The FAA has determined that notice and opportunity for prior public comment hereon are impracticable because these procedures would significantly delay issuance of the approval design and thus delivery of the affected aircraft. In addition, the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA, therefore, finds that good cause exists for making these special conditions effective upon issuance.

We invite interested persons to submit written data, views, or arguments as they desire. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data. We ask that you send us two copies of written comments.

We will file in the docket all comments we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning these special conditions. You may inspect the docket before and after the comment closing date. If you wish to review the docket in person, go to the address in the ADDRESSES section of this preamble between 7:30 a.m. and 4 p.m., Monday through Friday, except Federal holidays.

We will consider all comments we receive on or before the closing date for comments. We will consider comments filed late if it is possible to do so without incurring expense or delay. We may change these special conditions based on the comments we receive.

If you want the FAA to acknowledge receipt of your comments on this proposal, send us a pre-addressed, stamped postcard on which the docket number appears. We will stamp the date on the postcard and mail it back to you.

On September 18, 2009, Garmin International applied for a supplemental type certificate for installation of the Mid-Continent Instruments MD835 Lithium Ion battery in the G1000 & GFC700 equipped Cessna model 525 Citation Jet. The model 525 is a two-engine turbofan aircraft certified in the normal category under Title 14, part 23. The aircraft is certified for eight seats including the pilot, a maximum gross weight of 10,700 pounds, and maximum altitude of 41,000 feet mean sea level (MSL).

The current regulatory requirements for part 23 airplanes do not contain adequate requirements for the application of Li-ion batteries in airborne applications. Garmin International proposes to replace an existing BF Goodrich PS-834A lead-acid emergency battery with a Mid-Continent Instruments MD835 Lithium Ion battery on Cessna model 525 Citation Jets. This type of battery possesses certain failure, operational, and maintenance characteristics that differ significantly from the nickel cadmium (Ni-Cd) and lead-acid rechargeable batteries currently approved in other normal, utility, acrobatic, and commuter category airplanes.

Under the provisions of § 21.101, Garmin International must show that the Cessna model 525 Citation Jet, as changed, continues to meet the applicable provisions of the regulations incorporated by reference in the type certificate of the Cessna model 525 Citation Jet or the applicable regulations in effect on the date of application for the change. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” The regulations incorporated by reference in the Cessna model 525 Citation Jet are as follows:

For serial numbers 525-0001 through 525-0599

Part 23 effective February 1, 1965, as amended by Amendments 23-1 through 23-38, and 23-40;

For serial numbers: 525-0600 and subsequent:

Part 23 effective February 1, 1965, as amended by Amendments 23-1 through 23-38, and 23-40; except the following paragraphs applicable for Engines and Full Authority Digital Engine Controls (FADECs):

Sections 23.611, 23.777, 23.779, 23.781, 23.865, 23.867, 23.901, 23.903, 23.939, 23.943, 23.951, 23.955, 23.961, 23.973, 23.1011, 23.1013, 23.1019, 23.1021, 23.1041, 23.1043, 23.1045, 23.1091, 23.1093, 23.1103, 23,1111, 23.1121, 23.1123, 23.1141, 23.1143, 23.1145, 23.1163, 23.1181, 23.1182, 23.1183, 23.1189, 23.1191, 23.1193, 23.1195, 23.1203, 23.1301, 23.1305, 23.1309, 23.1337, 23.1521, 23.1549, and 23.1583 as amended through Amendment 23-1 through 23-38, and 23-40 through 23-54.

For serial numbers 525-0001 through 525-0599:

14 CFR part 36 effective December 1, 1969, as amended by Amendments 36-1 through 36-18;

For serial numbers 525-0600 and subsequent:

Part 36 December 1, 1969, as amended by Amendments 36-1 through 36-25

For serial numbers 525-0001 through 525-0599:

14 CFR part 34 effective September 10, 1990;

For serial numbers 525-0600 and subsequent:

Part 34 effective September 10, 1990, Fuel Venting and Exhaust Emission Requirements for Turbine Engine Powered Airplanes, as amended by Amendments 34-1 through 34-3.

Compliance with the Noise Control Act of 1972;

Special Conditions as follows:

23-ACE-55, additional requirements for:

Smoke evacuation, protection of electronic systems from lightning and high intensity radiated electromagnetic fields (HIRF), electronic flight instrument displays, thrust attenuating systems (thrust attenuating systems are not applicable for serial numbers 525-0600 and subsequent), engine fire extinguishing system, performance, including takeoff, takeoff speeds, accelerate-stop, takeoff path, takeoff distance and takeoff run, takeoff flight path, climb one engine inoperative, landing, balked landing, climb, minimum control speed, trim, static longitudinal stability, demonstration of static longitudinal stability, static directional and lateral stability, wings level stall, turning flight and accelerated stalls, stall warning, vibration and buffeting, high speed characteristics, airspeed indicating system, static pressure system, maximum operating speed limit, minimum flight crew, operating limitations, operating procedures, performance information, airspeed indicator, effects of contamination on Natural Laminar Flow airfoils, definitions, and AFM approved information.

Exemption as follows:

Exemption No. 5759 granted to use a relaxed “Dutch Roll” damping criteria above 18,000 feet in lieu of damping criteria of § 23.181(b).

Equivalent level of safety as follows (Applicable to airplanes S/N 525-0360 and On equipped with Collins Proline 21 electronic displays of engine instruments):

• Number ACE-00-01: Sections 23.1305(c)(2), (c)(5), and 23.1549(a) through (d), direct reading, digital only displays for the high-pressure turbine speed (N2), and fuel flow indications.

Compliance with ice protection has been demonstrated in accordance with §§ 23.1416 and 23.1419.

If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 23) do not contain adequate or appropriate safety standards for the Cessna model 525 Citation Jet because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16. The FAA issues special conditions, as defined in § 11.19, under § 11.38 and they become part of the type certification basis under § 21.101.

In addition to the applicable airworthiness regulations and special conditions, the model 525 must comply with the part 23 fuel vent and exhaust emission requirements of part 34 and the part 23 noise certification requirements of part 36.

Special conditions are initially applicable to the model for which they are issued. Should the applicant apply for a supplemental type certificate to modify any other model to incorporate the same type certificate to incorporate the same novel or unusual design feature, the special conditions would also apply to the other model.

The Cessna model 525 Citation jet will incorporate the following novel or unusual design features:

Garmin International proposes to replace an existing BF Goodrich PS-834A lead-acid emergency battery with a Mid-Continent Instruments MD835 lithium ion battery on Cessna model 525 Citation Jet. This type of battery possesses certain failure, operational characteristics, and maintenance requirements that differ significantly from the Ni-Cd and lead-acid rechargeable batteries currently approved in other normal, utility, acrobatic, and commuter category airplanes.

The applicable part 21 and part 23 airworthiness regulations governing the installation of batteries in general aviation airplanes, including § 23.1353, were derived from Civil Air Regulations (CAR 3) as part of the recodification that established 14 CFR part 23. The battery requirements, which were identified as § 23.1353, were basically a rewording of the CAR requirements and did not add any substantive technical requirements. An increase in incidents involving battery fires and failures that accompanied the increased use of Ni-Cd batteries in airplanes resulted in rulemaking activities on the battery requirements for business jet and commuter category airplanes. These regulations were incorporated into § 23.1353(f) and (g), which apply only to Ni-Cd battery installations.

The proposed use of Li-ion batteries on the Cessna model 525 Citation Jet has prompted the FAA to review the adequacy of the existing battery regulations with respect to that chemistry. As the result of this review, the FAA determines the existing regulations do not adequately address several failure, operational, and maintenance characteristics of Li-ion batteries that could affect safety of the battery installation and the reliability of the Cessna model 525 Citation Jet electrical power supply.

Li-ion batteries in general are significantly more susceptible to internal failures that can result in self-sustaining increases in temperature and pressure (i.e., thermal runaway) than their Ni-Cd and lead-acid counterparts. This is especially true for overcharging a Li-ion battery, which will likely result in explosion, fire, or both. Certain types of Li-ion batteries pose a potential safety problem because of the instability and flammability of the organic electrolyte employed by the cells of those batteries. The severity of thermal runaway in large batteries increases due to the higher amount of electrolyte.

If the discharge of the cells is below a typical voltage of 3.0 volts on some versions of Li-ion batteries, they will no longer accept a charge. This loss of capacity may not be detected by the simple voltage measurements commonly available to flight crews as a means of checking battery status, a problem shared with Ni-Cd batteries.

Unlike Ni-Cd and lead-acid cells, some types of Li-ion cells employ electrolytes that are known to be flammable. This material can serve as a source of fuel for an external fire in the event of a cell container breach.

The intent of these special conditions is to establish appropriate airworthiness standards for Li-ion battery installations in the Cessna model 525 Citation Jet. Special conditions also ensure that these battery installations do not possess hazardous or unreliable design characteristics. These special conditions adopt the following requirements as a means of addressing these concerns:

(1) Inclusion of those sections of § 23.1353 that are applicable to batteries of any type.

(2) Inclusion of the flammable fluid fire protection requirements of § 23.863. In the past, this rule was not applied to the batteries of business jet or commuter category airplanes since the electrolytes utilized in lead-acid and Ni-Cd batteries are not considered to be flammable.

(3) Addition of new requirements to address the potential hazards of overcharging and over discharging that are unique to Li-ion battery designs.

(4) Addition of maintenance requirements to ensure that batteries used as spares are maintained in an appropriate state of charge (SOC).

As discussed above, these special conditions are applicable to the Cessna model 525 Citation Jet. Should Garmin International apply at a later date for a supplemental type certificate to modify any other model to incorporate the same novel or unusual design feature, the special conditions would apply to that model as well.

This action affects only certain novel or unusual design features on the Cessna model 525 Citation Jet. It is not a rule of general applicability, and it affects only the applicant who applied to the FAA for approval of these features on the airplane.

The substance of these special conditions has been subjected to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. Therefore, because a delay would significantly affect the certification of the airplane, which is imminent, the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting these special conditions upon issuance. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above.

The authority citation for these special conditions is as follows:

Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Cessna model 525 Citation Jet airplanes modified by Garmin International.

1. Cessna Model 525 G1000 and GFC700 Lithium Battery Installation. The Federal Aviation Administration issues the following Special Conditions (SC), which apply to all Cessna model 525 Citation Jets equipped with Mid-Continent-835 Lithium Ion batteries, in lieu of the requirements of § 23.1353 (a)(b)(c)(d)(e), Amendment 23-49.

Lithium-ion batteries and battery installations on Cessna model 525 Citation Jet equipped with existing PS-834A batteries must be designed and installed as follows:

(1) Safe cell temperatures and pressures must be maintained during any probable charging or discharging condition, or during any failure of the charging or battery monitoring system not shown to be extremely remote. The Li-ion battery installation must be designed to preclude explosion or fire in the event of those failures.

(2) Li-ion batteries must be designed to preclude the occurrence of self-sustaining, uncontrolled increases in temperature or pressure.

(3) No explosive or toxic gases emitted by any Li-ion battery in normal operation or as the result of any failure of the battery charging or monitoring system, or battery installation not shown to be extremely remote, may accumulate in hazardous quantities within the airplane.

(4) Li-ion batteries that contain flammable fluids must comply with the flammable fluid fire protection requirements of § 23.863(a) through (d).

(5) No corrosive fluids or gases that may escape from any Li-ion battery may damage airplane structure or essential equipment.

(6) Each Li-ion battery installation must have provisions to prevent any hazardous effect on structure or essential systems that may be caused by the maximum amount of heat the battery can generate during a short circuit of the battery or of its individual cells.

(7) Li-ion battery installations must have—

(i) a system to control the charging rate of the battery automatically so as to prevent battery overheating or overcharging, or

(ii) a battery temperature sensing and over-temperature warning system with a means for automatically disconnecting the battery from its charging source in the event of an over-temperature condition, or

(iii) a battery failure sensing and warning system with a means for automatically disconnecting the battery from its charging source in the event of battery failure.

(8) Any Li-ion battery installation whose function is required for safe operation of the airplane must incorporate a monitoring and warning feature that will provide an indication to the appropriate flight crewmembers whenever the capacity and state of charge (SOC) of the batteries have fallen below levels considered acceptable for dispatch of the airplane.

(9) The Instructions for Continued Airworthiness (ICA) must contain required manufacturer's maintenance and inspection requirements to ensure batteries, including single cells, meet a safety function level essential to the aircraft's continued airworthiness.

(i) The ICA must contain operating instructions and equipment limitations in an installation maintenance manual.

(ii) The ICA must contain installation procedures and limitations in a maintenance manual sufficient to ensure cells or batteries, when installed according to the installation procedures, still meet safety functional levels essential to the aircraft's continued airworthiness. The limitations must identify any unique aspects of the installation.

(iii) The ICA must contain corrective maintenance procedures to functionally check battery capacity at the manufacturer's required inspection intervals.

(iv) The ICA must contain scheduled servicing information to replace batteries at the manufacturer's required replacement time.

(v) The ICA must contain maintenance and inspection requirements to visually check for a battery and/or charger degradation.

(10) Batteries in a rotating stock (spares) that have experienced degraded charge retention capability or other damage due to prolonged storage must be functionally checked at manufacturers recommended inspection intervals.

(11) If the Lithium Ion battery application contains software and/or complex hardware in accordance with Advisory Circular (AC) 20-115B and AC 20-152, they should be developed to the standards of DO-178B for software and DO-254 for complex hardware.

These special conditions are not intended to replace § 23.1353 in the certification basis of the Cessna model 525 Citation Jet. These special conditions apply only to Li-ion batteries and battery installations. The battery requirements of § 23.1353 remain in effect for batteries and battery installations on Cessna model 525 Citation Jets that do not use Lithium Ion batteries.

History

On Tuesday, May 11, 2010, the FAA published a notice of proposed rulemaking in the Federal Register to revise Class E airspace at Kulik Lake, AK (75 FR 26151).

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

The Class E airspace areas designated as 700/1,200 ft. transition areas are published in paragraph 6005 of FAA Order 7400.9T, Airspace Designations and Reporting Points, signed August 27, 2009, and effective September 15, 2009, 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 action amends Title 14 Code of Federal Regulations (14 CFR) part 71 by revising Class E airspace at Kulik Lake Airport, AK, to correct an old airspace description error. This Class E airspace will provide adequate controlled airspace upward from 700 feet above the surface for safety and management of IFR operations at Kulik Lake Airport.

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. Because 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 Kulik Lake Airport and represents the FAA's continuing effort to safely and efficiently use the navigable airspace.

The Department of Transportation published its amended Air Carrier Access Act rule, Nondiscrimination on the Basis of Disability in Air Travel, 14 CFR Part 382 (Part 382), in the Federal Register on May 13, 2008, (73 FR 27614), applying Part 382 to foreign carriers, adding new provisions concerning accommodations for passengers who use medical oxygen and who are deaf or hard-of-hearing, and reorganizing the entire rule. On March 18, 2009, the Department published a correction notice in the Federal Register (74 FR 11469), correcting several editorial errors, inconsistencies, and omissions that had been identified. Since the final rule became effective on May 13, 2009, we have identified several additional minor typographical and technical errors in the final rule text as well as the preamble, which this document corrects. We have set forth these corrections below. The corrections to the preamble can also be found on our Web site at http://airconsumer.ost.dot.gov/.

On page 27619, in the third column, we intended to state that the carriers may choose to supplement the accessibility service provided by airports themselves or hire a contractor to do so. We erroneously used the word “itself” instead of “themselves.” This error is being corrected.

On page 27620, in the first column, we discuss the applicability of the Title II ADA rules to transportation services provided by public entities. A period omitted at the end of that sentence is being added.

On page 27651, in the first column, in the first paragraph, we state that the requirements for information and reservation services apply to foreign carriers only with respect to flights covered by § 382.5. The correct section reference should be § 382.7. A similar typographical error is also being corrected on page 27651, in the second column, in the second paragraph.

On page 27654, in the first column, where we discuss the issue of whether a carrier should allow a passenger with a disability to make brief stops to obtain food and a beverage when assisting in his/her transfer to the connecting gate, we are correcting two editorial errors by deleting the word “would” from one sentence and the word “should” from another sentence.

On page 27665, in the first column, we discuss the cost incurred by small foreign carriers related to obtaining boarding equipment. An incomplete sentence is being corrected. Thus, the language that appeared as “mall carrier use the same airport, however, a sharing arrangement may be more effective” will read: “For small carriers using the same airport, however, a sharing arrangement may be more effective.”

On the same page, following the paragraph discussed above, another typographical error is being corrected by deleting an unnecessary “a” from the next sentence.

In § 382.7(f), we state that §§ 382.17 through 382.157 generally do not apply to an indirect carrier except insofar as § 382.11(b) applies to such a carrier. By doing so, we inadvertently omitted the first sentence in this subsection that would have explained that the general nondiscrimination provisions contained in §§ 382.1 through 382.15 do apply to indirect carriers. We are adding a sentence in § 382.7(f) to make this clear.

In addition, we are rephrasing the language in § 382.11(b) to clarify the circumstances where an indirect carrier must comply with §§ 382.17 through 382.157. That is that the indirect carrier must comply with these sections when it is providing facilities or services (such as checking in passengers and baggage, or providing boarding and deplaning assistance) that would have otherwise been provided by a direct carrier.

In § 382.23(d), we state the conditions under which a carrier may require a passenger with a medical certificate to undergo additional medical review by the carrier. Furthermore, we state that if the result of the review demonstrates that the passenger may not be able to complete the flight without extraordinary medical assistance or the passenger would impose a direct threat to the health or safety of other persons on the flight, the carrier “may take an action otherwise prohibited under § 382.23(a) of this part.” In this last sentence, we intended to state that the carrier may take an action otherwise prohibited under § 382.21(a). Therefore, this sentence is being corrected accordingly. In addition, we are capitalizing the first letter in the word “part” in the phrase “of this part” so that its form is consistent with the phrase as it is used elsewhere in the rule.

In § 382.27(a), we state that “except as provided in * * * and §§ 382.133(c)(3) and 382.133(d)(3), as a carrier you must not require a passenger with a disability to provide advance notice in order to obtain services or accommodations required by this Part.” We intended to provide that when a passenger with a disability plans to use a respiratory assistive device onboard, as detailed under § 382.133, the carrier is permitted to require that the passenger provide up to 48 hours' advance notice. However, we inadvertently referenced the wrong subsections of § 382.133. Neither § 382.133(c)(3) nor § 382.133(d)(3) is relevant to the notice issue in question. Therefore, we are correcting § 382.27(a) to reference the appropriate provisions in § 382.133, which are §§ 382.133(c)(4) and (5) and 382.133(d)(5) and (6).

In § 382.51(b), we are capitalizing the first letter in the word “part” in the phrase “in this part” so that its form is consistent with the phrase as it is used elsewhere in the rule.

In § 382.111(e), we state that “[a]ssistance in stowing and retrieving carry-on items, including mobility aids and other assistive devices stowed in the cabin (see also § 382.91(c))” must be provided. Section 382.91(c) relates to the carriers' responsibility to escort passengers with service animals to the service animal relief area and is not relevant to the substance of § 382.111(e). This typographical error is being corrected by changing “382.91(c)” to “382.91(d)”.

In § 382.111(f), we state that a carrier must provide “[e]ffective communication with passengers who have vision impairments and/or who are deaf or hard-of-hearing, so that these passengers have timely access to information the carrier provides to other passengers * * *.” Two mistakes are being corrected by this amendment. First, the use of the term “and/or” in § 382.111(f) can be read to require a carrier to provide deaf-blind passengers onboard the aircraft prompt access to information on such things as weather, on-board services, flight delays and connecting gates at the next airport. Contrary to this construction, we state in the preamble of the rule, on page 27642, that because communications with deaf-blind passengers regarding constantly-changing information requires highly specialized training for the carrier staff, we have determined that it is inappropriate at this time to require carriers to provide all the information covered in § 382.119 to deaf-blind passengers, including flight delays, weather conditions at the flight's destination, and boarding information, similar to the types of information referred to under § 382.111(f). This inconsistency was due to an editorial error which we are correcting by changing the term “and/or” in § 382.111(f) to “or”. Thus, § 382.111(f) applies only to passengers with a visual or a hearing disability, but not to deaf-blind passengers.

We also state in the preamble of the rule, on pages 27640-41, after reviewing all the comments regarding the use of the term “prompt” versus “timely” with respect to wheelchair service, we decided to retain the “prompt” standard as we believe “prompt” is a clearer description of the actual standard than “timely”. Throughout the relevant provisions in the text of the rule, “prompt” is used instead of “timely.” For instance, in § 382.53(a)(1), we require that a carrier must ensure that passengers with a disability who identify themselves as persons needing visual or hearing assistance have prompt access to the same information provided to other passengers at each gate. In § 382.119(a), we impose on carriers a similar standard for ensuring that passengers with those disabilities receive prompt access to the same information provided to other passengers onboard the aircraft. We inadvertently used the term “timely” in § 382.111(f), which renders the provision in this subsection inconsistent with our stated intention and the other provisions in the rule. Therefore, the term “timely” in § 382.111(f) is being changed to “prompt.”

In the rule as published in the Federal Register on May 13, 2008, §§ 382.151, 382.153, and 382.155 refer to “a carrier providing scheduled service or a carrier providing nonscheduled service using aircraft with 19 or more passenger seats * * *.” The words “scheduled” and “nonscheduled” do not add to the meaning of these sentences as the phrase “using aircraft with 19 or more passenger seats” applies to both scheduled and nonscheduled services. Consequently, we are striking the distinction between scheduled and nonscheduled service so that these provisions simply refer to “* * * a carrier providing service using aircraft with 19 or more passenger seats * * *.”

In § 382.151(c)(1), we state that when a passenger raises a disability-related complaint or concern, the carrier personnel must “immediately inform the passenger of the right to contact a CRO and then contact a CRO on the passenger's behalf or provide the passenger a means (e.g., a phone, a phone card plus the location and/or phone number of the CRO available at the airport).” In order to make the sentence complete, the phrase “to do so” is added after the phrase “provide the passenger a means.”

Pursuant to section 553(b) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)), the Department can waive prior notice and opportunity for public comment on this action if it finds that notice and comment procedures are impracticable, unnecessary, or contrary to the public interest, and incorporates a statement of the finding and the reasons therefore in the notice. The revisions contained in this notice correct typographical and technical errors, omissions, and unclear language in the final rule. These corrections are necessary to ensure the clarity and accuracy of the final rule. Since all are minor and non-substantive, public comments on these revisions are unnecessary. Therefore, we find good cause to waive notice and comment procedures.

In the preamble of the final rule published on Tuesday, May 13, 2008, 73 FR 27614, the following corrections are made:

1. On page 27619, in the third column, in the 11th line, replace the word “itself” with the word “themselves”.

2. On page 27620, in the first column, in the 42nd line, add a period followed by two spaces between “airport)” and “DOT's”.

3. On page 27651, in the first column, in the 11th line, replace “382.5” with “382.7.”

4. On the same page, in the second column, in the 27th line, replace “382.5” with “382.7.”

5. On page 27654, in the first column, in the 29th and the 30th lines, delete the first word “would” from the phrase “if doing so would would not result” so it reads “if doing so would not result”.

6. On the same page in the same column, in the 34th line, delete the word “should” from the phrase “service would should allow” so it reads “service would allow”.

7. On page 27665, in the first column, in the 35th and the 36th lines, revise the phrase “mall carrier use the same airport” so it reads “Small carriers using the same airport. * * *”

8. On the same page, in the same column, in the 50th line, delete the word “a” that was between the words “the” and “present” so the phrase reads “the present value”.

Items subject to the Export Administration Regulations (EAR) include items located in the United States, wherever they are produced; items of “U.S. origin,” that is, those produced in the United States, wherever they are located; and certain foreign produced items, including items subject to the EAR only on the basis of the “direct product rule.” The “direct product rule” is found in General Prohibition No. 3, section 736.2(b)(3) of the EAR, and in section 734.3(a)(4). Under the “direct product rule” as amended, foreign-made items are subject to the EAR and require an export license or license exception, if such items are:

• Located outside of the United States;

• Subject to national security controls under the EAR;

• The direct product of U.S.-origin software or technology that requires a written assurance as a supporting document for a license or as a pre-condition for use of License Exception Technology and Software, Restricted (TSR); and

• Being reexported to a destination in Country Group D:1 and E:1 of Supplement No. 1 to part 740.

This final rule changes the “direct product rule” as it is codified in the EAR, by expanding the country scope of the rule from Country Group D:1 and Cuba to Country Group D:1 and E:1 (Cuba, Iran, North Korea, Sudan, and Syria). This change is being made to bring the “direct product rule” into harmony with the policies the United States maintains against terrorist supporting countries in Country Group E:1.

This rule amends section 732.2, “Steps Regarding Scope of the EAR,” by revising paragraph (f)(1)(i) in “Step 6: Foreign-made items produced with certain U.S. technology for export to specified destinations,” specifically paragraph (f)(1)(i) and amending section 732.3, “Steps Regarding the Ten General Prohibitions,” by revising paragraph (f)(1)(ii) “Step 11: Foreign-produced direct product” to expand the country scope of these steps to include all the countries in Country Group E:1, namely, Cuba, Iran, North Korea, Sudan, and Syria. Because this part of the EAR is merely guidance, it will not affect the paperwork burden of the public.

A “License Exception” is an authorization contained in part 740 of the EAR that allows export or reexport under stated conditions of items subject to the EAR that would otherwise require a license under the provisions of the EAR. License Exception TSR, found in section 740.6 of the EAR, authorizes exports and reexports of certain technology and software to destinations in Country Group B of Supplement No. 1 to part 740 of the EAR. Eligible technology and software are those that require a license for national security reasons only, and are identified by “TSR—Yes” in Export Control Classification Numbers (ECCNs) on the Commerce Control List (Supplement No. 1 to part 774 of the EAR). Prior to using this license exception, a written assurance as described in section 740.6 of the EAR must be obtained from the consignee. This assurance is required as a preventative measure against diversion or release of U.S.-origin technology, a national security-controlled foreign direct product of such technology, and a national security-controlled foreign direct product of a plant or manufacturing equipment made from such technology to Cuba or countries with which the U.S. has national security concerns and nationals thereof. This rule expands the country scope covered by this assurance to include all the countries in Country Group E:1 of Supplement No. 1 to part 740 of the EAR. License Exception TSR is subject to the restrictions of section 740.2 of the EAR that apply to all license exceptions in part 740 of the EAR. This revision will have no effect on the paperwork burden of exporters using License Exception TSR.

In addition to the instructions contained in Supplement No. 1 to part 748 that describe how to submit an application to BIS, section 748.9 and Supplement No. 2 to part 748 of the EAR set out requirements that license applicants must address for certain items or types of transactions. This rule revises the instructions under paragraph (i), “Parts, components, and materials incorporated abroad into foreign-made products” by expanding the country scope to include all the countries in Country Group E:1. With the publication of this rule, paragraph (i)(2)(x) now states that if the foreign-made product is the direct product of U.S.-origin technology, and U.S.-origin technology will accompany a shipment to a country listed in Country Group D:1 or E:1 (see Supplement No. 1 to part 740 of the EAR), Block 24 must describe the type of technology and how it will be used. This change is being made to conform to the changes being made elsewhere in this rule to the “direct product rule.” The effect of this amendment on the paperwork burden hours for filling out a license application is negligible, as there are rarely transactions involving these items to countries in Country Group E:1.

Since August 21, 2001, the Act has been in lapse. However, the President, through Executive Order 13222 of August 17, 2001 (3 CFR, 2001 Comp. 783 (2002)), which has been extended by successive Presidential Notices, the most recent being that of August 13, 2009 (74 FR 41325 (August 14, 2009)), has continued the Regulations in effect under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.).

Shipments of items removed from license exception eligibility or from eligibility for export without a license as a result of this regulatory action that were on dock for loading, on lighter, laden aboard an exporting carrier, or en route aboard a carrier to a port of export, on July 30, 2010, pursuant to actual orders for export to a foreign destination, may proceed to that destination under the previous license exception eligibility, or without a license, so long as they have been exported from the United States before September 28, 2010. Any such items not actually exported before midnight, on September 28, 2010, require a license in accordance with this regulation.

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

2. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This rule involves two collections of information subject to the PRA. One of the collections has been approved by OMB under control number 0694-0088, “Multi Purpose Application,” and carries a burden hour estimate of 58 minutes for a manual or electronic submission. The other collection has been approved by OMB under control number 0694-0106, “Reporting and Recordkeeping Requirements under the Wassenaar Arrangement,” and carries a burden hour estimate of 21 minutes for a manual or electronic submission. Send comments regarding these burden estimates or any other aspect of these collections of information, including suggestions for reducing the burden, to OMB Desk Officer, New Executive Office Building, Washington, DC 20503; and to Jasmeet Seehra, OMB Desk Officer, by e-mail at Jasmeet_K._Seehra@omb.eop.gov or by fax to (202) 395-7285; and to the Office of Administration, Bureau of Industry and Security, Department of Commerce, 14th and Pennsylvania Avenue, NW., Room 6622, Washington, DC 20230.

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

4. The provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, the opportunity for public participation, and a delay in effective date, are inapplicable because this regulation involves a military and foreign affairs function of the United States (5 U.S.C. 553(a)(1)). Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this final rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under the Administrative Procedure Act or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable. BIS implements the “direct product rule” to require licenses for the reexport of items controlled for national security reasons to countries in Country Groups D:1 and E:2. If this rule were delayed to allow for notice and comment and a delay in the effective date, it would provide additional time to the embargoed countries, which are being added to the list of countries for which the direct product rule applies, to receive items without a license, contrary to the foreign policy and national security of the United States. Therefore, this regulation is issued in final form. Although there is no formal comment period, public comments on this regulation are welcome on a continuing basis. Comments should be submitted to Sharron Cook, Office of Exporter Services, Bureau of Industry and Security, Department of Commerce, 14th and Pennsylvania Ave., NW., Room 2705, Washington, DC 20230.

On December 16, 2009, the Commission published a Notice of Proposed Rulemaking, which proposed to amend Regulation 190.04(d) to permit a trustee, under appropriate circumstances, to operate the business of a commodity broker in bankruptcy in the ordinary course, including the purchase or sale of new commodity contracts on behalf of the customers of such commodity broker (the “Notice”).1 The proposed rule stated that the appropriateness of a particular set of circumstances would be determined by the Commission in its discretion, and such operation would require the written permission of the Commission.

The public comment period on the Notice ended on January 15, 2010. The Commission received two comments 2 during the comment period: (i) One from the trustee of a futures commission merchant (“FCM”) that was sold as a going concern in bankruptcy3 and (ii) one from a futures industry trade association.4

Collectively, the comments raise the following five (5) concerns with the Notice:

• The Commission's proposed rule is premature.

• The Commission staff should not be responsible for operating the FCM-related business of an insolvent FCM/broker-dealer.

• The Commission's proposed rule is overly broad as it does not specify all circumstances the Commission will consider in authorizing a trustee to operate the business of an FCM and provide the public with an opportunity to comment on these circumstances.

• The Commission should work with the Securities and Exchange Commission and the Securities Investor Protection Corporation to develop uniform procedures to guide a trustee of an insolvent FCM/broker-dealer in the absence of legislative changes.

• The Commission should grant immunity to a bankruptcy trustee, who is to operate the business of a commodity broker, in the limited operation of the business.

The Commission will address below each of the five concerns.

FIA stated that further action on the proposed rule is premature as the House of Representatives has passed a financial services reform bill which instructs the Commission, in coordination with the Securities and Exchange Commission (“SEC”) and several bank regulatory authorities, to recommend, within 180 days of the bill's enactment, legislative changes to the federal insolvency laws to, among others, clarify and harmonize the insolvency law applicable to entities that are both FCMs and broker-dealers.5 Moreover, FIA urged the Commission and the other regulatory authorities to perform a comprehensive review of the relevant provisions of the Bankruptcy Code (“Code”) and the Commission's bankruptcy rules even if the bill does not become law. FIA believes that it would be inappropriate to adopt amendments to the Commission's bankruptcy rules when such a review and recommendations for comprehensive reform are imminent.

While the FIA comment was relevant when filed, the Commission notes that the provision referred to is no longer pending. Moreover, the amendments to Regulation 190.04(d) are narrowly designed to address the manner in which customer accounts are handled, under appropriate circumstances, in a commodity broker bankruptcy, which may occur at any time. Accordingly, the Commission will not defer the adoption of the final rule based on this concern.

The Commission notes, that currently, even if a qualified transferee for an insolvent commodity broker is identified prior to a bankruptcy filing by a commodity broker, a number of steps are required, as a practical matter, after the filing of the bankruptcy petition and prior to the transfer. The completion of these steps requires a measurable period of time, and may occur while the financial markets are open and active.6

The adoption of the rule would benefit customers of a commodity broker in bankruptcy, under appropriate circumstances, by permitting those customers to manage their accounts during this time. In addition to the flexibility given to customers, the adoption of the rule would also provide the Commission with the latitude to handle unanticipated events.

United States futures customers in the Refco 7 and Lehman 8 bankruptcies were well protected: Due to the timing of the filing (late in the day on Friday), and, in Lehman, action by the District Court, transfers of all customer accounts took place without a time period during which the markets were open but customers were unable to manage their accounts. These circumstances will not necessarily be replicated in a future bankruptcy. As a result, the Commission believes that the adoption of the rule would provide it with the flexibility and discretion necessary to protect customers by responding promptly to exigent circumstances in future bankruptcies.9

FIA noted the trustee selected by the Securities Investor Protection Corporation (“SIPC”) to oversee an insolvent FCM/broker-dealer may not have sufficient knowledge or experience to operate the FCM-related business of a FCM/broker-dealer.10 FIA further noted that if the rule is adopted, the Commission's Division of Clearing and Intermediary Oversight (“DCIO”) would be responsible for operating the FCM-related portion of the FCM/broker-dealer business by default. FIA questioned the appropriateness of DCIO undertaking this responsibility and whether DCIO staff had the requisite expertise to do so.

In the Commission's experience, trustees appointed by SIPC and the U.S. Trustees, and their legal counsel, have financial services industry experience and have engaged in formal and informal discussions with Commission staff regarding FCMs business as such. The Commission expects that such communications will occur in future bankruptcies.

The Commission also notes that, pursuant to the rule under consideration, before a trustee can operate the business of a commodity broker in bankruptcy in the ordinary course (including entering into new contracts on behalf of customers), the trustee must obtain the written permission of the Commission. Moreover, the Commission would have the opportunity to determine if the circumstances were appropriate to allow such permission. The proposed rule does not mandate the Commission to grant this permission. Therefore, the Commission will consider the circumstances in deciding whether to permit the trustee to operate the commodity broker's business in the ordinary course.

In the Notice, the Commission stated that it may consider the following factors in authorizing a trustee to operate the business of an FCM: “(1) Whether the commodity broker has entered into an agreement providing for the imminent transfer of its customer accounts to an entity that is ready, willing and able to accept such transfer promptly; (2) whether the commodity broker has sufficient capital, at the time it becomes subject to bankruptcy proceedings, to continue operating its business in the ordinary course pending the transfer; and (3) whether a commodity broker will have sufficient capital, after the sale of its assets (including its FCM business), to continue operating its business in the ordinary course until all of its customer accounts have been transferred.” 11 FIA stated that the first and second factors “should be viewed as necessary conditions precedent to the exercise of such authority.” 12 FIA further stated that “[i]f the Commission believes there are other circumstances in which it may be appropriate to authorize a trustee to operate the business of the FCM, the public should have an opportunity to comment on those circumstances.” 13

As each bankruptcy is unique, the Commission notes that future bankruptcies of commodity brokers may present new factors for consideration. Therefore, it would be impracticable for the Commission to present a comprehensive list of factors for public comment. The proposed rule seeks to address the distinctiveness of each bankruptcy by providing the Commission and trustees with a degree of flexibility in dealing with unanticipated events with rapidly-changing circumstances.

FIA recommends that the Commission, SIPC and the SEC work together to develop uniform written guidance for a trustee of an FCM/broker-dealer. While the Commission has engaged in discussions with the SEC and SIPC concerning FCM/broker-dealer bankruptcies and contingency planning, and Part 190 of the Commission's regulations contains extensive guidance for the conduct of an FCM bankruptcy (which is also applicable to a SIPC trustee in a SIPA proceeding14 ), the Commission believes that the development of specific uniform procedures may be impracticable due to the differences between the regimes and to the fact that each bankruptcy has its own unique set of facts and circumstances.

The Refco Trustee recommends that Commission expand the proposed rule to provide the bankruptcy trustee with relief from personal liability and immunity from any suit for personal liability for actions or inactions taken by the trustee in good faith in the operation of the commodity broker's business. Specifically, the Refco Trustee notes that an unintended consequence of the proposed rule is that, “currently, a trustee in bankruptcy may be sued by third parties for acts or omissions in connection with the operation of a debtor's business.” 15 The Refco Trustee expressed concern that the potential for such liability to a trustee would deter qualified individuals from being willing to serve in that capacity.

The Commission does not have the authority to grant such immunity. However, as the Refco Trustee noted, a trustee in bankruptcy could seek a court order which includes such immunity.16

The Regulatory Flexibility Act (“RFA”) 17 requires Federal agencies, in promulgating regulations, to consider the impact of those regulations on small businesses. The final rule provides a limited exception to Regulation 190.04(d)(2), by permitting a trustee to operate, with the written permission of the Commission, the business of a commodity broker in bankruptcy in the ordinary course, including the purchase or sale of new commodity contracts on behalf of the customers of such commodity broker. The final rule does not impose a regulatory burden on either a commodity broker pre-bankruptcy or a trustee post-bankruptcy. Moreover, the final rule will affect only FCMs (including certain foreign futures commission merchants).18 The Commission has previously established certain definitions of “small entities” to be used by the Commission in evaluating the impact of its regulations on such entities in accordance with the RFA.19 The Commission has previously determined that FCMs are not small entities for the purpose of the RFA.20 Accordingly, pursuant to 5 U.S.C. 605(b), the Chairman certifies, on behalf of the Commission, that the final rule promulgated herein will not have a significant economic impact on a substantial number of small entities.

The Paperwork Reduction Act (“PRA”) 21 imposes certain requirements on Federal agencies in connection with their conducting or sponsoring any collection of information as defined by the PRA. The final rule promulgated in the release does not require the new collection of information on the part of any entities that would be subject to the final rule. Accordingly, for purposes of the PRA, the Commission certifies that the final rule promulgated in this release would not impose any new reporting or recordkeeping requirements.

Section 15(a) of the Act 22 requires that the Commission, before promulgating a regulation under the Act or issuing an order, consider the costs and benefits of its action. By its terms, Section 15(a) of the Act does not require the Commission to quantify the costs and benefits of a new regulation or to determine whether the benefits of the regulation outweigh its costs. Rather, Section 15(a) of the Act simply requires the Commission to “consider the costs and benefits” of its action.

Section 15(a) of the Act further specifies that costs and benefits shall be evaluated in light of the following considerations: (1) Protection of market participants and the public; (2) efficiency, competitiveness, and financial integrity of futures markets; (3) price discovery; (4) sound risk management practices; and (5) other public interest considerations. Accordingly, the Commission could, in its discretion, give greater weight to any one of the five considerations and could, in its discretion, determine that, notwithstanding its costs, a particular regulation was necessary or appropriate to protect the public interest or to effectuate any of the provisions or to accomplish any of the purposes of the Act.

The Commission has evaluated the costs and benefits of the final rule promulgated in this release, in light of (i) the comments that it has received on the Notice and (ii) the specific considerations identified in Section 15(a) of the Act, as follows:

In the event of the bankruptcy of a commodity broker, the final rule promulgated in this release would benefit the customers of such commodity broker, by providing them with the opportunity, under appropriate circumstances, to manage their accounts prior to the transfer of such accounts to a new commodity broker.

The final rule promulgated in this release is not expected to have an effect on efficiency or competition.

The final rule promulgated in this release will promote financial integrity of the futures markets by providing customers of a commodity broker in bankruptcy with the opportunity, under appropriate circumstances, to manage their accounts prior to the transfer of such accounts to a new commodity broker.

The final rule promulgated in this release is not expected to have a direct effect on the risk management practices of commodity brokers.

Recent events, such as the Refco and Lehman proceedings, have demonstrated that the final rule is necessary and prudent.

Accordingly, after considering the five factors enumerated in the Act, the Commission has determined to promulgated the final rules as set forth below.

1. On November 20, 2008, the Federal Energy Regulatory Commission (Commission) issued Order No. 720 requiring interstate and certain major non-interstate natural gas pipelines to post limited information on publicly accessible Internet Web sites regarding their operations.1 On January 21, 2010, the Commission issued Order No. 720-A in response to requests for rehearing and clarification of Order No. 720.2

Background

The final and temporary regulations (TD 9490) that are the subject of this document are under section 1502 of the Internal Revenue Code.

As published, the final and temporary regulations (TD 9490) contain errors that may prove to be misleading and are in need of clarification.

Paperwork Reduction Act

The collection of information contained in these final regulations has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) under control number 1545-1908. This information will be used to identify issuers of qualified zone academy bonds that have established a defeasance escrow as a remedial action taken because of failure to satisfy certain requirements of section 1397E.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number.

Books and records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

Section 1397E(a) of the Internal Revenue Code (Code) provides that an eligible taxpayer (within the meaning of section 1397E(d)(6)) that holds a qualified zone academy bond (“QZAB” or “QZABs”) on a credit allowance date is allowed a credit against Federal income tax for the taxable year that includes the credit allowance date. In general, a QZAB is a bond issued by a state or local government to finance certain eligible public school purposes under section 1397E(d). Section 1397E(b) provides that the amount of the QZAB credit equals the product of the credit rate and the face amount of the bond held by the taxpayer on the credit allowance date. Under section 1397E(b)(2), the credit rate is determined by the Treasury Department and equals the percentage that the Department estimates generally will permit the issuance of QZABs without discount and without interest cost to the issuer. Section 1397E(i)(1) defines credit allowance date as the last day of the one-year period beginning on the issue date of the issue and the last day of each successive one-year period thereafter. Under section 1397E(d)(3), the maximum term of a QZAB is determined by the Treasury Department and equals the term that the Department estimates will result in the present value of the obligation to repay the principal on the bond being equal to 50 percent of the face amount of the bond.

Section 1397E(j) provides that the amount of the QZAB credit allowed to the taxpayer is included in the taxpayer's gross income.

Section 1397E(e) imposes a national limitation on the amount of QZABs that may be issued for each calendar year. The limitation is allocated by the Treasury Department among the States on the basis of their respective populations of individuals below the poverty line.

Section 1397E was amended by section 107 of the Tax Relief and Health Care Act of 2006, Public Law 109-432, 120 Stat. 2922 (2006) (the “2006 Act”), by adding certain requirements for a bond to be a QZAB. In general, the 2006 Act added a new five-year spending period requirement, arbitrage investment restrictions, and information reporting requirements. Specifically, the 2006 Act added new section 1397E(f), which generally imposes spending period restrictions under which an issuer of QZABs must reasonably expect, as of the issue date, that: (1) At least 95 percent of the proceeds from the sale of the issue are to be spent for one or more qualified purposes with respect to qualified zone academies within the 5-year period beginning on the issue date of the QZAB; (2) a binding commitment with a third party to spend at least 10 percent of the proceeds from the sale of the issue will be incurred within the six-month period beginning on the issue date of the QZAB; and (3) such purposes will be completed with due diligence and the proceeds from the sale of the issue will be spent with due diligence. New section 1397E(f)(2) added by the 2006 Act provides authority to the Secretary of the Treasury to extend the five-year spending period. To the extent that less than 95 percent of the proceeds of the issue are spent within the five-year spending period (plus any extension granted by the Secretary of the Treasury), the 2006 Act requires the issuer to redeem the nonqualified bonds within 90 days after the end of such period.

In addition, the 2006 Act added new section 1397E(g), which generally requires that an issue of QZABs satisfy the arbitrage investment restrictions of section 148 with respect to the proceeds of the issue.

Finally, the 2006 Act added new section 1397E(h), which generally requires that issuers of QZABs submit information reporting returns to the IRS similar to the information reporting returns required to be submitted to the IRS under section 149(e) for tax-exempt state or local bonds.

Section 15316 of the Food, Conservation, and Energy Act of 2008, Public Law 110-246, 122 Stat. 1651 (2008) (the “2008 Energy Act”), added section 54A to the Code. Section 54A(a) provides that a taxpayer that holds a qualified tax credit bond on one or more credit allowance dates of the bond occurring during any taxable year is allowed as a credit against Federal income tax for the taxable year an amount equal to the sum of the credits determined under section 54A(b) with respect to such dates. Section 54A(d)(1) provides that the term qualified tax credit bond (“QTCB”) means a certain bond which is part of an issue that meets the requirements of section 54A(d)(2), (3), (4), (5), and (6) regarding expenditures of bond proceeds, information reporting, arbitrage, maturity limitations, and prohibitions against financial conflicts of interest. At the time of its enactment, the 2008 Energy Act did not treat QZABs as QTCBs.

Section 313 of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008, Div. C of Public Law 110-343, 122 Stat. 3765 (2008) (the “2008 Act”) added new section 1397E(m) providing that section 1397E shall not apply to any obligation issued after the date of the enactment of the 2008 Act on October 3, 2008. Effective for obligations issued after October 3, 2008, the 2008 Act amended section 54A(d)(1) defining a QTCB to include a qualified zone academy bond under section 54E of the Code. The 2008 Act also added section 54E, which provides revised program provisions for QZABs in lieu of the existing provisions under section 1397E and amended section 54A(d)(2)(C) to provide that, for purposes of section 54A(d)(2), the term “qualified purpose” for a QZAB means a purpose specified in section 54E(a)(1).

Section 301 of the Hiring Incentives to Restore Employment Act, Public Law 111-147, 124 Stat. 71 (2010) (the “HIRE Act”) added subsection (f) to section 6431 of the Code, which authorizes issuers to elect irrevocably to receive Federal direct payments of allowances of refundable tax credits to subsidize a prescribed portion of their borrowing costs instead of the Federal tax credits that otherwise would be allowed to holders of certain qualified tax credit bonds under section 54A. Under section 6431(f)(3)(A)(iii), the direct payment subsidy option under section 6431(f) applies to qualified zone academy bonds issued under section 54E that meet the requirements to be qualified tax credit bonds under section 54A.

Temporary regulations (TD 8755) interpreting section 1397E were published on January 7, 1998 (63 FR 671), and amended on July 1, 1999 (TD 8826; 64 FR 35573). Final regulations under section 1397E (TD 8903) were published on September 26, 2000 (65 FR 57732) (the “First Final Regulations”). On March 26, 2004, a notice of proposed rulemaking (REG-121475-03) was published in the Federal Register (69 FR 15747) (the “2004 Proposed Regulations”). The 2004 Proposed Regulations proposed to amend the First Final Regulations by providing guidance on the maximum term, permissible use of proceeds, and remedial actions for QZABs. A public hearing was scheduled for July 21, 2004. The public hearing was cancelled because no requests to speak were received. Written comments on the 2004 Proposed Regulations were received. After consideration of the written comments, and in light of the statutory changes made by the 2006 Act, the need for regulatory guidance on those statutory changes, and the close connection between that needed guidance and the guidance in the 2004 Proposed Regulations, the IRS and the Treasury Department determined to issue coordinated guidance as temporary regulations under TD 9339 which were published in the Federal Register on July 16, 2007 (72 FR 38767) and which became effective as of September 14, 2007 (the “Temporary Regulations”), with an opportunity for public comment in the corresponding proposed regulations (the “2007 Proposed Regulations”). The 2004 Proposed Regulations were withdrawn. No public hearing was requested and no written comments were received pursuant to the 2007 Proposed Regulations.

Accordingly, the IRS and the Treasury Department adopt the 2007 Proposed Regulations, in substantially the same form as the 2007 Proposed Regulations, as final regulations by this Treasury Decision.

In general, except as otherwise provided, these final regulations generally apply to QZABs issued under section 1397E that are sold on or after September 14, 2007.

Pursuant to section 313(b) of the 2008 Act, effective for QZABs that are sold on or after October 3, 2008, section 1397E is inapplicable and successor modified statutory provisions for QZABs apply under sections 54A and 54E. These final regulations generally do not apply to QZABs issued under sections 54A and 54E. However, Notice 2009-30, 2009-16 IRB 852 (April 20, 2009) and Notice 2010-22, 2010-10 IRB 435 (March 8, 2010) (relating to 2009 and 2010 volume cap allocations for QZABs respectively), provide that for QZABs issued under sections 54A and 54E that are sold on or after October 4, 2008, pending the promulgation and effective date of future administrative or regulatory guidance, taxpayers may rely on the interim guidance provided in these notices and, to the extent not inconsistent with these notices and the provisions of sections 54A and 54E, the Temporary Regulations issued under section 1397E. See § 601.601 (d)(2)(ii)(b).

The final regulations include a limited reliance provision for QZABs issued under sections 54A and 54E. Under this reliance provision, except to the extent inconsistent with the successor statutory provisions for QZABs in sections 54A and 54E and public administrative or regulatory guidance under those provisions and except as otherwise provided in a special restriction against reliance on the remedial action provisions in the final regulations, issuers and taxpayers may rely on the final regulations for QZABs that are issued under sections 54A and 54E. In the case of QZABs that are issued under sections 54A and 54E for which the issuer elects the Federal direct payment subsidy option under section 6431(f), issuers and taxpayers may not rely on the remedial action provisions in § 1.1397E-1(h) of the final regulations. The IRS and Treasury Department expect to announce appropriate remedial actions tailored to bonds involving the Federal direct payment subsidy option under section 6431 in future public guidance.

In addition, except as otherwise provided, § 1.1397E-1(h)(2), (h)(3), (h)(4), (i), and (j) of the final regulations regarding the five-year spending period, the arbitrage investment restrictions, and the information reporting requirement added by the 2006 Act apply to bonds issued under section 1397E pursuant to allocations of the national qualified zone academy bond volume cap authority arising in calendar years after 2005 and sold on or after September 14, 2007.

In addition, issuers and taxpayers also may apply the final regulations in whole, but not in part, to bonds issued under section 1397E that are sold before September 14, 2007.

Certain other special effective dates apply to particular provisions under § 1.1397E-1(m).

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. It is hereby certified that the collection of information contained in this regulation will not have a significant economic impact on a substantial number of small entities. Accordingly, a regulatory flexibility analysis is not required. The collection of information in this proposed regulation is in § 1.1397E-1(h)(8). This collection of information is required by the IRS to verify compliance with section 1397E. This information will be used to identify issuers of qualified zone academy bonds that have established a defeasance escrow as a remedial action taken because of failure to satisfy certain requirements of section 1397E. The collection of information is required to obtain or retain a benefit. The likely respondents are states or local governments that issue qualified zone academy bonds. The estimated number of respondents is 6, and the estimated average annual burden hours per respondent is 30 minutes. In addition, the establishment of a defeasance escrow need only be reported once. Accordingly, the number of, and the burden on, affected small entities is not significant. Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking preceding this regulation has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small businesses.

The principal author of these regulations is Zoran Stojanovic, Office of Associate Chief Counsel, IRS (Financial Institutions and Products). However, other personnel from the IRS and the Treasury Department participated in their development.

Electronic and Facsimile Availability

This document and additional information concerning OFAC are available from OFAC's Web site (http://www.treas.gov/ofac). Certain general information pertaining to OFAC's sanctions programs also is available via facsimile through a 24-hour fax-on-demand service, tel.: 202/622-0077.

On August 1, 2007, the President, invoking the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) (“IEEPA”), issued Executive Order 13441 (72 FR 43499, Aug. 3, 2007) (“E.O. 13441”). In E.O. 13441, the President determined that the actions of certain persons to undermine Lebanon's legitimate and democratically elected government or democratic institutions, to contribute to the deliberate breakdown of the rule of law in Lebanon, including through politically motivated violence and intimidation, to reassert Syrian control or contribute to Syrian interference in Lebanon, or to infringe upon or undermine Lebanese sovereignty contribute to political and economic instability in Lebanon and the region and constitute an unusual and extraordinary threat to the national security and foreign policy of the United States. To deal with that threat, the President declared a national emergency. E.O. 13441 then sets forth the actions ordered by the President.

Section 1(a) of E.O. 13441 blocks, with certain exceptions, all property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of any United States person, including any overseas branch, of any person determined by the Secretary of the Treasury, in consultation with the Secretary of State: (1) To have taken, or to pose a significant risk of taking, actions, including acts of violence, that have the purpose or effect of undermining Lebanon's democratic processes or institutions, contributing to the breakdown of the rule of law in Lebanon, supporting the reassertion of Syrian control or otherwise contributing to Syrian interference in Lebanon, or infringing upon or undermining Lebanese sovereignty; (2) to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, such actions, including acts of violence, or any person whose property and interests in property are blocked pursuant to E.O. 13441; (3) to be a spouse or dependent child of any person whose property and interests in property are blocked pursuant to E.O. 13441; or (4) to be owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to E.O. 13441. The property and interests in property of the persons described above may not be transferred, paid, exported, withdrawn, or otherwise dealt in.

In Section 1(b) of E.O. 13441, the President determined that the making of donations of certain articles, such as food, clothing, and medicine, intended to be used to relieve human suffering, as specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)), by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to E.O. 13441 would seriously impair his ability to deal with the national emergency declared in E.O. 13441. The President therefore prohibited the donation of such items unless authorized by OFAC.

Section 1(c) of E.O. 13441 provides that the prohibition on any transaction or dealing in blocked property or interests in property includes, but is not limited to, the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to E.O. 13441, and the receipt of any contribution or provision of funds, goods, or services from any such person.

Section 2 of E.O. 13441 prohibits any transaction by a United States person or within the United States that evades or avoids, has the purpose of evading or avoiding, or attempts to violate any of the prohibitions set forth in E.O. 13441, as well as any conspiracy formed to violate such prohibitions.

Section 5 of E.O. 13441 authorizes the Secretary of the Treasury, in consultation with the Secretary of State, to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA, as may be necessary to carry out the purposes of E.O. 13441. Section 5 of E.O. 13441 also provides that the Secretary of the Treasury may redelegate any of these functions to other officers and agencies of the U.S. Government. In furtherance of the purposes of E.O. 13441, OFAC is promulgating the Lebanon Sanctions Regulations, 31 CFR part 549 (the “Regulations”).

The Regulations implement targeted sanctions that are directed at certain persons who meet the criteria set forth above. The sanctions generally do not prohibit trade or the provision of banking or other financial services to the country of Lebanon, unless the transaction or service in question involves a person whose property and interests in property are blocked pursuant to these sanctions.

Subpart A of the Regulations clarifies the relation of this part to other laws and regulations. Subpart B of the Regulations implements the prohibitions contained in sections 1 and 2 of E.O. 13441. See, e.g., §§ 549.201 and 549.205. Persons designated by or under the authority of the Secretary of the Treasury pursuant to E.O. 13441 or otherwise subject to the blocking provisions of E.O. 13441 are referred to throughout the Regulations as “persons whose property and interests in property are blocked pursuant to § 549.201(a).” The names of persons designated pursuant to E.O. 13441 are published on OFAC's Specially Designated Nationals and Blocked Persons List, which is accessible via OFAC's Web site. Those names also are published in the Federal Register as they are added to the List, and the entire List is republished annually as Appendix A to 31 CFR chapter V.

Sections 549.202 and 549.203 of subpart B detail the effect of transfers of blocked property in violation of the Regulations and set forth the requirement to hold blocked funds, such as currency, bank deposits, or liquidated financial obligations, in interest-bearing blocked accounts. Section 549.204 of subpart B provides that all expenses incident to the maintenance of blocked physical property shall be the responsibility of the owners and operators of such property, and that such expenses shall not be met from blocked funds, unless otherwise authorized. The section further provides that blocked property may, in OFAC's discretion, be sold or liquidated and the net proceeds placed in a blocked interest-bearing account in the name of the owner of the property.

Section 549.205 of subpart B implements the prohibitions of E.O. 13441 on any transaction by a United States person or within the United States that evades or avoids, has the purpose of evading or avoiding, or attempts to violate any of the prohibitions set forth in E.O. 13441, and on any conspiracy formed to violate such prohibitions.

Section 549.206 of subpart B details transactions that are exempt from the prohibitions of the Regulations pursuant to sections 203(b)(1), (3), and (4) of IEEPA (50 U.S.C. 1702(b)(1), (3), and (4)). These exempt transactions relate to personal communications, the importation and exportation of information or informational materials, and transactions ordinarily incident to travel.

Subpart C of the Regulations defines key terms used throughout the Regulations, and subpart D contains interpretive sections regarding the Regulations. Section 549.411 of subpart D explains that the property and interests in property of an entity are blocked if the entity is 50 percent or more owned by a person whose property and interests in property are blocked, whether or not the entity itself is designated pursuant to E.O. 13441.

Transactions otherwise prohibited under the Regulations but found to be consistent with U.S. policy may be authorized by one of the general licenses contained in subpart E of the Regulations or by a specific license issued pursuant to the procedures described in subpart E of 31 CFR part 501. Subpart E of the Regulations also contains certain statements of licensing policy in addition to the general licenses.

Subpart F of the Regulations refers to subpart C of part 501 for applicable recordkeeping and reporting requirements. Subpart G of the Regulations describes the civil and criminal penalties applicable to violations of the Regulations, as well as the procedures governing the potential imposition of a civil monetary penalty. Subpart G also refers to Appendix A of part 501 for a more complete description of these procedures.

Subpart H of the Regulations refers to subpart E of part 501 for applicable provisions relating to administrative procedures and contains a delegation of authority by the Secretary of the Treasury. Subpart I of the Regulations sets forth a Paperwork Reduction Act notice.

Because the Regulations involve 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 Regulations 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 North Carolina Department of Transportation, who owns and operates this vertical-lift bridge, has requested a temporary deviation from the current operating schedule to facilitate painting of the structure. Under the regular operating schedule the bridge opens on signal as required by 33 CFR 117.5, except that under 33 CFR 117.823, the draw need not open for the passage of vessels from 8 a.m. to 10 a.m. on the second Saturday of July and from 7 a.m. to 11 a.m. on the second Sunday of November every year.

The Cape Fear River Memorial Bridge across the Cape Fear River, mile 26.8, at Wilmington, NC has vertical clearances in the open and closed positions of 135 feet and 65 feet above mean high water respectively.

Under this temporary deviation, the drawbridge will operate as follows: (1) From 8 a.m. on July 13, 2010 until and including 11:59 p.m. on August 15, 2010 vessel openings will be provided if at least three hours advance notice is given to the bridge tender at (910) 251-5773 or via marine radio on channel 18 VHF; the vertical clearance of the bridge will not be changed in this period; (2) From 12 a.m. (midnight) on August 16, 2010 until and including 11:59 p.m. on December 31, 2010, vessel openings will be provided if at least three hours advance notice is given to the bridge operator at (910) 251-5773 or via marine radio on channel 18 VHF; in this period, the available vertical clearances of portions of the drawbridge (up to half of the drawbridge at one time) will be reduced by approximately four feet to 131 feet and 61 feet above mean high water, respectively, to accommodate scaffolding. There are no alternate routes for vessels transiting this section of the Cape Fear River.

The Coast Guard has carefully coordinated the restrictions with commercial and recreational waterway users. The Coast Guard will use Local and Broadcast Notice to Mariners to inform all users of the waterway of the closure periods for the bridge so that vessels can arrange their transits to minimize any impacts caused by the temporary deviation.

In accordance with 33 CFR 117.35(e), the draw 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.

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected entities may include, but are not limited to:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT.

You may access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's e-CFR site at http://www.gpoaccess.gov/ecfr.

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2010-0232 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before September 28, 2010. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit a copy of your non-CBI objection or hearing request, identified by docket ID number EPA-HQ-OPP-2010-0232, by one of the following methods.

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the on-line instructions for submitting comments.

• Mail: Office of Pesticide Programs (OPP) Regulatory Public Docket (7502P), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001.

• Delivery: OPP Regulatory Public Docket (7502P), Environmental Protection Agency, Rm. S-4400, One Potomac Yard (South Bldg.), 2777 S. Crystal Dr., Arlington, VA. Deliveries are only accepted during the Docket Facility's normal hours of operation (8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays). Special arrangements should be made for deliveries of boxed information. The Docket Facility telephone number is (703) 305-5805.

In the Federal Register of May 19, 2010 (75 FR 28009) (FRL-8823-2), EPA issued a notice pursuant to section 408 of FFDCA, 21 U.S.C. 346a, announcing the receipt of a pesticide petition (PP 9E7648) filed by, Exponent Inc., 1150 Connecticut Ave., NW., Suite 1100, Washington, DC 20036, on behalf of Plant Impact plc, 12 S. Preston Office Village, Cuerdan Way, Bamber Bridge, Preston, PR5 6BL, United Kingdom. The petition requested that 40 CFR 180.960 be amended by establishing an exemption from the requirement of a tolerance for residues of castor oil, ethoxylated, dioleate; 110531-96-9. That notice included a summary of the petition prepared by the petitioner and solicited comments on the petitioner’s request. The Agency did not receive any comments

Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” Section 408(c)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and use in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing an exemption from the requirement of a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .” and specifies factors EPA is to consider in establishing an exemption.

EPA establishes exemptions from the requirement of a tolerance only in those cases where it can be shown that the risks from aggregate exposure to pesticide chemical residues under reasonably foreseeable circumstances will pose no appreciable risks to human health. In order to determine the risks from aggregate exposure to pesticide inert ingredients, the Agency considers the toxicity of the inert in conjunction with possible exposure to residues of the inert ingredient through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings. If EPA is able to determine that a finite tolerance is not necessary to ensure that there is a reasonable certainty that no harm will result from aggregate exposure to the inert ingredient, an exemption from the requirement of a tolerance may be established.

Consistent with FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action and considered its validity, completeness and reliability and the relationship of this information to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. In the case of certain chemical substances that are defined as polymers, the Agency has established a set of criteria to identify categories of polymers expected to present minimal or no risk. The definition of a polymer is given in 40 CFR 723.250(b) and the exclusion criteria for identifying these low-risk polymers are described in 40 CFR 723.250(d). Castor oil, ethoxylated, dioleate conforms to the definition of a polymer given in 40 CFR 723.250(b) and meets the following criteria that are used to identify low-risk polymers.

1. The polymer is not a cationic polymer nor is it reasonably anticipated to become a cationic polymer in a natural aquatic environment.

2. The polymer does contain as an integral part of its composition the atomic elements carbon, hydrogen, and oxygen.

3. The polymer does not contain as an integral part of its composition, except as impurities, any element other than those listed in 40 CFR 723.250(d)(2)(ii).

4. The polymer is neither designed nor can it be reasonably anticipated to substantially degrade, decompose, or depolymerize.

5. The polymer is manufactured or imported from monomers and/or reactants that are already included on the TSCA Chemical Substance Inventory or manufactured under an applicable TSCA section 5 exemption.

6. The polymer is not a water absorbing polymer with a number average molecular weight (MW) greater than or equal to 10,000 daltons.

Additionally, the polymer also meets as required the following exemption criteria specified in 40 CFR 723.250(e).

7. The polymer's number average MW of 1,260 is greater than 1,000 and less than 10,000 daltons. The polymer contains less than 10% oligomeric material below MW 500 and less than 25% oligomeric material below MW1,000, and the polymer does not contain any reactive functional groups.

Thus, castor oil, ethoxylated, dioleate meets the criteria for a polymer to be considered low risk under 40 CFR 723.250. Based on its conformance to the criteria in this unit, no mammalian toxicity is anticipated from dietary, inhalation, or dermal exposure to castor oil, ethoxylated, dioleate.

For the purposes of assessing potential exposure under this exemption, EPA considered that castor oil, ethoxylated, dioleate could be present in all raw and processed agricultural commodities and drinking water, and that non-occupational non-dietary exposure was possible. The number average MW of castor oil, ethoxylated, dioleate is 1,260 daltons. Generally, a polymer of this size would be poorly absorbed through the intact gastrointestinal tract or through intact human skin. Since castor oil, ethoxylated, dioleate conform to the criteria that identify a low-risk polymer, there are no concerns for risks associated with any potential exposure scenarios that are reasonably foreseeable. The Agency has determined that a tolerance is not necessary to protect the public health.

Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA has not found castor oil, ethoxylated, dioleate to share a common mechanism of toxicity with any other substances, and castor oil, ethoxylated, dioleate does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that castor oil, ethoxylated, dioleate does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's website at http://www.epa.gov/pesticides/cumulative.

Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the data base unless EPA concludes that a different margin of safety will be safe for infants and children. Due to the expected low toxicity of castor oil, ethoxylated, dioleate, EPA has not used a safety factor analysis to assess the risk. For the same reasons the additional tenfold safety factor is unnecessary.

Based on the conformance to the criteria used to identify a low-risk polymer, EPA concludes that there is a reasonable certainty of no harm to the U.S. population, including infants and children, from aggregate exposure to residues of castor oil, ethoxylated, dioleate.

An analytical method is not required for enforcement purposes since the Agency is establishing an exemption from the requirement of a tolerance without any numerical limitation.

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint U.N. Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.

The Codex has not established a MRL for castor oil, ethoxylated, dioleate.

Accordingly, EPA finds that exempting residues of castor oil, ethoxylated, dioleate from the requirement of a tolerance will be safe.

This final rule establishes a tolerance under section 408(d) of FFDCA in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these rules from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). Because this final rule has been exempted from review under Executive Order 12866, this final rule is not subject to Executive Order 13211, entitled Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., nor does it involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note).

Since tolerances and exemptions that are established on the basis of a petition under section 408(d) of FFDCA, such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) do not apply.

This final rule directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of FFDCA. As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes, or otherwise have any unique impacts on local governments. Thus, the Agency has determined that Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 9, 2000) do not apply to this final rule. In addition, this final rule does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4).

Although this action does not require any special considerations under Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994), EPA seeks to achieve environmental justice, the fair treatment and meaningful involvement of any group, including minority and/or low-income populations, in the development, implementation, and enforcement of environmental laws, regulations, and policies. As such, to the extent that information is publicly available or was submitted in comments to EPA, the Agency considered whether groups or segments of the population, as a result of their location, cultural practices, or other factors, may have a typical or disproportionately high and adverse human health impacts or environmental effects from exposure to the pesticide discussed in this document, compared to the general population.

The Congressional Review Act, 5 U.S.C. 801 et seq., generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of this rule in the Federal Register. This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

EPA Region 2 is publishing this direct final Notice of Deletion of the SMS Instruments Superfund Site (Site) from the National Priorities List (NPL). The NPL constitutes Appendix B of 40 CFR part 300, which is the Oil and Hazardous Substances Pollution Contingency Plan (NCP), which EPA promulgated pursuant to section 105 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980, as amended. EPA maintains the NPL as the list of sites that present a significant risk to public health, welfare, or the environment. Sites on the NPL may be the subject of remedial actions financed by the Hazardous Substance Superfund (Fund). As described in § 300.425(e)(3) of the NCP, a site deleted from the NPL remains eligible for remedial actions if conditions at the site warrant such action.

Because EPA considers this action to be noncontroversial and routine, this action will be effective September 13, 2010 unless EPA receives significant adverse comments by August 30, 2010. Along with this direct final Notice of Deletion, EPA is co-publishing a Notice of Intent to Delete in the “Proposed Rules” section of the Federal Register. If adverse comments are received within the 30-day public comment period of this deletion action, EPA will publish a timely withdrawal of this direct final Notice of Deletion before the effective date of the deletion, and the deletion will not take effect. EPA will, if appropriate, prepare a response to comments and continue with the deletion process on the basis of the Notice of Intent to Delete and the comments already received. There will be no additional opportunity to comment.

Section II of this document explains the criteria for deleting sites from the NPL. Section III discusses procedures that EPA is using for this action. Section IV discusses the SMS Instruments, Inc. Superfund Site and demonstrates how it meets the deletion criteria. Section V discusses EPA's action to delete the Site from the NPL unless adverse comments are received during the public comment period.

The NCP establishes the criteria that EPA uses to delete sites from the NPL. In accordance with 40 CFR 300.425(e), sites may be deleted from the NPL where no further response is appropriate. In making such a determination pursuant to 40 CFR 300.425(e), EPA will consider, in consultation with the state, whether any of the following criteria have been met:

i. Responsible parties or other parties have implemented all appropriate response actions required; or

ii. All appropriate Fund-financed responses under CERCLA have been implemented, and no further action by responsible parties is appropriate; or

iii. The remedial investigation has shown that the release of hazardous substances poses no significant threat to public health or the environment and, therefore, taking of remedial measures is not appropriate.

The following procedures apply to deletion of the Site:

(1) EPA consulted with the state of New York prior to developing this direct final Notice of Deletion and the Notice of Intent to Delete co-published today in the “Proposed Rules” section of the Federal Register.

(2) EPA has provided the state 30 working days for review of this notice and the parallel Notice of Intent to Delete prior to their publication today, and the state, through the New York Department of Environmental Conservation, has concurred on the deletion of the Site from the NPL.

(3) Concurrently with the publication of this direct final Notice of Deletion, a notice of the availability of the parallel Notice of Intent to Delete is being published in The South Bay News, a major local newspaper. The newspaper notice announces the 30-day public comment period concerning the Notice of Intent to Delete the Site from the NPL.

(4) The EPA placed copies of documents supporting the proposed deletion in the deletion docket and made these items available for public inspection and copying at the Site information repositories identified above.

(5) If adverse comments are received within the 30-day public comment period on this deletion action, EPA will publish a timely notice of withdrawal of this direct final Notice of Deletion before its effective date and will prepare a response to comments and continue with the deletion process on the basis of the Notice of Intent to Delete and the comments already received.

Deletion of a site from the NPL does not itself create, alter, or revoke any individual's rights or obligations. Deletion of a site from the NPL does not in any way alter EPA's right to take enforcement actions, as appropriate. The NPL is designed primarily for informational purposes and to assist EPA management. Section 300.425(e)(3) of the NCP states that the deletion of a site from the NPL does not preclude eligibility for future response actions, should future conditions warrant such actions.

The following summary provides EPA's rationale for deleting SMS Instruments Superfund Site (EPA ID: NYD001533165) from the NPL:

The Site is a 1.5-acre facility located at 120 Marcus Boulevard in Deer Park, New York. The facility was in operation from 1967 to 1990. The Site is in a light industrial and residential area and includes a 34,000 square-foot building. About 90% of the lot is covered by either the building or asphalt pavement. Primary operations at the SMS Instruments facility consisted of overhauling of military aircraft components which included the following operations: Cleaning, painting, degreasing, refurbishing, metal machining, and testing of components. Industrial wastes generated from degreasing and other refurbishing operations were discharged to a leaching pool on Site. Other sources of contamination included a 6,000 gallon Underground Storage Tank (UST) used for jet fuel storage and corroded and leaking drums stored outdoors in an unprotected area.

The site is located on the outwash plain of Long Island. The site elevation is approximately 75 feet above mean sea level. Topography is generally flat with the exception of a steep embankment leading to a large basin 50 feet from the eastern property line. The basin is within a major recharge zone for both the Upper Glacial and Magothy aquifers, which supply water to the entire island. The uppermost aquifer, the Upper Glacial, underlies the site. The depth to the water table is approximately 20 feet below grade. The saturated portion of the Upper Glacial aquifer, with a thickness of 100 feet, begins at the water table and extends down to 120 feet below grade. The Upper Glacial aquifer is underlain by the Magothy aquifer which is approximately 900 feet thick in the vicinity of the site. The groundwater flow direction is southerly for the Upper Glacial aquifer. Land use within the immediate vicinity of the site is light industrial, but predominant land use in the surrounding area is commercial and residential. Approximately 5,000 residences are within 1 mile of the site.

A preliminary assessment of the Site was performed by EPA in 1982 to determine its hazard ranking. Based upon the analytical results, which indicated that the groundwater in the vicinity of the Site contained various volatile organic compounds, the Site was listed on the New York State Registry of Inactive Hazardous Waste Disposal Sites as a “Class 2 Inactive Hazardous Waste Site” in 1985.

The Site was added to the NPL on June 10, 1986 (51 FR 21054).

The first Remedial Investigation and Feasibility Study (RI/FS) for the site was initiated in April 1987 and completed in June 1989. Through the site investigations, EPA determined that the contaminants of concern present in soils, and in the groundwater were volatile organic compounds (VOCs). Contaminants of concern at the site included benzene, toluene, chlorobenzene and xylene in both soils and groundwater. The site-related VOC groundwater contaminant plume was determined to have a cross-width of less than 70 feet and to extend vertically into the shallow portion (upper 40 saturated feet) of the Upper Glacial aquifer. In addition, EPA determined from the risk assessment that the contaminants in the groundwater in the shallow portion of the Upper Glacial aquifer at the site, if not addressed, pose an unacceptable cancer risk and noncancer hazard. Groundwater contamination was also identified in the groundwater upgradient of the site which was attributed to upgradient sources other than those at the SMS Instruments site. Groundwater remediation addressed both site-related and upgradient contaminant to State and Federal drinking water standards.

A Record of Decision (ROD) was signed on September 29, 1989 for Operable Unit 1 (OU-1), which addressed contaminated soil and groundwater related to the Site. The ROD selected two media-specific remediation actions, one for soil and one for groundwater. The following are the Remedial Action Objectives: (1) Remove the site-related sources of contamination into the groundwater to expedite compliance with Federal and State groundwater standards; (2) prevent potential future ingestion of site-related contaminated groundwater; (3) restore the quality of groundwater contaminated from the site-related activities to levels consistent with the Federal and State drinking water and groundwater quality standards; and (4) mitigate migration from the site of the site-related contaminated groundwater. The ROD specified the following remedial action components: (1) In-situ air stripping (soil vapor extraction), of the contaminated soil in the southeastern portion of the property in the area of high VOC contamination; (2) extraction of the site-related groundwater contaminant plume present in the upper 50 feet of the saturated Upper Glacial aquifer; (3) treatment of contaminated groundwater to drinking water standards; (4) reinjection of the treated groundwater into the Upper Glacial aquifer; and (5) disposal of treatment residuals, as appropriate.

As a requirement of the first ROD for the Site a second RI/FS was performed (as Operable Unit 2 (OU-2)) to determine the presence/existence of offsite, upgradient sources of contamination. No upgradient sources of contamination were found and a ROD for OU-2 was signed on September 27, 1993 which selected a “no-action” remedy.

The owner of the property negotiated a settlement with EPA in 1988 and the EPA took over all work associated with OU-1 and OU-2 Remedial Design and Remedial Action activities. The Remedial Design of the remedies was performed by CDM Federal, Inc. on behalf of EPA. The Remedial Action was implemented in two phases: Soil remediation and groundwater remediation.

Based on data from the RI and knowledge of the locations of the two primary source areas, namely, the underground cesspool and former UST, EPA's contractor (CDM Federal, Inc.) prepared a remedial design for a Soil Vapor Extraction System (SVE) to remediate these source areas. CDM Federal, Inc. initiated the construction of the SVE system in October 1991; the construction was completed in April 1992 and operation of the SVE system began shortly thereafter. Soil contamination in the soil vadose zone, within each of the two source areas, was remediated of VOCs (predominantly benzene, toluene, ethylbenzene, and xylenes (BTEX)) down to the water table depth approximately 20 feet below ground surface. Operation of the SVE system continued until November 1993, when it was determined (and confirmed by soil sampling) that all soil cleanup levels had been achieved. During the soil remedial action activities, CDM collected groundwater samples to monitor the contaminant levels at the site. In addition, CDM's subcontractor continuously monitored the influent and effluent air streams to, and from, the SVE system to assure treatment was being performed in accordance with the performance requirements of the site-specific Monitoring Plan. Demobilization of soil remediation equipment occurred in March 1994. A Remedial Action Report, documenting the completion of the remedial action, was approved by EPA on September 22, 1994.

On-site construction activities were initiated in August 1993. Construction of the groundwater treatment system was completed in June 1994. The system began full operation in September 1994. The groundwater remedy consisted of pumping contaminated groundwater out of the aquifer, treating it through air stripping and carbon adsorption, and reinjecting it into the aquifer. The Remedial Action Report documenting the completion of the construction of the groundwater remediation system at the site was signed on March 31, 1995. The total flow rate through the treatment plant was approximately 90 gallons per minute (gpm), pumped from two extraction wells. The system was in almost continuous operation from September 1994 through September 2005, treating a total of approximately 500 million gallons of contaminated groundwater. It should be noted that, due to frequent clogging of the injection wells, permission was granted (from the Town of Babylon) to discontinue use of the injection wells and discharge the treated groundwater directly into the recharge basin located adjacent to the site. The requirements for this discharge are the same as those for reinjection back into the aquifer. The groundwater treatment plant was decommissioned in 2007. The final building demolition and concrete foundation removal was completed in December 2007. In May 2008, NYSDEC issued the Final Pump and Treat System Dismantlement Report.

In 2005, EPA secured a REAC Contract with EarthTech, Inc. to pilot an alternative technology in order to decrease the time frame and the cost required to remediation groundwater contamination at the Site. EarthTech, Inc. built a transportable air-sparging system, installed the system on Site, attached the system to sparging wells, and began operating the system in May 2005. The air-sparging system successfully remediated the residual contamination that was the source of ongoing groundwater contamination. The air-sparging system was turned off in January 2010.

The table below summarizes the cleanup goals for the soils and groundwater:

Groundwater monitoring was performed quarterly from 1994 to 2002 and at least semi-annually from 2003 to 2005. From 2005 to 2010, groundwater monitoring was conducted on an annual basis. When the groundwater pump and treat system was shut down in 2005, groundwater monitoring results indicated excursions of contaminant concentrations above cleanup goals localized in the vicinity of monitoring well MW-6S. Once the air-sparging unit began operation, groundwater monitoring data in 2008 and 2009 indicated three slight excursions above drinking water standards at the same monitoring well. The last groundwater monitoring event, in January 2010, indicated compliance with NYS Class GA drinking water standards for all site-related and upgradient contaminants in all site-related monitoring wells, including monitoring well MW-6S.

Hazardous substances at the Site are at levels that allow for unlimited use and unrestricted exposure. Pursuant to Section 121(c) of CERCLA, EPA reviews site remedies where such hazardous substances, pollutants, or contaminants remain no less often than every five years after the initiation of a remedy at a site. EPA conducted a five-year review of the Site in July 2006. The five-year review led EPA to conclude that human health and the environment are being protected by the remedial action implemented at the Site. As hazardous substances at the Site are at levels that allow for unlimited use and unrestricted exposure, no future five-year reviews are necessary.

Public participation activities for this Site have been satisfied as required in CERCLA Sections 113(k) and 117. As part of the remedy selection process, the public was invited to comment on EPA's proposed remedies. All other documents and information which EPA relied on or considered in recommending this deletion are available for the public to review at the information repositories identified above.

All of the completion requirements for this Site have been met, as described in EPA's July 2010 Final Close Out Report. The State of New York, in a July 7, 2010 letter concurred on the proposed deletion of this Site from the NPL.

The NCP specifies that EPA may delete a site from the NPL if “all appropriate Fund-financed response under CERCLA has been implemented, and no further response action by responsible parties is appropriate.” 40 CFR 300.425(e)(1)(ii). EPA, with the concurrence of the State of New York, through NYSDEC, believes that this criterion for deletion has been met. Consequently, EPA is deleting this Site from the NPL. Documents supporting this action are available in the Site files.

The EPA, with the concurrence of the State of New York, through NYSDEC, has determined that all appropriate responses under CERCLA have been completed and that no further response actions under CERCLA are necessary. Therefore, EPA is deleting the Site from the NPL.

Because EPA considers this action to be noncontroversial and routine, EPA is taking it without prior publication. This action will be effective September 13, 2010 unless EPA receives adverse comments by August 30, 2010. If adverse comments are received within the 30-day public comment period of this action, EPA will publish a timely withdrawal of this direct final notice of deletion before the effective date of the deletion and the deletion will not take effect. EPA will, if appropriate, prepare a response to comments and continue with the deletion process on the basis of the notice of intent to delete and the comments received. There will be no additional opportunity to comment.

Regulations governing possession and landing limits for vessels fishing under common pool regulations are found at 50 CFR 648.86. The regulations authorize vessels issued a valid limited access NE multispecies permit and fishing under a NE multispecies day-at-sea (DAS), or fishing under a NE multispecies Small Vessel or Handgear A or B category permit, to fish for and retain NE multispecies, under specified conditions. The vessels fishing in the common pool are allocated a sub-ACL equivalent to that portion of the commercial groundfish ACL that is not allocated to the 17 approved NE multispecies sectors for FY 2010. The final rule implementing FW 44 (75 FR 18356, April 9, 2010) established ACLs for FY 2010. A subsequent action published on May 26, 2010 (75 FR 29459), adjusted allocations based on final rosters of vessels participating in sectors for FY 2010. For FY 2010, the common pool has been allocated sub-ACLs of 240 mt (529,109 lb) for GOM cod and 23 mt (50,706 lb) for GB yellowtail flounder.

The regulations at § 648.86(o) authorize the Administrator, Northeast (NE) Region, NMFS (Regional Administrator) to increase or decrease the trip limits for vessels in the common pool to prevent over-harvesting or under-harvesting the common pool sub-ACL. Exceeding the common pool sub-ACL prior to April 30, 2011, would require drastic trip limit reductions and/or imposition of differential DAS counting for the remainder of FY 2010 to minimize the overage, and would trigger accountability measures (AMs) in FY 2011, including differential DAS counting, to prevent future overages.

GB yellowtail flounder is a transboundary stock whose Total Allowable Catch (TAC) is negotiated under the U.S./Canada Resource Sharing Understanding (Understanding). The regulations implementing the Understanding at § 648.85(a) grant the RA additional authority to implement gear requirements in the U.S./Canada Management Area to prevent over- or under-harvest of the TAC. The regulations also require that, if any sector or the common pool exceeds its allocation of a TAC, that group is prohibited from fishing in the Eastern U.S./Canada Area, and any TAC overage at the end of the FY is deducted from the corresponding allocation in the following FY. Therefore, if the common pool exceeds the FY 2010 GB yellowtail flounder sub-ACL, vessels in the common pool will be prohibited from fishing in the Eastern U.S./Canada Area for the remainder of FY 2010, and the FY 2011 common pool sub-ACL would be reduced by the amount of any overage.

A previous inseason action published in the Federal Register on May 27, 2010 (75 FR 29678), reduced the common pool trip limits for five stocks: GOM haddock, GB haddock, GOM winter flounder, GB winter flounder, and GB yellowtail flounder.

Initial Vessel Monitoring System (VMS) and dealer reports indicate that approximately 66.5 percent of the GOM cod and 70.9 percent of the GB yellowtail flounder common pool sub-ACLs have been harvested as of July 15, 2010. Based on the rate of catch for GOM cod to date, the Regional Administrator has determined that, unless a reduction in trip limit is implemented, the common pool fishery will exceed its sub-ACL for GOM cod by early August 2010, well before the end of the FY.

Based on this information, the Regional Administrator is reducing the trip limit for GOM cod, effective July 30, 2010 through April 30, 2011, from 800 lb (362.9 kg) per DAS, not to exceed 4,000 lb (1,814.3 kg) per trip; to 200 lb (90.7 kg) per DAS, not to exceed 1,000 lb (453.6 kg) per trip. This action is intended to prevent common pool vessels from exceeding their sub-ACL and to allow these vessels to fish for other NE multispecies. Vessels with a Small Vessel category permit will be proportionally limited to not more than 75 lb (34.0 kg) of cod within their trip limit of 300 lb (136.1 kg) of cod, haddock, and yellowtail flounder, combined. The regulations at §§ 648.82(a)(6) and 648.88(a)(1) require that the cod trip limit for vessels with a limited access Handgear A or open access Handgear B permit change proportionally (rounded up to the nearest 25 lb (11.3 kg)) with any change to the landing limit for DAS vessels. Therefore, trip limits are reduced from 300 lb (136.1 kg) per trip to 75 lb (34.0 kg) per trip, for Handgear A vessels; and from 75 lb (34.0 kg) trip, to 25 lb (11.3 kg) trip, for Handgear B vessels.

At-sea observer reports indicate that catch rates of yellowtail flounder on GB are higher south of 41° 40' N. lat than north of it. Requiring common pool trawl vessels that fish any part of a trip in the Western U.S./Canada Area south of 41° 40' N. lat. to use either a haddock separator trawl or a Ruhle trawl will reduce the catch rate of yellowtail flounder, reduce discards, and is likely to result in the achievement of the TAC, without exceeding it. The Regional Administrator has determined that, because the GB yellowtail flounder trip limit has already been reduced, it is sufficient to implement only a change in gear requirements in order to ensure that the common pool vessels do not exceed the sub-ACL for yellowtail flounder. Based on this information, the Regional Administrator is prohibiting the use of trawl gear, except for the haddock separator trawl and the Ruhle trawl, as specified at § 648.85(a)(3)(ix) and (b)(10)(iv)(J)(3), respectively, by any limited access NE multispecies common pool vessel that harvests, possesses, or lands fish from, or deploys its net during any part of a trip in, the Western U.S./Canada Area south of 41° 40' N. lat. under a NE multispecies DAS, to reduce catches and discards of GB yellowtail flounder, effective July 30, 2010 through April 30, 2011, or until modified by a subsequent action. For any such vessels, other gear may be on board the vessel but must be stowed according to the regulations at § 648.23(b) for the entire trip. For any limited access NE multispecies common pool vessel possessing, harvesting, or landing fish exclusively from the area north of 41° 40' N. lat., all trawl gear, except the haddock separator trawl or Ruhle trawl, must be stowed while transiting the Western U.S./Canada Area south of this line.

The FW 44 final rule (75 FR 18356, April 9, 2010) delayed the opening of the Eastern U.S./Canada Area for vessels using trawl gear until August 1, 2010. To prevent overharvest of yellowtail flounder from closing the Eastern U.S./Canada Area and preventing access to the transboundary stocks of GB cod and GB haddock, the Regional Administrator is prohibiting the use of a flounder net in the Eastern U.S./Canada Area by any limited access NE multispecies common pool vessel, effective August 1, 2010, through April 30, 2011. Common pool trawl vessels will be able to fish in the Eastern U.S./Canada Area only if they are using either a haddock separator trawl or a Ruhle trawl. Any other trawl gear must be stowed according to the regulations and not available for use.

The regulations at § 648.85(a)(3)(iv)(D) specify that, if the Regional Administrator requires use of a particular gear type in order to reduce catches of stocks of concern, the following gear performance incentives will apply: Possession of flounders (all species combined), monkfish, and skates is limited to 500 lb (226.8 kg) (whole weight) each (i.e., no more than 500 lb (226.8 kg) of all flounders, no more than 500 lb (226.8 kg) of monkfish, and no more than 500 lb (226.8 kg) of skates), and possession of lobsters is prohibited. Therefore, common pool vessels fishing any part of a trip in the Eastern U.S./Canada Area or in the Western U.S./Canada Area south of 41° 40' N. lat. are restricted to these catch limits for the duration of that trip.

If sufficient GB yellowtail flounder common pool sub-ACL remains available, the Regional Administrator may lift these gear restrictions before the end of FY 2010 to allow additional opportunity to achieve the FY 2010 common pool sub-ACLs for the transboundary stocks of GB yellowtail flounder, GB cod, and GB haddock.

Catch will be closely monitored through dealer-reported landings, VMS catch reports, and other available information. Further inseason adjustments to increase or decrease the trip limits, as well as differential DAS measures may be considered, based on updated catch data and projections.

This action is authorized by 50 CFR part 648 and is exempt from review under Executive Order 12866.

Pursuant to 5 U.S.C. 553(b)(3)(B) and (d)(3), there is good cause to waive prior notice and opportunity for public comment, as well as the delayed effectiveness for this action, because notice, comment, and a delayed effectiveness would be impracticable and contrary to the public interest. The regulations at §§ 648.86(o) and 648.85(a)(3)(iv)(D) grant the Regional Administrator the authority to adjust NE multispecies trip limits and to implement gear restrictions in the U.S./Canada Management Area, respectively, to prevent over-harvesting or under-harvesting the common pool sub-ACLs. This action will implement a more restrictive trip limit for GOM cod and restrict the use of trawl gear in a portion of the U.S./Canada Management Area in order to ensure that the common pool sub-ACLs for GOM cod and GB yellowtail flounder are not overharvested, and the biological and economic objectives of the FMP are met.

It is important to take this action immediately because, based on current data and projections, continuation of the status quo will result in reaching the respective common pool sub-ACLs prior to the end of FY 2010. Attainment of any of the common pool sub-ACLs prior to the end of the FY on April 30, 2011, would result in lower trip limits and/or differential DAS counting for the remainder of FY 2010, and would result in end-of-the-year AMs to be put in place for the common pool in FY 2011. These restrictions could result in the loss of yield of other valuable species caught by vessels in the common pool.

The updated catch information that is the basis for this action only recently became available. The time necessary to provide for prior notice and comment, and delayed effectiveness for this action would prevent NMFS from implementing a reduced trip limit in a timely manner. A resulting delay in the curtailment of catch rate of these stocks could result in less revenue for the fishing industry and be counter to the objective of optimum yield.

The Regional Administrator's authority to decrease trip limits and to implement gear restrictions in the U.S./Canada Management Area for the common pool to help ensure that the common pool sub-ACL for all NE multispecies are harvested, but not exceeded, was considered and open to public comment during the development of Amendment 16 and FW 44. Therefore, any negative effect the waiving of public comment and delayed effectiveness may have on the public is mitigated by these factors.

In the 2009 annual management measures for ocean salmon fisheries (74 FR 20610, May 5, 2009), NMFS announced the commercial and recreational fisheries in the area from the U.S./Canada Border to the U.S./Mexico Border. These management measures included 2010 salmon seasons opening earlier than May 1, 2010.

On March 10, 2010, the Regional Administrator (RA) consulted with representatives of the Pacific Fishery Management Council (Council), Washington Department of Fish and Wildlife, Oregon Department of Fish and Wildlife, and California Department of Fish and Game. The parties to this consultation considered information related to Chinook salmon abundance forecasts, Chinook salmon catch rates, and possible impacts to Sacramento River fall Chinook salmon from the fisheries scheduled to open March 15, 2010. The fisheries opening March 15, 2010 were to occur in the impact area for Sacramento River fall Chinook salmon. Preliminary projections suggested that there would be limited harvest opportunity for Sacramento River fall Chinook salmon and, by moving the opening dates of these fisheries to after May 1, 2010 NMFS and the Council would have more time to evaluate the impacts of these fisheries on the Sacramento River fall Chinook salmon stock.

As a result, on March 10, 2010, the states recommended, and the RA concurred, that NMFS should adopt inseason actions #1 and #2 that would cancel the previously scheduled March 15, 2010 opening date for the (a) commercial fishery in the area from Cape Falcon, Oregon to Humbug Mountain, Oregon, and from Humbug Mountain, Oregon to the Oregon/California Border and (b) the recreational fishery in the area from Cape Falcon, Oregon, to Humbug Mountain, Oregon. Modification of quota and/or fishing seasons by inseason action is authorized by 50 CFR 660.409(b)(1)(i).

In the 2010 annual management measures for ocean salmon fisheries (75 FR 24482, May 5, 2010), NMFS announced the commercial and recreational fisheries in the area from the U.S./Canada Border to the U.S./Mexico Border, beginning May 1, 2010.

The RA consulted with representatives of the Council, Washington Department of Fish and Wildlife, and Oregon Department of Fish and Wildlife on June 10, 2010. The information considered during this consultation related to Chinook salmon catch to date and Chinook salmon catch rates compared to quotas and other management measures established preseason.

Inseason action #3 closed the commercial salmon fishery from the U.S./Canada Border to Cape Falcon, Oregon. This action was taken consistent with the 2010 management measures requirement that when it was projected that 35,000 Chinook salmon of the 42,000 Chinook salmon quota had been landed, NMFS would consider inseason action , to modify the open period and add landing and possession limits to extend the fishery through the end of June. On June 10, 2010, the states recommended this action and the RA concurred; inseason action #3 took effect on June 12, 2010, and was effective until it was modified by subsequent inseason action that will be described in a separate federal register notice. Modification of quota and/or fishing seasons is authorized by 50 CFR 660.409 (b)(1)(i).

The RA consulted with representatives of the Council, Washington Department of Fish and Wildlife, and Oregon Department of Fish and Wildlife on June 15, 2010. The information considered during this consultation related to catch to date for salmon and incidental halibut harvest, and Chinook salmon catch rates compared to quotas and other management measures established preseason.

Inseason action #4 closed the retention of Pacific halibut caught incidentally while trolling for salmon in halibut management area 2A (the coasts of Washington, Oregon and California). This action was taken due to attainment of the 2010 incidental halibut harvest quota. On June 15, 2010, the states recommended this action and the RA concurred; inseason action #4 took effect on June 16, 2010. Modification of quota and/or fishing seasons is authorized by 50 CFR 660.409(b)(1)(i) .

All other restrictions and regulations remain in effect as announced for the 2010 Ocean Salmon Fisheries and previous inseason actions.

The RA determined that the best available information indicated that the catch and effort data, and projections, supported the above inseason actions recommended by the states. The states manage the fisheries in state waters adjacent to the areas of the U.S. exclusive economic zone in accordance with these Federal actions. As provided by the inseason notice procedures of 50 CFR 660.411, actual notice of the described regulatory actions was given, prior to the date the action was effective, by telephone hotline number 206-526-6667 and 800-662-9825, and by U.S. Coast Guard Notice to Mariners broadcasts on Channel 16 VHF-FM and 2182 kHz.

The Assistant Administrator for Fisheries, NOAA (AA), finds that good cause exists for this notification to be issued without affording prior notice and opportunity for public comment under 5 U.S.C. 553(b)(B) because such notification would be impracticable. As previously noted, actual notice of the regulatory actions was provided to fishers through telephone hotline and radio notification. These actions comply with the requirements of the annual management measures for ocean salmon fisheries (74 FR 20610, May 5, 2009; 75 FR 24482, May 5, 2010), the West Coast Salmon Plan, and regulations implementing the West Coast Salmon Plan 50 CFR 660.409 and 660.411. Prior notice and opportunity for public comment was impracticable because NMFS and the state agencies had insufficient time to provide for prior notice and the opportunity for public comment between the time the fishery catch and effort data were collected to determine the extent of the fisheries, and the time the fishery modifications had to be implemented in order to ensure that fisheries are managed based on the best available scientific information, thus allowing fishers access to the available fish at the time the fish were available while ensuring that quotas are not exceeded. The AA also finds good cause to waive the 30-day delay in effectiveness required under U.S.C. 553(d)(3), as a delay in effectiveness of these actions would allow fishing at levels inconsistent with the goals of the Salmon Fishery Management Plan and the current management measures.

These actions are authorized by 50 CFR 660.409 and 660.411 and are exempt from review under Executive Order 12866.

NMFS manages the groundfish fishery in the BSAI exclusive economic zone according to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (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 2010 Bering Sea pollock TAC allocated to the AFA inshore open access fishery in the BSAI is 2,762 metric tons (mt) as established by the final 2010 and 2011 harvest specifications for groundfish in the BSAI (75 FR 11778, March 12, 2010), and further described at http://alaskafisheries.noaa.gov/sustainablefisheries/afa/10bsaicoopallocations.pdf.

In accordance with § 679.20(d)(1)(i), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the B season allowance of pollock TAC allocated to the AFA inshore open access fishery, which is catching pollock for processing by the inshore component in the Bering Sea subarea, has been reached. Therefore, the Regional Administrator is establishing the B season allowance of pollock TAC as the directed fishing allowance. Consequently, in accordance with § 679.20(d)(1)(iii), since this directed fishing allowance has been reached, NMFS is prohibiting directed fishing for pollock by AFA trawl catcher vessels participating in the inshore open access fishery in the Bering Sea subarea.

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

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA, (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of directing fishing for pollock by AFA trawl catcher vessels participating in the inshore open access fishery in the Bering Sea subarea. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of July 26, 2010.

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

This action is required by § 679.20 and is exempt from review under Executive Order 12866.