The United States Grain Standards Act (USGSA) authorizes the Secretary of Agriculture to establish official standards of kind and class, quality, and condition for soybeans and other grains (7 U.S.C. 76). The soybean standards appear in the regulations at 7 CFR 810.1604-810.1605. The U.S. Standards for Grain serve as the starting point to define U.S. grain quality in the marketplace.

This rule will make the following changes: (1) Revise designation of test weight in soybeans to be a non-grade determining informational factor, (2) amend the definition of “test weight per bushel” to indicate test weight for soybeans will be reported to the nearest tenth pound, and (3) clarify the certification requirements for test weight in soybeans and canola.

Since the establishment of the United States Standards for Soybeans in 1940, minimum TW has been included as a mandatory grade determining factor and has historically been perceived as a general indicator of overall soybean quality. Some perceive that a higher TW, or density, is indicative of a higher yield of oil and protein. Research indicates, however, that TW is not a good indicator of the oil and protein yield of processed soybeans. 1 A University of Illinois study concludes that the correlation coefficients between TW and protein and oil content are as low as 0.077 and 0.016 respectively. 2 Our analysis of our own inspection data supports the researchers' findings.

As part of its evaluation of TW, we conducted a statistical review of inspection data to determine the impact of removing TW as a grade determining factor on the certified grades. As discussed later in this document, we updated our analysis. The additional information confirms our earlier conclusion that the market should not anticipate grade inflation or deflation due to our actions.

Based on our analysis of inspection data and other information, we are changing the minimum TW per bushel from a grade determining factor to a non-grade determining informational factor in the official U.S. Standards for Soybeans. Even though we are changing TW to an informational factor, we will still require the measurement and reporting of TW for each official soybean grade inspection unless requested otherwise. Our evaluation indicates that not all buyers of soybeans are interested in the TW information; consequently, we will allow an optional exemption in the certification reporting requirements.

We are revising 7 CFR 810.102(d) to report TW in soybeans to the nearest tenth of a pound. Presently, TW in soybeans is certified in whole and half pounds with fractions of a half pound disregarded. This change will bring the reporting requirements for TW into line with the reporting requirements for other factors in the Official Standards for Soybeans, such as foreign material and moisture content.

To reflect the proposed change of TW from a grade determining factor to a non-grade determining informational factor, we are revising the tables pertaining to soybean grade limits in 7 CFR 800.86 of the regulations. Shiplots, unit trains, and lash barge lots are inspected in accordance to a statistically based inspection plan (7 CFR 800, originally published at 55 FR 24030; June 13, 1990). Inspection tolerances, commonly referred to as breakpoints, are used to determine acceptable quality. Changing TW from a grade determining factor to an informational factor necessitates removing soybean TW breakpoints from the Grade Limits and Breakpoints for Soybeans table and replacing them in the Breakpoints for Soybean Special Grades and Factors table.

We are clarifying the TW certification reporting requirements for both soybeans and canola in 7 CFR 800.162(c). For soybeans, we are clarifying the reporting requirements for test weight as a non-grade determining factor and the optional exemption for TW determination. The exemption will allow the applicant for inspection to request that TW not be determined, and therefore not reported. With regard to canola, we are clarifying that TW in canola is only determined and reported upon request of an applicant.

In the March 29, 2006 Federal Register (71 FR 15639-15643), we invited comments on our proposed rule identifying changes to the United States Standards for Soybeans.

We received one comment during the 60-day comment period. The comment was submitted jointly by the Japan Oilseed Processors Association and the Japan Oil and Fat Importers and Exporters Association.

The commenters were of the view that a change in the status of TW would adversely impact the distribution of soybean grades (that is, grade inflation or deflation).

As discussed in the proposed rule, we analyzed inspection data to determine the impact of removing TW as a grade determining factor on the certified grades. The review established that in over 400,000 soybean inspections, certified between January 1, 2001, and September 30, 2003, 99.5 percent of the official grades would have been unaffected by the removal of TW as a grading factor. In preparation of this final rule, we updated our analysis to cover the five-year period from January 1, 2001, through December 31, 2005. The review indicated that approximately 2.2 percent of U.S. No. 2 Yellow soybeans, which is the common trading standard, would have graded as U.S. No. 1, if TW was not a grade determining factor. In other words, for the data analyzed, the certified grade may have improved 2.2 percent of the time, if TW had not been a grading factor. Further, we found that approximately 0.7 percent of U.S. No. 3 Yellow soybeans would have certified as U.S. No. 2, if TW was not a grade determining factor. In both instances, we consider the percentage change as insignificant. As a result, the market should not anticipate grade inflation or deflation due to this change.

The commenters also were of the view that a change in the status of TW would result in an increase in the percentage of smaller sized soybeans and more broken soybeans. We have no evidence that a change in the status of TW from a grade determining factor to an informational factor will result in a higher percentage of smaller-sized soybeans or result in more broken soybeans or splits. As a result, the market should not anticipate an increase in the amount of smaller sized soybeans or in splits in U.S. soybeans, on average, due to this change.

Nonetheless, buyers of U.S. soybeans may also ask for a sizing determination. As part of the sizing request, buyers can specify the sieve size. We report the percentage of the size fractions, as requested, to the nearest tenth in the Remarks section of the certificate. We use statements, such as “(a certain percent) passing through (a specified round-hole sieve)” and “(a certain percent) remaining on top of (a specified sieve).”

Further, the percentage of splits in a sample is already a grading factor. Additionally, small broken pieces of soybeans, which pass through an 8/64 round-hole sieve, are considered as foreign material, another grading factor. If there is a concern about splits or foreign material, a buyer may specify tighter limits than that allowed by grade. For example, a buyer may contract for U.S. No. 2 Yellow soybeans with splits not to exceed 10.0 percent. The specification is tighter than the grade limit of 20.0 percent for U.S. No. 2 Yellow soybeans.

Buyers may also request official analysis for oil and protein content. In recognition of protein and oil as the true determinants of value in soybean processing and the markets' need to identify these intrinsic properties, GIPSA tests for both soybean protein and oil as official criteria under the USGSA.

Therefore, we are making no change in this final rule as a result of the comment.

As specified in the USGSA (7 U.S.C. 76(b)), amendments to the standards cannot become effective less than one calendar year after public notification, unless in the judgment of the Secretary, the public health, interest, or safety require that they become effective sooner. Making this rule effective on September 6, 2007 would be after the start of the marketing year, which begins September 1, 2007. There are inherent benefits in making this rule effective in time to have the same standards in place for the entire marketing year; we have determined that it is in the public interest to do so. There were no changes made in this final rule, so the standards are consistent with those proposed as published on March 29, 2006. For these reasons this final rule is effective September 1, 2007, for the beginning of the soybean harvest, and will facilitate domestic and export marketing of soybeans.

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

We are amending the soybean standards to change TW from a grade determining factor to an informational factor. We are changing the reporting requirements for TW in soybeans from whole and half pounds with a fraction of a half pound disregarded to reporting to the nearest tenth of a pound. In addition, we are clarifying the reporting requirements for TW in canola. These changes are needed to ensure market-relevant standards and to clarify reporting requirements. Further, the regulations and standards are applied equally to all entities.

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) requires agencies to consider the economic impact of each rule on small entities and evaluate alternatives that would accomplish the objectives of the rule without unduly burdening small entities or erecting barriers that would restrict their ability to compete in the market.

Under the provisions of the USGSA, grain exported from the United States must be officially inspected and weighed. We provide mandatory inspection and weighing services at 33 export facilities. All of these facilities are owned by multi-national corporations, large cooperatives, or public entities that do not meet the requirements for small entities established by the Small Business Administration.

The U.S. soybean industry, including producers (approximately 663,880), handlers (approximately 6,000 domestic elevators), traders (approximately 1,402 eligible soybean futures traders), processors (approximately 70 facilities), merchandisers, and exporters, are the primary users of the U.S. Standards for Soybean and utilize the official standards as a common trading language to market soybeans. Some of the entities may be small.

The USGSA (7 U.S.C. 87f-1) requires the registration of all persons engaged in the business of buying grain for sale in foreign commerce. In addition, those individuals who handle, weigh, or transport grain for sale in foreign commerce must also register. The USGSA regulations (7 CFR 800.30) define a foreign commerce grain business as persons who regularly engage in buying for sale, handling, weighing, or transporting grain totaling 15,000 metric tons or more during the preceding or current calendar year. At present, there are 92 registrants who account for practically 95 percent of U.S. soybean exports, which for fiscal year (FY) 2005 totaled approximately 23,174,129 metric tons (MT). While most of the 92 registrants are large businesses, some may be small.

GIPSA has determined that this final rule will not have a significant economic impact on a substantial number of small entities, as defined in the Regulatory Flexibility Act.

Pursuant to the Paperwork Reduction Act of 1995, the existing information collection requirements are approved under OMB Number 0580-0013. An insignificant change in burden will result from the soybean informational factor change. However, any burden measurement, as a result of this change, will remain within the previously approved information collection requirements. Accordingly, no further OMB clearance is required under the Paperwork Reduction Act.

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

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This action is not intended to have a retroactive effect. The USGSA provides in Section 87g that no State or subdivision may require or impose any requirements or restrictions concerning the inspection, weighing, or description of grain under the USGSA. Otherwise, this final rule will not preempt any State or local laws, regulations, or policies, unless they present any irreconcilable conflict with this rule. There are no administrative procedures that must be exhausted prior to any judicial challenge to the provisions of this final rule.

The correction to the final rule document in the Federal Register on August 16, 2006 (71 FR 47077), contains a further error in the preamble with respect to the date the revised civil penalty amounts are to be applied. The previous correction document also introduced two typographical errors in the text of Table One. Specifically, the amendment contained an incomplete citation to 49 U.S.C. 46301(a)(2)(A) and (B) in column two, entry three and dropped a footnote reference in column two, entry 11 to Table One. This publication corrects the error in the preamble and amends the regulatory language.

In the August 16, 2006, Federal Register (FR Doc. 06-6953), make the following correction to read as follows:

On page 47077, column 3 in the first line, remove the phrase “as of June 15, 2006.” and add in its place the phrase “as of June 16, 2006.”

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

Interested persons are invited to submit such written data, views, or arguments, as they may desire. Communications should identify the regulatory docket or special condition number and be submitted in duplicate to the address specified above. All communications received on or before the closing date for comments will be considered by the Administrator. The special conditions may be changed in light of the comments received. All comments received will be available in the Rules Docket for examination by interested persons, both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerning this rulemaking will be filed in the docket. Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this notice must include a self-addressed, stamped postcard on which the following statement is made: “Comments to CE259.” The postcard will be date stamped and returned to the commenter.

On February 13, 2006, AmSafe, Inc., applied for a supplemental type certificate, for the installation of a three-point safety belt restraint system incorporating an inflatable airbag for the pilot, co-pilot, and passenger seats of the Diamond Aircraft Industries, Inc., model DA40 and DA42 airplanes. The Diamond model DA40 is a single engine, four-place airplane, and the model DA42 is a twin engine, four-place airplane.

The inflatable restraint system is a three-point safety belt restraint system consisting of a lap belt and shoulder harness. An inflatable airbag is attached to the shoulder harness. The inflatable portion of the restraint system will rely on sensors to electronically activate the inflator for deployment. The inflatable restraint system will be installed on the pilot, co-pilot, and passenger seats.

If an emergency landing occurs, the airbag will inflate and provide a protective cushion between the occupant's head and the structure within the airplane. This will reduce the potential for head and torso injury. The inflatable restraint behaves in a manner similar to an automotive airbag; however, in this case, the airbag is integrated into the shoulder harness. While airbags and inflatable restraints are standard in the automotive industry, the use of an inflatable three-point restraint system is novel for general aviation operations.

The FAA has determined that this project will be accomplished on the basis of providing the same current level of safety as the Diamond Aircraft Industries, Inc., model DA40 and DA42 occupant restraint systems. The FAA has two primary safety concerns with the installation of airbags or inflatable restraints:

• That they perform properly under foreseeable operating conditions; and

• That they do not perform in a manner or at such times as to impede the pilot's ability to maintain control of the airplane or constitute a hazard to the airplane or occupants.

The latter point has the potential to be the more rigorous of the requirements. An unexpected deployment while conducting the takeoff or landing phases of flight may result in an unsafe condition. The unexpected deployment may either startle the pilot or generate a force sufficient to cause a sudden movement of the control yoke. Either action could result in a loss of control of the airplane, the consequences of which are magnified due to the low operating altitudes during these phases of flight. The FAA has considered this when establishing these special conditions.

The inflatable restraint system relies on sensors to electronically activate the inflator for deployment. These sensors could be susceptible to inadvertent activation, causing deployment in a potentially unsafe manner. The consequences of an inadvertent deployment must be considered in establishing the reliability of the system. AmSafe, Inc., must show that the effects of an inadvertent deployment in flight are not a hazard to the airplane or that an inadvertent deployment is extremely improbable. In addition, general aviation aircraft are susceptible to a large amount of cumulative wear and tear on a restraint system. The potential for inadvertent deployment may increase as a result of this cumulative damage. Therefore, the impact of wear and tear on inadvertent deployment must be considered. The effect of this cumulative damage means a life limit must be established for the appropriate system components in the restraint system design.

There are additional factors to be considered to minimize the chances of inadvertent deployment. General aviation airplanes are exposed to a unique operating environment, since the same airplane may be used by both experienced and student pilots. The effect of this environment on inadvertent deployment must be understood. Therefore, qualification testing of the firing hardware/software must consider the following:

• The airplane vibration levels appropriate for a general aviation airplane; and

• The inertial loads that result from typical flight or ground maneuvers, including gusts and hard landings.

Any tendency for the firing mechanism to activate as a result of these loads or acceleration levels is unacceptable.

Other influences on inadvertent deployment include high intensity electromagnetic fields (HIRF) and lightning. Since the sensors that trigger deployment are electronic, they must be protected from the effects of these threats. To comply with HIRF and lightning requirements, the AmSafe, Inc., inflatable restraint system is considered a critical system, since its inadvertent deployment could have a hazardous effect on the airplane.

Given the level of safety of the current Diamond Aircraft Industries, Inc., DA40 and DA42 occupant restraints, the inflatable restraint system must show that it will offer an equivalent level of protection for an emergency landing. If an inadvertent deployment occurs, the restraint must still be at least as strong as a Technical Standard Order approved belt and shoulder harnesses. There is no requirement for the inflatable portion of the restraint to offer protection during multiple impacts, where more than one impact would require protection.

The inflatable restraint system must deploy and provide protection for each occupant under an emergency landing condition. The seats of the models DA40 and DA42 are certificated to the structural requirements of § 23.562; therefore, the test emergency landing pulses identified in § 23.562 must be used to satisfy this requirement.

A wide range of occupants may use the inflatable restraint; therefore, the protection offered by this restraint should be effective for occupants that range from the fifth percentile female to the ninety-fifth percentile male. Energy absorption must be performed in a consistent manner for this occupant range.

In support of this operational capability, there must be a means to verify the integrity of this system before each flight. AmSafe, Inc., may establish inspection intervals where they have demonstrated the system to be reliable between these intervals.

An inflatable restraint may be “armed” even though no occupant is using the seat. While there will be means to verify the integrity of the system before flight, it is also prudent to require unoccupied seats with active restraints not constitute a hazard to any occupant. This will protect any individual performing maintenance inside the cockpit while the aircraft is on the ground. The restraint must also provide suitable visual warnings that would alert rescue personnel to the presence of an inflatable restraint system.

In addition, the design must prevent the inflatable seatbelt from being incorrectly buckled and/or installed such that the airbag would not properly deploy. AmSafe, Inc., may show that such deployment is not hazardous to the occupant and will still provide the required protection.

The cabins of the Diamond model airplanes identified in these special conditions are confined areas, and the FAA is concerned that noxious gasses may accumulate if the airbag deploys. When deployment occurs, either by design or inadvertently, there must not be a release of hazardous quantities of gas or particulate matter into the cockpit.

An inflatable restraint should not increase the risk already associated with fire. Therefore, the inflatable restraint should be protected from the effects of fire to avoid creating an additional hazard by, for example, a rupture of the inflator.

Finally, the airbag is likely to have a large volume displacement, and possibly impede the egress of an occupant. Since the bag deflates to absorb energy, it is likely that the inflatable restraint would be deflated at the time an occupant would attempt egress. However, it is appropriate to specify a time interval after which the inflatable restraint may not impede rapid egress. Ten seconds has been chosen as reasonable time. This time limit will offer a level of protection throughout the impact event.

Under the provisions of § 21.101, AmSafe, Inc., must show that the Diamond model DA40 and DA42, as changed, continue to meet the applicable provisions of the regulations incorporated by reference in Type Certificate No. A47CE (DA40), A57CE (DA42) or the applicable regulations in effect on the date of application for the change. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” The following models are covered by this special condition:

Type Certificate No. A47CE, Revision 6, dated January 12, 2006.

Type Certificate No. A57CE, Revision 4, dated June 30, 2006.

For the models listed above, the certification basis also includes all exemptions, if any; equivalent level of safety findings, if any; and special conditions not relevant to the special conditions adopted by this rulemaking action.

If the Administrator determines that the applicable airworthiness regulations (i.e., part 23 as amended) do not contain adequate or appropriate safety standards for the AmSafe, Inc., inflatable restraint as installed on these Diamond Aircraft Industries, Inc., models because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions, as appropriate, as defined in § 11.19, are issued in accordance with § 11.38, and become part of the type certification basis in accordance with § 21.101.

Special conditions are initially applicable to the model for which they are issued. Should the applicant apply for a supplemental type certificate to modify any other model included on the same type certificate to incorporate the same novel or unusual design feature, the special conditions would also apply to that model under the provisions of § 21.101.

The Diamond Aircraft Industries, Inc., models DA40 and DA42 will incorporate the following novel or unusual design feature:

The AmSafe, Inc., Three-Point Safety Belt Restraint System incorporating an inflatable airbag for the pilot, co-pilot, and passenger seats. The purpose of the airbag is to reduce the potential for injury in the event of an accident. In a severe impact, an airbag will deploy from one shoulder harness, in a manner similar to an automotive airbag. The airbag will deploy between the head of the occupant and airplane interior structure, which will provide some protection to the head of the occupant. The restraint will rely on sensors to electronically activate the inflator for deployment.

The Code of Federal Regulations state performance criteria for seats and restraints in an objective manner. However, none of these criteria are adequate to address the specific issues raised concerning inflatable restraints. Therefore, the FAA has determined that, in addition to the requirements of part 21 and part 23, special conditions are needed to address the installation of this inflatable restraint.

Accordingly, these special conditions are adopted for the Diamond Aircraft Industries, Inc., models equipped with the AmSafe, Inc., three-point inflatable restraint. Other conditions may be developed, as needed, based on further FAA review and discussions with the manufacturer and civil aviation authorities.

As discussed above, these special conditions are applicable to the Diamond Aircraft Industries, Inc., models DA40 and DA42 equipped with the AmSafe, Inc., three-point inflatable restraint system.

This action affects only certain novel or unusual design features on the previously identified Diamond models. It is not a rule of general applicability, and it affects only the applicant who applied to the FAA for approval of these features on the airplane.

Under standard practice, the effective date of final special conditions would be 30 days after the date of publication in the Federal Register ; however, the substance of these special conditions has been subjected to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. For this reason, and because a delay would significantly affect the delivery of the airplane(s), the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting these special conditions upon issuance. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above.

Discussion

The European Aviation Safety Agency (EASA), which is the airworthiness authority for the European Union, notified us that an unsafe condition may exist on certain Airbus Model A340-541 and -642 airplanes. The EASA advises that operators have reported failure of the anti-stall valve on the hydraulic pump of the ram air turbine (RAT) during scheduled ground tests. Investigation revealed that this failure was due to poor installation of the anti-stall valve sleeve, causing a shift in the anti-stall speed setting and leading to inability to supply adequate pressure to activate the RAT. These conditions, if not corrected, could result in loss of the RAT as a source of hydraulic and electrical power in an emergency situation.

Airbus has issued Service Bulletin A340-29-5010, including Appendix 01, dated October 10, 2005. The service bulletin describes procedures for determining the part number of the modification plate on the hydraulic pump of the ram air turbine (RAT), and follow-on corrective actions. The follow-on corrective actions include a one-time inspection of the anti-stall valve sleeve of the RAT for proper installation after determining the part number of the modification plate on the hydraulic pump of the RAT, reworking the anti-stall valve or replacing the RAT with a new RAT, and doing an operational test of the new RAT. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. The EASA mandated the service information and issued airworthiness directive 2006-0046, dated February 16, 2006, to ensure the continued airworthiness of these airplanes in the European Union.

The Airbus service bulletin refers to Hamilton Sundstrand Service Bulletin ERPS33T-29-3, dated August 1, 2005, as an additional source of service information for accomplishing the actions.

These airplane models are manufactured in France and are type certificated for operation in the United States under the provisions of section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and the applicable bilateral airworthiness agreement. As described in FAA Order 8100.14A, “Interim Procedures for Working with the European Community on Airworthiness Certification and Continued Airworthiness,” dated August 12, 2005, the EASA has kept the FAA informed of the situation described above. We have examined the EASA's findings, evaluated all pertinent information, and determined that we need to issue an AD for products of this type design that are certificated for operation in the United States.

Therefore, we are issuing this AD to prevent failure of the RAT hydraulic pump to supply adequate pressure to activate the RAT, and consequent loss of the RAT as a source of hydraulic and electrical power in an emergency situation. This AD requires accomplishing the actions specified in the Airbus service information described previously, except as discussed under “Differences Between the AD and the Airbus Service Bulletin.”

Unlike the procedures described in the service bulletin, the intent of the EASA airworthiness directive referenced in this AD is to mandate the one-time inspection of the anti-stall valve sleeve of the RAT for proper installation before determining the part number of the modification plate on the hydraulic pump of the RAT. If, after beginning the inspection, it is determined that the modification plate is already marked with a 'B' showing that the inspection was accomplished previously, no further action is required by this AD.

The service bulletin specifies returning any removed RAT to Hamilton Sundstrand; however, this AD does not require that action.

In this AD, the “inspection” specified in the service bulletin is referred to as a “general visual inspection.” We have included the definition for a general visual inspection in a note in the proposed AD.

None of the airplanes affected by this action are on the U.S. Register. All airplanes affected by this AD are currently operated by non-U.S. operators under foreign registry; therefore, they are not directly affected by this AD action. However, we consider this AD necessary to ensure that the unsafe condition is addressed if any affected airplane is imported and placed on the U.S. Register in the future.

If an affected airplane is imported and placed on the U.S. Register in the future, the required actions would take about 1 work hour per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the AD would be $80 per airplane.

No airplane affected by this AD is currently on the U.S. Register. Therefore, providing notice and opportunity for public comment is unnecessary before this AD is issued, and this AD may be made effective in less than 30 days after it is published in the Federal Register .

This AD is a final rule that involves requirements that affect flight safety and was not preceded by notice and an opportunity for public comment; however, we invite you to submit any relevant written data, views, or arguments regarding this AD. Send your comments to an address listed in the ADDRESSES section. Include “Docket No. FAA-2006-25722; Directorate Identifier 2006-NM-141-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the AD that might suggest a need to modify it.

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

You may examine the AD docket on the Internet at http://dms.dot.gov , or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them.

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 the regulation:

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

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

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

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

You may examine the airworthiness directive (AD) docket on the Internet at http://dms.dot.gov or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the street address stated in the ADDRESSES section.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that supersedes AD 2003-03-08, amendment 39-13032 (68 FR 4900, January 31, 2003). The existing AD applies to certain McDonnell Douglas DC-9-10, DC-9-20, DC-9-30, DC-9-40, and DC-9-50 series airplanes. That NPRM was published in the Federal Register on May 1, 2006 (71 FR 25510). That NPRM proposed to continue to require a one-time inspection at a certain disconnect panel in the left forward cargo compartment to find contamination of electrical connectors and to determine if a dripshield is installed over the disconnect panel, and corrective actions if necessary. That NPRM also proposed to revise the applicability of the existing AD to remove certain airplanes and add others.

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

ABX Air requests that we revise paragraph (h) of this AD to specify that it applies to airplanes equipped with forward lavatories. The commenter states that this change would be consistent with the applicability of AD 2003-03-08. The commenter also states that the change would eliminate the need for requesting an alternative method of compliance (AMOC) for airplanes that have had the forward lavatories removed.

We agree that paragraph (h) applies to airplanes equipped with forward lavatories. We point out that the effectivity of Boeing Alert Service Bulletin DC9-24A190, Revision 2, dated October 12, 2004, notes clearly that the service bulletin is applicable only to airplanes with forward lavatories installed. Since we reference Revision 2 in the applicability of this AD, this AD applies to the airplanes identified in Revision 2 and equipped with forward lavatories. However, we have revised paragraph (h) of this AD as proposed by the commenter to provide clarification.

Northwest Airlines (NWA) states that it has accomplished the intent of AD 2003-03-08 on all DC-9 airplanes in its fleet through two AMOCs, which allow use of alternative replacement parts. (The requirements of AD 2003-03-08 (corresponding to paragraph (f) of this AD) apply only to airplanes identified in Boeing Alert Service Bulletin DC9-24A190, Revision 01, dated November 21, 2001.) NWA states that it has inspected and modified several airplanes in accordance with AD 2003-03-08, which are not included in the effectivity of Revision 01 of the service bulletin. NWA further states that paragraph (h), as written in the NPRM, applies to any airplane that is not listed in Revision 01. NWA asserts that any such airplane would be required to accomplish paragraph (h) in accordance with Revision 2 of the service bulletin. Therefore, NWA requests that we revise the NPRM to accept previously granted AMOCs to AD 2003-03-08. As justification, NWA states that this change would allow compliance with Revision 2 (required by paragraph (h) of this AD) without having to apply for an additional AMOC. We infer that NWA would like previous AMOCs to be acceptable for compliance with both paragraphs (f) and (h) of this AD.

We agree that AMOCs approved previously in accordance with AD 2003-03-08 are acceptable for the corresponding provisions of paragraph (f) of this AD. Consequently, we have added a new paragraph (j)(3) to this AD accepting those AMOCs. However, we disagree with the commenter's interpretation that paragraph (h) of this AD applies to any airplane not identified in Revision 01 of the service bulletin. According to paragraph (c) of this AD, this AD applies only to the airplanes identified in Revision 2 of the service bulletin. Therefore, paragraph (h) of this AD applies to the airplanes identified in Revision 2 (and equipped with forward lavatories), except those on which Revision 01 of the service bulletin has been previously accomplished. Furthermore, it is not our intent to require accomplishment of both Revisions 01 and 2. Therefore, we have added a new paragraph (i) to this AD, which states that accomplishing the actions specified in paragraph (f) of this AD before the effective date of this AD is acceptable for compliance with the requirements of paragraph (h) of this AD. We have reidentified the subsequent paragraphs accordingly.

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

There are about 649 airplanes of the affected design in the worldwide fleet. The following table provides the estimated costs for U.S. operators 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); and

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

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

On November 18, 2005, the FAA issued AD 2005-24-11, amendment 39-14391 (70 FR 72363, December 5, 2005), for certain EMBRAER Model EMB-135BJ, -135ER, -135KE, -135KL, and -135LR airplanes; and Model EMB-145, -145ER, -145MR, -145LR, -145XR, -145MP, and -145EP airplanes. That AD requires repetitive inspections of the spring cartridges of the elevator gust lock system to determine if the lock washer projection correctly fits the slots in the cartridge flange, and corrective action if necessary. That AD also requires final terminating action for all affected airplanes.

On December 23, 2005, we issued a correction to AD 2005-24-11, (71 FR 231, January 4, 2006), which corrected the reference to the effective date of Brazilian airworthiness directive 2003-01-03R1.

As published, AD 2005-24-11 incorrectly cited the part numbers (P/Ns) of the spring cartridges in several places as P/N KDP2611 and P/N KDP4235. Those P/Ns do not exist. The correct P/Ns should be KPD2611 and KPD4235.

No other part of the regulatory information has been changed; therefore, the final rule is not republished in the Federal Register .

The effective date of this AD remains January 9, 2006.

You may examine the airworthiness directive (AD) docket on the Internet at http://dms.dot.gov or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the street address stated in the ADDRESSES section.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to certain EMBRAER Model ERJ 170 airplanes. That NPRM was published in the Federal Register on August 18, 2005 (70 FR 48500). That NPRM proposed to require replacing the very high frequency (VHF) antenna located in position 1 of the fuselage with a new, improved VHF antenna.

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

Air Line Pilots Association (ALPA) requests that all of the VHF antennas on the subject airplanes be replaced with the new, improved antennas. ALPA suggests that, for redundancy purposes, all of the VHF antennas should be replaced because “all” of the VHF antennas were damaged in the event that precipitated the AD.

We do not agree to require replacement of all the VHF communications antennas. Section 25.1316(b) of the Federal Aviation Regulations (FARs) (14 CFR 25.1316) requires that a major aircraft system that, if it failed, would contribute to or cause a condition that would reduce the capability of the airplane or flightcrew to cope with adverse operating conditions must be designed to be able to recover in a timely manner after exposure to lightning. In the incident precipitating this AD, the VHF communications system failed because none of the VHF antennas were able to recover. The newly designed replacement antenna required by this AD has been through considerable testing and we find that sufficient data exist to demonstrate that it meets the requirements of section 25.1316(b) and will be able to recover function of the VHF communications system following a lightning strike. Therefore, replacing the position 1 VHF communications antenna with the new antenna instead of replacing all of the VHF antennas is sufficient to ensure system recovery in the event of a lightning strike and will adequately address the unsafe condition addressed by this AD. However, operators are free to replace the position 2 and 3 VHF communications antennas with the newly designed antenna at their discretion. We have not changed the AD in this regard.

ALPA also requests that the FAA look into the subject airplane's ability to adequately and safely handle lightning strikes and static discharges. ALPA gives no justification for this request.

We do not agree. This airplane model design was certificated to the airworthiness standards for lightning protection provided in part 25 of the FARs (14 CFR part 25). The purpose of these standards is to ensure that the operation of the airplane is not adversely affected when the airplane is exposed to lightning. Beyond the event that is the subject of this AD, we are unaware of any other instances of this model airplane being adversely affected by exposure to lightning. We have made no change to the AD in this regard.

Modification and Replacement Parts Association (MARPA) requests that the language in the NPRM be changed to permit installation of PMA equivalent parts. The commenter states that the mandated installation of a certain part number in the NPRM “creates a conflict with 14 CFR Section 21.303.”

We do not agree with MARPA's request. We infer that MARPA would like the AD to specify the manufacturer and part number in order to permit installation of any equivalent PMA parts. We also infer that MARPA believes that it is not necessary for an operator to request approval of an alternate method of compliance (AMOC) in order to install an “equivalent” PMA part. Whether an alternative part is “equivalent” in adequately resolving the unsafe condition can only be determined on a case-by-case basis based on a complete understanding of the unsafe condition. We are not currently aware of any such parts. Our policy is that, in order for operators to replace a part with one that is not specified in the AD, they must request an AMOC. This is necessary so that we can make a specific determination that an alternative part is or is not susceptible to the same unsafe condition.

In response to MARPA's statement regarding a “conflict with FAR 21.303,” under which the FAA issues PMAs, this statement appears to reflect a misunderstanding of the relationship between ADs and the certification procedural regulations of part 21 of the Federal Aviation Regulations (14 CFR part 21). Those regulations, including section 21.303 of the Federal Aviation Regulations (14 CFR 21.203), are intended to ensure that aeronautical products comply with the applicable airworthiness standards. But ADs are issued when, notwithstanding those procedures, we become aware of unsafe conditions in these products or parts. Therefore, an AD takes precedence over design approvals when we identify an unsafe condition, and mandating installation of a certain part number in an AD is not at variance with section 21.303.

The AD provides a means of compliance for operators to ensure that the identified unsafe condition is addressed appropriately. For an unsafe condition attributable to a part, the AD normally identifies the replacement parts necessary to obtain that compliance. As stated in section 39.7 of the Federal Aviation Regulations (14 CFR 39.7), “Anyone who operates a product that does not meet the requirements of an applicable airworthiness directive is in violation of this section.” Unless an operator obtains approval for an AMOC, replacing a part with one not specified by the AD would make the operator subject to an enforcement action and result in a civil penalty. No change to the AD is necessary in this regard.

MARPA notes that safety gaps may occur because original equipment manufacturer (OEM) parts determined to be defective may have been replaced with PMA parts that are also defective. MARPA further states that frequently design defects that arise in OEM parts will also exist in PMA parts, since they may actually only differ in part number, while sharing the same design data. Therefore MARPA requests that the defective parts be identified by manufacturer and part number in the NPRM. MARPA also suggests wording be added to the NPRM that would “embrace any present or future PMA alternatives to either the defective part or the ‘new and improved’ part.”

From these statements, we infer that MARPA would like the NPRM to be revised to cover possible defective PMA alternative parts, rather than just OEM parts listed in the service bulletin, so that those defective PMA parts also are subject to the NPRM. We concur with MARPA's general request that, if we know that an unsafe condition also exists in PMA parts, the AD should address those parts, as well as the original parts. MARPA's remarks are timely in that the Transport Airplane Directorate currently is in the process of reviewing this issue as it applies to transport category airplanes. We acknowledge that there may be other ways of addressing this issue to ensure that unsafe PMA parts are identified and addressed. Once we have thoroughly examined all aspects of this issue, including input from industry, and have made a final determination, we will consider whether our policy regarding addressing PMA parts in ADs needs to be revised. We consider that to delay this AD action would be inappropriate, since we have determined that an unsafe condition exists and that replacement of certain parts must be accomplished to ensure continued safety. Therefore, no change has been made to the final rule in this regard.

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

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

This AD will affect about 43 airplanes of U.S. registry. The required actions will take about 2 work hours per airplane, at an average labor rate of $65 per work hour. Required parts will cost $654. Based on these figures, the estimated cost of the AD for U.S. operators is $33,712, or $784 per airplane.

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

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

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

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

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

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

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

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

On September 6, 2005, we issued AD 2005-19-03, amendment 39-14268 (70 FR 57126, September 30, 2005), for all BAe Systems (Operations) Limited Model ATP airplanes. That AD requires revising the Airworthiness Limitations Section (ALS) of the Instructions for Continued Airworthiness to incorporate life limits for certain items and inspections to detect fatigue cracking in certain structures. That AD also requires revising the ALS of the Instructions for Continued Airworthiness to incorporate new inspections to detect fatigue cracking of certain significant structural items (SSIs) and to revise life limits for certain equipment and various components. That AD resulted from a determination that existing inspection techniques are not adequate for certain SSIs and by the revision of certain life limits. We issued that AD to detect and correct fatigue cracking of certain structural elements, which could adversely affect the structural integrity of these airplanes.

Since we issued AD 2005-19-03, the European Aviation Safety Agency (EASA), which is the airworthiness authority for European Union, notified us that an unsafe condition may exist on all BAE Systems (Operations) Limited Model ATP airplanes. The EASA advises that a manufacturer review of fatigue test results identified additional and revised inspections for the fuselage that are necessary in order to ensure the continued structural integrity of the airplane. Inadequate inspection techniques or replacement intervals could result in fatigue cracking of certain structural elements, which could result in reduced structural integrity of the airplane and consequent rapid decompression of the airplane.

BAE Systems (Operations) Limited has issued Service Bulletin ATP-51-002, dated December 20, 2005. The service bulletin describes structural inspections of the fuselage for cracking, among other actions. The service bulletin describes additional inspections and revises the compliance times of certain existing inspections. The service bulletin also specifies repairs if necessary. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. The EASA mandated the service information and issued airworthiness directive 2006-0090, dated April 20, 2006, to ensure the continued airworthiness of these airplanes in the European Union.

This airplane model is manufactured in the United Kingdom and are type certificated for operation in the United States under the provisions of section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and the applicable bilateral airworthiness agreement. As described in FAA Order 8100.14A, “Interim Procedures for Working with the European Community on Airworthiness Certification and Continued Airworthiness,” dated August 12, 2005, the EASA has kept the FAA informed of the situation described above. We have examined the EASA's findings, evaluated all pertinent information, and determined that we need to issue an AD for products of this type design that are certificated for operation in the United States.

Therefore, we are issuing this AD to detect and correct fatigue cracking of certain structural elements, which could result in reduced structural integrity of the airplane and consequent rapid decompression of the airplane. This AD supersedes AD 2005-19-03 and retains the requirements of the existing AD. This AD also requires revising the ALS of the Instructions for Continued Airworthiness to include new and revised inspections of the fuselage specified in the service bulletin described previously.

None of the airplanes affected by this action are on the U.S. Register. All airplanes affected by this AD are currently operated by non-U.S. operators under foreign registry; therefore, they are not directly affected by this AD action. However, we consider this AD necessary to ensure that the unsafe condition is addressed if any affected airplane is imported and placed on the U.S. Register in the future.

The following table provides the estimated costs to comply with this AD for any affected airplane that might be imported and placed on the U.S. Register in the future.

You may examine the airworthiness directive (AD) docket on the Internet at http://dms.dot.gov or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the street address stated in the ADDRESSES section.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to certain Airbus Model A318, A319, A320, and A321 airplanes. That NPRM was published in the Federal Register on March 27, 2006 (71 FR 15065). That NPRM proposed to require revising the Limitations section of the airplane flight manual (AFM); performing a one-time hardness test of certain ribs of the left- and right-hand engine pylons, as applicable, which would terminate the AFM limitations; and performing related corrective actions if necessary.

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

The Air Transport Association (ATA), on behalf of its member, Northwest Airlines (NWA), requests that we review the requirement for the hardness test specified in the NPRM. NWA states that the NPRM proposes a hardness test before further flight in the case of a hard or overweight landing and further states that French airworthiness directive F-2006-011 R1, dated January 18, 2006, which also addresses the subject of this AD, did not have such a requirement. NWA asserts that a requirement to visually inspect the airplane and pylons for deformation after a hard landing already exists. NWA believes that, as a hardness test requires special tooling and expertise that would not likely be available at most locations where a hard landing might occur, the hardness test is not appropriate and a visual inspection in accordance with maintenance procedures should be accomplished instead.

We agree with NWA that a hardness test after a hard or overweight landing is not necessary. Therefore, we have revised paragraph (g) of the AD to remove the requirement for a hardness test after a hard or overweight landing.

To prevent possible confusion, we have revised paragraph (h) of the AD to clarify that the specified corrective actions apply to discrepant ribs discovered during the hardness test required by paragraph (g) of the AD.

The European Aviation Safety Agency (EASA) has issued airworthiness directive 2006-0136, dated May 22, 2006. The EASA airworthiness directive supersedes French airworthiness directive F-2006-011 R1, dated January 18, 2006, which was referenced in the NPRM as the applicable parallel airworthiness directive. The EASA airworthiness directive contains no new or revised material that affects the technical content of this AD; however, we have revised paragraph (k) of this AD for clarity and traceability of information that applies to this AD.

We have carefully 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 have determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD.

This AD will affect about 112 airplanes of U.S. registry. The required hardness test will take about 1 work hour per airplane, at an average labor rate of $65 per work hour. Based on these figures, the estimated cost of the AD for U.S. operators is $7,280, or $65 per airplane.

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

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

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

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

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

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

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

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

You may examine the airworthiness directive (AD) docket on the Internet at http://dms.dot.gov or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the street address stated in the ADDRESSES section.

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to certain aviation tires installed on various transport category airplanes. That NPRM was published in the Federal Register on May 3, 2006 (71 FR 25987). That NPRM proposed to require a one-time inspection of the nosewheel tires to determine if they are within a designated serial number range, and replacement if necessary.

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

Two commenters, both private citizens, state that they support the NPRM.

The same commenters request that we revise the cost estimate in the NPRM. Both commenters state that in their experience the inspection to determine the serial number of the tire would take much less time than the one hour given for that action in the NPRM. The commenters state that the inspection should take only 10 to 15 minutes. One commenter points out that the removal and replacement of the affected tires would take 1 to 2 hours, depending on the current status of the airplane and other variables.

We partially agree. We agree that the inspection may take less than 1 hour. We disagree that it is necessary to change the cost estimate for the inspection to 10 to 15 minutes rather than 1 hour. We provide these estimates in order to give airplane operators notice of the costs they are likely to incur to do the actions specifically required by the AD. To account for the worst-case cost for each operator, we generally round dollar and hour figures to the next-highest value.

We also disagree with the request to change the cost estimate to include the replacement cost. The replacement is an “on condition” action, and may or may not be required for a given airplane. The cost figures discussed in NPRMs represent only the time necessary to perform the specific actions actually required by the AD; in this case, the inspection. These figures also do not typically include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

We have not changed the final rule in this regard.

The same commenters both request that we revise the compliance time for doing the inspection from 60 days to 30 days. The commenters point out that Goodyear Aviation Service Bulletin SB-2005-32-004, Revision 5, dated December 22, 2005 (referred to in the NPRM as the appropriate source of service information for accomplishing the actions), recommends a compliance time of 14 days, which leads one commenter to believe that this is a serious problem and should be a safety concern for Gulfstream and Bombardier owners. One commenter says that even though the NPRM states that most operators have already complied with the service bulletin, that does not mean it is time to ease up on the others' safety. The other commenter points out that it doesn't take long to inspect the tire and determine the serial number. The commenters both cite serious aviation accidents related to blown tires, and state that the potential serious consequences also justify a shorter compliance time.

We acknowledge the commenters' concerns. However, we do not agree with the request to revise the compliance time. In developing an appropriate compliance time, we considered the safety implications, parts availability, and normal maintenance schedules. Further, the manufacturer agreed with the proposed compliance time, and now reports that of the 142 affected tires, 25 have been returned in accordance with the instructions in Goodyear Aviation Service Bulletin SB-2005-32-004, Revision 5. We also note that Gulfstream reports 90 percent compliance and Bombardier reports 82 percent compliance as of the closing date for comments on the NPRM. In addition, if we were to shorten the compliance time, it would be necessary for us to issue a supplemental NPRM to solicit additional public comment on the new, shorter compliance time. The additional time for comment would add at least 45 days to the total time it will take for the NPRM to become a final rule and thereby add 45 days more before the tires would be required to be inspected. Therefore, we have not changed the final rule in this regard.

Bombardier has informed us that it has issued two service bulletins that give additional service information for identifying the affected serial numbers and replacing the tires as applicable. We have reviewed and added the following service bulletins to Note 1 of the final rule: Bombardier Alert Service Bulletins A700-32-019 and A700-1A11-32-007, both dated November 2, 2005.

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

There are about 1,282 Gulfstream airplanes and about 104 Bombardier airplanes that use the affected tires in the worldwide fleet. This AD will affect about 1,035 Gulfstream airplanes, and about 104 Bombardier airplanes of U.S. registry. The inspection for the affected serial numbers takes about 1 work hour per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the AD for U.S. operators is $91,120, or $80 per airplane.

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

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

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

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

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

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

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

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

The FAA published this direct final rule with a request for comments in the Federal Register on July 18, 2006 (17 FR 40651). The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit such an adverse comment, were received with the comment period, the regulation will become effective on October 26, 2006, as per the direct final rule. No adverse comments were received, and thus this notice confirms that this direct final rule will become effective on that date.

The FAA published this direct final rule with a request for comments in the Federal Register on July 18, 2006 (71 FR 40653). The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit such an adverse comment, were received within the comment period, the regulation will become effective on October 26, 2006, as per that direct final rule. No adverse comments were received, and thus this notice confirms that this direct final rule will become effective on that date.

The United States Government, including the United States Department of Commerce, Bureau of Industry and Security (BIS), has come into the possession of information giving reason to believe, based on specific and articulable facts, that Akbar Ashraf Vaghefi (Germany and the United Arab Emirates (UAE)), Neda Overseas Electronics L.L.C. (UAE), Mostafa Salehi (UAE), IKCO Trading GmbH (Germany), Pyramid Technologies (UAE), A.H. Shamnad (UAE), S. Basheer (UAE), Hamed Athari (UAE), and Mayrow Technics Co. (UAE) are affiliated or conducting business with Mayrow General Trading and its related entities, and have acquired or attempted to acquire electronic components and devices capable of being used to construct Improvised Explosive Devices (IEDs). These electronic components and devices (“the commodities”) have been, and may continue to be, employed in IEDs or other explosive devices used against Coalition Forces in Iraq and Afghanistan.

In order to protect Coalition Forces operating in Iraq and Afghanistan, the Department of Commerce is amending General Order No. 3, set forth in Supplement No. 1 to part 736, to curtail the named entities' acquisition of the commodities. Pursuant to 15 CFR parts 736 and 744 (2006), that order imposed a license requirement for exports and reexports of all items subject to the Export Administration Regulations (EAR) (15 CFR parts 730 through 774) (2006) to Mayrow General Trading and entities related to or controlled by it. Specifically, this rule adds nine additional entities to General Order No. 3 that are related to Mayrow General Trading as follows:

Akbar Ashraf Vaghefi, Koburgerstr 10, D-10825, Berlin, Germany; and Shop No. 3-4 Sharafia Ahmed Ali Building, Al Nakheel, Deira, Dubai, U.A.E.;

Neda Overseas Electronics L.L.C., No. 308, 3rd Floor, Rafi Center, Al Nakheel, Deira, Dubai, U.A.E.;

Mostafa Salehi, No. 308, 3rd Floor, Rafi Center, Al Nakheel, Deira, Dubai, U.A.E.;

IKCO Trading GmbH, Schadowplatz 5, 40212 Dusseldorf, Germany;

Pyramid Technologies, P.O. Box 42340, Dubai, U.A.E.; and No. 3-4, Sharafia Ahmed Ali Building, Al Nakheel, Deira, Dubai 396, U.A.E.;

A.H. Shamnad, P.O. Box 42340, Dubai, U.A.E.; and No. 3-4 Sharafia Ahmed Ali Building, Al Nakheel, Deira, Dubai 396, U.A.E.;

S. Basheer, No. 3-4 Sharafia Ahmed Ali Building, Al Nakheel, Deira, Dubai 396, U.A.E.;

Hamed Athari, No. 3-4 Sharafia Ahmed Ali Building, Al Nakheel, Deira, Dubai 396, U.A.E.; and

Mayrow Technics Co, No. 3-4 Sharafia Ahmed Ali Building, Al Nakheel, Deira, Dubai 396, U.A.E.

Under this order, a BIS license is required for the export or reexport of any item subject to the EAR to any of the above-named entities, including any transaction in which any of the above-named entities will act as purchaser, intermediate consignee, ultimate consignee, or end-user of the items. This order also prohibits the use of License Exceptions ( see part 740 of the EAR) for exports and reexports of items subject to the EAR involving such entities.

This rule will spell out the full name and provide a pseudonym of one of the entities that was listed in General Order No. 3 published on June 5, 2006. F.N. Yaghmaei will now be listed as Farrokh Nia Yaghmaei, a.k.a., Farrokh Nia Yaghmayi, in the general order to better assist the public.

Consistent with section 6 of the Export Administration Act of 1979, as amended (50 U.S.C. app. 2401-2420) (2000) (the “Act”), a foreign policy report was submitted to Congress on August 29, 2006, notifying Congress of the imposition of a control in the form of a licensing requirement for exports and reexports of all items subject to the EAR destined to the nine additional entities related to Mayrow General Trading that are added to General Order No. 3 with this final rule.

Since August 21, 2001, the Act has been in lapse and the President, through Executive Order 13222 of August 17, 2001 (3 CFR, 2001 Comp. 783 (2002)), as extended most recently by the Notice of August 3, 2006 (71 FR 44551 (August 7, 2006)), has continued the EAR in effect under the International Emergency Economic Powers Act (50 U.S.C. 1701-1706 (2000)) (“IEEPA”). BIS continues to carry out the provisions of the Act, as appropriate and to the extent permitted by law, pursuant to Executive Order 13222.

1. This rule has been determined to be not significant for purposes of Executive Order 12866.

2. Notwithstanding any other provision of law, no person is required to respond to nor be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This regulation involves collections previously approved by the OMB under control numbers 0694-0088, “Multi-Purpose Application,” which carries a burden hour estimate of 58 minutes to prepare and submit form BIS-748. Miscellaneous and recordkeeping activities account for 12 minutes per submission. Total burden hours associated with the Paperwork Reduction Act and Office and Management and Budget control number 0694-0088 are expected to increase slightly as a result of this rule. Send comments regarding these burden estimates or any other aspect of this collection of information, including suggestions for reducing the burden, to David Rostker, OMB Desk Officer, by e-mail at david_rostker@omb.eop.gov or by fax to (202) 395-7285; and to the Regulatory Policy Division, Bureau of Industry and Security, Department of Commerce, P.O. Box 273, Washington, DC 20044, e-mail: publiccomments@bis.doc.gov.

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

4. The provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, the opportunity for public participation, and a delay in effective date, are inapplicable because this regulation involves a military or foreign affairs function of the United States. ( See 5 U.S.C. 553(a)(1)). Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 et. seq., are not applicable.

This document corrects an inadvertent error in the final rule that was published by the Bureau of Industry and Security (BIS) on July 31, 2006 (71 FR 43043). In the July 31, 2006, final rule, the amendatory instruction for ECCN 9A120 did not specify that the heading of the ECCN should be revised as set forth in the regulatory text for that ECCN. The regulatory text in the July 31, 2006 final rule contained the following heading for ECCN 9A120: “Complete unmanned aerial vehicles, not specified in 9A012, having all of the following:” This document corrects ECCN 9A120 by revising the heading to include the phrase “not specified in 9A012, having all of the following:”.

Although the Export Administration Act expired on August 20, 2001, the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as extended by the Notice of August 3, 2006, 71 FR 44551 (August 7, 2006), has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act.

1. This final rule has been determined to be not significant for purposes of E.O. 12866.

2. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act, unless that collection of information displays a currently valid Office of Management and Budget Control Number. This rule contains a collection of information subject to the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq. ). This collection has been approved by the Office of Management and Budget under control number 0694-0088, “Multi-Purpose Application,” which carries a burden hour estimate of 58 minutes for a manual or electronic submission. BIS anticipates a slight decrease in license applications submitted as a result of this rule.

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

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

Merial Ltd., 3239 Satellite Blvd., Bldg. 500, Duluth, GA 30096-4640, filed a supplement to NADA 12-350 for CORID (amprolium) Type A Medicated Article 25%. The supplemental NADA provides for formulation of Type C medicated calf feeds used for the prevention and treatment of coccidiosis at a broader range of concentrations. The supplemental NADA is approved as of July 19, 2006, and 21 CFR 558.55 is amended to reflect the approval. The basis of approval is discussed in the freedom of information summary.

In accordance with the freedom of information provisions of 21 CFR part 20 and 21 CFR 514.11(e)(2)(ii), a summary of safety and effectiveness data and information submitted to support approval of this application may be seen in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, between 9 a.m. and 4 p.m., Monday through Friday.

FDA has determined under 21 CFR 25.33(a)(1) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This rule does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a rule of “particular applicability.” Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801-808.

The collection of information contained in these final regulations has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) under control number 1545-1855.

The collection of information in these final regulations is in § 1.448-2(d)(8) and (e)(5). This information is required to enable the IRS to verify that a taxpayer is reporting the correct amount of income or gain or claiming the correct amount of losses, deductions, or credits from the taxpayer's use of the nonaccrual-experience method of accounting. The collection of information is required to obtain a benefit.

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

The estimated annual burden per respondent is 3 hours.

Comments concerning the accuracy of this burden estimate and suggestions for reducing this burden should be sent to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, Washington, DC 20224, and to the Office of Management and Budget, Attn: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503.

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

This document contains amendments to the Income Tax Regulations (26 CFR part 1) under section 448(d)(5). Section 448(d)(5) was enacted by section 801 of the Tax Reform Act of 1986 (Pub. L. 99-514, 100 Stat. 2085) and was amended by section 403 of the Job Creation and Worker Assistance Act of 2002 (Pub. L. 107-147, 116 Stat. 21) (JCWA), effective for taxable years ending after March 9, 2002. On September 4, 2003, the IRS and Treasury Department published in the Federal Register (68 FR 52543) proposed amendments to the regulations under section 448(d) by cross-reference to temporary regulations (REG-141402-02) and temporary regulations (68 FR 52496) (TD 9090) (collectively, the 2003 regulations) relating to the limitation on the use of the nonaccrual-experience method of accounting under section 448(d)(5). A public hearing was held on December 10, 2003. Written and electronic comments responding to the proposed regulations were received. After consideration of all of the comments, the proposed regulations are adopted as revised by this Treasury decision, and the corresponding temporary regulations are removed. The revisions are discussed below.

These final regulations generally follow the rules in the 2003 regulations. The final regulations include the four safe harbor nonaccrual-experience methods provided in the 2003 regulations, but those methods have been modified to provide more flexibility. Unlike the 2003 regulations, the final regulations do not require as a general rule that a taxpayer's nonaccrual-experience method be tested against one of the safe harbor nonaccrual-experience methods. Instead, the final regulations adopt, with modifications, the general rule from the 2003 regulations as a fifth safe harbor. The final regulations also adopt a new general rule that requires a taxpayer's nonaccrual-experience method be tested against actual experience unless the taxpayer has adopted one of the five safe harbor methods. These final regulations apply to taxable years ending on or after August 31, 2006.

Certain portions of the 2003 regulations have been removed or incorporated into other paragraphs of the final regulations. Section 1.448-2T(d) regarding certain receivables for which the nonaccrual-experience method is not allowed has been combined with § 1.448-2(c) in the final regulations. Special rules in various parts of the 2003 regulations such as § 1.448-2T(e)(2)(ii) and (iii), 1.448-2T(e)(3)(iii), 1.448-2T(e)(4)(ii) and (iii), and 1.448-2T(e)(5)(ii) and (iii), have been combined with the special rules in § 1.448-2T(e)(7) and are now in § 1.448-2(b), (c), and (d) of the final regulations. Most of § 1.448-2T(g), (h), and (j) of the 2003 regulations relating to methods of accounting and audit protection have been removed. The IRS and Treasury Department intend to issue administrative guidance that will contain procedures for certain changes in a nonaccrual-experience method of accounting. The general rule that a nonaccrual-experience method is a method of accounting to which sections 446 and 481 apply has been moved to § 1.448-2(b).

Other portions of the 2003 regulations have been moved to a new definitions and special rules paragraph in § 1.448-2(c) of the final regulations. Section 1.448-2T(d) regarding accounts receivable is included in a definition of accounts receivable in § 1.448-2(c)(1) of the final regulations. Other terms in the definitions paragraph include applicable period, bad debts, charge-offs, determination date, recoveries, and uncollectible amount. The final regulations incorporate these definitions, as appropriate, throughout. For example, in the 2003 regulations the four safe harbor methods include bad debts in the numerator; however, safe harbor 2 did not refer to bad debts, but instead described them as “accounts receivable actually determined to be uncollectible and charged off * * *” These descriptions should not be interpreted differently. Therefore, the final regulations use the defined term bad debts in each numerator. Finally, the examples are changed to conform to other changes within the final regulations.

The 2003 regulations provide that a taxpayer may use any nonaccrual-experience method of accounting, provided the taxpayer's method meets the self-test requirements. The self-testing in the 2003 regulations requires a taxpayer to compare its proposed nonaccrual-experience method with one of the four safe harbor methods to determine whether the taxpayer's proposed method clearly reflects experience. Self-testing is required in the first taxable year to determine whether the proposed method is allowed (first-year self-testing requirement) and, if allowed, self-testing is required every three taxable years thereafter (three-year self-testing requirement). The final regulations provide, as a general rule, that a taxpayer may use any nonaccrual-experience method of accounting that clearly reflects the taxpayer's experience. The final regulations provide that taxpayers must self-test against the taxpayer's actual experience to determine whether a method clearly reflects the taxpayer's experience unless the taxpayer has adopted one of the five safe harbor methods. The final regulations reserve on the definition of actual experience.

Many commentators suggested that taxpayers should not be required to incur additional expenses to develop a separate system for performing the self-test, noting that it would be burdensome and impractical for the majority of taxpayers using an alternative nonaccrual-experience method to conduct the self-test due to the limitations of their existing automated recordkeeping systems. One commentator suggested that the self-test was outside the scope of the JCWA and legislative intent. These commentators all recommended that the final regulations omit the self-testing requirement.

The JCWA provides that “[a] taxpayer may adopt, or * * * change to, a computation or formula that clearly reflects the taxpayer's experience,” and that “[a] request [to change] shall be approved if such computation or formula clearly reflects the taxpayer's experience.” Public Law 107-147, section 403(a). Taxpayers and the IRS must be able to determine whether a nonaccrual-experience method clearly reflects the taxpayer's experience. The Secretary has broad authority to determine whether a method of accounting clearly reflects the taxpayer's income. A self-testing requirement is consistent with the statute, because it is the manner by which taxpayers and the IRS determine whether a nonaccrual-experience method clearly reflects the taxpayer's experience, and thus, clearly reflects the taxpayer's income. Taxpayers must be able to show that a nonaccrual-experience method clearly reflects experience prior to adopting or changing to the method. The requirement to self-test provides an objective standard for making the determination. Therefore, the final regulations do not adopt the recommendation to omit a self-testing requirement and retain the rule that a taxpayer must maintain books and records sufficient to prove that the taxpayer's nonaccrual-experience method clearly reflects its experience for the taxable year of the exclusion.

Commentators stated that the self-testing requirements do not allow taxpayers the opportunity to demonstrate that a proposed method clearly reflects their experience, because under the 2003 regulations all methods must be compared to one of the safe harbors. The commentators stated that none of the safe harbors reflect actual experience, because all of the safe harbors are moving averages rather than a comparison of the estimated uncollectible amount for a taxable year under the taxpayer's nonaccrual-experience method to the actual collection experience of that taxable year's accounts receivable. Thus, the commentators stated, the safe harbors may or may not reflect actual experience as well as the proposed method.

The final regulations modify the self-testing requirements in response to these comments and eliminate the requirement in the 2003 regulations that a taxpayer's nonaccrual-experience method must be tested against one of the four safe harbor methods. The final regulations require that the taxpayer's nonaccrual-experience method must be tested against the taxpayer's actual experience, unless the taxpayer is using one of the safe harbor nonaccrual-experience methods, which are deemed to clearly reflect experience.

For taxpayers and the IRS to implement and administer the nonaccrual-experience method, the determination of actual experience is necessary. Although commentators stated that taxpayers should be allowed to use hindsight and that actual experience would require the use of data reflecting the portion of the subject accounts receivable that remain uncollectible, the commentators did not elaborate regarding what “remain uncollectible” means, nor did the commentators set the date at which accounts receivable “remain uncollectible.” The determination and proof of actual experience generally is a simple matter for taxpayers whose collection process with respect to the subject receivables is complete by the time the Federal income tax return is filed. The collection cycle for some taxpayers, however, may routinely span several taxable years. The commentators did not elaborate how such a factual determination could be made prior to filing the Federal income tax return for the applicable taxable year (or alternatively, prior to filing the method change request for the applicable taxable year) in cases in which a taxpayer's collection cycle for the receivables goes beyond the date for the filing of the return (or method change). For taxpayers with a longer collection process, the determination of the final actual experience is not possible by the time the Federal income tax return is filed, and may continue to be incomplete upon examination by the IRS, if the taxpayer's collection process with respect to receivables is still in process. Additionally, it is possible that accounts receivable written off in one taxable year may be recovered several taxable years later, even for taxpayers whose average collection cycle is short. Therefore, the final regulations reserve the determination of actual experience.

The IRS and Treasury Department anticipate providing future guidance that may change or restrict the rules for self-testing and may address the determination of actual experience. In the meantime, taxpayers may request advance consent to use a method other than a safe harbor method, but in the request taxpayers must establish to the satisfaction of the Commissioner how the determination of actual experience is made. Comments are requested concerning how to determine actual experience. Specifically, the IRS and Treasury Department seek comments on how the use of hindsight data can be made administrable. For example, how will the IRS National Office have the necessary data furnished with the application for change in method of accounting, and how will the taxpayer be able to timely perform the self-testing? In particular, should one, fixed determination date be used as a cut-off for all information included in the determination of actual experience? What facts and circumstances, known by the filing deadline for a change in method of accounting and the filing deadline for an original Federal income tax return, can a taxpayer and the IRS rely on to determine the taxpayer's actual experience for purposes of the first-year self-testing requirements for the application for change in method of accounting and for purposes of the three-year self-testing requirements for the filing of the Federal income tax return? For a taxpayer that is applying to adopt or change to a nonaccrual-experience method of accounting, should the taxpayer be allowed to rely on the results under the proposed method for the current taxable year compared to actual experience for old taxable years rather than a comparison of the results under the proposed method for the current taxable year compared to actual experience for the current taxable year at the time of filing, provided the taxpayer can demonstrate that there is not a change in the type of a substantial portion of the outstanding accounts receivable such that the risk of loss is substantially decreased? What standards should apply to a taxpayer who has had a change in the type of a substantial portion of the outstanding accounts receivable? If a taxpayer's business has changed in a manner that impacts a substantial portion of its outstanding accounts receivable, the taxpayer's historical data for its receivables could lose much of their relevance in determining the taxpayer's current nonaccrual experience.

The final regulations retain a modified version of the self-test from the 2003 regulations, which required the comparison of a taxpayer's method against one of the safe harbors. The safe harbor comparison method in the final regulations is used in conjunction with the fifth safe harbor nonaccrual-experience method, which allows a taxpayer to use any nonaccrual-experience method provided the method meets the safe harbor comparison method of self-testing. The safe harbor comparison method provided in the final regulations allows a taxpayer to compare the taxpayer's method against any of the safe harbors 1 through 4 during any self-testing period, rather than requiring the safe harbor chosen for comparison to be treated as a method of accounting. Because any of the safe harbors 1 through 4 are deemed to clearly reflect experience, a taxpayer should be able to compare its method against any of the safe harbors 1 through 4 to determine whether its method clearly reflects experience. The IRS and Treasury Department anticipate that the procedures for changes in method of accounting to use the new safe harbor nonaccrual-experience method will be provided in administrative guidance, and that these changes will be made with automatic consent.

The 2003 regulations provide, as part of the three-year self-test requirement, that if the taxpayer's cumulative alternative nonaccrual-experience amount excluded from income during the test period exceeds the taxpayer's cumulative safe harbor nonaccrual-experience amount, the taxpayer must recapture the excess into income in the third taxable year of the three-year self-test. The IRS and Treasury Department intended this recapture provision to allow minor variances or fluctuations produced by the taxpayer's nonaccrual-experience method without prohibiting continued use of the method. However, when the taxpayer's nonaccrual-experience method produces results that are more than minor variations or fluctuations from the three-year self-test amounts, the method does not clearly reflect the taxpayer's experience. The recapture provision addresses situations in which the taxpayer's nonaccrual-experience method generally clearly reflects experience, but the taxpayer has an anomalous taxable year in which the method does not clearly reflect experience. However, methods may consistently provide large distortions from the taxpayer's actual experience in future taxable years despite meeting the requirements of the first-year self-test. Consequently, the final regulations include a limit in the three-year self-testing provisions that, if exceeded, deems the taxpayer's nonaccrual-experience method to not clearly reflect the taxpayer's experience. Because the taxpayer must recapture the difference between the uncollectible amount under the taxpayer's nonaccrual-experience method and the taxpayer's actual experience, a change from the taxpayer's nonaccrual-experience method to a permissible method in the subsequent taxable year does not require a section 481(a) adjustment and is made on a cut-off basis.

Additionally, to provide transparency, the IRS and Treasury Department intend to provide in future guidance descriptions of methods and characteristics of methods combined with specific taxpayer circumstances that do not clearly reflect experience.

Commentators suggested that the self-test was not administrable in the context of consolidated groups. The IRS and Treasury Department believe that the final regulations do not impose more burden than any other method of accounting in the context of a consolidated group. Generally, methods of accounting, including the nonaccrual-experience method with its self-testing requirement, are adopted and applied separately by each entity within the consolidated group (or to separate trades or businesses within an entity), not at the consolidated group level.

The 2003 regulations have four safe harbors: Safe harbor 1 (the six-year moving average method), safe harbor 2 (the actual experience method), safe harbor 3 (the modified Black Motor method), and safe harbor 4 (the modified moving average method). Comments were received regarding safe harbors 1, 2, and 4. No comments were received regarding safe harbor 3.

Commentators questioned the need to impose different time periods for different safe harbor methods. For example, in the 2003 regulations, safe harbors 1, 3 and 4 are based on a six-year period (the current taxable year and the five immediately preceding taxable years), whereas safe harbor 2 is based on a three year period (the current taxable year and the two immediately preceding taxable years). These commentators recommended that, for consistency, the safe harbor methods should permit taxpayers to compute the uncollectible amounts using a period consisting of the current taxable year and no fewer than the two immediately preceding taxable years and no more than the five immediately preceding taxable years.

Providing options among the safe harbors, including those with different time periods, is consistent with legislative intent to provide taxpayers “with alternative computations or formulas that taxpayers may rely upon.” Different taxpayers may choose different methods with different time periods based on their individual circumstances and experience. The final regulations allow taxpayers flexibility to choose a period of at least three taxable years, but not more than six taxable years (applicable period), for purposes of the computations in each of the safe harbors. The taxable years included in the applicable period must be the most recent (which may or may not include the current taxable year, as applicable) and must be consecutive.

Additionally, commentators stated that including the current taxable year in computations can cause difficulties when preparing computations for estimated taxes. Therefore, the final regulations allow taxpayers flexibility with regard to whether the current taxable year is included in the applicable period. The choice of which taxable years and how many are included in the applicable period is part of the taxpayer's method of accounting under a safe harbor, and can be changed only with the consent of the Commissioner. Taxpayers making such a change may not have all the historical data necessary to compute a section 481(a) adjustment. Therefore, the final regulations provide that the change is done on a cut-off basis rather than with a section 481(a) adjustment.

Finally, some commentators reiterated their earlier suggestion that the Black Motor formula should be permitted as an additional safe harbor method. The IRS and Treasury Department continue to conclude that the Black Motor formula should not be provided as an additional safe harbor method because the formula overstates the uncollectible amount in many circumstances. The final regulations add a fifth safe harbor, which, as discussed above, allows taxpayers to use any alternative nonaccrual-experience method provided the method meets the requirements of the safe harbor comparison method under the self-testing requirements. The IRS and Treasury Department may provide additional safe harbors through future published guidance. In addition, if a taxpayer does not wish to rely on one of the safe harbors, the final regulations provide that a taxpayer may use any other alternative nonaccrual-experience method provided the method clearly reflects its experience and the taxpayer requests and receives consent from the Commissioner to use such method.

Commentators requested that the regulations specifically include a statement that unintentional or immaterial variances will not cause a taxpayer to be changed to the specific charge-off method. As discussed in the preamble to the 2003 regulations, the IRS and Treasury Department do not contemplate that a taxpayer be changed to the specific charge-off method due to unintentional or immaterial variances, especially if a taxpayer is disadvantaged by the variances. Such a rule is unnecessary, particularly with the flexibility added to each of the safe harbors

Safe harbor 1 in the 2003 regulations was referred to as the six-year moving average method. It is renamed the revenue-based moving average method in the final regulations to reflect the flexibility to choose between three to six taxable years for the applicable period. The final regulations provide that the revenue-based moving average percentage of safe harbor 1 (the ratio of net write-offs for the applicable period over accounts receivable earned over the same applicable period) is multiplied by a taxpayer's accounts receivable balance at the end of the taxable year to determine the taxpayer's nonaccrual-experience amount.

A commentator suggested that a safe harbor method should be added that would modify safe harbor 1 to multiply the revenue-based moving average percentage by a taxpayer's total billings (accounts receivable earned during the taxable year in lieu of its accounts receivable balance at the end of the taxable year). The commentator suggested that this new safe harbor would provide symmetry between the denominator of the revenue-based moving average percentage and the amount against which the revenue-based moving average percentage is multiplied.

The final regulations do not adopt this recommendation. The IRS and Treasury Department previously analyzed the effects of multiplying the revenue-based moving average percentage by the total billings during the taxable year and determined that this computation overstates that portion of the taxpayer's year-end accounts receivable balance that will not be collected. The existing formula is the method provided in former § 1.448-2T(e)(2), as contained in TD 8194, 53 FR 12513 (1988). Although the denominator and multiplicand are not symmetrical, the method accurately reflects the year-end receivables that will not be collected for taxpayers with a short collection cycle.

Under safe harbor 2 of the 2003 regulations, the taxpayer's adjusted nonaccrual-experience amount is determined by tracking the receivables in the taxpayer's accounts receivable balance at the beginning of the current taxable year to determine the dollar amount of the accounts receivable actually determined to be uncollectible and charged off and not recovered or determined to be collectible by the determination date. The determination date is the date selected by the taxpayer for the taxable year for purposes of safe harbor 2, and may not be later than the earlier of the due date, including extensions, for filing the taxpayer's Federal income tax return for that taxable year or the date on which the taxpayer timely files the return for that taxable year. Under Option A of safe harbor 2, the computation is repeated for the taxpayer's accounts receivable balance at the beginning of each of the two immediately preceding taxable years. Under Option B of safe harbor 2, taxpayers that do not have the information necessary to compute a three-year moving average in the first taxable year the method is used are allowed to transition into the method year-by-year. The total of the amounts determined to be uncollectible is divided by the total beginning accounts receivable balance for those taxable years used in the computation to determine the taxpayer's three-year (Option A), or up to three-year (Option B), moving average percentage. This percentage is then multiplied by the taxpayer's current year-end accounts receivable balance to arrive at the taxpayer's actual nonaccrual-experience amount. The taxpayer's actual nonaccrual-experience amount is then multiplied by 1.05 to determine the taxpayer's adjusted nonaccrual-experience amount.

As discussed above, the final regulations allow flexibility in the applicable period used in safe harbor 2. Additionally, because the final regulations provide definitions of terms used throughout the regulations for consistency, the terms used to describe the safe harbor 2 formula were changed to conform to the definitions in the final regulations. Although the description of the method may look as though it has changed substantially, the safe harbor 2 method is not intended to operate differently than the 2003 regulations, other than the flexibility in the applicable period and, as discussed below, the flexibility in the determination dates and in tracing recoveries.

Some commentators requested clarification as to whether safe harbor 2 is based on a computation that takes into account all known information arising both before and after the determination date. The commentators suggested that the 2003 regulations may be interpreted as taking into account only all known information arising on or before determination dates for previous taxable years involved in the computation.

The computation in safe harbor 2, Option A, in the final regulations, contemplates consideration of all known information arising on or before the determination date for the current taxable year, including beginning accounts receivable balances, charge-offs and recoveries, with respect to all taxable years included in the computation. For example, if an account receivable of a calendar year taxpayer exists on January 1, 2006, and is charged off as a bad debt on December 15, 2007, the bad debt should be included in the computation in the taxable year it is charged off and every subsequent taxable year for as long as the 2006 beginning of the year accounts receivable balance is part of the computation under this method. Consequently, the final regulations clarify that all known information arising on or before the determination date for the current taxable year, with respect to the taxable years included in the computation, should be considered.

In the 2003 regulations, Option B allows a taxpayer to transition into the actual experience safe harbor method. The final regulations allow a new taxpayer with no beginning accounts receivable to transition under either Option A or Option B ( see § 1.448-2(d)(4) of the final regulations). Option B in the final regulations differs from Option A in that it allows a taxpayer to use multiple determination dates (one for each taxable year of the applicable period) instead of one determination date. Therefore, under Option B in the final regulations, a taxpayer has a choice of the applicable period, three to six taxable years, and the taxpayer uses separate determination dates for each taxable year in the applicable period. That is, a taxpayer must use bad debts sustained by the separate determination date of each taxable year during the applicable period rather than bad debts sustained by the determination date of the current taxable year. The determination date used for each taxable year must be the determination date originally used for each taxable year at the time the uncollectible amount for that taxable year was computed. For example, if an account receivable of a calendar year taxpayer exists on January 1, 2006, and is charged off as a bad debt on December 15, 2007, and the determination date for the 2006 taxable year is September 1, 2007, the bad debt would never be included in the computation because it is charged off after the 2006 taxable year determination date. This method was requested by commentators to reduce the burden of having to update the total bad debts for a particular taxable year with every future computation that included that taxable year.

Other commentators requested clarification as to whether the determination date used in safe harbor 2 may shift from year to year. These commentators recommended that the final regulations confirm that a taxpayer may use a different determination date each taxable year, and that a change of determination date is not a change in method of accounting. Safe harbor 2 contemplates that a taxpayer may file its Federal income tax return at different times from year to year, and that the choice of a determination date used in the computation is not a method of accounting. However, once a determination date is selected and used for a particular taxable year, it may not be changed for that taxable year. Therefore, the final regulations clarify that the determination date may be different from year to year, and that a change in the determination date is not a change in method of accounting.

Under Option B of safe harbor 2, the 2003 regulations provide that a newly formed taxpayer that chooses Option B and does not have any accounts receivable upon formation will not be able to exclude any portion of its year-end accounts receivable from income for its first taxable year because the taxpayer does not have any accounts receivable on the first day of the taxable year that can be tracked. Some commentators recommended that the final regulations either permit newly formed taxpayers using Option B to exclude a portion of their year-end accounts receivable balance, or in the alternative, clarify the rules for adopting this safe harbor in the taxpayer's first taxable year in order to eliminate the administrative burden of filing Form 3115, “Application for Change in Accounting Method,” in the succeeding taxable year. The final regulations retain this special rule in § 1.448-(d)(4) for both safe harbor 2 and safe harbor 4, because the methods require a beginning accounts receivable balance to compute the uncollectible amount. Use of another method in the first taxable year may not clearly reflect experience. The final regulations clarify that the taxpayer must begin creating its moving average in its second taxable year by tracking the accounts receivable as of the first day of its second taxable year. The use of one of the safe harbor nonaccrual-experience methods of accounting described in paragraph (f)(2), (f)(4), or (f)(5), if applicable, of the final regulations in a taxpayer's second taxable year in this situation is not a change in method of accounting. Although the taxpayer must maintain the books and records necessary to perform the computations under the adopted safe harbor nonaccrual-experience method, the taxpayer is not required to affirmatively elect the method on its Federal income tax return for its first taxable year.

Commentators requested that safe harbor 2 be modified to permit taxpayers to use any reasonable method to determine recoveries. In response to commentators' concerns about whether taxpayers could use assumptions regarding recoveries rather than specifically trace, the preamble to the 2003 regulations stated that the IRS and Treasury Department do not intend that a taxpayer be changed to the specific charge-off method due to unintentional and/or immaterial variances, especially if the taxpayer is disadvantaged by such variances. Some commentators believe that despite the preamble, the 2003 regulations may require taxpayers to specifically trace 100% of recoveries. The IRS and Treasury Department did not intend to prevent taxpayers from using a method that allocates 100% of recoveries to current taxable year bad debts. Commentators also have stated that although some recoveries may be traceable, some recoveries may not be traceable due to lump sum recoveries from third parties.

The final regulations provide that a taxpayer specifically should trace recoveries if the taxpayer is able to do so without undue burden. However, the IRS and Treasury Department believe if the taxpayer is unable specifically to trace all recoveries without undue burden, the taxpayer should be able to use any reasonable method in determining the amount of recoveries to be traced to each taxable year's bad debts. Therefore, the final regulations allow taxpayers to use a reasonable allocation method. A method will be considered reasonable if there is a cause and effect relationship between the allocation base or ratio and the recoveries. The final regulations also provide that a taxpayer may trace only recoveries that are traceable and allocate the remaining, untraceable, recoveries to charge-offs of amounts in the relevant beginning accounts receivable balances. Methods that include, for example, receivables for which the nonaccrual-experience method is not allowed to be used ( see § 1.448-2(c)(1)(ii)) generally will not be considered reasonable.

Safe harbor 3 is a variation of the formula addressed in Black Motor Co. v. Commissioner , 41 B.T.A. 300 (1940), aff'd , 125 F.2d 977 (6th Cir. 1942). No comments were received regarding safe harbor 3. The final regulations adopt the method in the 2003 regulations, with minor revisions made to the terms used in the formulas to conform the terms used throughout the regulations.

The 2003 regulations provide that, for purposes of safe harbor 4, a taxpayer may determine the uncollectible amount by multiplying its accounts receivable balance at the end of the current taxable year by the ratio of total bad debts charged off for the current taxable year and the five preceding taxable years other than the credit charges (accounts receivable) that were charged off in the same taxable year they were generated, adjusted for recoveries of charge-offs during that period, to the sum of accounts receivable at the end of the current taxable year and the five preceding taxable years.

Some commentators argued that, by eliminating credit charges that were written off in the same taxable year they were generated, the effect of this computation for a taxpayer's first taxable year is to eliminate the intended benefit of section 448(d)(5). These commentators recommended that the final regulations permit newly formed taxpayers using safe harbor 4 to exclude a portion of their year-end accounts receivable balance, or in the alternative, clarify the rules on adopting this safe harbor method in the taxpayer's first taxable year in order to eliminate the administrative burden of filing Form 3115 in the succeeding taxable year.

This safe harbor method, like safe harbor 3, is a variation of the formula addressed in Black Motor Co. v. Commissioner. Safe harbor 4, by eliminating credit charges that were written off in the same taxable year they were generated, and thereby reducing the amount computed under the traditional Black Motor formula, remedies known shortcomings generally associated with the Black Motor formula, and as such, more accurately reflects a taxpayer's nonaccrual-experience. Therefore, the final regulations retain this rule.

Another commentator pointed out that there is a mismatching in the comparison of write-offs to accounts receivable in the formula used in safe harbor 4 because it compares the total accounts written off in a taxable year after the year of sale to the ending balances in accounts receivable for the six-year period. For example, the sum of the write-offs in each taxable year for the preceding taxable years' charges for services in year 7 is for services rendered in years 1 through 6, but the ending balances in accounts receivable are from years 2 through 7. This commentator opined that, if charges for services and accounts receivable are increasing, the ratio of write-offs from prior balances relative to current receivables would be understated and therefore the uncollectible amount would be understated. The commentator suggested that the sum of the write-offs in each taxable year for the preceding taxable years' charges for services should be divided by the sum of the beginning accounts receivable for the current and five preceding taxable years. The final regulations adopt this recommendation and, for purposes of safe harbor 4, the denominator is changed to reflect the beginning of the taxable year accounts receivable balances in lieu of accounts receivable balances at the end of the taxable year.

A commentator recommended that the final regulations clarify that newly formed or acquired taxpayers in a section 351(a) or 721(a) nontaxable transaction are allowed to use predecessor data to compute their uncollectible amount under the nonaccrual-experience method. The final regulations adopt this comment and provide special rules for acquisitions and dispositions. Taxpayers that acquire a major portion of a trade or business or a unit of a trade or business (for example, a hospital) should include the data from the predecessor in the computations to avoid potentially skewing the computations for the remainder of the applicable period. Additionally, taxpayers that dispose of a major portion of a trade or business or a unit of a trade or business should not use the data related to the disposed trade or business in the computations. For purposes of the nonaccrual-experience methods of accounting, a new, qualified taxpayer that acquires property in any transaction to which section 381(a) does not apply must adopt a nonaccrual-experience method on the basis of its own experience. However, to the extent predecessor information is available, the data must be used in the newly-adopted nonaccrual-experience method.

Some commentators recommended that the book-tax difference that may result from the use of the nonaccrual-experience method not be taken into account in determining whether a transaction is a reportable transaction for purposes of the disclosure rules under § 1.6011-4(b)(6). As a result of Notice 2006-6 (2006-5 I.R.B. 385), book-tax differences no longer create reportable transactions under § 1.6011-4(b)(6). Therefore, it is not necessary to adopt this recommendation.

As discussed, the 2003 regulations generally provide procedures for taxpayers that have fewer than the requisite number of taxable years to adopt or change to a safe harbor nonaccrual-experience method. Some commentators requested rules on how taxpayers may compute their nonaccrual-experience amount in the case of a short taxable year. Commentators opined that for certain safe harbors, such as safe harbors 2, 3 and 4, inaccurate income exclusion can arise because a short taxable year will have a disproportionate effect on the numerator and denominator of the computations. For example, a taxpayer that has a relatively stable balance of accounts receivable but a short period, such as three months, may generate only one-fourth of the normal write-offs. These commentators recommended that the final regulations provide that, if a taxpayer experiences a short taxable year, the net write-offs for the short period should be annualized in order to prevent distortion of the safe harbor computation. Alternatively, these commentators suggested that taxpayers should be allowed to include data from the previous twelve months in the safe harbor computation. For example, for a calendar year taxpayer who experiences a short period ending March 31st, the taxpayer would use data from the twelve months prior to the period ending on March 31st to compute its nonaccrual-experience amount.

The final regulations provide that taxpayers must make appropriate adjustments for short taxable years for nonaccrual-experience methods that are based on a comparison of accounts receivable balance to total bad debts. The IRS and Treasury Department intend to issue administrative guidance on appropriate adjustments.

As with the 2003 regulations, the final regulations provide, in § 1.448-2(d)(2), that a taxpayer applies its nonaccrual-experience method with respect to each specific account receivable eligible for the method. The preamble to the 2003 regulations states that a taxpayer may continue to use the periodic system described in Notice 88-51 (1988-1 C.B. 535) in conjunction with any permissible nonaccrual-experience method used by the taxpayer. The use of a periodic method remains permissible under § 1.448-2(d)(2) of the final regulations.

These final regulations are applicable to taxable years ending on or after August 31, 2006. A commentator recommended that the final regulations be applied retroactively to allow taxpayers to settle any open taxable year in which the nonaccrual-experience method is an issue under consideration in examination, in Appeals, or before the U.S. Tax Court by using one of the safe harbor methods, and thus, avoid continued disagreements between the government and taxpayers. The final regulations do not adopt this recommendation. However, the Commissioner may settle an earlier taxable year on the basis of a safe harbor method that clearly reflects the taxpayer's experience.

The 2003 regulations include specific rules for filing an application to change to a nonaccrual-experience method of accounting. The final regulations omit these rules, which will be provided in administrative guidance. The guidance will include automatic consent procedures for filing an application to change to one of the safe harbor nonaccrual-experience methods of accounting.

To adopt or change to a method other than one of the safe harbor nonaccrual-experience methods of accounting, a taxpayer must request advance consent under the current procedures for obtaining the consent of the Commissioner of Internal Revenue to change a method of accounting for Federal income tax purposes ( see , for example, Rev. Proc. 97-27 (1997-1 C.B. 680) (as modified and amplified by Rev. Proc. 2002-19 (2002-1 C.B. 696), as amplified and clarified by Rev. Proc. 2002-54 (2002-2 C.B. 432)). In the interest of sound tax administration, a new taxpayer must request advance consent to adopt a method other than one of the safe harbor nonaccrual-experience methods to ensure that the method clearly reflects income and experience.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) and (d) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. It is hereby certified that the collection of information contained in these regulations will not have a significant regulatory impact on a substantial number of small entities. This certification is based upon the fact that the estimated burden associated with the information collection averages three hours per respondent. Moreover, for taxpayers that are eligible to use these regulations and that follow these regulations, any burden due to the collection of information in these regulations will be outweighed by the benefit received by accruing less income than would otherwise be required. Accordingly, a regulatory flexibility analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, the proposed regulations preceding these regulations were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

The principal author of these regulations is W. Thomas McElroy, Jr. of the Office of Associate Chief Counsel (Income Tax and Accounting). However, other personnel from the IRS and Treasury Department participated in their development.

This document contains amendments to the Procedure and Administration Regulations (26 CFR part 301) under section 6502 of the Internal Revenue Code (Code). The regulations reflect the amendment of the Code by section 3461 of the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 1998), Public Law 105-206 (112 Stat. 685, 764).

On March 4, 2005, a notice of proposed rulemaking (REG-148701-03) relating to collection after assessment was published in the Federal Register (70 FR 10572). No public hearing was requested or held. Written and electronic comments responding to the notice of proposed rulemaking were received. After consideration of all the comments, the proposed regulations are adopted as amended by this Treasury decision. The revisions are discussed in this preamble.

Pursuant to section 6502 of the Code, the IRS generally has 10 years from the date of assessment to collect a timely assessed tax liability. Prior to January 1, 2000, the effective date of section 3461 of RRA 1998, section 6502 permitted the IRS to enter into agreements with the taxpayer to extend the period of limitations on collection at any time prior to the expiration of the period provided in section 6502. Prior to the enactment of RRA 1998, the IRS used these collection extension agreements, or waivers, in various circumstances to protect its ability to collect a tax liability beyond the original 10-year period of limitations on collection. For example, the IRS historically conditioned consideration of an offer in compromise upon the execution of a collection extension agreement or waiver.

In addition, the Code contains several provisions that operate to toll the period of limitations on collection upon the occurrence of certain events. For example, section 6331(k) operates in part to suspend the period of limitations on collection for the period of time during which an offer in compromise is pending, for 30 days after rejection, and while a timely filed appeal is pending. Similarly, section 6503(h) operates to suspend the period of limitations on collection for the period of time during which the IRS is prohibited from collecting a tax due to a bankruptcy proceeding, and for 6 months thereafter. These statutory suspension provisions toll the period of limitations on collection even if the period of limitations on collection previously has been extended pursuant to an executed collection extension agreement. See Klingshirn v. United States (In re Klingshirn ), 147 F.3d 526 (6th Cir. 1998).

Section 3461 of RRA 1998 amended section 6502 of the Code to limit the ability of the IRS to enter into agreements extending the period of limitations on collection. Section 3461 of RRA 1998 also included an off-Code provision governing the continued effect of collection extension agreements executed on or before December 31, 1999.

The final regulations incorporate the amendments made by section 3461 of RRA 1998. The regulations provide that the IRS may enter into an agreement to extend the period of limitations on collection if an extension agreement is executed: (1) At the time an installment agreement is entered into; or (2) prior to release of a levy pursuant to section 6343, if the release occurs after the expiration of the original period of limitations on collection.

One set of comments received in response to the notice of proposed rulemaking recommended that the final regulations: (1) Deem void all waivers signed prior to January 1, 2000, in conjunction with installment agreements that did not provide for payment in full of the underlying tax liability by the extended collection statute expiration date; and (2) provide that all taxpayers who have made payments since December 31, 2002, on such installment agreements are entitled to a refund of such payments. Because such provisions are beyond the scope of the underlying statute, they are not included in the final regulations.

Another set of comments received in response to the notice of proposed rulemaking concerned an inconsistency between the language of section 3461(c)(2) and a proposed alternative date of expiration for extension agreements made on or before December 31, 1999.

The notice of proposed rulemaking provided that extension agreements executed on or before December 31, 1999, other than those executed in connection with installment agreements, expire on the later of: (1) December 31, 2002, or if earlier, the date on which the extension agreement expired by its terms; or (2) the end of the original 10-year statutory period. The comments reflect that the language of the proposed regulations is inconsistent with the language of the statute. Few cases exist in which waivers executed on or before December 31, 1999, are still open under the statutory framework. Thus, there is no longer a need to address this provision in final regulations.

To the extent that the notice of proposed rulemaking differs from the final regulations, it is withdrawn as of the effective date of the final regulations.

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

The principal author of these regulations is Debra A. Kohn of the Office of the Associate Chief Counsel (Procedure and Administration), Collection, Bankruptcy & Summonses Division.

As authorized by the VOCA, OVC generally provides Federal financial assistance to states for the purpose of compensating and assisting victims of crime, provides funds for training and technical assistance services for victims of Federal crime, and provides funding and services for victims of terrorism and mass violence. This program is funded by fines, fees, penalty assessments, and bond forfeitures paid by federal offenders, as well as gifts from private individuals, deposited into the Crime Victims Fund in the U.S. Treasury.

On August 24, 2005, at 70 FR 49518, OJP published a proposed rule to implement the provisions of the (ITVERP). All comments concerning this rule were to be received by October 22, 2005. As a result of that publication, OVC received sixteen public comments. Eight of the comments came from individuals who had been victims of acts of international terrorism that occurred abroad. Two came from national victim assistance organizations, one of which represents the VOCA-funded victim assistance organizations in the fifty-six relevant jurisdictions. Three comments were from individual state victim compensation boards, one was from a Federal agency, one was from a professional trade organization, and one was from an interested individual. Other than a few syntactical or grammatical changes of a technical, non-substantive nature, after careful review of all comments, OVC has made only two minor modifications, clarifying the definition of “victim” in § 94.12(u)(2) (reworded to clarify which persons may be considered victims) and expanding the definition of “collateral source” in 94.12(c)(2).

OVC offers the following issue analysis to provide additional details on the purpose and operation of the ITVERP.

Twelve individuals or representatives of groups submitted comments regarding the scope of coverage of the program. These comments generally asked for the coverage of the program to be expanded in various ways. As detailed below, OVC thoughtfully considered each of these comments.

As noted in the Notice of Proposed Rulemaking, OVC recognizes that little or no support may be given by other countries to American nationals who are victims of acts of international terrorism events that occur abroad and that state programs differ in how they treat residents who are victimized abroad. Moreover, victims of acts of international terrorism that occur outside the United States face unique obstacles in securing assistance and support. Against this background of variation in compensation levels, the authorizing statute indicates that the major purpose of the ITVERP is to reimburse “victims of acts of international terrorism that occur outside the United States for expenses associated with that victimization” (42 U.S.C. 10603c(b) (emphasis added)). Thus, the program—by statute—is intended to ensure a basic level of support for immediate and out-of-pocket expenses associated with such victimization.

OVC also wishes to note that the ITVERP will cover a broader range of expenses than the types of emergency expenses that have been provided to date through the existing discretionary program operated by the FBI in conjunction with the Department of State and OVC. Some emergency claims that were previously denied may thus fall within the ITVERP's scope. Therefore, victims who have received prior emergency assistance may wish to review their prior payments in relation to the limits established by this program, and submit such additional claims to the ITVERP, if warranted.

Eight of the comments requested an expansion of the categories of reimbursable expenses, and one requested an increase of the limits of the existing categories. Requests for specific types of expenses are discussed below, but, as noted above, the goal of the program—by statute—is to provide a basic level of support for American nationals who are victims of acts of international terrorism that occur outside the United States. OVC encourages victims to avail themselves of additional sources of compensation, which may include reimbursements either from other sources above the ITVERP limitations or for categories of expenses not covered by the ITVERP. Closely adhering to the statutory mandate of reimbursement for expenses provides greater stability to the program. By keeping the ITVERP focused on direct, out-of-pocket expenses, consistent with the statutory authorization, OVC can ensure that funding will be available for all victims in the dreadful event that another act of international terrorism should occur overseas involving a large number of eligible victims.

Seven comments requested that the program be expanded to include lost wages among the reimbursable expenses. This request was often coupled with a request that the program cover loss of support. Three of these comments came from state victim compensation boards, two came from national victim assistance organizations, one came from a Federal agency, and one came from an injured victim. Three of the comments noted that although states (which cover lost wages and loss of support) are not required to compensate victims of international terrorism, many continue to do so. Thus, they conclude, such victims will need to apply to both State and Federal programs to receive compensation in those categories. The commenters point out, however, that not all state programs provide the same level of compensation.

As designed by OVC, the ITVERP sets a standard level of expense reimbursement assistance, but allows a victim to seek assistance from several sources, which necessarily means filing a claim or application for each source. Inasmuch as the program—by statute—is not intended to be comprehensive, of necessity it does not foreclose access to other sources of support or compensation. Although states are no longer required by the VOCA to provide assistance to victims of acts of international terrorism that occur outside the United States, they certainly may do so. In particular, states may offer compensation beyond the limits set by the ITVERP, or they may choose to fund categories of expenses not considered reimbursable under the ITVERP, such as lost wages and loss of support. As with noneconomic losses (such as pain and suffering or attorney's fees), lost wages and loss of support are not immediate and out-of-pocket expenses, and thus, by statute, are not covered under the ITVERP.

Four comments (two by state victim compensation boards, one by a national victim assistance group, and one by a federal agency) either asked for clarification of the intended coverage for family members or suggested that the ITVERP's scope be expanded to define additional family members as victims. Although state compensation statutes tend to define a wider range of family members as victims, the ITVERP's authorizing statute clearly limits reimbursement to victims who “suffered direct physical or emotional injury or death” (42 U.S.C. 10603c(a)(3)(A)(i)). These “direct victims” may be reimbursed for expenses in any category up to the allowable cap.

In limited circumstances, as noted in the statute (42 U.S.C. 10603c(a)(3)(B)), and clarified in the regulation's definitions (§ 94.12(u)(2)), the following family members of persons who “suffered direct physical or emotional injury or death” may be considered victims in their own right: (1) Spouse; (2) children; (3) parents; (4) siblings; and (5) other persons at the discretion of the Director, provided such persons have established sufficient ties to the direct victim. (An example of an “other person” might be a grandparent who had been rearing a child who was killed in an act of international terrorism.) This expansion of the definition of victim occurs only in the following three circumstances: (1) When the direct victim dies as a result of the act of terrorism; (2) when the direct victim is under 18 years of age (or is incompetent or incapacitated) at the time of the act of terrorism; or (3) when the direct victim is rendered incompetent or incapacitated at the time or as a result of the act of terrorism. Because of the expense-based nature of the program, these additional victims would directly qualify only for mental health care, within the ITVERP limits. Nevertheless, a family member who is considered a victim in his own right, and thus able to file a claim for mental health counseling, may also file a claim on behalf of the direct victim if he is also the victim's representative ( i.e. , a family member or legal guardian authorized to file the claim).

Aside from close family members who may be considered victims in their own right (see 42 U.S.C. 10603c(a)(3)(B)), family members or others may be reimbursed for expenses paid on behalf of the direct victim. Although the direct victim or one family member (or legal guardian) will be authorized to file the actual claim and receive the reimbursement, the funds may then be distributed among others who have paid for reimbursable expenses on behalf of the direct victim. Thus, for example, one family member may pay the victim's medical expenses, another may pay travel expenses for the victim, and a third may file the claim as the victim's representative. The family member filing the claim would receive the reimbursement under the ITVERP and would then act as a fiduciary to distribute the money to the appropriate family members who had actually paid the expenses.

A brief example may help to further illustrate. Suppose an individual were injured in a qualifying act of international terrorism. If the victim were not younger than 18 years of age, incompetent, incapacitated, or deceased, a single claim for reimbursable expenses could be filed by either the victim or the victim's representative. This claim could include reimbursable expenses actually paid by one or more other individuals, such as medical expenses or the travel expenses of up to two family members to assist the victim in the country where the act of terrorism took place. Although such expenses were initially paid by others, the claim for reimbursement would be based on the injury suffered by the person who is the direct victim. Other family members, such as the spouse, children, or parents of the victim, would not be eligible to file a claim on their own behalf for mental health counseling or other assistance. If the direct victim were younger than 18 years of age, incompetent, incapacitated, or deceased, then a single claim would still be made on behalf of the direct victim. This claim would still include any expenses paid by others on behalf of the victim, such as funeral expenses or the emergency travel of up to two family members. In addition, family members such as the spouse, children, parents, and siblings of the direct victim, would also be able to file individual claims for mental health counseling on their own behalf. Such additional victims would not be eligible for other expense reimbursement as part of their individual claim. They would, however, still be able to receive reimbursement for expenses paid under the claim of the direct victim.

Five comments (three by victims, one from a state victim compensation board, and one from a federal agency) involved suggestions for reimbursement in categories that are already covered by the ITVERP under certain circumstances. For example, tuition payments are considered a reimbursable expense for the direct victim if the schooling is related to retraining required as a direct result of the injury. This may include, for example, training for using TDD equipment, prosthetic limbs, Braille, and other vision and physical aids. Similarly, expenses for rehabilitation training to assist victims in adjusting to a new work environment would be reimbursed under the ITVERP. (See the table in the Appendix to Subpart A for examples.)

One commenter suggested expanding this existing education coverage to include tuition for a surviving spouse to return to school. Another suggestion was for future tuition for the children of a deceased victim. Because the ITVERP is restricted by statute to direct reimbursement to victims for actual out-of-pocket expenses resulting from the act of international terrorism, such expenses related to normal educational needs of the victim or surviving family members cannot be covered.

Along similar lines, immediate childcare costs may be considered reimbursable miscellaneous expenses when they are necessary for the children of the direct victim, or for the children of a deceased victim's family members who travel to the country where the act of international terrorism occurred to care for the victim or recover the victim's remains. Long-term childcare expenses, however, are more akin to personal expenses than immediate direct expenses attributable to the act of terrorism, and for that reason they cannot be covered by the ITVERP.

Emergency travel for up to two family members is a reimbursable miscellaneous expense in a variety of circumstances. This includes traveling to care for the direct victim or to recover the deceased victim's remains. Travel expenses will be covered to the country where the incident occurred, in most instances, but it may be to other locations depending on the circumstances (e.g., travel to a hospital in another country to which the victim has been evacuated).

A family member of a deceased victim inquired as to the specific items allowable as funeral expenses. Reimbursable expenses include a variety of costs associated with the return and disposition of the victim's remains, including markers, flowers, and costs related to memorial services, up to the cap on costs. Activities of a religious nature that are reasonably related to funeral and burial expenses are reimbursable. Other than the category cap, the primary limitation in this category is that the expense be for a “reasonably related activity.”

One comment by a professional trade group suggested that the definition of “burial costs” be expanded to be more consistent with the FTC regulatory provision on funerals (16 CFR 453 (1999)). The commenter wanted to ensure that the ITVERP regulation would not limit burial options for a family, such as the choice between an “earth burial” or cremation. As noted above, the coverage of burial costs is intended to be as inclusive as possible of all customs, cultures, and religious faiths. As an integral part of the grieving process, no family should be constrained by this program in observing appropriate burial customs in a manner and method decided by the family. To this end, and upon review of the language in the FTC rule, OVC does not believe that limiting reimbursement to the current language adopted by the FTC would be appropriate. Rather, OVC continues to read the existing language expansively, as a method to provide for wide coverage of burial expenses, consistent with the specific needs of each family. As noted previously, the ITVERP does not limit those options, other than to impose a reasonable spending cap of $25,000 for merchandise or activities reasonably related to funeral and burial costs, which can be directed according to the wishes of the family.

One commenter, a victim of international terrorism, requested that the program make interim emergency payments. The ITVERP already allows for interim emergency payments when the Director of OVC determines such payment is necessary to avoid or mitigate substantial hardship. Once the ITVERP becomes operational, such interim emergency payments will be possible for victims of future acts of international terrorism.

One comment by a victim pointed out that insurance carriers exclude costs associated with acts of international terrorism, or may cancel policies following a terrorist event. Changes to insurance industry practices would need to be effected by other legislative action and are beyond the purview of these regulations.

One victim suggested that under the ITVERP any final taxes owed by a deceased victim should be forgiven by the Internal Revenue Service, as they were for victims of the 9/11 attacks and the Oklahoma City bombing. Although the Victims of Terrorism Tax Relief Act of 2001 currently forgives final taxes for deceased victims of specified terrorist attacks, coverage with respect to other acts of international terrorism outside the United States would require an amendment to the Act or new legislation.

Individuals receiving reimbursements under the ITVERP should consult the Internal Revenue Service (and state taxing authorities, as appropriate) to determine the tax status of such reimbursements. The IRS has in the past limited tax exposure in situations of state compensation payments. It is anticipated that once OJP adopts final regulations for the ITVERP program, OVC will request that the IRS independently determine the appropriate tax status for expense reimbursements under the ITVERP.

Five comments (three from victims, one from a Federal agency, and one from an interested individual) suggested that some or all of the category caps were too low, particularly for the mental health category. The purpose of the ITVERP is to help victims mitigate certain economic losses occasioned by the terrorist event. Placing caps on reimbursement categories helps to ensure that funds will be available for future victims of international terrorism abroad. By statute, the program is not designed to insure against all losses. For example, reimbursement for property loss is intended to help victims replace items that are necessary for immediate daily living. The expectation is that families living abroad or on extended travel would avail themselves of the opportunity to purchase additional medical or travel insurance and insure items of substantial value (e.g., home, household goods, automobile). Similarly, funding for mental health counseling is intended to provide immediate counseling intervention, not long-term therapy. As with lost wages, which are not reimbursable under the ITVERP, programs funded under the Victims of Crime Act of 1984 (VOCA) may provide compensation in additional categories or in amounts above the ITVERP caps, and victims are encouraged to apply to such state programs.

Seven of the comments (three from state victim compensation boards, one from a national victim advocacy group, one from a federal agency, and two from victims) were related to collateral sources as defined in § 94.12(c) and described in § 94.25. Four of the comments requested clarification of the relationship between the ITVERP and state compensation programs. Two comments concerned payments received from a foreign government. The seventh comment concerned prior payments made under another Federal statute.

The Uniting and Strengthening America by Providing Appropriate Tools Required To Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), Public Law 107-56, eliminated the requirement for state crime victim compensation programs to pay compensation to victims in cases of international terrorism abroad. Accordingly, the ITVERP is the primary federally-funded reimbursement source for these victims. State crime victim compensation programs may elect to continue to provide compensation to victims of international terrorism abroad in categories not covered under the ITVERP, or in amounts beyond the ITVERP's category caps. If a state chooses to compensate residents who are victims of international terrorism outside the United States, it does so as a payer of last resort. Although the state may consider federal ITVERP payments as collateral source payments that diminish its payment obligations, state supplemental compensation payments will not reduce Federal payment obligations. In other words, if the state chooses to provide additional payments to victims who have received specific payments under the ITVERP, those payments will be considered supplemental support and not collateral sources for purposes of the Federal program. If the ITVERP and the state program provide reimbursement for identical expenses, the ITVERP is considered the initial payer. Moreover, international terrorism victims are not required to apply to state compensation programs before filing an application for reimbursement under the ITVERP. This policy is in line with the current practice and permits state compensation programs to retain their status as the payers of last resort.

For example, suppose that after an international terrorist event a victim were to apply for and receive full reimbursement under an ITVERP category, but outstanding expenses remain. A state compensation program is not required by VOCA to make additional payments under that category. The state may, however, elect to make supplemental payments (under that category) to the victim. Additionally, for expenses under categories that are not covered under the ITVERP, the state compensation programs may continue to reimburse the victim within the state's approved limit. Furthermore, any such supplemental or additional payments may be counted in a state's certified payout of victim compensation expenses, and therefore eligible for inclusion in the calculation of future state compensation awards under VOCA.

Two comments (both from victims) asked for clarification of the extent to which payments from a foreign government would affect ITVERP payments to victims. One commenter suggested that the regulations would cause hardship to victims if foreign payments are counted as collateral sources. Section 94.25 of the regulation specifically provides that any payment from the United States or a foreign government in the form of general compensation (e.g., a lump sum or structured payment) will be considered a collateral source. As such, an award under the ITVERP would be reduced by the amount of payment(s) by the foreign government (or the claimant would subrogate the United States to the extent of the ITVERP award if it is paid first). If, however, the payment from the United States or a foreign government is for reimbursement of a specific category of expenses that is not covered under the ITVERP or is a supplemental reimbursement beyond the ITVERP category cap, the reimbursement will not be considered a collateral source, and will not reduce the reimbursement the claimant receives from the ITVERP. Although unsatisfied judgments against foreign governments may be collateral sources under the final rule, in principle the ITVERP award is not intended to limit victims' options in seeking collateral source payments from other sources to cover otherwise non-compensated expenses. The intent is to ensure that funds are available to reimburse the basic expenses of victims, by not allowing the receipt of money from more than one source to cover the same expense. This may result in a slight reduction in reimbursements for some victims. In any event, further to the foregoing discussion (and comments from the Department of State), some clarifying changes have been made to the definition of collateral sources in the final rule.

ITVERP is an expense reimbursement program. As such, ITVERP funds are available to reimburse the victim for specific expenses (as opposed to a general compensation program). To ensure fiscal integrity, the program is designed to prevent duplication of payments. Thus, reimbursements by collateral sources for specific expenses below the cap are not exempted as there can only be one reimbursement for each specific expense. Nevertheless, the intent is that under no circumstances should total reimbursements under ITVERP exceed actual expenses. Where expenses are less than the ITVERP reimbursement plus any collateral sources, the claimant would be required to return the excess ITVERP payment. In the event that expenses are covered by another source, the claimant cannot be reimbursed for the same expense under ITVERP.

A comment from a Federal agency expressed concern about whether victims might receive a compensatory damage award from another Federal government source, such as the U.S. Treasury, and still be eligible for reimbursement under the ITVERP. As noted above, a victim would not be eligible under § 94.25 to receive reimbursement from the ITVERP for an expense for which he has already received reimbursement. Compensatory damage awards, by definition, typically make payment based on specific losses incurred. In cases where there are such awards, the ITVERP would not reimburse a victim for those expenses already covered by the award. If, however, a Federal government payment constituted supplemental reimbursement for a specific expense beyond the maximum amount reimbursed for that expense covered by the ITVERP, such payment would not be considered a collateral source, and would not diminish the amount to which a victim would otherwise be entitled under the ITVERP.

One comment by a victim indicated concern that the ITVERP would be uniformly applied to United States citizens as well as eligible noncitizens. The ITVERP statute specifically defines “victim” to include someone who is “a national of the United States or an officer or employee of the United States Government,” 42 U.S.C. 10603c(a)(3)(A)(ii), which expressly includes certain non-citizens. In addition, as previously noted in the section on Family Members , if the direct victim was younger than 18 years of age, incompetent, incapacitated, or deceased, additional family members would be considered victims for purposes of obtaining mental health counseling (42 U.S.C. 10603c(a)(3)(B)). Such family members need not be United States citizens or officers or employees of the United States to be eligible. The commenter also questioned whether reimbursement should be available only to innocent victims. The statute addresses this issue by creating an express statutory exception that “in no event shall an individual who is criminally culpable for the terrorist act or mass violence receive any compensation under this section, either directly or on behalf of a victim” (42 U.S.C. 10603c(a)(3)(C)).

Three comments (one from a national victim assistance group, one from a federal agency, and the third from a victim) related to application procedures. The national organization expressed its support for the statutory provision allowing retroactive filing of claims back to December 1988, and for the provision allowing for extensions (at the discretion of the Director) of the three-year deadline for filing applications (see § 94.32).

The national organization and the victim suggested that it was difficult for claimants who may be operating in a state of shock to remember to retain original receipts, especially after a substantial amount of time has elapsed. Although the regulation requires original receipts for the expenses to be reimbursed, § 94.31 takes into account situations where original receipts may not be available. In such cases (at the discretion of the Director of OVC), the claimant may submit an itemized list of expenses along with a certification that the original receipts are unavailable and a statement attesting that the items and amounts submitted in the application are true and correct to the best of the claimant's knowledge.

One of the state victim compensation boards submitted a comment expressing concern about the confidentiality of the information submitted by the claimants. Specifically, the commenter was concerned that the initial ITVERP application, any supporting documents, and the appeal material would become a public record. The organization was concerned that measures should be taken to safeguard the privacy of the victim and the victim's family.

Application materials and other supporting documents received from claimants will be maintained in accordance with the U.S. Department of Justice's applicable Privacy Act System of Records notice. The Freedom of Information Act contains an exemption that protects the privacy rights of individuals by prohibiting the disclosure of information that would constitute a clearly unwarranted invasion of privacy. In addition, 42 U.S.C. 10604(d) specifically prevents release of such information, except pursuant to Federal law.

Two comments (one from a national victim assistance organization and one from an interested individual) requested additional clarification of the term “emergency responder.” Section 94.41(u)(1) indicates that “victim” has the meaning given in 42 U.S.C. 10603c(a)(3)(A). Because of the statutory requirement of “direct physical or emotional injury as a result of international terrorism,” the term “victim” is understood to include three basic groups of individuals (all of whom are required by the Statute to be either United States nationals, or officers or employees of the United States Government): (1) Those who were present during the act of terrorism (i.e., those who might be thought of as traditional victims); (2) individuals who were present during the immediate aftermath of the act which would include those who immediately assist at the site (e.g., “good Samaritans”); and (3) emergency responders who assisted in efforts to search for and recover other victims. The common definition of “emergency responders” includes those who are mission-essential personnel involved in the search and rescue or recovery of other victims. Traditionally, this includes police officers, firefighters, and medical personnel engaged in these activities. Others may also be included depending on the circumstances of the act of terrorism; for example, if the act resulted in a collapsed building, structural engineers and construction workers would likely be directly involved in the rescue and recovery efforts.

One comment by a state victim compensation board requested clarification regarding whether multiple claims may be opened in the name of one victim, and if not, how the ITVERP would select the qualified claimant for each victim. As an expense reimbursement program, the ITVERP is designed to ensure that those who pay for certain expenses on behalf of a victim are reimbursed. There must be some limitation, however, to reduce the administrative burden in implementing this program, while at the same time ensuring that the appropriate individuals are reimbursed. The regulation establishes an effective system for achieving those goals by requiring, except in extraordinary circumstances, that a single claim be filed by each individual victim (or his representative if the victim is younger than 18 years of age, incompetent, incapacitated, or deceased). For that reason, there shall ordinarily be only one claimant with respect to each victim. A claimant submitting a claim for reimbursement as the victim's representative must certify that he is a family member or legal guardian authorized to submit the claim. When multiple sources have contributed toward payment of the victim's expenses, limiting reimbursement to a single claimant entrusts the victim (or the victim's representative) with the fiduciary obligation to distribute reimbursements, as appropriate, within the funding caps of the regulation.

The only exception to the principle of a single claimant or previously-authorized representative relates to interim emergency payments. Section 94.41 of the regulation allows for the possibility that in emergency situations there may be a need for others, such as a family member or consular officer, to submit a claim on behalf of the victim, to facilitate immediate treatment or travel. In such emergency situations, the claimant is considered a representative of the victim for that limited emergency purpose only. After the emergency has passed, the victim (or his representative, if the victim is younger than 18 years of age, incompetent, incapacitated, or deceased) would be substituted as the claimant and would submit all subsequent or supplemental claims.

As previously noted in the Family Members section, if the direct victim is younger than 18 years of age, incompetent, incapacitated, or deceased, § 94.12(u)(2) specifies those family members who may also be considered victims. In such cases, these additional victims are eligible for reimbursement for mental health counseling and could file individual claims in their own right.

One comment by a state victim compensation board requested clarification regarding how a U.S. Embassy would handle the collection and distribution of funds on behalf of a victim in the limited circumstance when a consular officer is authorized to file a claim on behalf of a victim. The commenter specifically wondered if the funds would be put in trust for the victim. Section 94.12(t) specifies that a U.S. consular officer or U.S. embassy official may receive money on behalf of a victim only if “no family member or legal guardian is available to file a claim for an interim emergency payment on behalf of a victim under § 94.41.” A review of instances in which a U.S. consular officer would need to file for such emergency expenses confirms that all such transfers are expected to occur according to currently established U.S. Department of State rules, which require strict accountability through use of a trust. Because the Department of State has already established strict accountability rules to govern the disbursement of funds on behalf of American citizens abroad, the Department of Justice will honor those rules in implementing the ITVERP.

In the rare circumstance in which the amount of funds in an emergency disbursement exceeds the actual amount necessary (e.g., medical evacuation costs were less than expected), excess funds would be transferred back to the Antiterrorism Emergency Reserve of the Crime Victims Fund. Those funds would again be available for supplemental claims, provided the expenses were under the cap for that category.

One comment from an interested individual expressed concern that the eligibility restriction found in § 94.21(c)(3)(iii) would exclude all victims of an act of international terrorism if the act occurred in a country for which the Department of State has issued a travel warning. Although § 94.21(c)(3)(iii) indicates a restriction of eligibility based on travel warnings, the restriction depends on two pre-conditions. First, § 94.21(c)(3) requires that the victim “(As a non-U.S. Government employee), [was] acting as an advisor, consultant, employee, or contractor, in a military or political capacity.” Thus, U.S. Government employees would not be excluded by the restriction of § 94.21(c)(3); in addition, a non-U.S. Government employee would be eligible unless that individual were working in a military or political capacity. Second, the § 94.21(c)(3)(iii) restriction applies only to countries where the travel warning was issued in relation to “armed conflict.” The Department of State maintains a list of countries for which it has issued travel warnings, some of which relate to armed conflict and others of which do not; these warnings may be accessed via the Internet at http://www.travel.state.gov/travel . (Please note that under § 94.21(c)(4) eligibility is predicated on the fact that a victim has not engaged in grossly reckless conduct which contributed materially to his death or injury.)

For example, the Department of State issued a travel warning for Nigeria on December 1, 2005, based on “increasing crime in Lagos, as well as unrest in the Delta”; in contrast, the travel warning issued on November 22, 2005, for Haiti was based on concern over “violent confrontations between armed groups”: If an incident were declared an act of international terrorism, the warning for Nigeria would not trigger a restriction in eligibility under the ITVERP, but the warning for Haiti could trigger a restriction on eligibility if the non-U.S. employee was acting as an advisor, consultant, employee, or contractor, in a military or political capacity.

This regulation has been drafted and reviewed in accordance with Exec. Order No. 12866, section 1(b), 58 FR 51, 735 (Sept. 30, 1993), Principles of Regulation. OJP has determined that this regulation is a “significant regulatory action” under Executive Order No. 12866, and accordingly, this regulation has been reviewed by the Office of Management and Budget.

This regulation will not have a substantial direct effect on the states, on the relationship between the national government and the states, or on distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Exec. Order No. 13132, 64 FR 43, 255 (Aug. 4, 1999), it is determined that this regulation does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.

This regulation has no cost to state, local, or tribal governments, or to the private sector. The ITVERP is funded by fines, fees, penalty assessments, and forfeitures paid by federal offenders, as well as gifts from private individuals, deposited into the Crime Victims Fund in the U.S. Treasury, and set aside in the Antiterrorism Emergency Reserve Fund, whose funds may not be obligated in an amount above $50 million in any given year. The cost to the Federal Government consists both of administrative expenses and amounts reimbursed to victims. Both types of costs depend on the number of claimants, prospective as well as retroactive. Although spending is anticipated to be higher in the initial years as a result of the number of potential retroactive claimants (approximately 900), the program will not spend more than the statutory maximum of $50 million each year.

This regulation will not have a significant economic impact on a substantial number of small entities. This regulation has no cost to State, local, or tribal governments, or to the private sector. The ITVERP is funded by fines, fees, penalty assessments, and bond forfeitures paid by Federal offenders, as well as gifts from private individuals, deposited into the Crime Victims Fund in the U.S. Treasury. Therefore, an analysis of the impact of this regulation on such entities is not required under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ).

The collection of information requirements contained in this regulation has been submitted to the Office of Management and Budget, pursuant to the Paperwork Reduction Act (44 U.S.C. 3506). Applicants seeking reimbursement from this program will be required to submit an official application form (the International Terrorism Victim Expense Reimbursement Program Application), that has been created by OVC. This application is a new information collection instrument that will be used to collect necessary information from and about the victims and claimants regarding expenses incurred by them, to be used by OVC in making a reimbursement determination. The total number of initial respondents (including both direct victims and family members) for this collection is estimated to be 2,000. This represents the estimated number of claimants who are currently eligible to request reimbursement under the ITVERP. The total initial public burden associated with this initial information collection is estimated to be approximately 1,500 hours. The amount of time for an average respondent to respond/reply is estimated to be approximately 45 minutes.

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

On June 20, 2005, VA published in the Federal Register (70 FR 35388) a proposal to revise VA's rules regarding the reconsideration of decisions on claims for benefits based on newly discovered service records received after the initial decision on a claim. Interested persons were invited to submit written comments on or before August 19, 2005. We received comments from the National Organization of Veterans' Advocates and three members of the public.

We are making two changes to 38 CFR 3.156(c)(2) based on internal agency reconsideration. First, we are revising the title of the Joint Services Records Research Center (JSRRC). In the proposed rulemaking, we stated the title as Center for Research of Unit Records (CRUR), which is incorrect. Instead, we will state the correct title in the regulation, which is Joint Services Records Research Center. Second, we are inserting the word “because” after “, or” in the first sentence of § 3.156(c)(2) to improve readability. We are not altering the substantive content of the paragraph by making these changes.

One commenter stated that she supported this rulemaking and that clarification of the rules currently in § 3.156 is needed. We appreciate this comment and believe that this rulemaking will improve the clarity of that regulation.

One commenter stated that in the proposed rule, we use the phrase “whichever is later” in numerous places. The commenter stated that if we are clarifying retroactive effective dates, the term should be “former”, as it would mean “before the date VA uses to base the effective date.”

At § 3.156(c)(3), the proposed regulation states:

As stated in the proposed rulemaking, proposed § 3.156(c)(2) is derived from current 38 CFR 3.400(q), regarding effective dates for awards based on new and material evidence. Section 3.400, VA's regulation regarding effective dates, uses the terminology “date of receipt of the claim or the date entitlement arose, whichever is the later.” This language is derived from 38 U.S.C. 5110, the authorizing statute for effective dates, which states that “the effective date of an award * * * shall be fixed in accordance with the facts found, but shall not be earlier than the date of receipt of application therefor.” The statute and the current regulation thus require that the effective date of the award be the later of the date of entitlement or the date VA received the application for the benefit. As such, the use of the term “later” in the proposed regulation is consistent with the statute and VA's long-standing terminology regarding effective dates. We believe the phrase “whichever is later” is well understood by claimants, their representatives, and VA staff. We therefore make no change based on this comment.

One commenter stated that VA should clearly define the phrases “effective on the date entitlement arose or the date VA received the previously denied claim, whichever is later,” “or such other date”, and “except as it may be affected by the filing date of the initial claim.”

These phrases, from proposed § 3.156(c)(3) and (4), all are based on language from VA's regulation regarding effective dates, § 3.400. In the proposed regulation, we are conforming the effective date provision to VA's existing regulations regarding effective dates. We believe these terms are well understood by claimants, their representatives, and VA staff. The meaning of the phrase “effective on the date entitlement arose or the date VA received the previously denied claim, whichever is later,” is discussed above and we do not believe further clarification is needed as to that phrase.

As to the second phrase referenced by the commenter, proposed § 3.156(c)(3) would state that the effective date of an award based on newly discovered service department records is the date entitlement arose or the date VA received the previously decided claim, whichever is later, or “such other date as may be authorized by the provisions of this part applicable to the previously decided claim.” Certain VA regulations authorize effective dates other than the date entitlement arose or the date VA received the claim. For example, if a claim for disability compensation was received within one year of separation from service, the effective date under 38 CFR 3.400(b)(2)(i) may be the day following separation from service. The reference to “such other date” merely indicates that VA will apply such effective-date provisions when they are controlling with respect to the previously decided claim.

As to the third phrase, proposed § 3.156(c)(4) states that, when an award is made based on new service department records, the disability rating assigned by VA for any past period will accord with the medical evidence of record “except insofar as [the rating] may be affected by the date of the initial claim.” This limitation merely reflects the rule, discussed above, that the effective date of any award or rating may be affected by the date of the initial claim for benefits. Because we believe these three phrases are sufficiently clear, we make no change based on this comment.

This commenter additionally expressed concern with proposed paragraph (c)(2), which states that VA cannot reconsider a claim under paragraph (c)(1) based on records that “did not exist when VA decided the claim.” The commenter asks how it is possible that records of a veteran could not exist, and seems to ask how it is possible that relevant records could be created after a claim has been denied. In proposed paragraph (c)(2), we are referring to records such as modified discharges and corrected military records. The effective date of an award based on such evidence is controlled by 38 U.S.C. 5110(i) and is beyond the scope of this rule. Hence, proposed paragraph (c)(2) expressly states that the proposed regulation does not apply in such cases. Therefore, we make no change based on this comment.

One commenter addressed the provision in the proposed rule at § 3.156(c)(2), which states that the provisions of subsection (c)(1) will not apply when the claimant fails to provide sufficient information for VA to identify and obtain the records. The commenter stated that this language is contrary to VA's duty to assist under 38 U.S.C. 5103A(c)(1). The commenter asserted that this statute limits VA's duty to obtain some records unless the claimant has furnished information sufficient to locate the records, but contains no limitation on the duty of VA to obtain service medical records.

As an initial matter, we note that this rule does not purport to define the scope of VA's duty to assist claimants under section 5103A. Rather, the purpose of this rule is to clarify long-standing VA rules, issued pursuant to the Secretary's general authority under 38 U.S.C. 501(a), which authorize VA to award benefits retroactive to the date of a previously decided claim when newly discovered service department records are received. The scope of this rule is not intended to be coextensive with the scope of VA's duty to assist claimants. Section 5103A, as enacted in 2000 by the Veterans Claims Assistance Act of 2000 (VCAA), Public Law No. 106-475, requires VA to assist claimants in obtaining evidence to substantiate their claims, including service medical records. If VA fails to provide such assistance in any claim to which that law applies, a claimant may seek direct administrative or judicial review to ensure VA's compliance with section 5103A. This rule will not affect any individual's rights under section 5103A. The provisions of section 3.156(c), which predate by decades the enactment of the VCAA, do not prescribe rights or duties concerning VA assistance in developing evidence but, rather, prescribe standards for reopening previously denied claims and establishing the effective dates of awards in such reopened claims. Because this rule does not affect any claimant's rights under 38 U.S.C. 5103A, it does not conflict with section 5103A.

Further, we believe that newly discovered service medical records ordinarily would provide a basis for retroactive benefits in disability compensation claims under this rule as proposed, if the provisions of the rule are otherwise met. Proposed § 3.156(c)(2) refers to circumstances in which the claimant failed to provide information sufficient for VA to identify and obtain the records at issue. When a claim for disability benefits is filed, VA seeks to obtain a complete copy of the veteran's service medical records from the service department. Accordingly, with respect to service medical records, a completed application form that sufficiently identifies the veteran's branch and dates of service will ordinarily be sufficient to enable VA to obtain the veteran's service medical records. If a newly discovered service department record is one that VA should have received at the time it obtained the veteran's service medical records, we believe it ordinarily would be within the scope of proposed § 3.156(c)(1). However, some types of service records would not commonly be associated with a veteran's service medical records even though they may reflect or otherwise relate to treatment or hospitalization during service. With respect to such records, we believe a determination must be made on a case-by-case basis as to whether the claimant provided VA with sufficient information to identify and obtain the record at the time of the prior claim. Therefore, we make no change based on this comment.

A commenter discussed that when a claimant is denied benefits for a disability, and then files a new claim based on a post-service change in diagnosis, and that claim is granted, the effective date should be the date of the original claim. This comment is outside the scope of the proposed regulation. The proposed regulation addresses new service medical records, while the comment addresses a new diagnosis in post-service records. Therefore, we make no change based on this comment.

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

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

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

Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Order classifies a rule as a significant regulatory action requiring review by the Office of Management and Budget if it meets any one of a number of specified conditions, including: having an annual effect on the economy of $100 million or more, creating a serious inconsistency or interfering with an action of another agency, materially altering the budgetary impact of entitlements or the rights of entitlement recipients, or raising novel legal or policy issues. VA has examined the economic, legal, and policy implications of this final rule and has concluded that it is a significant regulatory action under Executive Order 12866.

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

The Catalog of Federal Domestic Assistance program numbers and titles for this proposal are 64.100, Automobiles and Adaptive Equipment for Certain Disabled Veterans and Members of the Armed Forces; 64.101, Burial Expenses Allowance for Veterans; 64.102, Compensation for Service-Connected Deaths for Veterans' Dependents; 64.104, Pension for Non-Service-Connected Disability for Veterans; 64.105, Pension to Veterans Surviving Spouses, and Children; 64.106, Specially Adapted Housing for Disabled Veterans; 64.109, Veterans Compensation for Service-Connected Disability; and 64.110, Veterans Dependency and Indemnity Compensation for Service-Connected Death.

On August 22, 2002, VA published in the Federal Register (67 FR 54394) a proposal to amend those portions of the Schedule for Rating Disabilities that address cardiovascular and respiratory conditions by providing guidelines for the evaluation of these conditions and by explaining that hypertension will be evaluated separately from hypertensive and other types of heart diseases. Interested persons were invited to submit written comments on or before October 21, 2002. We received a combined comment from the American College of Chest Physicians, the American Thoracic Society, and the National Association for Medical Direction of Respiratory Care.

VA currently uses the ratio of FEV-1 (Forced Expiratory Volume in one second) to FVC (Forced Vital Capacity), or FEV-1/FVC ratio, to evaluate certain respiratory conditions. Proposed 38 CFR 4.96(d)(7) would direct raters to consider a decreased FEV-1/FVC ratio to be normal if the FEV-1 is greater than 100 percent. The rationale was that in that case the FVC would also be high (better than normal), so a decreased ratio would not indicate pathology. The commenter suggested that we not use the ratio but, rather, use 100 percent of predicted value. Because a decreased ratio could indicate pathology, but not disability, the commenter suggested we delete the statement in the preamble to the proposed rule that a decreased ratio is not indicative of pathology. Because the statement noted by the commenter was not part of the proposed regulatory language, but was made in the preamble to the proposed rule, it would have had no regulatory effect. Nevertheless, we agree with the rationale of this suggestion. Therefore, we will address the commenter's suggestion by changing the regulatory language in § 4.96(d)(7) to the following: “If the FEV-1 and the FVC are both greater than 100 percent, do not assign a compensable evaluation based on a decreased FEV-1/FVC ratio.”

Chronic bronchitis (diagnostic code 6600), pulmonary emphysema (diagnostic code 6603), chronic obstructive pulmonary disease (diagnostic code 6604), interstitial lung disease (diagnostic codes 6825-6833), and restrictive lung disease (diagnostic codes 6840-6845) are evaluated primarily on the basis of pulmonary function tests (PFT's). However, these conditions may also be evaluated based on alternative evaluation criteria, which may include measures of the maximum exercise capacity; the presence of pulmonary hypertension (documented by echocardiogram or cardiac catheterization), cor pulmonale, or right ventricular hypertrophy; episode(s) of respiratory failure; and a requirement for outpatient oxygen therapy. For example, a 100-percent evaluation for these conditions may be based on a maximum exercise capacity test result of less than 15 ml/kg/min oxygen consumption (with cardiac or respiratory limitation), and a 60-percent evaluation may be based on a maximum exercise capacity test result of 15 to 20 ml/kg/min oxygen consumption (with cardiac or respiratory limitation). We proposed that PFT's be required to evaluate this group of respiratory conditions except, among other exceptions, when the results of a maximum exercise capacity test are of record and are 20 ml/kg/min or less. We also proposed that if a maximum exercise capacity test is not of record, the veteran's disability evaluation would be based on alternative criteria. The commenter stated that since most of the patients with these respiratory conditions have a low exercise tolerance, using the results of only effort-dependent tests would make it easy for some marginal patients to qualify for compensation for their respiratory condition. The commenter stated that exercise tests should be considered maximal and should be performed after PFT results do not fully explain symptomatology.

The vast majority of veterans with respiratory diseases are evaluated on the basis of PFT results. Since the disability due to respiratory disease in veterans ranges from minimal to very severe, and veterans of all ages and all degrees of physical conditioning undergo examinations for respiratory disability, it would be speculative to say that most have a low exercise tolerance. The regulations do not require that a maximum exercise capacity test be conducted in any case, and it is not routinely conducted. If there is already a maximum exercise capacity test of record, and the results are 20 ml/kg/min or less, evaluation (at a 60- or 100-percent level, depending on the exact results) may be based on these results. If no maximum exercise capacity test is of record, as would be true in most cases, this regulation directs that evaluation be based on the alternative criteria. In any given case, the examiner may request, based on clinical judgment, that a maximum exercise capacity test be conducted, such as in cases where the PFT's do not fully explain symptomatology. However, the maximum exercise capacity test is not available in some medical facilities, and evaluation will properly be based in some cases on the clinician's assessment of severity based on history, physical findings, and available laboratory tests. We therefore make no change based on this comment.

The commenter stated that the diagnostic codes in the VA rating schedule for the listed conditions in the proposed rule were confusing and suggested that VA use the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) diagnostic coding system that is used throughout the United States in the health care delivery system. For several reasons, we believe that using ICD-9-CM codes is not a reasonable option.

First, ICD-9-CM and the VA rating schedule serve very different purposes. The ICD-9-CM is used by medical professionals in diagnosing medical conditions. The rating schedule is used by VA personnel in assigning evaluations to conditions that have been diagnosed by medical professionals for VA compensation purposes. The rating schedule is not simply a listing of conditions and symptoms. It includes evaluation criteria for each of the more than 700 disabilities listed. VA also rates disabilities not listed in the rating schedule to the most analogous disability that is listed there. Also, despite its length, the ICD-9-CM does not include certain conditions that VA must commonly evaluate, such as specific muscle injuries. For example, the criteria under diagnostic code 5301 in the rating schedule govern the evaluation of injuries to muscle group I (trapezius, levator scapulae, and serratus magnus). There are 23 muscle groups listed in the VA rating schedule that govern the evaluation of injuries to those muscle groups, and each of the 23 muscle groups has its own set of evaluation criteria based on the severity of the injuries affecting specific muscle functions. Six of them refer to various muscle injuries of the shoulder and upper arm. In contrast, ICD-9-CM code 959.2 covers injuries to the axilla and scapular region of the “Shoulder and upper arm,” which is as specific as ICD-9-CM gets for these injuries. Over 350,000 veterans are currently evaluated under VA's muscle injury criteria, which are commonly used for evaluating residuals of combat injuries, such as gunshot and shell fragment wounds. Such VA diagnostic codes are therefore of great importance to VA in evaluating veterans with combat wounds, and also provide useful information for statistical purposes.

Other problems would arise from replacing VA's diagnostic codes with the ICD-9-CM codes. ICD-9-CM's high level of specificity for some conditions would make use by raters difficult, since in some cases a specific code would apply, while in others only the general code would be required for rating purposes. Another issue is that VA has special codes for certain combined disabilities—loss or loss of use of an arm and loss or loss of use of a leg, for example—which have special significance for VA rating purposes, but which have no equivalent in ICD-9-CM. For these reasons, VA does not believe that using ICD-9-CM codes to indicate veterans' disabilities for purposes of compensation would be feasible or useful. We therefore make no change based on this comment.

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

This document contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).

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

Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Order classifies a rule as a significant regulatory action requiring review by the Office of Management and Budget if it meets any one of a number of specified conditions, including: Having an annual effect on the economy of $100 million or more, creating a serious inconsistency or interfering with an action of another agency, materially altering the budgetary impact of entitlements or the rights of entitlement recipients, or raising novel legal or policy issues. This document has been reviewed by the Office of Management and Budget under Executive Order 12866.

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

EPA is now taking final action to approve two of four requested revisions to the (SIP) for the Commonwealth of Kentucky submitted to EPA on March 15, 2001, and clarified in a letter dated July 18, 2001. The SIP submittal and the letter-clarification were submitted by the Kentucky Department for Environmental Protection, Division of Air Quality. The two revisions being approved today regard two main changes to Kentucky's rules. The first change involves the removal and separation of rule 401 Kentucky Administrative Regulations (KAR) 50:035 (“Permits”) into three separate rules under a new Chapter 52 (Permits, Registrations, and Prohibitory Rules). Specifically, these rules are 52:001 (Definitions for 401 KAR Chapter 52), 52:030 (“Federally-enforceable permits for non-major sources”), and 52:100 (“Public, affected state, and U.S. EPA review”). The second change involves corrections to grammatical errors in rule 50:032 (“Prohibitory Rule for Hot Mix Asphalt Plants”) and the removal of rule 50:032 from Chapter 50 and adding it to Chapter 52, under 52:090 (“Prohibitory Rule for Hot Mix Asphalt Plants”). Today's final action also responds to one set of adverse comments submitted in response to EPA's proposed rule published on December 30, 2002 (67 FR 79543). Today's final action does not address the removal of 401 KAR 50:030 (“Registration of Sources”) or changes made to 401 KAR 52:080 (“Regulatory limit on potential to emit”), which will be addressed in a separate action. Therefore, today's final action approves a total of four rules into the Kentucky SIP; 401 KAR 52:001, 401 KAR 52:030, 401 KAR 52:090, and 401 KAR 52:100 and the removal of rules 401 KAR 50:032 and 401 KAR 50:035. This final action is consistent with section 110 of the Clean Air Act.

On December 30, 2002, EPA simultaneously published a proposed rule (67 FR 79543, December 30, 2002) and a direct final rule (67 FR 79523, December 30, 2002) to approve the above described revisions to the Kentucky SIP, submitted by Kentucky on March 15, 2001. Because EPA received one set of adverse comments during the public comment period, EPA withdrew the direct final rule on February 10, 2003 (68 FR 6629). Today, EPA is taking final action on the Kentucky SIP revisions proposed for approval on December 30, 2002, as well as responding to the set of adverse comments received on that proposed action, with the exception of the portions of the March 15, 2001, submittal noted above.

EPA received comments from one commenter who opposed the proposed revision to the Kentucky SIP published on December 30, 2002 (67 FR 79543). A summary of the adverse comments received on the proposed rule and EPA's response to the comments, is presented below.

Comment: The commenter requests that EPA: (1) Reject approval of 401 KAR 52:001 and 401 KAR 52:100 and reject incorporation of these provisions into 40 Code of Federal Regulations (CFR) Part 52, Subpart S; (2) provide an additional comment period if EPA proposes to approve any non-emergency amendment of 40 CFR part 52, subpart S; (3) command that all prevention of significant deterioration (PSD) portions of 40 CFR part 124 apply to PSD permitting actions by Kentucky; and (4) cancel all authority that EPA gave to Kentucky to issue PSD permits.

Response: The following response will address each of the issues raised in the above comment in turn. First, the provisions contained in 401 KAR 52:001 (“Definitions for 401 KAR Chapter 52”) and 401 KAR 52:100 (“Public, affected state, and U.S. EPA review”) are required to be a part of the Kentucky SIP. Both the definitions and the public review provisions are consistent with federal requirements for the programs to which they apply. Therefore, the proposed rules are approvable into the Kentucky SIP. As a point of clarification, 401 KAR 52:001 and 52:100 relate specifically to Kentucky's Clean Air Act (CAA) title V permit program and Kentucky's Federally Enforceable State Operating Permit (FESOP) program. Kentucky's PSD permit rules, found in 401 KAR Chapter 51, refer to the public review provisions of 401 KAR 52:100, but only to the extent that such provisions are more stringent than the public review provisions found in the federal rule, 40 CFR 51.166(q).

Second, the Kentucky SIP, like many other SIPs, is regularly amended. Most recently, EPA proposed revisions to the Kentucky SIP on February 10, 2006 (71 FR 6988). This revision dealt specifically with Kentucky's PSD regulations. No public comments were received. The commenter failed to state any reason why the comment period for the present proposal (67 FR 79543) should be reopened.

Third, the commenter's request to expand the applicability of 40 CFR part 124 is not relevant to the present action which does not propose any changes to 40 CFR part 124. 40 CFR part 124 governs EPA procedures for certain permit actions (e.g., issuance, termination), but it does not apply to PSD permits issued by approved state agencies (40 CFR 124.1(e)). Rather, the public review procedures of PSD permits issued by an approved state are governed by 40 CFR 51.166(q). Kentucky's PSD regulations (401 KAR 51:017) require that Kentucky follow the public review procedures in 40 CFR 51.166(q), and any more stringent requirements existing in 401 KAR 52:100.

Fourth, the present action does not relate to Kentucky's authority to issue PSD permits, and therefore, EPA cannot “cancel” Kentucky's authority to issue PSD permits at this time.

Comment: EPA must act to provide a “swift and certain remedy,” (1) where KAR is different from 40 CFR 52.21(b) through (w); or (2) where KAR provides less effective technical environmental protection, less effective opportunity for public participation in the permitting process, or less effective legal forums and processes for review of questioned decisions.

Response: The proposed SIP revision at issue (67 FR 79543) relates only to specific portions of the KAR and it does not relate to Kentucky's PSD regulations. Therefore, the comment is not relevant to the proposed action. Nonetheless, as a point of clarification, 40 CFR 52.21 contains the Federal PSD program (i.e., if EPA were administering the PSD program). States may meet the requirements of the federal regulations with different but equivalent rules. As noted earlier, Kentucky recently revised its PSD program. That revision was noticed in the Federal Register and no public comments were received. It is not clear from the comment what “swift and certain remedy” the commenter requests EPA to take, but the comment is not relevant to the proposed action at issue at this time.

Comment: 401 KAR 52:100 is patently and callously contemptuous of the intent of the Federal Clean Air Act.

Response: The commenter fails to provide information demonstrating how 401 KAR 52:100 is “contemptuous” of the Clean Air Act (CAA). 401 KAR 52:100 is consistent with federal regulations promulgated pursuant to EPA's authority under the Clean Air Act.

Comment: There appears to be no parallel in the CAA or the CFR to 401 KAR 52:100, Section 2(3)(c), which grants the applicant ten (10) days of exclusive lawful speech. The commenter believes that this provision is not consistent with the CAA and 40 CFR 124.13. The commenter also believes that if the applicant cannot comment within the same timeframe as the public, then the PSD permit should not be issued to the applicant.

Response: As noted earlier, the provisions included in 40 CFR part 124 do not apply to the issuance of PSD permits by approved states. With regard to the comment about 401 KAR 52:100, Section 2(3)(c), a state may satisfy the Federal regulations with different but equivalent regulations, and a state may include additional procedures not included in the Federal regulations so long as the rule is not less stringent. This provision is not less stringent and does not impact the public's ability to comment on the proposed action. 401 KAR 52:100 is equivalent to the Federal regulations for the programs to which it applies and it is approvable into the Kentucky SIP.

As a point of clarification, this additional comment period is not an opportunity for the applicant to comment on the proposed permit, but rather, an opportunity for the applicant to respond to public comments received during the public comment period. This response to comments by the applicant is discretionary (i.e., the applicant may or may not actually provide such comments). Further, the response by the applicant is useful for both the reviewing agency and the public because it establishes a forum in which the applicant is responding to the public's concerns. The response to comments document is made part of the public record. Many state permitting programs include this provision to allow for a forum in which the applicant can respond to public comments and assist in public understanding of the issues in the application.

Comment: There appears to be no effective provision in 401 KAR 52:100 for extension of comment time. The commenter references 40 CFR 124.13, which allows for a comment period longer than 30 days to give reasonable opportunity to reply if such a need for time is demonstrated.

Response: As a general matter, the provisions of 40 CFR part 124 apply only to EPA and not to approved states. For state approved programs, such as CAA title V or PSD permit programs, the applicable public participation regulations are found in the federal regulations applicable to that specific state approved program. For example, for title V purposes, state programs must comply with the public participation provisions described in 40 CFR part 70; for PSD purposes, state programs must comply with the public participation provisions described in 40 CFR 51.166(q). 401 KAR 52:100 is consistent with the federal regulations for the programs to which it applies.

Comment: The commenter expresses that Section 3 of 401 KAR 52:100 is written as if a public hearing is optional. The commenter refers to the CAA and suggests that a hearing is obligated for many PSD matters.

Response: Kentucky's PSD regulations (401 KAR 51:017) require that the permitting authority follow the applicable procedures of 40 CFR 51.166(q) and 401 KAR 52:100.

Comment: The commenter states that citizens, in an area where a new major source is to be located or where an existing source is requesting a major modification, should be entitled and informed of the public participation process including five elements. These elements obligate a hearing if there is a request; affords time, such as at least 30 calendar days prior to the hearing during which citizens may familiarize themselves with the draft, the technical support of the draft, and the application; grant to anyone who makes some cogent timely comment, the legal standing right to appeal any issue raised by anyone's cogent timely comment; obligate that if a cogent technical comment is made orally at the hearing, that it has the full force of law and that it need not be submitted by the speaker in writing in order to be an item preserved for review (although encouraging written submissions for accuracy and courtesy to the permitting agency is proper), and; afford time, such as at least 12 calendar days following the hearing, during which citizens may timely file written comment on the draft after having had the opportunity to have heard the matters expressed in the hearing. The commenter further requests that EPA initiate rulemaking for various regulatory permit programs to “codify” certain public participation elements.

Response: With regard to the actions at issue at this time, Kentucky's provisions are equivalent to applicable federal regulations. Therefore, Kentucky's rules proposed for inclusion into the SIP are approvable by EPA.

Comment: The commenter expresses that Section 5 of 401 KAR 52:100 does not contain “identical, synonymous, or superior text as a notice requirement.” The commenter points to a January 2002 legal notice published by the Kentucky Division for Air Quality (KDAQ) as an example of a deficient public notice.

Response: In accordance with Kentucky's rules, public notice and participation on PSD permits is governed by 40 CFR 51.166(q). It is unclear whether the commenter believes that the KDAQ January 2002 legal notice fails to comply with the provisions in the Kentucky rules which apply to such notices. Nonetheless, the SIP action proposed by EPA on December 30, 2002, does not relate to the January 2002 public notice on a PSD permit discussed by the commenter. Comments regarding specific PSD permits and corresponding public notices should be raised during the public comment period on that permit and addressed to the agency responsible for issuing that permit. This comment is not relevant to the action at issue at this time.

Comment: The commenter asserts that the requirements of 40 CFR 51.166 are “terse to the point of near meaninglessness” and do not comply with Congressional intent for public participation. The commenter makes a similar statement regarding portions of 40 CFR part 124. The commenter gives specific examples of what a public notice could include.

Response: Neither of the provisions cited by the commenter are at issue in this final action regarding Kentucky's SIP. Both provisions are final federal rules that have been in effect for years. Comments regarding federal rules should have been provided within the timeframes for challenging such rules (i.e., when EPA proposes changes to federal rules, comments must be submitted within the stated timeframes in order to be considered by EPA for that rulemaking). The present action will have no impact on 40 CFR 51.166 or 40 CFR part 124.

Comment: The commenter notes that Section 2(4) of 401 KAR 52:100 will make public comments available upon request and believes the comments may be abridged, which does not meet the requirements set forth in 40 CFR 51.166.

Response: The commenter appears confused about the application of 401 KAR 52:100 to different air permit programs. As noted earlier, Kentucky's PSD permitting regulations require that the permitting authority follow the provisions described in 40 CFR 51.166 for public participation. 401 KAR 52:100 applies specifically to CAA title V operating permits (401 KAR 52:020) and Federally Enforceable State Operating Permits (FESOPs) (401 KAR 52:030). The language included in 401 KAR 52:100 is equivalent to federal regulations regarding public participation for the programs to which it applies. Therefore, the regulations proposed by Kentucky for inclusion in the Kentucky SIP are approvable.

Comment: The commenter states that much of 401 KAR 52:001 does not meet requirements established in 40 CFR 51.166(a). The commenter identifies several examples where the commenter believes that definitions in 401 KAR 52:001 are less stringent than the federal definitions, or otherwise problematic. As examples, the commenter cites to the definition of “electric utility steam generating unit,” “commence,” and “major modification.”

Response: Kentucky's PSD permitting definitions are found in 401 KAR 51:001, not 52:001. Kentucky's rules, including 401 KAR 52:001, are equivalent to the applicable federal regulations, and are approvable into the Kentucky SIP. Notably, the definitions included in Kentucky's PSD permit program (401 KAR Chapter 51) were recently revised by Kentucky to include new regulations promulgated by EPA in December, 2002. EPA published a notice regarding Kentucky's PSD program in the Federal Register on February 10, 2006 (71 FR 9688); no public comments were received on that proposed action. EPA took final action to approve those changes on July 11, 2006 (71 FR 38990).

Comment: With regard to a statement in 67 FR 79524 (the direct final rule that was withdrawn), the commenter states that “[t]he people are reasonably entitled to review EPA's work again prior to EPA granting any additional misplaced authority to a rogue state.”

Response: The procedure followed by EPA in the present action included the simultaneous publication of both a direct final rule (67 FR 79524, December 30, 2002) and a proposed rule (67 FR 79543, December 30, 2002). As noted in the direct final action, when EPA receives adverse comments on direct final rules, EPA withdraws the direct final rule and issues a final rule based on the simultaneously published proposed rule. EPA withdrew the direct final rule on February 10, 2003 (68 FR 6629). EPA's review of the proposed SIP revision by Kentucky was comprehensive. EPA is now taking final action based on the proposal, and addressing the one set of adverse comments received on the proposed action.

Comment: The commenter states that 67 FR 79523 and 79543 are devoid of explanation for the proposed addition of 401 KAR 52:001 and 401 KAR 52:100. The commenter further notes that 40 CFR part 52, subpart S is defective.

Response: EPA disagrees with the commenter's statement. The two Federal Register notices cited by the commenter include specific information regarding what actions are being taken by EPA. The Kentucky SIP contains rules that are equivalent to the applicable Federal rules. The commenter fails to provide any reason why 40 CFR part 52, subpart S is defective.

Comment: The commenter states that Kentucky should be sanctioned for having acted in contempt of the CAA.

Response: The commenter has not provided any information demonstrating how Kentucky has acted in “contempt” of the CAA. This comment does not appear relevant to the action proposed by EPA regarding the Kentucky SIP. EPA disagrees with the commenter's conclusion regarding sanctions.

Comment: The commenter states that there can be no doubt that Kentucky knowingly and intentionally submitted to EPA rules that provide less effective technical environmental protection; less effective opportunity for informed public participation in the permitting process; and less effective legal forums and processes for review of questioned decisions than that given to those where 40 CFR 52.21 and 40 CFR part 124 are fully applicable to PSD permits.

Response: EPA has no information or evidence suggesting that Kentucky has knowingly and intentionally violated any provision of the CAA or its implementing regulations. As noted earlier, 40 CFR part 124 does not apply to PSD permits issued by state permitting authorities and likewise, the provisions in 40 CFR 52.21 govern only EPA issuance of PSD permits.

Comment: The commenter appears to state concern regarding the time that EPA took to review the Kentucky SIP revision at issue.

Response: In reviewing the Kentucky SIP revision at issue, EPA followed its SIP processing guidance, its regulations at 40 CFR part 51, Appendix V, and the requirements of Section 110 of the Clean Air Act.

EPA is now taking final action to approve two of four requested revisions to the SIP for the Commonwealth of Kentucky submitted to EPA on March 15, 2001. The first revision being approved regards the removal and separation of rule 401 Kentucky Administrative Regulations (KAR) 50:035 (“Permits”) into three separate rules under a new Chapter 52 (Permits, Registrations, and Prohibitory Rules). Specifically, these rules are 52:001 (Definitions for 401 KAR Chapter 52), 52:030 (Federally-enforceable permits for non-major sources), and 52:100 (“Public, affected state, and U.S. EPA review”). The second change involves corrections to grammatical errors in rule 50:032 (“Prohibitory Rule for Hot Mix Asphalt Plants”) and the removal of rule 50:032 from Chapter 50 and adding it to Chapter 52, under 52:090 (“Prohibitory Rule for Hot Mix Asphalt Plants”).

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

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

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by November 6, 2006. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. See Clean Air Act section 307(b)(2).

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

Do not submit this information to EPA through www.regulations.gov or e-mail. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI). In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

When submitting comments, remember to:

1. Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number).

2. Follow directions—The EPA may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.

3. Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.

4. Describe any assumptions and provide any technical information and/or data that you used.

5. If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

6. Provide specific examples to illustrate your concerns, and suggest alternatives.

7. Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

8. Make sure to submit your comments by the comment period deadline identified.

Pursuant to requirements at 35 Illinois Administrative Code 218.586, Ford has been using and maintaining a vapor collection and control system (Stage II) at the Chicago Assembly Plant, which is certified as having a vapor recovery and removal efficiency of at least 95%. In addition, Section 202(a)(6) of the Clean Air Act (CAA) requires that automobile manufacturers such as Ford incorporate onboard refueling vapor recovery (ORVR) systems in new cars that recover at least 95% of the gasoline vapors displaced during the refueling of vehicles, with the intent that ORVR would fully replace the Stage II system once the ORVR systems were in widespread use throughout the motor vehicle fleet. Only ORVR-equipped vehicles can be fueled at this facility, therefore, the Stage II system at the Chicago Assembly Plant can be discontinued because it is a redundant control system.

The overall amount of gasoline vapor emissions emitted to the atmosphere will not change as a result of this action, and the action will therefore have no environmental effect. The Stage II system has a 95% vapor recovery. Every vehicle fueled with the Stage II system, however, is already equipped with ORVR, which also captures at least 95% of evaporative gasoline emissions. ORVR therefore fully displaces the need for Stage II vapor recovery at the Chicago Assembly Plant.

EPA is approving changes to the Illinois SIP to grant an adjusted standard that will allow Ford to discontinue use of its Stage II vapor recovery system at its Chicago Assembly Plant.

We are publishing this action without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comments. However, in the proposed rules section of this Federal Register publication, we are publishing a separate document that will serve as the proposal to approve the state plan if relevant adverse written comments are filed. This rule will be effective November 6, 2006 without further notice unless we receive relevant adverse written comments by October 6, 2006. If we receive such comments, we will withdraw this action before the effective date by publishing a subsequent document that will withdraw the final action. All public comments received will then be addressed in a subsequent final rule based on the proposed action. The EPA will not institute a second comment period. Any parties interested in commenting on this action should do so at this time. If we do not receive any comments, this action will be effective November 6, 2006.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget.

Because it is not a “significant regulatory action” under Executive Order 12866 or a “significant energy action,” this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001).

This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ).

Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (59 FR 22951, November 9, 2000).

This action also does not have federalism implications because it does not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act.

This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.

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

This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by November 6, 2006. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

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

Each state has a SIP containing the control measures and strategies used to attain and maintain the National Ambient Air Quality Standards (NAAQS). The SIP is extensive, containing elements covering a variety of subjects, such as air pollution control regulations, emission inventories, monitoring networks, attainment demonstrations, and enforcement mechanisms.

Each state must formally adopt the control measures and strategies in the SIP after the public has had an opportunity to comment on them. They are then submitted to EPA as SIP revisions on which EPA must formally act.

Once these control measures and strategies are approved by EPA, after notice and comment rulemaking, they are incorporated into the federally approved SIP and are identified in Title 40 of the Code of Federal Regulations part 52 (Approval and Promulgation of Implementation Plans), (40 CFR part 52). The actual state regulations approved by EPA are not reproduced in their entirety in 40 CFR part 52, but are “incorporated by reference,” which means that EPA has approved a given state regulation with a specific effective date. This format allows both EPA and the public to know which measures are contained in a given SIP and ensures that the state is enforcing the regulations. It also allows EPA and the public to take enforcement action, should a state not enforce its SIP-approved regulations.

The SIP is a living document which can be revised as necessary to address the unique air pollution problems in the state. Therefore, EPA must, from time to time, take action on SIP revisions containing new and/or revised regulations as being part of the SIP. On May 22, 1997 (62 FR 27968), EPA revised the procedures for incorporating by reference federally approved SIPs, as a result of consultations between EPA and the Office of the Federal Register (OFR).

EPA began the process of developing: (1) A revised SIP document for each state that would be incorporated by reference under the provisions of title 1 CFR part 51; (2) a revised mechanism for announcing EPA approval of revisions to an applicable SIP and updating both the IBR document and the CFR; and (3) a revised format of the “Identification of plan” sections for each applicable subpart to reflect these revised IBR procedures. The description of the revised SIP document, IBR procedures, and “Identification of plan” format are discussed in further detail in the May 22, 1997, Federal Register document.

The federally approved regulations, source-specific requirements, and nonregulatory provisions (entirely or portions of) submitted by each state agency have been organized by EPA into a “SIP compilation.” The SIP compilation contains the updated regulations, source-specific requirements, and nonregulatory provisions approved by EPA through previous rulemaking actions in the Federal Register . The compilation is contained in three-ring binders and will be updated, primarily on an annual basis. The nonregulatory provisions are available by contacting Kathleen D'Agostino at the Regional Office.

Each compilation contains three parts. Part one contains the regulations, part two contains the source-specific requirements that have been approved as part of the SIP, and part three contains nonregulatory provisions that have been approved by EPA. Each part consists of a table of identifying information for each SIP-approved regulation, each SIP-approved source-specific requirement, and each nonregulatory SIP provision. In this action, EPA is publishing the tables summarizing the applicable SIP requirements for Michigan. The effective dates in the tables indicate the date of the most recent revision of each regulation. The EPA Regional Offices have the primary responsibility for updating the compilation and ensuring its accuracy.

EPA's Region 5 Office developed and will maintain the compilation for Michigan. A copy of the full text of Michigan's regulatory and source-specific compilation will also be maintained at NARA and EPA's Air Docket and Information Center.

In order to better serve the public, EPA revised the organization of the “Identification of plan” section and included additional information to clarify the enforceable elements of the SIP.

The revised Identification of plan section contains five subsections: (a) Purpose and scope, (b) Incorporation by reference, (c) EPA approved regulations, (d) EPA approved source specific permits, and (e) EPA approved nonregulatory and quasi-regulatory provisions such as transportation control measures, statutory provisions, control strategies, monitoring networks, etc.

All revisions to the applicable SIP become federally enforceable as of the effective date of the revisions to paragraphs (c), (d), or (e) of the applicable Identification of plan section found in each subpart of 40 CFR part 52.

To facilitate enforcement of previously approved SIP provisions and provide a smooth transition to the new SIP processing system, EPA retains the original Identification of plan section, previously appearing in the CFR as the first or second section of part 52 for each state subpart. After an initial two-year period, EPA will review its experience with the new system and enforceability of previously approved SIP measures and will decide whether or not to retain the Identification of plan appendices for some further period.

Today's rule constitutes a “house­keeping” exercise to ensure that all revisions to the state programs that have occurred are accurately reflected in 40 CFR part 52. State SIP revisions are controlled by EPA regulations at 40 CFR part 51. When EPA receives a formal SIP revision request, the Agency must publish the proposed revision in the Federal Register and provide for public comment before approval.

EPA has determined that today's rule falls under the “good cause” exemption in section 553(b)(3)(B) of the Administrative Procedures Act (APA) which, upon finding “good cause,” authorizes agencies to dispense with public participation and section 553(d)(3) which allows an agency to make a rule effective immediately (thereby avoiding the 30-day delayed effective date otherwise provided for in the APA). Today's rule simply codifies provisions which are already in effect as a matter of law in Federal and approved state programs.

Under section 553 of the APA, an agency may find good cause where procedures are “impractical, unnecessary, or contrary to the public interest.” Public comment is “unnecessary” and “contrary to the public interest” since the codification only reflects existing law. Immediate notice in the CFR benefits the public by removing outdated citations.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and is therefore not subject to review by the Office of Management and Budget. This rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866. Because the agency has made a “good cause” finding that this action is not subject to notice-and-comment requirements under the Administrative Procedure Act or any other statute as indicated in the Supplementary Information section above, it is not subject to the regulatory flexibility provisions of the Regulatory Flexibility Act (5 U.S.C 601 et seq. ), or to sections 202 and 205 of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4). In addition, this action does not significantly or uniquely affect small governments or impose a significant intergovernmental mandate, as described in sections 203 and 204 of UMRA. This rule also does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant. This rule does not involve technical standards; thus the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. The rule also does not involve special consideration of environmental justice related issues as required by Executive Order 12898 (59 FR 7629, February 16, 1994). In issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct, as required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996). EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1998) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). EPA's compliance with these statutes and Executive Orders for the underlying rules are discussed in previous actions taken on the State's rules.

The Congressional Review Act (5 U.S.C. 801 et seq. ), as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. Section 808 allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding that notice and public procedure is impracticable, unnecessary or contrary to the public interest. Today's action simply codifies provisions which are already in effect as a matter of law in Federal and approved State programs. 5 U.S.C. 808(2). As stated previously, EPA has made such a good cause finding, including the reasons therefore, and established an effective date of September 6, 2006. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

EPA has also determined that the provisions of section 307(b)(1) of the Clean Air Act pertaining to petitions for judicial review are not applicable to this action. Prior EPA rulemaking actions for each individual component of the Michigan SIP compilation had previously afforded interested parties the opportunity to file a petition for judicial review in the United States Court of Appeals for the appropriate circuit within 60 days of such rulemaking action. Thus, EPA sees no need in this action to reopen the 60-day period for filing such petitions for judicial review for these “Identification of plan” reorganization actions for Michigan.

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

• Crop production (NAICS 111), e.g., agricultural workers; greenhouse, nursery, and floriculture workers; farmers.

• Animal production (NAICS 112), e.g., cattle ranchers and farmers, dairy cattle farmers, livestock farmers.

• Food manufacturing (NAICS 311), e.g., agricultural workers; farmers; greenhouse, nursery, and floriculture workers; ranchers; pesticide applicators.

• Pesticide manufacturing (NAICS 32532), e.g., agricultural workers; commercial applicators; farmers; greenhouse, nursery, and floriculture workers; residential users.

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

In addition to accessing an electronic copy of this Federal Register document through the electronic docket at http://www.regulations.gov , you may access this Federal Register document electronically through the EPA Internet under the “ Federal Register ” listings at http://www.epa.gov/fedrgstr . You may also access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's pilot e-CFR site at http://www.gpoaccess.gov/ecfr .

Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2006-0504 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before November 6, 2006.

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket that is described in ADDRESSES . Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit your copies, identified by docket ID number EPA-HQ-OPP-2006-0504, by one of the following methods:

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

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

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

In the Federal Register of July 5, 2006 (71 FR 38151) (FRL-8073-5), EPA issued a notice pursuant to section 408(d)(3) of FFDCA, 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 5F6959) by Bayer CropScience, 2 T.W. Alexander Drive, P.O. Box 12014, Research Triangle Park, NC 27709. The petition requested that 40 CFR 180. 600 be amended by increasing tolerances for residues of the herbicide propoxycarbazone, methyl 2-[[[(4,5-dihydro-4-methyl-5-oxo-3-propoxy-1H-1,2,4-triazol-1-yl)carbonyl]amino]sulfonyl]benzoate (MKH-6561) and its metabolite, methyl 2-[[[(4,5-dihydro-3-(2-hydroxypropoxy)-4-methyl-5-oxo-1H-1,2,4-triazol-1-yl)carbonyl]amino]sulfonyl] benzoate (Pr-2-OH MKH-6561), in or on wheat, forage from 1.5 parts per million (ppm) to 11 ppm; and of propoxycarbazone in or on animal commodities cattle/goat/horse/sheep, meat byproducts from 0.05 ppm to 0.30 ppm; and milk from 0.004 ppm to 0.03 ppm. Based on the scientific review of the residue chemistry data, EPA is raising the wheat forage tolerance to 17 ppm. The petitioner proposed raising the tolerances in order that wheat forage may be grazed by livestock immediately after the herbicide's application. Comments were received on the notice of filing. EPA's response to these comments is discussed in Unit IV.C.

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

EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. For further discussion of the regulatory requirements of section 408 of the FFDCA and a complete description of the risk assessment process, see http://www.epa.gov/fedrgstr/EPA-PEST/1997/November/Day-26/p30948.htm .

Consistent with section 408(b)(2)(D) of FFDCA, EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure, consistent with section 408(b)(2) of FFDCA, for increasing tolerances for residues of the herbicide propoxycarbazone and its metabolite in or on wheat, forage to 17 ppm; and for propoxycarbazone in or on animal commodities cattle/goat/horse/sheep, meat byproducts to 0.30 ppm; and milk to 0.03 ppm. EPA's assessment of exposures and risks associated with establishing the tolerance follows.

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. Specific information on the studies received and the nature of the toxic effects caused by propoxycarbazone as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies are discussed in the Federal Register of July 7, 2004 (69 FR 40774) (FRL-7365-7).

For hazards that have a threshold below which there is no appreciable risk, the dose at which no adverse effects are observed (the NOAEL) from the toxicology study identified as appropriate for use in risk assessment is used to estimate the toxicological level of concern (LOC). However, the lowest dose at which adverse effects of concern are identified (the LOAEL) is sometimes used for risk assessment if no NOAEL was achieved in the toxicology study selected. An uncertainty factor (UF) is applied to reflect uncertainties inherent in the extrapolation from laboratory animal data to humans and in the variations in sensitivity among members of the human population as well as other unknowns.

The linear default risk methodology (Q*) is the primary method currently used by the Agency to quantify non-threshold hazards such as cancer. The Q* approach assumes that any amount of exposure will lead to some degree of cancer risk, estimates risk in terms of the probability of occurrence of additional cancer cases.

A summary of the toxicological endpoints for propoxycarbazone used for human risk assessment is discussed in Unit III.B. of the final rule published in the Federal Register of July 7, 2004 (69 FR 40774) (FRL-7365-7).

1. Dietary exposure from food and feed uses . Tolerances have been established (40 CFR 180.600) for the residues of propoxycarbazone, in or on a variety of raw agricultural commodities. Risk assessments were conducted by EPA to assess dietary exposures from propoxycarbazone in food as follows:

i. Acute exposure . Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a one-day or single exposure.

No such effects were identified in the toxicological studies for propoxycarbazone therefore, a quantitative acute dietary exposure assessment is unnecessary.

ii. Chronic exposure . In conducting the chronic dietary exposure assessment EPA used the Dietary Exposure Evaluation Model software with the Food Commodity Intake Database (DEEM-FCID TM ), which incorporates food consumption data as reported by respondents in the USDA 1994-1996 and 1998 Nationwide Continuing Surveys of Food Intake by Individuals (CSFII), and accumulated exposure to the chemical for each commodity. The following assumptions were made for the chronic exposure assessments: For the chronic analyses, tolerance-level residues were assumed for all food commodities with current or proposed propoxycarbazone-sodium tolerances, and it was assumed that all of the crops included in the analysis were treated. Percent Crop Treated (PCT) and/or anticipated residues were not used in the chronic risk assessment.

2. Dietary exposure from drinking water . The Agency lacks sufficient monitoring exposure data to complete a comprehensive dietary exposure analysis and risk assessment for propoxycarbazone in drinking water. Because the Agency does not have comprehensive monitoring data, drinking water concentration estimates are made by reliance on simulation or modeling taking into account data on the physical characteristics of propoxycarbazone.

The Agency uses the FQPA Index Reservoir Screening Tool (FIRST) or the Pesticide Root Zone Model/Exposure Analysis Modeling System (PRZM/EXAMS), to produce estimates of pesticide concentrations in an index reservoir. The SCI-GROW model is used to predict pesticide concentrations in shallow ground water. For a screening-level assessment for surface water EPA will use FIRST (a tier 1 model) before using PRZM/EXAMS (a tier 2 model). The FIRST model is a subset of the PRZM/EXAMS model that uses a specific high-end runoff scenario for pesticides. Both FIRST and PRZM/EXAMS incorporate an index reservoir environment, and both models include a percent crop area factor as an adjustment to account for the maximum percent crop coverage within a watershed or drainage basin.

None of these models include consideration of the impact processing (mixing, dilution, or treatment) of raw water for distribution as drinking water would likely have on the removal of pesticides from the source water. The primary use of these models by the Agency at this stage is to provide a screen for sorting out pesticides for which it is unlikely that drinking water concentrations would exceed human health levels of concern.

Since the models used are considered to be screening tools in the risk assessment process, the Agency uses the estimated environmental concentrations (EECs), which are the model estimates of a pesticide's concentration in water. EECs derived from these models are used to quantify drinking water exposure and risk as a %RfD or %PAD.

Based on the FIRST and SCI-GROW models, the estimated environmental concentrations (EECs) of propoxycarbazone for chronic exposures are estimated to be 0.9 ppb for surface water and 0.4 ppb for ground water.

3. From non-dietary exposure . The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets).

Propoxycarbazone is not registered for use on any sites that would result in residential exposure.

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

Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, EPA has not made a common mechanism of toxicity finding as to propoxycarbazone and any other substances and propoxycarbazone does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has not assumed that propoxycarbazone has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see the policy statements released by EPA's Office of Pesticide Programs concerning common mechanism determinations and procedures for cumulating effects from substances found to have a common mechanism on EPA's website at http://www.epa.gov/pesticides/cumulative .

1. In general . Section 408 of FFDCA provides that EPA shall apply an additional tenfold margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the data base on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. Margins of safety are incorporated into EPA risk assessments either directly through use of a MOE analysis or through using uncertainty (safety) factors in calculating a dose level that poses no appreciable risk to humans. In applying this provision, EPA either retains the default value of 10X when reliable data do not support the choice of a different factor, or, if reliable data are available, EPA uses a different additional safety factor value based on the use of traditional uncertainty factors and/or special FQPA safety factors, as appropriate.

2. Conclusion . EPA has determined that there is reliable data showing that it will be safe for infants and children to remove the FQPA safety factor. The FQPA factor is removed based on the following:

i. There is no quantitative or qualitative evidence of increased susceptibility of rat and rabbit fetuses to in utero exposure to propoxycarbazone-sodium in developmental toxicity studies. There is no quantitative or qualitative evidence of increased susceptibility to propoxycarbazone-sodium following pre-/post-natal exposure to a 2-generation reproduction study;

ii. There is no concern for developmental neurotoxicity resulting from exposure to propoxycarbazone-sodium. A developmental neurotoxicity study (DNT) study is not required;

iii. The toxicological database is complete for FQPA assessment;

iv. The chronic dietary food exposure assessment utilizes HED recommended tolerance level residues and 100% CT information for all commodities. By using these screening-level assessments, actual exposures/risks will not be underestimated; and

v. The dietary drinking water assessment utilizes water concentration values generated by model and associated modeling parameters which are designed to provide conservative, health protective, high-end estimates of water concentrations which will not likely be exceeded.

1. Acute risk . An effect of concern attributable to a single exposure (dose) was not identified from the oral toxicity studies including the developmental toxicity studies in rat and rabbits. No acute risk is expected from exposure to propoxycarbazone-sodium.

2. Chronic risk . Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that exposure to propoxycarbazone from food and drinking water will utilize < 1 % of the cPAD for the U.S. population, and < 1 % of the cPAD for Children 1-2 years old. There are no residential uses for propoxycarbazone that result in chronic residential exposure to propoxycarbazone.

3. Short-term risk . Propoxycarbazone is not registered for use on any sites that would result in residential exposure. Therefore, the aggregate risk is the sum of the risk from food and water, which do not exceed the Agency's level of concern.

4. Determination of safety . Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population and to infants and children from aggregate exposure to propoxycarbazone residues.

Adequate enforcement methodology (liquid chromatography/mass spectroscopy) is available to enforce the tolerance expression. The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; e-mail address: residuemethods@epa.gov .

There are no Codex, Canadian or Mexican maximum residue limits established for propoxycarbazone-sodium on wheat, meat, meat byproducts or milk.

Public comments were received from B. Sachau who objected to the proposed tolerances because of the amounts of pesticides already consumed and carried by the American population. She further indicated that testing conducted on animals have absolutely no validity and are cruel to the test animals. B. Sachau's comments contained no scientific data or evidence to rebut the Agency's conclusion that there is a reasonable certainty that no harm will result from aggregate exposure to propoxycarbazone, including all anticipated dietary exposures and all other exposures for which there is reliable information. EPA has responded to B. Sachau's generalized comments on numerous previous occasions. [January 7, 2005, 70 FR 1349, 1354 (FRL-7691-4); October 29, 2004, 69 FR 63083, 63096 (FRL-7681-9)].

Therefore, the tolerances are increased for residues of the herbicide propoxycarbazone and its metabolite in or on wheat, forage to 17 ppm; and for propoxycarbazone in or on animal commodities cattle/goat/horse/sheep, meat byproducts to 0.30 ppm; and milk to 0.03 ppm.

This final rule establishes a tolerance under section 408(d) of FFDCA in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). Because this rule has been exempted from review under Executive Order 12866 due to its lack of significance, this rule is not subject to Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq. , or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). Nor does it require any special considerations under Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994); or OMB review or any Agency action under Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established on the basis of a petition under section 408(d) of FFDCA, such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of FFDCA. For these same reasons, the Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” This rule will not have substantial direct effects on tribal governments, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.

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

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

• Crop production (NAICS 111), e.g., agricultural workers; greenhouse, nursery, and floriculture workers; farmers.

• Animal production (NAICS 112), e.g., cattle ranchers and farmers, dairy cattle farmers, livestock farmers.

• Food manufacturing (NAICS 311), e.g., agricultural workers; farmers; greenhouse, nursery, and floriculture workers; ranchers; pesticide applicators.

• Pesticide manufacturing (NAICS 32532), e.g., agricultural workers; commercial applicators; farmers; greenhouse, nursery, and floriculture workers; residential users.

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

In addition to accessing an electronic copy of this Federal Register document through the electronic docket at http://www.regulations.gov , you may access this Federal Register document electronically through the EPA Internet under the “ Federal Register ” listings at http://www.epa.gov/fedrgstr. You may also access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's pilot e-CFR site at http://www.gpoaccess.gov/ecfr.

Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2006-0664 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before November 6, 2006.

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket that is described in ADDRESSES . Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit your copies, identified by docket ID number EPA-HQ-OPP-2006-0664, by one of the following methods:

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

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

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

In the Federal Register of June 29, 2005 (70 FR 124) (FRL-7718-8), EPA issued a notice pursuant to section 408(d)(3) of FFDCA, 21 U.S.C. 346a(d)(3), announcing the filing of pesticide petitions (PP 1E6332, PP 1E6319, PP 1E6223, PP 2F6433, PP 3E6763) by Syngenta Crop Protection Inc, P.O. Box 18300, Greensboro, NC 27419-8300. The petitions requested that 40 CFR 180.205 be amended by establishing tolerances for residues of the herbicide paraquat dichloride as follows: In or on okra at 0.05 ppm (PP 1E6332); onion (dry bulb) at 0.1 ppm (PP 1E6319); tanier at 0.05 ppm (PP 1E6223); animal feed, nongrass, group at 5.0; barley, hay at 3.0 ppm; barley, straw at 1.0 ppm; beet, sugar, tops at 0.05 ppm ; berry group at 0.05 ppm; cattle, kidney at 0.3 ppm; cotton gin byproducts at 82.0 ppm; cotton, seed at 5.0 ppm; cranberry at 0.05 ppm; ; fruit, pome, group at 0.05 ppm; fruit, stone, group at 0.05 ppm; goat, kidney at 0.3 ppm; grape at 0.05 ppm; hog, kidney at 0.3 ppm; hops, cone, dry at 0.5 ppm; horse, kidney at 0.3 ppm; nut, tree, group at 0.05 ppm; pea and bean, dried shelled, except soybean, subgroup at 0.30 ppm; pea and bean, succulent, shelled, subgroup at 0.05 ppm; sheep, kidney at 0.3 ppm; sorghum, forage at 0.1 ppm; soybean, seed at 0.70 ppm; soybean, forage at 0.40 ppm; soybean, hay at 6.0 ppm; soybean, aspirated grain fractions at 60.0 ppm; vegetable, brassica leafy, group at 0.05 ppm; vegetable, cucurbit, group at 0.05 ppm; vegetable, fruiting, group at 0.05 ppm; vegetable, legume, edible-podded, subgroup at 0.05 ppm; wheat, grain at 1.5 ppm; wheat, forage at 0.40 ppm; wheat, hay at 3.0 ppm; wheat, straw at 40.0 ppm; wheat, aspirated grain fractions at 65.0 ppm (PP 2F6433); ginger at 0.1 ppm (PP 3E6763). That notice included a summary of the petition prepared by Syngenta Crop Protection Inc., the registrant. As a result of the review of the residue field trials, the proposed tolerance level for barley, hay was subsequently revised to 3.5 ppm. One comment was received on the notice of filing. EPA's response to this comment is discussed in Unit IV (C) below.

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

EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. For further discussion of the regulatory requirements of section 408 of the FFDCA and a complete description of the risk assessment process, see http://www.epa.gov/fedrgstr/EPA-PEST/1997/November/Day-26/p30948.htm.

Consistent with section 408(b)(2)(D) of FFDCA, EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure, consistent with section 408(b)(2) of FFDCA, for a tolerance for residues of paraquat dichloride on animal feed, nongrass, group 18, forage at 75 ppm; animal feed, nongrass, group 18, hay at 210 ppm; barley, hay at 3.5 ppm; barley, straw at 1.0 ppm; beet, sugar, tops at 0.05 ppm; berry group 13 at 0.05 ppm; cattle, kidney at 0.50 ppm; cotton, gin byproducts at 110 ppm; cotton, undelinted seed at 3.5 ppm; cranberry at 0.05 ppm; fruit, pome, group 11 at 0.05 ppm; fruit, stone, group 12 at 0.05 ppm; ginger at 0.10 ppm; goat, kidney at 0.50 ppm; grain, aspirated fractions at 65 ppm; grape at 0.05 ppm; hog, kidney at 0.50 ppm; hop, dried cones at 0.50 ppm; horse, kidney at 0.50 ppm; nut, tree, group 14 at 0.05 ppm; okra at 0.05 ppm; onion, bulb at 0.10 ppm; pea and bean, dried shelled, except soybean, subgroup 6C, except guar bean at 0.30 ppm; pea and bean, succulent shelled, subgroup 6B at 0.05 ppm; sheep, kidney at 0.50 ppm; sorghum, forage, forage at 0.10 ppm; sorghum, grain, forage at 0.10 ppm; soybean, forage at 0.40 ppm; soybean, hay at 10 ppm; soybean, hulls at 4.5 ppm; soybean, seed at 0.70 ppm; vegetable, Brassica leafy, group 5 at 0.05 ppm; vegetable, cucurbit, group 9 at 0.05 ppm; vegetable, fruiting, group 8 at 0.05 ppm; vegetable, legume, edible podded, subgroup 6A at 0.05 ppm; wheat, forage at 0.50 ppm; wheat, grain at 1.1 ppm; wheat, hay at 3.5 ppm; and wheat, straw at 50 ppm. Additionally, EPA has determined that the current tolerance with regional registrations for residues of paraquat dichloride on tanier at 0.05 ppm may be extended to the State of Florida. EPA's assessment of exposures and risks associated with establishing the tolerance follows.

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. Specific information on the studies received and the nature of the toxic effects caused by paraquat dichloride as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in the index of docket ID number EPA-HQ-OPP-2006-0664.

For hazards that have a threshold below which there is no appreciable risk, the dose at which no adverse effects are observed (the NOAEL) from the toxicology study identified as appropriate for use in risk assessment is used to estimate the toxicological level of concern (LOC). However, the lowest dose at which adverse effects of concern are identified (the LOAEL) is sometimes used for risk assessment if no NOAEL was achieved in the toxicology study selected. An uncertainty factor (UF) is applied to reflect uncertainties inherent in the extrapolation from laboratory animal data to humans and in the variations in sensitivity among members of the human population as well as other unknowns.

The linear default risk methodology (Q*) is the primary method currently used by the Agency to quantify non-threshold hazards such as cancer. The Q* approach assumes that any amount of exposure will lead to some degree of cancer risk, estimates risk in terms of the probability of occurrence of additional cancer cases. More information can be found on the general principles EPA uses in risk characterization at http://www.epa.gov/pesticides/health/human.htm.

A summary of the toxicological endpoints for dichloride used for human risk assessment is shown in Table 1 of this unit:

1. Dietary exposure from food and feed uses. Tolerances have been previously established (40 CFR 180.205) for the residues of paraquat dichloride, in or on a variety of raw agricultural commodities, including egg, milk, and the meat, fat and meat by-products of cattle, goats, hogs, horses, and sheep. Risk assessments were conducted by EPA to assess dietary exposures from paraquat dichloride in food as follows:

i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a one-day or single exposure.

The Dietary Exposure Evaluation Model (DEEM-FCID TM , Version 2.03) analysis evaluated the individual food consumption as reported by respondents in the USDA 1994-1996 Nationwide Continuing Surveys of Food Intake by Individuals (CSFII) and a supplemental children's survey conducted in 1998 and accumulated exposure to the chemical for each commodity. The following assumptions were made for the acute exposure assessments: A partially refined, probabilistic acute dietary exposure assessment using tolerance-level residues for all registered and proposed commodities, maximum estimates of percent crop treated information for some registered commodities, and DEEM default processing factors for some commodities, was conducted for the general U.S. population and various population subgroups. Drinking water was incorporated directly into the dietary assessment using a high-end monitoring value of 1.52 ppb.

ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used the Dietary Exposure Evaluation Model software with the Food Commodity Intake Database (DEEM-FCID TM , Version 2.03), which incorporates food consumption data as reported by respondents in the USDA 1994-1996 and 1998 Nationwide Continuing Surveys of Food Intake by Individuals (CSFII), and accumulated exposure to the chemical for each commodity. The following assumptions were made for the chronic exposure assessments: A partially refined, chronic dietary exposure assessment using tolerance-level residues for all registered and proposed commodities, average estimates of percent crop treated information for some registered commodities, and DEEM default processing factors for some commodities, was conducted for the general U.S. population and various population subgroups. Drinking water was incorporated directly into the dietary assessment using a high-end monitoring value of 1.52 ppb.

iii. Cancer. Paraquat dichloride is a Category E chemical (evidence of non-carcinogenicity to humans).

iv. Anticipated residue and percent crop treated (PCT) information. Section 408(b)(2)(F) of FFDCA states that the Agency may use data on the actual percent of food treated for assessing chronic dietary risk only if the Agency can make the following findings: Condition 1, that the data used are reliable and provide a valid basis to show what percentage of the food derived from such crop is likely to contain such pesticide residue; Condition 2, that the exposure estimate does not underestimate exposure for any significant subpopulation group; and Condition 3, if data are available on pesticide use and food consumption in a particular area, the exposure estimate does not understate exposure for the population in such area. In addition, the Agency must provide for periodic evaluation of any estimates used. To provide for the periodic evaluation of the estimate of PCT as required by section 408(b)(2)(F) of FFDCA, EPA may require registrants to submit data on PCT.

The Agency used PCT information as follows:

For the acute assessment, maximum percent crop treated information was used on the following commodities: alfalfa 2.5%, almonds 30%, apples 30%, apricots 20%, artichokes 40%, asparagus 15%, avocados 5%, barley 2.5%, green beans 3%, blackberries 40%, blueberries 15%, broccoli 3%, Brussels sprouts 3%, cabbage 3%, cantaloupes 3%, carrots 3%, cherries 30%, corn 5%, cotton 20%, cucumbers 30%, dry beans/peas 5%, eggplant 20%, figs 10%, garlic 5%, grapefruit 5%, grapes 55%, hazelnuts (filberts) 70%, kiwifruit 3%, lemons 3%, lettuce 3%, nectarines 25%, olives 10%, onions 5%, oranges 10%, peaches 40%, peanuts 35%, pears 15%, green peas 3%, pecans 15%, peppers 30%, pistachios 45%, potatoes 5%, prunes and plums 20%, pumpkins 5%, raspberries 75%, rice 2.5%, safflower 2.5%, sorghum 2.5%, soybeans 2.5%, squash 10%, strawberries 25%, sugar beets 2.5%, sugarcane 5%, sunflowers 2.5%, sweet corn 5%, tangelos 30%, tangerines 10%, tomatoes 15%, walnuts 20%, watermelons 10%, and wheat 2.5%.

For the chronic assessment, average percent crop treated information was used on the following commodities: alfalfa 1%, almonds 30%, apples 20%, apricots 10%, artichokes 30%, asparagus 10%, avocados 1%, barley 1%, green beans 1%, blackberries 30%, blueberries 10%, broccoli 1%, cabbage 1%, cantaloupes 1%, carrots 1%, cherries 20%, corn 1%, cotton 20%, cucumbers 5%, dry beans/peas 1%, eggplant 20%, figs 10%, garlic 1%, grapefruit 5%, grapes 20%, hazelnuts (filberts) 55%, hops 80%, kiwifruit 1%, lemons 1%, lettuce 1%, nectarines 15%, olives 5%, onions 1%, oranges 5%, peaches 30%, peanuts 25%, pears 10%, green peas 1%, pecans 10%, peppers 10%, pistachios 30%, potatoes 5%, prunes and plums 15%, pumpkins 5%, raspberries 70%, rice 1%, safflower 1%, sorghum 1%, soybeans 1%, squash 5%, strawberries 15%, sugar beets 1%, sugarcane 5%, sunflowers 1%, sweet corn 1%, tangelos 20%, tangerines 5%, tomatoes 5%, walnuts 15%, watermelons 5%, and wheat 1%.

EPA uses an average PCT for chronic dietary risk analysis. The average PCT figure for each existing use is derived by combining available Federal, State, and private market survey data for that use, averaging by year, averaging across all years, and rounding up to the nearest multiple of 5% except for those situations in which the average PCT is less than one. In those cases 1% is used as the average. EPA uses a maximum PCT for acute dietary risk analysis. The maximum PCT figure is the single maximum value reported overall from available Federal, State, and private market survey data on the existing use, across all years, and rounded up to the nearest multiple of 5%, except for those situations in which the maximum PCT is 2.5%. In those cases, 2.5% is used as the maximum. In most cases, EPA uses available data from United States Department of Agriculture/National Agricultural Statistics Service (USDA/NASS), Proprietary Market Surveys, and the National Center for Food and Agriculture Policy (NCFAP) for the most recent 6 years.

2. Dietary exposure from drinking water. Paraquat dichloride undergoes minimal degradation in the environment, and thus is very persistent (as parent). However, its very high propensity to bind to solids, particularly clay, makes it very immobile. In addition, paraquat dichloride does not readily appear to desorb from clay. The greatest cause for concern is likely to be erosion of contaminated sediments off-site and subsequent redeposition onto non-target areas (especially surface water bodies). There is an additional (minor) concern for the one proposed new usage (wheat) that includes aerial spray; however, this use entails very small amounts (relative to all other uses), so spray drift onto nearby surface water drinking water sources should be fairly limited. Because of its very low mobility and strong tendency to bind tightly to soils, paraquat dichloride contamination of drinking water supplies derived from groundwater is expected to be highly unlikely. In addition, the strong binding characteristics of paraquat dichloride are likely to render most residues in raw drinking water sources removable through sedimentation processes, which are typically included as part of standard drinking water treatments.

Because of its strong cation-exchange sorption to soils, modeling is not appropriate for paraquat dichloride. In most circumstances, the levels of paraquat dichloride residues in surface or ground water are expected to be insignificant. Because it should sorb to suspended sediment, coagulation and flocculation processes in drinking water treatment plants are likely to remove any paraquat dichloride residues present in the raw water. Residues of paraquat dichloride in drinking water derived from surface supplies can therefore be assumed to be negligible. For residues in ground water however, the EPA used the value of 1.52 ppb reported in Virginia, for human exposure assessment, as this represents a high-end, but not worst-case value from the available monitoring data. As a result, the groundwater monitoring value of 1.52 ppb was used for both the acute and chronic analyses. This estimate of drinking water concentration was directly entered into the dietary exposure model (DEEM-FCID TM ).

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets).

Paraquat dichloride is not registered for use on any sites that would result in residential exposure.

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

Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, EPA has not made a common mechanism of toxicity finding as to paraquat dichloride and any other substances and paraquat dichloride does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has not assumed that paraquat dichloride has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see the policy statements released by EPA's Office of Pesticide Programs concerning common mechanism determinations and procedures for cumulating effects from substances found to have a common mechanism on EPA's website at http://www.epa.gov/pesticides/cumulative.

1. In general . Section 408 of FFDCA provides that EPA shall apply an additional tenfold margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. Margins of safety are incorporated into EPA risk assessments either directly through use of a MOE analysis or through using uncertainty (safety) factors in calculating a dose level that poses no appreciable risk to humans. In applying this provision, EPA either retains the default value of 10X when reliable data do not support the choice of a different factor, or, if reliable data are available, EPA uses a different additional safety factor value based on the use of traditional uncertainty factors and/or special FQPA safety factors, as appropriate.

2. Prenatal and postnatal sensitivity. Prenatal developmental studies in rats and mice show that developmental effects only occur in the presence of maternal toxicity. No effect on reproduction was observed. Fetal effects were limited to delayed ossification and decreased body weights. There was no indication from these studies that paraquat dichloride is involved in endocrine disruption.

3. Conclusion. The toxicological database for paraquat dichloride is incomplete, lacking an acceptable prenatal developmental study in a non-rodent species. However, four acceptable developmental studies in rats and mice have been submitted for paraquat dichloride, and the Agency considers the toxicology database adequate for hazard characterization, and to address FQPA concerns. The Agency is retaining a 3x uncertainty factor for the acute dietary subpopulation Females 13-49 years old because of residual concerns for developing fetuses. All other populations will have a 1x safety factor. The FQPA safety factor was reduced to (1x) for the following reasons:

(i) There is no evidence of neurotoxicity;

(ii) There is no indication of quantitative or qualitative increased susceptibility of rats or mice to in utero and/or prenatal/postnatal exposure of rats;

(iii) The dietary (food and drinking water) exposure assessments will not underestimate the potential exposures for infants and children; and

(iv) There are no registered residential uses of paraquat dichloride.

1. Acute risk. Using the exposure assumptions discussed in this unit for acute exposure, the acute dietary exposure from food to paraquat dichloride will occupy 33% of the aPAD for the U.S. population, 54% of the aPAD for females 13-49 years old, 52% of the aPAD for all infants (<1 year old), and 66% of the aPAD for children 1-2 years old. Acute aggregate risk consists of risks resulting from exposure to residues in food and drink water only. The acute dietary exposure analysis included both food and drinking water, and as a result, the acute aggregate risk assessment is equivalent to the acute dietary analysis.

2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that exposure to paraquat dichloride from food will utilize 8% of the cPAD for the U.S. population, 13% of the cPAD for all infants (<1 year old), and 26% of the cPAD for children 1-2 years old. There are no residential uses for paraquat dichloride that result in chronic residential exposure to paraquat dichloride. Chronic aggregate risk consists of risks resulting from exposure to residues in food and drink water only. The chronic dietary exposure analysis included both food and drinking water, and as a result, the chronic aggregate risk assessment is equivalent to the chronic dietary analysis.

3. Short-term risk. Short-term aggregate exposure takes into account residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

Paraquat dichloride is not registered for use on any sites that would result in residential exposure. Therefore, the aggregate risk is the sum of the risk from food and water, which does not exceed the Agency's level of concern.

4. Intermediate-term risk. Intermediate-term aggregate exposure takes into account residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

Paraquat dichloride is not registered for use on any sites that would result in residential exposure. Therefore, the aggregate risk is the sum of the risk from food and water, which does not exceed the Agency's level of concern.

5. Aggregate cancer risk for U.S. population. Paraquat dichloride is a Category E chemical (evidence of non-carcinogenicity in humans). As a result, an aggregate cancer risk assessment was not conducted.

6. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, and to infants and children from aggregate exposure to paraquat dichloride residues.

Adequate enforcement methodology is available to enforce the tolerance expression. Method I of Pesticide Analytical Manual (PAM), Volume II (spectrophotometric), is adequate for plant tolerance enforcement purposes. In addition, Method 1B (spectrophotometric) has also been found to adequately recover paraquat cation residues. Method IA of PAM Volume II (spectrophotometric) is available for animal tolerance enforcement purposes. Method 4B of PAM Volume II (HPLC) is also available for animal tolerance enforcement purposes.

Adequate enforcement methodology (specify method; example--gas chromatography) is available to enforce the tolerance expression. The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; e-mail address: residuemethods@epa.gov .

B. International Residue Limits

The Codex Alimentarius Commission has established several maximum residue limits (MRLs) for paraquat dichloride residues in various commodities. The Codex and U.S. tolerances are in harmony with respect to MRL/tolerance expression; both regulate the parent paraquat cation only. Compatibility between U.S. tolerances and Codex MRLs exists for eggs, passion fruit, sunflower seed, and vegetables [including Brassica leafy vegetables, carrots, cassava, corn (sweet), edible podded legume vegetables, fruiting vegetables, lettuce, onions (green), pigeon peas, turnips (roots and tops), and yams], milk and ruminant tissue, and poultry eggs. Incompatibilities of U.S. tolerances and Codex MRLs on the following raw plant commodities remain because of differences in agricultural practices: cotton seed, dry hops, maize, olives, sorghum, dry soya bean and certain vegetables (such as bulb onion). No Canadian or Mexican MRLs have been established for paraquat dichloride.

Several comments were received from a private citizen objecting to pesticide body load, IR-4 profiteering, animal testing, establishing tolerances, and pesticide residues. The Agency has received these same comments from this commenter on numerous previous occasions. Refer to the following Federal Register cites: 70 FR 37686, June 30, 2005; 70 FR 1354, January 7, 2005;, 69 FR 63096-63098, October 29, 2004; for the Agency's response to these objections.

Therefore, tolerances are established for residues of paraquat dichloride in or on animal feed, nongrass, group 18, forage at 75 ppm; animal feed, nongrass, group 18, hay at 210 ppm; barley, hay at 3.5 ppm; barley, straw at 1.0 ppm; beet, sugar, tops at 0.05 ppm; berry group 13 at 0.05 ppm; cattle, kidney at 0.50 ppm; cotton, gin byproducts at 110 ppm; cotton, undelinted seed at 3.5 ppm; cranberry at 0.05 ppm; fruit, pome, group 11 at 0.05 ppm; fruit, stone, group 12 at 0.05 ppm; ginger at 0.10 ppm; goat, kidney at 0.50 ppm; grain, aspirated fractions at 65 ppm; grape at 0.05 ppm; hog, kidney at 0.50 ppm; hop, dried cones at 0.50 ppm; horse, kidney at 0.50 ppm; nut, tree, group 14 at 0.05 ppm; okra at 0.05 ppm; onion, bulb at 0.10 ppm; pea and bean, dried shelled, except soybean, subgroup 6C, except guar bean at 0.30 ppm; pea and bean, succulent shelled, subgroup 6B at 0.05 ppm; sheep, kidney at 0.50 ppm; sorghum, forage, forage at 0.10 ppm; sorghum, grain, forage at 0.10 ppm; soybean, forage at 0.40 ppm; soybean, hay at 10 ppm; soybean, hulls at 4.50 ppm; soybean, seed at 0.70 ppm; vegetable, Brassica leafy, group 5 at 0.05 ppm; vegetable, cucurbit, group 9 at 0.05 ppm; vegetable, fruiting, group 8 at 0.05 ppm; vegetable, legume, edible podded, subgroup 6A at 0.05 ppm; wheat, forage at 0.50 ppm; wheat, grain at 1.1 ppm; wheat, hay at 3.5 ppm; and wheat, straw at 50 ppm..

This final rule establishes tolerances under section 408(d) of FFDCA in response to petitions submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993). Because this rule has been exempted from review under Executive Order 12866 due to its lack of significance, this rule is not subject to Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). Nor does it require any special considerations under Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994); or OMB review or any Agency action under Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established on the basis of a petition under section 408(d) of FFDCA, such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of FFDCA. For these same reasons, the Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” This rule will not have substantial direct effects on tribal governments, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.

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

You may be affected by this action if you manufacture (defined by statute at 15 U.S.C. 2602(7) to include import) chemical substances, including inorganic chemical substances, subject to reporting under the Inventory Update Reporting (IUR) regulations at 40 CFR part 710. Any use of the term “manufacture” in this document will encompass import, unless otherwise stated.

Potentially affected entities may include, but are not limited to: Chemical manufacturers and importers subject to IUR reporting, including chemical manufacturers and importers of inorganic chemical substances (NAICS codes 325, 32411).

This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. To determine whether you or your business may be affected by this action, you should carefully examine the applicability provisions at 40 CFR 710.48. If you have any questions regarding the applicability of this action to a particular entity, consult the technical contact person listed under FOR FURTHER INFORMATION CONTACT .

1. Submitting CBI . Do not submit CBI to EPA through regulations.gov or e-mail. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

2. Tips for preparing your comments . When submitting comments, remember to:

i. Identify the rulemaking by docket ID number and other identifying information (subject heading, Federal Register date and page number).

ii. Follow directions. The Agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.

iii. Explain why you agree or disagree; suggest alternatives, and substitute language for your requested changes.

iv. Describe any assumptions and provide any technical information and/or data that you used.

v. If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

vi. Provide specific examples to illustrate your concerns, and suggest alternatives.

vii. Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

viii. Make sure to submit your comments by the comment period deadline identified.

EPA is required under TSCA section 8(b), 15 U.S.C. 2607(b), to compile and keep current an inventory of chemical substances manufactured or processed in the United States. This inventory is known as the TSCA Chemical Substances Inventory (the TSCA Inventory). In 1977, EPA promulgated a rule (42 FR 64572, December 23, 1977) under TSCA section 8(a), 15 U.S.C. 2607(a), to compile an inventory of chemical substances in commerce at that time. In 1986, EPA promulgated the initial IUR rule under TSCA section 8(a) at 40 CFR part 710 (51 FR 21438, June 12, 1986) to facilitate the periodic updating of the TSCA Inventory and to support activities associated with the implementation of TSCA. In 2003, EPA promulgated extensive amendments to the IUR rule (68 FR 848, January 7, 2003) (FRL-6767-4) (2003 Amendments) to collect manufacturing, processing, and use exposure-related information, and to make certain other changes. Minor corrections to the IUR rule were made in July of 2004 (69 FR 40787, July 7, 2004) (FRL-7332-3), and additional revisions to the IUR rule were made on December 19, 2005 (70 FR 75059) (FRL-7743-9).

TSCA section 8(a)(1) authorizes the EPA Administrator to promulgate rules under which manufacturers and processors of chemical substances and mixtures (referred to hereinafter as chemical substances) must maintain such records and submit such information as the Administrator may reasonably require. TSCA section 8(a) generally excludes small manufacturers and processors of chemical substances from the reporting requirements established in TSCA section 8(a). However, EPA is authorized by TSCA section 8(a)(3) to require TSCA section 8(a) reporting from small manufacturers and processors with respect to any chemical substance that is the subject of a rule proposed or promulgated under TSCA section 4, 5(b)(4), or 6, or that is the subject of an order under TSCA section 5(e), or that is the subject of relief that has been granted pursuant to a civil action under TSCA section 5 or 7. Pursuant to TSCA section 8(a)(3)(B), the standard for determining whether an entity qualifies as a small manufacturer for purposes of 40 CFR part 710 generally is defined in 40 CFR 704.3. Processors are not currently subject to the regulations at 40 CFR part 710.

The data reported under the IUR rule are used to update the information maintained on the TSCA Inventory. EPA uses the TSCA Inventory and data reported under the IUR rule to support many TSCA-related activities and to provide overall support for a number of EPA and other federal health, safety, and environmental protection activities. The IUR rule, as amended by the 2003 Amendments and subsequent revisions, requires U.S. manufacturers (including importers) of chemicals listed on the TSCA Inventory to report to EPA every 5 years the identity of chemical substances manufactured for a commercial purpose during the reporting year in quantities of 25,000 pounds or more at any single site they own or control. The IUR generally excludes several categories of substances from its reporting requirements, i.e., polymers, microorganisms, naturally occurring chemical substances, and certain natural gas substances. Sites are required to report information such as company name, site location and other identifying information, identity and production volume of the reportable chemical substance, manufacturing exposure-related information associated with each reportable chemical substance, including the physical form and maximum concentration of the chemical substance and the number of potentially exposed workers.

Manufacturers (including importers) of larger volume chemicals (i.e., 300,000 pounds or more manufactured during the reporting year at any site) are additionally required to report certain processing and use information (40 CFR 710.52(c)(4)). This information includes process or use category, NAICS code, industrial function category, percent production volume associated with each process or use category, number of use sites, number of potentially exposed workers, and consumer/commercial information such as use category, use in or on products intended for use by children, and maximum concentration. For the 2006 submission period, inorganic chemicals are partially exempt regardless of production volume (i.e., submitters do not report the processing and use information listed in 40 CFR 710.52(c)(4)). After the 2006 reporting period, the partial exemption for inorganic chemicals will no longer be applicable and submitters will report processing and use information on inorganic chemical substances manufactured (including imported) at a site in volumes of 300,000 pounds or more, unless partially exempted as described in Unit II.C. In addition, specifically listed petroleum process streams and other specifically listed chemical substances are partially exempt during the 2006 submission period as well as during subsequent submission periods.

Through this action, EPA is amending the methods available for obtaining documents, including reporting instructions, and for submitting reports. Additionally, EPA is making several minor corrections, including clarifying requirements for the reporting of company identification information.

1. Methods to obtain reporting instructions and submit reports. Because IUR reporting occurs only once every 5 years, the methods used to make available or otherwise distribute reporting materials, and for submitting the required information to EPA, often change from one submission period to another. EPA is therefore providing instructions to obtain the most up-to-date information concerning IUR submissions.

For the 2006 submission period, EPA is allowing submissions, including those containing CBI, over the Internet using EPA's Central Data Exchange (CDX). Submitting IUR information through CDX is EPA's preferred submission method because this method enables EPA to notify the submitter that the Agency has received their submission, it reduces reporting errors, and it enables data to be available more quickly. Coupled with EPA's new reporting software, eIUR, the Agency believes electronic reporting will become the preferred method of reporting for industry as well as for EPA.

The reporting form, reporting software, instruction manual, and other guidance materials are available on EPA's website at www.epa.gov/oppt/iur or through EPA's hotline, and can be obtained as described in the regulatory text. EPA plans to continue to notify sites that submitted during the previous submission period of the advent of the next submission period. The notification will include information on how to obtain the documents described in this paragraph.

Although EPA prefers that submissions be made using CDX, the Agency will continue to accept submissions on CD ROM or in hard copy. Instructions for submitting IUR information in these formats are also included on the website and in the instructions manual.

2. Corrections . Section 710.52 describes the information to be reported by persons described in § 710.48. EPA is correcting two of the cross-references in this section. Section 710.57 describes recordkeeping requirements. EPA is correcting the title for this section. These changes are purely administrative, make the relevant regulatory provision internally consistent and correct, and do not have any substantive effect on any other part of the regulations at 40 CFR part 710.

a. Section 710.52(c)(4)(i)(F) states that:

b. Section 710.52(c)(4)(ii)(D) states that:

c. Section 710.57 is titled “Reporting requirements” and states that “[e]ach person who is subject to the reporting requirements of this subpart must retain records that document any information reported to EPA.” Because the subject of this section is recordkeeping requirements, EPA is correcting the section by changing the heading from “Reporting requirements” to “Recordkeeping requirements.”

3. Clarification . Section 710.52(c)(2)(i) states that:

EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial amendment and anticipates no adverse comment. This final rule will be effective on November 6, 2006 without further notice unless the Agency receives adverse comment by October 6, 2006. If EPA receives adverse comment on one or more distinct amendments, paragraphs, or sections of this rulemaking, the Agency will publish a timely withdrawal in the Federal Register indicating which provisions will become effective and which provisions are being withdrawn due to adverse comment. Any distinct amendment, paragraph, or section of today's rulemaking for which the Agency does not receive adverse comment will become effective on November 6, 2006, notwithstanding any adverse comment on any other distinct amendment, paragraph, or section of today's rule. For any distinct amendment, paragraph, or section of today's rule that is withdrawn due to adverse comment, EPA will publish a notice of proposed rulemaking in a future edition of the Federal Register . The Agency will address the comments on any such distinct amendment, paragraph, or section as part of that proposed rulemaking.

The public version of the official record for this rulemaking is contained in three separate dockets that can be accessed as described in the ADDRESSES unit. Docket ID number EPA-HQ-OPPT-2005-0059 contains the rulemaking record. This record includes the documents located in the docket.

1. USEPA. “Instructions for Reporting for the 2006 Partial Updating of the TSCA Chemical Inventory Database,” Draft. May 2006.

2. USEPA. “News About: The 2006 IUR Rule...change for easier, more accurate filing,” November 2005.

This direct final rule implements one change and several minor corrections to 40 CFR part 710, resulting in a burden and cost reduction. Since this direct final rule does not impose any new requirements, it is not subject to review by the Office of Management and Budget (OMB) under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993).

This direct final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq .

Since this action makes one change, several minor corrections, and a clarification to 40 CFR part 710, resulting in a burden reduction, EPA certifies this action will not have a significant economic impact on a substantial number of small entities. There will be no adverse impact on small entities resulting from this action.

This action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4).

The Agency has determined that this action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This action does not alter the relationships or distribution of power and responsibilities established by Congress.

The Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” This direct final rule will not have substantial direct effects on tribal governments, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.

This action does not require OMB review or any other Agency action under Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997).

Because this direct final rule is exempt from review under Executive Order 12866 due to its lack of significance, this direct final rule is not subject to Executive Order 13211, entitled Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note).

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

Regulations governing the Loligo squid fishery are found at 50 CFR part 648. The regulations require specifications for maximum sustainable yield, initial optimum yield, allowable biological catch, domestic annual harvest (DAH), domestic annual processing, joint venture processing, and total allowable levels of foreign fishing for the species managed under the Atlantic Mackerel, Squid, and Butterfish Fishery Management Plan. The procedures for setting the annual initial specifications are described in § 648.21.

The 2006 specification of DAH for Loligo squid was set at 16,872.4 mt (71 FR 10621, March 2, 2006). This amount is allocated by quarter, as shown below.

Section 648.22 requires NMFS to close the directed Loligo squid fishery in the EEZ when 80 percent of the quarterly allocation is harvested in Quarters I, II, and III, and when 95 percent of the total annual DAH has been harvested. NMFS is further required to notify, in advance of the closure, the Executive Directors of the Mid-Atlantic, New England, and South Atlantic Fishery Management Councils; mail notification of the closure to all holders of Loligo squid permits at least 72 hours before the effective date of the closure; provide adequate notice of the closure to recreational participants in the fishery; and publish notification of the closure in the Federal Register . The Administrator, Northeast Region, NMFS, based on dealer reports and other available information, has determined that 80 percent of the DAH for Loligo squid in Quarter III will be harvested. Therefore, effective 0001 hours, September 2, 2006, the directed fishery for Loligo squid is closed and vessels issued Federal permits for Loligo squid may not retain or land more than 2,500 lb (1,134 kg) of Loligo during a calendar day. The directed fishery will reopen effective 0001 hours, October 1, 2006, when the Quarter IV quota becomes available.

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

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.

NMFS closed the directed fishery for pollock in Statistical Area 610 of the GOA under § 679.20(d)(1)(iii) on August 28, 2006 (71 FR 51532, August 30, 2006).

NMFS has determined that approximately 6,500 mt of pollock remain in the directed fishing allowance. Therefore, in accordance with § 679.25(a)(1)(i), (a)(2)(i)(C) and (a)(2)(iii)(D), and to fully utilize the C season allowance of the 2006 TAC of pollock in Statistical Area 610, NMFS is terminating the previous closure and is reopening directed fishing for pollock in Statistical Area 610 of the GOA. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance will be reached after 72 hours. Consequently, NMFS is prohibiting directed fishing for pollock in Statistical Area 610 of the GOA effective 1200 hrs, A.l.t., September 3, 2006. After the effective date of this closure, the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the opening of pollock in Statistical Area 610 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 August 28, 2006.

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 § 679.25 and § 679.20 and is exempt from review under Executive Order 12866.

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.

NMFS closed the directed fishery for pollock in Statistical Area 620 of the GOA under § 679.20(d)(1)(iii) on August 28, 2006, it will publish August 31, 2006.

NMFS has determined that approximately 2,900 mt of pollock remain in the directed fishing allowance. Therefore, in accordance with § 679.25(a)(1)(i), (a)(2)(i)(C) and (a)(2)(iii)(D), and to fully utilize the C season allowance of the 2006 TAC of pollock in Statistical Area 620, NMFS is terminating the previous closure and is reopening directed fishing for pollock in Statistical Area 620 of the GOA. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance will be reached after 72 hours. Consequently, NMFS is prohibiting directed fishing for pollock in Statistical Area 620 of the GOA effective 1200 hrs, A.l.t., September 3, 2006. After the effective date of this closure, the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the opening of pollock in Statistical Area 620 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 August 29, 2006.

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 § 679.25 and § 679.20 and is exempt from review under Executive Order 12866.

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

The 2006 halibut bycatch allowance specified for the trawl Pacific cod fishery category in the BSAI is 1,434 metric tons as established by the 2006 and 2007 final harvest specifications for groundfish in the BSAI (71 FR 10894, March 3, 2006).

In accordance with § 679.21(e)(7)(v), the Acting Administrator, Alaska Region, NMFS, has determined that the 2006 halibut bycatch allowance specified for the trawl Pacific cod fishery category in the BSAI has been caught. Consequently, NMFS is closing directed fishing for Pacific cod by vessels using trawl gear in the BSAI.

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

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of directed fishing for Pacific cod by vessels using trawl gear in the BSAI. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of August 30, 2006.

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

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