against the source of infection but also include statements that “Latex condoms are less effective against STIs, such as Human Papillomavirus (HPV) and herpes. These STIs can also be spread by contact with infected skin that is not covered by the condom.”

(Comment 35) One comment indicated that consumers should be aware that latex condoms might cause an allergic reaction and the use of a nonlatex condom might reduce this risk. The comment noted that “special controls beyond evidence-based labeling do not appear to be warranted.” Another comment recommended that FDA require that packaging between latex condoms, latex condoms with N-9, natural membrane condoms, and novelty condoms look “clearly different.”

(Response) FDA appreciates the information submitted and intends to consider these comments when FDA evaluates the regulatory approach to these devices.

(Comment 36) One comment stated that the 1-year period proposed for implementing new condom labeling for latex condoms legally marketed before the effective date of this final rule is unrealistically short. This comment said it will take approximately 24 months, not 12 months, to implement all the required changes because the draft labeling may necessitate changes to packaging with its requisite capital equipment changes.

(Response) In the final guidance, FDA has shortened the statement of intended action to be placed on the individual foil packet (primary package). As a result of this change, a different size foil package for the individual condom should not be needed. FDA has also shortened the recommended statements to be included in the package insert and made more clear the flexibility permitted to manufacturers to determine how to present certain elements, such as contraceptive effectiveness information. Therefore, FDA does not believe that capital equipment changes will be needed to implement this special control. In addition, as discussed in section II, latex condoms legally marketed before the effective date of this final rule will be expected to comply with the requirement of special controls within 11 months after the effective date, as was proposed. However, the effective date of this final rule will be 60 days after publication, not 30 days as anticipated, so manufacturers will have a total of 13 months after publication to comply with the requirement of special controls.

The agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

FDA has examined the impacts of the final rule under Executive Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The agency believes that this final rule is not an economically significant regulatory action under the Executive order.

The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. FDA does not believe that the final rule will have a significant economic impact on a substantial number of small entities, but recognizes the uncertainty of its estimates. In the proposed rule the agency solicited but did not receive specific comments on its estimates and methodology of analysis of the impact of the rule on small businesses.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $130 million, using the most current (2007) Implicit Price Deflator for the Gross Domestic Product. FDA does not expect this final rule to result in any 1-year expenditure that would meet or exceed this amount.

The purpose of this final rule is to amend the classification regulation for condoms to designate a labeling guidance as a special control for latex condoms. As discussed earlier in this preamble, latex condoms are currently classified into class II in accordance with section 513 of the act. The special controls guidance identifies particular issues associated with these devices and recommends labeling to address those issues. The benefit of this final rule is that establishing the labeling guidance as a special control ensures that manufacturers will provide consumers with the information they need to make an informed decision regarding the use of latex condoms and to use them safely and effectively. The labeling guidance helps ensure that information provided to consumers does not undervalue the overall STI-risk reduction provided by latex condom use, but does not exaggerate the effectiveness of latex condoms against certain types of STIs. More specific information about the effectiveness of latex condoms with respect to pregnancy and STI transmission, as well as clearer directions for use and precautions about how to obtain the maximum benefit from latex condoms, can lead to better choices by individuals who seek to protect themselves against unintended pregnancy and STIs. Establishing a rule designating as a special control a guidance document that contains labeling recommendations, rather than establishing a labeling regulation, provides both the agency and manufacturers greater flexibility and will result in providing consumers with any new or enhanced information more quickly. The agency believes this special control will, together with the general controls, provide reasonable assurance of the safety and effectiveness of these devices.

The final rule will affect persons responsible for the labeling of latex condoms, which, in most cases, will be manufacturers of condoms, including repackagers. Manufacturers of latex condoms, including repackagers, will need to address the issues identified in the special controls guidance document. A firm need only show that its device meets the recommendations of the guidance document or in some other way provides equivalent assurances of safety and effectiveness. To meet the recommendations of the special controls guidance document, wording on the retail package, including the principal display panel, the primary condom package (individual foil), and package insert will most likely need changes to conform to the guidance document.

Agency records show there are approximately 35 entities that manufacture or repackage latex condoms affected by this final rule. FDA does not track the number of different product and package combinations (stockkeeping units (SKUs)) on the market. Based on data FDA received from industry, FDA estimates that currently there are between 500 and 1,000 SKUs on the market that will need labeling changes. If the products are sold with a retail package, the wording on each of these SKUs will need to be changed. Because manufacturers can often use the same individual foil and package inserts across their product lines, the number of versions of foil and insert labeling that require changes will be less than the number of SKUs.

Based on the agency's experience with the industry and anecdotal information from manufacturer and retail Web sites, FDA estimates that there will be a total of 802 to 1,605 labeling changes to retail packages, individual foils, and package inserts. FDA assumed that 95 percent of the SKUs (475 to 950) are marketed with 3 levels of labeling (a retail package, individual foil, and package insert), and the remaining 5 percent have 2 levels (a foil and package insert). For the SKUs with three levels of labeling, FDA further assumed that for every 3 retail package redesigns there would be 1 foil label redesign, and for every 4 retail package redesigns, there would be 1 package insert redesign. FDA based these assumptions on FDA's knowledge that a single condom type is often sold in several retail packages containing different numbers of condoms, in which case retail packages would be different for each SKU but package inserts and foil labels would be shared by multiple SKUs. The distribution of the different labeling that would need to be redesigned is listed in Table 1 of this document and includes 475 to 950 retail packages, 183 to 367 foils, and 144 to 288 inserts. (Sample calculation: (500 x 0.95 / 3) + (500 x 0.05) foils and (500 x 0.95 / 4) + (500 x 0.05) inserts.)

Frequent package changes or redesigns are standard business practice in the consumer healthcare products market. Manufacturers with products intended for retail sales will have established routines for product relabeling and employees with the technical expertise to implement labeling changes. The cost to relabel a product can be broken into three basic components: regulatory, graphics, and manufacturing. The regulatory component includes determining what changes are necessary, drafting the wording for the new labeling, and coordinating the review and revisions. The graphics component includes preparing the layouts, proofs, and printing. Finally, the manufacturing component includes incorporating the new labeling into the manufacturing system, discarding old labeling inventory, and making any changes to the packaging line to accommodate the new labeling, if necessary.

The final rule designates a special controls guidance document that recommends changes to wording and some additional text. Many of the labeling recommendations are similar to statements in existing condom labeling, but are being updated to reflect current information. These changes should not require major changes in the design or layout of existing labeling and FDA believes that the changes can be incorporated without having to increase the dimensions of any of the labeling. As discussed elsewhere in the preamble, FDA received one comment that suggested that manufacturers might need to increase package size to accommodate the proposed wording. After conducting a label comprehension study and considering other comments and information, FDA shortened and reworded the recommended labeling. In addition, the intended final special controls guidance does not specify a particular format for the contraceptive effectiveness information. The agency believes that with the changes to the wording and increased flexibility in presentation, we have addressed these concerns.

The itemized cost estimates used in this analysis were derived from a study performed for FDA by Eastern Research Group, Inc. (ERG), an economic consulting firm, to estimate the economic impact of the 1999 Over-the-Counter Human Drug Labeling Requirements final rule (64 FR 13254, March 17, 1999). 8 Because the packaging requirements for latex condoms are similar to those of many over-the-counter (OTC) drugs, the cost to redesign and print the labeling for OTC drugs is an appropriate proxy for the estimated costs to redesign and print condom labeling. For this analysis, cost estimates were adjusted to account for inflation using the producer price index (PPI) for finished consumer goods, and current wage rates specific to the medical device industry were substituted for the wages used by ERG in the original OTC drug labeling impact study. 9

FDA estimates that the regulatory component of each labeling redesign would require between 8 to 16 hours per SKU. Using a wage rate of $44.17, the incremental cost of the one-time regulatory component cost to redesign would be $353 to $707 per labeling redesign (8 to 16 hours x $44.17/hour). 10 The one-time cost of the graphic component was estimated to be $640 per labeling redesign. 11 The one-time cost of the manufacturing component, which included the incorporation of the new labeling into the manufacturing system and discarding the remaining inventory of the old labeling, was estimated to require between 3 and 5 hours per label. Using the wage rate of $21.84 for a production employee, this cost would range from about $66 to $109 per label (3 (to 5) hours x 21.84/hour). 12 The value of the old labeling inventory would vary greatly depending on the type and complexity of the labeling, the average sales per SKU, and the length of the implementation period granted. Based on the ERG study, with a 13-month implementation period FDA estimates that the one-time inventory loss would range from $478 to $1,913 per foil or package insert and from $1,435 to $5,738 per carton. 13

FDA believes that by providing manufacturers with a 13-month period to achieve compliance for those latex condoms that are legally marketed before the rule is effective, there will be enough time for them to sell their existing product inventory and have enough newly labeled inventory on hand to meet demand without a disruption in supply. The total estimated incremental one-time costs to the industry for each component of a labeling redesign was calculated by multiplying the cost per label by the number of labels affected and are presented in table 2 of this document. Because of the uncertainty of the estimates, only the lowest and highest estimated costs are presented rather than reporting the intermediate values that would be obtained using other pairings of high with low values in the ranges estimated. The total one-time incremental cost to the industry was estimated to be between $1.7 million and $9.0 million. The cost to individual firms to comply with this rule would vary greatly depending on the number of products they produced, how the products were packaged, and the sales volume. As stated earlier in this document, frequent labeling changes are a cost of doing business in the consumer healthcare products market and firms would have the skills necessary to comply with this rule. Because the steps followed for a firm-initiated change are the same as for regulatory change, the labeling recommendations could be incorporated at the time a firm is implementing a firm-initiated labeling change for little additional cost, and thus, the economic impact will be mitigated by the number of firm-initiated labeling changes made during the implementation period. In addition, because most labeling equipment can handle different labeling sizes and types and because there are a large number of companies available that can provide contract labeling services, FDA does not believe that any manufacturer would incur major costs such as the need to purchase new labeling or packaging equipment as a result of this rule.

There are about 12 domestic entities that manufacture or repackage condoms. The Small Business Administration (SBA) has established criteria to identify small entities in given industries using the North American Industry Classification System Code (NAICS). The NAICS for manufacturing latex condoms is 326299 (All Other Rubber Product Manufacturing). Firms in this industry are considered small if they have fewer than 500 employees. Ten of the 12 domestic entities affected by this rule are small as defined by SBA.

The one-time cost to relabel, including the inventory loss, will range from about $3,000 to $9,000 per unique product SKU. When the SKUs differ only by the quantity per carton the one-time cost per SKU are even less, ranging from about $2,100 to $6,400 because the foil and insert labels are the same.

As discussed earlier in this document, while the cost to the industry to revise latex condom labeling is small, FDA lacks sufficient specific information on the distribution of costs and characterization of the industry to certify that this rule would not have a significant economic impact on a substantial number of small entities. Thus, while FDA does not believe that this final rule will have a significant effect on a substantial number of small entities, FDA recognizes the uncertainty of the estimates.

This document contains amendments to the Income Tax Regulations (26 CFR part 1) under section 6050P relating to information reporting for cancellation of indebtedness by certain entities. The amendments will reduce the number of information reports required to be filed under section 6050P.

In general, section 6050P requires certain entities to file information returns with the IRS, and to furnish information statements to debtors, reporting discharges of indebtedness of $600 or more. As originally enacted by the Omnibus Budget Reconciliation Act of 1993, Public Law 103-66 (107 Stat. 312, 531-532 (1993)), section 6050P applied solely to “applicable financial entities,” which was then defined to include only financial institutions, credit unions, and Federal executive agencies.

In 1996, final regulations were published implementing section 6050P. See TD 8654, 61 FR 262 (January 4, 1996) (the 1996 regulations). The 1996 regulations required applicable financial entities, as then defined, to issue Forms 1099-C, “Cancellation of Debt,” upon the occurrence of one of several “identifiable events” as provided in § 1.6050P-1(b)(2)(i)(A) through (H). One of these identifiable events requiring the issuance of a Form 1099-C was the expiration of a “non-payment testing period” pursuant to § 1.6050P-1(b)(2)(i)(H). The 1996 regulations created a rebuttable presumption (the “36-month rule”) under § 1.6050P-1(b)(2)(iv) that this period expired if a creditor had not received a payment for 36 months. Section 1.6050P-1(b)(2)(iv) provides that the presumption that an identifiable event occurred can be rebutted by a creditor if the creditor had engaged in significant, bona fide collection activity.

After the issuance of the 1996 regulations, the Debt Collection Improvement Act of 1996, Public Law 104-134 (110 Stat. 1321, 368-369 (1996)) (the 1996 Act), expanded section 6050P to cover any executive, judicial, or legislative agency (as defined in 31 U.S.C. 3701(a)(4)) as well as any applicable financial entity. The 1996 Act was effective April 26, 1996. The Ticket to Work and Work Incentives Improvement Act of 1999, Public Law 106-170 (113 Stat. 1860, 1931 (1999)) (the 1999 Act), further expanded section 6050P by expanding the definition of “applicable financial entity” to include any organization “a significant trade or business of which is the lending of money.” The 1999 Act was effective for discharges of indebtedness occurring after December 31, 1999.

In 2002, the IRS and the Treasury Department published proposed regulations to reflect the changes to section 6050P. See REG-107524-00, 67 FR 40629 (June 13, 2002). The IRS received written (including electronic) comments on the proposed regulations and a public hearing was held on October 8, 2002. After consideration of the comments received, the IRS adopted the proposed regulations with amendments. See TD 9160, 69 FR 62181 (October 25, 2004) (the 2004 regulations). Section 1.6050P-2 of the 2004 regulations describes the circumstances in which an organization has a significant trade or business of lending money, thereby triggering an information reporting requirement when it cancels debt.

The 36-month rule of § 1.6050P-1(b)(2)(iv) was drafted at a time when section 6050P applied only to financial institutions, credit unions, and Federal executive agencies and did not extend to any executive, judicial, or legislative agency or any organization “a significant trade or business of which is the lending of money.” Since the publication of the 2004 regulations, commenters have raised the concern that the application of the 36-month rule to entities with a significant trade or business of lending money might trigger a reporting requirement even when the entity has not legally or practically discharged the debt. The IRS and the Treasury Department agree that it is appropriate to limit the application of the 36-month rule to the entities for which it was originally intended in order to avoid premature information reporting of cancellation of indebtedness income. Doing so will reduce the information reporting burden on entities that were not originally within the scope of the 36-month rule and will protect debtors from receiving information returns that prematurely report cancellation of indebtedness income from such entities.

The Treasury Department and IRS are still considering other comments received since the publication of the 2004 regulations, including a request to clarify the meaning of “stated principal” in § 1.6050P-1(c) and (d)(3) when it is applied to those who acquire a loan from a person other than the debtor. Section 1.6050P-1(c) provides that “indebtedness” for purposes of section 6050P means any amount owed to an applicable entity, including stated principal, fees, stated interest, penalties, administrative costs, and fines. Section 1.6050P-1(d)(3) further provides that, in the case of a lending transaction, the discharge of an amount other than stated principal is not required to be reported under section 6050P. Commenters have stated that it is unclear whether the simplifying rule limiting an information report to the amount of stated principal can be applied to loan acquirers. Commenters have asserted that loan acquirers might know only the aggregate amount due on the loans they are purchasing, not the breakdown of that amount into principal and accrued interest or fees. Therefore, if loan acquirers discharge an aggregate amount, it is difficult for them to determine how much is required to be reported under section 6050P. The Treasury Department and IRS is considering issuing future guidance under section 6050P to address these concerns.

The temporary regulations and amendments to existing regulations limit the application of the 36-month rule to the entities described in the 1993 Act. The temporary regulations avoid premature information reporting from certain entities that are currently required to report under section 6050P. Notwithstanding this limitation, the temporary regulations provide that, in the case of an entity previously subject to the 36-month rule that was required to file information returns in a tax year prior to 2008 due to application of the 36-month rule, and who failed to so file, the date of discharge is the first identifiable event, if any, described in § 1.6050P-1(b)(2)(i)(A) through (G) that occurs after 2007. Thus, any entity previously subject to the 36-month rule that has never filed an information return remains subject to the information reporting requirement upon the occurrence of any of the other identifiable events.

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.

For the applicability of the Regulatory Flexibility Act (5 U.S.C. chapter 6) refer to the Special Analyses section of the preamble to the cross-reference notice of proposed rulemaking published in the Proposed Rules section in this issue of the Federal Register . Pursuant to section 7805(f) of the Internal Revenue Code, these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The principal author of these temporary regulations is Barbara Pettoni, Office of Associate Chief Counsel (Procedure and Administration).

This document and additional information concerning the Office of Foreign Assets Control (“OFAC”) are available from OFAC's Web site ( http://www.treas.gov/ofac ) or via facsimile through a 24-hour fax on-demand service, tel.: 202/622-0077.

The Iranian Transactions Regulations, 31 CFR part 560 (the “ITR”), implement a series of Executive Orders that began with Executive Order 12613 of October 30, 1987, issued pursuant to authorities including the International Security and Development Cooperation Act of 1985 (22 U.S.C. 2349aa-9). In that order, after finding, inter alia, that the Government of Iran was actively supporting terrorism as an instrument of state policy, the President prohibited the importation of Iranian-origin goods and services. Subsequently, in Executive Order 12957, issued on March 15, 1995, under the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) (“IEEPA”), the President declared a national emergency with respect to the actions and policies of the Government of Iran, including its support for international terrorism, its efforts to undermine the Middle East peace process, and its efforts to acquire weapons of mass destruction and the means to deliver them. To deal with that threat, Executive Order 12957 imposed prohibitions on certain transactions with respect to the development of Iranian petroleum resources. On May 6, 1995, to further respond to this threat, the President issued Executive Order 12959, which imposed comprehensive trade and financial sanctions on Iran. Finally, on August 19, 1997, the President issued Executive Order 13059 consolidating and clarifying the previous orders.

Section § 560.516 of the ITR contains authorizations with respect to certain transactions that are processed by U.S. depository institutions, as well as by U.S. registered brokers or dealers in securities. OFAC now is amending § 560.516 to narrow the scope of authority provided in paragraph (a) of this section. As amended, paragraph (a) of § 560.516 authorizes U.S. depository institutions to process transfers of funds to or from Iran, or for the direct or indirect benefit of persons in Iran or the Government of Iran, only if the transfer meets one of the conditions set forth in the sub-paragraphs to paragraph (a) and does not involve debiting or crediting an Iranian account, as defined in § 560.320 of the ITR. Prior to this amendment, sub-paragraph (a)(1) authorized such transactions when the transfer was by order of a non-Iranian foreign bank from its own account in a domestic bank to an account held by a domestic bank for a non-Iranian foreign bank. This is commonly referred to as the “U-turn” authorization. It is so termed because it is initiated offshore as a dollar-denominated transaction by order of a foreign bank's customer; it then becomes a transfer from a correspondent account held by a domestic bank for the foreign bank to a correspondent account held by a domestic bank for another foreign bank; and it ends up offshore as a transfer to a dollar-denominated account of the second foreign bank's customer. OFAC now is narrowing the scope of authority provided by paragraph (a) of § 560.516 by deleting sub-paragraph (a)(1) and, thereby, revoking the authorization for “U-turn” transfers.

The reasons OFAC is revoking this authorization include the need to further protect the U.S. financial system from the threat of illicit finance posed by Iran and its banks. This threat was highlighted in March of 2008 when the United Nations Security Council adopted Resolution 1803, which calls upon all states “to exercise vigilance over the activities of financial institutions in their territories with all banks domiciled in Iran...in order to avoid such activities contributing to the proliferation [of] sensitive nuclear activities, or to the development of nuclear weapon delivery systems * * *.” Moreover, on October 16, 2008, the Financial Action Task Force (“FATF”), the world's premier standard-setting body for anti-money laundering and counter-terrorist financing (“AML/CFT”), warned for the fourth time about the risks posed to the international financial system by continuing deficiencies in Iran's AML/CFT regime, and in particular emphasized Iran's lack of effort in addressing the risk of terrorist financing. The FATF called on all countries to strengthen preventive measures to protect their financial systems from the risk.

As a result of this amendment, effective November 10, 2008, U.S. depository institutions no longer will be allowed to process “U-turn” transfers involving Iran, thereby precluding transfers designed to dollarize transactions through the U.S. financial system for the direct or indirect benefit of Iranian banks or other persons in Iran or the Government of Iran. OFAC is revising and republishing § 560.516 of the ITR in its entirety because, in addition to removing sub-paragraph (a)(1), OFAC also is amending this section to delete references to outdated provisions and make other minor technical changes. OFAC also is revising § 560.405 and § 560.532 of the ITR to make certain conforming changes by deleting references to outdated provisions.

Because the amendment of the ITR involves a foreign affairs function, the provisions of Executive Order 12866 and the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, opportunity for public participation, and delay in effective date, are inapplicable. Because no notice of proposed rulemaking is required for this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.

The collections of information related to the ITR are contained in 31 CFR part 501 (the “Reporting, Procedures and Penalties Regulations”). Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), those collections of information have been approved by the Office of Management and Budget under control number 1505-0164. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

The Norfolk Southern Corporation, who owns and operates this single-leaf bascule drawbridge, has requested a temporary deviation from the current operating regulations set out in 33 CFR 117.997(e) to facilitate structural repairs.

The Norfolk Southern #7 Bridge, at AIWW mile 5.8, across the Elizabeth River (Southern Branch) in Chesapeake, VA, has a vertical clearance in the closed position to vessels of 7 feet above mean high water.

To facilitate replacement of curved tread plates on the curved segmental girders of the lift span, the drawbridge will be maintained in the closed-to-navigation position from 5 a.m. on December 31, 2008, until and including 5 a.m. on January 2, 2009.

The Coast Guard will inform the users of the waterway through our Local and Broadcast Notices to Mariners of the opening restrictions of the draw span to minimize transiting delays caused by the temporary deviation.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the designated time period.

This deviation from the operating regulations is authorized under 33 CFR 117.35.

The Union Pacific Railroad Company requested a temporary deviation for the Clinton Railroad Drawbridge, across the Upper Mississippi, mile 518.0, at Clinton, Iowa to open on signal if at least 24 hours advance notice is given in order to facilitate needed bridge maintenance and repairs. The Clinton Railroad Drawbridge currently operates in accordance with 33 CFR 117.5, which states the general requirement that drawbridges shall open promptly and fully for the passage of vessels when a request to open is given in accordance with the subpart. In order to facilitate the needed bridge work, the drawbridge must be kept in the closed-to-navigation position. This deviation allows the bridge to open on signal if at least 24 hours advance notice is given from 12:01 a.m., December 15, 2008 until 9 a.m., March 15, 2009.

There are no alternate routes for vessels transiting this section of the Upper Mississippi River.

The Clinton Railroad Drawbridge, in the closed-to-navigation position, provides a vertical clearance of 18.7 feet above normal pool. Navigation on the waterway consists primarily of commercial tows and recreational watercraft. This temporary deviation has been coordinated with waterway users. No objections were received.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.

As part of its review of the Schedule for Rating Disabilities (38 CFR part 4), VA published a proposal to amend the portion of the schedule pertaining to the eye in the Federal Register of May 11, 1999 (64 FR 25246-25258). Interested persons were invited to submit written comments on or before July 12, 1999. We received comments from the Disabled American Veterans, the Blinded Veterans Association, and one other interested party.

We proposed to add paragraph (c) to § 4.75 to codify the longstanding VA practice that when visual impairment of only one eye is service-connected, either directly or by aggravation, the visual acuity of the nonservice-connected eye must be considered to be 20/40, subject to the provisions of 38 CFR 3.383(a). Section 3.383(a) directs that when there is blindness in one eye as a result of service-connected disability and blindness in the other eye as a result of nonservice-connected disability, VA will pay compensation as if both were service-connected.

We also proposed to remove current § 4.78, which provides a method of determining the level of disability when the visual impairment is aggravated during military service. As stated in the proposed rule, § 4.78 is not consistent with VA's method of evaluating visual impairment incurred in service in one eye only, nor is it consistent with VA's statutory scheme governing VA benefits. Its application may, in some cases, result in a higher evaluation for a condition that is aggravated by service than for an identical condition incurred in service, which is not equitable. Section 4.78 is also inconsistent with the method of evaluating other paired organs, such as the hands, where only the service-connected hand is evaluated, regardless of the status of the nonservice-connected hand, subject to the provisions of § 3.383(a).

One commenter challenges the rule proposed in § 4.75(c) as contrary to legal authority and long-standing VA practice. According to the commenter, the proper rating of visual disability always considers: (1) The vision of each eye, regardless of whether the origin of the service-connected disability is one or both eyes and (2) the entire disability, regardless of whether service connection is based on incurrence or aggravation. The commenter stated that “service connection is always bilateral in the legal sense.” The commenter stated that VA used the term “service connected” in current § 4.78 in its literal sense and that the nonservice-connected visual impairment to which § 4.78 refers “denotes the origin of the disability, not its legal status.” The commenter further asserted that “service connection attaches to the impairment of function or disability and not to the organ or body part per se” and that “service connection is accordingly established for visual impairment that is incurred in or aggravated by service and is not limited to the eye with the service-related disability.” The commenter cited VA's Office of the General Counsel opinion VAOPGC 25-60 (9-13-60) and 38 U.S.C. 1160 in support of these assertions.

To an extent, the commenter is correct that the proper rating of visual disability always considers the vision of each eye, regardless of whether the origin of the service-connected disability is one or both eyes. However, if visual impairment of only one eye is service-connected, the vision in the other eye is considered to be normal, i.e. , 20/40. To do otherwise would violate 38 CFR 4.14, which provides that “the use of manifestations not resulting from service-connected disease or injury in establishing the service-connected evaluation * * * [is] to be avoided.” Proposed § 4.75(c) merely states long-standing VA practice in this regard.

The commenter is mistaken about the entire disability being considered, regardless of whether service connection is based on incurrence or aggravation. As 38 CFR 4.22 plainly states: “In cases involving aggravation by active service, the rating will reflect only the degree of disability over and above the degree existing at the time of entrance into the active service * * *. It is necessary therefore, in all cases of this character[,] to deduct from the present degree of disability the degree, if ascertainable, of the disability existing at the time of entrance into active service. * * *”

Although there are certain specified exceptions (such as 38 U.S.C. 1151 and 1160), generally the statutes governing VA benefits authorize compensation for service-connected disability only. 38 U.S.C. 101(13), 1110, 1131. Only disabilities that result from injury or disease incurred or aggravated in service may be service connected. 38 U.S.C. 1110, 1131; 38 CFR 3.310(a). VAOPGC 25-60 addressed whether VA had authority to award a 100-percent disability rating for visual impairment where there is service-connected loss or loss of use of one eye and nonservice-connected loss or loss of use of the other eye arising after service. The opinion held that VA did not have statutory authority to compensate veterans for nonservice-connected visual disability arising after service. However, Congress later provided an exception in 38 U.S.C. 1160. If a veteran has visual impairment in one eye as a result of service-connected disability and visual impairment in the other eye as a result of nonservice-connected disability not the result of the veteran's own willful misconduct and either (1) the impairment of visual acuity in each eye is rated at a visual acuity of 20/200 or less or (2) the peripheral field of vision for each eye is 20 degrees or less, VA must pay compensation to the veteran as if the combination of both disabilities were the result of service-connected disability. 38 U.S.C. 1160(a). Thus, VA's authority to consider nonservice-connected visual disability for compensation purposes is limited to the circumstances described in section 1160(a). Absent the degree of visual impairment in both eyes prescribed in section 1160(a), nonservice-connected visual disability is not compensable and therefore not to be considered when rating service-connected disability. Where a claimant has a service-connected disability of only one eye and a nonservice-connected visual impairment but not of the degree prescribed by section 1160(a) in the other eye, deeming the nonservice-connected eye as having a visual acuity of 20/40 results in accurate evaluations that are based solely upon service-connected visual impairment. Our proposal to deem the nonservice-connected eye as having a visual acuity of 20/40 is consistent with current law. We make no change based upon this comment.

This commenter also asserted that VA should consider hearing loss less than total deafness and visual impairment less than blindness when evaluating impairment of the nonservice-connected ear and eye, respectively. The commenter disagreed with VA's Office of the General Counsel opinion VAOPGCPREC 32-97, which interpreted the statutes governing compensation for service-connected disabilities and concluded that where a claimant has service-connected hearing loss in one ear and nonservice-connected hearing loss in the other ear, for purposes of evaluating the service-connected disability, the hearing in the ear with nonservice-connected hearing loss should be considered normal, unless the claimant is totally deaf in both ears. The issue raised by the commenter was mooted by the Veterans Benefits Act of 2002, Public Law 107-330, which authorized VA, when a veteran has compensable service-connected hearing loss in one ear and nonservice-connected deafness in the other ear, to assign an evaluation and pay compensation as though both ears were service-connected, and the Dr. James Allen Veteran Vision Equity Act of 2007, Public Law 110-157, which authorized VA, when a veteran has service-connected visual impairment in one eye and nonservice-connected visual impairment in the other eye of the degree described above, to assign an evaluation and pay compensation as though both eye disabilities were service connected. See 38 U.S.C. 1160(a)(1) and (3).

Further, while § 4.78 addressed aggravation, it is unnecessary to include this in this regulation as it is covered in 38 CFR 4.22. Section 4.78's discussion of aggravation was duplicative of § 4.22.

Proposed § 4.75(d) stated that the evaluation for visual impairment of one eye may be combined with evaluations for other disabilities that are not based on visual impairment and included disfigurement as an example. One commenter suggested that we evaluate phthisis bulbi (shrunken eyeball) or other serious cosmetic defect of the eyeball at 40 percent instead of referring the rater to diagnostic code 7800 (“Scars, disfiguring, head, face, or neck”) under the skin portion of the Rating Schedule. The commenter felt this would provide a standard evaluation for this problem.

The portion of the Rating Schedule that addresses the skin has been revised (67 FR 49590, July 31, 2002) since the comment was written. Diagnostic code 7800 is no longer limited to evaluation of scarring of the skin. The revised evaluation criteria include a 30-percent evaluation for gross distortion or asymmetry of a paired set of features with visible or palpable tissue loss. Since by definition, phthisis bulbi is a shrunken or atrophic eyeball, there would be visible or palpable tissue loss, and this level of evaluation under diagnostic code 7800 would apply. Any other cosmetic defect of the eyeball that meets the criteria for disfigurement could also be evaluated under diagnostic code 7800, with the level of evaluation based on application of the criteria for disfigurement. Therefore, we make no change based on this comment.

Proposed § 4.75(e) instructed adjudicators to increase evaluations by 10 percent in situations where a claimant has anatomical loss of one eye with inability to wear a prosthesis. One commenter suggested that 10 percent be added in the absence of anatomical loss but with deformity and inability to wear a prosthesis. The evaluation criteria of diagnostic code 7800 would apply in this situation. The level of evaluation for deformity and inability to wear a prosthesis could be more or less than 10 percent, depending on the extent of disfigurement. However, to avoid pyramiding under 38 CFR 4.14 (“the evaluation of the same manifestation under different diagnoses [is] to be avoided”), an evaluation under diagnostic code 7800 would preclude an additional 10 percent for the same deformity under § 4.75. We have decided to also specify in § 4.75(e) that the 10-percent increase in evaluation under that provision for anatomical loss of one eye with inability to wear a prosthesis precludes an evaluation under diagnostic code 7800 based on gross distortion or asymmetry of the eye.

We made nonsubstantive revisions to proposed § 4.75(b), (c), (d), (e), and (f) to improve clarity.

We proposed to delete § 4.83, which stated that a person not able to read at any one of the scheduled steps or distances, but able to read at the “next scheduled step or distance,” is to be rated as reading at this latter step or distance. A commenter noted that this rule is vital for determining whether to select the higher or lower evaluation and recommended that we retain § 4.83. In our view, an adjudicator could simply refer to 38 CFR 4.7 to determine the correct evaluation. However, we will retain this instruction to promote consistency of evaluations. We have included the following language in § 4.76(b) at § 4.76(b)(4): “To evaluate the impairment of visual acuity where a claimant has a reported visual acuity that is between two sequentially listed visual acuities, use the visual acuity which permits the higher evaluation.”

We proposed that visual acuity would generally be evaluated on the basis of corrected distance vision. One commenter suggested that because VA policy is to rate on central acuity, not eccentric viewing, we should revise the proposed language of § 4.76(b)(1) to clarify that even when a central scotoma is present, central visual acuity is evaluated based upon best corrected distance vision with central fixation. We agree that central visual acuity should be emphasized. To assure consistency of evaluation and eliminate the variability that could result if eccentric vision were tested, we have revised the language of proposed § 4.76(b)(1) according to the commenter's suggestion. For the sake of consistency, we have also added “central” to § 4.76(a) before “ uncorrected and corrected visual acuity”.

Another commenter asked how visual acuity is determined if central fixation is not possible. Visual acuity can be determined in these cases by optometrists and ophthalmologists, because they are routinely trained in special methods and techniques that allow them to assess visual acuity and/or function when there is loss of central fixation. Thus, central visual acuity can still be used to rate visual impairment, even if central fixation is impossible.

In § 4.76(b)(1), we proposed to amend how we evaluate visual acuity where there is a significant difference in the lens required to correct distance vision in the poorer eye compared to the lens required to correct distance vision in the better eye. We proposed to evaluate the visual acuity of the poorer eye using either its uncorrected visual acuity or its visual acuity as corrected by a lens that does not differ by more than three diopters from the lens needed for correction of the other eye, whichever results in better combined visual acuity. This provision reduced the diopter difference required for application of this provision from the current requirement of more than four diopters to a requirement of more than three diopters. We proposed to reduce the diopter difference because at more than three diopters there is a significant possibility that a claimant will have visual difficulties. However, we have learned that even reducing the diopter difference required for application of this provision from more than four diopters to more than three diopters may still not assure that the individual's brain will be able to “fuse” the two differently sized images. The inability to do so results in an intolerable optical correction from clinically significant aniseikonia (where the ocular image of an object as seen by one eye differs in size and shape from that seen by the other).

Therefore, we have decided to remove the language “by a lens that does not differ by more than three diopters from the lens needed for correction of the other eye.” By permitting evaluation based on either uncorrected vision or corrected vision without specifying the refractive power of the lens, we can accommodate both individuals who do experience visual difficulty when wearing such different lenses and individuals who do not experience visual difficulty.

Further, we have added to § 4.76(b)(1) language stating, “and either the poorer eye or both eyes are service connected” to emphasize VA's authority to service connect unilateral visual impairment. This additional language clarifies that VA evaluators must apply this provision whether disability of either only one eye (the poorer eye) or both eyes is service-connected.

We made nonsubstantive revisions to proposed § 4.76(a), (b)(1), (b)(2) and (b)(3) to improve clarity.

We proposed to remove § 4.76a because directions for evaluating visual fields were revised and moved to § 4.77. The proposed rule did not make it clear whether or not Table III and Figure 1, which are part of § 4.76a, were to be retained. Table III lists the normal degrees of the visual field at the eight principal meridians and also gives an example of computing concentric contraction of abnormal visual fields. One commenter suggested that we retain the example of computing visual fields because it is useful for understanding the material on average concentric contraction. We agree, and although we have deleted from § 4.76a the text preceding Table III, we have retained Table III (including the example) and Figure 1 in the final rule.

Proposed § 4.77(a) stated that to be adequate for VA purposes, examinations of visual fields must be conducted using a Goldmann kinetic perimeter or equivalent kinetic method, using a standard target size and luminance (Goldmann's equivalent (III/4e)). It required that at least 16 meridians 221/2 degrees apart be charted for each eye. Table III listed the normal extent of the visual fields (in degrees) at the 8 principal meridians (45 degrees apart). It also stated that the examination must be supplemented by the use of a tangent screen when the examiner indicates it is necessary.

The preamble to the proposed rule also stated that until there are reliable standards for comparing the results from static and kinetic perimetry, we propose to retain the requirement for the use of Goldmann kinetic perimetry, which is more reliable than the alternatives. One commenter suggested that VA's disability examination worksheet for the eye also specify the use of a Goldmann kinetic perimeter or equivalent kinetic examination method.

After the proposed rule was published, software programs for automated perimetry were developed that completely simulate results from Goldmann perimetry and can be charted on standard Goldmann charts. The Compensation and Pension Service, after consultation with the Veterans Health Administration's Chiefs of Ophthalmology and Optometry, sent a letter (FL06-21) on November 8, 2006, to the Veterans Benefits Administration regional offices stating that Humphrey Model 750, Octopus Model 101, and later versions of these perimetric devices with simulated kinetic Goldmann testing capability are acceptable devices for determining the extent of visual field loss for compensation and pension eye rating examinations.

Therefore, we have changed proposed § 4.77(a) to indicate that examiners must assess visual fields using either Goldmann kinetic perimetry or automated perimetry using Humphrey Model 750, Octopus Model 101, or later versions of these perimetric devices with simulated kinetic Goldmann testing capability. We also clarified the directions about the Goldmann equivalent that must be used for phakic (normal), aphakic, and pseudophakic individuals. The content of the disability examination worksheets is beyond the scope of this rulemaking, and we make no change based on the comment about the worksheet.

We proposed to evaluate visual fields by using a Goldmann kinetic perimeter or equivalent kinetic method, using a standard target size and luminance (Goldmann's equivalent (III/4e)). That Goldmann equivalent is useful for evaluating visual fields except in certain cases where a larger equivalent size is needed. We have therefore clarified the use of Goldmann equivalents in the final rule by revising proposed § 4.77(a) to state that, for phakic (normal) individuals, as well as for pseudophakic or aphakic individuals who are well adapted to intraocular lens implant or contact lens correction, visual field examinations must be conducted using a standard target size and luminance, which is Goldmann's equivalent III/4e. For aphakic individuals not well adapted to contact lens correction or pseudophakic individuals not well adapted to intraocular lens implant, visual field examinations must be conducted using Goldmann's equivalent IV/4e.

Proposed § 4.77(a) stated that “[a]t least two recordings of visual fields must be made” for purposes of VA's disability evaluations. We have learned from vision specialists that this is not necessary and is not standard procedure, since the visual field outline is determined by testing multiple objects along each meridian. Therefore, we have removed the language requiring “two recordings” as unnecessary. In conjunction with this change, we have also removed the proposed statement that the confirmed visual fields must be made a part of the examination report. Instead, we have stated in § 4.77(a) that in all cases, the results of visual field examinations must be recorded on a standard Goldmann chart. We additionally require that the Goldmann chart be included with the examination report.

Proposed § 4.77(a) also said that the examination must be supplemented by the use of a tangent screen when the examiner indicates it is necessary. We have determined that a 30-degree threshold visual field with the Goldmann III stimulus size could be used in lieu of a tangent screen. This test provides information similar to the tangent screen. For this reason, the final rule provides that adjudicators must consider either of these two tests when additional testing of visual fields becomes necessary, and requires that the examination report include either the tracing of the tangent screen or the tracing of the 30-degree threshold visual field.

We made further nonsubstantive revisions to proposed § 4.77(a), (b), and (c) to improve clarity.

In proposed § 4.78(b)(1), we provided guidance concerning the evaluation of diplopia, and proposed that adjudicators assign an evaluation for diplopia for only one eye. Further, we proposed that where a claimant has both diplopia and decreased visual acuity or a visual field defect, the corrected visual acuity for the poorer eye (or the affected eye, if only one eye is service-connected) is deemed to be, depending on the severity of the diplopia, between one and three steps poorer, provided that the adjusted level of corrected visual acuity does not exceed 5/200. Using the adjusted visual acuity for the poorer eye (or the affected eye) and the corrected visual acuity for the better eye, we proposed that the claimant's visual impairment be evaluated under diagnostic codes 6064 through 6066. Proposed diagnostic code 6064 refers to light perception only (LPO), which exceeds a visual acuity level of 5/200. Hence, an evaluation under diagnostic code 6064 is not permitted under § 4.78(b). Therefore, in § 4.78(b)(1) we have omitted reference to diagnostic code 6064.

We proposed not to retain in § 4.78(b)(1) the rule from former § 4.77 (Examination of muscle function) which stated that “[d]iplopia which is only occasional or correctable is not considered a disability,” since it pertains to the issue of service connection rather than evaluation. Section 4.78(b)(1) addresses evaluation of muscle function rather than service connection. One commenter stated that this rule provides useful guidance to adjudicators considering claims for service connection for diplopia. In response to this comment, and because disease of or injury to one or more extraocular eye muscles may cause diplopia which is occasional or correctable, rather than including this language in § 4.78(b)(1), we have added a note under diagnostic code 6090 (diplopia) stating that in accordance with 38 CFR 4.31, diplopia that is occasional or that is correctable with spectacles is evaluated at 0 percent. This would clarify how to evaluate diplopia with these characteristics.

In order to remove any doubt about the difference between § 4.78(b)(2), which explains how to evaluate diplopia that is present in more than one quadrant or range of degrees, and § 4.78(b)(3), which explains how to evaluate diplopia that exists in two separate areas of the same eye, we have changed the language of § 4.78(b)(2) from “[w]hen diplopia is present in more than one quadrant,” as proposed, to “[w]hen diplopia extends beyond more than one quadrant”. This is similar to the language in the current rating schedule and will ensure a clear distinction between these provisions.

We made nonsubstantive revisions to proposed § 4.78 (a) and (b) to improve clarity.

We proposed to evaluate angle-closure glaucoma (diagnostic code 6012), which often presents as a red, painful eye, sometimes accompanied by nausea and vomiting, either on the basis of visual impairment or on the basis of incapacitating episodes, whichever results in a higher evaluation. We proposed to evaluate open-angle glaucoma (diagnostic code 6013), which generally presents as painless, chronic, progressive loss of vision, solely on the basis of visual impairment because open-angle glaucoma is unlikely to result in incapacitating episodes.

One commenter questioned why angle-closure glaucoma based on incapacitating episodes does not include a 10-percent evaluation for incapacitating episodes of at least 1 week, but less than 2 weeks total duration per year, when diagnostic codes 6000 through 6009 provide for such an evaluation. Under the proposed rule, a minimum evaluation of 10 percent would be assigned for angle-closure glaucoma if continuous medication is required. In our view, virtually all claimants with symptomatic angle-closure glaucoma would require continuous medication, which would entitle them to a minimum 10-percent evaluation. Therefore, we did not propose a 10-percent evaluation based on incapacitating episodes. We make no change based upon this comment.

One commenter suggested that we evaluate both angle-closure and open-angle glaucoma on the basis of visual field loss or central visual acuity impairment, whichever results in a higher evaluation. Section 4.75(a) states that the evaluation of visual impairment is based on impairment of visual acuity (excluding developmental errors of refraction), visual field, and muscle function. All three elements of visual impairment may be present in glaucoma, although visual field loss is most common. Not only would the commenter's suggestion limit the rating possibilities to two of the three elements of visual impairment, it also would not allow for evaluation of angle-closure glaucoma based on incapacitating episodes. Section 4.75(b) states that eye examinations must be conducted by a licensed optometrist or ophthalmologist, and such specialists are unlikely to overlook a visual field defect or any other type of visual impairment in an individual with glaucoma. In our judgment, allowing evaluation to be based on any of the three elements of visual impairment or on incapacitating episodes is a fair way to assess glaucoma and to assure that the veteran is evaluated based on the disabling effects that provide the higher benefit. We have therefore not adopted the commenter's suggestion.

We proposed that certain eye disabilities be evaluated either on visual impairment or on incapacitating episodes, whichever results in a higher evaluation. We proposed to define an incapacitating episode as a period of acute symptoms severe enough to require bed rest and treatment by a physician or other healthcare provider.

One commenter suggested that the rating formula based on incapacitating episodes—60 percent if there are incapacitating episodes of at least 6 weeks total duration per year, 40 percent if there are incapacitating episodes of at least 4 weeks, but less than 6 weeks, total duration per year, etc.—is miserly because a veteran will be compensated only for visual impairment or periods of incapacitation, but not both, and with less than bedrest, the veteran receives nothing.

In most eye diseases, visual impairment will be the major problem and therefore the more common basis of evaluation. With modern medical and surgical treatment, few patients require bedrest of any duration for eye disease. However, an evaluation based on incapacitating episodes might be higher in those few cases in which bedrest might be required, e.g., angle-closure glaucoma with severe pain, nausea, and vomiting. If bedrest is not required, evaluation is based on visual impairment. The evaluations based on visual impairment and those based on incapacitating episodes are both meant to account for the average occupational impairment. Providing alternative criteria allows the rater to evaluate using the set of criteria more favorable to the veteran.

The same commenter asked why there is a maximum evaluation of 60 percent for incapacitating episodes.

As stated above, with modern medical and surgical treatment, very few, if any, veterans will experience incapacitating episodes of more than 6 weeks total duration per year due to eye disease. However, for any who do, 38 CFR 4.16(a), which provides for a total evaluation based on individual unemployability, and 38 CFR 3.321(b)(1), which provides for extra-schedular evaluations in cases where an evaluation is inadequate because the condition presents such an unusual disability picture that applying the regular schedular standards would be impractical, provide reasonable alternatives for assigning an evaluation greater than 60 percent. In our judgment, the range of evaluations we have provided based on incapacitating episodes of eye disease will adequately compensate veterans, and a 100-percent evaluation level based on incapacitating episodes is not warranted.

Conditions evaluated on the basis of incapacitating episodes are entitled to a 60-percent evaluation when the claimant has experienced at least 6 weeks of incapacitating episodes over the preceding 12 months. One commenter suggested that, in some cases, an adjudicator would not be able to assign the maximum 60-percent evaluation until after the passage of an entire year, and felt that evaluations based upon incapacitating episodes should be retroactive to the date of the first incapacitating episode, regardless of when it occurred.

By statute (38 U.S.C. 5110(a)), except as otherwise provided, the effective date of an award of compensation will be fixed in accordance with the facts but not before the date of receipt of the claim. Furthermore, an award of increased compensation will be effective the earliest date it is ascertainable that an increase in disability occurred if application is received within 1 year of that date. 38 U.S.C. 5110(b)(2). Otherwise, the effective date is the date the claim was received. 38 CFR 3.400(o)(2). We are aware of no special provisions that would apply to the evaluation of incapacitating episodes of the eye. Under governing law, entitlement to a 60-percent rating would not arise until 6 weeks of incapacitating episodes have taken place, and the effective date could not be established before then. Once the claimant has experienced 6 weeks of incapacitating episodes, the 60-percent evaluation will be assigned, even if the evaluation occurs within several months of the initial incapacitating episode. In cases where it takes the entire 12-month period for a claimant to experience 6 weeks of incapacitating episodes, the 60-percent evaluation will be assigned at that time. However, during the interim, a rating corresponding to the total duration of incapacitating episodes already experienced may be assigned. That is to say, once 1 week of incapacitating episodes is experienced, a 10-percent rating may be assigned; once 2 weeks of incapacitating episodes are experienced, a 20-percent rating may be assigned; etc. We make no change based on this comment.

The proposed criteria based on incapacitating episodes referred to the total duration of incapacitating episodes “per year”. To clarify that we mean during the preceding 12-month period, and not the calendar year, we have changed this language to refer to incapacitating episodes “during the past 12 months”. This language is consistent with other provisions in the rating schedule that evaluate incapacitating episodes (e.g., diagnostic code 5243, intervertebral disc syndrome, and diagnostic code 7354, hepatitis C). We are also adding language to indicate that bed rest must be prescribed by a physician to the notes following diagnostic codes 6000 through 6009 and diagnostic code 6012 of the rating schedule. This clarifies VA's intent in the proposed rule and makes a nonsubstantive change for clarification purposes.

One commenter asked for clarification as to whether the absence of light perception is to be evaluated as anatomical loss of one eye (diagnostic code 6063) or light perception only (diagnostic code 6064).

Section 4.75(d) states that the evaluation for visual impairment of one eye must not exceed 30-percent unless there is anatomical loss of the eye. This is clear and straightforward and names no exceptions. Therefore, in evaluating visual acuity of one eye, no light perception is evaluated the same as light perception only. To avoid confusion, we have revised the titles of diagnostic codes 6062 to “No more than light perception in both eyes” and 6064 to “No more than light perception in one eye.”

As previously discussed under one of the comments about diplopia, we have added a note to diagnostic code 6090 stating that occasional or correctable diplopia will be evaluated as 0-percent disabling.

One commenter asked that we clarify whether the use of an eye patch for diplopia warrants special monthly compensation (SMC) ( see 38 CFR 3.350) for loss or loss of use of an eye. Since the eye is present when an eye patch is used for diplopia, SMC for loss of an eye is not warranted. Visual impairment due to diplopia is determined without the eye patch, and it could be at any level of severity, so SMC for loss of use of an eye is also not warranted. The fact that the eye is not being used when it is patched does not necessarily mean it cannot be used, which would be required for loss of use.

We use the word “alternatively” instead of the proposed “otherwise” in diagnostic code 6011 for clarity and add “if this would result in a higher evaluation” for further guidance. We use similar language in diagnostic code 6081 for the same purpose. We additionally edited the proposed criteria for evaluating malignant neoplasms of the eyeball (diagnostic code 6014) for the sake of clarity.

VA appreciates the comments submitted in response to the proposed rule. Based on the rationale stated in the proposed rule and in this document, the proposed rule is adopted as final with the changes noted.

The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any year. This final rule would have no such effect on State, local, and tribal governments, or on the private sector.

This document contains no provisions constituting a collection of information under the Paperwork Reduction Act (44 U.S.C. 3501-3521).

Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Executive Order classifies a “significant regulatory action,” requiring review by the Office of Management and Budget (OMB) unless OMB waives such review, as any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

The economic, interagency, budgetary, legal, and policy implications of this final rule has been examined, and it has been determined to be a significant regulatory action under the Executive Order because it is likely to result in a rule that may raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. This final rule would not affect any small entities. Only VA beneficiaries could be directly affected. Therefore, pursuant to 5 U.S.C. 605(b), this final rule is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

The Catalog of Federal Domestic Assistance program numbers and titles are 64.104, Pension for Non-Service-Connected Disability for Veterans, and 64.109, Veterans Compensation for Service-Connected Disability.

I. Background

On July 14, 2008 (73 FR 40228), EPA published a notice of proposed rulemaking (NPR) for the State of Delaware. The NPR proposed approval of the Regulation 1148—Control of Stationary Combustion Turbine Electric Generating Unit Emissions. The formal SIP revision was submitted by the State of Delaware on September 11, 2007.

Regulation 1148 requires that an owner or operator of an existing stationary combustion turbine electric generating unit located in Delaware with a base-load nameplate capacity of 1 megawatt (MW) or greater must, by May 1, 2009, either demonstrate that the existing stationary combustion turbine generating unit meets the emission limits listed below or must install NO X emission controls designed to meet these limits:

• For CTs that burn gaseous fuel—42 parts per million volume (ppmv) NO X .

• For CTs that burn liquid fuel—88 ppmv NO X .

Design of these limits was based on anticipated NO X emissions if water injection pollution control equipment were installed. The six CTs affected by this regulation operate without any NO X pollution control equipment, although they are subject to regulations designed to control NO X emissions. Delaware determined that the six sources could achieve significant reductions in their NO X emissions through the use of water injection equipment. EPA has previously recognized this equipment and technology as reasonably available control technology (RACT). Water injection is a proven, feasible technology that has been used in other states to reduce NO X emissions.

This revision will reduce NO X emissions from CTs by 40 percent, or by 0.88 tons per day to approximately 1.33 tons per day. Such a reduction will significantly improve air quality, particularly on days when CTs normally operate, i.e., hot humid days and when weather conditions are conducive to forming ground-level ozone, and is one of the many regulatory steps taken to allow Delaware to attain the National Ambient Air Quality Standards (NAAQS) by 2010.

Other specific requirements of Regulation 1148 and the rationale for EPA's proposed action are explained in the NPR and will not be restated here. No public comments were received on the NPR.

EPA is approving Regulation 1148—Control of NO X Emissions from Stationary Combustion Turbine Electric Generating Units as a revision to the Delaware SIP.

Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et. seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et. seq. );

• 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);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

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 action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by January 9, 2009. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action 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 to control NO X emissions from stationary combustion turbine electric generating units in Delaware may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

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

On July 29, 2003, Illinois submitted a site-specific SO 2 State Implementation Plan (SIP) revision request for the Central Illinois Light Company, in Bartonville, Peoria County, Illinois (CILCO Edwards). The facility is now known as AmerenEnergy Resources Generating Company, Edwards Power Plant. The SIP revision request, which amended CILCO (AmerenEnergy) Edwards' SO 2 emission limits, was identical to an earlier temporary SIP revision, which EPA approved on April 13, 2000 (65 FR 19838). Therefore, on November 12, 2004 (69 FR 65378), EPA approved the July 29, 2003, permanent SIP revision request as a direct final action. However, on December 13, 2004, EPA received adverse comments on the action. EPA withdrew the direct final approval on January 11, 2005 (70 FR 1824). The adverse comments and EPA's responses are given in section III below.

CILCO (AmerenEnergy) Edwards operates three boilers, numbered 1, 2, and 3. Its SO 2 emission limits are codified at 35 Illinois Administrative Code (IAC) 214.561. Previously, the Illinois SO 2 SIP limited the emissions from Boilers 1 and 3 to 6.6 pounds of SO 2 per million British Thermal Units (lb/MMBtu) and Boiler 2's emissions to 1.8 lb/MMBtu (See 35 IAC 214.141). The July 29, 2003, SIP revision request incorporated rule changes which were identical to the limits in the variance submitted on May 21, 1999, and approved by EPA on April 13, 2000. The average SO 2 emissions from Boilers 1, 2, and 3, as a group, may not exceed 4.71 lb/MMBtu actual heat input. The average SO 2 emissions from any one boiler may not exceed 6.6 lb/MMBtu actual heat input. CILCO (AmerenEnergy) Edwards must determine compliance with these limits on a daily basis using the SO 2 methodology of the Phase II Acid Rain program set forth in 40 CFR part 75. A plantwide SO 2 emission limit for CILCO (AmerenEnergy) Edwards restricts Boilers 1, 2, and 3, as a group, to 34,613 pounds SO 2 per hour (lb/hr) on a 24-hour average. Compliance with the plantwide limit must also be determined on a daily basis using the Phase II Acid Rain methodology.

EPA received one set of comments from Heart of Illinois Sierra Club, dated December 13, 2004, which disagreed with EPA's direct final action.

Comment: The commenter cited that in 2004, the Environmental Integrity Project ranked CILCO (AmerenEnergy) Edwards 47th in the United States for SO 2 emissions. The commenter also stated that the CILCO (AmerenEnergy) Edwards facility “emits approximately 13% of the state's SO 2 emissions and lacks even rudimentary pollution controls. The proposed emission rate of 4.71 lb/MMBtu reflects the facility's refusal to install pollution controls and is at least 4 times higher than the limits proposed for new coal-fired power plants.”

Response: EPA notes that the Environmental Integrity Project's report from May 2004 does rank CILCO (AmerenEnergy) Edwards as 47th in the nation by total tons per year of SO 2 . The report also shows that the twelve power plants with the highest SO 2 emissions in the United States emitted more than twice CILCO (AmerenEnergy) Edwards' SO 2 emissions, in tons per year. Illinois' Annual Air Quality Report for 2003 (IEPA/BOA/04-019, August 2004) indicated that the State's total point source SO 2 emissions for 2003 were 512,320.6 tons per year (tpy), and the total SO 2 emissions from external fuel combustion electric generation sources were 348,602.0 tpy (Table C4). Total fuel combustion SO 2 emissions were estimated in the report as 414,050.0 tpy (Table 8). CILCO (AmerenEnergy) Edwards' 55,035 tpy SO 2 for 2003 would be 10.7%, 15.8%, and 13.3% of these totals, respectively. EPA agrees that CILCO (AmerenEnergy) Edwards is a large facility with significant SO 2 emissions. Its boilers have control systems for nitrogen oxides and particulate matter, but not for SO 2 . As part of the variance in 1999, the Illinois Pollution Control Board required CILCO (AmerenEnergy) Edwards to research and report on techniques to control its SO 2 emissions. CILCO (AmerenEnergy) Edwards reported that installing flue gas desulfurization systems to control SO 2 would be both economically and technically infeasible. The CILCO (AmerenEnergy) Edwards facility does not have the necessary space available to install them.

The States prepare SIPs in order to maintain the ambient air quality standards, pursuant to section 110 of the Clean Air Act (CAA). In its review of State SO 2 SIPs and SIP revision requests, EPA generally does not prescribe specific control measures, nor does it comment on the size of individual facilities. Rather, EPA requires that the emission limits be clear, enforceable, and protective of the National Ambient Air Quality Standards (NAAQS) for SO 2 . The level of emissions allowed for new coal-fired plants in Illinois is not necessarily relevant to the emission limits of existing sources. Newer facilities may be expected to be more efficient or better suited for current control technology. Illinois may determine how best to manage its emission regulations, as long as the NAAQS continue to be maintained. In support of the 1999 variance, Illinois submitted air quality modeling results which evaluated the highest ground-level SO 2 concentrations possible with CILCO (AmerenEnergy) Edwards operating in compliance with the 1999 variance limits. This modeling, which included the SO 2 emissions from other nearby sources and a background SO 2 concentration value, showed that CILCO (AmerenEnergy) Edwards did not cause or contribute to a violation of the SO 2 NAAQS. EPA believes that the State has demonstrated that the CILCO (AmerenEnergy) Edwards rule revision will maintain the NAAQS.

Comment: The public was led to believe that the variance approved in 2000 would be a temporary measure.

Response: The 2000 action did in fact address a temporary measure. The Illinois Pollution Control Board (IPCB) anticipated that the company might ask for a permanent revision to its emission limits. The variance required CILCO (AmerenEnergy) Edwards to research and consider alternatives for complying with Phase II of the Acid Rain Program, report back to the IPCB, and if necessary, apply by February 28, 2002, for permanent SO 2 emission limit changes. The April 13, 2000, Federal Register made note of this provision at 65 FR 19839. It was not possible to inform the public of CILCO (AmerenEnergy) Edwards' intentions, since they were unknown to EPA at the time. CILCO (AmerenEnergy) Edwards might have reverted to its former limits, applied for the 1999 variance to be made permanent in 2002, or applied at any time for a different rule revision altogether.

Comment: The timetable for review and available information is inadequate. The commenter requested additional time for review and also requested that EPA provide a public hearing to discuss the SIP revision prior to acting on it.

Response: Upon receipt of the adverse comments, EPA withdrew the direct final action. The comment period was not extended. Thirty days is the usual comment period for a SIP action. The November 12, 2004, action was expected to be noncontroversial because it addressed a SIP revision which was identical to the SIP rule variance which EPA approved on April 13, 2000. There was a thirty day comment period for the April 13, 2000, action as well, and no comments were received at the time.

In accordance with SIP procedures, the State of Illinois provided an opportunity for a public hearing on this proposed action prior to its adoption by the Illinois Pollution Control Board. The Notice of Hearing for this petition was filed on August 21, 2002, and the public hearing was held on October 11, 2002. Representatives from the Illinois Environmental Protection Agency and CILCO (AmerenEnergy) Edwards gave statements. No members of the public attended the hearing.

Comment: EPA must complete the New Source Review investigation prior to approving this SIP revision. EPA should not approve a variance for a coal-fired power plant to skirt existing SO 2 limits for a facility that is under active investigation for a new source review violation.

Response: Ongoing New Source Review investigations are not pertinent to the SIP approval process. It is not possible to anticipate the final outcome of these investigations. Any effect on allowable emissions or SIP rules will occur on a separate schedule. The courts did not place restrictions on the facilities under investigation that would have precluded SIP rulemaking actions; nor did the fact of such an investigation occurring within EPA place such restrictions. Since CILCO (AmerenEnergy) Edwards' proposed new limits were properly adopted by the State and were shown through air quality modeling to protect the SO 2 NAAQS, they are Federally approvable.

Comment: The modeling fails to include new sources which have been built, permitted, or have applied for permits since 1999. The comment named Indeck-Elwood, Peabody's Prairie State Generating Station, Enviropower Franklin County Proposal, CornBelt Energy, the Dynegy Baldwin expansion, Franklin Power, the Marion IGCC proposal, a new coal plant in Springfield, Illinois, the Holcim Cement Plant in Missouri, and the proposed Peabody Thoroughbred power plant in Kentucky as other large SO 2 sources that were not included in the CILCO (AmerenEnergy) Edwards modeling.

Response: Illinois' SIP emission inventory does not include sources which are not yet operating. Several of the commenter's named sources were not operating in 1998, when the CILCO (AmerenEnergy) Edwards modeling was completed, and some have not begun operating to date. As part of the Prevention of Significant Deterioration (PSD) permitting process, new sources address the maintenance of the NAAQS with dispersion modeling that includes neighboring sources. Such modeling would address the combined impact of the new source and existing nearby sources.

Illinois' emission inventory for the CILCO (AmerenEnergy) Edwards rule included large SO 2 sources within 50 kilometers (km) of CILCO (AmerenEnergy) Edwards. The Industrial Source Complex Short Term model (ISCST3), EPA's recommended regulatory dispersion model in 1998, is not considered appropriate for use beyond a 50 km distance. All of the facilities named by the commenter are beyond 100 km from CILCO (AmerenEnergy) Edwards. A background SO 2 concentration, determined by actual monitored air quality data, was added to the modeled concentrations in a NAAQS analysis to represent the impacts of sources too distant to explicitly include in the modeling study.

Comment: CILCO (AmerenEnergy) Edwards must conduct SO 2 modeling that considers whether there are 24-hour or other SO 2 NAAQS violations, and whether there is any impact of CILCO (AmerenEnergy) Edwards on the Mingo National Wildlife Refuge or any other Class I area.

Response: CILCO (AmerenEnergy) Edwards conducted air quality modeling to address the impacts of the variance in 1998. The 1998 modeling addressed all three averaging times for the SO 2 NAAQS (3 hour, 24 hour, and annual). No violations were found. The Mingo National Wildlife Refuge and the next nearest Class I area, Mammoth Cave National Park, are both over 300 km from CILCO (AmerenEnergy) Edwards. As stated before, the ISCST3 model is not considered appropriate for such distances. CILCO (AmerenEnergy) Edwards' SIP revision request was submitted in 2002, and at that time, EPA did not require Class I area analyses when the source was more than 100 km from a Class I area. Some current models can evaluate long-range transport beyond 100 km, but CILCO (AmerenEnergy) Edwards' distance from Class I areas and the emission change represented by the 1999 variance do not indicate a need for additional long-range transport modeling.

Comment: EPA must consider CILCO (AmerenEnergy) Edwards' impact on PM 2.5 and 8-hour ozone NAAQS.

Response: The SO 2 SIP revision for CILCO (AmerenEnergy) Edwards retains the facility's 34,613 lb/hr overall SO 2 emissions cap and does not provide for an increase in PM 2.5 precursor emissions. The SIP revision does not provide for increases in ozone precursors. The States are required to submit attainment plans for areas designated nonattainment for particulate matter less than 2.5 microns in diameter (PM 2.5 ) and ozone on an 8-hour average. These plans are being prepared separately under statutory schedules. Where appropriate, CILCO (AmerenEnergy) Edwards' emissions will be included in the analyses and control strategies. These ongoing actions do not affect the ability of CILCO (AmerenEnergy) Edwards to demonstrate that its SO 2 limits address the NAAQS for SO 2 . If further revisions to CILCO (AmerenEnergy) Edwards' SO 2 limits are necessary as part of the PM 2.5 or ozone SIPs, Illinois must submit such revisions for Federal approval as they are developed.

Comment: EPA has not complied with the Endangered Species Act (ESA). Federal agencies are required to review their actions “to insure that any action authorized, funded, or carried out by such agency * * * is not likely to jeopardize the continued existence of any endangered species * * * .” See Sec. 7(a)(2) of the Endangered Species Act.

Response: EPA disagrees with the commenter. Under relevant CAA provisions, States are entitled to administer their own plans for the implementation, maintenance, and enforcement of the national primary and secondary ambient air quality standards. 42 U.S.C. 7410. EPA is required to approve a State's revision to its SIP that meets all applicable CAA requirements. 42 U.S.C. 7410(k)(3). Illinois' proposed SIP revision for CILCO (AmerenEnergy) Edwards satisfies the conditions of section 110(l) of the CAA, the applicable CAA requirement. Accordingly, and as confirmed by recent Supreme Court precedent, the ESA requirements cited in the comments do not apply to EPA's decision to approve Illinois' SIP revision for CILCO (AmerenEnergy) Edwards. See 50 CFR 402.03; National Ass'n of Home Builders v. Defenders of Wildlife, 127 S. Ct. 2518 (2007) ( Defenders of Wildlife ).

Section 7(a)(2) of the ESA generally requires Federal agencies to consult with the relevant Federal wildlife agencies to ensure that actions they authorize, fund, or carry out are not likely to jeopardize the continued existence of Federally-listed endangered or threatened species, or result in the destruction or adverse modification of designated critical habitat of such species. 16 U.S.C. 1536(a)(2). In accordance with relevant ESA implementing regulations, this requirement applies only to actions in which there is discretionary Federal involvement or control. 50 CFR 402.03. In National Ass'n of Home Builders v. Defenders of Wildlife, 127 S. Ct. 2518 (2007) ( Defenders of Wildlife ), the Supreme Court examined these provisions in the context of EPA's decision to approve a State permitting program under the Clean Water Act (CWA). In that case, the Court held that when a Federal agency is required by statute to undertake a particular action once certain specified triggering events have occurred, there is no relevant agency discretion, and thus the requirements of ESA section 7(a)(2) do not apply. 127 S. Ct. at 2536.

With regard to EPA's transfer of CWA permitting authority to a State, the Court found that the relevant CWA provision mandated that EPA “shall approve” a State permitting program if a list of CWA statutory criteria are met. Therefore, EPA lacked the discretion to deny a transfer application that satisfied those criteria. Id. at 2531-32. The Court also found that the relevant CWA program approval criteria did not include consideration of endangered or threatened species, and stated that “[n]othing in the text of [the relevant CWA provision] authorizes EPA to consider the protection of threatened or endangered species as an end in itself when evaluating [an] application” to transfer a permitting program to a State. Id. at 2537. Accordingly, the Court held that the CWA required EPA to approve the State's permitting program if the statutory criteria were met; those criteria did not include the consideration of ESA-protected species; and thus, consistent with 50 CFR 402.03, the non-discretionary action to transfer CWA permitting authority to the State did not trigger relevant ESA section 7 requirements.

Similar to the CWA program approval provision at issue in Defenders of Wildlife, section 110(k)(3) of the CAA mandates that EPA “shall approve” a SIP submittal that meets applicable CAA requirements. 42 U.S.C. 7410(k)(3). With respect to SIP revisions such as Illinois' requested revision, section 110(l) of the CAA provides the relevant applicable CAA requirements and prohibits the Administrator from approving a SIP revision that “would interfere with any applicable requirement concerning attainment and reasonable further progress * * *, or any other applicable requirement” of the CAA. 42 U.S.C. 7410(l).

As was the case with the CWA requirements in Defenders of Wildlife, the SIP requirements contained in section 110 of the CAA do not include protection of listed species, and section 110(l) of the CAA does not state that consideration of impacts on listed species is a factor to consider in approving SIP revisions. EPA's action on State SIP submittals is governed by section 110 of the CAA, which unequivocally directs EPA to approve State plans meeting applicable CAA requirements.

EPA recognizes that it exercises some judgment when evaluating whether a SIP submittal meets specific statutory criteria. However, as the Supreme Court held in Defenders of Wildlife, the use of such judgment does not allow the Agency “the discretion to add another entirely separate prerequisite”—such as the ESA section 7(a)(2) consultation requirements—to the list of required criteria EPA considers when determining whether it “shall approve” a SIP revision request. 127 S. Ct. at 2537.

Applying the reasoning of Defenders of Wildlife, the SIP approval criteria contained in the CAA do not provide EPA with the discretionary authority to consider whether approval of SIP revisions may affect any listed species. EPA has determined that Illinois has submitted a SIP revision request for CILCO (AmerenEnergy) Edwards that satisfies all of the applicable SIP requirements contained in section 110 of the CAA. 1 Thus, given the Supreme Court precedent and applicable regulations—see 50 CFR 402.03—EPA is without discretion to disapprove or condition the State's SIP revision request based on considerations regarding listed species, and the ESA requirements cited by the commenter are thus inapplicable to this approval action.

Comment: Approving a permanent variance appears to be illegal backsliding under CAA section 110, because the proposed rule would relax the clean air safeguards contained in the existing SIP.

Response: EPA disagrees. This SIP revision has been shown to maintain the SO 2 NAAQS under worst-case operating conditions. Therefore, it does not violate 110(l). Sections 110(l) and 110(n)(1) allow States to revise their SIPs and submit them to the EPA for review and approval.

EPA is approving a July 29, 2003, site-specific request to revise Illinois' SO 2 SIP for the Central Illinois Light Company E.D. Edwards Generating Station, now known as AmerenEnergy Resources Generating Company, Edwards Power Plant, in Bartonville, Peoria County, Illinois. The requested revision changes the SO 2 emission limits for the plant's three boilers.

Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve State choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves State law as meeting Federal requirements and does not impose additional requirements beyond those imposed by State law. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• 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);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the State, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

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 action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by January 9, 2009. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action 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).)

This is a summary of the Commission's Report and Order , MB Docket No. 07-280, adopted October 22, 2008, and released October 24, 2008. The Notice of Proposed Rule Making proposed the allotment of Channel 267A at Linden, Tennessee. See 73 FR 2211, published January 14, 2008. The full text of this Commission decision is available for inspection and copying during normal business hours in the Commission's Reference Information Center, 445 Twelfth Street, SW., Washington, DC 20554. The complete text of this decision may also be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc., 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone 1-800-378-3160 or http://www.BCPIWEB.com . This document does not contain proposed information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any proposed information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4). The Commission will send a copy of this Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

The allotment of Channel 267A at Linden was allotted herein to prevent removal of Linden's sole local service due to the grant of a contingent hybrid community of license application, File No. BNPH-20070502AFM. The FM Table already lists vacant but applied for Channel 267A at Linden. See 67 FR 59213, published September 20, 2002. In this regard, George S. Flinn, Jr. was the winning bidder of this vacant Linden allotment in Auction 70 for authority to construct a new FM station. Thereafter, the applicant filed a hybrid community of license application to substitute Channel 264C3 for vacant but applied for Channel 267A at Linden, reallot Channel 264C3 from Linden to Waynesboro, Tennessee, as its first local service, and modify the new FM station license to specify Channel 264C3 at Waynesboro. See BNPH-20070502AFM. The application was granted simultaneously with the release of the Report and Order in this proceeding. As a result, the Media Bureau's Consolidated Database System will reflect the assignment of Channel 264C3 at Waynesboro, Tennessee in lieu of Channel 267A at Linden, Tennessee for this new FM station.

This is a synopsis of the Report and Order in MB Docket No. 08-67, adopted October 22, 2008, and released October 24, 2008. The full text of this decision is available for inspection and copying during normal business hours in the FCC Reference Information Center at Portals ll, CY-A257, 445 12th Street, SW., Washington, DC 20554. The complete text of this decision may also be purchased from the Commission's copy contractor, Best Copying and Printing, Inc. 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone 1-800-378-3160 or http://www.BCPIWEB.com . This document does not contain proposed information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any proposed information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4). The Commission will send a copy of this Report and Order in a report to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

This document announces that, on October 31, 2008, OMB approved, for a period of three years, the information collection requirement(s) contained in section 73.624(g) of the rules. The Commission publishes this notice to announce the effective date of this rule. If you have any comments on the burden estimates listed below, or how the Commission can improve the collections and reduce any burdens caused thereby, please contact Cathy Williams, Federal Communications Commission, Room 1-C823, 445 12th Street, SW., Washington, DC 20554. Please include the OMB Control Number, 3060-0906, in your correspondence. The Commission will also accept your comments via the Internet if you send them to PRA@fcc.gov.

To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an e-mail to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the Commission is notifying the public that it received OMB approval on October 31, 2008, for the information collection requirement(s) contained in the Commission's rules at 47 CFR 73.624(g).

Under 5 CFR part 1320, an agency may not conduct or sponsor a collection of information unless it displays a current, valid OMB Control Number.

No person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act that does not display a valid OMB Control Number.

The OMB Control Number is 3060-0906 and the total annual reporting burden for respondents for this collection of information is as follows:

OMB Control Number: 3060-0906.

OMB Approval Date: 10/31/2008.

Expiration Date: 10/31/2011.

Title: Annual DTV Report, FCC Form 317; 47 CFR Section 73.624(g).

Form Number: FCC Form 317.

Type of Review: Revision of a currently approved collection.

Respondents: Business or other for-profit entities; Not-for-profit institutions.

Number of Respondents/Responses: 1,815 respondents; 3,630 responses.

Estimated Hours per Response: 2.0 hours-4.0 hours

Frequency of Response: Recordkeeping requirement; Annual reporting requirement.

Total Annual Burden: 10,890 hours.

Annual Burden Cost: $181,500.

Obligation to Respond: Required to obtain or retain benefits. The statutory authority for this collection of information is contained in Sections 154(i), 303, 336 and 403 of the Communications Act of 1934, as amended.

Nature and Extend of Confidentiality: There is no need for confidentiality with this collection of information.

Privacy Impact Assessment: No impact(s).

Needs and Uses: Congress has mandated that after February 17, 2009, full-power television broadcast stations must transmit only in digital signals, and may no longer transmit analog signals. On December 22, 2007, the Commission adopted a Report and Order In the matter of the Third Periodic Review of the Commission's Rules and Policies Affecting the Conversion to Digital Television , MB Docket No. 07-91, FCC 07-228, to establish the rules, policies and procedures necessary to complete the nation's transition to DTV. Specifically, as a result of the Report and Order, DTV stations that are permittees must comply with the requirements for feeable ancillary or supplementary services in section 73.624(g) (using FCC Form 317).

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The 2008 Pacific halibut PSC limit for vessels using trawl gear was established as 2,000 metric tons by the 2008 and 2009 harvest specifications for groundfish of the GOA (73 FR 10562, February 27, 2008).

In accordance with § 679.21(d)(7)(i), the Regional Administrator has determined that the 2008 Pacific halibut PSC limit allocated to vessels using trawl gear in the GOA will soon be reached. Therefore, NMFS is prohibiting directed fishing for groundfish by vessels using trawl gear in the GOA, except for directed fishing for pollock by vessels using pelagic trawl gear in those portions of the GOA that remain open to directed fishing for pollock. This closure also does not apply to fishing by vessels participating in the cooperative fishery in the Rockfish Pilot Program for the Central GOA.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA, (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such a requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay closing directed fishing for groundfish by vessels using trawl gear in the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of November 4, 2008.

The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

This action is required by § 679.21 and is exempt from review under Executive Order 12866.