This DoD regulatory action is part of a Governmentwide initiative to streamline and simplify the Federal Government's policy framework for grants and agreements. As part of this initiative, OMB established a new title 2 of the CFR for grants and agreements [69 FR 26276, May 11, 2004], a step recommended by an interagency work group helping to implement the Federal Financial Assistance Management Improvement Act of 1999 (Pub. L. 106-107). The primary purpose of the title is to co-locate OMB circulars and other guidance on grants and agreements with Federal agencies' regulations implementing those OMB issuances.

The Federal Register notice establishing 2 CFR also stated that OMB would issue in that new title Governmentwide guidance on nonprocurement debarment and suspension in a form that agencies could adopt by regulation. That approach enables a Federal agency to implement the guidance without having to repeat the full text, as it must do with a common rule. Instead, the agency's brief adopting regulation just needs to state any agency-specific additions and clarifications to the guidance. The approach is similar to the one that OMB and the agencies have used to implement the Governmentwide cost principles in OMB Circulars A-21, A-87, and A-122, and the audit guidance in OMB Circular A-133.

This new approach has two major advantages. First, it will reduce the volume of Federal regulations. We estimate that today's regulatory action reduces the volume of the DoDGARs by about eight percent. Second, the brief adopting part makes it easy for the affected public to identify an agency's additions and clarifications to the Governmentwide policies and procedures, something that was difficult with the common rule.

DoD is taking three steps in this regulatory action to implement the OMB guidance. First, DoD is establishing Chapter XI, “Department of Defense,” in Subtitle B of 2 CFR, where all of the DoDGARs ultimately will be located. Second, it is adding a new part 1125 to Chapter XI, as the brief part to adopt the OMB guidance and state DoD-specific additions and clarifications. Third, it is removing 32 CFR part 25, the part containing the common rule on nonprocurement debarment and suspension that the OMB guidance supersedes.

The technical corrections that DoD is making to the DoDGARs through this regulatory action accomplish two purposes. First, they replace the references to 32 CFR part 25 that appeared in other DoDGARs parts with references to the OMB guidance, as implemented by the new 2 CFR part 1125 (see amendment numbers 2.d, 3.b, 3.d-f, 3.i, 5.b-f, 6.b, 7.b-d, and 8.b-d following this preamble). Second, they correct typesetting errors made to some DoDGARs parts in an August 2005 Federal Register notice [70 FR 49460] (see amendment numbers 2.c, 3.c, 3.e-h, and 8.c following this preamble).

Under the Administrative Procedure Act (5 U.S.C. 553) agencies generally offer interested parties the opportunity to comment on proposed regulations before they become effective. However, in this case, the substance of the regulation already has been subject to comment on two occasions. The first occasion was through DoD's adoption of the update to the Governmentwide nonprocurement debarment and suspension common rule that recast the regulation in plain English and made other needed changes. DoD proposed that regulation for comment on January 23, 2002 [67 FR 3265], before adopting the final rule on November 26, 2003 [68 FR 65534]. As permitted by OMB, DoD made a few agency-specific additions and clarifications to the Governmentwide wording when it adopted the common rule.

The second opportunity to comment was through OMB's conversion of the substance of the Governmentwide common rule to guidance suitable for agency adoption. OMB issued the guidance in interim final form on August 31, 2005 [70 FR 51863], with an opportunity for comment. It then issued the final guidance on November 15, 2006 [71 FR 66431].

Adopting 2 CFR part 1125 as a direct final rule constitutes an administrative simplification that makes no substantive changes to DoD policy or procedures for nonprocurement debarment and suspension. The new part includes the same agency-specific additions and clarifications to the OMB guidance that DoD made when it adopted the Governmentwide common rule in 2003. The substance of this final rule therefore is unchanged from what was adopted previously with opportunity for comment.

Accordingly, the Department finds that the solicitation of public comments on this direct final rule is unnecessary and that “'good cause”' exists under 5 U.S.C. 553(b)(B) and 553(d) to make this rule effective on August 27, 2007 without further action.

Although it is not necessary, DoD is providing an opportunity for comment. In doing so, we are not seeking to revisit substantive issues that were resolved during the adoption of the final common rule in 2003. Rather, we specifically invite comments only on any unintended substantive changes that the new 2 CFR part 1125 makes relative to DoD policy and procedures in 32 CFR part 25, the part that it is supersedes. If any comments identifying unintended substantive changes are received by July 26, 2007, the Department will make any amendments to the final rule that are warranted.

This rule is not significant because the replacement of the common rule with OMB guidance and a brief DoD adopting regulation does not make any changes in current policies and procedures.

This regulatory action will not have a significant adverse impact on a substantial number of small entities.

This regulatory action does not contain a Federal mandate that will result in the expenditure by State, local, and tribal governments, in aggregate, or by the private sector of $100 million or more in any one year.

This regulatory action will not impose any additional reporting or recordkeeping requirements under the Paperwork Reduction Act.

This proposed regulatory action does not have Federalism implications, as set forth in Executive Order 13132. It 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.

Under section 5 of Executive Order 12866, Regulatory Planning and Review, each agency must develop a program to periodically review its existing regulations to determine if they should be changed or eliminated (58 FR 51735, October 4, 1993). The purposes of the review are to make the agency's regulatory program more effective in achieving the regulatory objectives and less burdensome. The FAA conducts its review on a three-year cycle.

On February 25, 2004, we published a notice in the Federal Register asking the public to tell us which regulations we should amend, remove, or simplify (69 FR 8575). The notice stated that we would consider the comments and adjust our regulatory priorities consistent with our statutory responsibilities. The notice also stated we would publish a summary of the comments and an explanation of how we would act on them.

In response to the February 2004 notice, we received 97 comments from 30 different commenters. For comparison, we received 476 comments during the previous review and 82 comments the time before that. We received comments from citizens, private pilots, commercial pilots, and representatives of interest groups and commercial entities. The interest groups that filed comments include the Air Transport Association, the Allied Pilots Association, the Experimental Aircraft Association, the National Air Carrier Association, and the Regional Airline Association. The commercial entities that filed comments include ABX Air, Inc.; Alteon Training; Apex Aviation Corporation; Boeing Commercial Airplanes; General Electric Aircraft Engines; Honeywell Engines, Systems and Services; Morris Research, Inc.; the Orange County (Ca.) Flight Center; Southwest Airlines; and World Airways.

Our February 2004 request for comments asked that commenters identify three regulations that we should amend or remove. This is to enable us to focus on commenters' high priority concerns. Most commenters limited themselves to three or fewer comments. However, the Air Transport Association filed 21 comments, while Southwest Airlines and the National Air Carrier Association filed 5 each.

Our February 2004 request for comments also asked the public to direct comments about 14 CFR parts 125 and 135 to the working group that is conducting a separate review of those parts to avoid any duplication of effort. We appreciate that commenters complied with this request. For the first time, the regulatory review included 14 CFR Chapter III, the regulations governing commercial space transportation. However, we did not receive any comments on these regulations.

We have organized the comments in four groups:

• Comments that we have already addressed,

• Comments that we are addressing,

• Comments that we will address, and

• Comments that we will not address at this time.

Readers should note that, in this document, when we say we “are addressing” a comment, we do not mean we will necessarily address a comment exactly as proposed by a commenter. We reserve the right to “address” comments in a way that is in accord with our statutory authority, balances competing interests, and fosters a safe and efficient civil aviation system. We have carefully considered issues raised by commenters and are taking, or will take, action to address those issues, as discussed below, but we do not guarantee the outcome of our action will always correspond to the commenters' views. With regard to comments that we will not address now, readers should note that, while we disagree with some of the comments, in other cases we simply cannot take action now due to competing priorities and limited resources.

We have already addressed 23 of the 97 comments. One individual commenter asked us to amend the medical examination requirement to require pilots to report only new medical examinations that occurred after the last application date. Response: We have already included this in the instructions printed on the form.

Southwest Airlines asked us to restructure the environmental assessment process for routine airspace and airport expansion. Response: On June 8, 2004, we issued revised FAA Order No. 1050.1E, entitled, “Environmental Impacts: Policies and Procedures.” The order establishes a categorical exclusion from National Environmental Policy Act requirements for these changes.

The Air Transport Association asked that, before undertaking new regulatory reviews, we conduct a thorough analysis of the accomplishments of the previous review. Response: We already do this as part of the review of existing regulations and through the reviews conducted under section 610 of the Regulatory Flexibility Act.

The Air Transport Association also asked that the FAA conduct a rigorous evaluation of the need and impact of every proposed regulation. Response: Existing laws and Executive Orders already require this. For example, the National Environmental Policy Act requires analysis of the environmental impact of Federal actions, and Executive Order 12866, Regulatory Review, requires analysis of the costs and benefits of proposed regulatory actions.

An individual commenter asked that the FAA control air pollution, aircraft noise, and crashes and prevent pilots who are under the influence of illegal substances from operating aircraft. Response: We already have regulations in place for these purposes, including 14 CFR part 34 (air pollution), part 36 (noise), and part 61 (drug and alcohol testing).

An individual commenter asked that we allow general aviation operations at the Ronald Reagan Washington National Airport. Response: While the airport was closed to general aviation as part of the security measures adopted in the aftermath of the terrorist attacks on September 11, 2001, the Transportation Security Administration (TSA) has since reopened the airport to general aviation operations that meet specific security criteria (70 FR 41585, July 19, 2005).

ABX Air recommended removing from 14 CFR part 39 airworthiness directive 91-08-51, amendment 39-7031. This amendment requires certain actions for aircraft equipped with a Honeywell flight management system that had a navigational database. The AD became effective on June 24, 1991 and had a compliance period of 72 hours. Response: We agree with the commenter and withdrew AD 91-08-51 on October 5, 2005.

We received four comments on 14 CFR 91.205(b)(12) and 121.353 asking us to require pyrotechnic signaling devices only for aircraft used in extended over-water operations. Response: On December 27, 2004, we published a final rule that removes the requirement for a pyrotechnic signaling device for aircraft operated for hire over water and beyond power-off gliding distance from shore for air carriers operating under Part 121 unless it is part of a required life raft. All other operators will continue to be required to have onboard one pyrotechnic signaling device if they operate aircraft for hire over water and beyond power-off gliding distance from shore (69 FR 77596).

World Airways asked us to amend 14 CFR 121.311(e)(2) to allow certain passengers the ability to keep their seats reclined if they do not obstruct others' access to the aisle or emergency exits. Response: Paragraph (e)(2) is an exception to the requirement in paragraph (e) that no certificate holder may take off or land an airplane unless each passenger seat back is in the upright position. Paragraph (e)(2) states that paragraph (e) does not apply to seats on which cargo or persons who are unable to sit erect for a medical reason are carried in accordance with procedures in the certificate holder's manual if the seat back does not obstruct any passenger's access to the aisle or to any emergency exit. Thus, we see no need to amend the regulation since it already allows the flexibility the commenter is seeking.

Three commenters, including World Airways, the National Air Carrier Association and the Air Transport Association, filed four comments on the topic of supplemental oxygen. Specifically, they requested we change 14 CFR 121.333(c)(3) and 91. 211(b)(2) to allow for a quick seat swap or quick leave by one pilot without requiring the remaining pilot to put on an oxygen mask. Response: On November 10, 2005, we published a direct final rule to address these comments (70 FR 68330). The direct final rule procedure involves issuing a final rule with request for comments. If we receive any adverse comment, we withdraw the rule before it becomes effective. We may then issue a notice of proposed rulemaking. We received an adverse comment from the National Transportation Safety Board stating that we relied on data that did not represent actual pilot performance under realistic decompression conditions. See Docket No. FAA-2005-22915. For this reason, we withdrew the final rule on January 11, 2006 (71 FR 1688). We don't plan any further action at this time.

The Air Transport Association asked that we amend 14 CFR 121.368 by adopting its comments dated May 5, 2003, on inspection procedures. Response: Chapter 10, Volume 3 of FAA Order No. 8300.10, Airworthiness Inspectors' Handbook, addresses these comments.

The Air Transport Association also commented on supplemental inspections, 14 CFR 121.370a. This rule requires all aircraft in operation after December 20, 2010, to have a maintenance program that includes damage-tolerance based inspections and procedures. The Association asked that we adopt its comments on inspection procedures dated May 5, 2003 (Docket No. FAA 1999-5401). The regulation imposes an undue burden on operators and may also duplicate other existing regulatory requirements. Response: These comments were addressed in the aging aircraft safety final rule, which was published on February 5, 2005 (70 FR 5517).

The Air Transport Association asked for confirmation that 14 CFR 121.393(b) allows a pilot to substitute for a flight attendant during an intermediate stop. Response: Existing paragraph (b)(2) allows the certificate holder to substitute for the required flight attendants other persons qualified in the emergency evacuation procedures for that aircraft as required in 14 CFR 121.417 if these persons are identified to the passengers. So the answer is a qualified “yes.” A pilot could substitute for a flight attendant during an intermediate stop. The pilot would have to be qualified in the aircraft's emergency evacuation procedures and would have to be identified to the passengers.

We received three comments on our regulations governing mechanical reliability reports (14 CFR 121.703). The Air Transport Association recommended that we require reporting only of significant occurrences and within 72 hours after the aircraft has returned to service, rather than 72 hours after the occurrence. Southwest Airlines asked us to remove service difficulty reporting requirements that have been previously tracked by individual carriers. The Regional Airline Association asked that we offer air carriers the option to refrain from submitting mechanical reliability reports. Response : This issue was the subject of a final rule we published on December 30, 2003 (68 FR 75380), with a request for comments. We subsequently delayed the effective date of the final rule to give us time to consider the comments. On December 29, 2005, we withdrew the final rule to re-examine the Service Difficulty Report (SDR) program. In the same document, we adopted several amendments that improve the functioning of the SDR program (70 FR 76974). These amendments include increasing the time for submitting an SDR from 72 hours to 96 hours after an event occurs that requires an SDR. This change gives certificate holders additional time to prepare the SDR and should reduce the number of supplemental SDRs that need to be filed.

One commenter representing General Electric Aircraft Engines asked that we amend 14 CFR part 187 to correspond with laws passed by Congress that eliminate some fees. The fees that are the subject of the comment are for certification services performed outside the United States. Response : We decided in 1997 not to charge these particular fees. Part 187 does not require the agency to charge these fees. It only establishes a method for calculating them.

We are in the process of addressing 13 of the 97 comments. General Electric Aircraft Engines commented on the parts manufacturer approval regulations in 14 CFR parts 21 and 45. The comment urged FAA to issue for public comment the most recent version of the document originally prepared by the Parts and Production Certification Working Group of the Aviation Rulemaking Advisory Committee in February 1999. Response : We have incorporated the working group's recommendations into an ongoing rulemaking project to revise 14 CFR parts 21 and 45.

Another representative of General Electric Aircraft Engines made several comments on 14 CFR part 21, Certification Procedures for Products and Parts. One comment urged us to address international consortium arrangements in part 21 by allowing multiple international production authorizations. Another comment recommended allowing and recognizing work on complete products that is done by one production certificate (PC) holder at another PC holder's facility without requiring formal extension of the PC. A third comment asked us to clarify exactly when an engine or propeller is submitted for airworthiness certification or approval. A representative of Honeywell Engines, Systems and Services also commented on part 21. One comment asked us to remove 14 CFR 21.325(b)(3), which limits export airworthiness approvals to products manufactured and located in the United States. The commenter believes that this regulation is unnecessary and costly and does not support a global manufacturing environment. Honeywell stated that it should be the production approval holder's responsibility to make sure products meet the approved design, and the place of production should not matter. Another comment urged elimination of 14 CFR 21.147, which requires the holder of a production certificate to notify us of each change to the quality control system that may affect the inspection, conformity, or airworthiness of the product. In the commenter's view, this requirement is burdensome, unnecessary, and subject to varying interpretation. Response : All of these comments are being addressed in an ongoing project to amend part 21 that was published for public comment on October 5, 2006 (71 FR 58913). The comment period closed on February 5, 2007, and we are now in the process of analyzing the comments.

An individual commenter proposed that we require separate exit doors for passengers and flight crewmembers to prevent hijacking of commercial airliners. Response : The existing regulations require a reinforced flight deck door that significantly reduces the risk of forced entry onto the flight deck. For airplanes of 20 passengers or greater, the regulations already prescribe separate emergency exits for passengers and flightcrew. It would not be feasible to retrofit the existing commercial airline fleet with separate exit doors. Further, a separate project is addressing suspicious activity or security breaches in the cabin. On September 21, 2005, we issued a notice of proposed rulemaking concerning flightdeck door monitoring and crew discreet alerting systems (70 FR 55492). This proposal would require a means to monitor the door area outside the flightdeck and a means to discretely notify the flightcrew of threats. The comment period closed on November 21, 2005, and we are in the process of preparing the final rule. The existing regulations and this proposal, when it is finalized, will help address the commenter's concern about hijacking.

A representative of Alteon Training commented there is a pressing need within the industry to update, standardize, and harmonize the various regulations and documents relating to airman and crewmember training. There are multiple documents that include qualification and training requirements for pilots, flight instructors, simulator instructors, check airmen, and training evaluators. Many of the sources of information are in conflict with one another. These documents include 14 CFR parts 61, 91, 135, 121, and 142; various Practical Test Standards; Operations Inspector's Handbooks; and several FAA forms. Response: These comments are being addressed by the Flight Simulation final rule, published on October 30, 2006 (71 FR 63391) and by an upcoming proposal to amend subparts N and O of 14 CFR part 121.

One individual recommended we abolish or amend 14 CFR 121.383(c), which prohibits people aged 60 and older from serving as commercial pilots. According to the commenter, the rule is baseless, discriminatory, and deprives the U.S. airline industry of some of its most able and experienced pilots. Response: On January 30, 2007, the Administrator announced that the FAA will propose a raise in the mandatory retirement age for U.S. commercial pilots from 60 to 65. The FAA plans to have an NPRM out by the end of calendar year 2007. The public, industry, and individual pilots will then have the opportunity to comment.

Another of the Air Transport Association's comments concerns crewmember requirements at stops where passengers remain on board, 14 CFR 121.393. The Association asked us to confirm that flight attendants may leave the aircraft to conduct passenger-related business as long as the engines are shut down and at least one floor level exit is open when staffing is reduced in accordance with 14 CFR 121.393(b). The reason is that allowing flight attendants to step onto the jet bridge at intermediate stops facilitates communication with ground personnel, reduces delays, and otherwise promotes the efficient use of personnel on through flights. Response: A rulemaking team has been established, is considering the issues, and will recommend the best way to proceed.

Another Air Transport Association comment concerns crewmember emergency training, 14 CFR 121.417(c)(2)(ii)(B). The Association recommended elimination of the requirement that recurrent training must include a module on transferring each type of slide or raft pack from one door to another. The Association believes it is impractical to expect that a crewmember would be able to complete the complex series of steps required to remove a slide or raft from one exit and install it in another in a post-ditching situation. Response: This issue is being addressed in an ongoing rulemaking project to revise subparts N and O of 14 CFR part 121.

The Air Transport Association also requested a change to 14 CFR 121.434 to allow the check pilot to step away during flight without a replacement and allow the pilot in training to remain at the controls under certain circumstances. Response: This comment is being addressed by an upcoming proposal to amend subparts N and O of 14 CFR part 121.

The Boeing Company commented regarding 14 CFR 25.777, Cockpit controls, and 14 CFR 25.779, Motion and effect of cockpit controls. According to the commenter, 14 CFR 25.777(b) states the direction of movement of cockpit controls must meet the requirements of 14 CFR 25.779. However, that regulation explicitly addresses only a certain list of controls, leaving other controls subject to implicit coverage. The commenter urged us to revise the requirements to either list all controls or include language describing how to show compliance for nonlisted controls. In the commenter's view, the recommended change would improve the efficiency of the production approval process without compromising aviation safety. Response: A rulemaking team has been established, is considering the issues, and will recommend the best way to proceed.

We plan to address 13 of the comments. ABX Air commented there are overlaps between 14 CFR 121.370, 121.370a, the proposed widespread fatigue damage rule, and various airworthiness directives on the subject of aging aircraft. The commenter recommends forming a committee to coordinate and eliminate duplication between these items. Response: The FAA recently performed a comprehensive review of the Aging Airplane Program. Among other things, our review identified overlapping and redundant requirements in certain rulemaking initiatives, such as those identified by the commenter. Based on this, we developed ways to eliminate duplication between the rulemaking initiatives. A public notice entitled “Fuel Tank Safety Compliance Extension and Aging Airplane Program Update,” which was issued on July 30, 2004, summarized the FAA's conclusions and plans (69 FR 45936). These plans should address the recommendation made by the commenter.

The Air Transport Association recommended we adopt the rulemaking recommendations of the Clarification of Major/Minor Repairs or Alterations Working Group of the Aviation Rulemaking Advisory Committee (ARAC). This change would address a controversial enforcement and compliance issue. Response: The recently formed Aviation Safety Repairs and Alterations Team is conducting a thorough evaluation of all comments we have received on this issue, including the ARAC recommendations. The team plans to make recommendations for changes to existing policies and development of new policies.

We received 11 comments from several commenters on various aspects of flight time limitations and rest requirements, which are found in 14 CFR 121.471 to 525. Some of the commenters wanted us to guarantee that flight crewmembers get enough rest and to base rest requirements on time on duty rather than on flight time. Some suggested specific language that would require crewmembers to have at least 10 consecutive hours of rest after completing a flight. Another commenter suggested that we restrict the ability of carriers to reduce rest time by allowing reduced rest time only when delays occur that are beyond the carriers' control. Alternatively, one commenter asked us to consider the rest periods during duty in setting the rest-time requirements. Response: In 1995, the FAA published a comprehensive notice of proposed rulemaking addressing duty period limitations, flight time limitations, and rest requirements for flight crewmembers. We received a large number of comments. We intend to address these issues and are currently considering our next action.

We received 48 comments that we will not address at this time. We have arranged this section in numerical order of the regulation cited by the commenters, except that we discuss general or overarching comments up front.

The Regional Airline Association made a comment about recent rulemaking proposals. The Association believes FAA policy seems to support the notion that certain advisory material currently contained in Advisory Circulars should instead be placed into the appendices of the FAA regulations. The justification is not that the FAA wants the industry to conform to only “one means of compliance,” but that advisory material placed into an appendix will somehow be easier to revise. The association believes we should use appendices sparingly and not to establish requirements. Response: It is true that we have recently adopted Quality Performance Standards (QPS) appendices that contain both regulatory and informational material. We have two reasons for doing so. Much of the material in the QPS appendices is regulatory and properly belongs in the regulations. Secondly, we believe this is a user-friendly approach. By having the advisory material close to the QPS requirements in one document, people will not have to refer to several documents to learn both what is required and a recommended way of complying.

We received two comments on 14 CFR part 1, which contains definitions of terms used throughout our regulations. The National Air Carrier Association proposed we revise part 1 to include definitions of “accepted,” “airworthy,” “competent,” and “repair.” Response: We disagree with the comment. These particular terms are used in a number of different circumstances in the regulations, and it would not be possible to write all-purpose definitions.

The other comment on part 1 came from a representative of GE Aircraft Engines who urged us to amend part 1 to include definitions of words used in our regulations that have a meaning different from that given in the dictionary. We do not believe this is appropriate. Terms are included in part 1 or in individual regulations because they have specialized meanings.

An individual commenter suggested the cost of the requirements for flotation equipment (14 CFR 25.801) and crewmember training in ditching procedures (14 CFR 121.417) are not offset by any benefits in lives saved or injuries prevented. Response: These requirements have been in place for many years. While we acknowledge the number of ditching incidents is low, we do not have any information that the relatively minor cost of these requirements exceeds the benefits they would provide in the event ditching became necessary.

The same commenter questioned whether it is necessary to supply oxygen to the passenger cabin in the event of an emergency. Response: Between 1959 and 1996, there were about 40 reported decompression events in the worldwide fleet of large transport category airplanes over 60,000 pounds. Airplanes are being approved to operate at ever-increasing altitudes, which increases the risk to passengers should a cabin decompression occur. The FAA believes it is necessary to supply oxygen to the passenger cabin in the event of an emergency because any cabin decompression is a serious matter that could lead to permanent injury or death due to lack of oxygen. While these events are rare, we believe the emergency oxygen systems play a significant role in ensuring the well-being of passengers.

An individual proposed that we eliminate the vertical burn test requirement for seat cushions in 14 CFR 25.853(c). In the commenter's view, this is a costly requirement that is not necessary due to advances in technology. Response: We do not necessarily disagree with the comment, but due to other ongoing projects, it is not an immediate priority. Southwest Airlines proposed we eliminate 14 CFR 25.853(g) and 121.215(d), which contain requirements to provide lavatory ashtrays and no-smoking signs in the aircraft cabin. According to the commenter, these requirements are unnecessary since smoking has been banned on commercial flights in the U.S. for almost 20 years and announcements to this effect are made throughout each flight. Response: We disagree with the comment. Even though smoking is prohibited, there are still smokers, and the lavatory ashtrays provide a safe place to extinguish illegal smoking material. We also believe the sign or placard requirement provides a continuous reminder to passengers of the ban on smoking. This is especially important on longer flights.

ABX Air stated there is a conflict between 14 CFR 25.857 and 121.583 with regard to carrying supernumeraries aboard a cargo airplane. The commenter recommended changing 14 CFR 25.857(e) to allow the supernumeraries identified in 14 CFR 121.583 to be carried aboard airplanes with a Class E cargo compartment. In the commenter's view, the change would eliminate the need for individual exemptions. Response: Because the kinds of supernumeraries identified in part 121 are varied, and the duties they may perform during flight are also varied, it is not a straightforward matter to include them all in part 25. We find it appropriate to use the exemption process to consider each case on merit and may initiate rulemaking action as appropriate at some future time.

A representative of General Electric Aircraft Engines recommends we rescind 14 CFR 25.901(b)(2) as obsolete, impossible to interpret consistently, and having no well-defined means of compliance. This regulation requires the components of each powerplant installation to be constructed, arranged, and installed to ensure their continued safe operation between normal inspections or overhauls. According to the commenter, engines are currently overhauled when a departure from normal operation is observed, not according to a specific time interval. Also, the current large commercial transport fleet operates at an extremely high level of propulsion system reliability. Response: We acknowledge that a literal application of this rule at the component level has long since given way to the realities of meeting the intent of the requirement at the airplane system level. This regulation prohibits intentionally exposing the airplane to practically preventable powerplant installation failures. Consequently, we do not agree the regulation is no longer useful or effective. While we plan no immediate action on this issue, we may consider rulemaking in the future to update the requirement and provide standardized compliance guidance, as resources and priorities allow.

The Boeing Company commented that 14 CFR 25.1353, Electrical equipment and installations, and 14 CFR 25.1431, Electronic equipment should be revised to clarify what is meant by “electronic” versus “electrical.” The lack of a clear distinction between the terms has posed problems and duplicated efforts during aircraft certification activities. At times, the commenter has shown compliance with both regulations, when compliance with only one is sufficient. To remedy the problem, the commenter suggested we revise 14 CFR 25.1353 to clarify that it pertains to equipment directly related to generation and distribution of primary electrical power. The commenter also recommended we revise 14 CFR 25.1431 to clarify that it pertains to all other electrically powered equipment. Response: Existing § 25.1353 applies to both electronic and electrical equipment. While § 25.1353(c) references storage batteries, the regulation is not limited to power generation and distribution functions. For example § 25.1353(a), (b), and (d) apply to all electrical and electronic equipment. Existing § 25.1431 clearly states that it applies to radio and electronic equipment. We are not aware of any misunderstanding of how this regulation applies to the aircraft certification process. For these reasons, we do not believe the recommended changes are necessary.

General Electric Aircraft Engines filed four comments on 14 CFR part 33, which contains the airworthiness standards for aircraft engines. The commenter believes § 33.17, Fire prevention, does not take account of fire protection zones as used at the aircraft level for engine certification. As a result, the commenter recommends we revise the regulation to allow for the actual installations, with the installation assumptions documented in the installation manual. Response: We agree that § 33.17 does not address fire zone definitions. We consider fire zones and aircraft-level installation assessments to be outside the scope of the engine certification process and are addressed during aircraft certification. Changes to part 33 are not appropriate.

The commenter recommended we revise 14 CFR 33.87, Endurance test, to allow the use of other test cycles based on submittal of acceptable data. The commenter notes that the test cycle was defined when engine architecture and control systems were simpler and may not provide the best current test for a specific change or application. Response: The test cycle of § 33.87 and its associated test conditions have been revised in the four decades since we adopted them. There have been two major revisions to the regulation (Amendments 6 and 10) to accommodate the increasing complexity of the engine, airframe, and their interface. The purpose of the endurance test is to show a level of engine operability and durability within the approved engine ratings and limitations and to contribute to an acceptable level of safety for aircraft gas turbine engines. An alternate test cycle may not be as reliable as the one specified in § 33.87. However, our regulations do provide a means for evaluating alternatives and approving those that provide an equivalent level of safety (14 CFR 21.21).

Concerning 14 CFR 33.88, Engine overtemperature test, the commenter stated that the requirement was originally a 5-minute uncooled rotor integrity demonstration (reference AC33-3). As implemented by Amendment 6, it became a 30-minute test which was found to be overly severe because of flowpath limitations. Amendment 10 changed the duration back to 5 minutes but also changed the focus from a rotor integrity demonstration to an overall hot section durability demonstration. There is little evidence that cooled rotors are significantly influenced by a 75 degrees F increase in gas path temperature, making this requirement superfluous from a safety standpoint. Further there is no direct Joint Aviation Requirements—Engines (JAR-E) or Certification Specification—Engines (CS-E) corollary. JAR-E 700 and CS-E 700, Excess Operating Conditions, is the closest related requirement, and it only comes into play if the conditions of speed and temperature can arise. Response: The engine overtemperature test is intended to ensure that turbine engine hot sections can safely accommodate overtemperature events, which history has shown do occur. Many years of successful service experience provide the necessary validation for the overtemperature requirement. We agree there is no direct JAR-E or CS-E corollary for this requirement. The FAA and the European Aviation Safety Authority continue to work cooperatively toward harmonized regulations, as appropriate.

Concerning 14 CFR 33.97, Thrust reversers, the commenter recommended a revision to address the difference between fan (cold structure) and core (hot structure) reversers. The commenter also pointed out the endurance and calibration tests are almost never performed with the reversers installed. More often than not, simulated service cycles satisfy the requirement of § 33.97(a). Response: We agree there have been a number of instances where the endurance, calibration, operation, and vibration tests are run without the reverser installed. We evaluate these instances on a case-by-case basis for compliance. We may consider a change to § 33.97(a) to remove the strict requirement of running tests with the reverser installed; expand the scope of which block tests require an engine and thrust reverser compatibility evaluation; and allow alternate considerations, other than tests, for these evaluations in the future as workload and resources permit.

ABX Air filed four comments on specific airworthiness directives (AD). In each case, the commenter suggested the AD was obsolete and should be withdrawn. Withdrawing the AD would eliminate the cost of tracking and maintaining records. Response: In one case, we agree with the suggestion and discussed the issue earlier in this document under the heading “Comments we have already addressed.” Two of the comments concern ADs that require modification of certain protective breathing equipment mask assemblies. Without more information about how cancellation of these ADs would relieve the burden on the commenter, we are unable to evaluate the merits of these recommendations. The fourth comment concerns AD 84-18-07, Amendment 39-4915, which requires inspection of certain discharge cartridges for erroneously placed aluminum foil in the electrical connector pins. Response: We would like to point out that this AD does not apply to components installed on foreign-registered aircraft. It is possible that a U.S. carrier could buy an aircraft that has one of these components installed and has not complied with this AD. Thus, the possibility exists that withdrawal of this AD could lead to an unsafe condition. For this reason, we disagree with the comment.

The Air Transport Association suggested we amend the appropriate section of 14 CFR part 39 to allow the FAA Certificate Management Office (CMO) to approve minor changes or deviations from the means of compliance specified in an Airworthiness Directive. Currently, § 39.19 requires an operator to send a proposed alternate means of compliance through its principal inspector to the manager of the office that issued the AD for review and approval. According to the commenter, allowing the CMO to approve minor deviations would streamline the process and reduce aircraft and engine downtime. Response: We disagree with the proposal. Alternative means of compliance to an AD need to be reviewed by an engineer familiar with the technical information in the type design to assure the objective of the AD is attained.

A representative of General Electric Aircraft Engines recommended that we amend 14 CFR 43.3(j) to allow a manufacturer to perform maintenance on any aircraft, aircraft engine, propeller, or part thereof manufactured by him under a type or production certificate without needing any other certificate or authorization. Currently, the regulations allow a manufacturer to either rebuild or alter, but not to perform maintenance on those items. In the commenter's view, requiring a manufacturer to hold a repair station license to perform maintenance on the manufacturer's own products adds an administrative burden on the manufacturer and diverts FAA resources away from critical safety functions. Response: We disagree with the comment. The holder of a production certificate has demonstrated the capability to produce accurate copies of a particular design, but has made no showing about the ability to perform various kinds of maintenance. To allow a manufacturer, based on a production certificate, to perform maintenance without determining the manufacturer meets the repair station criteria of 14 CFR part 145 would not be prudent and would not contribute to safety.

The same representative of General Electric Aircraft Engines also filed a comment on 14 CFR part 45, Identification and registration marking. The commenter recommended we coordinate with the Department of Defense (DoD) to make the DoD's unique item identification and the FAA part marking requirements the same for products used in both military and civil aviation. Response: We do not disagree with the comment. Currently, DoD is developing its marking requirements. We are monitoring their activities and may consider rulemaking once we have a clear picture of what they will require.

The Experimental Aircraft Association filed a comment on 14 CFR 47.33(c), which contains the requirements for registering aircraft not previously registered anywhere. The Association recommends we allow an applicant for registration of an aircraft built from a kit to file either a bill of sale or an invoice from the manufacturer. Currently, the regulation requires a bill of sale. In the Association's view, this requirement is burdensome because most kit manufacturers do not provide a bill of sale. Response: Invoices do not themselves provide proof of ownership. Proof of ownership should include language that shows a sale took place and the signature of the seller. For this reason, we do accept some invoices if they have a signature for the manufacturer and some wording such as “sold to [name of buyer].”

An individual commenter recommended that we eliminate the requirement in 14 CFR 61.23 that private pilots hold a third-class medical certificate. In its place, the commenter suggested we accept a driver's license and require the private pilot to consult an aviation medical examiner if an illness occurs that might reasonably be expected to affect the ability to fly. Response: Out of a concern for the potential safety impact of the change given the large number of private pilots, and in the absence of any data to support the change, we are not inclined to change the rule at this time.

A representative of World Airways objected to the requirements of 14 CFR 61.18, 63.14, and 65.14 concerning security disqualification. These regulations require the FAA to deny a pilot certificate when the Transportation Security Administration (TSA) has notified the FAA in writing that an individual poses a security threat. The commenter believes it is inappropriate for FAA to deny a certificate based solely on the recommendation of another organization. The commenter suggested the FAA set up an independent review process to prevent the careers of aviation professionals from being unjustly terminated by unilateral action of the TSA. Response: We disagree with the comment. Congress has given TSA legal authority to make these determinations. It is beyond the scope of FAA's authority to establish a separate mechanism that duplicates TSA's duties. Although in this one particular area there is a separation of duties, FAA and TSA are working closely and cooperating to ensure a safe and secure aviation system.

We received several comments on 14 CFR part 91, which contains our general operating and flight rules. A representative of Apex Aviation proposed that we amend 14 CFR 91.117(c) by adding the words “under VFR” after the word “aircraft.” The commenter believes the change would allow operation of an aircraft under IFR at up to 250 knots in certain areas. In the commenter's view, the current regulation unnecessarily slows traffic flow, may interfere with sequencing of aircraft by air traffic control, and costs money and wastes fuel by extending flight time. Response: All IFR traffic is under air traffic control, which can specify any speed less than 250 knots that may be necessary. We believe the commenter may have misunderstood the regulation. The speed restrictions in the existing rule do not distinguish between VFR and IFR. The speed restrictions are based on the flight altitude or airspace designation.

A representative of World Airways also commented on 14 CFR 91.117(c), asking that it either be eliminated or restricted to VFR aircraft not in contact with air traffic control. In the commenter's view, the existing limitation may serve a purpose for keeping the closure speeds of aircraft not in contact with air traffic control to a minimum, but for those who routinely operate below Class B airspace in contact with, or at the direction of, air traffic control, this restriction is unnecessary. In fact, it has the potential to degrade safety due to pilot distraction while trying to determine the lateral limits of Class B airspace when on an IFR flight plan. Response: The maximum allowable speed is governed by aircraft altitude or airspace designation. There is an exception where the minimum safe airspeed for a particular operation is greater than the maximum prescribed by the rule. In this case, the aircraft may be operated at that minimum, and air traffic control should be advised.

One individual commenter suggested we update 14 CFR 91.207, Emergency locator transmitters, to include the new 406MHz emergency locator transmitter. The change should include actual decoding and reading of the transmitter's identification number and GPS location by independent test equipment to verify the transmitter is sending the correct information through its antenna. Response: We disagree with the comment. Approved emergency locator transmitters are specified in technical standard orders (TSOs), which are more easily updated than regulations. The 406 MHz transmitter is included in TSO-C126, which was last updated on December 8, 2006.

Another individual commenter suggested we create an exception from 14 CFR 91.207 to allow turbojet aircraft to use portable emergency locator transmitters, rather than requiring the transmitters to be attached to the aircraft. Response: We disagree with the comment. The requirement for transmitters to be attached to the aircraft ensures they are on board for every flight and automatically activate when needed.

A representative of Morris Research, Inc, proposed that we amend 14 CFR 91.213(a)(2) to allow operation of turbine-powered aircraft under part 91 using the FAA-approved master minimum equipment list for that type of aircraft as the approved minimum equipment list without having to get a letter of authorization from the FAA. Among its reasons for the proposed change, the commenter noted that it is burdensome to require each turbine-powered aircraft operated under part 91 to get a letter of authorization to operate with the most insignificant inoperative equipment, such as a passenger reading light. Response: While we do not necessarily disagree with the comment, due to resources allocated to other projects, this is not a high priority.

The National Air Carrier Association recommended that we eliminate the requirement that the FAA review and approve wet leases before a certificate holder conducts operations involving a wet lease (14 CFR 119.53). The Association considers this requirement unnecessary, costly, and burdensome. It suggested that providing the wet lease agreement to the FAA before or after the operation allows the FAA to provide adequate surveillance over operational control. Response: We are not persuaded that this requirement is unnecessary. In a wet lease situation, the party exercising operational control is held responsible for the safety and regulatory compliance of the flights conducted under the wet lease. It is not in the public interest to allow operations to be conducted under a wet lease (without the FAA having an opportunity to review the wet lease and determine beforehand which party has operational control) if the party alleging to have operational control is later found not to be responsible for the safety and regulatory compliance of the flights.

There were nine comments filed by the Air Transport Association on 14 CFR part 121 that may have merit, but we are unable to devote resources to a rulemaking project at this time. We do not view these recommended changes as being higher priority than the rulemaking projects already in progress. These comments include the following:

• Amend 14 CFR 121.335, Equipment standards, to eliminate the reference to an obsolete regulation;

• Amend 14 CFR 121.367, Maintenance, preventive maintenance, and alterations programs, by revising the introductory language to consolidate the regulatory requirements;

• Amend 14 CFR 121.613, Dispatch or flight release under IFR or over the top, to allow a flight to be released without meeting the required approach minimums at the destination if an alternate airport is given in the dispatch release;

• Amend 14 CFR 121.619, Alternate airport for destination, to reflect current aircraft and airport approach capabilities;

• Amend 14 CFR 121.619 to reduce minimums from 2,000 to 1,000 feet and from three miles to one mile visibility during the period from one hour before to one hour after estimated time of arrival;

• Amend 14 CFR 121.621, Alternate airport for destination, to either remove or extend the current six-hour time limit on no-alternate operations;

• Amend 14 CFR 121.645, Fuel supply, to eliminate the requirement that fuel loads for international aircraft operations include an extra 10 percent of the total flight time;

• Amend 14 CFR 121.652, Landing weather minimums, to eliminate the reduced landing weather minimums for less experienced pilots when an autopilot or head-up guidance is used (the National Air Carrier Association also filed a comment on this topic); and

• Amend 14 CFR 121.655, Applicability of reported weather minimums, to allow some flexibility when the reported visibility in the main body of the weather report is less than four miles.

The National Air Carrier Association suggested we delete 14 CFR 121.139, Requirements for manual aboard aircraft, in its entirety. This regulation, in part, requires certificate holders conducting supplemental operations to carry appropriate parts of the printed manual on each airplane when away from the principal base of operations. If the manual is not in printed form, it requires the airplane to carry a compatible reading device. The commenters believe this is an unnecessary requirement given the state of technology today. Response: Our view is that the information in the manual must be available wherever the aircraft goes. For this reason, we are not inclined to change the regulation.

A representative of the Orange County (CA) Flight Center suggested we amend one of the flight training requirements of 14 CFR 141.79 to allow use of a flight training device to accomplish the recurrent proficiency check required by paragraph (d)(2). The commenter suggested allowing the flight training device on a rotational basis at schools that have an approved instrument course that requires use of the flight training device. Response: While we do not necessarily disagree with the comment, due to resources allocated to other projects, it is not a high priority.

A representative of Honeywell Engines, Systems and Services suggested we change 14 CFR 145.153(b)(1), which requires certificated U.S. repair stations to employ supervisors who are certificated under 14 CFR part 65. The commenter feels this requirement is burdensome, unnecessary, and costly and suggests that a technical lead could ensure that employees performing the work are capable. Response: We believe that supervisors must be certified to ensure they can direct the activities of workers who may not be at the journeyman level. For this reason, we are not inclined to change the regulation.

The Boeing Company suggested a change to 14 CFR 183.29(i), which prohibits an acoustical engineering representative (AER) from determining a type design change is not an acoustical change. In the commenter's view, this limit is not consistent with how we manage other designated engineering representatives. It also requires applicants to provide a significant amount of information to FAA to enable us to determine how a type design change should be certified for noise. Removing this limit could improve efficiency without adversely affecting safety. Response: We disagree with the comment. An AER is authorized only to determine the noise test, test data, and associated analyses comply with the applicable regulations. A determination that a type design change is an acoustical change is not a compliance determination and would not be appropriate for an AER, even if the limit were not spelled out in the regulation.

The FAA finds that reviewing public comments on our regulations helps us in assessing the effectiveness of our regulatory agenda and adjusting the agenda when necessary. As a result of this review, we have identified many issues of importance to the industry and other interested parties. Some of these issues, we are pleased to note, we either have already addressed or are currently addressing. In addition, the review offers us a general understanding of industry's and the public's concerns about our regulations. We intend to continue to request public comments on a three-year cycle to identify any necessary changes to our regulatory program. We plan to issue a notice requesting public comments for our next review later this year.

This amendment to Title 14 of the Code of Federal Regulations, Part 97 (14 CFR part 97), establishes, amends, suspends, or revokes SIAPs and/or Weather Takeoff Minimums. The complete regulatory description of each SIAP and/or Weather Takeoff Minimums is contained in official FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR part 97.20. The applicable FAA Forms are identified as FAA Forms 8260-3, 8260-4, 8260-5 and 8260-15A. Materials incorporated by reference are available for examination or purchase as stated above.

The large number of SIAPs and/or Weather Takeoff Minimums, their complex nature, and the need for a special format make their verbatim publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs and/or Weather Takeoff Minimums but refer to their depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP and/or Weather Takeoff Minimums contained in FAA form documents is unnecessary. The provisions of this amendment state the affected CFR sections, with the types and effective dates of the SIAPs and/or Weather Takeoff Minimums. This amendment also identifies the airport, its location, the procedure identification and the amendment number.

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

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

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

The Director of FinCEN is the delegated administrator of the Bank Secrecy Act. 1 The Bank Secrecy Act authorizes the Director to issue regulations that require all financial institutions defined as such in the Bank Secrecy Act to maintain or file certain reports or records that have been determined to have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings, or in the conduct of intelligence or counter-intelligence activities, including analysis, to protect against international terrorism and to prevent, deter, and detect money laundering. 2

Casinos are cash-intensive businesses that also offer a broad array of financial services. These services include providing customer deposit or credit accounts, transmitting and receiving funds transfers directly from other financial institutions, check cashing, and currency exchanging. Consequently, casinos offer services that are similar to and may serve as substitutes for services ordinarily provided by depository institutions and certain non-bank financial institutions. As such, casinos are vulnerable to abuse by money launderers, terrorist financiers, and tax evaders.

In general, state-licensed casinos were made subject to the Bank Secrecy Act by regulation in 1985. 3 The 1985 rulemaking was based on the authority of the Secretary of the Treasury to designate as financial institutions for Bank Secrecy Act purposes: (i) Businesses that engage in activities that are “similar to, related to, or a substitute for” the activities of businesses defined as “financial institutions”  4 in the Bank Secrecy Act and (ii) other businesses “whose cash transactions have a high degree of usefulness in criminal, tax, or regulatory matters.”  5 Congress later explicitly added casinos and other gaming establishments to the definition of “financial institution” in the Bank Secrecy Act. 6 Casinos authorized to conduct business under the Indian Gaming Regulatory Act became subject to the Bank Secrecy Act by regulation in 1996, 7 and card clubs became subject to the Bank Secrecy Act by regulation in 1998. 8

Regulations under the Bank Secrecy Act define a “transaction in currency” as any transaction “involving the physical transfer of currency from one person to another.”  9 Casinos must report each transaction in currency involving “cash in” or “cash out” of more than $10,000, 10 and are required to aggregate transactions in currency (that is, treat the transactions as a single transaction) if the casino has knowledge that the transactions are conducted by or on behalf of the same person and result in cash in or cash out of more than $10,000 during any gaming day. 11 The rule requiring casinos to report transactions in currency also lists examples of transactions in currency involving cash in and cash out. 12

Casinos must report transactions in currency by filing FinCEN Form 103—“Currency Transaction Report by Casinos.” A casino must record on the Currency Transaction Report identifying information for persons involved in the transaction, verify identifying information, and include information describing the transaction. 13 In addition, a casino must file the report within 15 days following the date of the reportable transaction and retain a copy of the report for a period of five years from the date of the currency transaction(s). 14

The final rule contained in this document is based on the Notice of Proposed Rulemaking published March 21, 2006 (“Notice”). 15 The Notice proposed to exempt from coverage of the rule requiring casinos to file Currency Transaction Reports: (i) Jackpots from slot machines and video lottery terminals, (ii) certain transactions between casinos and currency dealers or exchangers, and (iii) certain transactions between casinos and check cashers. Also, the Notice proposed to provide additional examples of cash in and cash out transactions.

The comment period for the Notice of Proposed Rulemaking ended on May 22, 2006. We received a total of 16 comment letters. Of these, five were submitted by casinos, two by casino trade associations, seven by agencies representing state or tribal governments, one by a casino gaming equipment manufacturer, and one by an agency of the United States Government.

There was strong support for exempting the following transactions from the requirement to file Currency Transaction Reports: (i) Jackpots from slot machines and video lottery terminals, (ii) certain transactions between casinos and currency dealers or exchangers, and (iii) certain transactions between casinos and check cashers. In addition, commenters were generally supportive of nine of the eleven additional examples of cash in and cash out transactions.

The following two proposed amendments received extensive comment: (i) The addition of “money plays” as “bets of currency” and therefore as examples of cash in transactions; and (ii) the addition of bills inserted into electronic gaming devices as an example of a cash in transaction. A discussion of the comments follows in the section-by-section analysis below.

As we explained in the Notice, jackpots from slot machines and video lottery terminals account for a significant portion of Currency Transaction Reports filed by casinos. Absent fraud or abuse of the slot machine or video lottery terminal, a customer  16 who wins more than $10,000 in jackpots at a slot machine or video lottery terminal generally will have won those funds solely because of the workings of the random number generator in the slot machine or in a central computer that is networked with the video lottery terminal. Accordingly, the jackpots are not likely to form part of a scheme to launder funds through the casino. Moreover, casinos are required to file federal income tax forms with the Internal Revenue Service on jackpots of $1,200 or more; therefore, jackpots from slot machines and video terminals are not likely to form part of a scheme to evade taxes.

The commenters agreed with modifying 103.22(b)(2) to delete the reference to slot jackpots as reportable cash out transactions in currency. In addition, the commenters were nearly unanimous in asserting that this deletion would have no negative impact on law enforcement investigations.

We are adopting the proposed amendments regarding slot machine and video terminal jackpots without change. Thus, the final rule amends 103.22(b)(2)(ii)(E) by removing the reference to “slot jackpots” from the examples of cash out transactions, and adding paragraph 103.22(b)(2)(iii)(D), which exempts jackpots from slot machines and video lottery terminals as reportable cash out transactions.

As described above, existing regulations require a casino to file a Currency Transaction Report for cash in or cash out transactions in excess of $10,000 conducted between casinos and currency dealers or exchangers, and between casinos and check cashers. 17 In the Notice, FinCEN stated its view that as long as these currency transactions are conducted pursuant to a contractual or other arrangement with a casino covering those services in sections 103.22(b)(2)(i)(H), 103.22(b)(2)(ii)(G), and 103.22(b)(2)(ii)(H), these currency transactions should not be subject to a casino's currency transaction reporting requirements. Requiring a casino to file Currency Transaction Reports for these transactions, which do not pose a significant money laundering risk, would result in duplicative reports, since currency dealers or exchangers and check cashers are already required to file Currency Transaction Reports on them. 18 Accordingly, we believe that Currency Transaction Reports filed by casinos on these transactions do not have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings.

Commenters generally supported the proposed amendment, 19 and we are adopting it without change. Thus, the final rule amends 103.22(b)(2) by exempting certain transactions with currency dealers or exchangers and check cashers as reportable transactions for currency transaction reporting purposes.

1. Purchases of chips, tokens, and other gaming instruments—103.22(b)(2)(i)(A) . We proposed to amend 103.22(b)(2)(i)(A) by removing the reference to “plaques,” another name for a high value chip, and including a reference to “other gaming instruments.” A “gaming instrument” would include any casino-issued financial product that is used to facilitate a gaming transaction ( e.g. , high dollar denomination plaques used in playing baccarat games and cheques used in playing roulette), including those associated with a particular customer.

Fewer than half of the commenters addressed this proposal, but they agreed generally with broadening the category of casino-issued financial products that facilitate gaming transactions. One commenter asked for clarification about whether the purchase of a casino “smart card” would represent the purchase of a gaming instrument. If the customer must establish a personal identification number (PIN) and an account number prior to receiving a casino smart card, it is FinCEN's view that the casino should treat the transaction as a form of “front money deposit,” and not the purchase of a gaming instrument. 20 FinCEN is adopting the proposed amendment without change.

2. Bets of currency, including money plays—103.22(b)(2)(i)(E). Under the existing regulations, a bet of currency is listed as an example of a cash in transaction. 21 Our Notice included an explicit reference to money plays as bets of currency. In a money play, a customer places currency on the table prior to the beginning of play. The dealer does not exchange the currency for chips, and the currency is not placed in a table “drop-box” unless the customer loses the wager. Our Notice stated that a money play is a transaction in currency involving cash in regardless of whether the customer wins or loses the wager. 22 Under current non-federal regulations, money plays are only permitted in Mississippi, Nevada, and certain gaming tribal jurisdictions. Within those few jurisdictions, money plays represent a comparatively small number of bets.

Most of the comments on this proposed amendment disagreed with including money plays as an example of bets of currency that are reportable as cash in transactions. Commenters argued that a money play is a transaction in currency only to the extent the customer loses the wager and the dealer places the currency in a drop-box. Commenters contended that when a customer wins a money play there occurs no physical transfer of currency—from the customer to the casino, or from the casino to the customer. Commenters also argued that a money play in which the customer wins the wager involves no conversion of funds and therefore poses no risk of money laundering.

Commenters also noted that treating money plays as bets of currency could result in Currency Transaction Reports that they believe are misleading. For example, if a customer wins a money play, the currency wagered would be returned to the customer and also treated as a cash out transaction even though the transaction involved the same currency the customer used to make the money play. Similarly, if a customer wins a money play at a table and re-bets the same currency at the table, two cash in transactions that may need to be aggregated would occur, with the result that the customer would appear to have brought more money into the casino than in fact is the case.

FinCEN continues to maintain that money plays at a table game are bets of currency, regardless of whether the customer wins, and that these are cash in transactions under Bank Secrecy Act regulations once the customer can no longer retrieve the bet. 23 We are, however, exempting money plays to the extent the customer wagers the same physical currency that the customer wagered on a prior money play on the same table game, and the customer has not departed from the table. We have also concluded that when a customer wins a money play wager, the currency won would be a cash out transaction. However, since the currency used to place the wager is the same physical currency received when the customer wins the bet, we are exempting such cash out transactions from the currency transaction reporting requirements.

Therefore, the final rule amends 103.22(b)(2)(i)(E), as proposed, to include money plays as bets of currency. Further, the final rule amends proposed 103.22(b)(2)(iii) by excluding from cash out transactions the currency won in a money play when that currency is the same as the currency wagered in the money play. In addition, the final rule excludes from cash in transactions, currency wagered in a money play to the extent it is the same physical currency the customer previously wagered in a money play on the same table game without leaving the table. 24

3. Bills inserted into electronic gaming devices—103.22(b)(2)(i)(I). In the Notice, we proposed to amend 103.22(b)(2)(i)(I) by including bills inserted into electronic gaming devices as an example of a cash in transaction. “Electronic gaming devices” would include slot machines and video lottery terminals.

This proposal generated the most comments. All commenters on this proposal, except for one, asserted that slot machines and other electronic gaming devices pose a low risk for money laundering activity and that FinCEN's proposal to include bills inserted into electronic gaming devices as a type of reportable cash in transaction should be rejected.

Most commenters observed that, contrary to FinCEN's assertion, existing business practices and records would not adequately report bills inserted into electronic devices, in part because most systems capture play only for customers who are using a club card. 25 According to the commenters, it is not the industry norm to require customers to be cardholders in order to play slot machines. In fact, several commenters indicated that uncarded play represents between 40-50 percent of all play. The majority of commenters also pointed out that the data gathered by tracking the play of cardholders may be misleading, incomplete and inaccurate for several reasons. First, there is no way for casinos to ensure that a patron is actually the person using his or her card, since patrons may share cards with friends and family, or inadvertently leave a card in a machine resulting in the next player's bills being attributed incorrectly to the previous patron. 26 According to the commenters, this situation may result in flawed per-customer totals and lead to the filing of erroneous Currency Transaction Reports. Second, even for those casinos that have systems in place to track slot play, commenters indicate that the industry standard is to capture a total amount of cash in per player, which includes not just bills inserted but also any credits earned. The commenters as a group (including a company that designs, produces, programs, installs, services and operates gaming machines in the United States) asserted that the development of a system to capture the data sought would take significant time and resources. In addition, the commenters observed that such a system would deter money laundering by cardholders only, a group unlikely to engage in money laundering activity given that they must provide identification as a prerequisite to obtaining a card.

Several commenters noted that, while electronic gaming devices generally present low risk for money laundering activity to begin with (given the relatively labor-intensive process of inserting bills one at a time), potential safeguards already exist to prevent such activity. For example, according to the commenters, casino personnel are already trained to file a Suspicious Activity Report in such situations or in situations where a customer appears to be “fast-feeding” a machine.

Several commenters also expressed concern that the proposal would generate confusion when compared with guidance issued by FinCEN in February 2005 regarding the “knowledge” requirement. 27 One commenter requested clarification from FinCEN regarding the knowledge requirement and suggested that FinCEN limit the knowledge of transactions to “contemporaneous knowledge,” with the result that a transaction would be reportable if an employee is aware of the activity as it is happening. Other commenters observed that even casinos that are able to track data associated with electronic gaming devices still will not have “knowledge” that a player has inserted currency into a machine because casino data systems do not generate a record of player identity and the amount of currency inserted.

We note that the amendment would not have changed the existing obligations of casinos to report currency transactions. Under our existing rules, customers inserting currency into electronic gaming devices are conducting “cash in” transactions. Further, the amendment would not have created any new recordkeeping or aggregation requirements. 28 For purposes of determining whether to aggregate multiple transactions involving the insertion of currency into slot machines and other electronic gaming devices and file Currency Transaction Reports, the existing knowledge standard continues to apply. Under 31 CFR 103.22(c)(3) multiple transactions are treated as a single transaction if the casino has knowledge that the transactions are by or on behalf of any person and result in cash in totaling more than $10,000 during any gaming day. A casino has knowledge if its officers, directors, or employees have knowledge that multiple currency transactions have occurred, including knowledge from examining records which contain information that such multiple currency transactions have occurred. As explained in FinCEN Ruling 2005-1, the mere existence of information in the records would not represent knowledge of the information by the casino; rather an officer, director, or employee must have knowledge of the information, which could be obtained by observation of a patron's activity or by examination of the casino's records. 29

Accordingly, the final rule retains the specific reference to “bills inserted into electronic gaming devices” as an example of cash in transactions. However, the final rule expressly exempts from reporting requirements with respect to multiple transactions the insertion of currency into an electronic gaming device unless the casino has knowledge that this activity gives rise to a reportable currency transaction, in which case this exemption would not apply.

4. Redemptions of chips, tokens, tickets and other gaming instruments—103.22(b)(2)(ii)(A). We proposed to amend 103.22(b)(2)(ii)(A) by removing the reference to plaques and including a reference to “tickets and other gaming instruments.” A “ticket” is a document issued by a slot machine, video lottery terminal, or a pari-mutuel clerk to a customer as a record of either a wager or the insertion or transfer of funds. 30 A customer can wager a ticket at a machine or terminal that accepts tickets, or redeem a ticket for currency at a cage, slot booth, redemption kiosk, or pari-mutuel window. A gaming instrument would encompass any casino-issued financial product that is used to facilitate a gaming transaction.

We received six comments on the proposal. Only one commenter opposed the proposal. The commenter opposing the proposal raised concerns relating to the identification of patrons that redeem tickets at kiosks or terminals. 31 The commenter's concerns notwithstanding, the amendment would not have changed the obligations of casinos under our rules, and we are adopting the amendment as proposed.

5. Payments by a casino to a customer based on receipt of funds through wire transfers—103.22(b)(2)(ii)(F). We proposed to amend 103.22(b)(2)(ii)(F) pertaining to payments in currency by a casino to a customer based on receipt of funds through a wire transfer. Specifically, we proposed to delete the phrase “for credit to a customer” because the reference to credit for this type of cash transaction has been confusing for some casinos. We received one comment to this amendment, which agreed with the revision. We are, therefore, adopting the amendment as proposed.

6. Travel and complimentary expenses and gaming incentives—103.22(b)(2)(ii)(I). In the Notice, we proposed to amend 103.22(b)(2)(ii)(I) by replacing the term “entertainment” with the term “complimentary,”  32 and by adding the phrase “gaming incentives.”

Most of the comments on this amendment agreed with the revision. 33 One commenter, however, argued that the revision was unnecessary because travel and complimentary expenses, which according to the commenter are already regulated by state and tribal authorities, present little opportunity for money laundering, tax evasion, or terrorist financing. While it is true that these expenses also are regulated at the state and tribal level, many transactions involving casinos that we regulate are regulated by other governmental authorities. In addition, we disagree that the risks associated with travel and complimentary expenses are as minimal as the commenter asserts. FinCEN is, therefore, adopting the amendment as it was proposed in keeping with our stated intention to update and clarify the categories of reportable cash out transactions.

7. Payments for tournaments, contests, and other promotions—103.22(b)(2)(ii)(J). In the Notice, we proposed to amend 103.22(b)(2)(ii)(J) by adding “payments for tournaments, contests, or other promotions” as examples of cash out transactions.

Most of the comments on this amendment also agreed with the revision. One commenter, however, argued that the addition of this example was unjustified. According to the commenter, there is a small likelihood that tournaments, contests, or promotions would factor into any scheme to launder money, evade taxes, or finance terrorism. FinCEN was not persuaded by these arguments and is adopting the proposed amendment in keeping with its stated intention to update and clarify the categories of reportable cash out transactions.

To assist casinos and card clubs in completing FinCEN Form 103, Currency Transaction Report by Casinos, FinCEN is providing the following guidance for items affected by this final rule. Slot jackpots are no longer required to be reported in item 31d (or elsewhere on the form). Money play bets are reported as cash in transactions in item 30d (“currency wager(s)”). Bills inserted into electronic gaming devices are reported as cash in transactions in item 30h (“other (specify)”), with the words “bills inserted in EGDs” in the space immediately following “(specify)”. The redemptions of tickets are reported as cash out transactions in item 31a (“redemptions of casino chips, tokens and other gaming instruments”). Casinos may continue to use the current version of Form 103 if they complete it in accordance with this guidance. However, FinCEN is posting on its website a revised copy of Form 103 with minor editorial changes to reflect this guidance along with updated instructions to reflect the exemptions contained in § 103.22(b)(2)(iii) in this final rule.

The Department of the Treasury has determined that this rule is not a significant regulatory action under Executive Order 12866.

We certify that this regulation will not have a significant economic impact on a substantial number of small entities, since the regulatory reporting threshold excludes casinos whose gross annual gaming revenues do not exceed $1 million. In addition, the final rule exempts previously reportable transactions, such as jackpots from slot machines and video lottery terminals, as well as cash out transactions involving certain money plays, from the final rule's reporting obligations.

This rule is being made effective without a delayed effective date in accordance with 5 U.S.C. 553(d)(1).

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM. The Coast Guard did not receive an Application for Approval of Marine Event for this event with sufficient time to implement a NPRM, thereby making an NPRM impracticable. A delay or cancellation of the fireworks display in order to accommodate a full notice and comment period would be contrary to the pubic interest.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Any delay encountered in this regulation's effective date would be impracticable and contrary to public interest since immediate action is needed to prevent traffic from transiting a portion of Three Mile Harbor off East Hampton, NY and to protect the maritime public from the hazards associated with this fireworks event.

The temporary zone should have minimal negative impact on the public and navigation because it will only be enforced for a two hour period on only one of two specified days. In addition, the area closed by the safety zone is minimal, allowing vessels to transit around the zone in Three Mile Harbor off East Hampton, NY.

The Fundation Amistad Fireworks display will be taking place in Three Mile Harbor off East Hampton, NY from 8:30 p.m. to 11:30 p.m. on July 14, 2007. If the fireworks display is cancelled due to inclement weather on July 14, 2007, it will take place during the same hours on July 15, 2007. This safety zone is necessary to protect the life and property of the maritime public from the hazards posed by the fireworks display. It will protect the maritime public by prohibiting entry into or movement within this portion of Three Mile Harbor one hour prior to, during and one hour after the stated event.

This regulation establishes a temporary safety zone on the navigable waters of Three Mile Harbor off East Hampton, NY within an 800-foot radius of the fireworks barge located at approximate position 41°1′5″ N, 072°11′55″ W. The temporary safety zone will be outlined by temporary marker buoys installed by the event organizers.

This action is intended to prohibit vessel traffic in a portion of Three Mile Harbor off East Hampton, NY to provide for the protection of life and property of the maritime public. The safety zone will be enforced from 8:30 p.m. until 11:30 p.m. on July 14, 2007. Marine traffic may transit safely outside of the safety zone during the event thereby allowing navigation of the rest of Three Mile Harbor except for the portion delineated by this rule.

The Captain of the Port anticipates minimal negative impact on vessel traffic due to this event due to the limited area and duration covered by this safety zone. Public notifications will be made prior to the effective period via local notice to mariners and marine information broadcasts.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

This regulation may have some impact on the public, but the potential impact will be minimized for the following reasons: Vessels will only be excluded from the area of the safety zone for 3 hours; and vessels will be able to operate in other areas of Three Mile Harbor off East Hampton, NY during the enforcement period.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule will have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule may affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit or anchor in those portions of Three Mile Harbor off East Hampton, NY covered by the safety zone. For the reasons outlined in the Regulatory Evaluation section above, this rule will not have a significant impact on a substantial number of small entities.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

Under subsection 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 [Pub. L. 104-121], the Coast Guard wants to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking. If this rule will affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call Lieutenant D. Miller, Chief, Waterways Management Division, Sector Long Island Sound, at (203) 468-4596.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule 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. This rule is not an economically significant rule and will not concern an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Commandant Instruction M16475.1D and Department of Homeland Security Management Directive 5100.1, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of the categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation. This rule falls under the provisions of paragraph (34)(g) because the rule establishes a safety zone.

A final “Environmental Analysis Check List” and a final “Categorical Exclusion Determination” will be available in the docket where indicated under ADDRESSES .

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. Information is organized as follows:

EPA is approving IDEQ's and Ecology's SIP revisions to address the requirements of Clean Air Act (CAA) section 110(a)(2)(D)(i). This CAA section requires each state to submit a SIP that prohibits emissions that could adversely affect another state, addressing four key elements. The SIP must prevent sources in the state from emitting pollutants in amounts which will: (1) Contribute significantly to nonattainment of the NAAQS in another state, (2) interfere with maintenance of the NAAQS by another state, (3) interfere with plans in another state to prevent significant deterioration of air quality, or (4) interfere with efforts of another state to protect visibility.

EPA issued guidance on August 15, 2006, entitled “Guidance for State Implementation Plan (SIP) Submissions to Meet Current Outstanding Obligations Under Section 110(a)(2)(D)(i) for the 8-Hour Ozone and PM 2.5 National Ambient Air Quality Standards,” relating to SIP submissions to meet the requirements of CAA section 110(a)(2)(D)(i). As discussed below, Idaho's and Washington's analyses of their respective SIPs with respect to the statutory requirements of CAA section 110(a)(2)(D)(i) are consistent with the guidance. The discussion below covers how Idaho and Washington have addressed the four key requirements of CAA section 110(a)(2)(D)(i).

IDEQ addressed the first two elements of CAA section 110(a)(2)(D)(i) by submitting a technical demonstration supporting the conclusion that emissions from Idaho do not significantly contribute to nonattainment or interfere with maintenance of the 8-hour ozone and PM 2.5 NAAQS in another state. IDEQ relied on analysis by EPA that determined that it was reasonable to exclude the western United States, including Idaho, from the Clean Air Interstate Rule (CAIR), 70 FR 25162 (May 12, 2005). In the proposal for CAIR, EPA determined that because of geographical, meteorological, and topological factors, PM 2.5 and 8-hour ozone nonattainment problems are not likely to be affected significantly by pollution transported across these state's boundaries. See 69 FR 4566, 4581 (January 30, 2004).

IDEQ also relied on information on the nearest nonattainment areas. For PM 2.5 , the closest nonattainment area is 25 miles away in Libby, Montana. 70 FR 944, 986 (January 5, 2005). IDEQ noted that the Technical Support Document (TSD) for the PM 2.5 designation of the Libby area contains a description of the nonattainment area and sources. The Libby TSD states that PM 2.5 levels in the Libby, Montana area are localized due to topography and meteorological factors.

For ozone, the closest nonattainment area to Idaho is Las Vegas, Nevada. Las Vegas is over 400 miles away. See 69 FR 23858, 23919 (April 30, 2004). IDEQ noted that the supporting documentation for the designation of this nonattainment area demonstrates that the Las Vegas, Nevada area is geologically and topologically separate from surrounding areas. Based on this and other information provided by IDEQ in its SIP submittal, EPA believes the state has sufficiently demonstrated that emissions from Idaho do not significantly contribute to nonattainment or interfere with maintenance of the NAAQS in another state. Additional supporting information can be found in IDEQ's submittal included in the docket.

The third element IDEQ addressed is prevention of significant deterioration (PSD). For 8-hour ozone, the state has met the obligation by confirming that major sources in the state are currently subject to PSD programs that implement the 8-hour ozone standard and that the state is working on adopting any relevant requirements of the Phase II ozone implementation rule. For PM 2.5 , IDEQ confirmed that the state's PSD program is being implemented in accordance with EPA's interim guidance calling for the use of PM 10 as a surrogate for PM 2.5 for the purposes of PSD review.

The fourth element IDEQ addressed is protection of visibility. EPA's regional haze regulations, 64 FR 35714 (July 1, 1999), require states to submit regional haze SIPS to EPA by December 17, 2007. Since Idaho has not yet completed or submitted its regional haze SIP, it is not possible at this time for the State of Idaho to determine whether Idaho interferes with measures to protect visibility in the applicable SIP of another state.

Ecology addressed the first two elements of CAA section 110(a)(2(D)(i) by submitting a technical demonstration supporting the conclusion that emissions from Washington do not significantly contribute to nonattainment or interfere with maintenance of the 8-hour ozone and PM 2.5 NAAQS in another state. Ecology relied on analysis by EPA that determined that it was reasonable to exclude the western United States, including Washington, from CAIR. As discussed in the proposal for CAIR, EPA determined that because of geographical, meteorological, and topological factors, PM 2.5 and 8-hour ozone nonattainment problems are not likely to be affected significantly by pollution transported across these State's boundaries. See 69 FR at 4581.

Ecology also relied on information on the nearest nonattainment areas. For PM 2.5 , the closest nonattainment area is Libby, Montana. 70 FR at 986. Libby is over 150 miles away from Spokane, the nearest major city in Washington. Ecology noted that the TSD for the PM 2.5 designation of the Libby area contains a description of the nonattainment area and sources. The Libby TSD states that PM 2.5 levels in the Libby, Montana area are localized due to topography and meteorological factors.

For ozone, the closest nonattainment area to Washington is the San Francisco Bay area in California. See 69 FR at 23887. San Francisco is over 600 miles away from Vancouver, the closest major urban area in Washington. Ecology noted that the supporting documentation for the designation of the San Francisco Bay nonattainment area contains information showing that the San Francisco airshed is separate from areas to the north.

Ecology also discussed the Portland-Vancouver Interstate Ozone area. The Portland-Vancouver Interstate Ozone area comprises Portland, Oregon and Vancouver, Washington. The area was a maintenance area for the 1-hour ozone standard. It has been meeting the 8-hour ozone NAAQS since the standard was promulgated in 1997. Ecology explains that the Southwest Clean Air Agency (SWCAA), the local CAA planning agency for the Vancouver area, and the Oregon Department of Environmental Quality (ODEQ) worked together on modeling that demonstrates that the Portland-Vancouver area will continue to attain the 8-hour ozone NAAQS through 2015. Both SWCAA and Oregon have developed 110(a)(1) maintenance plans for the 8-hour ozone NAAQS based on the modeling to meet EPA implementation requirements. The modeling also demonstrates as part of the 110 (a)(l) plan that the Salem-Keizer area to the south of Portland will continue to maintain the 8-hour ozone NAAQS through 2015. Ecology notes that both Washington and Oregon will submit the plans to EPA for approval this year. The draft plans are available on the SWCAA and ODEQ websites.

Based on this and other information provided by Washington in its SIP submittal, EPA believes the state has sufficiently demonstrated that emissions from Washington do not significantly contribute to nonattainment or interfere with maintenance of the NAAQS in another state. Additional supporting information can be found in the state's SIP submittal included in the docket.

The third element Ecology addressed is PSD. For 8-hour ozone, the state has met the obligation by confirming that major sources in the state are currently subject to PSD programs that implement the 8-hour ozone standard and that the state is working on adopting any relevant requirements of the Phase II ozone implementation rule. For PM 2.5 , Ecology confirmed that the state's PSD program is being implemented in accordance with EPA's interim guidance calling for the use of PM 10 as a surrogate for PM 2.5 for the purposes of PSD review.

The fourth element Ecology addressed is protection of visibility. EPA's regional haze regulations require states to submit regional haze SIPS to EPA by December 17, 2007. Since Washington has not yet completed or submitted its regional haze SIP, it is not possible at this time for the State of Washington to determine whether Washington interferes with measures to protect visibility in the applicable SIP of another state.

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

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

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by August 27, 2007. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This section provides additional information by addressing the following questions:

Section 110 of the Clean Air Act (CAA) requires states to develop air pollution regulations and control strategies to ensure that state air quality meets the national ambient air quality standards established by EPA. These ambient standards are established under section 109 of the CAA, and they currently address six criteria pollutants. These pollutants are: Carbon monoxide, nitrogen dioxide, ozone, lead, particulate matter, and sulfur dioxide.

Each state must submit these regulations and control strategies to us for approval and incorporation into the Federally-enforceable SIP.

Each Federally-approved SIP protects air quality primarily by addressing air pollution at its point of origin. These SIPs can be extensive, containing state regulations or other enforceable documents and supporting information such as emission inventories, monitoring networks, and modeling demonstrations.

In order for state regulations to be incorporated into the Federally-enforceable SIP, states must formally adopt the regulations and control strategies consistent with state and Federal requirements. This process generally includes a public notice, public hearing, public comment period, and a formal adoption by a state-authorized rulemaking body.

Once a state rule, regulation, or control strategy is adopted, the state submits it to us for inclusion into the SIP. We must provide public notice and seek additional public comment regarding the proposed Federal action on the state submission. If adverse comments are received, they must be addressed prior to any final Federal action by us.

All state regulations and supporting information approved by EPA under section 110 of the CAA are incorporated into the Federally-approved SIP. Records of such SIP actions are maintained in the Code of Federal Regulations (CFR) at title 40, part 52, entitled “Approval and Promulgation of Implementation Plans.” The actual state regulations which are approved are not reproduced in their entirety in the CFR outright but are “incorporated by reference,” which means that we have approved a given state regulation with a specific effective date.

Enforcement of the state regulation before and after it is incorporated into the Federally-approved SIP is primarily a state responsibility. However, after the regulation is Federally approved, we are authorized to take enforcement action against violators. Citizens are also offered legal recourse to address violations as described in section 304 of the CAA.

EPA is approving revisions to the Iowa SIP which include updates to the Polk County Board of Health Rules and Regulations, Chapter V, Air Pollution. This revision was initially submitted by Iowa on December 21, 2006. The approval request was modified by letter dated May 3, 2007, in which Iowa requested that we take no action on changes to Article X, section 5-28, relating to preconstruction waivers. Pursuant to Iowa's request, EPA is not acting on the revision to section 5-28 and is retaining the version of section 5-28 in the current approved SIP. Polk County intends to revise the waiver provision in section 5-28 in the near future. Polk County routinely revises its local program to be consistent with the federally-approved Iowa rules. The 2006 revisions included updates to definitions of distillate oil, biodiesel fuel, diesel fuel, and painting and surface coating operations.

Polk County also included exemptions to permit requirements to be consistent with the Iowa SIP. These exemptions cover emissions points and activities which have low emissions, such as cafeteria facilities and janitorial services. EPA previously approved these same exemptions in a statewide rule after the state's technical justification for the exemptions was reviewed by EPA. EPA previously determined that these exemptions would not cause a relaxation of the Iowa SIP.

The state submittal has met the public notice requirements for SIP submissions in accordance with 40 CFR 51.102. The submittal also satisfied the completeness criteria of 40 CFR part 51, appendix V. In addition, as explained above and in more detail in the technical support document which is part of this document, the revision meets the substantive SIP requirements of the CAA, including section 110 and implementing regulations.

EPA is approving this revision which includes changes made to the Polk County SIP submitted by Iowa. These changes are consistent with the federally-approved Iowa SIP. We do not anticipate any adverse comments. Please note that if EPA receives adverse comments on part of this rule, and if that part can be severed from the remainder of the rule, EPA may adopt as final those parts of the rule that are not the subject of an adverse comment.

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

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

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by August 27, 2007. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)