Background

The regulations in “Subpart—Fruits and Vegetables” (7 CFR 319.56 through 319.56-8, referred to below as the regulations) prohibit or restrict the importation of fruits and vegetables into the United States from certain parts of the world to prevent the introduction and dissemination of plant pests that are new to or not widely distributed within the United States.

The national plant protection organization (NPPO) of South Africa has requested that the Animal and Plant Health Inspection Service (APHIS) amend the regulations to allow fresh blueberries ( Vaccinium spp.) to be imported from South Africa into the continental United States. In addition, the NPPO of Uruguay has requested that APHIS amend the regulations to allow fresh blueberries (the highbush blueberries Vaccinium corymbosum L. and the rabbit-eye blueberries Vaccinium virgatum Aiton) to be imported from Uruguay into the continental United States. As part of our evaluation of South Africa's and Uruguay's requests, we prepared pest risk assessments (PRA) for each country, as well as a risk management document that covers both countries. For these risk assessments, we assumed that any blueberries imported into the United States would undergo minimal post-harvest fruit processing, which includes the commercial processes of culling, packing, and forced-air cooling, but no washing or other treatment. Copies of the PRAs and risk management document may be obtained from the person listed under FOR FURTHER INFORMATION CONTACT or viewed on the Regulations.gov Web site (see ADDRESSES above for instruction for accessing Regulations.gov ).

The PRA prepared in response to South Africa's request, titled “Qualitative Pathway-Initiated Risk Assessment of the Importation of Blueberry Fruits ( Vaccinium species) from the Republic of South Africa into the United States” (April 2007), evaluates the risks associated with the importation of fresh blueberries into the continental United States from South Africa. The PRA and supporting documents identified one pest of quarantine significance, the Mediterranean fruit fly or Medfly ( Ceratitis capitata ), present in South Africa that could be introduced into the United States via fresh blueberries. APHIS has determined that measures beyond standard port of entry inspection are required to mitigate the risks posed by this plant pest. Therefore, we propose to require that the blueberries be subjected to cold treatment in accordance with schedule T107-a, which is described in § 305.16 of the phytosanitary treatments regulations in 7 CFR part 305.

This cold treatment schedule has been proven effective in treating the Medfly on imported fruit from South Africa.

The PRA prepared in response to Uruguay's request, titled “Importation of fresh highbush and rabbit-eye blueberry ( Vaccinium corymbosum L & V. Virgatum Aiton) fruit into the Continental United States from Uruguay” (April 2007), evaluates the risks associated with the importation of fresh blueberries into the continental United States from Uruguay. The PRA and supporting documents identified two pests of quarantine significance, the Medfly and the South American fruit fly ( Anastrepha fraterculus ), that were selected for further analysis and determined to potentially present a risk of introduction into the United States via blueberries from Uruguay. APHIS has determined that measures beyond standard port of entry inspection are required to mitigate the risks posed by these plant pests. Therefore, we propose to require that the blueberries be subjected to cold treatment in accordance with schedule T107-a-1, which is described in § 305.16 of the phytosanitary treatments regulations in 7 CFR part 305.

This cold treatment schedule has been proven effective in treating the Medfly, as well as several species of Anastrepha , including the South American fruit fly, on imported fruit from South America.

In addition to requiring cold treatment, we would limit the importation of fresh blueberries from South Africa and Uruguay to commercial shipments only and require that each shipment of fruit from South Africa and Uruguay be accompanied by a phytosanitary certificate issued by the NPPO of the importing country. Produce grown commercially is less likely to be infested with plant pests than noncommercial shipments. Noncommercial shipments are more prone to infestations because the commodity is often ripe to overripe and is often grown with little or no pest control. Commercial shipments, as defined in § 319.56-1, are shipments of fruits and vegetables that an inspector identifies as having been produced for sale and distribution in mass markets. Identification of a particular shipment as commercial is based on a variety of indicators, including, but not limited to, the quantity of produce, the type of packaging, identification of a grower or packinghouse on the packaging, and documents consigning the shipment to a wholesaler or retailer.

The proposed conditions described above for the importation of fresh blueberries from South Africa and Uruguay into the continental United States would be added to the fruits and vegetables regulations as a new § 319.56-2vv. In addition, we would also amend the table in § 305.2(h)(2)(i) of the phytosanitary treatments regulations to add entries for fresh blueberries from South Africa and Uruguay and to designate cold treatment schedule T107-a for South African blueberries and T107-a-1 for Uruguayan blueberries as approved treatments for the specific pests named in this document.

The regulations currently allow blueberries from Argentina to be imported into the United States only after fumigation with methyl bromide using treatment schedule T101-i-1-1. This is an approved treatment schedule for mitigating the risks associated with the Medfly, which was found to be present in part of Argentina. In addition to the Medfly, the South American fruit fly is also present in Argentina. Previously, we did not have specific information that blueberry is a host of the South American fruit fly, but research has since demonstrated that blueberry is a host of both the Medfly and the South American fruit fly. Because treatment schedule T101-i-1-1 has been proven effective in treating the South American fruit fly as well as the Medfly, the risks associated with South American fruit fly have already been addressed through that treatment schedule. To reflect the identification of the South American fruit fly as a pest of blueberries from Argentina, we would amend the entry for blueberries from Argentina in § 319.56-2x to include the South American fruit fly with the Medfly as a pest of blueberry fruit that requires mitigation unless the fruit is grown in a fruit fly-free area.

In May 2006, the NPPO of Argentina requested that APHIS allow the use of cold treatment as an alternative treatment to meet the United States entry requirements for blueberries from Argentina. After receiving this request, we reviewed the data supporting the request and determined that there is no statistical difference in the cold treatment susceptibility of the Medfly and the South American fruit fly when infesting various citrus cultivars. Based on that evaluation, we determined that cold treatment would also mitigate the pest risk associated with these fruit fly species in blueberries and would serve as an effective substitute for the methyl bromide treatment T101-i-1-1. Therefore, we are proposing to amend § 305.2(h) to provide for the use of cold treatment on blueberries from Argentina. This would be a more environmentally favorable option to the currently required methyl bromide fumigation treatment.

This proposed rule has been reviewed under Executive Order 12866. The rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

We are proposing to allow the importation into the continental United States of fresh blueberries from South Africa and Uruguay under certain conditions. As a condition of entry, the blueberries would have to undergo cold treatment and would have to be accompanied by a phytosanitary certificate issued by the NPPO of the importing country. This action would allow for the importation of blueberries from South Africa and Uruguay into the continental United States while continuing to provide protection against the introduction of quarantine pests. In addition, we are proposing to allow the use of cold treatment for blueberries imported into the United States from Argentina. This action would provide an alternative to the currently approved methyl bromide treatment.

The Regulatory Flexibility Act requires agencies to evaluate the potential effects of their proposed and final rules on small businesses, small organizations, and small governmental jurisdictions. Section 603 of the Act requires an agency to prepare and make available for public comment an initial regulatory flexibility analysis (IRFA) describing the expected impact of a proposed rule on small entities, unless the head of the agency certifies that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities. APHIS has prepared this IRFA in fulfillment of this requirement. We welcome public comment on expected small-entity effects of the proposed rule.

The United States is the largest producer of blueberries, supplying more than half the world's production (55 percent). Canada follows with 28 percent of world supplies and Poland comes third with 10 percent of the world's blueberry fruit production.

Michigan, Maine, and New Jersey are the leading States in U.S. blueberry production. Combined, these three States produce more than half of all U.S. blueberries (table 1). Nine States account for 98 percent of U.S. production. Fresh blueberries require harvesting by hand, whereas blueberries destined for processing can be machine-harvested. The cost of farm labor is considerably higher in the United States than in many other countries.

In 2005, the United States produced 135,021 metric tons of highbush blueberries destined for the fresh market, valued at $381 million. In the United States, highbush blueberries are harvested from April to early October with the majority of the blueberries picked from mid-June to mid-August.

Between 1995 and 2005, total U.S. blueberry consumption increased by 47 percent, from 13 ounces to 20 ounces per person. Most of the increase has been in the fresh market with a doubling in fresh consumption, from 4.3 ounces per person in 1995 to 8.7 ounces in 2005.

Table 2 shows U.S. imports and exports of fresh blueberries for the past 3 years. The United States is a net importer, and our major foreign supplier of fresh blueberries (by value) is Canada. Annual U.S. imports of fresh blueberries averaged 29,469 metric tons between 2004 and 2006.

The Federal Credit Union Act (the Act) requires the NCUA Board to prepare bylaws that “shall be used” by FCUs and authorizes NCUA to enforce FCU Bylaws through charter suspension and liquidation. 12 U.S.C. 1758, 1766. Until 1982, the FCU Bylaws were incorporated by reference in NCUA's regulations. NCUA's authority to enforce bylaw violations through less severe administrative remedies then was clear because such violations could be viewed as a violation of NCUA's regulations, thus enabling NCUA to bring a variety of administrative enforcement actions to effect compliance in appropriate cases.

In 1982, the Bylaws were removed from the regulations as part of a general deregulatory effort. At that time, three separate sections of NCUA regulations incorporated the FCU Bylaws by reference. 12 CFR 701.2, 701.3, 701.14 (1982). Another section required NCUA approval of any bylaw amendments. 12 CFR 701.4 (1982). NCUA deleted two of the sections incorporating the Bylaws by reference, as well as the regulation requiring NCUA approval of amendments, in two final rules issued in 1982. 47 FR 23685 (June 1, 1982); 47 FR 46249 (Oct. 18, 1982).

These rules were one result of a comprehensive review of agency regulations NCUA undertook in the early 1980s in an effort to eliminate redundant or outdated requirements. The goal of this process was to reduce the number and complexity of NCUA regulations and delete guidance found in other publications. 47 FR 46249 (Oct. 18, 1982). The Bylaws were only one of several items deleted from incorporation by reference in the 1982 rules cited above. One of the rules also deleted the NCUA Accounting Manual and Data Processing Guidelines from incorporation by reference. 47 FR 23685 (June 1, 1982). The other also deleted references to chartering procedures contained elsewhere in NCUA guidance. 47 FR 46249 (Oct. 18, 1982). The discussions in the proposed and final rules and at the NCUA Board meetings focus on the other provisions in the rules, with very little information about the Bylaws. Id. ; 47 FR 23750 (June 1, 1982); 47 FR 23686 (June 1, 1982); 46 FR 48940 (Oct. 5, 1981); Recordings of NCUA Board Meetings Sept. 24, 1981; May 20, 1982 and Sept. 23, 1982. The sole comment about the Bylaws available in the administrative record is in the preamble to one of the final rules, and it states: “The commenters also were in agreement with NCUA's deregulation of charter and bylaw provisions and condensation of chartering procedures.” 47 FR at 46249.

The Board's 1982 actions resulted in the retention of one section incorporating the Bylaws by reference, § 701.2, which was not deleted until 1999. 12 CFR 701.2 (1982-1999). Although one of the 1982 rules deleted other publications incorporated by reference in § 701.2, while leaving the reference to the Bylaws intact, the proposed and final rules do not explain this action. 47 FR 23685 (June 1, 1982); 46 FR 48490 (Sept. 24, 1981). NCUA deleted § 701.2 as a technical amendment in 1999. 64 FR 57363 (Oct. 25, 1999). After reviewing the entire record, retention of the incorporation of the bylaws in § 701.2 appears to have been an oversight.

When the Bylaws were deregulated in 1982, the rule changes did not address the issue of whether the agency would enforce the Bylaws or intervene in disputes concerning the Bylaws. NCUA's policy not to become involved in bylaw disputes unless the bylaw violation threatens the safety and soundness of the credit union or violates a provision of the FCU Act or NCUA regulations evolved in various issuances and procedures after 1982. Numerous legal opinion letters state this policy, as well as NCUA's position that the Bylaws represented a contract between a credit union and its members. NCUA's view was that state corporate law, if consistent with the Act and NCUA regulations, determined disputes regarding the enforcement of bylaw provisions. As a result of the deregulation of the bylaws, NCUA's ability to enforce the Bylaws, absent a safety and soundness reason, has become problematic.

NCUA's post-deregulatory policy has sometimes had the effect of requiring FCU members to resort to state court action in order to force their credit union to abide by its bylaws. While this approach worked fairly well for the most part over the years, recently, NCUA has learned of cases where members have been unable to use the judicial system to enforce rights granted by the Bylaws. While NCUA continues to maintain members can enforce the bylaws as a contract, the Board recognizes that, in certain circumstances, this remedy may not be practical or provide adequate relief due to circumstances such as timing and cost.

As the administrative record demonstrates, the Board did not foresee the current challenges members can face in seeking to enforce the bylaws when it deregulated the Bylaws in 1982 in an effort to eliminate redundancy and maximize flexibility for FCUs. At this time, the Board finds reincorporating the bylaws into NCUA's regulations is an appropriate step. Reincorporation is the least burdensome way to ensure FCUs and their members are aware of NCUA's authority to issue and enforce the Bylaws under the Act.

Congress has provided the Board explicit authority in the Act to suspend or revoke the charter of any FCU, or place the FCU into involuntary liquidation, for a violation of any provision of its bylaws. 12 U.S.C. 1766(b)(1). A charter suspension or liquidation, however, is a very extreme remedy and is unlikely to be an appropriate remedy for any bylaw violation. The resultant loss of credit union service would likely result in far more harm to members than the FCU's failure to follow its bylaws.

NCUA believes the better approach is to reincorporate the Bylaws into NCUA's regulations. The Board believes credit unions and their members should be able to resolve bylaw disputes without NCUA taking administrative action. In those rare cases where disputes cannot be resolved, NCUA will have clear authority to use a range of administrative actions. This will result in administrative remedies far less harsh than a charter suspension or liquidation to effect a credit union's compliance with its bylaws.

Reincorporating the Bylaws into NCUA's regulations imposes no new regulatory burden, as all FCUs are already required to have NCUA-approved bylaws. NCUA publishes form bylaw language and all FCUs have adopted some version of the form language. The latest version of the Bylaws allows FCUs flexibility wherever possible by providing check-off or fill-in-the-blank options that can be adopted without further NCUA action. NCUA's regional directors must approve all other bylaw amendments. NCUA will approve all proposed bylaw amendments that do not conflict with the Act or NCUA regulation and guidance, present a potential safety and soundness threat, or restrict members' rights. NCUA does not maintain copies of each FCU's bylaws and bylaw amendments.

In considering reincorporation, the Board again thought about whether it should continue to prescribe model bylaw language or whether it should, as suggested by several commenters during the 2006 Bylaw revision process, prescribe only general categories and allow FCUs to draft their own bylaws. The Board's concerns with this approach remain the potential for confusion and the adoption of illegal bylaw provisions. While some previous commenters suggested a categories-style rule, others, including credit union employees and credit union legal representatives, have indicated that having form Bylaws is an aid and is not overly burdensome. Credit union staff members and boards of directors know that the Bylaws are a condensation of some requirements in the Act, NCUA regulations, and NCUA guidance. For most, the option to draft bylaws completely on their own is unattractive because of the amount of research required to ensure inclusion of all necessary provisions. Also, presumably, NCUA would have to adopt some oversight mechanism to prevent adoption of bylaw provisions that are inconsistent with statutory and regulatory requirements or present safety and soundness concerns. Because NCUA does not now maintain copies of individual FCU bylaws or review bylaws in examinations as a matter of course, having a category-type regulation would likely result in more regulation, not less.

The Board also considered modeling its bylaw regulation on the approach used by the Office of Thrift Supervision (OTS). The OTS has detailed regulations listing required bylaw provisions and also provides model bylaw language separately. 12 CFR 544.5, 552.5; OTS Applications Handbook, Forms 1577, 1508. The model language is mostly a restatement of the regulation. Id . Thrifts are not required to adopt the model language exactly, and, like FCUs, may also adopt certain optional provisions. All amendments, including the model option provisions, must be filed with OTS. 12 CFR 544.5(d), 552.6(c). The result of the OTS approach is similar to NCUA's. Both federal thrifts and FCUs have form bylaw language. Although the regulation permits thrifts to adopt their own language rather than the model, drafting bylaws that comply with the requirements of the regulation results in bylaws nearly indistinguishable from the form bylaws. Both federal thrifts and FCUs are allowed to select certain options without further agency action, but thrifts must file all amendments with OTS. After considering the OTS approach, the Board continues to believe that incorporating the Bylaws by reference into NCUA's regulations is the most expeditious and least burdensome approach.

The proposed rule will give NCUA authority to enforce bylaw violations in certain, limited cases through administrative tools in the Act. Incorporating the FCU Bylaws into NCUA's regulations will not mean NCUA will become involved as a matter of course in bylaw disputes. The Board believes credit union officials and members should be able to work together to resolve the vast majority of bylaw and internal governance disputes. This was true before 1982 when the Bylaws were incorporated by reference in NCUA's regulations and, as was the case then, NCUA has no intention of using agency resources to enforce every bylaw violation. Furthermore, under the risk-based examination system in use for FCUs, examiners do not currently, nor will they under this proposed rule, inquire into an FCU's bylaws unless the FCU's management raises the issue.

A credit union's management, however, should not be able to ignore the Bylaws unilaterally. Members have a reasonable expectation that their credit union will be operated in accordance with its approved bylaws. NCUA already has the authority to exercise its administrative enforcement authority when a credit union violates the Act or NCUA regulations or a threat to the safety and soundness of the institution exists. NCUA also believes it should have the ability to institute an enforcement action when a bylaw violation poses a threat to fundamental, material credit union member rights. These rights are those that go to the very heart of the cooperative principles that serve as the cornerstone of the credit union system. Specifically, they include the right to:

• Maintain a share account;

• Maintain credit union membership;

• Have access to credit union facilities;

• Participate in the director election process;

• Attend annual and special meetings; and

• Petition for removal of directors and committee members.

It continues to be NCUA's intent that credit unions and their members will make every effort to resolve bylaw disputes without NCUA intervention. If a bylaw dispute cannot be resolved, however, credit union officials or members should contact the regional office with jurisdiction for the FCU. Regional offices have substantial experience in reviewing and working with credit unions on bylaw disputes, as well as proposed bylaw amendments. The regional offices have historically assisted credit union officials and members in resolving bylaw and internal governance disputes. However, if a matter involves fundamental, material credit union member rights, NCUA will have clear discretion to take administrative action as warranted. The Board believes this is preferable to requiring credit unions and their members to resort to the state courts, with the attendant expense, time delays and uncertainty regarding bylaw enforceability.

NCUA issued an updated and revised version of the FCU Bylaws in 2006. 71 FR 24551 (April 26, 2006). Because the revised Bylaws were issued so recently, NCUA believes another major review is unnecessary at this time. The Board believes, however, this rulemaking presents an appropriate opportunity to address one particular circumstance previously only addressed in legal opinions, namely, the responsibility of the Supervisory Committee to assume the responsibilities of the board of directors temporarily if, for any reason, an entire board of directors is simultaneously removed or unable to serve. See OGC Opinion 06-0446 (April 27, 2006). This proposed rule adds new provisions to the Bylaws clarifying responsibilities and procedures if, for any reason, including removal or other inability to serve, an FCU has no remaining directors. This proposed rule also revises the introduction to the Bylaws to reflect the reincorporation of the Bylaws in the regulations.

The proposal adds a new Section to Article IX to clarify the Supervisory Committee's responsibilities if an FCU has no remaining directors. If an entire board of directors resigns, is removed simultaneously, or for whatever circumstance is unable to serve, the Supervisory Committee has the responsibility to act as a temporary board of directors. As has been previously stated in NCUA legal opinions, the FCU Bylaws will now provide that, as the temporary board of directors, the Supervisory Committee must either schedule a special meeting to elect an interim board, or, if the credit union's next annual meeting of members will occur within 45 days after the FCU loses its directors, must serve as the temporary board until the next annual meeting.

NCUA believes this provision belongs in Article IX, entitled “Supervisory Committee,” because it addresses responsibilities of the Supervisory Committee when an FCU has no remaining directors. Several other bylaws refer to procedures by which remaining directors can replace directors who have been removed or have resigned, but because this bylaw addresses the situation where no directors remain and the responsibility falls upon the Supervisory Committee, it is placed in Article IX.

The proposal also cross references this new language in Article XVI, Section 3, addressing removal of directors by members, and Article VI, Section 4, addressing board of director vacancies. These new provisions do not automatically become part of any FCU's existing bylaws and FCUs are not required to adopt them. In the event a credit union does not adopt the new bylaw provisions, NCUA will continue to follow the guidance expressed in its prior legal opinion, cited above.

The NCUA Board has also considered whether to allow more flexibility in the Bylaws regarding the number of members necessary to request a special meeting as well as the timing for when the meeting is held. NCUA's position is that any necessary changes in this area for a particular credit union should be handled through the bylaw amendment process explained in the introduction to the Bylaws.

NCUA is also adopting a minor procedural change in an effort to streamline the bylaw amendment process even further. NCUA will continue to post all bylaw amendment opinion letters on its Web site. Bylaw opinion letters issued since the last major revision of the bylaws in April 2006 will now include the language for any amendment approved, or a link to that language. Credit unions seeking to adopt a bylaw amendment using identical language to a previously approved amendment must still file the proposed amendment with their Regional Office, but will receive notice of the Region's action on their request within 15 business days. Review of all bylaw amendment requests ensures that an amendment approved for one FCU is appropriate for another FCU, but NCUA believes this review can be accomplished more quickly when the requested amendment is identical to one approved for another FCU.

Finally, the proposal includes a revised introduction to reflect incorporation of the Bylaws in NCUA regulations. The introduction retains language explaining how to adopt and amend the bylaws as well as additional guidance. For bylaw amendments, the introduction now states that FCUs seeking a bylaw amendment identical to a previously approved bylaw amendment can expect an answer from their Regional Office within 15 business days of the receipt of the request.

NCUA seeks comment on the proposal to incorporate the Bylaws in NCUA regulations. NCUA specifically requests comments on the standards, discussed above, for when it will intervene in bylaw disputes, including any other criteria NCUA should consider in determining when it will institute an enforcement action regarding the bylaws. Also, NCUA specifically requests comment on the “fundamental, material member rights” discussed above and whether any rights should be added to or deleted from this list. Finally, NCUA seeks comments on the addition of the director succession bylaw and the revised introduction.

The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact a rule may have on a substantial number of small credit unions, defined as those under ten million dollars in assets. This proposed rule incorporates the Bylaws into NCUA's regulations without imposing any regulatory burden, since the FCU Act requires FCUs to adopt NCUA-approved bylaws. The proposed rule will not have a significant economic impact on a substantial number of small credit unions, and, therefore, a regulatory flexibility analysis is not required.

NCUA has determined that the proposed rule would not increase paperwork requirements under the Paperwork Reduction Act of 1995 and regulations of the Office of Management and Budget. 44 U.S.C. 3501 et seq. ; 5 CFR part 1320.

Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. In adherence to fundamental federalism principles, NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order. The proposed rule would not have substantial direct effects on the states, on the connection between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. NCUA has determined that this proposed rule does not constitute a policy that has federalism implications for purposes of the executive order.

The NCUA has determined that the proposed rule would not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999, Public Law 105-277, 112 Stat. 2681 (1998).

Accordingly, NCUA proposes to amend 12 CFR part 701 by adding § 701.2 to read as follows:

NCUA's chartering and field of membership policy is set out in NCUA's Chartering and Field of Membership Manual (Chartering Manual), Interpretive Ruling and Policy Statement (IRPS) 03-1. 68 FR 18333 (Apr. 15, 2003). The policy is set forth in IRPS 03-1 and implements credit union field of membership law under the Federal Credit Union Act. In 2006, NCUA issued amendments to the Chartering Manual chapter on underserved areas. NCUA IRPS 06-1, 71 FR 36667 (Jun. 28, 2006).

The Board issued its last comprehensive rulemaking regarding its chartering policy in the spring of 2003. 68 FR 18333 (Apr. 15, 2003). Over the past four years, NCUA's Field of Membership Taskforce has monitored and reviewed the implementation of IRPS 03-1 and its amendments in an effort to improve consistency and provide a basis for further clarifications and modifications, if necessary. In response to this continued oversight, and requests from the NCUA Board, staff has identified issues that need clarification and are the basis for this proposal.

Chapter 2 Field of Membership Requirements for Community Credit Unions: Section V—Community Charter Requirements.

In 1998 Congress passed the Credit Union Membership Access Act (“CUMAA”) and reiterated its longstanding support for credit unions, noting that they “have the specif[ic] mission of meeting the credit and savings needs of consumers, especially persons of modest means.” Public Law 105-219, section 2, 112 Stat. 913 (August 7, 1998). The Federal Credit Union Act (“FCUA”) grants the NCUA Board broad general rulemaking authority over federal credit unions. 12 U.S.C. 1766(a). In passing CUMAA Congress amended the FCUA and specifically delegated to the Board the authority to define by regulation the meaning of a “well-defined local community” for federal credit union community charters. 12 U.S.C. 1759(g).

In developing a working regulatory definition of a local community the Board has been mindful of the statutory language as well as its important responsibility to ensure that it charters safe and sound credit unions that can provide a broad range of financial services to as many people in the community as possible.

Since 2000 there has been significant growth in the number of credit unions with community charters. The majority of these have come from conversions of credit unions with single and multiple common bond fields of membership. In 2000 approximately 8.6% of federal credit union charters were community charters. By the end of 2006 approximately 22.5% of federal charters were community charters. The proportion of federal credit union members that belong to federal community charters increased significantly by the end of 2006 to 32.6%, surpassed only by the proportion of members in multiple common bond credit unions which at the end of 2006 was 52.3%. The increasing number of federal community charters has resulted in an increasing amount of assets concentrated in federal community charters. At the end of 2006 approximately 29.5% of all federal credit union assets were in community charters. As time passes and the membership profiles of these credit unions change from associational or occupational based to community based fields of membership, community charters are likely to enhance the delivery of financial services to individuals at all income levels throughout the communities they serve.

Community charters are playing an increasingly important role in helping credit unions fulfill the longstanding mission envisioned by Congress in passing the FCUA and restated in 1998 with the passage of CUMAA. Given their increasing significance it is critical that NCUA apply its expertise to approve community charter applications for local communities that are conducive to that mission, that are sized and structured in a way that assures the credit union's financial stability and long term viability, and where the applicant's proposal demonstrates the ability to offer credit union service to as many people as possible. Today community charters are collectively in sound financial condition. As of March 2007, over eighty percent of federal community charters have CAMEL composite ratings of one or two. Federal community charters also generally report strong levels of net worth. As of December 31, 2006, federal community charters had an aggregate net worth ratio of 11.48%.

The Board continues to recognize two important characteristics in a local community charter. First, there must be some geographic certainty to the community boundaries, e.g., they must be well-defined; and next, there should be sufficient social and economic activity among enough community members to assure that a viable community exists.

Historically, we have expressed this latter requirement as “interaction and/or shared common interests.” Chartering Manual, Chapter 2, V.A.1. This approach is consistent with the longstanding mission of credit unions reiterated by Congress in the findings section of CUMAA, when it noted that, “to promote thrift and credit extension, a meaningful affinity and bond among members manifested by a commonality of routine interaction, shared and related work experiences, interests, or activities * * * is essential to the fulfillment of the public mission of credit unions.” Public Law 105-219, section 2, 112 Stat. 913 (August 7, 1998).

The Board has gained broad experience in reviewing what constitutes a well-defined local community through the analysis and approval of numerous community charter conversions and expansions. In this process the Board has exercised its regulatory judgment in determining whether, in a particular case, a well-defined local community exists. This involves the application of its expertise to the question of whether a proposed area has a sufficient level of interaction and/or shared common interests to be considered a well-defined local community in which a credit union can flourish and successfully provide thrift, credit, and other financial services to members of the community.

The Board's experience also indicates that there is ample uncertainty among applicants regarding two important issues, particularly in connection with applications involving large multi-jurisdictional areas. First, how does an applicant best demonstrate interaction and/or shared common interests? Second, what amount of evidence is required in a particular case?

In an attempt to address these concerns the Board is proposing to modify the definition of what constitutes a well-defined local community to utilize objective measurable standards when appropriate, as well as to revise some of the documentation requirements for other types of local community charters. These proposed changes should make it easier for an applicant to determine and demonstrate whether a proposed area is a well-defined local community while at the same time maintaining the use of many of the most significant indicia of interaction and/or shared interests. The Board believes that this proposal will result in more objective application of the standards, less difficulty for applicants, and more efficient use of agency resources. The Board looks forward to public comments on all aspects of these proposed changes.

The Federal Credit Union Act provides that a “community credit union” consists of “persons or organizations within a well-defined local community, neighborhood, or rural district.” 12 U.S.C. 1759(b)(3). The Act expressly requires the Board to apply its regulatory expertise and define what constitutes a well-defined local community. 12 U.S.C. 1759(g). It has done so in the Chartering Manual, Chapter 2, Section V, Community Charter Requirements. In 2003, the Board, after issuing notice and seeking comments, issued IRPS 03-1 that stated any county, city, or smaller political jurisdiction, regardless of population size, is by definition a local community. 68 FR 18334, 18337 (Apr. 15, 2003). Under this definition, no documentation demonstrating that the political jurisdiction is a well-defined local community is required.

After four years of experience, the Board has reviewed this definition of well-defined local community and still finds it compelling. The Board finds that a single governmental unit below the state level is well-defined and local, consistent with the governmental system in the United States consisting of a local, state, and federal government structure. A single political jurisdiction also has strong indicia of a community, including common interests and interaction among residents. Local governments by their nature generally must provide residents with common services and facilities, such as educational, police, fire, emergency, water, waste, and medical services. Further, a single political jurisdiction frequently has other indicia of a well-defined local community identified in the Chartering Manual as acceptable examples of documentation, such as a major trade area, employment patterns, local organizations and/or a local newspaper. Such examples of commonalities are indicia that single political jurisdictions are well-defined local communities where residents have common interests and/or interact.

The Board's experience has been that well-defined local communities can come in various population and geographic sizes. While the statutory language ‘local community’ does imply some limit, Congress has directed NCUA to establish a regulatory definition consistent with the mission of credit unions. While single political jurisdictions below the state level meet the definition of a well-defined local community, nothing precludes a larger area comprised of multiple political jurisdictions from also meeting the regulatory definition. There is no statutory requirement or economic rationale that compels the Board to charter only the smallest well-defined local community in a particular area.

The Board's experience has been that applicants have the most difficulty in preparing applications involving larger areas with multiple political jurisdictions. This is because, as the population and area increase and multiple jurisdictions are involved, there is often conflicting evidence both for and against interaction and/or shared common interests. This often causes some confusion to the applicant about what evidence is required and what criteria are considered to be most significant under such circumstances.

The current chartering manual provides examples of the types of information an applicant can provide that would normally evidence interaction and/or shared common interests. These include but are not limited to: (1) Defined political jurisdictions; (2) major trade areas; (3) shared common facilities; (4) organizations within the community area; and (5) newspapers or other periodicals about the area.

These examples are helpful but the Board's experience is that very often in situations involving multiple jurisdictions, where it has determined that a well-defined local community exists, interaction or common interests are evidenced by a major trade area that is an economic hub, usually a dominant city, county or equivalent, containing a significant portion of the area's employment and population. This central core often acts as a nucleus drawing a sufficiently large critical mass of area residents into the core area for employment and other social activities such as entertainment, shopping, and educational pursuits. By providing jobs to residents from outside the dominant core area it also provides income that then generates further interaction both in the hub and in outlying areas as those individuals spend their earnings for a wide variety of purposes in outlying counties where they live. This commonality through interaction and/or shared common interests in connection with an economic hub is conducive to a credit union's success and supports a finding that such an area is a local community.

The Board views evidence that an area is anchored by a dominant trade area or economic hub as a strong indication that there is sufficient interaction and/or common interests to support a finding of a local community capable of sustaining a credit union. This type of geographic model greatly increases the likelihood that the residents of the community manifest a “commonality of routine interaction, shared and related work experiences, interests, or activities * * *” that are essential to support a strong healthy credit union capable of providing financial services to members throughout the area. Public Law 105-219, section 2(3), 112 Stat. 913 (August 7, 1998).

The Office of Management and Budget (“OMB”) publishes statistics that identify geographic areas that exhibit these important criteria. The Board is familiar with and has utilized these statistics. In the past four years the agency has approved in excess of 50 community charters involving Metropolitan Statistical Areas, usually involving a community based around a dominant core trade area.

The Board believes that when statistics can demonstrate the existence of such relevant characteristics it is appropriate to presume that sufficient interaction and/or common interests exist to support a viable community based credit union. In such situations the area should be entitled to a presumption that it meets the regulatory definition of a local community.

Certain areas do not have one dominant economic hub. Other areas may contain two or more dominant hubs. These situations diminish the persuasiveness of the evidence and make it inappropriate to engage in the presumption. In those instances the Board proposes to seek public comment and require additional evidence in order to assure that its critical analysis considers all relevant evidence.

On December 27, 2000, OMB published Standards for Defining Metropolitan and Micropolitan Statistical Areas. 65 FR 82228. The following definitions established by OMB are relevant here:

Core Based Statistical Area (“CBSA”) —“A statistical geographic entity consisting of the county or counties associated with at least one core (urbanized area or urban cluster) of at least 10,000 population, plus adjacent counties having a high degree of social and economic integration with the core as measured through commuting ties with the counties containing the core. Metropolitan and Micropolitan Statistical Areas are the two categories of Core Based Statistical Areas.” 65 FR 82238 (Dec. 27, 2000).

Metropolitan Division —“A county or group of counties within a Core Based Statistical Area that contains a core with a population of at least 2.5 million.” 65 FR 82238 (Dec. 27, 2000). OMB recognizes that Metropolitan Divisions often function as distinct, social, economic, and cultural areas within a larger Metropolitan Statistical Area. See OMB Bulletin No. 07-01, December 18, 2006.

Metropolitan Statistical Area (“MSA”) —“A Core Based Statistical Area associated with at least one urbanized area that has a population of at least 50,000. The Metropolitan Statistical Area comprises the central county or counties containing the core, plus adjacent outlying counties having a high degree of social and economic integration with the central county as measured through commuting.” 65 FR 82238 (Dec. 27, 2000).

Micropolitan Statistical Area (“MicroSA”) —“A Core Based Statistical Area associated with at least one urban cluster that has a population of at least 10,000, but less than 50,000. The Micropolitan Statistical Area comprises the central county or counties containing the core, plus adjacent outlying counties having a high degree of social and economic integration with the central county as measured through commuting.” 65 FR 82238 (Dec. 27, 2000).

Demonstrated commuting patterns supporting a high degree of social and economic integration are a very significant factor in community chartering, particularly in situations involving large areas with multiple political jurisdictions. In a community based model significant interaction through commuting patterns into one central area or urban core strengthens the membership of a credit union and allows a community based credit union to efficiently serve the needs of the membership throughout the area. Such data demonstrates a high degree of interaction through the major life activity of working and activities associated with employment. Large numbers of residents share common interests in the various economic and social activities contained within the core economic area.

Historically, commuting has been an uncomplicated method of demonstrating functional integration. NCUA agrees with OMB's conclusion that “Commuting to work is an easily understood measure that reflects the social and economic integration of geographic areas.” 65 FR 82233 (Dec. 27, 2000). The Board also finds compelling OMB's conclusion that commuting patterns within statistical areas demonstrate a high degree of social and economic integration with the central county. OMB's threshold for qualifying a county as an outlying county eligible for inclusion in either a MSA or MicroSA is a threshold of 25% inter-county commuting. OMB also considers a multiplier effect (a standard method used in economic analysis to determine the impact of new jobs on a local economy) that each commuter would have on the economy of the county in which he or she lives and notes that a multiple of two or three generally is accepted by economic development analysts for most areas. 65 FR 82233 (Dec. 27, 2000). “Applying such a measure in the case of a county with the minimum 25 percent commuting requirement means that the incomes of at least half of the workers residing in the outlying county are connected either directly (through commuting to jobs located in the central county) or indirectly (by providing services to local residents whose jobs are in the central county) to the economy of the central county or counties of the CBSA within which the county at issue qualifies for inclusion.” 65 FR 82233 (Dec. 27, 2000).

The Board is proposing the establishment of a standard statistical definition of a well-defined local community. The Board believes that the application of strictly statistical rules for determining whether a CBSA should be presumed a well-defined local community has the advantage of minimizing ambiguity and making the application process less time consuming. While it finds evidence established in this manner to be compelling, the Board believes that the reasonableness of the presumption is further strengthened when additional factors establishing the dominance of the core area are present. These additional factors are also objective and easily measurable. First, as OMB has noted, Metropolitan Divisions often function as distinct social, economic, and cultural areas. In the Board's view this evidence detracts from the cohesiveness of the CBSA. Accordingly, the proposal will not permit a CBSA to meet the automatic definition of a well-defined local community when it contains a Metropolitan Division. Next, the Board acknowledges that not all areas of the country are the same and there may be a CBSA that does not contain a sufficiently dominant core area or contains several significant core areas. Such situations also dilute the cohesiveness of the CBSA. For these reasons the Board proposes to require that the CBSA contain a dominant core city, county, or equivalent that contains the majority of all jobs and 1/3 of the total population contained in the CBSA before the definition would be met. These additional requirements will assure that the core area dominates any other area within the CBSA with respect to jobs and population. Applicants can find information about an area's population and number of local jobs, based upon an analysis of where people who work in an area reside, at the Bureau of the Census' Internet site ( http://www.census.gov ). Information about the current definitions of CBSAs is available at the Office of Management and Budget's Internet site ( http://www.whitehouse.gov/omb ). Applications for part of a CBSA are acceptable provided they include the dominant core city, county, or equivalent.

Accordingly, the Board proposes establishing a new statistical definition for a well-defined local community in cases involving multiple political jurisdictions when the following three requirements are met:

• The area must be a recognized CBSA or part thereof without a Metropolitan Division; and

• The area must contain a dominant city, county or equivalent with a majority of all jobs in the CBSA; and

• The dominant city, county or equivalent must contain at least 1/3 of the CBSA's total population.

Although there is no legal requirement to do so, the Board believes that in situations where the CBSA does not exhibit the standards required to meet the new statistical definition for a well-defined local community, or the area does not qualify under the single political jurisdiction definition, public notice and comment will assist it with its analysis of whether the area in question is a well-defined local community capable of supporting a community credit union while also informing the public about the process. The public notice and comments will assist the Board in its critical analysis of the evidence and provide the public with an opportunity to provide timely comments and relevant information to the NCUA on the proposed local community area the credit union is seeking to serve.

Accordingly, for those community charter applications that do not meet the established definitions of a well-defined local community, the Board proposes to publish a notice in the Federal Register . The proposed rule contains a new section entitled “V.A.3 Public Notice and Comment Procedures.” The notice will solicit comments relevant to the proposed community charter, including whether it meets the well-defined local community requirements. The comments will be considered by the agency before a decision on the application is made. The Board is proposing a 30 calendar day comment period.

Currently under the Chartering Manual, multiple political jurisdictions with populations of up to 500,000 and Metropolitan Statistical Areas (MSAs) with populations of up to one million may qualify as a local community based on a narrative description of the area. The narrative must describe how the area meets the standards for community interaction and/or common interests. The Board is proposing that applications for areas containing multiple political jurisdictions that do not meet the proposed statistical definition be subject to public notice and comment. In those cases applicants will also be required to supplement the narrative with supporting documentation demonstrating how the regulatory requirements of a well-defined local community have been met.

This amendment would assure greater consistency in NCUA's application of chartering requirements for all community charter applicants seeking to serve multiple political jurisdictions. The proposed change would clarify NCUA's expectation and inform applicants that statements in a narrative must be substantiated through documentation.

The Board seeks to expand the well-defined local community documentation section to provide more guidance to credit unions on the type of evidence that demonstrates whether the area is a well-defined local community. To accomplish this the Board is proposing to add language providing more descriptive information and examples relevant to establishing the existence of well-defined local communities in order to clarify the degree of documentation required. For example, the Board finds that population density and geographic size can be useful to consider in determining whether the area is a well-defined local community.

The Board also seeks to emphasize that community charter applicants can provide NCUA with statistical data, such as on employment patterns, in addition to third-party surveys and authoritative letters from government or corporate officials. This type of documentation can be used to support interaction and/or common interests among residents.

Since 2001, the Chartering Manual has exempted a community charter applicant from submitting a narrative summary or documentation supporting a request of a proposed community charter, amendment, or conversion, with the same exact geographic area as one NCUA had previously approved. The Board is proposing a five-year limitation on a community charter applicant's use of this exemption. NCUA believes that five years is an appropriate time period in which to allow applicants to rely upon the narrative and documentation in past submissions. The Board requests comment regarding whether this or another time period is appropriate.

In some parts of the United States, economic growth and population change can be dramatic over time. This means that documentation supporting a proposed community for some areas may become outdated more quickly than documentation supporting other areas where indicia of community interaction and/or common interests may still be valid. With this change NCUA seeks to strike a balance between requiring an applicant to repeat the exercise of demonstrating a proposed area is a well-defined local community, when NCUA already has made that exact determination, and retaining an exemption based on a previous narrative and documentation that may no longer be accurate. The Board is also proposing adding a new heading “V.A.5—Previously Approved Communities” to describe this exemption to make this provision more reader-friendly. This limitation would not apply to applications that meet the single political jurisdiction or statistical area definition of local community.

Since the passage of CUMAA, despite the separate statutory language authorizing local community credit unions comprised of a rural district, NCUA has not defined that term. NCUA's experience is that rural areas often lack the normal indicia that NCUA considers in making a determination that a proposed area is a well-defined local community. Unlike the proposed statistical area definition, the Board is proposing a definition that reflects an area that may lack the traditional characteristics of interaction or shared common interests. Therefore, the proposal does not require an applicant to demonstrate interaction or shared common interests. The Board expects a rural district to be less densely populated and frequently lacking any centralized urban core or cluster. Although the proposed rural district may include contiguous counties the Board also believes such a district should have a relatively small, widely disbursed, population. Therefore, NCUA is proposing to define a rural district as an area that is not in an MSA or MicroSA and has a population density that does not exceed 100 people per square mile where the total population of the rural district does not exceed 100,000. This would exclude the majority of the United States population that lives in and around large urban areas yet, based on census data, still include the vast majority of counties in the United States having fewer than 100,000 persons. Population density also varies widely but many counties also have a density of less than 100 persons per square mile. Together these requirements would assure that an area under consideration as a rural district has both a small total population and a relatively light population density. If the Board adopts a definition it will modify the language throughout the Chartering Manual to assure conformity.

Because the NCUA Board has less experience with rural districts, it seeks public comment on whether it should adopt its proposed definition, a definition used by one of the agencies discussed below, or some other definition. Comment is also requested regarding whether a rural district that consists of a non-metropolitan or rural area should be subject to different analyses or documentation requirements than metropolitan or suburban areas. The Board welcomes comments on what specific indicia may be appropriate to demonstrate the existence of a rural district consistent with the FCU Act.

When developing the proposed definition for rural district, the Board considered the criteria other executive branch agencies use as a framework for defining what is rural in the United States. These agencies are the U.S. Census Bureau, the OMB, and the Economic Research Service (ERS) of the U.S. Department of Agriculture (USDA). The table that follows summarizes each agency's definition of what constitutes a rural area.

The Census Bureau, the OMB (by virtue of no MSA designation in the area), and the ERS all provide definitions of rurality based on their analysis of 2000 Census data.

The Board is proposing to provide community charter applicants with more consistent guidance regarding NCUA's practices for reviewing the adequacy of business and marketing plans. Under the current Chartering Manual, a credit union converting to or expanding its community charter must provide, “a marketing plan that addresses how the community will be served.” The Board is proposing a clarification to the marketing plan requirement to provide credit unions with additional guidance. The proposal explains that the plan should include the financial products, programs, and services to be provided to the entire community.

In general, where both credit unions are community charters, the continuing credit union must meet the criteria for expanding the community boundaries. A community credit union cannot merge into a single occupational/associational, or multiple common bond credit union, except in an emergency merger. However, a single occupational or associational, or multiple common bond credit union can merge into a community charter as long as the merging credit union has a service facility within the community boundaries or a majority of the merging credit union's field of membership would qualify for membership in the community charter. While a community charter may take in an occupational, associational, or multiple common bond credit union in a merger, it will remain a community charter. Groups within the merging credit union's field of membership located outside of the community boundaries may not continue to be served. The merging credit union must notify groups that will be removed from the field of membership as a result of the merger. However, the credit union may continue to serve members of record.

NCUA is unaware of any particular problems in this merger context. We are soliciting comments, however, to determine if there are any concerns in this regard and, if so, what adjustments to NCUA's Chartering Manual may be required.

Chapter 3 Service To Underserved Communities: Section III.A—General.

The FCUA defines an underserved area as a local community, neighborhood, or rural district that is an “investment area” as defined in Section 103(16) of the Community Development Banking and Financial Institutions Act of 1994. Currently Chapter 3 of the Chartering Manual provides that for an underserved area, the well-defined local community, neighborhood, or rural district requirement is met when the area meets the definition of local community set forth in Section III.A.

The Board proposes to amend the language in this Section to conform it with the proposed changes to the definition of local community by removing the definitions from Chapter 3 and instead referring the reader to Chapter 2 for the actual text of the definition. This change will avoid confusion and eliminate any need for future changes to this Section should the definitions contained in Chapter 2 change.

The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact a regulation may have on a substantial number of small credit unions, primarily those under ten million dollars in assets. The proposed amendments will not have a significant economic impact on a substantial number of small credit unions and therefore, a regulatory flexibility analysis is not required.

In accordance with the requirements of the Paperwork Reduction Act of 1995 (PRA), NCUA may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OMB control number assigned to § 701.1 is 3133-0015, and to the forms included in Appendix D is 3133-0116. NCUA has determined that the proposed amendments will not increase paperwork requirements and a paperwork reduction analysis is not required.

Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. In adherence to fundamental federalism principles, NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order. The proposed rule would not have substantial direct effects on the states, on the connection between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. NCUA has determined that the proposed rule does not constitute a policy that has federalism implications for purposes of the executive order because it only applies to federal credit unions.

The NCUA has determined that the proposed rules would not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act of 1999, Pub. L. 105-277, 112 Stat. 2681 (1998).

Accordingly, NCUA proposes to amend 12 CFR part 701 as follows:

We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28348; Directorate Identifier 2007-NM-060-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments.

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 proposed 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 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.

The FAA has examined the underlying safety issues involved in fuel tank explosions on several large transport airplanes, including the adequacy of existing regulations, the service history of airplanes subject to those regulations, and existing maintenance practices for fuel tank systems. As a result of those findings, we issued a regulation titled “Transport Airplane Fuel Tank System Design Review, Flammability Reduction and Maintenance and Inspection Requirements” (67 FR 23086, May 7, 2001). In addition to new airworthiness standards for transport airplanes and new maintenance requirements, this rule included Special Federal Aviation Regulation No. 88 (“SFAR 88,” Amendment 21-78, and subsequent Amendments 21-82 and 21-83).

Among other actions, SFAR 88 requires certain type design ( i.e. , type certificate (TC) and supplemental type certificate (STC)) holders to substantiate that their fuel tank systems can prevent ignition sources in the fuel tanks. This requirement applies to type design holders for large turbine-powered transport airplanes and for subsequent modifications to those airplanes. It requires them to perform design reviews and to develop design changes and maintenance procedures if their designs do not meet the new fuel tank safety standards. As explained in the preamble to the rule, we intended to adopt airworthiness directives to mandate any changes found necessary to address unsafe conditions identified as a result of these reviews.

In evaluating these design reviews, we have established four criteria intended to define the unsafe conditions associated with fuel tank systems that require corrective actions. The percentage of operating time during which fuel tanks are exposed to flammable conditions is one of these criteria. The other three criteria address the failure types under evaluation: single failures, single failures in combination with another latent condition(s), and in-service failure experience. For all four criteria, the evaluations included consideration of previous actions taken that may mitigate the need for further action.

We have determined that the actions identified in this AD are necessary to reduce the potential of ignition sources inside fuel tanks, which, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane.

Boeing determined during the SFAR 88 review that certain non-conductive fasteners, which penetrate the main and center fuel tanks, could be subject to lightning strikes or fault currents induced by short circuits. During a lightning strike or fault current event, electrical current may be conducted to those non-conductive fasteners, which if unsealed could create arcing inside the fuel tanks. This condition, if not corrected, could result in a fuel tank explosion and consequent loss of the airplane.

We have reviewed Boeing Alert Service Bulletin 737-57A1279, dated January 24, 2007. The service bulletin describes procedures for the following actions (depending on airplane configuration):

• Sealing the fasteners on the front and rear spar inside the main fuel tank and on the lower panel of the center fuel tank;

• Inspecting the wire bundle support installation in the equipment cooling system bays to identify the type of clamp installed and determine whether the Teflon sleeve is installed;

• Replacing any incorrect clamp with a new correct clamp; and

• Installing any missing Teflon sleeving.

Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition.

We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously.

There are about 1,754 airplanes of the affected design in the worldwide fleet; of these, 645 airplanes are U.S. registered. The following table provides the estimated costs for U.S. operators to comply with this proposed AD, at an average hourly labor rate of $80.

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 proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would 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 proposed regulation:

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

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); 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 proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation.

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

We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28349; Directorate Identifier 2007-NM-025-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments.

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 proposed 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 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.

The FAA has examined the underlying safety issues involved in fuel tank explosions on several large transport airplanes, including the adequacy of existing regulations, the service history of airplanes subject to those regulations, and existing maintenance practices for fuel tank systems. As a result of those findings, we issued a regulation titled “Transport Airplane Fuel Tank System Design Review, Flammability Reduction and Maintenance and Inspection Requirements” (66 FR 23086, May 7, 2001). In addition to new airworthiness standards for transport airplanes and new maintenance requirements, this rule included Special Federal Aviation Regulation No. 88 (“SFAR 88,” Amendment 21-78, and subsequent Amendments 21-82 and 21-83).

Among other actions, SFAR 88 requires certain type design ( i.e. , type certificate (TC) and supplemental type certificate (STC)) holders to substantiate that their fuel tank systems can prevent ignition sources in the fuel tanks. This requirement applies to type design holders for large turbine-powered transport airplanes and for subsequent modifications to those airplanes. It requires them to perform design reviews and to develop design changes and maintenance procedures if their designs do not meet the new fuel tank safety standards. As explained in the preamble to the rule, we intended to adopt airworthiness directives to mandate any changes found necessary to address unsafe conditions identified as a result of these reviews.

In evaluating these design reviews, we have established four criteria intended to define the unsafe conditions associated with fuel tank systems that require corrective actions. The percentage of operating time during which fuel tanks are exposed to flammable conditions is one of these criteria. The other three criteria address the failure types under evaluation: single failures, single failures in combination with a latent condition(s), and in-service failure experience. For all four criteria, the evaluations included consideration of previous actions taken that may mitigate the need for further action.

We have determined that the actions identified in this AD are necessary to reduce the potential of ignition sources inside fuel tanks, which, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane.

We have received a report indicating that a certain type of fastener used in the fuel tank walls of Model 747 airplanes is insufficiently bonded to the airplane structure. Further, these fasteners do not have sufficient electrical insulation applied inside the fuel tanks to prevent arcing in the event of a lightning strike or high-powered short circuit. This condition, if not corrected, could result in a fuel tank explosion or fire.

We have reviewed Boeing Special Attention Service Bulletin 747-57-2326, dated January 4, 2007, which describes procedures for applying insulating sealant to certain fasteners inside the main fuel tanks.

We have reviewed Boeing Special Attention Service Bulletin 747-57-2327, Revision 1, dated July 10, 2006, which describes procedures for reconfiguring the clamps of certain wire bundles by wrapping additional Teflon sleeving around the wire bundles, installing new, larger clamps, and sealing the ends of certain fasteners inside the auxiliary fuel tank, main fuel tanks, and surge tanks.

Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition.

We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously.

There are about 707 airplanes of the affected design in the worldwide fleet. This proposed AD would affect about 107 airplanes of U.S. registry. Depending on airplane configuration, the proposed actions would take between 106 and 448 work hours per airplane, at an average labor rate of $80 per work hour. Required parts would cost between $430 and $2,074 per airplane. Based on these figures, the estimated cost of the proposed AD for U.S. operators is between $8,910 and $37,914 per airplane, or up to $4,056,798 for all airplanes.

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 proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would 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 proposed regulation:

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

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); 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 proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation.

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

We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28352; Directorate Identifier 2007-NM-037-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments.

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 proposed 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 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.

We have received two reports of missing flipper doors for the engine core cowls on Boeing Model 747 series airplanes equipped with General Electric CF6-80C2 engines. Investigation into the cause of the missing flipper doors revealed that hinge pins for the flipper doors were not secured correctly, and the vibration from the engine core cowls caused the hinge pins to migrate, allowing the flipper doors to fall off.

When the engine core cowl is opened during normal operation, the flipper door opens to provide clearance for the hinge fittings. When the engine core cowl is closed, the flipper door is clamped underneath the strut seal, forming a continuous strut firewall. If a flipper door is missing, it creates a 1-inch by 5-inch hole in the strut firewall. According to requirements of the master minimum equipment list, an airplane cannot depart with a missing flipper door.

This condition, if not corrected, could result in the potential for an engine fire to propagate into the flammable leakage zone of the strut and for the amount of fire extinguishing agent reaching the fire to be diluted, and subsequent uncontained fire in the engine strut.

We have reviewed Boeing Special Attention Service Bulletin 747-71-2310, dated October 13, 2005. The service bulletin describes procedures for repetitively inspecting the left- and right-hand flipper door assemblies for migrated hinge pins and damaged flipper doors, and corrective actions if necessary. The corrective actions include replacing any damaged flipper door with a new or serviceable flipper door, and modifying the hinge assemblies if necessary. The modification includes shortening the hinge pin and peening (deforming) both ends of the hinge assembly to capture the pin. Modifying the hinge assemblies eliminates the need for the repetitive inspections. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition.

The Boeing service bulletin refers to Rohr Service Bulletin TBC/80C2-NAC-71-035, dated October 10, 2005, as an additional source of service information for inspecting hinge pins of the flipper doors, inspecting and replacing damaged flipper doors, and modifying the hinge assemblies of the flipper doors.

We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously.

There are about 297 airplanes of the affected design in the worldwide fleet. The following table provides the estimated costs for U.S. operators to comply with this proposed 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 proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would 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 proposed regulation:

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

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); 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 proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation.

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

We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28351; Directorate Identifier 2007-NM-074-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments.

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 proposed 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 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.

The FAA has examined the underlying safety issues involved in fuel tank explosions on several large transport airplanes, including the adequacy of existing regulations, the service history of airplanes subject to those regulations, and existing maintenance practices for fuel tank systems. As a result of those findings, we issued a regulation titled “Transport Airplane Fuel Tank System Design Review, Flammability Reduction and Maintenance and Inspection Requirements” (66 FR 23086, May 7, 2001). In addition to new airworthiness standards for transport airplanes and new maintenance requirements, this rule included Special Federal Aviation Regulation No. 88 (“SFAR 88,” Amendment 21-78, and subsequent Amendments 21-82 and 21-83).

Among other actions, SFAR 88 requires certain type design (i.e., type certificate (TC) and supplemental type certificate (STC)) holders to substantiate that their fuel tank systems can prevent ignition sources in the fuel tanks. This requirement applies to type design holders for large turbine-powered transport airplanes and for subsequent modifications to those airplanes. It requires them to perform design reviews and to develop design changes and maintenance procedures if their designs do not meet the new fuel tank safety standards. As explained in the preamble to the rule, we intended to adopt airworthiness directives to mandate any changes found necessary to address unsafe conditions identified as a result of these reviews.

In evaluating these design reviews, we have established four criteria intended to define the unsafe conditions associated with fuel tank systems that require corrective actions. The percentage of operating time during which fuel tanks are exposed to flammable conditions is one of these criteria. The other three criteria address the failure types under evaluation: Single failures, single failures in combination with a latent condition(s), and in-service failure experience. For all four criteria, the evaluations included consideration of previous actions taken that may mitigate the need for further action.

We have determined that the actions identified in this AD are necessary to reduce the potential of ignition sources inside fuel tanks, which, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane.

Model DC-10 airplanes have a fuel boost pump and a fuel transfer pump mounted to the fuel tank No. 2 lower skin. The instructions for early DC-10s called out electrical bonding to structure on both fuel transfer pump housings; however, a later drawing change did not call out bonding for the fuel transfer pump housing. The same condition exists on Model MD-11 airplanes. It is unknown whether there is an adequate bond on these airplanes, and operators need to make that determination. Inadequate bonding could result in a potential ignition source inside the fuel tank if the fuel transfer pump and structure interface are not submerged in fuel, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane.

We have reviewed Boeing Service Bulletins DC10-28-250 and MD11-28-129, both dated July 26, 2006. The service bulletins describe procedures for measuring the electrical resistance between the No. 2 fuel transfer pump adapter surface of the fuel tank and the fuel transfer pump housing flange, and performing corrective and other specified actions as applicable. The corrective actions include electrically bonding the fuel tank No. 2 fuel transfer pump access door surfaces and fuel pump housing if the resistance measurement is more than 2.5 milliohms. The other specified actions include an electrical resistance bonding test to verify the electrical resistance between the fuel transfer pump housing and the structure is 2.5 milliohms maximum. For airplanes on which the electrical resistance is not achieved, the procedures include reworking the electrical bond until that electrical resistance is achieved. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition.

We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously.

There are about 573 airplanes of the affected design in the worldwide fleet. This proposed AD would affect about 399 airplanes of U.S. registry. The proposed measurement 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 proposed AD for U.S. operators is $31,920, 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 proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would 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 proposed regulation:

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

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); 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 proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation.

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

The Entity List (Supplement No. 4 to part 744 of the EAR) provides notice to the public of the identity of certain parties whose presence as a recipient of items subject to the Export Administration Regulations (EAR) can impose a license requirement in an export or reexport transaction. The reasons for which BIS may place an entity on the Entity List are stated in §§ 744.2, 744.3, 744.4, 744.6, 744.10 and 744.20 of the EAR.

In addition to those reasons, this proposed rule would create a new § 744.11 to authorize BIS to add to the Entity List entities that BIS has reasonable cause to believe, based on specific and articulable facts, have been, are or pose a risk of being involved in activities that are contrary to the national security or foreign policy interests of the United States or those acting on behalf of such entities. This new section would not be used to add to the Entity List entities that are U.S. persons (as defined in § 772.1 of the EAR). This new section also would not be used to add to the Entity List entities for which the EAR already impose a license requirement because those entities are already listed on the List of Specially Designated Nationals and Blocked Persons published by the Treasury Department, Office of Foreign Assets Control.

BIS is proposing to take this action to focus its export control efforts more closely on problematic potential recipients of items that are subject to the EAR, but who do not meet the criteria currently set forth in §§ 744.2, 744.3, 744.4, 744.6, 744.10 or 744.20. With this rule, the United States government would be able to conduct prior review and make appropriate licensing decisions regarding proposed exports and reexports to such recipients to the degree necessary to protect its interests. BIS would be able to tailor license requirements and availability of license exceptions for exports and reexports to parties who have taken, are taking, or will take actions that are contrary to United States national security or foreign policy interests without imposing additional license requirements that apply broadly to entire destinations or items. BIS believes that such targeted application of license requirements would provide the flexibility to deter use of items that are subject to the EAR in ways that are inimical to the interests of the United States with minimal costs to and disruption of legitimate trade. As export controls continue to focus not just on countries, but also on individual customers or entities, BIS believes it is important to provide more information to the public about entities of concern. Implementation of this rule will provide additional information to the public to enhance the ability to screen potential recipients of items subject to the EAR.

In addition, this proposed rule would simplify the EAR by reducing the need to issue general orders to impose license requirements on specific parties. License requirements currently imposed on specific entities through general orders would, under this rule, be imposed by adding such entities to the Entity List. Such an action would reduce the number of EAR provisions that the public would have to review to determine license requirements under the EAR.

This proposed rule would authorize BIS to impose foreign policy export and reexport license requirements, limit the availability of License Exceptions, and set license application review policy for exports and reexports of items subject to the EAR to entities that BIS has reasonable cause to believe, based on specific and articulable facts, have been, are or pose a risk of being involved in activities that are contrary to the national security or foreign policy interests of the United States or those acting on behalf of such entities. This proposed rule would not require that such activities involve items or activities that are subject to the EAR.

This proposed rule lists five types of conduct, in addition to the grounds set forth in §§744.2, 744.3, 744.4, 744.6 or 744.20, that BIS could determine are contrary to U.S. national security or foreign policy interests. They are: (i) Supporting persons engaged in acts of terror; (ii) Actions that could enhance the military capability of, or the ability to support terrorism of governments that have been designated by the Secretary of State as having repeatedly provided support for acts of international terrorism; (iii) Transferring, developing, servicing, repairing, or producing conventional weapons in a manner that is contrary to United States national security or foreign policy interests or enabling such transfer, development, service, repair or production by supplying parts, components, technology, or financing for such activity; (iv) Deliberately failing or refusing to comply with an end use check conducted by or on behalf of BIS or the Department of State, Directorate of Defense Trade Controls by denying access, by refusing to provide information about parties to a transaction, or by providing information about such parties that is false or that cannot be verified or authenticated; and (v) Engaging in conduct that poses a risk of violating the EAR and raises sufficient concern that prior review of exports or reexports involving the party and the possible imposition of license conditions or license denial enhances BIS's ability to prevent violations of the EAR.

These criteria are illustrative of conduct that could be contrary to the national security or foreign policy interests of the United States. A party could be added to the Entity List if specific and articulable facts provided reasonable cause to believe that it is involved in, has been involved in, or poses a significant risk of being or becoming involved in one of the five listed illustrative activities or other activities that are contrary to U.S. national security or foreign policy interests.

This proposed rule also would authorize BIS to modify the license requirements, license exception availability or license application review policy that applies to any entity placed on the Entity List pursuant to this rule.

This proposed rule would not be used to add to the Entity List a party to which exports or reexports require a license pursuant to §§ 744.12, 744.13, 744.14 or 744.18 of the EAR. Those sections impose license requirements because of the presence of certain parties on the List of Specially Designated Nationals and Blocked Persons published by the U.S. Department of the Treasury, Office of Foreign Assets Control. This proposed rule would not authorize placing U.S. persons, as defined in § 772.1 of the EAR, on the Entity List.

All impositions of license requirements or statements of license application review policy or any modification thereof made pursuant to this rule would be required to be made by publishing an amendment to the Entity List found at Supplement No. 4 to part 744 of the Export Administration Regulations. Under this proposed rule, license exceptions are not available for any entity added to the Entity List pursuant to this rule unless specifically authorized in the entry for the entity.

This proposed rule would explicitly set forth the ability of a party who is listed on the Entity List to request that its listing be removed or modified. Such requests, including reasons therefor, would have to be made in writing, and BIS would be required to provide a written response that would be the final agency decision on the request. Such requests would be reviewed by the Departments of Commerce, State, Defense, and Energy and, if appropriate in a particular case, the Treasury. The interagency decision, as communicated to the requesting entity by BIS, would be the final agency action on such a request.

This proposed rule would make a conforming change to the definition of U.S. person in § 772.1 by adding § 744.11 to the list of sections to which that definition applies.

The license requirements proposed by this rule would be an expansion of foreign policy export controls that would require a report to Congress in accordance with section 6 of the Export Administration Act. BIS will submit the appropriate report to Congress before implementing any such expanded controls.

BIS is seeking public comments on this proposed rule and will consider all comments received on or before August 6, 2007 in developing any final rule. Comments received after that date will be considered if possible, but their consideration cannot be assured. All public comments on this proposed rule must be in writing (including fax or e-mail) and will be a matter of public record, available for public inspection and copying. The Office of Administration, Bureau of Industry and Security, U.S. Department of Commerce, displays these public comments on BIS's Freedom of Information Act (FOIA) Web site at http://www.bis.doc.gov/foia. This office does not maintain a separate public inspection facility. If you have technical difficulties accessing this Web site, please call BIS's Office of Administration at (202) 482-0953 for assistance.

1. This rule has been determined to be a significant rule pursuant to 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 rule involves a collection of information that has been approved by the OMB under control number 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. Additionally, this rule contains a new collection of information subject to review and approval by OMB under the Paperwork Reduction Act. This collection will be submitted to OMB for approval. This rule proposes a procedure for a listed party to request removal or modification of its listing, as set forth in proposed § 744.16. BIS estimates that this new collection will involve an annual burden of 15 hours.

Send comments regarding these burden estimates or any other aspect of these collections 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.

3. This rule does not contain policies with Federalism implications as this 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. However, to obtain the benefit of a variety of viewpoints before issuing any final rule, BIS is issuing this rule in proposed form with a request for comments.

The Department of State (Department) designates U.S. government, academic and private sector entities to conduct educational and cultural exchange programs pursuant to a broad grant of authority provided by the Mutual Educational and Cultural Exchange Act of 1961, as amended (Fulbright-Hays Act). Under this authority, designated program sponsors facilitate the entry into the United States of more than 300,000 exchange participants each year.

The former United States Information Agency (USIA) and, as of October 1, 1999, its successor, the Department, have promulgated regulations governing the Exchange Visitor Program that are set forth at 22 CFR 62. Regulations governing exchange visitor college and university students appear at 22 CFR 62.23.

The Department plans to publish an Interim Final Rule relating to exchange visitor trainees and interns (see 22 CFR 62.22). This Interim Final Rule creates a new exchange visitor category—the Intern—for private sector organizations sponsoring individuals who are currently enrolled in and pursuing studies at a degree- or certificate-granting post-secondary academic institution outside the United States or have graduated from such an institution no more than 12 months prior to his/her exchange visitor program begin date, and who enters the United States to participate in a structured and guided work-based internship program in his/her specific academic field.

This Proposed Rule is promulgated to make the use of a similar intern category available to American college and university Exchange Visitor Program designated sponsors. Generally speaking, the proposed regulations governing the new student intern category track the internship regulations applicable to training program sponsors.

The new student intern sub-category is available to foreign students enrolled in accredited post-secondary educational institutions outside the United States. Student interns may participate in a student internship program for up to 12 months at each degree level. For example, if a student comes to the United States to participate in a student internship program at the equivalent of a baccalaureate program, he/she could remain in the United States for up to 12 months. The same individual would be permitted another student internship program up to 12 months at the next higher degree level, such as a masters degree program, or students changing majors and obtaining a new degree.

Selection criteria for the new student intern sub-category must include the following requirements: The student must be accepted to participate in an internship by the post-secondary educational institution listed as the sponsor on his or her Form DS-2019 and is primarily in the United States to engage in a student internship program rather than to engage in employment or provide services to an employer; the student intern must be in good academic standing with the post-secondary educational institution in which he or she is enrolled and currently participating outside the United States; and the student intern will return to the academic program in the home educational institution abroad after completion of the student internship program which is required to fulfill a degree requirement.

The new regulations outline provisions for dealing with the sponsor's obligations and any third parties—either domestic or overseas—with whom sponsors contract to assist them in recruiting, selecting, screening, orienting, placing, training, or evaluating foreign nationals who participate in student internship programs. The regulations require sponsors to enter into a written agreement with third parties outlining the full relationship between the parties on all matters involving the Exchange Visitor Program. Third parties must provide a Dun & Bradstreet identification number. At the recommendation of exchange community comments, the Department is also changing its Regulations to require sponsors to screen and vet all third parties.

A wide range of U.S. businesses and governmental or non-governmental entities host foreign students in student internship programs on behalf of designated sponsors. These regulations set baseline standards to which sponsors are required to adhere to ensure that such host organizations are legitimate entities, are appropriately registered or licensed to conduct their activities in their jurisdiction, and possess and maintain the ability and resources to provide structured and guided work-based experience according to individualized Training and Internship Placement Plans (T/IPP—Form DS-7002). In some instances, sponsors will also be required to conduct a site visit of the host organization's location. The goal of the sponsor in vetting host organizations is to collect sufficient evidence to support a finding that participants are properly placed with host organizations that meet these standards.

In order to participate in the student intern sub-category, designated sponsors must complete and obtain requisite signatures for a T/IPP. The information may be obtained from the intern's dean or academic advisor at the intern's home institution, which sets forth: The goals and objectives of the internship; a description of the student internship program (location; contact information; number of hours per week of work and compensation therefore, if any; a description of the supervision the intern will receive; and the dates of the student internship program); a description of how the student internship program will enhance the student intern's educational program in the home institution; a determination as to whether and to what extent the student intern has previously taken part in a student internship program in the United States; and, finally, a determination whether all the criteria and program requirements of the new regulation are met.

In order to ensure the quality of the internship program, program sponsors must evaluate the effectiveness and appropriateness of the internship program in achieving its stated goals and objectives.

The Proposed Rule, if adopted, will permit student interns to engage in full-time employment during the student internship program as outlined on their T/IPP, with or without wages or other compensation. Employment is not required for participation in the program. In those cases where the student intern is employed, all employment activities must be approved by the home institution's dean or academic advisor, and the responsible officer.

Finally, the regulations prohibit sponsors from placing student interns in unskilled or casual labor positions, in positions that require or involve child care or elder care, positions in the field of aviation, or in any kind of position that involves patient care or contact. Further, sponsors must not place student interns in positions that involve more than 20 per cent clerical work during their programs.

The Department has determined that this Proposed Rule involves a foreign affairs function of the United States and is consequently exempt from the procedures required by 5 U.S.C. 553 pursuant to 5 U.S.C. 553(a)(1). Nonetheless, because of its importance to the public, the Department has elected to solicit comments during a 60-day comment period.

It has been found not to be a major rule within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996. It will not have a substantial effect on the States, the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, it has been determined that the Proposed Rule does not have sufficient federalism implications to warrant application of the consultation provisions of Executive Orders 12372 and 13132.

Since this rulemaking is exempt from 5 U.S.C 553, and no other law requires the Department to give notice of proposed rulemaking, this rulemaking also is not subject to the Regulatory Flexibility Act (5 U.S.C. 601, et seq. ) and Executive Order 13272, section 3(b).

The Department of State does not consider this Proposed Final Rule to be a “significant regulatory action” under Executive Order 12866, as amended, section 3(f), Regulatory Planning and Review. In addition, the Department is exempt from Executive Order 12866 except to the extent that it is promulgating regulations in conjunction with a domestic agency that are significant regulatory actions. The Department has nevertheless reviewed the Proposed Rule to ensure its consistency with the regulatory philosophy and principles set forth in that Executive Order.

The Department has reviewed this Proposed Rule in light of sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.

Section 202 of the Unfunded Mandates Reform Act of 1995 (UFMA), Pub. L. 104-4, 109 Stat. 48, 2 U.S.C. 1532, generally requires agencies to prepare a statement before proposing any rule that may result in an annual expenditure of $100 million or more by State, local, or tribal governments, or by the private sector. This rule will not result in any such expenditure, nor will it significantly or uniquely affect small governments.

This regulation will 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. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this regulation.

The information collection requirements contained in this rulemaking (Form DS-7002) have been approved by the Office of Management and Budget pursuant to the Paperwork Reduction Act, 44 U.S.C. Chapter 35, under OMB Control Number 1405-0170, expiration date: 07/31/2009.

Accordingly, for the reasons stated in the preamble, the Department of State proposes to amend 22 CFR part 62 as follows:

You may submit or retrieve comments online through the Document Management System (DMS) at: http://dms.dot.gov/submit. It is available 24 hours each day, 365 days each year. Please follow the instructions online for more information and help.

An electronic copy of this document may also be downloaded by accessing the Office of the Federal Register's home page at: http://www.archives.gov and the Government Printing Office's Web page at: http://www.access.gpo.gov/nara.

The Transportation Equity Act for the 21st Century (TEA-21) (Pub. L. 105-178, 112 Stat. 107), established the IRRBP, codified at 23 U.S.C. 202(d)(4)(B), under which a minimum of $13 million of IRR Program funds was set aside for a nationwide priority program for improving deficient IRR bridges. On May 8, 2003, the FHWA published a final rule for the IRRBP at 68 FR 24642 (23 CFR 661). This present rulemaking is necessary due to recent legislative changes in section 1119 of SAFETEA-LU (Pub. L. 109-59, 119 Stat. 1144).

Section 1119 of SAFETEA-LU authorizes $14 million per year for fiscal years 2005 through 2009 from the Highway Trust Fund for the IRRBP to carry out PE, CE, and construction to replace or rehabilitate structurally deficient or functionally obsolete IRR bridges. Pursuant to these new statutory requirements, the FHWA developed proposed amendments to the existing IRRBP regulation. These amendments were distributed to the IRRCC for its review and comment prior to this publication. The IRRCC was established under 25 CFR part 170 by the Secretaries of the Interior and Transportation, to provide input and recommendation to BIA and FHWA in developing IRR Program policies and procedures and to supplement government-to-government consultation by coordinating and obtaining input from Tribes, BIA, and FHWA. The IRRCC consists of a primary and alternate Tribal representative from each of the 12 BIA Regions, along with 2 non-voting Federal representatives (one each from BIA and FHWA). The proposed changes were discussed at several IRRCC meetings and in detail with the IRRCC Funding Workgroup.

The following information highlights the major issues in the discussion at several IRRCC meetings:

1. First Come, First Serve Basis —This is the present funding methodology of the IRRBP. The IRRCC's position is that this method only works if there are sufficient funds. The IRRCC recommends using the scoring matrix method similar to the IRR High Priority Project (HPP) program in prioritizing the applications for bridge funding as an alternate method. Although the IRRCC believes this method would provide IRRBP funds to the project that has been rated as having the greatest need, the FHWA believes that its current practice has worked well in equitably addressing bridge rehabilitation and replacement projects in the past.

2. PE and Construction Costs —The IRRCC recommends that the set-aside for PE funds should be up to 15 percent of the annual IRRBP allocation. It further recommends that the cost contribution for BIA owned and non-BIA owned IRR bridges should be up to $150,000 for each project. The FHWA agrees with this recommendation, and proposes to make these changes.

For construction, the IRRCC recommends that the funding ceiling for non-BIA owned bridge projects should be retained at $1,500,000 per project to meet the rising cost of construction. After reviewing the regulations and the past history and project size of non-BIA owned bridge projects funded under this program, the FHWA proposes to limit the funding for those construction projects to $1,000,000 in order to maximize the number of bridge projects funded.

3. The use of IRR Construction Funds on IRRBP Projects —The IRRCC requests a clear explanation as to how a Tribe may reimburse its IRR construction funds if said funds are used to finance IRRBP projects in advance of receipt of IRRBP funds. This has been included in the proposed changes to the regulation.

4. Removal of historic bridges —The FHWA proposes to clarify that existing IRR bridges replaced under the IRRBP must be taken completely out of service and removed from the IRR inventory. This is done so that in the future only the new bridge will be eligible for IRRBP fund consideration. However, the IRRCC requests and the FHWA agrees to propose to allow a Tribe the ability to request a special exemption, from BIADOT, regarding the “removal from service” requirement if the bridge is considered historic.

Descriptions of the regulatory changes proposed in this part are set forth below. All members of the public who are affected by the amendments to the regulation are encouraged to submit comments in writing. Comments from interested Tribal members are particularly requested. We have made several minor grammatical changes, such as shortening sentences for clarity, which will not change the meaning or intent of the regulation. These minor changes are not addressed in the Section-by-Section discussion.

The requirement for a set of plans, specifications, and estimates from a public authority has been moved to 661.27 for clarification purposes. We propose to include preliminary engineering (PE) as an eligible activity, as established in the section 1119(g) of SAFETEA-LU.

We propose to add the following definitions in this section:

This section has been modified to delete obsolete language about the annual funding of the IRRBP program. Section 1119(g) of SAFETEA-LU changed the annual funding amount provided to this program. However, the FHWA proposes to delete mention of specific funding amounts in this section, and has instead stated the total funding available in section 661.9.

The FHWA proposes to modify this section to reflect the most recent funding amounts authorized by section 1119(g) of SAFETEA-LU.

The FHWA proposes to consolidate the eligibility activities for IRRBP funds into one section. This section also proposes to add preliminary engineering and the demolition of old bridges as new eligible items.

The FHWA proposes to modify this section to eliminate physical deterioration as a criteria for eligibility for this program. This term does not appear in section 1119(g) of SAFETEA-LU and as such we are proposing to delete it from the regulation.

The FHWA proposes to clarify in this section that existing IRR bridges replaced under the IRRBP must be taken completely out of service and removed from the IRR inventory. This is done so that in the future, only the new bridge will be eligible for IRRBP fund consideration. However, the IRRCC requests and the FHWA agrees to propose to allow a Tribe the ability to request a special exemption, from BIADOT, regarding the “removal from service” requirement if the bridge is considered historic.

The FHWA proposes to remove the word “would” from the criteria to clarify eligibility for bridge replacement.

This section explains the priority process for both BIA and non-BIA owned bridges as well as the separate queues for both construction and preliminary engineering within both categories of bridges.

This is a new section that we propose to include in the regulation, which describes the requirements for submitting a complete application package for PE. The complete application packages would be placed in the queues (BIA or non-BIA owned bridges) after receipt by FHWA. Incomplete application packages would be disapproved and returned for revision and resubmission along with a notation providing the reason for disapproval.

Funding for the approved eligible projects on the queues will be made available to the Tribes or the Secretary of the Interior upon availability of program funding at FHWA.

We propose to include in this section that all complete application packages would be placed in the queues (BIA or non-BIA owned bridges). All environmental and archeological clearances and complete grants of public rights-of-way must be acquired prior to submittal of the construction application package. Incomplete application packages would be disapproved and returned for revision and resubmission along with a notation providing the reason for disapproval. Funding for the approved eligible projects on the queues will be made available to the Tribes or the Secretary of the Interior upon availability of program funding at FHWA.

The FHWA proposes to maximize the use of IRRBP funds for BIA owned bridges. Up to 80 percent of the available funding made available for PE and construction in any fiscal year will be eligible for use on BIA owned IRR bridges. The remaining 20 percent of IRRBP funding in any fiscal year will be made available for PE and construction for use on non-BIA owned IRR bridges. Each fiscal year the FHWA will review the projects awaiting funding and may shift funds between BIA owned and non-BIA owned bridge projects so as to maximize the number of projects funded and the overall effectiveness of the program.

The FHWA proposes to change the language of this section to properly identify which Transportation Improvement Program (TIP) is used for the approved bridge projects.

FHWA proposes to include this section in order to identify the amount of funding that will be made available for the new eligible item of preliminary engineering. The amount recommended was developed in consultation with the IRRCC and represents the average costs of preliminary engineering on bridge projects. The remaining funding is made available for construction.

The FHWA proposes to utilize the same funding distribution, i.e. , up to 80 percent of the available annual funds, for BIA owned bridge projects with the remaining funds utilized for non-BIA owned bridges. After consultation with the IRRCC, FHWA is proposing that the FHWA have the ability to review the queue of projects awaiting funding at various times during the fiscal year, and shift funds between BIA owned and non-BIA owned bridge projects in order to maximize the number of projects funded.

The FHWA proposes to reduce the funding ceiling for construction on non-BIA owned bridge projects to $1,000,000. The FHWA reviewed the history of the IRRBP and determined that since 1998, over 100 non-BIA owned bridge projects have been funded with this program. For these non-BIA owned bridge projects, the average project size was less than $600,000 and more than 75 percent were funded at a level below the proposed $1,000,000 threshold. In addition, other sources of funds are available for non-BIA owned bridge projects.

Additionally, FHWA proposes to limit the amount of funding available for preliminary engineering to $150,000 per project. This recommendation is based on the historical size of the bridge projects previously funded under this program and assumes a typical PE cost of around 15 to 20 percent of a project's construction cost.

The IRRCC recommends, and FHWA is proposing, a revision that allows a Tribe to request additional funds above the referenced thresholds by submitting a written justification for consideration to FHWA. The approval of the requests would be considered on a case-by-case basis.

The FHWA proposes that if a request for additional funding is approved by the FHWA, the request would be placed at the top of the appropriate queue. Because an ongoing construction project would be costly to stop and then remobilize, a request to fund a contract modification will have a higher priority than a request for additional funding for a project award. Additional funds could also be made available from a Tribe's existing IRR Program share.

The FHWA proposes to change the phrasing of this section for clarification purposes and to identify that if IRR Program construction funds are used for this purpose, the funds must be identified on an FHWA approved IRR TIP prior to their expenditure.

In this new section we propose that IRRBP funds provided to a project and not obligated at the end of the fiscal year must be returned to the FHWA. The funds will be re-allocated to BIA the following fiscal year and would require a justification for the failure to obligate in the previous year.

The FHWA proposes to add this section in order to clarify that bridges on all types of routes that are included in the IRR Inventory are eligible for funding under this program.

The FHWA proposes to include the cost associated with the approach roadway work to be eligible for IRRBP funds. The limit of approach roadway work would be limited to a nominal amount of work, sufficient to connect the new facility to the existing roadway or to return the gradeline to an attainable touchdown point in accordance with good design practice. Long approach fills, causeways, connecting roadways, interchanges, ramps, and other extensive structures, when constructed beyond an attainable touchdown point, would not be eligible for IRRBP funds.

The FHWA proposes to include this new section in order to clarify the design standards that must be met in the design of bridges being funded under this program.

The FHWA proposes to include this new section in order to clarify the procedures that must be followed when formal bridge inspections are carried out.

The FHWA proposes to include this new section in order to clarify the actions that should be taken when a deficient bridge is identified and not scheduled for improvement.

For ease of reference, distribution and derivation tables are provided for the current sections and the new sections, as follows:

All comments received before the close of business on the comment closing date indicated above will be considered and will be available for examination in the docket at the above address. Comments received after the comment closing date will be filed in the docket and will be considered to the extent practicable. In addition to late comments, the FHWA will also continue to file relevant information in the docket as it becomes available after the comment period closing date, and interested persons should continue to examine the docket for new material. A final rule may be published at any time after close of the comment period.

The FHWA has determined preliminarily that this action would not be a significant regulatory action within the meaning of Executive Order 12866 and would not be significant within the meaning of U.S. Department of Transportation regulatory policies and procedures. It is anticipated that the economic impact of this rulemaking would be minimal. These proposed changes would not adversely affect, in a material way, any sector of the economy. In addition, these changes would not interfere with any action taken or planned by another agency and would not materially alter the budgetary impact of any entitlements, grants, user fees, or loan programs. Consequently, a full regulatory evaluation is not required.

In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 5 U.S.C. 601-612) the FHWA has evaluated the effects of this proposed action on small entities and has determined that the proposed action would not have a significant economic impact on a substantial number of small entities. This proposed action would amend the existing regulations pursuant to section 1119 of SAFETEA-LU and would not fundamentally alter the funding available for the replacement or rehabilitation of structurally deficient or functionally obsolete IRR bridges. For these reasons, the FHWA certifies that this action would not have a significant economic impact on a substantial number of small entities.

This proposed rule would not impose unfunded mandates as defined by the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48). This proposed rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $128.1 million or more in any one year (2 U.S.C. 1532). Further, in compliance with the Unfunded Mandates Reform Act of 1995, the FHWA will evaluate any regulatory action that might be proposed in subsequent stages of the proceeding to assess the effects on State, local, tribal governments and the private sector.

This proposed action has been analyzed in accordance with the principles and criteria contained in Executive Order 13132, and the FHWA has determined preliminarily that this proposed action would not have sufficient federalism implications to warrant the preparation of a federalism assessment. The FHWA has also determined that this proposed action would not preempt any State law or State regulation or affect the States' ability to discharge traditional State governmental functions.

The FHWA met with the IRRCC at three separate meetings in; Tulsa, Oklahoma, in February 2006; Denver, Colorado, in March 2006; and Hinckley, Minnesota, in August 2006, to jointly review this proposed regulation and provide the IRRCC with the opportunity to ask questions and make recommendations. The IRRCC was established under 25 CFR part 170 by the Secretaries of the Interior and Transportation, to provide input and recommendation to BIA and FHWA in developing IRR Program policies and procedures and to supplement government-to-government consultation by coordinating and obtaining input from Tribes, BIA, and FHWA. The IRRCC consists of a primary and alternate Tribal representative from each of the 12 BIA Regions, along with 2 non-voting Federal representatives (one each from BIA and FHWA).

The proposed regulation was first distributed to the IRRCC at the Tulsa meeting referenced above. The IRRCC then met in a special meeting in Denver, Colorado, specifically to review the regulation and develop recommendations for the FHWA rulemaking. The funding workgroup of the IRRCC was assigned the task of carrying forth the recommendations to FHWA. In Hinckley, Minnesota, the FHWA met with the funding workgroup and together they reviewed the comments. This regulation reflects the results of the IRRCC input. All aspects of the regulation were reviewed by the IRRCC and the major items of discussion are listed in the background section of this regulation.

We have analyzed this action under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use, dated May 18, 2001. We have determined that it is not a significant energy action under that order since it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects is not required.

Catalog of Federal Domestic Assistance Program Number 20.205, Highway Planning and Construction. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this program. Accordingly, the FHWA solicits comments on this issue.

Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct, sponsor, or require through regulations. The FHWA has determined that this proposal does not contain collection of information requirements for the purposes of the PRA.

This action meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. The FHWA certifies that this proposed action would not cause any environmental risk to health or safety that might disproportionately affect children.

The FHWA has analyzed this proposed rule under Executive Order 12630, Governmental Actions and Interface with Constitutionally Protected Property Rights. The FHWA does not anticipate that this proposed action would affect a taking of private property or otherwise have taking implications under Executive Order 12630.

The agency has analyzed this proposed action for the purpose of the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4347) and has determined that this proposed action would not have any effect on the quality of the environment.

A regulation identification number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN contained in the heading of this document can be used to cross-reference this action with the Unified Agenda.

In consideration of the foregoing, the FHWA proposes to amend title 23, Code of Federal Regulations, by revising part 661 to read as set forth below:

The correction notice that is the subject of this document is under section 355(b) of the Internal Revenue Code.

As published, the notice of proposed rulemaking (REG-123365-03) contains errors that may prove to be misleading and are in need of clarification.

Accordingly, the publication of proposed rulemaking (REG-123365-03), which was the subject of FR Doc. 07-2269, is corrected as follows:

1. On page 26014, column 2, in the preamble, under the paragraph heading “1. SAG Rule Applicable During the Pre-Distribution Period”, second paragraph of the column, fourth line, the language “members are disregarded and all assets” is corrected to read “members is disregarded and all assets”.

2. On page 26014, column 2, in the preamble, under the paragraph heading “1. SAG Rule Applicable During the Pre-Distribution Period”, second paragraph of the column, eleventh line, the language “a five-year active trade or businesses.” is corrected to read “a five-year active trade or business.”.

3. On page 26015, column 1, in the preamble, under the paragraph heading “3. Acquisitions of Stock in Subsidiary SAG Members”, fifth line of the column, the language “in sections B.4 and C.3.a.ii. of this” is corrected to read “in sections B.4. and C.3.a.ii. of this”.

4. On page 26015, column 1, in the preamble, under the paragraph heading “C. Acquisitions of a Trade or Business” , second line of the paragraph, the language “provide that a trade or business” is corrected to read “provides that a trade or business”.

5. On page 26015, column 3, in the preamble, under the paragraph heading “1. Purpose of Section 355(b)(2)(C) and (D)”, second paragraph of the column, fourth line, the language “using it assets—instead of its stock, or” is corrected to read “using its assets—instead of its stock, or”.

6. On page 26016, column 2, in the preamble, under the paragraph heading “i. Certain Acquisitions by the DSAG or CSAG”, last line of the first paragraph, the language “assets to acquire the trade or business” is corrected to read “assets to acquire the trade or business.”.

7. On page 26016, column 3, in the preamble, under the paragraph heading “ii. Certain Acquisitions by a Distributee Corporation”, tenth line of the paragraph, the language “section A.1 of this preamble, section” is corrected to read “section A.1. of this preamble, section”.

8. On page 26017, column 2, in the preamble, under the paragraph heading “i. Acquisitions in Exchange for Assets”, third paragraph of the column, first line, the language “As discussed in section C.1 of this” is corrected to read “As discussed in section C.1. of this”.

9. On page 26018, column 1, in the preamble, under the paragraph heading “i. Acquisitions in Exchange for Assets”, fourth paragraph of the column, sixth line, the language “and (D) are satisfied. Such an” is corrected to read “and (D) is satisfied. Such an”.

10. On page 26019, column 3, in the preamble, under the paragraph heading “c. Application of Section 355(b)(2)(C) and (D) to Predecessors”, second paragraph of the column, third line, the language “singly-entity for purposes of section” is corrected to read “single-entity for purposes of section”.

11. On page 26025, column 1, in the preamble, under the paragraph heading “J. Additional Requests for Comments” , eleventh line of the column, the language “sections D.1.b. and D.2.c of this” is corrected to read “sections D.1.b. and D.2.c. of this”.

12. On page 26025, column 2, in the preamble, under the paragraph heading “J. Additional Requests for Comments” , fourth line from the bottom of second paragraph, the language “example, § 1.355-3(c) Example ( 9 )” is corrected to read “example, § 1.355-3(c) Example 9”.

You may be potentially affected by this action if you perform renovations of child-occupied facilities for compensation or dust sampling in child-occupied facilities. EPA is proposing to define a child-occupied facility as a building, or a portion of a building, constructed prior to 1978, visited regularly by the same child, under 6 years of age, on at least two different days within any week (Sunday through Saturday period), provided that each day's visit lasts at least 3 hours and the combined weekly visits last at least 6 hours, and the combined annual visits last at least 60 hours. Examples of child-occupied facilities are day-care centers, preschools, and kindergarten classrooms. Child-occupied facilities may be located in target housing or in public or commercial buildings. Potentially affected entities may include, but are not limited to:

• Building construction (NAICS 236), e.g., single family housing construction, multi-family housing construction, residential remodelers, nonresidential construction.

• Specialty trade contractors (NAICS 238), e.g., plumbing, heating, and air-conditioning contractors, painting and wall covering contractors, electrical contractors, finish carpentry contractors, drywall and insulation contractors, siding contractors, tile and terrazzo contractors, glass and glazing contractors.

• Real estate (NAICS 531), e.g., lessors of residential and nonresidential buildings, property managers.

• Child day care services (NAICS 624410).

• Elementary and secondary schools (NAICS 611110), e.g., elementary schools with kindergarten classrooms.

• Other technical and trade schools (NAICS 611519), e.g., training providers.

• Engineering services (NAICS 541330) and building inspection services (NAICS 541350), e.g., dust sampling technicians.

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 in Units IV.B. and IV.C. If you have any questions regarding the applicability of this action to a particular entity, consult the technical person listed under FOR FURTHER INFORMATION CONTACT .

1. Submitting CBI . Do not submit this information 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 document 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 proposing to add child-occupied facilities to the universe of buildings covered by a prior proposal. EPA would apply all of the training, certification, accreditation, work practice, and recordkeeping requirements of the January 10, 2006 proposal (“2006 Proposal”, Ref. 1) to child-occupied facilities. A child-occupied facility would be defined as “a building, or a portion of a building, constructed prior to 1978, visited regularly by the same child, under 6 years of age, on at least two different days within any week (Sunday through Saturday period), provided that each day's visit lasts at least 3 hours and the combined weekly visits last at least 6 hours, and the combined annual visits last at least 60 hours.” Examples of child-occupied facilities are day-care centers, preschools, and kindergarten classrooms. Child-occupied facilities may be located in target housing or in public or commercial buildings.

The purpose of the 2006 Proposal was to establish new requirements to reduce exposure to lead hazards created by renovation, repair, and painting activities that disturb lead-based paint. The proposal contained requirements for training renovators and dust sampling technicians; certifying renovators, dust sampling technicians, and renovation firms; accrediting providers of renovation and dust sampling technician training; for renovation work practices; and for recordkeeping. These requirements would apply in “target housing,” which is defined in TSCA section 401 as “any housing constructed before 1978, except housing for the elderly or persons with disabilities (unless any child under age 6 resides or is expected to reside in such housing) or any 0-bedroom dwelling.” Initially the rule would apply to all renovations for compensation performed in (1) target housing where a child with an increased blood lead level resides; (2) rental target housing built before 1960; and (3) owner-occupied target housing built before 1960, unless, with respect to owner-occupied target housing, the person performing the renovation obtains a statement signed by the owner-occupant that the renovation will occur in the owner's residence and that no child under age 6 resides there. EPA proposed a subsequent phase-in for target housing built in the years 1960 through 1977, with certain exemptions. The training, certification, accreditation, work practice, and recordkeeping requirements of the 2006 Proposal would apply to all persons who do renovation for compensation, including renovation contractors, maintenance workers in multi-family housing, painters and other specialty trades, with certain exceptions. The 2006 Proposal contains exemptions for owner-occupied target housing where no children under age 6 reside, minor repair and maintenance activities that disrupt two square feet or less of painted surfaces per component, or renovations where specified methods have been used to determine that the areas affected by the renovation are free of lead-based paint.

In this document, EPA is proposing to apply these same training, certification, accreditation, work practice, and recordkeeping requirements and exemptions to firms and individuals who perform renovations for compensation in child-occupied facilities. EPA welcomes comment on this supplemental proposal by entities, such as day care providers, elementary schools, and public or commercial building owners, who would be affected by the expanded scope of coverage. EPA intends to review the comments received on this supplementary proposal and then promulgate a final rule addressing both the 2006 Proposal and this proposal.

These training, certification and accreditation requirements and work practice standards are being proposed pursuant to the authority of TSCA section 402(c)(3), 15 U.S.C. 2682(c)(3), as amended by Title X of the Housing and Community Development Act of 1992, Public Law 102-550 (also known as the Residential Lead-Based Paint Hazard Reduction Act of 1992) (“the Act” or “Title X”). The notification and recordkeeping requirements associated with child-occupied facilities are being proposed pursuant to section 407 of TSCA. The Model State Program and amendments to the regulations on the authorization of State and Tribal programs with respect to renovators and dust sampling technicians are being proposed pursuant to section 404 of TSCA, 15 U.S.C. 2684.

On January 10, 2006, EPA issued a notice of proposed rulemaking for requirements to reduce exposure to lead hazards created by renovation, repair, and painting activities that disturb lead-based paint in target housing (Ref. 1). EPA received approximately 250 comments from a wide variety of commenters, including State and local governments, industry groups, advocacy groups, renovation contractors, training providers, and individuals. Twenty-nine of those commenters observed that the proposal did not cover buildings where children under age 6 spend a great deal of time, such as day care centers and schools. Commenters noted that the risk posed to children from lead-based paint hazards in schools and day-care centers is likely to be equal to, if not greater than, the risk posed from these hazards at home. These commenters suggested that EPA expand its proposal to include such places. Several suggested that EPA use the definition of “child-occupied facility” in 40 CFR § 745.223 to define the expanded scope of coverage.

The Federal Motor Carrier Safety Administration (FMCSA) published a proposed rule in the Federal Register of May 29, 2007 (72 FR 29472). That document proposed to establish fees and a fee bracket structure for the Unified Carrier Registration Agreement. Inadvertently, there were a number of errors in the preamble of that document.

In proposed rule FR Doc. 07-2652, beginning on page 29472 in the issue of May 29, 2007, make all the following corrections.

1. On page 29472, beginning in the first column, correct the Addresses section to read:

3. On page 29472, in the third column, in the first sentence under the II. Statutory Requirements for UCR Fees heading, correct the U.S.C. reference to read: “(see 49 U.S.C. 14504a(d)(7)(A), (f)(1) and (g))''.

4. On page 29478, under the heading E. Carrier Population, in the third column, change three numbers to correct an arithmetical error. On line 14, correct “6,647” to “6,665” wherever it appears. On lines 27 and 32, correct “2,532” to “2,550” wherever it appears. On line 33, correct “2,582” to “2,600.”

5. On page 29480, in the third column, under the heading National Environmental Policy Act, correct the reference on line 4 that reads “(42 D.S.C. 4321 et seq. )” to read “(42 U.S.C. 4321 et seq. )” and the reference on line 20 that reads “(42 D.S.C. 7401 et seq. )” to read “(42 U.S.C. 7401 et seq. )''.

6. On page 29481, in the first column, on line 5 under the heading Executive Order 13211 (Energy Effects), correct “VSE” to read “Use.”

On July 14, 2000, we received a petition from the Biodiversity Legal Foundation and other petitioners to list the wolverine within the contiguous United States as a threatened or endangered species and to designate critical habitat for the species. We published a 90-day petition finding in the Federal Register on October 21, 2003 (68 FR 60112). The 90-day finding determined that the petition failed to present substantial scientific and commercial information indicating that listing the wolverine may be warranted.

Defenders of Wildlife and other plaintiffs filed a complaint on June 8, 2005, alleging that we used the wrong standards to assess the wolverine petition. On September 29, 2006, the U.S. District Court, District of Montana, ruled that our 90-day petition finding was in error and ordered us to make a 12-month finding on the status of the wolverine. On April 18, 2007, the U.S. District Court granted our April 5, 2007 (unopposed), motion for a modification to extend the deadline for the status review and 12-month finding for the wolverine by five months, to February 28, 2008.

Section 4(b)(3)(B) of the Act (16 U.S.C. 1531 et seq. ) requires that, for any petition to revise the Lists of Endangered and Threatened Wildlife and Plants (Lists) that contains substantial scientific or commercial information that the petitioned action may be warranted, we make a finding within 12 months of the date of the receipt of the petition on whether the petitioned action is (a) Not warranted, (b) warranted, or (c) warranted, but that the immediate proposal of a regulation implementing the petitioned action is precluded by other pending proposals to determine whether other species are threatened or endangered, and we are making expeditious progress to add or remove qualified species from the Lists. This current status review process, which will culminate in the 12-month finding on the wolverine, is initiated by court order rather than initiated by a substantial 90-day finding

At this time, we are soliciting new information on the status of and potential threats to the wolverine. We will base our 12-month finding on a review of the best scientific and commercial information available, including all such information received as a result of this notice. We are aware that several peer-reviewed research manuscripts on the wolverine are currently in preparation for publication in The Journal of Wildlife Management. If they are completed in time, we will consider these papers, in addition to any other works constituting the best scientific and commercial information available, in making our 12-month finding.

Please submit email comments in an ASCII or Microsoft Word file and avoid the use of any special characters or any form of encryption. Also, please include “Attn: wolverine status review” in the subject line of your e-mail message. If you do not receive a confirmation from the system that we have received your e-mail message, please submit your comments in writing using one of the alternate methods described in the ADDRESSES section.

Before including your address, phone number, e-mail address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.

The primary author of this document is staff of the Montana Field Office, U.S. Fish and Wildlife Service, Helena, MT.

The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq. ).