This final rule has been determined to be not significant for purposes of Executive Order 12866, and, therefore, has not been reviewed by the Office of Management and Budget (OMB).

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. There are no administrative procedures which must be exhausted prior to any judicial challenge to the provisions of this final rule.

AMS Cotton and Tobacco Programs is amending the procedures for providing cotton leaf grade classification services as authorized by the United States Cotton Standards Act of 1923, as amended (7 U.S.C. 51-65), the Cotton Statistics and Estimates Act of 1927 (7 U.S.C. 471-476), and the U.S. Cotton Futures Act (7 U.S.C. 15b, 7 U.S.C. 4736, 7 U.S.C. 1622(g)). While measurements for other quality factors are performed by precise HVI measurements, manual determinations for leaf grade and extraneous matter are currently part of the official USDA cotton classification. Accurate assignment of leaf grade is of economic importance to all participants along the cotton supply chain since leaf content is all waste and there is a cost factor associated with its removal. Furthermore, since small leaf particles cannot always be removed, these particles detract from the quality and, therefore, the value of the finished product.

AMS has HVIs with the ability to optically identify, with a high level of confidence, the number of leaf particles (Particle Count) and to measure the surface area covered by non-lint particles (Area). AMS then applies mathematical algorithms to correlate Particle Count and Area data to the Universal Cotton Standards for Leaf Grade which serve as the ultimate comparison for cotton grading. A pilot project was conduct by AMS during 2009 and 2010 cotton classing seasons to evaluate the accuracy of the proposed instrument leaf grade determination process. Results showed that the HVI measures leaf as compared back to the Universal Cotton Standards for Leaf Grade more accurately than cotton classers. This rule amends the cotton classification process, replacing the classer's leaf determination with the instrument leaf measurement made by the HVI system. Instrument leaf grading is expected to improve the repeatability, consistency and accuracy of leaf grade classification data provided to the cotton industry, while improving operational efficiency.

In § 27.2 (n), the definition of the term “classification” is revised to reflect the changes in procedures made under 7 CFR part 28.

Also under 7 CFR part 27, § 27.31 is revised to reflect the deletion of the requirement for cotton classers to manually determine leaf grade. The revised section reflects the changes made in procedures for determination of cotton quality in accordance with the official standards.

In 7 CFR part 28, § 28.8 is revised to reflect the change in cotton classification procedures which replaces classer visual examinations to determine leaf grade with instrument leaf measurement by HVI systems.

In addition, miscellaneous other changes are made to 7 CFR parts 27 and 28 to better reflect current procedures in view of leaf determination change. For example, those determinations made by cotton classers or by authorized Cotton Program employees are specified.

A proposed rule was published on December 23, 2011, with a comment period of December 23, 2011 through January 9, 2012 (76 FR 80278). AMS received four comments: One from a national trade organization that represents approximately 80 percent of the US cotton industry, including cotton producers, ginners, warehousemen, merchants, cooperatives, cottonseed processors, and textile manufacturers from Virginia to California; one from a national trade organization comprised of eight state and regional membership organizations that represent approximately 680 individual cotton ginning operations in 17 cotton-producing states; one from a national trade organization representing cotton merchant firms that handle over 80 percent of the U.S. cotton sold in domestic and foreign markets; and one from an individual commenter who grades cotton. The comments from the trade organizations were supportive of both the proposed changes while the individual commenter was opposed. The comments may be viewed at www.regulations.gov.

Comments from the three national trade organizations expressed support for AMS using instrument leaf grading as the method for determining official leaf grades. Furthermore, each of these organizations recognized how thorough testing conducted by AMS throughout both the 2009 and 2010 classing seasons demonstrated improvements in both the consistency and repeatability of leaf grade determination.

One individual commenter expressed concerns about the accuracy of instrument-determined leaf grades, the timing of the regulatory change, and the length of the comment period. The commenter stated their belief that instrument leaf grading is not a more accurate means to grade cotton over a human classer. AMS began using the instrument-based system on a trial basis, with the ability of classers to overwrite inaccurately assigned data, during the 2009 and 2010 cotton crops. Results demonstrated significant improvements in accuracy and repeatability as factors such as grader fatigue and central tendency were eliminated. Trial results were presented at numerous open-forum discussions conducted throughout the Cotton Belt to ensure that technical and operational information was fully and accurately communicated to the various segments of the U.S. cotton industry. AMS graders in all field offices evaluated the process change for accuracy, provided feedback, and were briefed on the impact the change would have on streamlining their duties. AMS integrated these graders' feedback to help refine the computer system used for assigning the leaf grade.

The timeline for implementing the process change was scheduled around the completion of critical software programing modifications made to more than four hundred proprietary AMS Information Technology (IT) programs. These computer programs ensure the accurate calculation, secure storage, and seamless flow of cotton quality data, while providing timely information to managers for the evaluation of equipment and employees. With the industry's acceptance, approval, and recommendation to implement, the expectation was that software modifications and the regulatory process would conclude concurrently prior to the beginning of the 2011 crop. However, changes in the timeline have resulted in finalization at this time.

The comment period time frame was deemed appropriate to implement instrument leaf grading as soon as possible in order to allow the cotton industry to fully benefit from the increased accuracy and repeatability of cotton leaf data provided by instrument leaf grading during the current classing season. The timing of the comment period fell coincidentally during the Annual Cotton Beltwide Conference—the largest single gathering of representative of all segments of the U.S. cotton industry. AMS used this forum to notify constituents of the opportunity to submit comments.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of this action on small entities and has determined that its implementation will not have a significant economic impact on a substantial number of small entities. Fees paid by users of the service are not changed by this action; implementation of the new procedures indicates the existing fees remain sufficient to fully reimburse AMS for provision of the services.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions so that small businesses will not be disproportionately burdened. There are an estimated 25,000 cotton growers, merchants, and textile manufacturers in the U.S. who voluntarily use the AMS cotton classing services annually under the United States Cotton Standards Act of 1923, as amended, the Cotton Statistics and Estimates Act of 1927, and the U.S. Cotton Futures Act. The majority of these cotton growers are small businesses under the criteria established by the Small Business Administration (13 CFR 121.201). The change in procedures will not significantly affect small businesses as defined in the RFA because:

(1) Classification will continue to be based upon the Universal Cotton Standards for Leaf Grade established and maintained by the Department;

(2) The HVI measurement has been a part of the official classification record since 1991. Implementation of the revision for all cotton classification will not affect competition in the marketplace or adversely impact on cotton classification fees; and

(3) The use of cotton classification services is voluntary. For the 2010 crop, 17.6 million bales were produced by growers, and virtually all of them were voluntarily submitted for USDA classification. Futures classification services provided for merchants during the same period totaled approximately 750 thousand bales.

In compliance with Office of Management and Budget (OMB) regulations (5 CFR part 1320), which implement the Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3520), the information collection requirements contained in the regulation to be amended is currently approved under OMB control number 0581-0008, Cotton Classing, Testing and Standards.

Pursuant to 5 U.S.C. 553, it is found that good cause exists for not postponing the effective date of the rule until 30 days after publication in the Federal Register because: (1) The 2011 cotton crop year has already begun; (2) the industry is familiar with instrument leaf grading process as AMS implemented a pilot project to evaluate the accuracy of the determination for crop years 2009 and 2010; and (3) there is overall industry support for this change.

For the reasons set forth in the preamble, 7 CFR parts 27 and 28 are amended as follows:

We issued a supplemental notice of proposed rulemaking (SNPRM) to amend 14 CFR part 39 to include an airworthiness directive (AD) that would apply to the specified products. That SNPRM was published in the Federal Register on January 3, 2011 (76 FR 28). The original NPRM (74 FR 53436, October 19, 2009) proposed to require replacing the power control relays for the fuel boost pumps and override pumps with new relays having a GFI feature. The SNPRM proposed to add an electrical bonding resistance measurement for certain GFI relays to verify that certain bonding requirements are met. The SNPRM also proposed to add, for certain airplanes, an inspection to ensure that certain screws are properly installed, and installing longer screws if necessary.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the SNPRM (76 FR 28, January 3, 2011) and the FAA's response to each comment. Boeing concurs with the contents of the SNPRM.

American Airlines (AA) and TDG Aerospace requested that we revise the SNPRM (76 FR 28, January 3, 2011) to allow incorporation of the previously-approved Supplemental Type Certificate (STC) ST01950LA, issued January 17, 2007, as an approved means of compliance for providing fault protection for the center override fuel pumps. The commenters stated that the UFI, in accordance with STC ST01950LA, performs as a GFI for the center override pumps, providing equivalent or better protection for detection and prevention of ground fault anomalies. The commenters added that the FAA has acknowledged that the UFI provides transient fault detection and steady state fault detection; and in response to any of the above electrical faults, the UFI will de-energize the airplane electromechanical relay to shut off the fuel pump. TDG stated that Boeing Model 757 airplanes utilize the same fuel pump part number for the center tank fuel boost pump application as the Boeing Model 737NG airplane. TDG Aerospace STC ST01950LA for Model 757 airplanes utilizes the same UFI part number as STC ST02076LA for Model 737NG airplanes that have the UFI as an acceptable means of compliance through the Manager, Seattle Aircraft Certification Office (ACO) approval process under Docket No. FAA-2010-1199 (AD 2011-20-07, Amendment 39-16818 (76 FR 60710, September 30, 2011)). TDG Aerospace pointed out that a large number of Model 757 operators have already incorporated STC ST01950LA as a means of compliance with FAA AD 2008-11-07, Amendment 39-15529 (73 FR 30755, May 29, 2008).

We partially agree. We have been informed that referring to an STC now violates Office of the Federal Register (OFR) regulations (1 CFR part 51) for approval of optional materials “incorporated by reference” in rules. However, we have added paragraph (g)(2)(ii) to this AD to specify that installation of TDG Aerospace UFIs to the center tank override pumps must be done in accordance with a method approved by the Manager, Seattle ACO, FAA. We have also added “Note 1 to paragraph (g)(2)(ii) of this AD” to specify that additional guidance on installing TDG Aerospace UFIs can be found in TDG Aerospace STC ST01950LA.

AA requested that we exempt airplanes that have the UFI installed for the center override pumps from performing screw length inspections and electrical bonding checks that are specific to the GFI installation. The commenter stated that the UFI installation under STC ST01950LA already complies with proper grip length. The commenter also stated that the UFI STC requires the bonding check of the installed UFI bracket to each panel.

We disagree with the commenter's request because the inspection requirements of paragraph (h) of the final rule clearly identify that the screw grip length inspections and GFI bonding checks are applicable only to airplanes that have Boeing Alert Service Bulletin 757-28A0078 or 757-28A0079, both dated July 16, 2008, accomplished before the effective date of the AD. Airplanes that have incorporated the UFI under STC ST01950LA on their center tank override pumps do not need to perform these additional inspections required by paragraph (h) of this AD. No changes have been made to this AD in this regard.

AA and United Airlines requested correction of a number of typographical errors in Boeing Service Bulletins 757-28A0078 and 757-28A0079, both Revision 1, both dated August 24, 2010.

AA stated that typographical errors in Boeing Service Bulletin 757-28A0078, Revision 1, dated August 24, 2010, mistakenly refer to the P37 panel as “P33.” In addition, AA and United Airlines stated that those service bulletins mistakenly refer to the standard wiring practices manual rather than the standard overhaul practices manual (SOPM) for the P33 and P37 panel identification.

United Airlines requested that paragraph (i) of the SNPRM (76 FR 28, January 3, 2011) be corrected to identify paragraph 3.B.12.l.(5) of Part 1 of the Accomplishment Instructions of Boeing Service Bulletin 757-28A0078, Revision 1, dated August 24, 2010, and not the currently referenced paragraph 3.B.12.i.(5). Boeing Service Bulletin Information Notice 757-28A0078 IN 02, dated October 6, 2010, identifies paragraph 3.B.12.l.(5) as the impacted paragraph of the service bulletins.

We agree that the typographical errors needed to be corrected. Boeing has released Service Bulletins 757-28A0078 and 757-28A0079, both Revision 2, both dated January 11, 2012, which correct typographical errors in the calculations in paragraphs 3.B.12.m.(5) and 3.B.12.m.(6) of Boeing Service Bulletins 757-28A0078 and 757-28A0079, both Revision 1, both dated August 24, 2010. These service bulletin revisions also clarify certain actions and correct other typographical errors. Paragraphs (c), (g), and (h) of this AD have been updated to refer to Boeing Service Bulletins 757-28A0078 and 757-28A0079, both Revision 2, both dated January 11, 2012. Paragraph (i) of the SNPRM (76 FR 28, January 3, 2011) has been removed from this final rule. We have also added a new paragraph (i) to this AD to allow credit for accomplishing Boeing Service Bulletin 757-28A0078 or 757-28A0079, both Revision 1, both dated August 24, 2010, before the effective date of this AD.

AA recommended that we allow the identification of the P33 and P37 panels as a statement “outside the scope of the AD.” AA stated that the GFI physical differences would be enough to distinguish between the old and new relay types. The commenter also stated that post-modification parts are illustrated in the revisions to operators' manuals, in the illustrated parts catalog, and airplane maintenance manual. The commenter pointed out that the lack of panel labeling would not affect the level of safety.

We disagree with the commenter's recommendation to change the final rule to address this issue. The requirement for panel identification specified in Step 3 in Figure 1 and Figure 2 of Boeing Service Bulletins 757-28A0078 and 757-28A0079, both Revision 1, both dated August 24, 2010, refers to identifying the P33 and P37 panels to show that this change was accomplished. Note (a) that accompanies the Step 3 instructions in those service bulletins calls for marking the panels with a unique marking under SOPM 20-50-10, which points to the incorporation of the changes under the accomplishment instructions of those service bulletins. It does not call for a change to the P33 and P37 panel part number. No change has been made to the AD in this regard.

We have restructured paragraph (g) of this AD to clarify the locations for replacing the power control relays. Paragraph (g)(1) of this AD specifies the “main tank fuel boost pumps,” and paragraph (g)(2) of this AD specifies the “center tank override fuel boost pumps.”

In addition, we have removed the Paperwork Reduction Act Burden Statement paragraph since no reporting is required in this AD.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting the AD with the changes described previously—and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the SNPRM (76 FR 28, January 3, 2011) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the SNPRM (76 FR 28, January 3, 2011).

We also determined that these changes will not increase the economic burden on any operator or increase the scope of the AD.

We estimate that this AD affects 696 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We estimate the following costs to do any necessary installation that would be required based on the results of the proposed inspection. We have no way of determining the number of aircraft that might need this installation:

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

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

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

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

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

(3) Will not affect intrastate aviation in Alaska, and

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

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

Discussion

On April 1, 2011, we issued AD 2011-08-07, Amendment 39-16657 (76 FR 24798, May 3, 2011), for all RR RB211-Trent 875-17, RB211-Trent 877-17, RB211-Trent 884-17, RB211-Trent 884B-17, RB211-Trent 892-17, RB211-Trent 892B-17, and RB211-Trent 895-17 turbofan engines. On September 9, 2011, we also issued a correction (76 FR 59013, September 23, 2011) to that AD. That AD requires initial and repetitive UIs of certain LP compressor blades identified by S/N. That AD resulted from mandatory continuing airworthiness information (MCAI) issued by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. We issued that AD to prevent LP compressor blades from failing due to blade root cracks, which could lead to uncontained engine failure and damage to the airplane.

Since we issued AD 2011-08-07 (76 FR 24798, May 3, 2011), RR determined that additional S/Ns of LP compressor blades are affected and require inspection. EASA has also issued AD 2012-0025, dated February 8, 2012, to expand the population of affected LP compressor blades operating in Europe. About 2,300 of the added blades require inspection within 70 cycles of the effective date of the AD since those blades have more fatigue damage from prior use.

This superseding AD differs from EASA AD 2012-0025. This AD only requires inspection of LP compressor blades that are listed in Appendices 3A through 3G of RR Alert Service Bulletin (ASB) No. RB.211-72-AG244, Revision 4, dated December 22, 2011. We are developing another AD to require inspection of LP compressor blades listed in Appendices 3H through 3L of RR ASB No. RB.211-72-AG244, Revision 4, dated December 22, 2011.

We reviewed Rolls-Royce plc ASB No. RB.211-72-AG244, Revision 4, dated December 22, 2011. The service information describes procedures for performing UIs of the LP compressor blades.

We are issuing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This AD requires accomplishing the actions specified in the service information described previously except that this AD only requires inspection of LP compressor blades that are listed in Appendices 3A through 3G of RR ASB No. RB.211-72-AG244, Revision 4, dated December 22, 2011.

An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because about 2,300 LP compressor blades require inspection within 70 cycles after the effective date of the AD. This equates to about one month's time for Trent 800 engines flying two flights per day. Therefore, we find that notice and opportunity for prior public comment are impracticable and that good cause exists for making this amendment effective in less than 30 days.

This AD is a final rule that involves requirements affecting flight safety, and we did not provide you with notice and an opportunity to provide your comments before it becomes effective. However, we invite you to send any written data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include the docket number FAA-2010-0821 and directorate identifier 2010-NE-30-AD at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

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

Based on the service information, we estimate that this AD will affect about 158 engines installed on airplanes of U.S. registry. We also estimate that it will take about 3 hours per engine inspection, and six inspections per year. The average labor rate is $85 per work-hour. We estimate that one LP compressor blade per year will need replacement, at a cost of about $82,000. Based on these figures, we estimate the annual cost of the AD on U.S. operators to be $323,740. Our cost estimate is exclusive of possible warranty coverage.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

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

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

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

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

(3) Will not affect intrastate aviation in Alaska, and

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

Accordingly, under the authority delegated to me by the Administrator, the FAA amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an airworthiness directive (AD) that would apply to The Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes. That NPRM was published in the Federal Register on September 27, 2010 (75 FR 59167). That NPRM proposed to require modifying the inner walls of the thrust reverser (TR), inspecting for damage of the upper and lower inner wall insulation blankets, measuring the electrical conductivity on the aluminum upper compression pads 2 and 3 as applicable, inspecting for discrepancies of the TR inner wall, and corrective actions if necessary. That NPRM also proposed to require, for certain airplanes, doing various concurrent actions (including replacing the inner wall blanket insulation, installing updated full-authority digital electronic control software, and modifying the TR inner wall and insulation blankets).

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the proposal (75 FR 59167, September 27, 2010) and the FAA's response to each comment.

Despite fully supporting the implementation of the actions of the NPRM (75 FR 59167, September 27, 2010), Boeing stated that it does not consider thermal overheat on the TR inner walls on the affected airplanes to be a safety issue. The structural integrity of the inner wall may deteriorate due to pre-cooler air ingress behind the blankets, but the Boeing Safety Review Board determined that this does not constitute a safety hazard to the airplane or to persons on the ground. Boeing identified support data for this determination, which included a safety assessment, full-scale test demonstration, and structural analysis.

We infer that Boeing wants us to withdraw the NPRM (75 FR 59167, September 27, 2010), because there is no unsafe condition. We disagree. The thermal overheat could affect the structural capability of the inner wall of the thrust reverser such that, if a pneumatic duct bursts, the inner wall could fail, causing uncontrollable asymmetric thrust during a rejected takeoff, or causing large parts to hit the fuselage or empennage in flight.

Boeing requested that we remove Model 737-900ER series airplanes from the applicability of the NPRM (75 FR 59167, September 27, 2010), since configuration control prevents the intermix of the affected TRs on these airplanes.

We agree. The TR inner walls on Model 737-900ER series airplanes have not been identified as having a thermal overheat issue. We have therefore removed these airplanes from the applicability of this AD.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, issued Proposed AD 10-087, dated September 30, 2010 (which has since been issued as EASA AD 2010-0244R1, dated May 17, 2011, and corresponds to FAA NPRM (75 FR 59167, September 27, 2010)). Boeing reported that it had requested certain changes (to the compliance time and applicability) to the EASA Proposed AD, and provided a list of the specific requests including changing the compliance time and eliminating language regarding certain “specific airplane(s).”

We find these comments to be addressed to EASA Proposed AD 10-087 and do not apply to the FAA proposed AD (75 FR 59167, September 27, 2010). The applicability is the same in the EASA and FAA ADs, and accounts for Boeing's comment concerning Model 737-900ER series airplanes. The compliance time of the EASA AD is different from that of the FAA AD, based on differing AD processes and publication schedules. We have not changed the final rule regarding this issue.

Continental Airlines (CAL) disagreed with the fleet cost estimates for the actions specified in Boeing Service Bulletin 737-78-1088, dated May 12, 2010, as proposed in paragraph (i) of the NPRM (75 FR 59167, September 27, 2010). CAL explained that inner wall delamination requires the repair to be performed in an autoclave, which requires disassembly of the TR. (There are two half TR sections per engine.) CAL stated that returning each TR half to service after disassembly and inspection of components could cost from $16,000 to $56,000, depending on the hours and cycles on the TR.

We disagree with the request to revise the cost estimate. The economic analysis of the NPRM (75 FR 59167, September 27, 2010) did not consider the cost of conditional actions, such as repairing damage detected during a required inspection. The economic analysis of this AD is limited to the cost of actions that are required of every operator. Such conditional repairs would be required—regardless of AD direction—to correct an unsafe condition identified in an airplane and to ensure that the airplane is operated in an airworthy condition, as required by the Federal Aviation Regulations. We would have no way of determining these on-condition costs, which would depend on the TR condition and vary from operator to operator. We have not changed the final rule regarding this issue.

Three commenters requested that we revise the 24-month compliance time for the modification specified in paragraph (g) of the NPRM (75 FR 59167, September 27, 2010).

CAL requested that we extend the compliance time to 30 months, when 116 of its airplanes will also require the inspection specified in paragraph (i) of the proposed AD (75 FR 59167, September 27, 2010). This compliance time extension would reduce CAL's modifications on its fleet from 5 airplanes to 4 airplanes per month. CAL added that, even with this extended compliance time, it would be difficult to modify 4 (16 TR halves) per month because of the limited number of spare TR halves available.

Southwest Airlines (SWA) reported that it would need to modify 39 of its 946 TRs each month to meet a 24-month compliance time, and therefore suggested a stepped compliance time schedule, ranging from 12 months to 48 months, based on the service life of the TR.

American Airlines (AAL) stated that the 24-month compliance time will have a significant impact on its “light” C check.

We disagree to extend the compliance time for paragraph (g) of this AD. In developing an appropriate compliance time for these actions, we considered the urgency associated with the subject unsafe condition, the practical aspect of accomplishing the required modification and the normal scheduled maintenance times for most affected operators. In consideration of these items and of parts availability, we have determined that the proposed 24-month compliance time for the modification will ensure an acceptable level of safety. According to the provisions of paragraph (o) of this AD, however, we may approve requests to adjust the compliance time if the request includes data substantiating that the new compliance time would provide an acceptable level of safety. We have not changed the final rule regarding this issue.

AAL requested that the service instructions for Boeing Service Bulletin 737-78-1082, dated March 25, 2010; and Boeing Service Bulletin 737-78-1088, dated May 12, 2010; be revised to incorporate general findings and clarifications. AAL asserted that not addressing these issues could adversely affect accomplishment of these service bulletins.

We agree that additional clarification would be beneficial in the identified areas of Boeing Service Bulletin 737-78-1082, dated March 25, 2010; and Boeing Service Bulletin 737-78-1088, dated May 12, 2010. Such minor clarifications, however, are not necessary for compliance with this AD. We have provided AAL's comments to Boeing for review and incorporation, as necessary, into future revisions of those service bulletins, which might be approved as a global alternative method of compliance with this AD if we can substantiate that the revision provides an acceptable level of safety. We have not changed the final rule regarding this issue.

SWA requested that we revise paragraph (i) of the NPRM (75 FR 59167, September 27, 2010) to allow cold-bonding methods for repairing damaged areas, in addition to the autoclave procedures specified in Boeing Service Bulletin 737-78-1088, dated May 12, 2010. That service bulletin permits curing repaired areas only as specified in the Boeing 737-700 Structural Repair Manual (SRM), which specifies the autoclave procedures. According to SWA, this would require operators to pull TRs for repair at an approved overhaul facility, thereby increasing the turn time for repairs since only five Boeing-approved overhaul facilities have autoclave capabilities.

We disagree with the request to allow the cold-bonding procedure. Boeing and the FAA are unaware of any cold-bonding methods that would be applicable to the composite TR inner wall on the affected airplanes. Current SRM repair methods for composite structure involve either autoclave or vacuum bag/heat blanket cure methods. But Boeing Service Bulletin 737-78-1088, dated May 12, 2010, and the alternative Boeing Service Bulletin 737-78-1079, Revision 2, dated June 7, 2010, limit the SRM repairs for the TR inner wall to autoclave cures. For the areas being repaired on the inner wall, the additional plies required to make a structurally adequate vacuum bag-cured repair are excessive and would make the inner wall unusable. We therefore find it appropriate for those service bulletins to specify autoclave curing only. In addition, Boeing has evaluated the potential number of repairs that would be done at overhaul facilities with autoclave capabilities, and does not foresee a problem addressing the corrective actions on the affected airplanes within the compliance times. We have not changed the final rule regarding this issue.

SWA requested that we revise paragraph (i) of the proposed AD (75 FR 59167, September 27, 2010), which proposed certain inspections in accordance with Boeing Service Bulletin 737-78-1088, dated May 12, 2010. SWA recommended a minimum of 48 months, “per [this service bulletin],” for these actions. (The compliance time in the proposed AD ranged from 30 to 96 months.)

We disagree with the request. As stated previously, when we developed the compliance time for this AD action we considered the safety implications of the identified unsafe condition, the average utilization rate of the affected fleet, the practical aspects of performing the inspections on the fleet during regular maintenance periods, and the availability of replacement parts. We have determined that the proposed compliance times are appropriate. We have not changed the final rule regarding this issue.

AAL described difficulty in accomplishing the actions specified in Boeing Service Bulletin 737-78-1079, Revision 2, dated June 7, 2010 (paragraph (n) of the NPRM (75 FR 59167, September 27, 2010)): Seals must be installed individually, the fire seal can tear and need replacement, and the roller edge of the insulation blanket interferes with the upper fire seal support flange insulations. AAL received some additional installation instructions from Boeing and recommended that they be included in this service bulletin.

We agree that additional clarification may be beneficial, but we find that accomplishing the actions specified in the Accomplishment Instructions of Boeing Service Bulletin 737-78-1079, Revision 2, dated June 7, 2010, will address the identified unsafe condition. We have provided AAL's comments to Boeing for review and incorporation, as necessary, into a future service bulletin revision, which might be approved as an alternative method of compliance with this AD if we can substantiate that the revision provides an acceptable level of safety. We have not changed the final rule regarding this issue.

Paragraph (n) of this AD specifies the optional accomplishment of certain actions in accordance with Boeing Service Bulletin 737-78-1079, Revision 2, dated June 7, 2010. That service bulletin incorrectly notes that removal of a compression pad assembly is not necessary if the adjacent inner wall area does not show signs of heat damage, because the compression pad assembly is made from titanium. This AD requires removing the affected compression pads and inspecting the underlying structures as part of this optional action, regardless whether a pad assembly is made of titanium or aluminum alloy. Boeing has indicated that the incorrect notes may be removed in a future revision of that service bulletin; if so, we may approve the revised service bulletin as a global AMOC with the requirements of this AD.

We have revised or added certain headers in this AD. We have also revised the wording in paragraphs (l) and (n) of this AD; this change has not changed the intent of those paragraphs.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting the AD with the change described previously. We also determined that this change will not increase the economic burden on any operator or increase the scope of the AD.

We estimate that this AD affects 710 airplanes of U.S. registry. The following table provides the estimated costs for U.S. operators to comply with this AD, at an average labor rate of $85 per hour.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA Airworthiness Directive 2011-0088, dated May 13, 2011 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

Airbus has issued Mandatory Service Bulletin A340-52-5017, including Appendices 1 and 2, dated February 17, 2011. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are issuing this AD because we evaluated all pertinent information and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design.

There are no products of this type currently registered in the United States. However, this rule is necessary to ensure that the described unsafe condition is addressed if any of these products are placed on the U.S. Register in the future.

Although the MCAI or service information allows further flight after cracks are found, paragraph (g) of this AD requires that you replace both the forward and aft fittings before further flight if any crack is found.

Since there are currently no domestic operators of this product, notice and opportunity for public comment before issuing this AD are unnecessary.

This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2012-0331; Directorate Identifier 2011-NM-119-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

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

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

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

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

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

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

3. Will not affect intrastate aviation in Alaska; and

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

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

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

Comments Invited

This AD is a final rule that involves requirements affecting flight safety, and we did not provide you with notice and an opportunity to provide your comments prior to it becoming effective. However, we invite you to participate in this rulemaking by submitting written comments, data, or views. We also invite comments relating to the economic, environmental, energy, or federalism impacts that resulted from adopting this AD. The most helpful comments reference a specific portion of the AD, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit them only one time. We will file in the docket all comments that we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this rulemaking during the comment period. We will consider all the comments we receive and may conduct additional rulemaking based on those comments.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Emergency AD No.: 2010-0272-E, dated December 22, 2010 (EAD 2010-0272-E), to correct an unsafe condition for the Agusta Model AB204B, AB205A-1, AB206A, AB206B, AB212, AB412 and AB412EP helicopters. EASA advises that Rotor Blades Inc. (RBI) informed Bell Helicopter Textron Inc. (BHTI) about four incidents of a blade tip weight separating from a blade in flight, and the subsequent investigation showed that these occurrences were caused by improper repair actions by RBI. EASA states that to address this safety concern, BHTI issued several alert service bulletins (ASBs) applicable to U.S. and Canada manufactured Bell type designs. In response to these ASBs, Transport Canada issued Emergency AD CF-2007-21R1 (dated November 30, 2010), and the FAA issued Emergency AD 2010-26-52 (dated December 10, 2010). EASA states that although the unsafe condition has been detected only on parts manufactured by BHTI and installed on BHTI helicopters, the possibility exists, due to part number commonality between the rotor blade type designs, that the affected parts may be installed on corresponding Agusta helicopter types, among others, for helicopter models not type certificated in the U.S. Agusta has issued Bollettino Tecnico (BT) 412-130, dated December 20, 2010 (BT 412-130), to inform affected owners and operators of this unsafe condition, and EASA issued EAD 2010-0272-E in response to the BT to address this unsafe condition.

These helicopters have been approved by the aviation authority of Italy and are approved for operation in the United States. Pursuant to our bilateral agreement with Italy, EASA, its technical representative, has notified us of the unsafe condition described in the EASA AD. We are issuing this AD because we evaluated all information provided by EASA and determined the unsafe condition exists and is likely to exist or develop on other helicopters of these same type designs.

We reviewed BT 412-130, which references Bell Helicopter ASB No. 412-07-123 Revision B, dated November 22, 2010, and specifies removing any affected tail rotor blade, returning the removed blade to Agusta, and replacing it with an airworthy blade. EASA classified this BT as mandatory and issued EAD 2010-0272-E to ensure the continued airworthiness of these helicopters.

This AD requires, before further flight, unless already accomplished, replacing any affected blade with an airworthy blade. An airworthy blade is one that has a part number and a serial number not included in the Applicability section of this AD. Affected blades are those having a part number and serial number as follows:

No helicopters of this type are registered in the United States. However, this rule is necessary to ensure that the described unsafe condition is addressed if any of these products are placed on the U.S. Registry in the future.

EASA AD 2010-0272-E applies to Agusta S.p.A. Model AB204B, AB205A-1, AB206A, AB212, AB412, and AB412EP helicopters. This AD only applies to the U.S. type certificated Agusta Model AB412 helicopters.

There are no costs of compliance because no helicopters of this type design are on the U.S. Registry.

Since there are currently no affected helicopters on the U.S. Registry, we believe it is unlikely that we would receive any adverse comments or useful information about this AD from U.S. Operators. Since an unsafe condition exists that requires the immediate adoption of this AD, we have determined that notice and opportunity for prior public comment before issuing this AD are unnecessary and that good cause exists for making this amendment effective in less than 30 days.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

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

For the reasons discussed, I certify that this AD:

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

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

3. Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and

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

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the Federal Register on October 11, 2011 (76 FR 62669), and proposed to correct an unsafe condition for the specified products. The MCAI states:

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

The commenter, Matthew B. Mitchell, stated that the number of U.S.-registered Model BD-100-1A10 airplanes exceeds the 76 airplanes shown in the Costs of Compliance section of this AD, and should be 238 airplanes, to agree with Aircraft Geometric Height Measurement Element (AGHME) figures.

We agree to revise the number of U.S.-registered airplanes used to determine the cost estimate in this AD. We have confirmed with Bombardier, Inc., that 217 Model BD-100-1A10 airplanes are registered in the U.S. We have changed the figures in the “Costs of Compliance” section of this AD accordingly.

We have redesignated Note 1 of the NPRM (76 FR 62669, October 11, 2011) as paragraph (c)(2) of this AD, paragraph (c) of the NPRM as paragraph (c)(1) of this AD, and Note 2 of the NPRM as Note 1 to paragraphs (g) and (h) of this AD. We have also relocated Note 1 of this AD to follow paragraph (g) of this AD.

We reviewed the available data, including the comment received, and determined that air safety and the public interest require adopting the AD with the changes described previously. We determined that these changes will not increase the economic burden on any operator or increase the scope of the AD.

We estimate that this AD will affect 217 products of U.S. registry. We also estimate that it will take about 1 work-hour per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this AD to the U.S. operators to be $18,445, or $85 per product.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

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

For the reasons discussed above, I certify this proposed regulation:

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

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

3. Will not affect intrastate aviation in Alaska; and

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

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

You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM (76 FR 62669, October 11, 2011), the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 95-20-04 R1, Amendment 39-9454 (60 FR 63414, December 11, 1995). That AD applies to the specified products. The NPRM published in the Federal Register on August 8, 2011 (76 FR 48049). That NPRM proposed to continue to require implementation of a SID program of structural inspections to detect fatigue cracking, and repair if necessary. That NPRM also proposed to add Model L-1011-385-3 airplanes to the applicability, change certain inspection thresholds and intervals for Model L-1011-385-1, L-1011-385-1-14, and L-1011-385-1-15 airplanes, include three additional SSDs for Model L-1011-385-3 airplanes, and remove an SSD that has been addressed by a different AD action.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the proposal NPRM (76 FR 48049, August 8, 2011) and the FAA's response to each comment.

An anonymous commenter requested that we stop “regulating job(s) out of this country” and leave companies alone to run their business as they see fit.

We infer the commenter is requesting that we withdraw the NPRM (76 FR 48049, August 8, 2011). We disagree. This AD addresses an identified unsafe condition. If the structural inspections required by this AD are not done, an airplane could develop fatigue cracking that could compromise the structural integrity of the airplane. We have not revised this AD in this regard.

Lockheed Martin requested that we clarify the section of the document referenced in paragraph (g)(5) of the NPRM (76 FR 48049, August 8, 2011) by replacing “Appendix VI” with “Section VI., Appendix.” The commenter noted that there is no Appendix VI in the document and that there is a section VI titled Appendix.

We agree, for the reason provided by the commenter. We have revised paragraph (g)(5) of this AD accordingly.

We have added Note 1 following paragraph (n)(1) of this AD to clarify that guidance on doing repairs in accordance with a “L-1011-385 Series Supplemental Inspection Document” specified in paragraph (n)(1) of this AD can be found in the applicable service bulletins identified in certain SSDs of the “L-1011-385 Series Supplemental Inspection Document.”

We have revised certain headers throughout this AD. We have also revised the wording in paragraph (g) of this AD. These changes have not changed the intent of this AD.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting the AD with the change described previously—and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (76 FR 48049, August 8, 2011) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (76 FR 48049, August 8, 2011).

We also determined that these changes will not increase the economic burden on any operator or increase the scope of the AD.

We estimate that this AD affects 26 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

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

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

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

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

(3) Will not affect intrastate aviation in Alaska, and

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

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the Federal Register on December 12, 2011 (76 FR 77159), and proposed to supersede AD 2009-21-06, Amendment 39-16043 (74 FR 53151, October 16, 2009). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states:

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (76 FR 77159, December 12, 2011) or on the determination of the cost to the public.

We reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed—except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (76 FR 77159, December 12, 2011) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (76 FR 77159, December 12, 2011).

We estimate that this AD will affect 59 products of U.S. registry.

The actions that are required by AD 2009-21-06, Amendment 39-16043 (74 FR 53151, October 16, 2009), and retained in this AD take about 1 work-hour per product, at an average labor rate of $85 per work-hour. Based on these figures, the estimated cost of the currently required actions is $85 per product.

We estimate that it will take about 6 work-hours per product to comply with the new basic requirements of this AD. The average labor rate is $85 per work-hour. Required parts will cost about $2,315 per product. Where the service information lists required parts costs that are covered under warranty, we have assumed that there will be no charge for these parts. As we do not control warranty coverage for affected parties, some parties may incur costs higher than estimated here. Based on these figures, we estimate the cost of this AD to the U.S. operators to be $166,675, or $2,825 per product.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

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

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

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

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

3. Will not affect intrastate aviation in Alaska; and

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

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

You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM (76 FR 77159, December 12, 2011), the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

History

On January 24, 2012, the FAA published in the Federal Register a notice of proposed rulemaking to modify certain VOR Federal airways and establish RNAV routes in the vicinity of Windsor Locks, CT, due to the planned decommissioning of the Bradley VORTAC (77 FR 3415).

Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal. One comment was received from the Aircraft Owners and Pilots Association which expressed support for the proposal.

Since publication of the NPRM, Canada put into effect a reconfiguration of airway structure that affects the segment of V-203 that lies within Canadian airspace. Currently, that segment extends between the Massena, NY, 047° radial and the Montreal, Canada, 188° radial, to Montreal. Due to the reconfiguration, V-203 no longer terminates at Montreal. The new termination point is the FRANX fix, which is defined by the intersection of the Massena, NY, 047° and the St Jean, Canada 270° radials. This change lies entirely within Canadian airspace.

A number of points were removed from the descriptions of T-212, T-255 and T-300 because the points are not needed to form the alignment of the routes.

This action amends Title 14 Code of Federal Regulation (14 CFR) part 71 by modifying VOR Federal airways V-130, V-203, V-405 and V-419; revoking V-205; and establishes RNAV routes T-212, T-255, and T-300. These changes are required due to the planned decommissioning of the Bradley VORTAC in 2012.

V-130, currently extending from the Albany, NY, VORTAC, through the Bradley VORTAC, to the Martha's Vineyard, MA, VOR/DME, this action is modified by eliminating the segment that extends from the Albany, NY, VORTAC, to the Bradley VORTAC, to the Norwich, CT, VOR/DME. The modified V-130 originates at the Norwich VOR/DME and follows the existing route to the Martha's Vineyard, MA, VOR/DME.

V-203 is extended to encompass a part of V-130 that is being removed as described above. V-203 currently begins at the Albany, NY, VORTAC and ends at the Montreal, Canada, VOR/DME. The extended segment of V-203 runs southeast from the Albany VORTAC to the existing STELA intersection (formed by the intersection of the Albany 134° and the Chester, MA, VOR/DME 266° radials). At that point, flights may link with other VOR Federal airways. In addition, the termination point of V-203 is modified to match the Canadian airway changes (noted above), and now terminates at the FRANX fix, located in Canadian airspace, instead of the Montreal VOR/DME.

V-205 is removed in its entirety because other existing airways are available that provide for navigation to and from Putnam (V-205 currently extends from the COATE intersection 8 NM northwest of the Sparta, NJ, VORTAC to the Putnam, CT, VOR/DME.) In addition, a new RNAV route (T-212) overlies part of the V-205 route and terminates at Putnam.

V-405 is realigned to bypass the Bradley VORTAC and is routed through the Barnes, MA, VORTAC (located approximately 13 NM north of Bradley). The airway then proceeds through the Putnam, CT, VOR/DME to the Providence, RI, VORTAC and resumes the currently published route to Martha's Vineyard, MA.

V-419, currently extending between the Westminster, MD, VORTAC, and the Boston, MA, VOR/DME, now extends between Westminster, MD and the existing BRISS intersection (formed by the intersection of the Carmel, NY, VOR/DME 045° and the Madison, CT, 328° radials). The route segments between the BRISS intersection and Boston are eliminated. Alternative routing to Boston is available using other existing airways and/or via the new RNAV routes.

The FAA is also establishing three new RNAV routes, designated T-212, T-255 and T-300. T-212 extends between the WEARD, NY, fix and the Putnam, CT, VOR/DME. T-212 overlies V-205, which is removed.

T-255 extends between the NELIE, CT, waypoint (WP) and the Martha's Vineyard, MA, VOR/DME. It overlies that portion of V-405 that is being removed as described above.

T-300 extends between the Albany, NY, VORTAC and the Martha's Vineyard, MA, VOR/DME. This route overlies another portion of V-130 that is removed under this action.

VOR Federal airways are published in paragraph 6010, and RNAV routes are published in paragraph 6011, respectively, of FAA Order 7400.9V dated August 9, 2011, and effective September 15, 2011, which is incorporated by reference in 14 CFR 71.1. The VOR Federal airways and RNAV routes listed in this document will be subsequently published in the Order.

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. Therefore, this regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation because the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, 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 I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.

This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority because it amends the airway structure to ensure the continuity of air navigation capability in the Windsor Locks, CT, area and expands the availability of RNAV routes within the NAS.

Radials listed in this rule are expressed in degrees relative to True North.

The FAA has determined that this action is categorically excluded from further environmental documentation according to FAA Order 1050.1E, paragraph 311a, 311b, and 311i. The implementation of this action will not result in any extraordinary circumstances in accordance with paragraph 304 of Order 1050.1E.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:

Background

On January 4, 2012, the FAA published a final rule entitled, “Flightcrew Member Duty and Rest Requirements” (77 FR 330). In that rule, the FAA created new part 117, which replaces the existing flight, duty, and rest regulations, contained in Subparts Q, R, and S, for part 121 passenger operations. As part of this rulemaking, the FAA also applied the new part 117 to certain part 91 operations, and permitted all-cargo operations operating under part 121 to voluntarily opt into the part 117 flight, duty, and rest regulations.

Since the rule was published, the FAA has received numerous questions concerning the provisions of the final rule. Even though the final rule's compliance date is January 4, 2014, the FAA concludes that responding to the questions and providing additional regulatory clarity will enable the stakeholders to better plan the changes that they will need to make in order to comply with the final rule. To the extent possible, the FAA also seeks to ensure consistency of interpretation by answering the stakeholders' questions in a single document instead of multiple different interpretations.

Accordingly, the FAA requests that all clarifying questions be submitted to the docket no later than June 4, 2012. The FAA emphasizes that it is not reconsidering the provisions of the final rule or reopening the final rule to notice and comment. Rather, the FAA is simply soliciting questions about how the final rule works so that the FAA can provide greater clarity to the stakeholders by answering those questions.

If you wish to submit a request to the FAA for clarification of the Flightcrew Member Duty and Rest Requirements final rule, you must send your request using the below method by June 4, 2012.

1. Post your request on the Federal eRulemaking Portal. To access this electronic docket, go to http://www.regulations.gov, enter Docket Number FAA-2012-0358, and follow the online instructions for sending your request electronically.

2. In addition to sending your request to the electronic docket, send a copy via email to the subject matter expert as noted below.

Technical Questions: Dale E. Roberts, Air Transportation Division, Flight Standards Service, Federal Aviation Administration; email dale.e.roberts@faa.gov.

Legal Questions: Alex Zektser, Office of the Chief Counsel, Regulations Division, Federal Aviation Administration; email alex.zektser@faa.gov.

The FAA will attempt to reply to the clarifying questions that are submitted by June 4, 2012.

Background

Since 1994, the FAA has operated in the area of commercial space launch activities under the authority delegated by Congress in 49 U.S.C. chapter 701. See Revision of Title 49, United States Code Annotated, “Transportation,” Public Law 103-272, 108 Stat. 745, 1130 (1994). The FAA implements these regulations through Title 14, Code of Federal Regulations (14 CFR) chapter III, Commercial Space Transportation.

In 2010, Congress consolidated commercial space laws into a single, unified title of the United States Code. See Enactment of Title 51—National and Commercial Space Programs, Public Law 111-314, 124 Stat. 3328 (2010). Congress' purpose was “to codify certain existing laws related to national and commercial space programs as a positive law title of the United States Code.” Id. During this process, 49 U.S.C. chapter 701 was transferred and redesignated as 51 U.S.C. chapter 509. The recodification makes no substantive changes.

The congressional transfer of authority made a number of citations in the Code of Federal Regulations obsolete. See 14 CFR chapter III (2011); 49 CFR 1.47 (2010). This amendment corrects the affected citations to accurately reference the new citations. This amendment does not make substantive changes to the affected regulations.

In consideration of the foregoing, the Federal Aviation Administration amends chapter III of title 14, Code of Federal Regulations, and subtitle A of title 49, Code of Federal Regulations, as follows:

We are adopting Rule 239 under the Securities Act of 1933 (“Securities Act”).1 We are also adopting Rule 12a-10 and an amendment to Rule 12h-1 under the Securities Exchange Act of 1934 (“Exchange Act”) 2 and Rule 4d-11 under the Trust Indenture Act of 1939 (“Trust Indenture Act”).3

On July 21, 2010, the President signed the Dodd-Frank Act into law.4 Title VII of the Dodd-Frank Act (“Title VII”) provides the Securities and Exchange Commission (“SEC” or the “Commission”) and the Commodity Futures Trading Commission (“CFTC”) with the authority to regulate over-the-counter (“OTC”) derivatives in light of the recent financial crisis.

Title VII provides that the CFTC will regulate “swaps,” the SEC will regulate “security-based swaps,” and the CFTC and SEC will jointly regulate “mixed swaps.” 5 Title VII amends the Exchange Act to require, among other things, the following: (1) Transactions in security-based swaps must be submitted for clearing to a clearing agency if such security-based swap is one that the Commission has determined is required to be cleared, unless an exception from mandatory clearing applies; 6 (2) transactions in security-based swaps must be reported to a registered security-based swap data repository (“SDR”) or the Commission; 7 and (3) if a security-based swap is subject to mandatory clearing, transactions in security-based swaps must be executed on an exchange or a registered or exempt security-based swap execution facility (“security-based SEF”), unless no exchange or security-based SEF makes such security-based swap available for trading or the security-based swap transaction is subject to the clearing exception in Exchange Act Section 3C(g).8

Title VII seeks to ensure that, wherever possible and appropriate, security-based swaps are cleared.9 Paragraph (a)(1) of new Exchange Act Section 3C establishes a mandatory clearing requirement for certain security-based swaps.10 Exchange Act Section 3C(b) sets forth a process by which we would determine whether a security-based swap or any group, category, type or class of security-based swap that a clearing agency plans to accept for clearing is required to be cleared.11 If we make a determination that a security-based swap is required to be cleared, then parties may not engage in such a security-based swap without submitting it for clearing, unless an exception applies.12 If we make a determination that a security-based swap is not required to be cleared, such security-based swap may still be cleared on a non-mandatory basis by the clearing agency if it has rules that permit it to clear such security-based swap.13 Further, pending the adoption of rules implementing the mandatory clearing requirement, a clearing agency may clear security-based swaps that the clearing agency's rules permit it to clear.14

Clearing agencies are broadly defined under the Exchange Act and may undertake a variety of functions.15 One such function is to act as a central counterparty (“CCP”).16 For example, when a security-based swap between two counterparties that are members of a CCP is executed and submitted for clearing, the original contract is extinguished and is replaced by two new contracts where the CCP is the buyer to the seller and the seller to the buyer. This process is known as “novation.” 17 At that point, the original counterparties are no longer counterparties to each other. As a result, the creditworthiness and liquidity of the CCP is substituted for the creditworthiness and liquidity of the original counterparties.18

Under the rules we proposed regarding mandatory clearing, to meet the clearing requirement in Exchange Act Section 3C, the parties would be required to submit security-based swaps required to be cleared to a clearing agency that functions as a CCP for central clearing.19 Those proposed rules also would establish procedures for a clearing agency to submit to us for a review each security-based swap, or group, category, type or class of security-based swap that the clearing agency plans to accept for clearing. We would review the submission and make a determination about whether the security-based swap, or group, category, type or class of security-based swap, is required to be cleared.20 Under the statute and the proposed rules, the submission would be publicly available and a public comment period would be provided with respect to whether the clearing requirement will apply.21

If we determine that a security-based swap, or group, category, type, or class of security-based swap, is required to be cleared, counterparties would be required to submit such security-based swaps negotiated and entered into bilaterally to the clearing agency for novation.22 If we determine that a security-based swap, or group, category, type, or class of security-based swap, is not required to be cleared, such security-based swap, or group, category, type, or class of security-based swap, may still be cleared on a voluntary basis by a clearing agency that functions as a CCP if the clearing agency has rules that permit it to clear such security-based swap.23 For security-based swaps submitted for novation, the CCP will be the issuer of new security-based swaps.

Because the definition of “security” in the Securities Act was amended in Title VII to include security-based swaps,24 the novation of a security-based swap by a clearing agency functioning as a central counterparty involves an offer and sale by the clearing agency of a security (the security-based swap) under the Securities Act. The Securities Act requires that any offer and sale of a security must either be registered under the Securities Act or made pursuant to an exemption from registration.25 Certain provisions of the Exchange Act relating to the registration of classes of securities and the indenture qualification provisions of the Trust Indenture Act also potentially will apply to security-based swaps. The provisions of Section 12 of the Exchange Act could, without an exemption, require that security-based swaps be registered before a transaction could be effected on a national securities exchange.26 In addition, registration of a class of security-based swaps under Section 12(g) of the Exchange Act will be required if the security-based swap is considered an equity security and there are more than 500 record holders of a particular class of security-based swaps at the end of a fiscal year. Further, without an exemption, the Trust Indenture Act requires qualification of an indenture for security-based swaps considered to be debt.27

The provisions of Title VII do not contain an exemption from Securities Act or Exchange Act registration, or from Trust Indenture Act qualification, for security-based swaps. However, we believe that compliance by the clearing agency with the registration and qualification provisions of these Acts likely will be impracticable and frustrate the purposes of Title VII. We have taken action in the past to facilitate clearing of certain credit default swaps by clearing agencies functioning as CCPs. For example, prior to enactment of the Dodd-Frank Act, we permitted five clearing agencies to clear certain credit default swaps (“eligible CDS”) on a temporary conditional basis.28 To facilitate the operation of clearing agencies as CCPs for eligible CDS, we also adopted temporary exemptions from certain provisions of the Securities Act, the Exchange Act and the Trust Indenture Act, subject to certain conditions.29 In the adopting release, we noted that we believed that the existence of CCPs for CDS would be important in helping to reduce counterparty risks inherent in the CDS market.30 In addition to those actions with respect to eligible CDS, as discussed further below, we adopted exemptions under the Securities Act and the Exchange Act for certain standardized options.31

On June 9, 2011, we proposed exemptions from the registration requirements of the Securities Act and the Exchange Act, and from the qualification requirements of the Trust Indenture Act, for security-based swaps issued by certain clearing agencies satisfying certain conditions to facilitate the intent of Dodd-Frank Act with respect to mandatory clearing of security-based swaps.32 The proposed rules would exempt certain transactions by clearing agencies in these security-based swaps from all provisions of the Securities Act, other than the Section 17(a) anti-fraud provisions, as well as exempt these security-based swaps from the Exchange Act registration requirements and from the provisions of the Trust Indenture Act, provided certain conditions are met.33

The Proposing Release requested comment on a variety of significant aspects of the proposed exemptions. We received seven comment letters in connection with the Proposing Release, of which six commented on the proposed exemptions.34 Most commentators supported the proposed exemptions and did not suggest any changes to the exemptions as they applied to security-based swaps issued by a registered or exempt clearing agency in its function as a CCP.35 As discussed below, a few commentators suggested additional exemptions for security-based swaps. We have reviewed and considered all of the comments that we received relating to the proposed exemptions.

As described in detail below, we are adopting the rules as proposed without modification. The exemptions we are adopting in this release cover all security-based swaps that may be cleared, including eligible CDS that currently are being issued in reliance on the temporary exemptions for eligible CDS that expire on April 16, 2012.

We proposed Securities Act Rule 239 to exempt the offer and sale of security-based swaps that are or will be issued to eligible contract participants by, and in a transaction involving, a clearing agency that is registered under Section 17A of the Exchange Act or exempt from such registration by rule, regulation or order of the Commission in its function as a CCP, from all provisions of the Securities Act, except the anti-fraud provisions of Section 17(a), subject to certain conditions.

Commentators generally supported proposed Securities Act Rule 239.36 We received only one specific comment on the proposed rule.37 This commentator suggested that the Commission provide an exemption under the Securities Act similar to the proposed rule for transactions in uncleared security-based swaps entered into between eligible contract participants and effected through any trading platform.38 This commentator did not provide any explanation as to why such exemption was needed, including how security-based swap trading platforms operate, that would enable us to evaluate whether another exemption under the Securities Act is necessary or appropriate.

We requested comment in the Proposing Release and in the Interim SBS Exemptions Release as to whether security-based swaps are or will be transacted in a manner that would not permit the parties to rely on existing exemptions under the Securities Act.39 We also requested comment in these releases on whether the Commission should consider additional exemptions under the Securities Act for security-based swaps traded on a national securities exchange or security-based SEF with eligible contract participants.40 This commentator's suggestion related to exemptions affecting transactions that do not involve registered or exempt clearing agencies and appears responsive to the request for whether additional exemptions should be considered. Thus, we believe that this commentator's suggestion relating to uncleared security-based swaps is more appropriate to be considered in connection with the Interim SBS Exemptions Release and, therefore, we are not adopting rules at this time providing exemptions that would apply to uncleared security-based swaps, including those that may be effected on or through trading platforms.41

We are adopting Securities Act Rule 239 without any changes from the proposal. The final rule exempts the offer and sale of security-based swaps that are or will be issued to eligible contract participants by, and in a transaction involving, a clearing agency that is registered under Section 17A of the Exchange Act 42 or exempt from such registration 43 by rule, regulation or order of the Commission (“registered or exempt clearing agency”) in its function as a CCP, from all provisions of the Securities Act, except the anti-fraud provisions of Section 17(a), subject to the conditions described below.44 Thus, Securities Act Rule 239 as adopted permits the offer and sale of security-based swaps to eligible contract participants that are or will be issued by, and in a transaction involving, a registered or exempt clearing agency in its function as a CCP without requiring compliance with Section 5 of the Securities Act.45

Consistent with the proposal, under Securities Act Rule 239 as adopted, the offer and sale of a security-based swap is exempt from the provisions of the Securities Act, other than Section 17(a), if the following conditions are satisfied:

• The security-based swap is or will be issued by a clearing agency that is registered with us under Section 17A of the Exchange Act or exempt from such registration by rule, regulation or order of the Commission;

• The Commission has determined that the security-based swap is required to be cleared or the registered or exempt clearing agency is permitted to clear the security-based swap pursuant to its rules;

• The security-based swap is sold only to an eligible contract participant (as defined in Section 1a(18) of the Commodity Exchange Act) in a transaction involving the registered or exempt clearing agency in its function as a CCP with respect to the security-based swap; 46 and

• For each security-based swap that is offered or sold in reliance upon this exemption, the following information is included in an agreement covering the security-based swap the registered or exempt clearing agency provides to, or makes available to, its counterparty or is posted on a publicly available Web site maintained by the registered or exempt clearing agency:

• A statement identifying any security, issuer, loan, or narrow-based security index underlying the security-based swap;

• A statement indicating the security or loan to be delivered (or class of securities or loans), or if cash settled, the security, loan or narrow-based security index (or class of securities or loans) whose value is to be used to determine the amount of the settlement obligation under the security-based swap; and

• A statement of whether the issuer of any security or loan, each issuer of a security in a narrow-based security index, or each referenced issuer underlying the security-based swap is subject to the reporting requirements of Exchange Act Section 13 or Section 15(d) and, if not subject to such reporting requirements, whether public information, including financial information, about any such issuer is available and where the information is available.

We believe this exemption will further the goal in the Dodd-Frank Act of central clearing of security-based swaps. Without exempting the offers and sales of such security-based swaps by a registered or exempt clearing agency in its function as a CCP from the Securities Act (other than Section 17(a)), we believe that a registered or exempt clearing agency may not be able to clear security-based swaps in the manner contemplated by the Dodd-Frank Act and our proposed rules implementing its provisions. Therefore, we believe that with the above conditions, an exemption from the Securities Act is necessary and appropriate in the public interest and consistent with the protection of investors.

Consistent with the proposal, the Securities Act exemption applies only to offers and sales of security-based swaps that are or will be issued by, and in a transaction involving, a clearing agency in its function as a CCP that is either registered with us or exempt from such registration by rule, regulation or order of the Commission. Registered clearing agencies are regulated by us under the Exchange Act and must comply with the standards in the Exchange Act, including the requirements of Section 17A.47 The activities of such clearing agencies relating to the clearing or submission for clearing of security-based swaps are subject to regulation under the Exchange Act and applicable rules thereunder.48 The Securities Act exemption also is available for security-based swaps that are issued by a clearing agency that we have exempted from registration with us by rule, regulation, or order, subject to such terms and conditions contained in any exemption.49 We believe it is appropriate to make the Securities Act exemption available to security-based swaps issued by exempt clearing agencies because in granting an exemption the Commission could impose appropriate conditions to the availability of the exemption that would provide protection to investors.

The Securities Act exemption applies to the extent the clearing agency will issue or is issuing the security-based swap in its function as a CCP and applies to transactions involving such clearing agency.50 We note that a clearing agency's role as a CCP and an issuer of security-based swaps is similar to a clearing agency's role with respect to standardized options.51 We believe that a clearing agency's role as a CCP for security-based swaps, similar to a clearing agency's role with respect to standardized options, is fundamentally different from a conventional issuer that registers transactions in its securities under the Securities Act.52 For example, the purchaser of a security-based swap does not, except in the most formal sense, make an investment decision regarding the clearing agency.53 Rather, the security-based swap investment decision is based on the referenced security, loan, narrow-based security index, or issuer. In this circumstance, coupled with the other conditions to the Securities Act exemption, we do not believe that Securities Act registration of the offer and sale of security-based swaps by a clearing agency in its function as a CCP to eligible contract participants is necessary.

In the Mandatory Clearing Release, we proposed rules to implement the provisions of the Dodd-Frank Act regarding mandatory and voluntary clearing of security-based swaps, or groups, categories, or types or classes of security-based swaps.54 Those proposed rules would establish procedures for a clearing agency to submit for a review the security-based swap, or group, category, type or class of security-based swap, that the clearing agency plans to accept for clearing. As proposed, we would review the submission and make a determination of whether the security-based swap, or group, category, type or class of security-based swap, is required to be cleared.55

Consistent with the purposes of the Dodd-Frank Act, the Securities Act exemption is intended to facilitate clearing of security-based swaps that the Commission determines are subject to mandatory clearing, or that are permitted to be cleared pursuant to the clearing agency's rules. Consequently, under the Securities Act exemption a registered or exempt clearing agency is entitled to rely on the exemption to issue, in its function as a CCP, security-based swaps that we determine are required to be cleared. In addition, the Securities Act exemption is available to a registered or exempt clearing agency issuing a security-based swap, in its function as a CCP, that is not subject to mandatory clearing but is permitted to be cleared pursuant to the clearing agency's rules. The Securities Act exemption is not available for security-based swaps issued by a registered or exempt clearing agency in its function as a CCP that are not required to be cleared or permitted by its rules to be cleared.

The Dodd-Frank Act also provides that if a security-based swap is subject to the mandatory clearing requirement, it must be traded on an exchange or a registered or exempt security-based SEF, unless no security-based SEF makes such security-based swap available to trade.56 Thus, it is possible that a security-based swap could be subject to mandatory clearing without being traded on an exchange or security-based SEF. The Securities Act exemption is available for security-based swaps that are subject to the mandatory clearing requirement or are permitted to be cleared pursuant to the clearing agency's rules,57 regardless of whether such security-based swaps also are traded on a national securities exchange or through a security-based SEF.58 We believe that if the conditions to the Securities Act exemption are satisfied, then the protections provided for in the analogous exemptions for standardized options and security futures arising from the requirement for exchange trading, such as compliance with the statutory listing standards, are not needed here.59 Unlike security future products that may be purchased by any person, under the Dodd-Frank Act security-based swaps may only be offered and sold to eligible contract participants either pursuant to an exemption from the registration requirements of the Securities Act and in transactions not effected on a national securities exchange or in registered offerings effected on a national securities exchange. No offers or sales of security-based swaps may be made to non-eligible contract participants unless there is an effective registration statement under the Securities Act covering transactions in such security-based swap 60 and any security-based swap transaction with a non-eligible contract participant must be effected on a national securities exchange.61 As a result, security-based swaps issued by a registered or exempt clearing agency in its function as a CCP may only be offered and sold to eligible contract participants, unless there is an effective registration statement and the transaction is effected on a national securities exchange. Thus, because only eligible contract participants may enter into the security-based swaps not traded on a national securities exchange, we do not believe it is necessary to condition the Securities Act exemption on whether the security-based swap is traded on a national securities exchange. In addition, including such a provision could frustrate the goals of the Dodd-Frank Act because the Dodd-Frank Act did not restrict transactions with eligible contract participants to transactions on national securities exchanges. Consequently, the Securities Act exemption does not include such a requirement.

Under the Dodd-Frank Act, only an eligible contract participant may enter into security-based swaps other than on a national securities exchange.62 In addition, security-based swaps that are not registered pursuant to the Securities Act can only be sold to eligible contract participants.63 New Securities Act Section 5(d) specifically provides that it is unlawful to offer to buy, purchase, or sell a security-based swap to any person that is not an eligible contract participant, unless the transaction is registered under the Securities Act.64 Given that Congress determined it is appropriate to limit the availability of registration exemptions under the Securities Act to eligible contract participants, consistent with the proposal, we believe it is appropriate to limit the Securities Act exemption to security-based swaps entered into with eligible contract participants.

The Securities Act exemption requires the registered or exempt clearing agency to disclose, either in its agreement regarding the security-based swap or on its publicly available Web site, certain information with respect to the security-based swap. Consistent with the proposal, this information includes the following:

• A statement identifying any security, issuer, loan, or narrow-based security index underlying the security-based swap;

• A statement indicating the security or loan to be delivered (or class of securities or loans), or if cash settled, the security, loan, or narrow-based security index (or class of securities or loans) whose value is to be used to determine the amount of the settlement obligation under the security-based swap; and

• A statement of whether the issuer of any security or loan, each issuer of a security in a narrow-based security index, or each referenced issuer underlying the security-based swap is subject to the reporting requirements of Exchange Act Section 13 or Section 15(d) and, if not subject to such reporting requirements, whether public information, including financial information, about any such issuer is available, and, if so, the location where the information is available.

While the Dodd-Frank Act does not condition clearing of security-based swaps on the availability of such information, we believe it is important for eligible contract participants to understand whether such information is publicly available. The availability (or absence) of public information is generally important to eligible contract participants and the registered or exempt clearing agency in evaluating and pricing the security-based swap. Therefore, the Securities Act exemption requires disclosure about whether such information is available.

If the issuer of the referenced security or loan or the referenced issuer is not subject to Exchange Act reporting, but there is publicly available information about the issuer, the clearing agency is required under the Securities Act exemption to disclose that fact and disclose where the information is available. This disclosure could include, for example, a statement that the issuer is listed on a particular foreign exchange and where information about issuers on such exchange can be found.

Under the Securities Act exemption, the required information could be provided in the agreement covering the security-based swap the registered or exempt clearing agency provides or makes available to the counterparty or on a publicly available Web site maintained by the clearing agency. We understand that master agreements and related schedules for security-based swaps generally contain detailed information about the terms of the security-based swaps.68 In addition, each registered clearing agency is required to post and maintain a current and complete version of its rules on its Web site. Thus, we believe that parties engaging in security-based swaps transactions would be familiar with looking to the agreements or a clearing agency's Web site to obtain information. Given that clearing agencies generally provide information in agreements and maintain publicly available Web sites, we believe that providing the information we are requiring to be disclosed in the agreement for the security-based swap or on the clearing agency's publicly available Web site would not pose significant burdens for clearing agencies.

We proposed Exchange Act Rule 12a-10 to exempt security-based swaps that are or have been issued by a registered or exempt clearing agency in reliance on the proposed exemption under the Securities Act from the registration requirements of Section 12(a) of the Exchange Act under certain conditions. We also proposed an amendment to Exchange Act Rule 12h-1 to exempt security-based swaps that are or have been issued by a registered or exempt clearing agency from the registration requirements of Section 12(g) of the Exchange Act under certain conditions.

Commentators generally supported the proposed rule and amendment.69 We received only two specific comments on the proposed rule and amendment.70 One commentator suggested that the Commission provide exemptions under the Exchange Act similar to the proposed rule and amendment for transactions in uncleared security-based swaps entered into between eligible contract participants and effected through any trading platform.71 This commentator did not provide any explanation as to why such exemptions were needed, including how security-based swap trading platforms operate, that would enable us to evaluate whether other exemptions under the Exchange Act are necessary or appropriate. Another commentator suggested that the Commission provide an exemption under Section 12(g) of the Exchange Act similar to the proposed amendment for uncleared security-based swaps transactions entered into solely between eligible contract participants.72

We requested comment in the Proposing Release and in the Interim SBS Exemptions Release as to whether security-based swaps are or will be transacted in a manner that would not permit the parties to rely on existing exemptions under the Exchange Act.73 We also requested comment in these releases on whether the Commission should consider additional exemptions under the Exchange Act for security-based swaps traded on a national securities exchange or security-based SEF with eligible contract participants.74 These commentators' suggestions related to exemptions affecting transactions that do not involve registered or exempt clearing agencies and appear responsive to the request for whether additional exemptions should be considered. Thus, we believe that these commentators' suggestions relating to uncleared security-based swaps are more appropriate to be considered in connection with the Interim SBS Exemptions Release and, therefore, we are not adopting rules at this time providing exemptions that would apply to uncleared security-based swaps, including those that may be effected on or through trading platforms.75

Section 12(a) of the Exchange Act makes it unlawful for any broker or dealer to effect a transaction in a non-exempt security on a national securities exchange unless the security has been registered under Section 12(b) of the Exchange Act for trading on that exchange. Section 12(g)(1) of the Exchange Act, as modified by rule, requires any issuer with more than $10,000,000 in total assets and a class of equity securities held by 500 or more persons to register such security with us.76

Rule 12b-1 under the Exchange Act prescribes the procedures for registration under both Section 12(b) and Section 12(g) of the Exchange Act. Absent an exemption, security-based swaps that will be traded on national securities exchanges would be required to be registered under Section 12(b) of the Exchange Act. A registered or exempt clearing agency issuing a security-based swap would be required, without an available exemption, to register the security-based swaps under Section 12(b) of the Exchange Act before such security-based swaps could be traded on a national securities exchange. In addition, if the security-based swaps were considered equity securities of the registered or exempt clearing agency, the registration provisions of Section 12(g) of the Exchange Act could apply.

As noted above, just as a registered or exempt clearing agency is different from a conventional issuer that registers transactions in its securities under the Securities Act, it is also different with respect to registering a class of its securities, in this case the security-based swap issued by the registered or exempt clearing agency, under the Exchange Act. Therefore, we are adopting two rules relating to Exchange Act registration of security-based swaps that are or have been issued by a registered or exempt clearing agency in its function as a CCP.

We are adopting new Rule 12a-10 under the Exchange Act without any changes from the proposal to exempt security-based swaps that are or have been issued by a registered or exempt clearing agency in reliance on Securities Act Rule 239 from Section 12(a) of the Exchange Act under certain conditions.77 Exchange Act Rule 12a-10 as adopted provides that Exchange Act Section 12(a) does not apply to any security-based swap that:

• Is or will be issued by a registered or exempt clearing agency in its function as a CCP with respect to the security-based swap;

• The Commission has determined is required to be cleared, or that the clearing agency is permitted to clear pursuant to its rules;

• Is sold to an eligible contract participant in reliance on Securities Act Rule 239; and

• Is traded on a national securities exchange registered pursuant to Section 6(a) of the Exchange Act.

We also are adopting an amendment to Exchange Act Rule 12h-1 without any changes from the proposal to exempt security-based swaps that are or have been issued by a registered or exempt clearing agency from the provisions of Section 12(g) of the Exchange Act under certain conditions.78 Exchange Act Rule 12h-1(h) as adopted exempts from Section 12(g) of the Exchange Act security-based swaps that are issued by a registered or exempt clearing agency in its function as a CCP, whether or not such security-based swap is traded on a national securities exchange registered pursuant to Section 6(a) of the Exchange Act or a registered or exempt security-based SEF.79 In addition, the security-based swaps being issued by the registered or exempt clearing agency in its function as a CCP must be required to be cleared, or be permitted to be cleared pursuant to the clearing agency's rules, and may only be sold to eligible contract participants.

As we noted in the discussion of Securities Act Rule 239, we believe the interest of investors in the security-based swap is primarily with respect to the referenced security or loan, referenced issuer or referenced narrow-based security index, and not with respect to the registered or exempt clearing agency functioning as the CCP.80 Therefore, we believe that requiring registration of security-based swaps under the Exchange Act would not provide additional useful information or meaningful protection to investors with respect to the security-based swap. In addition, the other consequences of Exchange Act registration, such as requirements for ongoing periodic reporting and application of the proxy rules to the clearing agency, would not be meaningful in the context of security-based swaps. At the same time, requiring such registration likely would impose burdens on clearing agencies issuing security-based swaps.81 Therefore, based on the discussion above, we believe that exempting the registered or exempt clearing agency from the requirements of the Exchange Act arising from Section 12(a) or 12(g) is necessary or appropriate in the public interest and is not inconsistent with the public interest or the protection of investors.

In addition, we note that similar Exchange Act exemptions exist for standardized options issued by a registered options clearing agency and security futures products issued by a registered or exempt clearing agency.82 We believe that it is appropriate to establish comparable regulatory treatment for security-based swaps issued by a registered or exempt clearing agency with respect to the applicability of Section 12 of the Exchange Act to security-based swaps issued by a registered or exempt clearing agency. Moreover, we believe it is important to further the goal of facilitating clearing of security-based swaps while maintaining appropriate investor protection.

Consistent with the proposal, security-based swaps that will not be cleared by a registered or exempt clearing agency in its function as a CCP but are listed for trading on a national securities exchange or registered or exempt security-based SEF will not be able to rely on these exemptions from registration under Section 12(b) or Section 12(g) of the Exchange Act.83

We proposed Rule 4d-11 under Section 304(d) of the Trust Indenture Act that would exempt any security-based swap offered and sold in reliance on Securities Act Rule 239 from having to comply with the provisions of the Trust Indenture Act.

Commentators generally supported the proposed rule.84 We received only two specific comments on the proposed rule.85 Consistent with the comments noted above, these commentators suggested that the Commission provide an exemption under the Trust Indenture Act similar to the proposed rule for certain uncleared security-based swap transactions involving eligible contract participants.86 As noted above, these commentators' suggestions related to exemptions affecting transactions that do not involve registered or exempt clearing agencies and appear responsive to the request for whether additional exemptions should be considered. Thus, we believe that these commentators' suggestions relating to uncleared security-based swaps are more appropriate to be considered in connection with the Interim SBS Exemptions Release and, therefore, we are not adopting rules at this time providing exemptions that would apply to uncleared security-based swaps, including those that may be effected on or through trading platforms.87

We are adopting Rule 4d-11 under Section 304(d) of the Trust Indenture Act without any changes from the proposal. Final Rule 4d-11 exempts any security-based swap offered and sold in reliance on Securities Act Rule 239 from having to comply with the provisions of the Trust Indenture Act.88 We adopted a similar exemption on a temporary basis for eligible CDS.89

The Trust Indenture Act is aimed at addressing problems that unregulated debt offerings pose for investors and the public,90 and provides a mechanism for debtholders to protect and enforce their rights with respect to the debt. We do not believe that the protections contained in the Trust Indenture Act are needed to protect eligible contract participants to whom a sale of a security-based swap is made in reliance on Securities Act Rule 239. The identified problems that the Trust Indenture Act is intended to address generally do not occur in the offer and sale of security-based swaps.91 For example, security-based swaps are contracts between two parties and, as a result, do not raise the same problem regarding the ability of parties to enforce their rights under the instruments as would, for example, a debt offering to the public. Moreover, through novation, the clearing agency functionally becomes the counterparty to the buyer and the seller, and, in the case where buyer and seller are both members of the CCP, each would look directly to the clearing agency to satisfy the obligations under the security-based swap. As a consequence, enforcement of contractual rights and obligations under the security-based swap would occur directly between such parties, and the Trust Indenture Act provisions would not provide any additional meaningful substantive or procedural protections.

Accordingly, due to the nature of security-based swaps as contracts that will be or have been issued by a registered or exempt clearing agency in its function as a CCP, we do not believe the protections contained in the Trust Indenture Act are needed with respect to these instruments. Therefore, we believe the exemption is necessary or appropriate in the public interest, consistent with the protection of investors and the purposes fairly intended by the Trust Indenture Act.

The exemptions we are adopting in this release are not available for security-based swaps that are not cleared (“uncleared security-based swaps”), including, for example, uncleared security-based swaps entered into on organized markets, such as a security-based SEF or a national securities exchange. It is our understanding that transactions involving uncleared security-based swaps entered into between eligible contract participants may occur today on organized platforms that would likely register as security-based SEFs, and we understand that this activity will likely continue after the full implementation of Title VII.92 As noted above, security-based swaps are included in the definition of security under the Securities Act and the Exchange Act and are subject to the full panoply of the federal securities laws, including the registration requirements of Section 5 of the Securities Act and Section 12 of the Exchange Act. Because the exemptions we are adopting in this release are not available with respect to uncleared security-based swaps, counterparties that are eligible contract participants and engaging in an uncleared security-based swap would have to either rely on other available exemptions from the registration requirements of the Securities Act, the Exchange Act, and, if applicable, the Trust Indenture Act, or consider whether to register such transaction and/or class of security.93

Further, as noted above, security-based swap transactions involving persons that are not eligible contract participants, whether the transaction is cleared or not cleared, must be registered under the Securities Act and effected on a national securities exchange.94 One commentator suggested that the Commission adopt a simplified disclosure and registration scheme for those security-based swaps transactions that may involve persons who are not eligible contract participants.95 As the commentator's suggestions are outside the scope of the proposed rules, we are not considering the suggestions as part of this rulemaking. In the future, we may evaluate the need for a simplified disclosure and registration scheme for security-based swaps that may be offered and sold to persons who are not eligible contract participants.

As noted above, we adopted the temporary exemptions for eligible CDS to facilitate the operation of clearing agencies functioning as CCPs for eligible CDS. Those exemptions expire on April 16, 2012. The exemptions we are adopting in this release cover all security-based swaps that may be cleared, including eligible CDS that currently are being issued in reliance on the temporary exemptions for eligible CDS. Clearing agencies that have been actively engaged as CCPs in clearing eligible CDS transactions in reliance on the temporary exemptions for eligible CDS will be required to comply with the conditions of the exemptions we are adopting in this release upon the effective date of the final rules.

The final rules will become effective on April 16, 2012. The Administrative Procedure Act generally requires that an agency publish an adopted rule in the Federal Register 30 days before it becomes effective.96 This requirement, however, does not apply if a substantive rule grants or recognizes an exemption or relieves a restriction or if the Commission finds good cause not to delay the effective date.97 The Commission finds that the final rules meet both criteria.

The final rules provide exemptions under the Securities Act, the Exchange Act and the Trust Indenture Act for security-based swaps issued by a registered or exempt clearing agency in its function as a CCP. In addition, as discussed above, we adopted the temporary exemptions for eligible CDS to facilitate the operation of clearing agencies as CCPs for eligible CDS. The exemptions we are adopting in this release cover all security-based swaps that may be cleared, including eligible CDS that currently are being issued in reliance on the temporary exemptions for eligible CDS. Given that the temporary exemptions for eligible CDS will expire on April 16, 2012, the final rules are needed to be effective by that date in order to continue facilitating the operation of CCPs in clearing eligible CDS.

Although the final rules condition the exemptions on the registered or exempt clearing agency disclosing certain information with respect to the security-based swaps it clears, we believe that providing this information will not pose significant transition burdens for the three clearing agencies that have been actively engaged as CCPs in clearing eligible CDS in reliance on the temporary exemptions for eligible CDS, which expire on April 16, 2012.98 As noted above, these three clearing agencies are deemed registered as clearing agencies for purposes of clearing security-based swaps and are able to engage as CCPs in clearing eligible CDS, in part, pursuant to the temporary exemptive order relating to Sections 5 and 6 of the Exchange Act.99 The temporary exemptive order contains the conditions relating to, among other things, available information about the eligible CDS and the underlying reference entity of such eligible CDS. Since these clearing agencies have been required to comply with these conditions, they should have the information readily available regarding the eligible CDS that they would need to comply with the conditions of the final rules we are adopting in this release. The final rules provide that these clearing agencies either make the information publicly available on the clearing agency's Web site or in an agreement the clearing agency provides or makes available to its counterparty to the security-based swap transaction. As discussed below, we estimate that each clearing agency will spend approximately 2 hours in order to comply with this information disclosure requirement.100

As discussed above, we are adopting rules and amendments to existing rules to provide certain exemptions under the Securities Act, the Exchange Act, and the Trust Indenture Act for security-based swaps issued by a registered or exempt clearing agency in its function as a CCP. The final rules, which have not been changed from the proposal, exempt security-based swaps that are or will be issued to eligible contract participants by, and in a transaction involving, a registered or exempt clearing agency in its function as a CCP from all provisions of the Securities Act, other than the Section 17(a) antifraud provision, as well as from the registration requirements under Exchange Act Section 12 and the provisions of the Trust Indenture Act.

We requested comment on the economic analysis included in the Proposing Release, but we did not receive any comments.

The final rules are intended to further the goal of central clearing of security-based swaps by providing exemptions for the issuance of security-based swaps by a registered or exempt clearing agency in its function as a CCP from certain regulatory provisions that might otherwise impair their ability to engage in such clearing activities. Without an exemption, (1) a security-based swap transaction involving a registered or exempt clearing agency functioning as a CCP would have to be registered under the Securities Act; (2) the security-based swaps that are or have been issued in a transaction involving a registered or exempt clearing agency functioning as a CCP would have to be registered as a class of securities under the Exchange Act; and (3) the provisions of the Trust Indenture Act would apply. We believe that requiring compliance with these provisions likely would unnecessarily impede central clearing of security-based swaps and that the exemptions are necessary to facilitate the intent of the Dodd-Frank Act with respect to mandatory clearing of security-based swaps. Absent these exemptions, we believe that registered or exempt clearing agencies would incur additional costs due to compliance with the registration requirements of the Securities Act and the Exchange Act solely because of their clearing functions.101

The final rules should facilitate clearing of security-based swaps by clearing agencies functioning as CCPs at minimal cost to the CCP. Because reliance on the exemptions will not require any filing with or submission to us, other than costs incurred to comply with the information condition of Securities Act Rule 239, the costs of being able to rely on such exemptions, we believe, are minimal.

The exemptions would treat security-based swaps issued or cleared by a registered or exempt clearing agency in its function as a CCP in the same manner as similar types of securities, such as security futures products and standardized options.102 The exemptions are similar to the temporary exemptions for eligible CDS. A registered or exempt clearing agency issuing security-based swaps in its function as a CCP would benefit from the exemptions because it would not have to file registration statements covering the offer and sale of the security-based swaps. If a registered or exempt clearing agency is not required to register the offer and sale of security-based swaps, it would not have to incur the costs of such registration, including legal and accounting costs. Some of these costs, such as the costs of obtaining audited financial statements, may still be incurred by the clearing agency as a result of other regulatory requirements for clearing agencies.

Exchange Act Rule 12a-10 provides that the Exchange Act Section 12(a) does not apply to any security-based swap that is issued by a registered or exempt clearing agency in reliance on Securities Act Rule 239 and traded on a national securities exchange. In addition, Exchange Act Rule 12h-1(h) exempts from Exchange Act Section 12(g) security-based swaps that are issued by a registered or exempt clearing agency in reliance on Securities Act Rule 239, whether or not such security-based swap is traded on a national securities exchange or a registered or exempt security-based SEF. Thus, the clearing agency will not incur the costs of registration or the costs associated with Exchange Act periodic reporting. The availability of exemptions under the Securities Act, the Exchange Act, and the Trust Indenture Act means that registered or exempt clearing agencies will not incur the costs associated with registering transactions or classes of securities, such as costs associated with preparing documents describing security-based swaps, preparing indentures, or arranging for the services of a trustee.

The final rules we are adopting exempt offers and sales of security-based swaps that are or will be issued to eligible contract participants by, and in a transaction involving, a registered or exempt clearing agency in its function as a CCP from all provisions of the Securities Act, other than the Section 17(a) antifraud provision, as well as from the registration requirements under Section 12 of the Exchange Act and the provisions of the Trust Indenture Act.103 Because these exemptions are available to any registered or exempt clearing agency offering and selling security-based swaps to an eligible contract participant, in its function as a CCP, we do not believe that the exemptions impose a burden on competition. In contrast, we believe the exemptions as adopted will facilitate moving security-based swaps into centralized clearing, furthering the goal of the Dodd-Frank Act to reduce systemic risk while improving market access to hedging instruments that can contribute to lower costs of raising capital. In addition, we believe the exemptions will promote efficiency by treating security-based swaps issued by clearing agencies in a manner similar to standardized options and security futures issued by clearing agencies. Harmonizing the regulatory treatment of these securities under the Securities Act, Exchange Act, and the Trust Indenture Act should reduce the potential for regulatory arbitrage between such products.

We also believe that the ability to novate security-based swaps with registered or exempt clearing agencies functioning as CCPs will improve the transparency of the security-based swap market and provide greater assurance to participants as to the capacity of the counterparty to perform its obligations under the security-based swap. We believe that clearing agencies providing the information required by Securities Act Rule 239(b)(3) may provide transparency among clearing agencies because it will make it easier for clearing agencies and eligible contract participants to determine what security-based swaps are being cleared. We believe that increased transparency in the security-based swap market could help to limit market turmoil and thereby facilitate the capital formation process.

We recognize that a consequence of the exemptions would be the unavailability of certain remedies under the Securities Act and the Exchange Act and certain protections under the Trust Indenture Act. Absent an exemption, a clearing agency may have to file a registration statement covering the offer and sale of the security-based swaps, may have to register the class of eligible security-based swaps that it has issued or cleared under the Exchange Act, and may have to satisfy the applicable provisions of the Trust Indenture Act, which would provide investors with civil remedies in addition to antifraud remedies. A registration statement covering the offer and sale of security-based swaps may provide certain information about the clearing agency, security-based swap contract terms, and the identification of the particular reference securities, issuers, and loans underlying the security-based swap. However, it would not necessarily provide the type of information necessary to assess the risk of the reference issuer, security, narrow-based security index, or loan. Further, while a registration statement would provide information to eligible contract participants, as well as to the market as a whole, registered clearing agencies already are required to make their audited financial statements and other information about themselves publicly available.104 While an investor would be able to pursue an antifraud action in connection with the purchase and sale of security-based swaps under Exchange Act Section 10(b),105 it would not be able to pursue civil remedies under Securities Act Sections 11 or 12.106 We could still pursue an antifraud action in the offer and sale of security-based swaps issued by a clearing agency.107

Securities Act Rule 239(b)(3) requires a clearing agency availing itself of the Securities Act exemption to include in an agreement covering the security-based swap the clearing agency provides or makes available to its counterparty or include on a publicly available Web site maintained by the clearing agency:

• A statement identifying any security, issuer, loan, or narrow-based security index underlying the security-based swap;

• A statement indicating the securities or loans to be delivered (or class of securities or loans), or if cash settled, the securities, loans or narrow-based security index (or class of securities or loans) whose value will determine the settlement obligation under the security-based swap; and

• A statement of whether the issuer of any security or loan, each issuer of a security in a narrow-based security index, or each referenced issuer underlying the security-based swap is subject to the reporting requirements of Exchange Act Section 13 or Section 15(d) and, if not subject to such reporting requirements, whether public information, including financial information, about any such issuer is available and where the information is available.

We believe some of the information the clearing agency will make available will be the same information the clearing agency collects and analyzes in making its business decision to plan to accept the security-based swap, or any group, category, type, or class of security-based swaps, for clearing. A clearing agency may incur costs in providing or making available this information in order to rely on the exemption.108

Certain provisions of Securities Act Rule 239 would result in “collection of information requirements” within the meaning of the Paperwork Reduction Act of 1995 (“PRA”).109 We published a notice requesting comment on the collection of information requirements in the Proposing Release for Securities Act Rule 239 and we submitted these requirements to the Office of Management and Budget (“OMB”) for review in accordance with the PRA. We requested comment on the collection of information requirements included in the Proposing Release for Securities Act Rule 239, but we did not receive any comments.

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

• “Rule 239” (new collection of information).

Rule 239 is a new collection of information under the Securities Act. This new collection of information relates to the information requirements for clearing agencies seeking to rely on the final rules. There is no mandatory retention period for the information disclosed, and the information disclosed will be made publicly available on the clearing agency's Web site or in an agreement the clearing agency provides or makes available to its counterparty to the security-based swap transaction. The collection of information is mandatory and it will not be kept confidential.

As discussed above, one condition to the availability of the exemption provided in Securities Act Rule 239 for offers and sales of security-based swaps issued by, and in a transaction involving, a registered or exempt clearing agency in its function as a CCP is that such registered or exempt clearing agency has an agreement covering the security-based swap that is provided or made available to its counterparty or a publicly available Web site maintained by the registered or exempt clearing agency that contains the following:

• A statement identifying any security, issuer, loan, or narrow-based security index underlying the security-based swap;

• A statement indicating the security or loan to be delivered (or class of securities or loans), or if cash settled, the security, loan or narrow-based security index (or class of securities or loans) whose value is to be used to determine the amount of the settlement obligation under the security-based swap; and

• A statement of whether the issuer of any security or loan, each issuer of a security in a narrow-based security index, or each referenced issuer underlying the security-based swap is subject to the reporting requirements of Exchange Act Section 13 or Section 15(d) and, if not subject to such reporting requirements, whether public information, including financial information, about any such issuer is available and where the information is available.

For purposes of the PRA, we estimate that there will be an annual incremental increase in the paperwork burden for clearing agencies as issuers of security-based swaps to comply with our new collection of information requirements. The disclosure provisions of Securities Act Rule 239 apply to registered or exempt clearing agencies relying on the exemption from the registration requirements of the Securities Act. These disclosure provisions will require those relying on the exemption to make certain information about security-based swaps that may be cleared by the registered or exempt clearing agency available to eligible contract participants and other market participants. This estimate is consistent with the estimate in the Proposing Release and we received no comments on this estimate.

Currently, three clearing agencies clear eligible CDS, which include security-based swaps.110 The obligation to centrally clear certain security-based swap transactions is a new requirement under Title VII of the Dodd-Frank Act, and clearing agencies that are deemed registered as clearing agencies are eligible to clear security-based swaps. Based on the fact that there are currently three clearing agencies authorized to clear security-based swaps and that there could conceivably be a few more in the foreseeable future,111 we estimate that three to six clearing agencies may plan to centrally clear security-based swaps and seek to rely on the exemptions we are adopting in this release, and therefore, would be subject to the collection of information.112 For purposes of the PRA, we estimate six clearing agencies would seek to rely on the exemptions we are adopting in this release. This estimate is consistent with the estimate in the Proposing Release and we received no comments on this estimate.

We believe that a registered or exempt clearing agency issuing security-based swaps in its function as a CCP could incur some costs associated with disclosing, or providing or making available, certain information in accordance with Securities Act Rule 239, either in its agreement regarding the security-based swap or on its publicly available Web site, with respect to the security-based swap. A clearing agency also could incur costs associated with updating the information on its Web site or in its agreements, if necessary. The purpose of the requirement is to inform investors about whether there is publicly available information about the issuer of the referenced security or referenced issuer and we believe that a clearing agency likely already would be collecting and making public the type of information required by the final rule.113

We estimate that each registered or exempt clearing agency issuing security-based swaps in its function as a CCP will spend approximately 2 hours each time it provides or updates the information in its agreements relating to security-based swaps or on its Web site.114 We estimate that each registered or exempt clearing agency will provide or update the information 20 times per year.115 Therefore, we estimate that the total annual reporting burden for clearing agencies to provide the information in their agreements relating to security-based swaps or on their Web site to comply with Securities Act Rule 239(b)(3) will be 240 hours (20 × 2 hours × 6 respondents). We estimate that 75% of the burden of preparation is carried by the clearing agency internally and that 25% of the burden is carried by outside professionals retained by the clearing agency at an average cost of $400 per hour. These estimates are consistent with the estimates in the Proposing Release and we received no comments on these estimates.

There is no recordkeeping requirement associated with Securities Act Rule 239.

Under Section 605(b) of the Regulatory Flexibility Act,116 we certified that, when adopted, Rule 239 under the Securities Act, Rule 12a-10 under the Exchange Act, the amendment to Rule 12h-1 under the Exchange Act, and Rule 4d-11 under the Trust Indenture Act would not have a significant economic impact on a substantial number of small entities. This certification, including our basis for the certification, was included in Part VIII of the Proposing Release. We solicited comments on the potential impact of these rules and amendment on small entities, but received none. The final rules are identical to the proposed rules. Accordingly, there have been no changes to the proposal that would alter the basis upon which the certification was made.

The rules and amendments described in this release are being adopted under the authority set forth in Sections 19 and 28 of the Securities Act, Sections 3C, 12(h), 23(a) and 36 of the Exchange Act and Section 304(d) of the Trust Indenture Act.

For the reasons set out in the preamble, the Commission is amending Title 17, Chapter II, of the Code of Federal Regulations as follows:

On April 1, 2011, the National Highway Traffic Safety Administration (NHTSA) published a final rule setting forth “Uniform Criteria for State Observational Surveys of Seat Belt Use.” 76 FR 18042. That final rule amended the regulation establishing uniform criteria for designing and conducting State observational surveys of seat belt use and the procedures for obtaining NHTSA approval of survey designs, and provided a new form for reporting seat belt use rates to NHTSA.

The final rule specified that beginning with calendar year 2012 surveys, States must use survey designs that have been approved by NHTSA as conforming to the revised uniform criteria. Under the rule, States were required to submit proposed survey designs by January 3, 2012. Almost all States met this deadline. However, in reviewing the proposed survey designs, NHTSA found it necessary to seek clarification from States, in some cases several times. Due to the unanticipated complexity of the review process, only a few States have survey designs that have been approved at this time by NHTSA.

Most States conduct seat belt use surveys in May and June, during the time of the nationally-supported seat belt enforcement mobilization. NHTSA does not believe that proposed survey designs will be approved in time for all States to train data collectors and conduct seat belt use surveys in May and June of 2012. For this reason, NHTSA is amending the final rule to allow States to conduct calendar year 2012 seat belt use surveys using designs approved by NHTSA under the old uniform criteria or, at a State's election if its new survey design has been approved, under the revised uniform criteria. Beginning in calendar year 2013, all States must conduct a survey whose design satisfies and is approved by NHTSA under the revised uniform criteria.

The Administrative Procedure Act (APA) authorizes agencies to dispense with certain notice procedures for rules when they find “good cause” to do so. See 5 U.S.C. 553(b)(B). Specifically, the requirements for prior notice and opportunity to comment do not apply when the agency for good cause finds that those procedures are “impractical, unnecessary, or contrary to the public interest.”

This final rule would amend only the date by which States must conduct seat belt use surveys using the revised uniform criteria. NHTSA already sought public comment on all other aspects of the revised uniform criteria. See 75 FR 4509 (Jan. 28, 2010). The earlier-published final rule reflects the agency's consideration of and response to those comments. See 76 FR 18042 (Apr. 1, 2011).

This amendment would relieve a burden on the States and has no safety impact. While most States met the deadline to submit proposed survey designs under the revised criteria, there has been a need for significant consultation during NHTSA's review of these proposed designs. At this time, only a few States have survey designs that have been approved by NHTSA under the revised uniform criteria. NHTSA does not believe that proposed survey designs will be approved in time for all States to conduct seat belt use surveys during May and June, as is typical practice. Further, notice and comment are “impractical, unnecessary, or contrary to the public interest” given this timeline. This final rule would provide States with sufficient notice so that States may elect to collect data in May and June 2012 using either the old uniform criteria or the revised uniform criteria.

The APA provides that rules generally may not take effect earlier than thirty (30) days after they are published in the Federal Register. See 5 U.S.C. 553(d). However, section 553(d)(1) provides that a substantive rule which grants or recognizes an exemption or relieves a restriction may take effect earlier. Today's final rule, which relieves a restriction, is effective immediately upon publication.

The agency has discussed the relevant requirements of regulatory analyses and notices in the underlying final rule published at 76 FR 18042 (Apr. 1, 2011). Those discussions are not affected by this amendment.

The Department of Transportation assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda.

Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit http://www.regulations.gov.

For the reasons discussed in the preamble, the National Highway Traffic Safety Administration amends 23 CFR part 1340 as follows:

This is a summary of the Wireline Competition Bureau's Order in WC Docket Nos. 10-90, 07-135, 05-337, 03-109; GN Docket No. 09-51; CC Docket Nos. 01-92, 96-45; WT Docket No. 10-208; DA 12-298, released on February 27, 2012. The full text of this document is available for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 12th Street SW., Washington, DC 20554. Or at the following Internet address: http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0227/DA-12-298A1.pdf.

1. In the USF/ICC Transformation Order, the Commission delegated to the Wireline Competition Bureau (Bureau) the authority to revise and clarify rules as necessary to ensure that the reforms adopted in the Order are properly reflected in the rules. In this Order, the Bureau acts pursuant to this delegated authority to revise and clarify certain rules, and acts pursuant to authority delegated to the Bureau in §§ 0.91, 0.201(d), and 0.291 of the Commission's rules to clarify certain rules.

2. In the USF/ICC Transformation Order, the Commission adopted a prospective transitional intercarrier compensation framework for VoIP-PSTN traffic. This transitional framework included default compensation rates and addressed a number of implementation issues, including explaining the scope of charges that local exchange carrier (LEC) partners of affiliated or unaffiliated retail VoIP providers are able to include in tariffs. In particular, the Commission determined that it was appropriate to adopt a “symmetric” framework for VoIP-PSTN traffic. This symmetric approach means that “providers that benefit from lower VoIP-PSTN rates when their end-user customers' traffic is terminated to other providers' end-user customers also are restricted to charging the lower VoIP-PSTN rates when other providers' traffic is terminated to their end-user customers.”

3. As part of its symmetric regime, the Commission adopted rules that “permit a LEC to charge the relevant intercarrier compensation for functions performed by it and/or its retail VoIP partner, regardless of whether the functions performed or the technology used correspond precisely to those used under a traditional TDM architecture.” The Commission cautioned, however, that “although access services might functionally be accomplished in different ways depending upon the network technology, the right to charge does not extend to functions not performed by the LEC or its retail VoIP service provider partner.” The Commission adopted this limitation to address concerns in the record regarding double billing. This limitation was codified as part of the VoIP-PSTN framework in § 51.913(b) of the Commission's rules. The Commission also modified its tariffing rules in Part 61 for competitive LECs to implement the VoIP symmetry rule.

4. On February 3, 2012, YMax Communications Corp. (YMax) filed an ex parte letter seeking confirmation of its interpretation that “under [the Commission's] new VoIP-PSTN `symmetry' rule, a LEC is performing the functional equivalent of ILEC access service, and therefore entitled to charge the full `benchmark' rate level, whenever it is providing telephone numbers and some portion of the interconnection with the PSTN, and regardless of how or by whom the last-mile transmission is provided.” Stated differently, YMax seeks guidance from the Commission as to whether the revised rule language in Part 61, specifically, § 61.26(f) permits a competitive LEC to tariff and charge the full benchmark rate even if it includes functions that neither it nor its VoIP retail partner are actually providing. YMax asserts that the purpose of the Commission's revisions to § 61.26(f) was to “defin[e] the minimum access functionality necessary in order for a CLEC to be allowed to collect access charges at the full benchmark level under the VoIP-PSTN symmetry rule.” We disagree. The Commission revised § 61.26(f) to reflect the change in the tariffing process to implement the VoIP symmetry rule, which included limitations to prevent double billing. Interpreting the rule in the manner proposed by YMax could enable double billing. The Commission made clear in adopting the VoIP-symmetry rule that it intended to prevent double billing and charging for functions not actually provided. Indeed, § 51.913(b) expressly states that “[t]his rule does not permit a local exchange carrier to charge for functions not performed by the local exchange carrier itself or the affiliated or unaffiliated provider of interconnected VoIP service or non-interconnected VoIP service.”

5. YMax's letter does, however, highlight a potential ambiguity because the amended rule § 61.26(f), which is the tariffing provision intended to implement the VoIP symmetry rule, did not include an express cross reference to § 51.913(b). Although § 51.913(b) makes clear that its terms apply notwithstanding any other Commission rule, to remove any ambiguity regarding the scope of what competitive LECs are permitted to assess in their tariffs, we amend § 61.26(f) to make clear that the ability to charge under the tariff is limited by § 51.913(b). In so doing, we address and reject YMax's interpretation of § 61.26(f).

6. Verizon Petition for Clarification or, in the Alternative, for Reconsideration. In the USF/ICC Transformation Order, the Commission adopted rules to phase down existing high-cost support for competitive eligible telecommunications carriers (ETCs), and addressed the phase down of existing high-cost support to Verizon Wireless and Sprint pursuant to those carriers' prior merger commitments, as clarified by the Corr Wireless Order. On December 29, 2011, Verizon Wireless filed a petition for clarification or, in the alternative, for reconsideration of this aspect of the Order as it applies to Verizon Wireless. Verizon Wireless argues that there are two permissible interpretations of the USF/ICC Order as it bears on the phase down of support for Verizon Wireless: That the general phase down of the competitive ETC support applies but Verizon Wireless's merger commitment no longer does, or that Verizon Wireless's merger commitment remains in effect but general phase down of competitive ETC support does not. Verizon Wireless states that a Bureau-level clarification is the appropriate means of resolving this ambiguity.

7. The Bureau clarifies that, pursuant to paragraph 520 of the USF/ICC Transformation Order, only Verizon Wireless's merger commitment applies. Specifically, the Bureau clarifies that Verizon Wireless will receive support in 2012 based on its merger commitments, as clarified by the Corr Wireless Order, not based on the general phase down of competitive ETC support described in the USF/ICC Transformation Order. Verizon Wireless will not receive high-cost competitive ETC support after 2012. The Universal Service Administrative Company (USAC) shall disburse to Verizon Wireless in 2012 20 percent of the support it would have received for each ETC service area in the absence of its merger commitment and the USF/ICC Transformation Order. As a proxy for the amount Verizon Wireless would have received in 2012 in the absence of its merger commitment and the USF/ICC Transformation Order, USAC shall use the amount of support it calculated for Verizon Wireless in 2011 pursuant to the identical support rule and the interim cap, including any support not actually disbursed to Verizon Wireless as a result of the merger commitment.

8. Accordingly, the Bureau grants Verizon's Petition to the extent it requests clarification of the phase down of competitive ETC support and dismisses Verizon's Petition to the extent it alternatively requests reconsideration of the same issue.

9. Other Matters. First, the Bureau amends the definition of “rate-of-return carrier” in § 54.5 of our rules to correct an erroneous cross-reference to the definition of price cap regulation.

10. Second, the Bureau dismisses in part the petition for reconsideration filed by the United States Telecom Association (USTelecom), which, among other things, asked the Commission to clarify that reductions in legacy support resulting from a failure to meet the urban rate floor will, at most, extend only to high-cost loop support and high-cost model support.

11. In the USF/ICC Clarification Order, the Bureaus addressed this issue by amending § 54.318(d) to clarify that support reductions associated with the rate floor will offset frozen CAF Phase I support only to the extent that the recipient's frozen CAF Phase I support replaced HCLS and HCMS. The Bureaus further stated that the offset does not apply to frozen CAF Phase I support to the extent that it replaced IAS and ICLS. Because the USF/ICC Clarification Order addressed this issue, the Bureau dismisses as moot that portion of the USTelecom petition for reconsideration.

12. This document does not contain new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does not contain any new or modified information collection burden for small business concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

13. Final Regulatory Flexibility Certification. The Regulatory Flexibility Act of 1980, as amended (RFA), requires that a regulatory flexibility analysis be prepared for rulemaking proceedings, unless the agency certifies that “the rule will not have a significant economic impact on a substantial number of small entities.” The RFA generally defines “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).

14. This Order clarifies, but does not otherwise modify, the USF/ICC Transformation Order. These clarifications do not create any burdens, benefits, or requirements that were not addressed by the Final Regulatory Flexibility Analysis attached to USF/ICC Transformation Order. Therefore, we certify that the requirements of this Order will not have a significant economic impact on a substantial number of small entities. The Commission will send a copy of the Order including a copy of this final certification in a report to Congress pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996, see 5 U.S.C. 801(a)(1)(A). In addition, the Order and this certification will be sent to the Chief Counsel for Advocacy of the Small Business Administration, and will be published in the Federal Register. See 5 U.S.C. 605(b).

15. The Commission will send a copy of this Order to Congress and the Government Accountability Office pursuant to the Congressional Review Act.

16. Accordingly, it is ordered, pursuant to the authority contained in sections 1, 2, 4(i), 201-206, 214, 218-220, 251, 252, 254, 256, 303(r), 332, and 403 of the Communications Act of 1934, as amended, and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 151, 152, 154(i), 201-206, 214, 218-220, 251, 252, 254, 256, 303(r), 332, 403, 1302, and pursuant to §§ 0.91, 0.201(d), 0.291, 1.3, and 1.427 of the Commission's rules, 47 CFR 0.91, 0.201(d), 0.291, 1.3, 1.427 and pursuant to the delegation of authority in paragraph 1404 of FCC 11-161 (rel. Nov. 18, 2011), that this Order is adopted, effective May 7, 2012.

17. It is further ordered, that parts 54 and 61 of the Commission's rules, 47 CFR parts 54, 61 are amended as set forth, and such rule amendments shall be effective 30 days after the date of publication of the rule amendments in the Federal Register.

18. It is further ordered that, pursuant to the authority contained in section 254 of the Communications Act of 1934, as amended, 47 U.S.C. 254, and the authority delegated in §§ 0.91 and 0.291 of the Commission's rules, 47 CFR 0.91, 0.291, the Petition for Clarification or, in the Alternative, for Reconsideration of Verizon is granted in part and dismissed in part and the Petition for Reconsideration of United States Telecom Association is dismissed in part.

19. It is further ordered, that the Commission shall send a copy of this Order to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

20. It is further ordered, that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Order, including the Final Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the Small Business Administration.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR parts 54 and 61 to read as follows:

This is a synopsis of the Commission's document DA 12-430, adopted March 20, 2012, and released March 20, 2012, in CG Docket No. 10-210.

The full text of document DA 12-430 and copies of any subsequently filed documents in this matter will be available for public inspection and copying via ECFS, and during regular business hours at the FCC Reference Information Center, Portals II, 445 12th Street SW., Room CY-A257, Washington, DC 20554. They may also be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc., Portals II, 445 12th Street SW., Room CY-B402, Washington, DC 20554, telephone: (800) 378-3160, fax: (202) 488-5563, or Internet: www.bcpiweb.com. Document DA 12-430 can also be downloaded in Word or Portable Document Format (PDF) at http://www.fcc.gov/cgb/dro/headlines.html and at http://www.fcc.gov/cgb/dro/cvaa.html.

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

Document DA 12-430 contains a modified information collection requirement. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public to comment on the modified information collection requirement contained in document DA 12-430 as required by the Paperwork Reduction Act (PRA), Public Law 104-13 in a separate published Federal Register Notice (Notice). Public and agency comments are due on or before May 29, 2012. See Information Collection Being Reviewed by the Federal Communications Commission, Notice, published at 77 FR 18813, March 28, 2012. In addition, the Commission notes that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, the Commission previously sought specific comment on how the Commission might “further reduce the information collection burden for small business concerns with fewer than 25 employees.” See 44 U.S.C. 3506(c)(4). In the present document, the Commission has assessed the effects of the rules for the NDBEDP pilot program and finds that the collection of information requirements will not have a significant impact on small business concerns with fewer than 25 employees.

The Commission will not send a copy of document DA 12-430 to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A), because the conditional waiver adopted in document DA 12-430 does not amend the Commission's rules.

1. On April 4, 2011, in accordance with the Twenty-First Century Communications and Video Accessibility Act (CVAA), Public Law 111-260, 124 Stat. 2751 (2010), the Commission adopted a Report and Order establishing the National Deaf-Blind Equipment Distribution Program (NDBEDP). See Relay Services for Deaf-Blind Individuals, Report and Order, document FCC 11-56, published at 76 FR 26641, May 9, 2011 (NDBEDP Pilot Program Order). The goal of the NDBEDP is to ensure that low-income individuals who are deaf-blind receive the equipment they need to effectively access telecommunications services, Internet access services, and advanced communications services. The CVAA authorizes the Commission to allocate up to $10 million annually from the Interstate Telecommunications Relay Services Fund (TRS Fund) for this nationwide equipment distribution effort. See 47 U.S.C. 620(c). The Commission will certify and provide funding to one entity in each state for the purpose of distributing communications equipment to low-income individuals who are deaf-blind.

2. NDBEDP certified programs may seek reimbursement of costs from the TRS Fund up to the funding allocation for the state, for the equipment they distribute, the reasonable costs of providing related services, and the costs associated with administering these programs. In the NDBEDP Pilot Program Order, the Commission adopted a funding mechanism that allows for reimbursement for these authorized costs every six months. See 47 CFR 64.610(f)(2) of the Commission's rules. To obtain reimbursement for authorized costs, certified programs must provide the Commission with documentation and a reasonably detailed explanation of the costs actually incurred during the prior six-month period of the funding year.

3. The Commission announced that it would accept applications through November 21, 2011, from programs interested in receiving certification to participate in the NDBEDP pilot program. See FCC Announces 60-Day Period to Apply for Certification to Participate in the National Deaf-Blind Equipment Distribution Program, Public Notice, document DA 11-1591, released September 22, 2011. In response, the Commission received 58 applications from entities representing each of the 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands. All applications are from state or local government agencies or non-profit entities.

4. More than half of the applications received include a request for the Commission to permit claims for reimbursement of NDBEDP expenses more frequently than once every six months. Many of the applicants assert that the inability to receive compensation more frequently than once every six months will compromise significantly their ability to staff their programs, purchase equipment, actively conduct program outreach, and handle other required tasks. Accordingly, they claim that the once every six months reimbursement interval will severely and profoundly limit their ability to serve eligible low-income, deaf-blind individuals in a timely manner. Several applicants also assert that permitting more frequent claims for reimbursement is necessary to maintain financial stability and to ensure timely payments to vendors and contractors. Still others raise questions about their ability to participate in the NDBEDP program at all if not permitted to receive compensation on a more frequent basis, especially given their non-profit status, the sizeable expenditures they must incur for covered equipment, and recent budget reductions experienced by state and local government agencies that make reliance on regular funding critical to their participation in this program.

5. Generally, the Commission may waive any provision of its rules on its own motion for good cause shown. See 47 CFR 1.3 of the Commission's rules. In addition, the Commission may take into account considerations of hardship, equity, or more effective implementation of overall policy on an individual basis. WAIT Radio v. FCC, 418 F.2d 1153, 1157 (D.C. Cir. 1969), affirmed, 459 F.2d 1203 (D.C. Cir. 1972). In sum, a waiver of our rules is appropriate if special circumstances warrant a deviation from the general rule, and such deviation would better serve the public interest than strict adherence to the general rule. Northeast Cellular Tel. Co. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990).

6. For good cause shown, and to reduce the financial burden on programs that the Commission certifies to participate in the NDBEDP and better enable selected participants to fully meet the needs of eligible low-income, deaf-blind individuals in a timely manner, the Commission conditionally waives its rules to permit such programs to submit claims for reimbursement from the TRS Fund more frequently. The Commission finds persuasive applicants' assertions that a six-month reimbursement cycle will impose a hardship that could prevent many entities from participating in the NDBEDP. Many of the non-profit and state or local programs that have applied for certification report that they operate on limited funding that will be strained if forced to wait a full six months for compensation. This is especially true given the high costs of equipment generally required by individuals who are deaf-blind. The Commission finds that the large upfront expenses needed for such equipment justifies a waiver to permit more frequent reimbursement.

7. To be compensated for equipment distributed and services rendered under the NDBEDP pursuant to this waiver, each certified entity must comply with certain conditions. Specifically, each certified entity that wishes to take advantage of this waiver will be permitted to elect a reimbursement schedule on either a monthly or quarterly basis. Such entity must notify the TRS Fund Administrator of its election at the start of each Fund Year, and maintain that schedule for the duration of the Year. Entities electing to seek reimbursement on a monthly or quarterly basis also will be required to submit documentation and a reasonably detailed explanation of costs incurred within 30 days after the end of each month or quarter, respectively, of the Fund Year (July 1 through June 30). See 47 CFR 64.610(f)(2) of the Commission's rules. In either case, the TRS Fund Administrator and the NDBEDP Administrator shall review the costs submitted and may request supporting documentation to verify the expenses claimed. See 47 CFR 64.610(f) of the Commission's rules. Entities that do not take advantage of this waiver do not need to so notify the Fund Administrator, but will be required to submit documentation and a reasonably detailed explanation of their costs incurred within 30 days after the end of each six-month period of the funding year, as required by the Commission's rules. See 47 CFR 64.610(f)(2) of the Commission's rules. In each case, costs submitted must be for those costs actually incurred during each preceding one-, three-, or six-month period.

8. The Commission further notes that the waiver granted in document DA 12-430 will be for the duration of the NDBEDP pilot program. The purpose of establishing the NDBEDP initially as a pilot program is to provide the flexibility needed to enable certified programs to structure their distribution and service delivery systems to effectively meet the needs of their participants. This flexibility is expected to result in a variety of equipment distribution and service delivery models that could serve as the foundation for establishment of the permanent NDBEDP. The Commission concludes that allowing certified entities to receive the needed funding in a timely manner will better enable such entities to make their programs effective and sustainable, which, in turn, will help inform future Commission decisions regarding a permanent NDBEDP that furthers the public interest.

9. Pursuant to sections 4(i) and 719 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 620, and § 1.3 of the Commission's rules, 47 CFR 1.3, and § 64.610(f)(2) of the Commission's rules is conditionally waived to permit NDBEDP certified programs to submit claims for reimbursement more frequently than once every six months as required by § 64.610(f)(2) of its rules and to submit reimbursement claims up to one time each month.

10. This action is taken under delegated authority pursuant to §§ 0.141 and 0.361 of the Commission's rules, 47 CFR 0.141, 0.361.

This is a synopsis of the Commission's document in MM Docket No. 99-25, FCC No. 12-28, adopted March 19, 2012. A synopsis of the proposed rulemaking segment of this decision will be published in a later issue of the Federal Register. The full text of the Fifth Report and Order, Fourth Further Notice of Proposed Rulemaking and Fourth Order on Reconsideration is available for inspection and copying during normal business hours in the FCC Reference Center (Room CY-A257), 445 12th Street SW., Washington, DC 20554. The full text may also be downloaded at: http://www.fcc.gov.

Paperwork Reduction Act Analysis. This Report and Order does not adopt any new or revised information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13 (44 U.S.C. 3501-3520). In addition, therefore, it does not contain any new or modified “information collection burden for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

Report to Congress. The Commission will send a copy of this Fifth Report & Order to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

1. In the Fifth Report and Order, we modify our rules to implement certain provisions of the Local Community Radio Act of 2010 (“LCRA”), which unambiguously require the Commission to eliminate its third-adjacent channel spacing requirements and to maintain the spacing requirements currently in place to protect radio reading services. In the Fourth Order on Reconsideration, we dismiss in part and deny in part a petition for reconsideration of the Third Report and Order in this docket, which the Commission released in 2007, and terminate the Second Further Notice of Proposed Rulemaking (Second FNPRM) that accompanied that order.

2. In January 2000, the Commission adopted a Report and Order establishing the LPFM service. In doing so, the Commission sought “to create a class of radio stations designed to serve very localized communities or underrepresented groups within communities.” The Commission created two classes of LPFM facilities. The LP100 class consists of stations with a maximum power of 100 watts effective radiated power (“ERP”) at 30 meters antenna height above average terrain (“HAAT”), providing an FM service radius (1 mV/m or 60 dBu) of approximately 3.5 miles. The LP10 class consists of stations with a maximum of 10 watts ERP at 30 meters HAAT, providing an FM service radius of approximately one to two miles. “[T]o preserve the integrity and technical excellence of existing FM radio service,” the Commission adopted separation requirements for LPFM stations operating on co-, first- and second-adjacent channels to full-service FM, FM translator and FM booster stations. The Commission, however, declined to impose third adjacent channel distance separation requirements, and declined to adopt special protections for radio reading services. The Commission specified that LPFM stations operate on a “secondary” basis. In other words, LPFM stations generally cannot cause interference to existing and future full-service FM and other “primary” stations and are not protected against interference from these stations.

3. To ensure that any new LPFM service included the voices of community-based schools, churches and civic organizations, the Commission established ownership and eligibility rules for the LPFM service. Specifically, the Commission restricted LPFM service to noncommercial educational (“NCE”) operations, and restricted licensee eligibility to applicants with no attributable interests in any other broadcast station or other media subject to the Commission's ownership rules. The Commission also limited eligibility to local entities during the first two years LPFM licenses were available. To choose among entities filing mutually exclusive applications for LPFM licenses, the Commission adopted a point system that favors local ownership and locally-originated programming, with ties between competing applicants resolved by either voluntary time-sharing agreements between such applicants or, in the event that the applicants cannot agree, the imposition of “involuntary time-sharing,” with each tied and grantable applicant awarded an equal, successive and non-renewable license term of no less than one year, for a combined total eight-year term.

4. In September 2000, the Commission adopted a Memorandum Opinion and Order on Reconsideration. In the Reconsideration Order, the Commission revised and clarified some of its LPFM rules, including the local program origination criterion adopted for the point system. The Commission again declined to impose third-adjacent channel separation requirements. Instead, it adopted complaint and license modification procedures to address any unexpected, significant third-adjacent channel interference problems caused by LPFM stations. It also modified the spacing standards to protect radio reading services and adopted procedures for addressing any interference caused by an LPFM station to the input signal of an FM translator or FM booster station.

5. Shortly thereafter, in December 2000, Congress enacted the Making Appropriations for the Government of the District of Columbia for FY 2001 Act (“2001 DC Appropriations Act”). Therein, Congress directed the Commission to prescribe third-adjacent channel spacing requirements for LPFM stations, which the Commission did in April 2001. Congress also directed the Commission to conduct an experimental program to evaluate the likelihood of interference to existing full-service FM stations and FM translator stations if LPFM stations were not subject to third-adjacent channel spacing requirements, and to submit a report that included the Commission's recommendations regarding reduction or elimination of the spacing requirements for third-adjacent channels. The Commission selected an independent third party, the Mitre Corporation (“Mitre”), to conduct field tests. Mitre submitted a report to the Commission, which, in turn, sought comment on the report. In February 2004, the Commission submitted a report to Congress on this issue. Based on the Mitre study, the Commission recommended that Congress “modify the statute to eliminate the third-adjacent channel distan[ce] separation requirements for LPFM stations.”

6. In March 2005, the Commission adopted a Second Order on Reconsideration and Further Notice of Proposed Rulemaking. In the Second Order, the Commission modified some of the rules governing the LPFM service, noting that the rules needed adjustment in light of the experiences of LPFM applicants and licensees. In the accompanying FNPRM, the Commission sought comment on a number of issues with respect to LPFM ownership restrictions and eligibility. The Commission also proposed certain changes to the rules governing the formation and duration of voluntary and involuntary time-sharing arrangements among mutually exclusive LPFM applicants. Finally, the Commission sought comment on a number of changes to the LPFM technical rules.

7. In December 2007, the Commission released the Third Report and Order and Second FNPRM. In the Third Report and Order, the Commission resolved the issues raised in the FNPRM. Among other things, the Commission set forth an interim processing policy that it would use to consider requests for waiver of the second-adjacent channel spacing requirements from certain LPFM stations, reinstated the local ownership requirement, and clarified its definition of local origination. The Commission also modified the rules governing the formation and duration of voluntary and involuntary time-sharing arrangements among mutually exclusive LPFM applicants. In the Second FNPRM, the Commission proposed certain rule changes designed to avoid the potential loss of LPFM stations. The Commission made these proposals “[i]n light of changed circumstances since [it] last considered the issue of protection rights for LPFM stations from subsequently authorized full-service stations.” The Commission sought comment on whether to codify the procedures for LPFM stations seeking a waiver of the second-adjacent channel spacing requirements, whether rule changes were warranted to provide additional flexibility to propose LPFM station modifications, whether to require full-service new station and modification applicants to provide technical and/or financial assistance to potentially impacted LPFM stations, whether to adopt contour protection-based licensing standards for LPFM stations, and whether to modify the LPFM-FM translator protection priorities.

8. On January 4, 2011, President Obama signed the LCRA into law. Through the LCRA, Congress expanded LPFM licensing opportunities. Specifically, Congress repealed the requirement that LPFM stations operate a minimum distance from nearby stations operating on third-adjacent channels, and required the Commission to eliminate its third-adjacent channel minimum distance separation requirements. Congress also authorized the Commission to waive the second-adjacent channel spacing requirements if an LPFM station demonstrates that its proposed operations will not result in interference to any authorized radio service. Further, it set forth criteria that the Commission must take into account when licensing FM translator, FM booster and LPFM stations.

9. As Congress expanded LPFM licensing opportunities, it also took steps to provide enhanced interference protection to existing full-service FM, FM translator and FM booster stations. Specifically, while Congress eliminated the third-adjacent channel spacing requirements, it required the Commission to retain the spacing requirements that apply to LPFM stations operating on a third-adjacent channel to FM stations that broadcast radio reading services. Congress also required the Commission to modify its rules to “address the potential for predicted interference to FM translator input signals on third-adjacent channels,” and to modify the interference protection and remediation requirements applicable to LPFM stations operating on third-adjacent channels.

10. The LCRA unambiguously requires the Commission to eliminate its third-adjacent channel spacing requirements and to maintain the spacing requirements currently in place to protect radio reading services. We do so in this Fifth Report and Order. We take these steps without providing prior public notice and comment because they involve no discretion. We merely are revising our rules in the manner specified in the legislation. Notice and comment would serve no purpose and thus are unnecessary. Our actions fall within the “good cause” exception of the Administrative Procedure Act (“APA”).

11. Section 2 of the LCRA amends section 632 of the 2001 DC Appropriations Act to delete the requirements that the Commission establish and maintain minimum distance separations for third-adjacent channels. It essentially lays the groundwork for section 3(a) of the LCRA, which requires the Commission to “modify its rules to eliminate third-adjacent minimum distance separation requirements between—(1) low-power FM stations; and (2) full service FM stations, FM translator stations, and FM booster stations.” Section 73.807 of the Commission's rules currently sets forth these spacing requirements. We hereby delete the provisions requiring protection of third-adjacent channel stations set forth in that section, with the exception of § 73.807(a)(2), (b)(2) and (g) of our rules.

12. Radio reading services provide access to printed news and other information sources for blind or print-disabled persons. They are transmitted on one of several standardized subcarrier frequencies within a 200 kHz FM channel. These transmissions cannot be received on a standard radio. Listeners must use special radios that tune subcarrier signals to receive these services. When the Commission established the LPFM service in 2000, it initially did not adopt any additional interference protections for radio reading services. The Commission reasoned that subcarrier programming is transmitted within a broadcast station's assigned frequency and thus receives the same protection from interference as the main broadcast programming of the station.

13. The Commission reconsidered this decision shortly thereafter due to concerns about the greater vulnerability of radio reading service receivers to third-adjacent channel interference. It noted that, because of their designs, the subcarrier receivers used for radio reading services are more susceptible to interference than mass marketed receivers. The Commission therefore modified the spacing standards set forth in § 73.807 of the rules to require LPFM stations to satisfy the second-adjacent channel spacing requirements with respect to any third-adjacent channel FM station that broadcasts a radio reading service via a subcarrier frequency.

14. The Commission took this step because, at the time, it had declined to adopt generally applicable third-adjacent channel spacing requirements. It later adopted such requirements at the direction of Congress. These spacing requirements were identical to the second-adjacent channel spacing requirements. Accordingly, while the Commission did not delete the protections specific to FM stations providing radio reading services from the rules, the protections became redundant. Now, however, with the elimination of the third-adjacent spacing requirements, these provisions again have relevance. In this regard, section 4 of the LCRA directs the Commission to “comply with existing minimum distance separation requirements” for stations that broadcast radio reading services. Accordingly, we conclude that we must retain without modification §§ 73.807(a)(2) and (b)(2) of our rules to implement section 4.

15. As noted above, in the Third Report and Order, the Commission adopted an interim waiver processing policy. The Commission also revised § 73.809 and other provisions of the rules in order to protect and preserve the LPFM service. Ace Radio Corporation (“Ace Radio”) filed a petition for reconsideration (“Ace Radio Petition”) of the Third Report and Order, which opposed both the interim waiver processing policy and the revisions made to § 73.809. For the reasons discussed below, we deny in part the Petition and defer consideration of the remainder of the Ace Radio's arguments.

16. Ace Radio challenges the interim waiver processing policy. However, in the Fourth FNPRM, we tentatively conclude that section 3(b)(2) of the LCRA supersedes this policy. We believe it is appropriate to defer consideration of Ace Radio's arguments regarding the interim waiver processing policy until we have resolved this issue. To the extent Ace Radio's arguments remain relevant, we will consider them at that time.

17. We reject Ace Radio's arguments regarding our revisions to § 73.809 of the rules to remove second-adjacent channels from the interference complaint procedures set forth therein. Ace Radio first argues that it did not have an opportunity to comment on the Commission's proposal to modify § 73.809 of the rules to remove second-adjacent channels from the rule. It also asserts that the revisions to § 73.809 are not justified by the record and, when coupled with the Commission's interim waiver processing policy, will allow LPFM stations to operate within a full-service station's 70 dBu contour, resulting in interference holes, otherwise known as the “swiss cheese” effect.

18. The Commission provided ample public notice that it was considering modification of § 73.809 of the rules to remove second-adjacent channels. In the FNPRM, the Commission explicitly raised the issue of “encroachment” and whether a relaxation of the second-adjacent channel interference restrictions found in § 73.809 of the rules was necessary to prevent LPFM stations from being displaced. While Ace Radio argues that “the number of city of license applications filed does not justify [the Commission's] action,” it fails to raise any facts or questions of law showing that the Commission's decision was incorrect. Contrary to Ace Radio's suggestion that the number of LPFM stations at risk of displacement is insignificant, the Bureau identified 44 LPFM stations that could be forced to cease operations as a result of the filing activity resulting from the January 2007 lifting of the freeze on the filing of FM community of license modification proposals combined with the implementation of new streamlined licensing procedures.

19. We also note that Ace Radio has mischaracterized the effects this rule modification will have on signal reception within a full-service station's 70 dBu contour. The diagram provided by Ace Radio portrays the full 60 dBu contour of 118 hypothetical LPFM stations within the 70 dBu contour of a full-service station. The fact that an LPFM station has a 60 dBu contour on a second- or third-adjacent channel inside the 70 dBu contour of a full-service station does not establish that the LPFM station would cause interference. Any potential interference received by the full-service station would be only in the immediate vicinity of the low-power transmitter site, and can be substantially reduced or eliminated through various technical measures. Finally, contrary to Ace Radio's assertion, the Commission did not, in its modification of Section 73.809, remove the second-adjacent restriction for the general allocation processes for LPFMs. Rather, this rule change is limited to situations involving a full-service station that is authorized subsequent to an LPFM station. As such, Ace Radio's concerns are without merit.

20. As noted above, the Commission issued a Second FNPRM in 2007. We find that all of the proposals made in the Second FNPRM are either inconsistent with or otherwise mooted by the LCRA. Specifically, the Commission proposed to codify the interim processing policy for second-adjacent channel waiver requests that it adopted in the Third Report and Order. However, in the Fourth FNPRM, we conclude that the second-adjacent channel waiver provisions of the LCRA supersede this interim policy. Accordingly, we find the Commission's proposal to codify the interim policy to be moot and will not pursue it further. Similarly, we find the Commission's proposal to adopt a contour overlap interference protection approach to be statutorily barred by section 3(b)(1) of the LCRA, which prohibits the Commission from modifying the current co-channel and first- and second-adjacent channel distance separation requirements. We will not pursue this proposal either. Finally, the Commission proposed certain rule changes related to LPFM station displacement, the obligations of full-service new station and modification applicants to potentially impacted LPFM stations, and LPFM-FM translator protection priorities. We believe that Congress's adoption of the LCRA renders pursuit of those earlier proposals unnecessary at this time. Thus, we will not move forward with any of them. Given our findings regarding each of the proposals set forth by the Commission in the Second FNPRM, we consider the Second FNPRM to have been concluded.

21. The Commission will send a copy of this Fifth Report and Order to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

22. Accordingly, It is ordered, pursuant to the authority contained in the Local Community Radio Act of 2010, Public Law 111-371, 124 Stat. 4072 (2011), and sections 1, 2, 4(i), 303, 307, and 309(j) of the Communications Act of 1934, 47 U.S.C. 151, 152, 154(i), 303, 307, and 309(j), that this Fifth Report and Order, Fourth Further Notice of Proposed Rulemaking and Fourth Order on Reconsideration is adopted.

23. It is further ordered that pursuant to the authority contained in the Local Community Radio Act of 2010, Public Law 111-371, 124 Stat. 4072 (2011), and sections 1, 2, 4(i), 303, and 307 of the Communications Act of 1934, 47 U.S.C. 151, 152, 154(i), 303, and 307, the Commission's rules are hereby amended. It is our intention in adopting these rule changes that, if any provision of the rules is held invalid by any court of competent jurisdiction, the remaining provisions shall remain in effect to the fullest extent permitted by law.

24. It is further ordered that the rules shall be effective June 4, 2012.

25. It is further ordered that the Petition for Rulemaking filed by REC Networks on July 16, 2004, is hereby dismissed, and Proceeding No. PRM-04-MB is terminated.

26. It is further ordered that the Petition for Reconsideration filed by Ace Radio Corp. on February 19, 2008, is denied in part.

27. It is further ordered that the Second Further Notice of Proposed Rulemaking in MM Docket No. 99-25 is terminated.

28. It is further ordered that the Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Fifth Report and Order, Fourth Further Notice of Proposed Rulemaking and Fourth Order on Reconsideration, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration, and shall cause it to be published in the Federal Register.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 73 to read as follows:

On December 27, 2002, the agency published in the Federal Register a final rule establishing FMVSS No. 403, Platform lift systems for motor vehicles, and FMVSS No. 404, Platform lift installations in motor vehicles. 1 We established these two standards to provide practicable, performance-based requirements and compliance procedures for the regulations promulgated by DOT under the Americans with Disabilities Act (ADA),2 and to ensure the safety of vehicles equipped with those lift systems. FMVSS Nos. 403 and 404 provide that only lift systems that comply with objective safety requirements may be sold and installed on new motor vehicles, and that vehicles with lift systems must comply with objective safety requirements in order to be sold.

FMVSS No. 403 establishes requirements for platform lifts that are designed to carry passengers with limited mobility, including those who rely on wheelchairs, scooters, canes and other mobility aids, so that they can move into and out of motor vehicles. The standard requires that these lifts meet minimum platform dimensions and maximum size limits for platform protrusions and gaps between the platform and either the vehicle floor or the ground. The standard also requires handrails, a threshold warning signal, and retaining barriers and specifies performance tests.

FMVSS No. 404 establishes requirements for vehicles that, as manufactured, are equipped with platform lifts. The lifts installed on those vehicles must be certified as meeting FMVSS No. 403, must be installed according to the lift manufacturer's instructions, and must continue to meet all of the applicable requirements of FMVSS No. 403 after installation. The standard also requires that specific information be made available to lift users.

Recognizing that the usage patterns of platform lifts used in public transit differ from those of platform lifts for individual (i.e., private) use, the agency established separate requirements for public use lifts and private use lifts. FMVSS No. 404, S4.1.1 requires that the lift on each lift-equipped bus, school bus and multipurpose passenger vehicle other than a motor home with a gross vehicle weight rating (GVWR) more than 4,536 kg (10,000 lb) must be certified as meeting all applicable public use lift requirements set forth in FMVSS No. 403. FMVSS No. 404, S4.1.2 requires the lift on each lift-equipped vehicle with a GVWR of 4,536 kg (10,000 lb) or less to be certified to either the public use or private use lift requirements set forth in FMVSS No. 403. Different requirements apply to vehicles with public use lifts than to vehicles with private use lifts because public use lifts generally are subject to more stress and cyclic loading and will be used by more numerous and varied populations.

As required by the ADA, FMVSS Nos. 403 and 404 are consistent with the Architectural and Transportation Barriers Compliance Board (ATBCB) guidelines published on September 6, 1991.3 In order to provide manufacturers sufficient time to meet any new requirements established in FMVSS Nos. 403 and 404, the agency provided a two-year lead-time, which scheduled the standards to become effective on December 27, 2004.

On October 1, 2004, in response to petitions for reconsideration of its December 27, 2002 final rule, the agency published a final rule in the Federal Register revising FMVSS Nos. 403 and 404. Among the changes made by the October 1, 2004 final rule, the agency amended edge guard requirements and the wheelchair test device specifications.4

On December 23, 2004, the agency published an interim final rule in the Federal Register delaying the compliance date until April 1, 2005 for FMVSS No. 403 and July 1, 2005 for FMVSS No. 404.5 On July 15, 2005, the agency published in the Federal Register its disposition of petitions for reconsideration of its October 1, 2004 final rule and other submissions regarding that final rule.6 The July 15, 2005 document did not address submissions received from the Blue Bird Body Company (Blue Bird), the School Bus Manufacturers Technical Council (SBMTC), which represents school bus manufacturers (including Blue Bird), and the Manufacturers Council of Small School Buses (MCSSB), an affiliate of the National Truck Equipment Association formed to represent the interest of small manufacturers. The submissions, which were styled as petitions for reconsideration, requested changes in the required level of lighting on public use lift platforms. Since the agency did not address that issue of lighting levels in the October 2004 final rule, there was no agency action regarding lighting to be reconsidered. The agency stated in the notice that it would treat the submissions as petitions for rulemaking and respond in a separate notice.

NHTSA received three additional petitions for rulemaking after July 15, 2005, seeking revisions to FMVSS Nos. 403 and 404. Specifically, we received petitions from Maxon Lift Corporation (Maxon), Ricon Corporation (Ricon) and the Lift-U Division of Hogan Manufacturing, Inc. (Lift-U), all of which are platform lift manufacturers. The petitioners requested that the agency amend: (A) The control panel switch requirements in S6.7.6.2 of FMVSS No. 403 so that lift controls in locations remote from the driver's seating position are not subject to the illumination requirements in S5.3 of FMVSS No. 101; (B) the threshold warning signal requirements in S6.1.4 of FMVSS No. 403 to permit warning lights to be mounted in a location clearly visible in reference to the lift; (C) the threshold warning signal requirements in S6.1.4 and S6.1.6 of FMVSS No. 403 to clarify the units of measurement and minimum required luminance at the designated measurement point; (D) the threshold warning test in S7.4 of FMVSS No. 403 to include a performance test for warning systems using infrared and other sensor technologies; (E) the wheelchair test device specification in S7.1.2 of FMVSS No. 403 to include anti-tip devices; (F) the wheelchair retention device impact test specifications in S7.7 of FMVSS No. 403 to permit use of a loaded wheelchair test device; and (G) the requirements for platform lighting on public use lifts in S4.1.5 of FMVSS No. 404 to reduce the required illumination levels to those specified by the ADA and the Federal Transit Administration (FTA).

In a notice of proposed rulemaking (NPRM) published on December 20, 2007,7 NHTSA proposed to amend the text of FMVSS Nos. 403 and 404. That NPRM addressed the six pending petitions for rulemaking. The NPRM also proposed additional changes to FMVSS Nos. 403 and 404 based upon NHTSA's experience during compliance testing.

First, in response to the petition from Maxon, NHTSA proposed an amendment to make it clear that the illumination requirements of FMVSS No. 101 do not apply to controls that are located outside the vicinity of the driver. Under the proposed amendments, controls within the vicinity of the driver, as defined in S5.3.4(a) of FMVSS No. 101, would be required to comply with the FMVSS No. 101 illumination requirements. The purpose of the FMVSSS No. 101 requirement is to prevent illuminated controls from distracting a driver who has adapted to dark ambient roadway conditions. That concern is not present for controls outside the vicinity of the driver. The proposed amendment also specified that lift controls outside the vicinity of the driver have a means for illuminating characters to make them visible under both daylight and nighttime conditions.

In response to the petition from Maxon, NHTSA proposed an amendment to the threshold warning signal location in S6.1.4 of FMVSS No. 403. The present language requires that the visual warning signal be installed such that it does not require more than a ± 15 degree side-to-side head rotation as viewed by a passenger in a wheelchair backing onto the platform from the interior of the vehicle. The agency acknowledged that the requirement created ambiguity because it did not specify whether the measurement was a line-of-sight measurement or whether peripheral vision may be used. Consequently, NHTSA proposed defining the requirement so that visual warning must be visible from a point 914 mm (3 ft) above the center of the threshold warning area.

In response to the petition from Ricon, NHTSA proposed an amendment to clarify the units of measurement and minimum required luminance of the visible threshold warning signal. The visual warning is required to be a flashing red beacon with a minimum intensity of 20 candela, and the intensity measurement is taken away from the source. Ricon stated that it had confirmed that “candela” is a measurement of output at the source, and, to measure luminous intensity at a specified distance from a source, the measurement should be specified in “lux” or “foot-candles.” In response, NHTSA proposed removing the requirement that the visible intensity be measured away from the source and replaced it with a more general visibility requirement.

In response to the petition from Lift-U, NHTSA proposed revising S7.4 to include a performance test for threshold warning systems using infrared and other technologies. Lift-U acknowledged that the current test is effective for testing technologies that sense weight. However, Lift-U stated that the substantive requirement in S6.1 does not specify the use of a warning device that senses weight. NHTSA proposed amending S7.4 to include the option of performing the current threshold warning test with an occupant in the wheelchair test device.

In response to the petition from Ricon, NHTSA proposed amending the wheelchair retention impact test specifications in S7.7 to permit the addition of a 50 kg (110 pound) weight to the wheelchair test device during the test. Ricon contended, and NHTSA's test data confirmed, that the center of gravity of an unloaded wheelchair changes significantly upon impact with an outer barrier. That change, when combined with continued forward motion of the drive wheels, caused the test device to flip backwards, resulting in failure of the test. NHTSA proposed allowing the addition of the weight because this failure is due to the test procedure rather than any inadequacy in the wheelchair retention device.

The petition from Ricon and the recent testing also caused NHTSA to propose amending the wheelchair retention test specifications in S7.7 and the inner roll stop test specifications in S7.8 to provide for the turning off the wheelchair drive motor after the initial impact by the test device. The agency stated that it could be difficult to design wheelchair retention devices and inner roll stops that protect wheelchair passengers from all possible situations without interfering with the normal operation of the lift. The agency also stated its belief that it was sufficient to ensure that the strength and configuration of wheelchair retention devices and inner roll stops are designed so that wheelchairs will not plow through or roll over them. In a typical real world situation, persons occupying wheelchairs would not be operating them at high rates of speed on the platform, and would turn off the drive power upon impact with a barrier. The agency proposed amendments to the test specifications in S7.7 and S7.8 because maintaining power after the initial impact may result in testing inconsistencies due to differences in the drive wheel torque and stall rates of some test devices. Turning off the power would also stabilize the wheelchair test device after impact and prevent damage to the wheelchair test device and the lift.

As a consequence of this amendment, NHTSA also proposed amending S6.4.7 to eliminate the requirement that the wheelchair test device remain upright with all of its wheels in contact with the platform surface following impact. Instead, NHTSA proposed to revise S6.4.7 to provide that a wheelchair retention device passes the impact test if, after impact, the wheelchair test device remains supported by the platform surface with none of the axles of its wheels extending beyond the plane that is perpendicular to the platform reference plane (Figure 1) which passes through the edge of the platform surface that is traversed when entering or exiting the platform from the ground level loading position. The proposed test criteria references axles rather than wheels to prevent the occurrence of another type of test failure during rearward testing, i.e., one in which the large wheels of the wheelchair test device may rest on the platform and touch the outer barrier with the tires extending beyond the plane after impact. A similar amendment was proposed to the inner roll stop test.

In response to petitions from Blue Bird, the SBMTC, and the MCSSB, the agency proposed reducing the platform illumination requirements for public lifts in S4.1.5 of FMVSS No. 404. NHTSA proposed reducing the illumination requirements to those specified by the ADA and the FTA. NHTSA intended that its current requirements not produce an additional burden on public use manufacturers. However, NHTSA was convinced by the petitioners' arguments that the agency was placing additional burdens on manufacturers by requiring that they comply with both the ADA requirements and the more rigorous requirements in FMVSS No. 404. Furthermore, NHTSA noted the intervening enactment of the National Technology Transfer and Advancement Act,8 which requires Federal agencies to use available technical standards that are developed or adopted by a voluntary consensus standards body, in lieu of government-unique standards, except where use of those voluntary consensus standards is inconsistent with law or otherwise impractical.

NHTSA also proposed four technical changes. First, NHTSA proposed amending S7 of FMVSS No. 403 to require the performance of the handrail test in S7.12 on a lift/vehicle combination rather than on a test jig. The handrail requirements in S6.4.9.8 require 38 mm (1.5 in) of clearance between each handrail and any portion of the vehicle, throughout the range of passenger operation. It is not possible to determine that clearance if the test is conducted on a jig.

NHTSA also proposed a correction to Figure 2 of FMVSS No. 403. Currently, the height of the measurement point from which the intensity of the threshold audible warning is measured is identified as 919 mm. The proposed amendment would replace that distance with the correct measurement point of 914 mm (3 feet).

NHTSA also proposed an amendment to clarify the control panel switch requirements of S6.7.4. Currently, there is an ambiguity regarding what must happen when two or more switches are actuated simultaneously. The proposed amendment would require that, if one or more functions are actuated while an initial function is actuated, the platform must either continue in the direction dictated by the original function or stop.

NHTSA proposed amending the interlock requirements and test procedures in S6.10.2.4, S6.10.2.5, S6.10.2.6, S6.10.2.7, S7.5, and S7.6 of FMVSS No. 403. The purpose of the proposed amendments was to eliminate confusion, discovered as a result of compliance testing and communications from a lift manufacturer. The proposed amendments would revise and renumber S7.5.2 and S7.5.3 to make clear that those provisions constitute a single test procedure that is applicable to both the requirements of S6.10.2.5 and S6.10.2.6. The proposed amendments would also change the test procedure set forth in those provisions to ensure that an outer barrier is fully deployed by the time the platform is 75 mm (3 in) above the ground. NHTSA also proposed a similar amendment to the inner roll stop test procedure set forth in S7.6.2 and S7.6.3.

Finally, NHTSA included discussion of a November 3, 2005 interpretation. That interpretation is repeated in Section V below to ensure wide-spread dissemination.

NHTSA received five comments in response to the NPRM from the following parties: Maxon Lift Corporation (Maxon); the American Association of Justice (AAJ); the National Truck Equipment Association (NTEA); 9 Blue Bird Body Company (Blue Bird); and Lift-U Division of Hogan Manufacturing, Inc. (Lift-U). Maxon addressed the handrail test procedure and the outer barrier interlock test procedure. The AAJ's comment solely addressed the issue of preemption of State tort law. The NTEA and Blue Bird addressed the platform illumination test procedure. Lift-U's comment addressed the barrier impact test. We address these comments in detail below.

We received no comments on several topics for which amendments were proposed in the December 2007 NPRM. We received no comments on the following proposed amendments: Limiting the FMVSS No. 101 control illumination requirement to lift controls located near the driver; modifying location and intensity requirements for the threshold warning beacon; including the option of using a 5th percentile female for the threshold warning test procedure to allow for the possibility of lift systems using infrared sensors; and continuing to exclude the anti-tip devices from the specification for the standard test wheelchair specified in paragraph S7.1.2 of FMVSS No. 403. Except as discussed below, we have included the proposed amendments in the regulatory text without further discussion for the reasons set forth in the December 2007 NPRM.

Maxon commented on the proposed technical change that would amend the test procedure for outer barrier interlock testing. In the December 2007 NPRM, NHTSA proposed revising the test procedure to ensure that the outer barrier by fully deployed by the time the platform is 75 mm (3 in) off the ground. The proposed language would provide for the platform to be moved up until the platform is 75 mm (3 in) above the ground. Thereafter, the front wheel of the wheelchair test device is placed on the edge of the outer barrier and the platform is moved up until it stops. If the interlocks are working correctly, the wheel of the wheelchair test device will prevent the outer barrier from deploying, the wheelchair test device wheel will not move vertically upward more than 13 mm (0.5 in), and the platform will stop automatically before the upper surface is greater than 75 mm (3 in) above the ground.

Maxon expressed concern involving the potential use of auxiliary wheelchair retention devices such as belts. Maxon states that that these devices are designed to disable lift operation when they are unfastened. Accordingly, Maxon contends, it would be necessary to fasten such devices prior to conducting the outer barrier interlock test in S7.5. Maxon requested clarification as to whether belt-type retention devices can and should be fastened prior to testing.

Agency's Response: We are clarifying the proposed language as a result of Maxon's comment. We recognize that auxiliary retention devices such as a belt can disable lift operation when they are not fastened, and we agree with Maxon that the failure to fasten such a belt would render the test moot. To remedy the ambiguity, we are adding language to S7.5.1.1, as proposed, to clarify that other retention devices are configured so that they do not prevent lift operation.

Lift-U commented on proposed changes to the barrier impact test. In the December 2007 NPRM, the agency proposed several changes to the barrier impact test, including a change to the test procedure so that the wheelchair test device's power is cut off after initial impact with the barrier. The agency stated that turning off power during the wheelchair retention and inner roll stop impact tests would stabilize the wheelchair test device after impact and thereby help prevent technical failures and related damage to the wheelchair test device or the lift.

Lift-U contended in its comment that the power to the drive wheels should be maintained after impact to test the effectiveness of the wheelchair retention device. Lift-U stated that the wheelchair retention device is, arguably, the most important safety device on the lift platform system because it is the only means of preventing a wheelchair and passenger from rolling off the edge of the platform. Lift-U stated that an effective test method must demonstrate that the retention device cannot be defeated.

Lift-U also disagreed with some of the agency's assertions in the December 2007 NPRM in support of the proposed change. NHTSA stated that, in typical real world situations, occupied wheelchairs will not be moving at high rates of speed on the platform. Lift-U contended that the agency's reasoning is flawed because the test itself is an implicit acknowledgement that it is possible for occupants to lose control of their mobility device on a platform. Lift-U further stated that the agency's assumption that occupants would terminate drive power upon impact with a barrier assumes that the occupant is able to do so.

Lift-U stated that the proposed test procedure must be evaluated against the stated test objective. In its comment, Lift-U noted the agency's two objectives—preventing the test device from plowing through or rolling over the top of the barrier.

Lift-U questioned what is meant by the term “initial impact.” Lift-U stated that, if it is defined as “initial contact,” then the release of power to the wheelchair test device would subject the barrier to an inconsequential impact. Lift-U also stated that the moment of “initial impact” could be the moment the barrier reaches its maximum deflection due to the impact, thereby demonstrating that the barrier is sufficient to absorb the impact.

However, even if this more rigorous interpretation is intended, Lift-U contended that this part of the test cannot demonstrate whether the barrier is effective at preventing a wheelchair from rolling over the top. Lift-U stated that height and rigidity are the two aspects of barrier design that would determine its effectiveness, and that even a tall barrier would be susceptible to a wheelchair rolling over it if the barrier is not sufficiently rigid, while a rigid barrier could be defeated if its height were insufficient to prevent being over-topped by a wheelchair. In either case, Lift-U contends that the adequacy of the barrier can be determined only when the wheelchair has had the opportunity to climb over it after the initial impact.

Lift-U questioned the agency's assertion that continued application of wheelchair drive power leads to technical failures that are unrelated to the barrier's safety. Lift-U also questioned the agency's statement that it could be difficult to design retention devices and inner roll stops that protect wheelchair passengers in all situations without interfering with normal lift operation. Lift-U concluded that the present regulatory language provides a means to test all aspects of a barrier's design and thereby demonstrates its adequacy.

Finally, Lift-U supported other proposed changes to the barrier impact test. Specifically, Lift-U supported the option of adding a weight to the wheelchair test device and the change in the compliance criteria.

Agency's Response: NHTSA is not making any substantive changes to the proposal based upon Lift-U's comment. However, we are clarifying the regulatory text to ensure that the term “initial impact” is not misunderstood. We recognize the merit in Lift-U's argument in favor of retaining the present test, in which the power to the wheelchair test device is not turned off until all wheelchair motion stops (except for the drive wheels). Nevertheless, we believe that a test in which the power to the wheelchair test device is turned off after initial impact is more practicable while also meeting the safety purpose of the standard.

Our experience to date with the present test procedure has demonstrated that the behavior of the wheelchair test device is often unstable and erratic if drive power continues to be applied after impact. We have observed that the wheelchair test device can bounce violently on the platform, repeatedly ram into the barriers and other components of the lift, flip over backwards or sideways, or fall off the platform completely. Some of this behavior may reflect possible outcomes of actual lift use, as Lift-U has stated (e.g., a malfunctioning wheelchair). However, the test is so inconsistent as to be impracticable for compliance testing. Furthermore, the test is often damaging to the wheelchair test device.

Regarding the meaning of the term “initial impact,” we agree with Lift-U that turning off drive power immediately at the moment of initial contact with the barrier would be an insufficient test of the barrier's integrity. Allowing the entire impact to be sustained by the barrier before turning off drive power to the wheelchair test device (that is, releasing the joystick controller) involves a more substantial infliction of force against that barrier. When the wheelchair test device strikes the barrier, slack and elasticity allow the wheelchair test device to deflect the barrier until the striking force is counteracted. The barrier will deflect and bend before developing enough force to stop and begin to reverse the wheelchair test device's motion.

We believe “initial impact” includes all of the transfer of energy from the wheelchair test device to the barrier that takes place during this process. Our intention is that power to the wheelchair test device should be released only after the full impact cycle described above is completed. The proposed change merely eliminates additional impacts which may occur as a result of the wheelchair test device bouncing repeatedly off the barrier. We believe those subsequent impacts are unnecessary and that withstanding the first full impact is both a rigorous demonstration of barrier integrity and an adequate test of compliance with the requirement. To clarify our intent, we are changing the text of S7.7.2.4 to make clear that the complete initial impact of the wheelchair test device is absorbed by the barrier. Because identical language is also used in the procedure for the inner barrier impact test, we are making an identical change to S7.8.3. Otherwise, we are proceeding with the change in the barrier impact test procedure as proposed in the December 2007 NPRM.

Among the technical changes proposed in the December 2007 NPRM were amendments to the handrail test procedures in FMVSS No. 403. S6.4.9 details the handrail requirements for public and private use lifts. S6.4.9.8 of that standard provides that, when tested in accordance with S7.12.1, there must be at least 38 mm (1.5 in) of clearance between each handrail and any portion of the vehicle, throughout the range of passenger operation. In order to measure this clearance, the lift must be mounted on a vehicle during the test. The proposed amendments would require the handrail test in S7.12 to be performed on a lift/vehicle combination rather than on a test jig.

Maxon commented that NHTSA should not make the proposed change for three reasons. First, Maxon noted that measurement of handrail displacement on a lift mounted on a test fixture is already difficult and it would be made more difficult by mounting the lift on a vehicle. Maxon stated that the added movement could make the accuracy of the measurement questionable. Second, Maxon observed that S7.12.1 does not require measurement throughout the range of passenger operation, which does not ensure that clearance is maintained at all lift positions. Third, Maxon noted that S7.12.1 and S7.12.2 do not specify a direction for the applied test load. As a consequence, Maxon contends, a manufacturer could test only in the most favorable direction and test only one vehicle. Maxon concluded that the proposed change would increase the testing burden without providing any increase in safety to passengers because the test would not ensure that lifts have adequate handrail clearance in all applications.

Agency's Response: We have not made any changes to the proposed handrail test procedures based on Maxon's comments. It appears from Maxon's comments that the commenter has misinterpreted the handrail test requirement and the general applicability of FMVSS No. 403. Regarding the use of an actual vehicle rather than a test fixture, we believe that the purpose of the test is to reflect real world use and clearances. Although some FMVSS No. 403 test procedures can be performed on a test fixture without any compromise in the validity of the test or its applicability to actual use of the lift, in many cases a handrail test performed on a test fixture would not simulate actual handrail clearance and could fail to ensure the safety of lift users under actual operating conditions.

Regarding measurement accuracy, we note that Maxon did not provide any information to substantiate their assertion that handrail tests conducted on a lift/vehicle combination are inadequate compared to tests conducted on a test fixture. Thus, we do not have any basis for determining that handrail displacement tests on a lift/vehicle combination are impractical.

Maxon's other concerns are based on a misunderstanding of how NHTSA conducts compliance testing. Although Maxon states that measurement of handrail displacement is required only in one lift position, we observe that S6.4.9.8 states that the required handrail clearance must be maintained throughout the range of passenger operation. Maxon's statement that a lift manufacturer could test handrail deflection only in a single direction is similarly incorrect. Paragraphs S6.4.9.7 and S6.4.9.9 both state that the required force is applied at any point and in any direction on the handrail. NHTSA's regulations state, at 49 CFR 571.4, that the term “any” indicates that a requirement must be met at all points within a range of possible points. In this case, the use of the word “any” in S6.4.9.7 and S6.4.9.9 means that a handrail can be tested and must comply with the standard in every possible direction in which it deflects when subjected to the specified force.

Both Blue Bird and the NTEA submitted comments related to the proposed test procedure for platform illumination in FMVSS No. 404. The platform illumination requirement applies to public-use lifts and is intended to facilitate lift use in darkness. S4.1.5 currently requires that public use lifts have a light or set of lights that provides at least 54 lm/m2 (5 lm/ft2) of luminance on all portions of the surface of the platform, throughout the range of passenger operation.

In the December 2007 NPRM, the agency proposed to reduce the required light intensity from 54 lm/m2 (5 lm/ft2) to 22 lm/m2 (2 lm/ft2). This reduction would bring the FMVSS No. 404 requirement into accord with ADA and FTA light intensity requirements.

In response to comments received by the agency regarding the lack of a test procedure to demonstrate compliance with the lighting requirement, NHTSA proposed amendments to S4.1.5 to set forth how platform illumination is to be measured. Specifically, the agency proposed the following procedures for platform illumination measurement:

• Illumination measurements would be recorded with the vehicle engine shut off.

• The vehicle and lift would be in an environment in which there is no ambient light.

• The sensor portion of the light meter would be within 50 mm (2 in) of the surface being measured.

• The measurement would be made with a light meter that has a range comparable to a minimum of 0 to 100 Lux, in increments comparable to 1 Lux or less, an accuracy of ± 5% of the actual reading and a sampling rate of at least 2 Hz.

Both Blue Bird and the NTEA observed that, because the proposed test would be conducted with the vehicle's engine shut off, the light illumination level would be affected by the vehicle battery condition. The NTEA asked if NHTSA agreed that the test should be conducted with the vehicle's battery fully charged with a voltage of approximately 12 volts DC. Blue Bird suggested adding a paragraph to FMVSS No. 404 that would specify the battery condition at the time of testing. Blue Bird's suggested regulatory language would require that the battery be in a fully charged condition as defined by the battery manufacturer or, if such information cannot be obtained, industry-accepted third party sources be consulted, and would include measurements of the voltage, temperature, and specific gravity of the battery.

Agency's Response: We agree that the state of charge of a vehicle battery could affect illumination testing under our proposed test procedure. We proposed that the test be conducted when the engine is not running, which we believe is appropriate because lifts often must be operated with the engine turned off. The proposed test procedure simulates a more rigorous condition than if the engine were running.

We have considered specifying a minimum voltage for the vehicle battery for the platform illumination test. However, FMVSS No. 404 does not directly concern the operation of the vehicle's electrical system. Furthermore, the specification of a minimum battery voltage could be design-restrictive and would neglect differences between vehicles. For example, some lift-equipped vehicles could have an auxiliary battery, which may or may not provide extra power for lift lighting. In such a case, it could be unclear which battery voltage would be applicable to the FMVSS No. 404 test. Furthermore, we do not believe regulation of the specific gravity of a battery is warranted because compliance tests are conducted on new vehicles. Consequently, the batteries of vehicles that are tested would be relatively new and unaffected by dilution, sulfation, or other factors that could degrade the electrolyte in older batteries.

We believe that a performance-based approach for the illumination test will be simpler and less design-restrictive. Accordingly, we are altering the proposed test procedure to require that the lift-equipped vehicle must be operated prior to testing. Specifically, we are requiring that the engine be run for a minimum of 20 minutes by idling or driving the test vehicle with the vehicle's HVAC system turned off. Thereafter, the engine would be turned off and the test conducted. We believe 20 minutes is an appropriate amount of time to charge the battery and, if necessary, to warm it to conduct a consistent test. We believe that this performance-based test, rather than the minimum battery voltage proposed by the commenters, ensures sufficient battery voltage in a way that closely reflects real-world use of a platform lift system mounted on a vehicle.

The NTEA's comment supported adopting the ADA requirements for platform illumination levels. However, the NTEA noted that, to fully comply with ADA requirements, vehicle manufacturers have added more lighting in the vehicle doorway to achieve the lighting required on the ground beyond the deployed lift. The NTEA states that this additional lighting could be problematic because the intensity and positioning of lamps have the potential to obscure a lift operator's vision and could create a burn hazard.

Agency's Response: We have not made any change to our proposal based on this comment. We have no authority to alter the ADA requirement for lighting the ground beyond a deployed platform lift. The December 2007 NPRM concerned only illumination of the platform itself, and lighting the ground beyond a platform lift is beyond the scope of what was proposed in the December 2007 NPRM. The NTEA's comment acknowledges that this is not an issue specific to NHTSA.

Blue Bird requested that the light meter sample rate not be specified in the platform illumination test procedure and that the sensor measurement range not be specified. With respect to light meter sample rate, Blue Bird stated that specifying a light meter sample rate could be interpreted to prohibit the use of analog light meters. Blue Bird also requested that the measurement range for the light meter not be specified because it is not unusual for parts of a platform lift surface to be illuminated in excess of 100 Lux, and a technician conducting measurements would be able to judge an appropriate measurement range.

Agency's Response: Regarding the light meter measurement range, we note that the 0 to 100 Lux measurement range set forth in the proposal is a minimum range. Thus, any meter with a full-scale range equal to or greater than that is acceptable. In cases with the illumination level exceeds 100 Lux, there is no limitation on using a device with a greater range (or using a higher scale setting on a device with selectable ranges). We also note that the capability of taking illumination readings above 100 Lux is superfluous because compliance with S4.1.5 is established far below 100 Lux.

Nevertheless, we have reevaluated those specifications and believe that they do not need to be included in the regulatory text. Accordingly, we are deleting those specifications from the proposed S4.1.5 test procedure, and manufacturers will be able to certify their platform lighting system using any analog or digital light meter. However, we give notice that, for NHTSA's compliance testing, we intend to use a light meter that meets the specifications set forth in the December 2007 NPRM, and we will be amending the FMVSS No. 404 Test Procedure, NHTSA TP-404, accordingly.

In the view of AAJ, NHTSA's discussion in the December 2007 NPRM of the 2000 Supreme Court case, Geier v. American Honda Motor Co., 529 U.S. 861, and the agency's assessment of the possibility of preemption represented a “sudden decision to claim [implied] preemption” of State tort law.

Agency's Response: The discussion in that notice was similar to the discussions in other agency notices of that period. As this agency has previously explained, AAJ generally misinterpreted those discussions.10

The amendments in Section IV were not proposed in the December 2007 NPRM. The agency has determined that good cause exists for the following technical corrections to be issued without publishing advance notice of the amendments or providing opportunity for public comment. The amendments discussed in Section IV correct obvious errors in regulatory text created by NHTSA's FMVSS Nos. 403 and 404 rulemakings. In one case, the technical correction reverses an earlier inadvertent change to regulatory text that was made without any discussion in the preamble.

In the December 2002 final rule establishing FMVSS Nos. 403 and 404, NHTSA added a definition for “motor home” to 49 CFR 571.3 that applies to all FMVSSs. In that final rule, the agency categorized a motor home as a “multi-purpose vehicle.” However, NHTSA intended to categorize a “motor home” as a “multipurpose passenger vehicle.” The term “multipurpose passenger vehicle” is defined in section 571.3, whereas the term “multi-purpose vehicle” is not defined. We are correcting this obvious error in this final rule.

In the October 2004 final rule responding to petitions for reconsideration, NHTSA amended the “Application” section (S3) of FMVSS Nos. 403 and 404. The agency made changes to the “Application” section to make clear that FMVSS Nos. 403 and 404 do not apply to systems involving specialized medical transport. In the December 2004 interim final rule, NHTSA again amended the “Application” section to delay the compliance dates for FMVSS Nos. 403 and 404. In the December 2004 interim final rule, the agency inadvertently deleted the changes made in the October 2004 final rule. The changes to the “Application” sections in the December 2004 interim final rule were intended solely to delay the effective date. The agency did not discuss changing or intend to change the types of platform lifts or vehicles to which FMVSS Nos. 403 and 404 apply. This final rule corrects this inadvertent change in the applicability of FMVSS Nos. 403 and 404.

We are changing the phrase “less than” to “more than” in two places in the edge guard test in S7.7.4 of FMVSS No. 403. The procedures set forth in paragraphs S7.7.4.3 and S7.7.4.6 specify a range of heights at which the edge guard test requirements are applicable. The requirements are supposed to apply in a height range extending from 90 mm (3.5 in) above ground to 38 mm (1.5 in) below vehicle floor level. However, the regulatory text sets forth the upper limit as “less than” 38 mm (1.5 in) below floor level. In order for the test to be correct, the upper limit should be specified as “more than” 38 mm (1.5 in) below floor level—meaning that the platform must be lower in height than 38 mm (1.5 in) below the vehicle floor. Otherwise, the test would only be conducted in two places, as there is unlikely to be any height that is both less than 38 mm (1.5 in) below floor level and 90 mm (3.5 in) above the ground. If that was NHTSA's intent, there would have been no need for the test to be conducted at a range of heights. In order to conduct this test as NHTSA intended, it is necessary that the platform be no higher than 38 mm (1.5 in) below the vehicle floor to ensure deployment of an inner barrier or roll-stop. This final rule amends paragraphs S7.7.4.3 and S7.7.4.6 of FMVSS No. 403 to correct this obvious error.

There was an error in the proposed regulatory text of paragraph S7 in the December 2007 NPRM. Paragraph S7 sets forth which of the test procedures must be performed on a platform lift installed on a vehicle and which may be performed with the lift mounted on a fixture or test jig. The proposed language of paragraph S7 regrouped the handrail test procedure of S7.12 with those tests that must be performed on a vehicle/lift combination. In the proposed regulatory text, we erroneously included the inner roll stop test procedure of S7.8 in both groups of tests. The inner roll stop test procedure must be performed on a lift/vehicle combination as the current regulatory text states. We have corrected this inadvertent error in this final rule.

In the December 2007 NPRM, the agency proposed amending S6.4.7 to delete the requirement that the wheelchair test device remain upright with all its wheels in contact with the platform surface following impact. Instead, NHTSA proposed to revise S6.4.7 to provide that a wheelchair retention device passes the impact test if, after impact, the wheelchair test device remains supported by the platform surface with none of the axles of its wheels extending beyond the plane perpendicular to the platform reference plane (Figure 1) which passes through the edge of the platform surface that is transverse when entering or exiting the platform from the ground level loading position. We have modified the language to clarify that such a plane would be tangent to the edge of the platform surface. We have made a similar change to the proposed amendment to S6.4.8.3 using the same language in relation to the inner roll stop requirement.

On November 3, 2005, we issued an interpretation letter related to S7.4 of FMVSS No. 403, addressed to Maxon. The November 2005 interpretation clarified specific procedures that are performed as part of the threshold warning signal test. Although the agency has decided against revising the language of S7.4, we include a discussion of the matter in this document to ensure wide-spread dissemination of the interpretation.

In asking about the threshold warning requirements, the incoming letter suggested that there was an apparent inconsistency between the requirement and the associated test procedure.

The agency responded, explaining, as follows, that the specified test procedure for the threshold warning system is consistent with that requirement:

The amendments made by this final rule are mandatory for purposes of compliance 180 days after publication of this final rule. Optional compliance is permitted immediately upon publication of the final rule. We believe these dates are appropriate given that the amendments are for the purpose of clarifying the requirements of the standard and providing further flexibility in compliance.

NHTSA has considered the impacts of this rulemaking action under Executive Order 12866, Executive Order 13563, and the Department of Transportation's regulatory policies and procedures. This action was not reviewed by the Office of Management and Budget under E.O. 12866. The agency has considered the impact of this action under the Department of Transportation's regulatory policies and procedures (44 FR 11034; February 26, 1979), and has determined that it is not “significant” under them. This rulemaking document was not reviewed under E.O. 12866.

This document makes amendments to FMVSS Nos. 403 and 404 to clarify the requirements of the standard and to provide further flexibility in compliance. The impacts of the amendments are so minimal that a full regulatory evaluation is not required. Readers who are interested in the overall costs and benefits of the platform lift requirements are referred to the agency's Final Economic Assessment for the December 2002 final rule (Docket No. NHTSA-2002-13917-3). The amendments made by this document will not change the costs and benefits in a quantifiable manner.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 et seq., as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996), whenever an agency is required to publish a notice of rulemaking for any proposed or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effect of the rule on small entities (i.e., small businesses, small organizations, and small governmental jurisdictions). The Small Business Administration's regulations at 13 CFR Part 121 define a small business, in part, as a business entity “which operates primarily within the United States.” (13 CFR 121.105(a)). No regulatory flexibility analysis is required if the head of an agency certifies the rule will not have a significant economic impact on a substantial number of small entities. SBREFA amended the Regulatory Flexibility Act to require Federal agencies to provide a statement of the factual basis for certifying that a rule will not have a significant economic impact on a substantial number of small entities.

NHTSA has considered the effects of this final rule under the Regulatory Flexibility Act. I certify that this final rule will not have a significant economic impact on a substantial number of small entities. The final rule does not impose new requirements but instead amends FMVSS Nos. 403 and 404 to clarify the requirements of the standards and to provide further flexibility in compliance.

NHTSA has examined today's rule pursuant to Executive Order 13132 (64 FR 43255, August 10, 1999) and concluded that no additional consultation with States, local governments or their representatives is mandated beyond the rulemaking process. The agency has concluded that the rulemaking does not have sufficient federalism implications to warrant consultation with State and local officials or the preparation of a federalism summary impact statement. The rule does not have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

NHTSA rules can preempt in two ways. First, the National Traffic and Motor Vehicle Safety Act contains an express preemption provision:

The express preemption provision described above is subject to a savings clause under which “[c]ompliance with a motor vehicle safety standard prescribed under this chapter does not exempt a person from liability at common law.” 49 U.S.C. 30103(e). Pursuant to this provision, State common law tort causes of action against motor vehicle manufacturers that might otherwise be preempted by the express preemption provision are generally preserved.

However, the Supreme Court has recognized the possibility, in some instances, of implied preemption of such State common law tort causes of action by virtue of NHTSA's rules, even if not expressly preempted. This second way that NHTSA rules can preempt is dependent upon there being an actual conflict between an FMVSS and the higher standard that would effectively be imposed on motor vehicle manufacturers if someone obtained a State common law tort judgment against the manufacturer, notwithstanding the manufacturer's compliance with the NHTSA standard. Because most NHTSA standards established by an FMVSS are minimum standards, a State common law tort cause of action that seeks to impose a higher standard on motor vehicle manufacturers will generally not be preempted. However, if and when such a conflict does exist—for example, when the standard at issue is both a minimum and a maximum standard—the State common law tort cause of action is impliedly preempted. See Geier v. American Honda Motor Co., 529 U.S. 861 (2000).

Pursuant to Executive Order 13132 and 12988, NHTSA has considered whether this rule could or should preempt State common law causes of action. The agency's ability to announce its conclusion regarding the preemptive effect of one of its rules reduces the likelihood that preemption will be an issue in any subsequent tort litigation. To this end, the agency has examined the nature (e.g., the language and structure of the regulatory text) and objectives of today's rule and finds that this rule, like many NHTSA rules, prescribes only a minimum safety standard. As such, NHTSA does not intend that this rule preempt State tort law that would effectively impose a higher standard on motor vehicle manufacturers than that established by today's rule. Establishment of a higher standard by means of State tort law would not conflict with the minimum standard adopted here. Without any conflict, there could not be any implied preemption of a State common law tort cause of action.

With respect to the review of the promulgation of a new regulation, section 3(b) of Executive Order 12988, “Civil Justice Reform” (61 FR 4729, February 7, 1996) requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect; (2) clearly specifies the effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct, while promoting simplification and burden reduction; (4) clearly specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. This document is consistent with that requirement.

Pursuant to this Order, NHTSA notes as follows. The issue of preemption is discussed above. NHTSA notes further that there is no requirement that individuals submit a petition for reconsideration or pursue other administrative proceeding before they may file suit in court.

Executive Order 13045, “Protection of Children from Environmental Health and Safety Risks” (62 FR 19855, April 23, 1997), applies to any rule that: (1) Is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental, health, or safety risk that the agency has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the agency.

Although this final rule is part of a rulemaking expected to have a positive safety impact on children, it is not an economically significant regulatory action under Executive Order 12866. Consequently, no further analysis is required under Executive Order 13045.

Under the Paperwork Reduction Act of 1995 (PRA), a person is not required to respond to a collection of information by a Federal agency unless the collection displays a valid OMB control number. There is no information collection requirement associated with this final rule.

Under the National Technology Transfer and Advancement Act of 1995 (NTTAA) (Pub. L. 104-113), “all Federal agencies and departments shall use technical standards that are developed or adopted by voluntary consensus standards bodies, using such technical standards as a means to carry out policy objectives or activities determined by the agencies and departments.”

As discussed in the preamble to the December 2002 final rule, the equipment standard was drafted to include or exceed all existing government (FTA, ADA) and voluntary industry (e.g., SAE) standards.11 Readers who are interested in the source of the requirements in FMVSS No. 403 are referred to that document. The agency included a table showing the source of each requirement in FMVSS No. 403.

This document is not imposing new requirements, but is instead amending FMVSS Nos. 403 and 404 to clarify the requirements of the standards and to provide further flexibility in compliance. As discussed in the December 2007 NPRM, the proposal to amend S4.1.5 of FMVSS No. 404 to reduce the required platform illumination levels to those specified by the ADA and FTA is consistent with the NTTAA.12

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires Federal agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually (adjusted for inflation with base year of 1995). Before promulgating a NHTSA rule for which a written statement is needed, section 205 of the UMRA generally requires the agency to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows the agency to adopt an alternative other than the least costly, most cost-effective, or least burdensome alternative if the agency publishes with the final rule an explanation of why that alternative was not adopted.

This final rule will not result in any expenditure by State, local, or tribal governments or the private sector. Thus, this final rule is not subject to the requirements of sections 202 and 205 of the UMRA.

NHTSA has analyzed this rulemaking action for the purposes of the National Environmental Policy Act. The agency has determined that implementation of this action will not have any significant impact on the quality of the human environment.

The Department of Transportation assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda.

Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit http://www.regulations.gov.

In consideration of the foregoing, NHTSA hereby amends 49 CFR part 571 as follows:

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679. Regulations governing sideboard protections for GOA groundfish fisheries appear at subpart B of 50 CFR part 680.

The A season allowance of the 2012 Pacific cod total allowable catch (TAC) apportioned to CVs using hook-and-line gear in the Western Regulatory Area of the GOA is 145 metric tons (mt), as established by the final 2012 and 2013 harvest specifications for groundfish of the GOA (77 FR 15194, March 14, 2012).

In accordance with § 679.20(d)(1)(i), the Administrator, Alaska Region, NMFS (Regional Administrator) has determined that the A season allowance of the 2012 Pacific cod TAC apportioned to CVs using hook-and-line gear in the Western Regulatory Area of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 130 mt, and is setting aside the remaining 15 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific cod by CVs using hook-and-line gear in the Western Regulatory Area of the GOA. After the effective date of this closure the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.

This action responds to the best available information recently obtained from the fishery. The Acting 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 directed fishing for Pacific cod by CVs using hook-and-line gear in the Western Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of March 30, 2012.

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.