9–7–06 Thursday Vol. 71 No. 173 Sept. 7, 2006

Pages 52733–52980

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Contents Federal Register Vol. 71, No. 173

Thursday, September 7, 2006

Agency for Healthcare Research and Quality Consumer Product Safety Commission NOTICES PROPOSED RULES Meetings: Consumer Product Safety Act and Federal Hazardous Citizens’ Health Care Working Group, 52797 Substances Act: Adult all terrain vehicle requirements and three-wheeled all terrain vehicle ban Agricultural Marketing Service Correction, 52758 RULES Spearmint oil produced in Far West, 52735–52738 Corporation for National and Community Service NOTICES Agriculture Department Agency information collection activities; proposals, See Agricultural Marketing Service submissions, and approvals, 52775–52776 See Commodity Credit Corporation See Forest Service Defense Department See Grain Inspection, Packers and Stockyards See Air Force Department Administration See Navy Department NOTICES Agency information collection activities; proposals, Economic Development Administration submissions, and approvals, 52759–52760 NOTICES Adjustment assistance; applications, determinations, etc.: GasTech Engineering Inc. et al., 52764 Air Force Department NOTICES Education Department Meetings: NOTICES Air University Board of Visitors, 52776 Agency information collection activities; proposals, submissions, and approvals; correction, 52776 Centers for Disease Control and Prevention Postsecondary education: NOTICES Federal Family Education Loan Program— Energy Employees Occupational Illness Compensation Interest rates, 52776–52778 Program Act of 2000: William D. Ford Federal Direct Loan Program— Special Exposure Cohort; employee class designations— Interest rates, 52778–52783 Ames Laboratory, Ames, IA, 52798 Bethlehem Steel Corp., Buffalo, NY, 52797 Energy Department Y-12 Plant, Oak Ridge, TN, 52798 See Federal Energy Regulatory Commission Meetings: NOTICES National Institute for Occupational Safety and Health— Electricity export and import authorizations, permits, etc.: Radiation and Worker Health Advisory Board, 52798– Evergreen Wind Power, LLC, 52784–52785 52799 Sempra Energy Solutions, 52785 Applications, hearings, determinations, etc.: Western Systems Power Pool, 52783–52784 Coast Guard RULES Equal Employment Opportunity Commission Drawbridge operations: NOTICES Connecticut, 52743–52744 Agency information collection activities; proposals, NOTICES submissions, and approvals, 52791–52792 Reports and guidance documents; availability, etc.: Ports and terminals; holding valid certificates of Executive Office of the President adequacy, 52811 See Presidential Documents

Commerce Department Federal Aviation Administration See Economic Development Administration RULES See Industry and Security Bureau Class D and E airspace, 52740–52741 See International Trade Administration Class E airspace, 52741 See National Oceanic and Atmospheric Administration PROPOSED RULES Airworthiness standards: Special conditions— Commodity Credit Corporation Airbus Model A380-800 airplanes, 52755–52757 RULES NOTICES Loan and purchase programs: Meetings: Noninsured Crop Disaster Assistance Program; tropical RTCA, Inc., 52845–52846 regions, 52738–52740 RTCA Program Management Committee, 52844–52845

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Federal Communications Commission Food and Drug Administration RULES NOTICES Radio services, special: Reports and guidance documents; availability, etc.: Private land mobile radio services— Commercially distributed analyte specific reagents; 5.9 GHz band; dedicated short-range communications frequently asked questions, 52799–52800 services, 52747–52750 In vitro diagnostic multivariate index assays, 52800– 800 MHz band; public safety interference proceeding, 52801 52750–52751 NOTICES Forest Service Agency information collection activities; proposals, NOTICES submissions, and approvals, 52792–52796 Meetings: Resource Advisory Committees— Federal Election Commission Plumas County, 52760 NOTICES Meetings; Sunshine Act, 52796 Grain Inspection, Packers and Stockyards Administration NOTICES Federal Emergency Management Agency Agency designation actions: NOTICES Various states, 52760–52764 Agency information collection activities; proposals, submissions, and approvals, 52811–52814 Health and Human Services Department See Agency for Healthcare Research and Quality Federal Energy Regulatory Commission See Centers for Disease Control and Prevention NOTICES See Food and Drug Administration Environmental statements; notice of intent: See National Institutes of Health Golden Pass Pipeline LP, 52786–52788 See Substance Abuse and Mental Health Services Hydroelectric applications, 52788–52791 Administration Applications, hearings, determinations, etc.: North American Electric Reliability Corp., 52785–52786 Homeland Security Department Tennessee Valley Authority, 52786 See Coast Guard Federal Highway Administration See Federal Emergency Management Agency NOTICES Housing and Urban Development Department Environmental statements; notice of intent: Cuyahoga County, OH, 52846 NOTICES Agency information collection activities; proposals, Federal Motor Carrier Safety Administration submissions, and approvals, 52814–52815 NOTICES Motor carrier safety standards: Industry and Security Bureau Drivers’ hours of service; exemption applications— RULES Werner Enterprises, Inc., 52846–52848 Export administration regulations: Commerce Control List— Federal Reserve System Wassenaar Arrangement Plenary Agreement NOTICES implementation; Categories 1-9 revisions; reporting Banks and bank holding companies: requirements, definitions, and new or expanded Formations, acquisitions, and mergers, 52796 export controls, 52956–52979 Permissible nonbanking activities, 52796 Interior Department Federal Transit Administration See Fish and Wildlife Service NOTICES See Land Management Bureau Reports and guidance documents; availability, etc.: See National Park Service High-Occupancy Vehicle Lanes converted to High- NOTICES Occupancy/Toll lanes; classification as fixed Meetings: guideway miles for funding formulas; policy Delaware and Lehigh National Heritage Corridor statement, 52849–52851 Commission, 52815 Fish and Wildlife Service Internal Revenue Service RULES PROPOSED RULES Northwestern Hawaiian Islands Marine National Income taxes: Monument; establishment Qualified business unit branches; transfers using profit Correction, 52874 and loss method of accounting, currency gain or loss NOTICES calculation, 52876–52918 Endangered and threatened species: Survival enhancement permits— International Trade Administration Pygmy rabbit; Columbia Basin distinct population NOTICES segment; safe harbor agreement, 52816–52818 Antidumping: Endangered and threatened species permit applications, Honey from— determinations, etc., 52816 China, 52764–52766 Marine mammal permit applications, determinations, etc., Structural steel beams from— 52818 Korea, 52766–52770

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Countervailing duties: Thunder Bay National Marine Sanctuary, MI; meetings, Corrosion-resistant carbon steel flat products from— 52758 France, 52770–52774 NOTICES Pasta from— Meetings: Turkey, 52774–52775 Gulf of Mexico Fishery Management Council, 52775

Justice Department National Park Service NOTICES NOTICES Privacy Act; systems of records, 52821–52822 Environmental statements; notice of intent: Valley Forge National Historic Park, PA; white-tailed deer Labor Department management plan, 52820–52821 NOTICES Agency information collection activities; proposals, submissions, and approvals, 52822–52823 Navy Department RULES Land Management Bureau Navigation, COLREGS compliance exemptions: NOTICES USS NEW ORLEANS, 52741–52743 Environmental statements; availability, etc.: Roan Plateau, CO; resource management plan, 52818– Nuclear Regulatory Commission 52820 NOTICES Environmental statements; availability: National Aeronautics and Space Administration Energy Northwest, 52824–52826 NOTICES Meetings; Sunshine Act, 52826 Meetings: Regulatory guides; issuance, availability, and withdrawal, NASA Advisory Council, 52823–52824 52826–52827 National Archives and Records Administration Pipeline and Hazardous Materials Safety Administration RULES NOTICES Records management: Pipeline safety: Systematic declassification review of foreign government Waiver petitions— information; general guidelines, 52743 TransCanada Pipelines Ltd., 52871–52873 National Highway Traffic Safety Administration NOTICES Presidential Documents Motor vehicle safety standards; exemption petitions, etc.: ADMINISTRATIVE ORDERS Automobili Lamborghini SpA, et al., 52851–52868 Terrorist attacks; continuation of national emergency with Saleen, Inc., 52869–52871 respect to certain (Notice of September 5, 2006), 52733

National Institutes of Health Securities and Exchange Commission NOTICES NOTICES Inventions, Government-owned; availability for licensing, Securities Exchange Act: 52802–52806 Exemption for qualified contingent trades from rule Meetings: 611(a) of regulation NMS, 52829–52831 National Institute of Allergy and Infectious Diseases, NYSE Arca, Inc. and the National Association of 52806 Securities Dealers, Inc., regulatory responsibilities National Institute of Child Health and Human allocation plan., 52827–52829 Development, 52806 Self-regulatory organizations; proposed rule changes: National Institute of Diabetes and Digestive and Kidney American Stock Exchange LLC, 52831–52833 Diseases, 52807 Boston Stock Exchange, Inc., 52833–52835 National Institute on Deafness and Other Communication Chicago Board Options Exchange, Inc., 52835–52836 Disorders, 52806–52807 National Stock Exchange, Inc., 52836–52841 National Library of Medicine, 52807–52808 Philadelphia Stock Exchange, Inc., 52842–52843 Recombinant DNA Advisory Committee, 52808 Scientific Review Center, 52809–52810 Small Business Administration National Oceanic and Atmospheric Administration NOTICES RULES Disaster loan areas: Fishery conservation and management: New Mexico, 52843–52844 Alaska; fisheries of Exclusive Economic Zone— Pennsylvania, 52844 Deep-water species, 52754 Meetings: Northwestern Hawaiian Islands Marine National Regulatory Fairness Boards— Monument; establishment Region VIII; hearing, 52844 Correction, 52874 PROPOSED RULES State Justice Institute Ocean and coastal resource management: NOTICES Marine sanctuaries— Reports and guidance documents; availability, etc.: Flower Garden Banks National Marine Sanctuary, TX; Grants, cooperative agreements, and contracts, guidelines, meetings, 52757–52758 52920–52954

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Substance Abuse and Mental Health Services Veterans Affairs Department Administration RULES Adjudication; pensions, compensation, dependency, etc: NOTICES Nonservice-connected disability; claims based on Agency information collection activities; proposals, aggravation, 52744–52747 submissions, and approvals, 52810–52811 Meetings: Substance Abuse Treatment Center National Advisory Separate Parts In This Issue Council, 52811 Part II Treasury Department, Internal Revenue Service, 52876– Transportation Department 52918 See Federal Aviation Administration See Federal Highway Administration Part III See Federal Motor Carrier Safety Administration State Justice Institute, 52920–52954 See Federal Transit Administration See National Highway Traffic Safety Administration Part IV See Pipeline and Hazardous Materials Safety Commerce Department, Industry and Security Bureau, Administration 52956–52979 RULES Organization, functions, and authority delegations: Research and Innovative Technology Administrator, Reader Aids Federal Highway Administrator, Federal Railroad Consult the Reader Aids section at the end of this issue for Administrator, et al., 52751–52754 phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws. To subscribe to the Federal Register Table of Contents Treasury Department LISTSERV electronic mailing list, go to http:// See Internal Revenue Service listserv.access.gpo.gov and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions.

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CFR PARTS AFFECTED IN THIS ISSUE

A cumulative list of the parts affected this month can be found in the Reader Aids section at the end of this issue.

3 CFR Proclamations: 7463 (See Notice of September 5, 2006) ...... 52733 Administrative Orders: Notices: Notice of September 5, 2006 ...... 52733 7 CFR 985...... 52735 1437...... 52738 14 CFR 71 (2 documents) ...... 52740, 52741 Proposed Rules: 25...... 52755 15 CFR 740...... 52956 743...... 52956 772...... 52956 774...... 52956 Proposed Rules: 922 (2 documents) ...... 52757, 52758 16 CFR Proposed Rules: 1307...... 52758 1410...... 52758 1500...... 52758 1515...... 52758 26 CFR Proposed Rules: 1...... 52876 32 CFR 706...... 52741 2002...... 52743 33 CFR 117...... 52743 38 CFR 3...... 52744 47 CFR 1...... 52747 90 (2 documents) ...... 52747, 52750 95...... 52747 49 CFR 1...... 52751 50 CFR 404...... 52874 679...... 52754

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Federal Register Presidential Documents Vol. 71, No. 173

Thursday, September 7, 2006

Title 3— Notice of September 5, 2006

The President Continuation of the National Emergency With Respect to Cer- tain Terrorist Attacks

Consistent with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), I am continuing for 1 year the national emergency I declared on September 14, 2001, in Proclamation 7463, with respect to the terrorist attacks at the World Trade Center, New York, New York, the Pentagon, and aboard United Airlines flight 93, and the continuing and immediate threat of further attacks on the United States. Because the terrorist threat continues, the national emergency declared on September 14, 2001, and the measures adopted to deal with that emergency must continue in effect beyond September 14, 2006. Therefore, I am con- tinuing in effect for an additional year the national emergency I declared on September 14, 2001, with respect to the terrorist threat. This notice shall be published in the Federal Register and transmitted to the Congress.

THE WHITE HOUSE, September 5, 2006. [FR Doc. 06–7527 Filed 9–6–06; 8:45 am] Billing code 3195–01–P

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Rules and Regulations Federal Register Vol. 71, No. 173

Thursday, September 7, 2006

This section of the FEDERAL REGISTER [email protected] and or her principal place of business, has contains regulatory documents having general [email protected], respectively. jurisdiction to review USDA’s ruling on applicability and legal effect, most of which Small businesses may request the petition, provided an action is filed are keyed to and codified in the Code of information on complying with this not later than 20 days after the date of Federal Regulations, which is published under regulation by contacting Jay Guerber, the entry of the ruling. 50 titles pursuant to 44 U.S.C. 1510. Marketing Order Administration The original salable quantity and The Code of Federal Regulations is sold by Branch, Fruit and Vegetable Programs, allotment percentages for Scotch and the Superintendent of Documents. Prices of AMS, USDA, 1400 Independence Native spearmint oil for the 2006–2007 new books are listed in the first FEDERAL Avenue, SW., STOP 0237, Washington, marketing year were recommended by REGISTER issue of each week. DC 20250–0237; Telephone: (202) 720– the Committee at its October 5, 2005, 2491, Fax: (202) 720–8938, or E-mail: meeting. The Committee recommended [email protected]. salable quantities of 878,205 pounds DEPARTMENT OF AGRICULTURE SUPPLEMENTARY INFORMATION: This rule and 1,007,886 pounds, and allotment percentages of 45 percent and 46 Agricultural Marketing Service is issued under Marketing Order No. 985 (7 CFR part 985), as amended, percent, respectively, for Scotch and Native spearmint oil. A proposed rule 7 CFR Part 985 regulating the handling of spearmint oil produced in the Far West (Washington, was published in the Federal Register [Docket No. FV06–985–2 FIR] Idaho, Oregon, and designated parts of on February 1, 2006 (71 FR 5183). Nevada and Utah), hereinafter referred Comments on the proposed rule were Marketing Order Regulating the to as the ‘‘order.’’ The order is effective solicited from interested persons until Handling of Spearmint Oil Produced in under the Agricultural Marketing March 3, 2006. No comments were the Far West; Revision of the Salable Agreement Act of 1937, as amended (7 received. Subsequently, a final rule Quantity and Allotment Percentage for U.S.C. 601–674), hereinafter referred to establishing the salable quantities and Class 3 (Native) Spearmint Oil for the as the ‘‘Act.’’ allotment percentages for Scotch and 2006–2007 Marketing Year USDA is issuing this rule in Native spearmint oil for the 2006–2007 conformance with Executive Order marketing year was published in the AGENCY: Agricultural Marketing Service, 12866. Federal Register on April 5, 2006 (71 FR USDA. This rule has been reviewed under 16986). ACTION: Final rule. Executive Order 12988, Civil Justice This rule continues in effect the Reform. Under the provisions of the action that revised the quantity of SUMMARY: The Department of marketing order now in effect, salable Native spearmint oil that handlers may Agriculture (USDA) is adopting, as a quantities and allotment percentages purchase from, or handle for, producers final rule, without change, an interim may be established for classes of during the 2006–2007 marketing year, final rule revising the quantity of Class spearmint oil produced in the Far West. which ends on May 31, 2007. Pursuant 3 (Native) spearmint oil that handlers This rule continues in effect the action to authority contained in §§ 985.50, may purchase from, or handle for, that increased the quantity of Native 985.51, and 985.52 of the order, the producers during the 2006–2007 spearmint oil produced in the Far West Committee, with seven of the eight marketing year. This rule continues in that may be purchased from or handled members present, met on April 18, effect the action that increased the for producers by handlers during the 2006, and unanimously recommended Native spearmint oil salable quantity 2006–2007 marketing year, which ends that the 2006–2007 Native spearmint oil from 1,007,886 pounds to 1,161,260 on May 31, 2007. This rule will not allotment percentage be increased by 7 pounds, and the allotment percentage preempt any State or local laws, percent. from 46 percent to 53 percent. The regulations, or policies, unless they Thus, taking into consideration the marketing order regulates the handling present an irreconcilable conflict with following discussion on adjustments to of spearmint oil produced in the Far this rule. the Native spearmint oil salable West and is administered locally by the The Act provides that administrative quantity, the 2006–2007 marketing year Spearmint Oil Administrative proceedings must be exhausted before salable quantity and allotment Committee (Committee). The Committee parties may file suit in court. Under percentage for Native spearmint oil is recommended this rule for the purpose section 608c(15)(A) of the Act, any increased to 1,161,260 pounds and 53 of avoiding extreme fluctuations in handler subject to an order may file percent, respectively. supplies and prices to help maintain with USDA a petition stating that the The salable quantity is the total stability in the Far West spearmint oil order, any provision of the order, or any quantity of each class of oil that market. obligation imposed in connection with handlers may purchase from, or handle DATES: Effective Date: October 10, 2006. the order is not in accordance with law for, producers during the marketing FOR FURTHER INFORMATION CONTACT: and request a modification of the order year. The total salable quantity is Susan M. Hiller, Marketing Specialist or to be exempted therefrom. A handler divided by the total industry allotment and Gary D. Olson, Regional Manager, is afforded the opportunity for a hearing base to determine an allotment Northwest Marketing Field Office, on the petition. After the hearing USDA percentage. Each producer is allotted a Marketing Order Administration would rule on the petition. The Act share of the salable quantity by applying Branch, Fruit and Vegetable Programs, provides that the district court of the the allotment percentage to the AMS, USDA; Telephone: (503) 326– United States in any district in which producer’s individual allotment base for 2724, Fax: (503) 326–7440, or E-mail: the handler is an inhabitant, or has his the applicable class of spearmint oil.

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The estimated total industry allotment demand. The Committee also policy statement, a requirement base for Native spearmint oil for the considered reports and other whenever the Committee recommends 2006–2007 marketing year was information from handlers and implementing volume regulations or established at 2,191,056 pounds. This producers in attendance at the meeting recommends revisions to existing figure represents a one percent increase and reports given by the Committee volume regulations, meets the intent of over the revised 2005–2006 total manager from handlers and producers § 985.50 of the order. During its allotment base. This figure is generally who were not in attendance. On discussion of revising the 2006–2007 revised each year on June 1 due to average, handlers estimated that the salable quantity and allotment producer base being lost because of the demand for 2006–2007 Native percentage, the Committee considered: bona fide effort production provisions of spearmint oil is 300,000 pounds above (1) The estimated quantity of salable oil § 985.53(e). The revision is usually the quantity already contracted for sale. of each class held by producers and minimal. The 2006–2007 marketing year began handlers; (2) the estimated demand for By increasing the salable quantity and on June 1, 2006, with an estimated each class of oil; (3) prospective allotment percentage, this final rule carry-in of 50,000 pounds of salable oil. production of each class of oil; (4) total makes an additional amount of Native When the estimated carry-in is added to of allotment bases of each class of oil for spearmint oil available by releasing oil the original 2006–2007 salable quantity the current marketing year and the from the reserve pool. When applied to of 1,007,886 pounds, a total estimated estimated total of allotment bases of each individual producer, the allotment available supply for the 2006–2007 each class for the ensuing marketing percentage increase allows each marketing year of 1,057,886 pounds year; (5) the quantity of reserve oil, by producer with reserve pool oil to take results. Of this amount, 819,560 pounds class, in storage; (6) producer prices of up to an amount equal to their allotment of oil has already been contracted for oil, including prices for each class of oil; base from their reserve for this class of the 2006–2007 marketing year. and (7) general market conditions for oil. Before November 1, 2006, a Additionally, an estimated deficiency of each class of oil, including whether the producer may also transfer excess oil to 133,800 pounds may exist from estimated season average price to another producer to enable that producers not producing their full producers is likely to exceed parity. producer to fill a deficiency in that salable quantity. As a result, an Conformity with USDA’s ‘‘Guidelines producer’s annual allotment for this estimated 104,526 pounds of oil would for Fruit, Vegetable, and Specialty Crop class of oil. remain uncontracted and available for Marketing Orders’’ has also been The following table summarizes the sale without this increase. This increase reviewed and confirmed. Committee recommendation: supplies an additional 153,374 pounds The increase in the Native spearmint of oil to the market, resulting in 257,900 oil salable quantity and allotment Native Spearmint Oil Recommendation pounds of oil available for contracting percentage allows for anticipated market (A) Estimated 2006–2007 Allotment for 2006–2007 marketing year. needs for this class of oil. In Base—2,191,056 pounds. This is the The Committee was reluctant to determining anticipated market needs, estimate on which the original 2006– recommend any more of an increase in consideration by the Committee was 2007 Native spearmint oil salable the salable quantity due to the given to historical sales, and changes quantity and allotment percentage was uncertainty of the 2006–2007 marketing and trends in production and demand. year; however, the Committee continues based. Final Regulatory Flexibility Analysis (B) Original 2006–2007 Allotment to believe that an increase is necessary Percentage—46 percent. This was to supply the higher quantity of Native Pursuant to requirements set forth in unanimously recommended by the spearmint oil demanded according to the Regulatory Flexibility Act (RFA), the Committee on October 5, 2005. their revised market estimate. Therefore, Agricultural Marketing Service (AMS) (C) Original 2006–2007 Salable the industry may not be able to meet has considered the economic impact of Quantity—1,007,886 pounds. This market demand without this increase. In this action on small entities. figure is 46 percent of the estimated addition, when the Committee made its Accordingly, AMS has prepared this 2006–2007 allotment base of 2,191,056 original recommendation for the final regulatory flexibility analysis. pounds. establishment of the Native spearmint The purpose of the RFA is to fit (D) Increase in Allotment oil salable quantity and allotment regulatory actions to the scale of Percentage—7 percent. The Committee percentage for the 2006–2007 marketing business subject to such actions in order recommended a 7 percent increase at its year, it had anticipated that the year that small businesses will not be unduly April 18, 2006, meeting. would end with an ample available or disproportionately burdened. (E) 2006–2007 Allotment supply. Marketing orders issued pursuant to the Percentage—53 percent. This figure is Based on its analysis of available Act, and the rules issued thereunder, are derived by adding the increase of 7 information, USDA has determined that unique in that they are brought about percent to the original 2006–2007 the salable quantity and allotment through group action of essentially allotment percentage of 46 percent. percentage for Native spearmint oil for small entities acting on their own (F) Calculated Revised 2006–2007 the 2006–2007 marketing year should be behalf. Thus, both statutes have small Salable Quantity—1,161,260 pounds. increased to 1,161,260 pounds and 53 entity orientation and compatibility. This figure is 53 percent of the percent, respectively. There are eight spearmint oil handlers estimated 2006–2007 allotment base of This rule finalizes an interim final subject to regulation under the order, 2,191,056 pounds. rule that relaxed the regulation of Native and approximately 59 producers of (G) Computed Increase in the 2006– spearmint oil and will allow producers Scotch spearmint oil and approximately 2007 Salable Quantity—153,374 to meet market demand while 88 producers of Native spearmint oil in pounds. This figure is 7 percent of the improving producer returns. In the regulated production area. Small estimated 2006–2007 allotment base of conjunction with the issuance of this agricultural service firms are defined by 2,191,056 pounds. rule, the Committee’s revised marketing the Small Business Administration In making this recommendation, the policy statement for the 2006–2007 (SBA) (13 CFR 121.201) as those having Committee considered all available marketing year has been reviewed by annual receipts of less than $6,500,000, information on price, supply, and USDA. The Committee’s marketing and small agricultural producers are

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defined as those having annual receipts This rule continues in effect the alternatives to the increase finalized of less than $750,000. action that revised the quantity of herein. The Committee not only Based on the SBA’s definition of Native spearmint oil that handlers may considered leaving the salable quantity small entities, the Committee estimates purchase from, or handle for, producers and allotment percentage unchanged, that 2 of the 8 handlers regulated by the during the 2006–2007 marketing year, but also looked at various increases order could be considered small which ends on May 31, 2007. That ranging from 0 percent to 10 percent. entities. Most of the handlers are large interim final rule increased the Native The Committee reached its corporations involved in the spearmint oil salable quantity from recommendation to increase the salable international trading of essential oils 1,007,886 pounds to 1,161,260 pounds, quantity and allotment percentage for and the products of essential oils. In and the allotment percentage from 46 Native spearmint oil after careful addition, the Committee estimates that percent to 53 percent. consideration of all available 19 of the 59 Scotch spearmint oil An econometric model was used to information, and believes that the level producers and 18 of the 88 Native assess the impact that volume control recommended will achieve the spearmint oil producers could be has on the prices producers receive for objectives sought. Without the increase, classified as small entities under the their commodity. Without volume the Committee believes the industry SBA definition. Thus, a majority of control, spearmint oil markets would would not be able to meet market needs. handlers and producers of Far West likely be over-supplied, resulting in low The AMS is committed to compliance spearmint oil may not be classified as producer prices and a large volume of with the E-Government Act, to promote small entities. oil stored and carried over to the next the use of the Internet and other The Far West spearmint oil industry crop year. The model estimates how information technologies to provide is characterized by producers whose much lower producer prices would increased opportunities for citizen farming operations generally involve likely be in the absence of volume access to Government information and more than one commodity, and whose controls. services, and for other purposes. income from farming operations is not The recommended allotment This rule will not impose any exclusively dependent on the percentages, upon which 2006–2007 additional reporting or recordkeeping production of spearmint oil. A typical producer allotments are based, are 45 requirements on either small or large spearmint oil-producing operation has percent for Scotch and 53 percent for spearmint oil handlers. As with all enough acreage for rotation such that Native (a 7 percentage point increase Federal marketing order programs, the total acreage required to produce the from the original salable percentage of reports and forms are periodically crop is about one-third spearmint and 46 percent). Without volume controls, reviewed to reduce information two-thirds rotational crops. Thus, the producers would not be limited to these requirements and duplication by typical spearmint oil producer has to allotment levels, and could produce and industry and public sector agencies. have considerably more acreage than is sell additional spearmint oil. The In addition, as noted in the initial planted to spearmint during any given econometric model estimated a $1.40 regulatory flexibility analysis, USDA season. Crop rotation is an essential decline in the season average producer has not identified any relevant Federal cultural practice in the production of price per pound (from both classes of rules that duplicate, overlap or conflict spearmint for weed, insect, and disease spearmint oil) resulting from the higher with this rule. control. To remain economically viable quantities that would be produced and Further, the Committee’s meeting was with the added costs associated with marketed if volume controls were not widely publicized throughout the spearmint oil production, most used (i.e., if the salable percentages spearmint oil industry and all interested spearmint oil-producing farms fall into were set at 100 percent). persons were invited to attend the the SBA category of large businesses. Loosening the volume control meeting and participate in Committee Small spearmint oil producers restriction by increasing the allotment deliberations. Like all Committee generally are not as extensively percentages resulted in this revised meetings, the April 18, 2006, meeting diversified as larger ones and as such price decline estimate of $1.40 per was a public meeting and all entities, are more at risk to market fluctuations. pound if volume controls were not used. both large and small, were able to Such small producers generally need to A previous price decline estimate of express their views on this issue. market their entire annual crop and do $1.49 per pound was based on the An interim final rule concerning this not have the luxury of having other 2006–2007 allotment percentages (45 action was published in the Federal crops to cushion seasons with poor percent for Scotch and 46 percent for Register on May 26, 2006. Copies of the spearmint oil returns. Conversely, large Native) published in the Federal rule were mailed by the Committee’s diversified producers have the potential Register on April 5, 2006 (71 FR 16986). staff to all committee members, to endure one or more seasons of poor The surplus situation for the producers, handlers, and other spearmint oil markets because income spearmint oil market that would exist interested persons. In addition, the rule from alternate crops could support the without volume controls in 2006–2007 was made available through the Internet operation for a period of time. Being also would likely dampen prospects for by USDA and the Office of the Federal reasonably assured of a stable price and improved producer prices in future Register. That rule provided for a 60-day market provides small producing years because of the buildup in stocks. comment period which ended July 25, entities with the ability to maintain The use of volume controls allows the 2006. No comments were received. proper cash flow and to meet annual industry to fully supply spearmint oil A small business guide on complying expenses. Thus, the market and price markets while avoiding the negative with fruit, vegetable, and specialty crop stability provided by the order consequences of over-supplying these marketing agreements and orders may potentially benefit the small producer markets. The use of volume controls is be viewed at: more than such provisions benefit large believed to have little or no effect on http://www.ams.usda.gov/fv/moab.html. producers. Even though a majority of consumer prices of products containing Any questions about the compliance handlers and producers of spearmint oil spearmint oil and will not result in guide should be sent to Jay Guerber at may not be classified as small entities, fewer retail sales of such products. the previously mentioned address in the the volume control feature of this order Based on projections available at the FOR FURTHER INFORMATION CONTACT has small entity orientation. meeting, the Committee considered section.

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After consideration of all relevant alternative means for communication determined to be not significant, and material presented, including the (Braille, large print, audiotape, etc.) was not reviewed by the Office of Committee’s recommendation, and should contact the USDA Target Center Management and Budget (OMB). other information, it is found that at (202) 720–2600 (voice and TDD). Regulatory Flexibility Act finalizing the interim final rule, without SUPPLEMENTARY INFORMATION: change, as published in the Federal It has been determined that the Register (71 FR 30266, May 26, 2006) Background Regulatory Flexibility Act is not will tend to effectuate the declared A proposed rule published on October applicable to this rule because CCC is policy of the Act. 3, 2005 proposed changes for handling not required to publish a notice of certain but not all claims for assistance proposed rulemaking for the subject List of Subjects in 7 CFR Part 985 in certain defined ‘‘tropical regions’’ matter of this rule. Marketing agreements, Oils and fats, (including Hawaii and Puerto Rico) Environmental Assessment Reporting and recordkeeping under the Noninsured Crop Disaster requirements, Spearmint oil. Assistance Program (NAP) program The environmental impacts of this administered by CCC under rules found rule have been considered consistent PART 985—MARKETING ORDER at 7 CFR Part 1437. The comment period with the provisions of the National REGULATING THE HANDLING OF for the rule ended on November 2, 2005, Environmental Policy Act of 1969 SPEARMINT OIL PRODUCED IN THE and no comments were received. The (NEPA), 42 U.S.C. 4321 et seq., the FAR WEST background and need for the rule were regulations of the Council on described in the preamble to the Environmental Quality (40 CFR parts I Accordingly, the interim final rule proposed rule. The new regulations, as 1500–1508), and FSA regulations for amending 7 CFR part 985, which was proposed, are adopted by final rule with compliance with NEPA, 7 CFR 799. FSA published at 71 FR 30266 on May 26, minor clarifying changes. This final rule has concluded that this rule is 2006, is adopted as a final rule without is made effective as of January 1, 2006, categorically excluded from further change. since, as contemplated in the proposed environmental review and Dated: August 31, 2006. rule, the rule was to be effective with all documentation. No extraordinary Lloyd C. Day, covered crops planted as of that date. circumstances or other unforeseeable Administrator, Agricultural Marketing Provision is made in the rule itself for factors exist which would require Service. adjustments as may be needed between preparation of an environmental [FR Doc. E6–14760 Filed 9–6–06; 8:45 am] the old and new rules. It is understood, assessment or environmental impact BILLING CODE 3410–02–P however, that the changes in 7 CFR statement. 1437 are, in all cases, advantageous to producers. If not, any producer with a Executive Order 12988 DEPARTMENT OF AGRICULTURE claim arising from a policy issued before This rule has been reviewed in the date of publication of this final rule accordance with Executive Order 12988. Commodity Credit Corporation who would have profited from the old This rule preempts State and other local policy may apply for relief. laws that are inconsistent with it. Before 7 CFR Part 1437 In the preamble to the proposed rule any legal action may be brought RIN 0560 AH19 it was indicated that the source of regarding a determination under this authority for extending the rule to rule, the administrative appeal Noninsured Crop Disaster Assistance certain tropical regions was 48 U.S.C. provisions set forth at 7 CFR parts 11 Program—Tropical Regions 1469d. However, the NAP program has and 780 must be exhausted. been since inception extended to those AGENCY: Commodity Credit Corporation, regions. NAP was first provided for in Executive Order 12372 USDA. crop insurance legislation that allowed This program is not subject to the ACTION: Final rule. for crop insurance in such regions and provisions of Executive Order 12372, allowed NAP as an alternative to which require intergovernmental SUMMARY: This rule changes how the catastrophic crop insurance coverage consultation with State and local Commodity Credit Corporation (CCC) where such coverage is not available. It officials. ‘‘States’’ for this purpose handles certain claims under the remains the case, even though the included the 50 States and other areas Noninsured Crop Disaster Assistance statutory authority for NAP has addressed in the rule. See the notice Program (NAP) for ‘‘tropical’’ regions, changed, that NAP is to be available related to 7 CFR part 3014, subpart V, including Hawaii, Puerto Rico and other where conventional federal crop published at 48 FR 29115 (June 24, specified areas. The changes will reduce insurance catastrophic insurance is not 1983). the burden on the affected program available and the authority for federal participants and ease program crop insurance continues to include an Unfunded Mandates Reform Act of administration in the affected areas. allowance for federal crop insurance in 1995 EFFECTIVE DATE: January 1, 2006. the areas covered by this NAP rule. That The rule contains no Federal FOR FURTHER INFORMATION CONTACT: noted, on review, the provisions of the mandates under the regulatory Frances Williams, Program Specialist, rule which provide for different provisions of Title II of the Unfunded Noninsured Crop Disaster Assistance treatment in certain tropical areas as Mandates Reform Act of 1995 (UMRA) Program, Farm Service Agency, United opposed to others have been found to be for State, Local, and tribal governments States Department of Agriculture justified because of differing agricultural or the private sector. Thus, this rule is (USDA), STOP 0517, Room 3648–S, conditions and no change has been not subject to the requirements of 1400 Independence Avenue, SW., made in the rule in this regard. sections 202 and 205 of the UMRA. Washington, DC 20250–0517. Telephone: 202–690–0700. Electronic Executive Order 12866 Paperwork Reduction Act of 1995 Mail: [email protected]. This rule is issued in conformance The information collection burden for Persons with disabilities who require with Executive Order 12866, was NAP is by OMB under 5 CFR 1320 and

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assigned OMB Control Number 0560– Authority: 7 U.S.C. 7333; 15 U.S.C. 714 et § 1437.502 Coverage periods and fees for 0175. In the proposed rule (70 FR seq.; and 48 U.S.C. 1469. covered tropical crops. 57520, 57521) the Agency provided an I 2. Add Subpart F to read as follows: (a) The crop year for all covered estimate of the effect this rule would tropical crops is the calendar year have on the information collection Subpart F—Coverage in the Tropical Region (January 1 through December 31 requirements of the NAP program and Sec. beginning in 2006 through subsequent requested public comment on whether 1437.501 Applicability; definition of years). the collection of information is ‘‘tropical region’’ and additional definitions (b) The application closing date for all necessary for the proper performance of 1437.502 Coverage periods and fees for covered tropical crops is December 1 of the functions of the agency, whether the covered tropical crops. the calendar year before the applicable information will have practical utility, 1437.503 Covered losses and recordkeeping crop year. the accuracy of the agency’s burden requirements for covered tropical crops. (c) For covered tropical crops, per estimate, ways to enhance the quality, 1437.504 Notice of loss for covered tropical county per crop year, a maximum utility, and clarity of the information crops. service fee of $100.00 is required of the collected, and ways to minimize the 1437.505 Application for payment for the tropical region. producer for coverage of: burden. No comments were received. (1) With respect to annual and Executive Order 12612 Subpart F—Determining Coverage in biennial crops, all plantings of the same the Tropical Region crop planted during the crop year, as This rule does not have sufficient determined by CCC. Federalism implications to warrant the § 1437.501 Applicability; definition of (2) With respect to perennial crops, all ‘‘tropical region’’ and additional definitions. preparation of a Federalism Assessment. acreage of the crop existing during the This rule will not have a substantial (a) This subpart shall only apply to crop year, as determined by CCC. direct effect on States or their political covered tropical crops in the tropical (d)(1) Multiple planting periods and subdivisions or on the distribution of region for the 2006 and subsequent final planting dates are not applicable power and responsibilities among the crops years, as those terms are defined for covered tropical crops. However, various levels of government. ‘‘States’’ in this subpart. Benefits under this part nothing in this section shall prohibit for this purpose included the 50 States may be extended to those crops only to assigning different production the extent that they are otherwise and other areas addressed in the rule. expectations to different fields. eligible for assistance under this part. (2) The coverage period for perennial Government Paperwork Elimination Covered crops shall not apply to ‘‘value and other crops covered by this subpart Act loss’’ crops, as defined elsewhere in this begins on January 1 of the relevant crop FSA is committed to compliance with part. For those crops that are covered by this subpart, loss and payment year and ends on December 31 of that the Government Paperwork Elimination year. Act (GPEA) and the Freedom to E-File determinations for the program covered Act, which require Government in this part shall be determined by the § 1437.503 Covered losses and agencies in general and FSA in rules that otherwise apply to the recordkeeping requirements for covered particular to provide the public the program subject to the modifications tropical crops. option of submitting information or provided by this subpart. The rules that (a) Prevented planting coverage is not transacting business electronically to otherwise apply include, but are not available for covered tropical crops, the maximum extent possible. The limited to, limitations on payments that other than in Hawaii and Puerto Rico, forms and other information collection appear elsewhere in this part. except as approved by the Deputy (b) For purposes of this subpart: Administrator in special cases. activities required for participation in (1) Tropical region includes, as may (b) Except in Hawaii and Puerto Rico, the program are available electronically be further limited by the Deputy or as otherwise approved by the Deputy for downloading or electronic Administrator: Hawaii, American Administrator in individual cases, submission through the USDA eForms Samoa, Guam, the U.S. Virgin Islands, eligible causes of loss for covered Web site at http:// Puerto Rico, and the former Trust tropical crops will only include forms.sc.egov.usda.gov/eforms. Territory of the Pacific Islands (the hurricanes, typhoons, and named Federal Assistance Programs Commonwealth of the Northern Mariana Islands, the Republic of the Marshall tropical storms. The title and number of the Federal Islands, the Federated States of (c) Producers who have applied for assistance program found in the Catalog Micronesia, and the Republic of Palau). coverage on covered tropical crops must of Federal Domestic Assistance to which (2) 2006 and subsequent crops means maintain for the full coverage period this final rule applies are Noninsured those crops in the ground on or after contemporaneous records. Assistance, 10–451. January 1, 2006. Contemporaneous records are those created at the time of planting and List of Subjects in 7 CFR Part 1437 (3) Covered tropical crops means those crops and commodities in the harvesting of the crop for which the Agricultural commodities, Disaster tropical region governed by this subpart, application for coverage is filed. In this assistance, Reporting and recordkeeping those being all crops and commodities regard: requirements. in the tropical region that are otherwise (1) Producers may be selected on a random or targeted basis for compliance I Accordingly, for the reasons set forth eligible for generating a benefit claim review with this requirement and any in the preamble, 7 CFR part 1437 is under this part, except for value-loss other requirements that may apply to amended as follows: crops as defined elsewhere in this part. (c) The Deputy Administrator may this program. PART 1437—NONINSURED CROP adjust requirements for assistance so as (2) A failure to maintain acceptable DISASTER ASSISTANCE PROGRAM to provide a fair transition from contemporaneous records throughout previous rules for crop covered by this the crop year may be treated by CCC as I 1. The authority citation for part 1437 subpart to those provisions which are grounds of ineligibility for benefits is revised to read as follows: provided for in this subpart. under this part.

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§ 1437.504 Notice of loss for covered undertaken, to the maximum extent Islands, the Federated States of tropical crops. possible, for the full reporting period, Micronesia, and the Republic of Palau. (a) The provisions of § 1437.10(c) that being the period for which (f) All crop acreage for covered regarding late filed notice of loss do not production could count against a loss as tropical crops for which a notice of loss apply to covered tropical crops. indicated in this subpart. is filed must not be destroyed until (b) Where a notice of loss for covered (3) Failure to keep sufficient records authorized by CCC. tropical crops is provided according to to allow the computations provided for § 1437.10, producers must provide in this subpart is grounds for denial of § 1437.505 Application for payment for the tropical region. records maintained according to the claim. § 1437.503(c) of the: (c) Producers with coverage of a (a) For producers of covered tropical (1) Number of acres or other basis of covered tropical crop for a crop year crops in Guam, Virgin Islands, measurement, as applicable, of the crop must, by the earlier of 90 calendar days American Samoa, and the from which production could be after the crop year ends or the date a Commonwealth of the Northern Mariana achieved existing on the day the eligible notice of loss is filed, file a certified Islands, the Republic of the Marshall natural disaster occurred or, for report setting out the: Islands, the Federated States of prolonged natural disasters, such as a (1) Collective acres of the crop acreage Micronesia, and the Republic of Palau, drought and similar damage where planted or in the ground during the crop an application for payment must be applicable, existing on the day the year. filed at the same time as the filing of the notice of loss is filed. (2) Total production harvested from notice of loss required under §§ 1437.10 (2) Amount, including zero, as the crop acreage for the full crop year and 1437.504. applicable, of production harvested, in the case of a perennial plant and for (b) For producers in Puerto Rico and before or after the disaster, from those the full life of the plants for other crops. Hawaii, an application for payment for crop plantings (damaged or undamaged) (d) With respect to the report required such crops must be filed by the later of: which were in existence on the farm at in paragraph (c) of this section: (1) The date on which the notice of the time of the disaster including (1) If a report is filed before the end loss is filed in accordance with production from the covered plantings of the crop year, an updated crop report §§ 1437.10 and 1437.502(i), and (in existence at the time of the loss must be filed within 90 calendar days (2) The date of the completion of event) that may occur after the loss from the end of the crop year to harvest for the specific crop acreage that event even when, to the extent provided supplement the original report; existed at the time of loss for which the for in paragraph (c) of this section, the (2) If the report is for any annual or notice of loss was filed. harvest occurs after the end of the crop biennial crops where production Signed in Washington, DC, August 23, year. Crop acreage of the covered crop continued or could have continued 2006. that is in existence at the time of the loss beyond the period covered in the Thomas B. Hofeller, event that can be harvested after the reports otherwise filed under this Acting Executive Vice President, Commodity eligible natural disaster must be section, an additional report of Credit Corporation. harvested, or continue to be harvested, production must be filed within 30 days [FR Doc. E6–14736 Filed 9–6–06; 8:45 am] of the end of the last countable and the harvested acres and production BILLING CODE 3410–05–P reported to FSA according to this production for the covered crop or 30 subpart, except that for perennial crops days after the last date on which such production could have been obtained, the requirement ends with the end of DEPARTMENT OF TRANSPORTATION the crop year. For non-perennial crops whichever is later. the obligation to harvest ends with the (3) A failure to file an adequate report Federal Aviation Administration end of the life-cycle for the plantings where a report is required by this that were in existence at the time of the section may result in the producer being 14 CFR Part 71 loss event. In this regard: treated as having a zero yield capability (i) Except as otherwise determined by for the crop year involved for purposes [Docket No. FAA–2006–24813; Airspace FSA, such production, before or after of constructing a crop history. Docket No. 06–AAL–16] Alternatively, the Deputy Administrator the loss event, will be taken into Modification of Legal Description of may assign another sanction for that account in computing eligibilities. Class D and E Airspace; Fairbanks, (ii) Production that must be reported failure. In addition to other sanctions as Fort Wainwright Army Airfield, AK under paragraph (b)(2)(i) of this section may apply, a failure to file such reports includes, except in the case of perennial may be grounds for denial of a claim. AGENCY: Federal Aviation plants, all production irrespective of The Deputy Administrator may adjust Administration (FAA), DOT. whether the production occurs in the crop histories as determined appropriate ACTION: Direct final rule; confirmation of same crop year. to create, to the extent practicable, an effective date. (iii) For perennial plants, only appropriate crop history for loss production in the same crop year must computation purposes. SUMMARY: The U.S. Army will soon be be reported. (4) Such reports as are provided for in changing the name of Fort (Ft.) (iv) All production that must be this subsection must be filed for every Wainwright Army Airfield (AAF) to reported for covered tropical crops will, crop year for which there is coverage, Ladd AAF. This action amends the except as specified by the Deputy irrespective of whether a claim is filed airport name accordingly for each of the Administrator, be taken into account in for that year. Class D and Class E airspace the loss determinations made under this (e) Unless otherwise specified by the descriptions in FAA Order 7400.9N. part. The producer is obligated to Deputy Administrator, appraisals are This action also amends an altitude maximize that production. That is, not required of crop acreage for covered omission which currently does not exist harvesting and other production tropical crops on Guam, Virgin Islands, in the FAA Order 7400.9N. This action activities for the plants in the ground at American Samoa, and the also redefines the airspace description the time of the disaster must be Commonwealth of the Northern Mariana to account for recent updates to the undertaken or continue to be Islands, the Republic of the Marshall airfield coordinates.

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DATES: This direct final rule is effective 23, 2006 (71 FR 49343). Airspace Docket ACTION: Final rule. on 0901 UTC, November 23, 2006. No. 06–AAL–07. FOR FURTHER INFORMATION CONTACT: Gary DATES: Effective Date: 0901 UTC, SUMMARY: The Department of the Navy Rolf, Federal Aviation Administration, November 23, 2006 is amending its certifications and 222 West 7th Avenue, Box 14, FOR FURTHER INFORMATION CONTACT: Gary exemptions under the International Anchorage, AK 99513–7587; telephone Rolf, AAL–538G, Federal Aviation Regulations for Preventing Collisions at number (907) 271–5898; fax: (907) 271– Administration, 222 West 7th Avenue, Sea, 1972 (72 COLREGS), to reflect that 2850; e-mail: [email protected]. Box 14, Anchorage, AK 99513–7587; the Deputy Assistant Judge Advocate Internet address: http:// telephone number (907) 271–5898; fax: General (Admiralty and Maritime Law) www.alaska.faa.gov/at. (907) 271–2850; e-mail: has determined that USS NEW ORLEANS (LPD 18) is a vessel of the SUPPLEMENTARY INFORMATION: The FAA [email protected]. Internet address: Navy which, due to its special published this direct final rule with a http://www.alaska.faa.gov/at. construction and purpose, cannot fully request for comments in the Federal SUPPLEMENTARY INFORMATION: comply with certain provisions of the 72 Register on Monday, July 17, 2006 (71 History COLREGS without interfering with its FR 40394). The FAA uses the direct special function as a naval ship. The final rulemaking procedure for non- Federal Register Document E6–13803, intended effect of this rule is to warn controversial actions where the FAA Airspace Docket No. 06–AAL–07, mariners in waters where 72 COLREGS believes that there will be no adverse published on Wednesday, August 23, apply. public comment. The direct final rule 2006 (71 FR 49343), revised Class E advised the public that no adverse airspace at Barter Island, AK. An error DATES: Effective Date: August 18, 2006. comments were anticipated, and that was discovered in the airspace description that incorrectly identified FOR FURTHER INFORMATION CONTACT: unless a written adverse comment, or a Commander Gregg A. Cervi, JAGC, U.S. written notice of intent to submit such the Barter Island Airport by including the name ‘‘Edward Burnell Sr. Navy, Deputy Assistant Judge Advocate an adverse comment, were received General (Admiralty and Maritime Law), within the comment period, the Memorial’’. This action corrects that error. Office of the Judge Advocate General, regulation would become effective on Department of the Navy, 1322 Patterson November 23, 2006. Correction to Final Rule Ave., SE., Suite 3000, Washington Navy One comment was received via I Accordingly, pursuant to the authority Yard, DC 20374–5066, telephone 202– telephone, in which the person voiced 685–5040. opposition to the name change. That delegated to me, the airspace opinion is not within the scope of this description of the Class E airspace SUPPLEMENTARY INFORMATION: Pursuant published in the Federal Register, action, in that it does not address any to the authority granted in 33 U.S.C. Wednesday, August 23, 2006 (71 FR aeronautical effect. His complaint is 1605, the Department of the Navy 49343), (FR Doc E6–13803, page 49344, with the U.S. Army’s decision to change amends 32 CFR part 706. This column 3) is corrected as follows: the name. This action essentially amendment provides notice that the Deputy Assistant Judge Advocate addresses the title of the airspace § 71.1 [Corrected] General (Admiralty and Maritime Law), annoted in the the FAA Order 7400.8. * * * * * No other adverse comments were under authority delegated by the received. This notice confirms that the AAL AK E5 Barter Island, AK [Revised] Secretary of the Navy, has certified that rule will become effective on that date. Barter Island Airport, AK USS NEW ORLEANS (LPD 18) is a (Lat. 70°08′02″ N., long. 143°34′55″ W.) vessel of the Navy which, due to its Issued in Anchorage, AK, on August 28, special construction and purpose, 2006. That airspace extending upward from 700 feet above the surface within a 4.7-mile cannot fully comply with the following Anthony M. Wylie, radius of the Barter Island Airport; and that specific provisions of 72 COLREGS Director, Alaska Flight Service Information airspace extending upward from 1,200 feet without interfering with its special Office. above the surface within a 83-mile radius of function as a naval ship: Rule 27, [FR Doc. E6–14821 Filed 9–6–06; 8:45 am] the Barter Island Airport, excluding that pertaining to the placement of all-round airspace east of 141° West Longitude. BILLING CODE 4910–13–P task lights in a vertical line; Annex I, * * * * * paragraph 3(a), pertaining to the Issued in Anchorage, AK, on August 23, horizontal distance between the forward DEPARTMENT OF TRANSPORTATION 2006. and after masthead lights; and Annex I, Anthony M. Wylie, paragraph 2(k), pertaining to the vertical Federal Aviation Administration Director, Alaska Flight Service Information separation between anchor lights. The Office. Deputy Assistant Judge Advocate 14 CFR Part 71 [FR Doc. E6–14830 Filed 9–6–06; 8:45 am] General (Admiralty and Maritime Law) [Docket No. FAA–2006–23714; Airspace BILLING CODE 4910–13–P has also certified that the lights Docket No. 06–AAL–07] involved are located in closest possible compliance with the applicable 72 Revision of Class E Airspace; Barter DEPARTMENT OF DEFENSE COLREGS requirements. Island, AK Moreover, it has been determined, in AGENCY: Federal Aviation Department of the Navy accordance with 32 CFR Parts 296 and Administration (FAA), DOT. 701, that publication of this amendment 32 CFR Part 706 ACTION: Final rule; correction. for public comment prior to adoption is Certifications and Exemptions Under impracticable, unnecessary, and SUMMARY: This action corrects an error the International Regulations for contrary to public interest since it is in the airspace description contained in Preventing Collisions at Sea, 1972 based on technical findings that the a Final Rule that was published in the placement of lights on this vessel in a Federal Register on Wednesday, August AGENCY: Department of the Navy, DOD. manner differently from that prescribed

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herein will adversely affect the vessel’s PART 706—CERTIFICATIONS AND I 2. Table Three of § 706.2 is amended ability to perform its military functions. EXEMPTIONS UNDER THE by adding, in numerical order, the List of Subjects in 32 CFR Part 706 INTERNATIONAL REGULATIONS FOR following entry for USS NEW PREVENTING COLLISIONS AT SEA, ORLEANS: Marine safety, Navigation (water), and 1972 Vessels. § 706.2 Certifications of the Secretary of the Navy under Executive Order 11964 and I For the reasons set forth in the I 1. The authority citation for part 706 33 U.S.C. 1605. preamble, amend part 706 of title 32 of continues to read: the Code of Federal Regulations as * * * * * Authority: 33 U.S.C. 1605. follows:

TABLE THREE

Side lights Stern light, Forward Anchor lights Masthead Side lights Stern light distance distance anchor light, relationship lights arc of arc of arc of inboard of forward of height above of aft light to Vessel No. visibility; visibility; rule visibility; rule ship’s sides stern in me- hull in forward light rule 21(a) 21(b) 21(c) in meters ters; rule meters; 2(K) in meters 3(b) annex 1 21(c) annex 1 2(K) annex 1

******* USS NEW OR- LPD 18 ...... 2.36m below. LEANS.

*******

I 3. Table Four, in Paragraph 20 of numerical order, the following entry for § 706.2 Certifications of the Secretary of § 706.2, is amended by adding, in USS NEW ORLEANS (LPD 18): the Navy under Executive Order 11964 and 33 U.S.C. 1605. * * * * *

Angle in degrees of task lights off vertical as Vessel Number viewed from directly ahead or astern

USS NEW ORLEANS ...... LPD 18 ...... 10

*******

I 4. Table Five of § 706.2 is amended by following entry for USS NEW § 706.2 Certifications of the Secretary of adding, in numerical order, the ORLEANS: the Navy under Executive Order 11964 and 33 U.S.C. 1605. * * * * *

TABLE FIVE

Masthead Forward After mast- lights not masthead head light less than 1⁄2 Percentage over all other light not in ship’s length horizontal Vessel No. lights and forward aft of forward separation at- obstructions. quarter of masthead tained Annex I, sec. ship. Annex I, light. Annex 2(f) sec. 3(a) I, sec. 3(a)

******* USS NEW ORLEANS ...... LPD 18 ...... X 70.7

*******

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Approved: August 18, 2006. declassification after 25 years unless deviation from the regulation governing Gregg A. Cervi, specifically exempted. the operation of the U.S. 1 Bridge, Commander, JAGC, U.S. Navy, Deputy Therefore, pursuant to 5 U.S.C. across the Housatonic River, mile 3.5, at Assistant Judge Advocate General (Admiralty 553(b)(B), good cause exists for waiving Stratford, Connecticut. Under this and Maritime Law). the requirements of notice and temporary deviation, only one of the [FR Doc. E6–14693 Filed 9–6–06; 8:45 am] opportunity for comment on the two moveable bascule spans will be BILLING CODE 3810–FF–P withdrawal of 32 CFR part 2002. opened for the passage of vessel traffic. Following the issuance of Executive This deviation is necessary to facilitate Order 12958, as amended, these sections scheduled bridge maintenance. NATIONAL ARCHIVES AND RECORDS became obsolete. Therefore, because the DATES: This deviation is effective from ADMINISTRATION Information Security Oversight Office September 18, 2006 through November (ISOO) has no authority to retain these 16, 2006. 32 CFR Part 2002 sections, the process of notice and ADDRESSES: Materials referred to in this [NARA–06–006] comment would be unproductive and is document are available for inspection or unnecessary. Additionally, it is in the RIN 3095–AB51 copying at the First Coast Guard public interest to remove an obsolete District, Bridge Branch Office, One General Guidelines for Systematic regulation. South Street, New York, New York Declassification Review of Foreign This rule is not a significant 10004, between 7 a.m. and 3 p.m., Government Information; Removal of regulatory action for the purposes of Monday through Friday, except Federal Part Executive Order 12866 and has not been holidays. The First Coast Guard District submitted for Office of Management and Bridge Branch Office maintains the AGENCY: National Archives and Records Budget review under that order. As public docket for this temporary Administration (NARA). required by the Regulatory Flexibility deviation. ACTION: Final rule. Act, I certify that this rule will not have FOR FURTHER INFORMATION CONTACT: Judy a significant impact on a substantial SUMMARY: The National Archives and Leung-Yee, Project Officer, First Coast number of small entities because this Guard District, at (212) 668–7165. Records Administration (NARA) is rule applies to Federal agencies. This SUPPLEMENTARY INFORMATION: The U.S. 1 removing Information Security regulation does not have any federalism Bridge across the Housatonic River, mile Oversight Office (ISOO) regulations on implications. the general guidelines for systematic 3.5, at Stratford, Connecticut, has a declassification review of foreign List of Subjects in 32 CFR Part 2002 vertical clearance in the closed position government information. Following the Archives and records, of 32 feet at mean high water and 37 feet issuance of Executive Order 12958 Declassification. at mean low water. The existing (Classified National Security operating regulations are listed at 33 Information) on April 17, 1995, and its PART 2002—[REMOVED] CFR 117.207(a). amendment on March 25, 2003, the The bridge owner, Connecticut General Guidelines for Systematic I Under E.O. 12958, as amended, Department of Transportation, requested Declassification Review of Foreign section 3.3(g) and for the reasons set a temporary deviation to allow opening Government Information, became forth in the preamble, NARA amends 32 only one of the two moveable bascule obsolete. The final rule will affect CFR chapter 20 by removing part 2002. spans for the passage of vessel traffic Federal agencies. Dated: August 24, 2006. from September 18, 2006 through November 16, 2006, in order to facilitate EFFECTIVE DATE: Effective September 7, J. William Leonard, 2006. scheduled bridge maintenance. Director, Information Security Oversight Under this temporary deviation, the FOR FURTHER INFORMATION CONTACT: J. Office. U.S. 1 Bridge need only open one of the William Leonard, Director, ISOO, at Approved: August 30, 2006. two movable bascule spans for the 202–357–5400. Allen Weinstein, passage of vessel traffic from September SUPPLEMENTARY INFORMATION: The Archivist of the United States. 18, 2006 through November 16, 2006. authority citation for part 2002 is no [FR Doc. E6–14761 Filed 9–6–06; 8:45 am] Two-span, full bridge, openings shall be longer valid with the revocation of E.O. BILLING CODE 7515–01–P provided upon request, if at least a 12356 following the issuance of E.O. three-day advance notice is given, by 12958, as amended. Part 2002 calling the number posted at the bridge. prescribed the general guidelines for the DEPARTMENT OF HOMELAND Otherwise, the bridge will continue to systematic declassification review of SECURITY open during this temporary deviation in classified foreign government accordance with the schedule specified information that was either received or Coast Guard in 33 CFR 117.207(a). classified by the United States In accordance with 33 CFR 117.35(c), Government or its agents, and 33 CFR Part 117 this work will be performed with all due incorporated into records determined by speed in order to return the bridge to the Archivist of the United States to [CGD01–06–111] normal operation as soon as possible. have permanent value. E.O. 12958, as Drawbridge Operation Regulations; Should the bridge maintenance amended, and its implementing Housatonic River, Stratford, CT authorized by this temporary deviation regulation, 32 CFR parts 2001 and 2004 be completed before the end of the (ISOO Directive No. 1), provide for the AGENCY: Coast Guard, DHS. effective period published in this notice, declassification of classified foreign ACTION: Notice of temporary deviation the Coast Guard will rescind the government information. As national from regulations. remainder of this temporary deviation, security classified information, the bridge shall be returned to its classified foreign government SUMMARY: The Commander, First Coast normal operating schedule, and notice information is subject to automatic Guard District, has issued a temporary will be provided to the public.

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This deviation from the operating One commenter expressed the considered part of the service-connected regulations is authorized under 33 CFR opinion that VA should establish condition, for purposes of authorizing 117.35. service connection for the entire service connection and compensation, Dated: August 28, 2006. aggravated injury or disease, but only there is no clear basis for awarding service connection for the entire Gary Kassof, pay compensation for that part of the condition that is due to aggravation by nonservice-connected condition, Bridge Program Manager, First Coast Guard including aspects of that condition that District. an already service-connected condition. The commenter opined that 38 U.S.C. are not attributable to a service- [FR Doc. E6–14834 Filed 9–6–06; 8:45 am] 1110 and 1131 do not allow VA to connected condition. BILLING CODE 4910–15–P establish service connection for part of Although 38 U.S.C. 1110 neither uses a condition. The same commenter stated nor defines the term ‘‘service- that it has been the policy of VA to connected,’’ that term is defined in 38 DEPARTMENT OF VETERANS compensate the entire disability where U.S.C. 101(16) to mean, in pertinent AFFAIRS a service-connected condition and a part, that a ‘‘disability was incurred or nonservice-connected condition affect a aggravated * * * in line of duty in the 38 CFR Part 3 single organ, body system, or function, active military, naval, or air service.’’ Nothing in that definition requires or RIN 2900–AI42 and the two conditions have common symptoms that cannot be separated. authorizes VA to grant service Claims Based on Aggravation of a This commenter felt that the policy was connection for the entirety of a disease Nonservice-Connected Disability an acknowledgment by VA that the or injury that was not incurred or symptoms cannot be separated to allow aggravated in service. AGENCY: Department of Veterans Affairs. proportioning the disability attributable Both commenters expressed concerns ACTION: Final rule. to each organ, body system, or function. about the difficulties in establishing the We do not agree with this proposed degree of aggravation that is to be SUMMARY: The Department of Veterans amendment to the rule. compensated. However, VA believes Affairs (VA) is amending its that, if medical evidence is adequately adjudication regulations concerning In Allen v. Brown, 7 Vet. App. 439 developed, computation of the degree of secondary service connection. This (1995), the CAVC held that 38 U.S.C. aggravation should be attainable. The amendment is necessary because of a 1110 requires VA to pay compensation degree of aggravation would be assessed court decision that clarified the for the aggravation of the nonservice- based upon the objective medical circumstances under which a veteran connected disability but did not, we evidence of record. may be compensated for an increase in believe, express a specific view on Both commenters objected to the the severity of an otherwise nonservice- whether VA would be required or proposed rule’s requirement of ‘‘medical connected condition which is caused by permitted to grant ‘‘service connection’’ evidence extant before the aggravation aggravation from a service-connected for all or only part of the nonservice- sufficient to establish the pre- condition. The intended effect of this connected disease. Section 1110 does aggravation severity of the disability.’’ amendment is to conform VA not directly speak to awards of ‘‘service They suggested that a current medical regulations to the court’s decision. connection,’’ but merely authorizes opinion should be sufficient to establish compensation for ‘‘disability,’’ which DATES: Effective Date: October 10, 2006. the fact of aggravation. the CAVC in Allen construed to mean Aggravation is a comparative term FOR FURTHER INFORMATION CONTACT: Bill ‘‘impairment of earning capacity.’’ meaning that a disability has worsened Russo, Chief, Regulations Staff, Section 1110 further requires that the from one level of severity to another. In Compensation and Pension Service, disability have been caused by an injury order to establish the degree to which Department of Veterans Affairs, 810 or disease incurred or aggravated in aggravation has occurred, it is necessary Vermont Avenue, NW., Washington, DC service. This is consistent with the to compare the current level of severity 20420, (202) 273–7211. proposed rule, which requires that the to a prior level of severity. In cases of SUPPLEMENTARY INFORMATION: VA ‘‘disability’’ (the increased severity of disabilities which pre-existed service, in published in the Federal Register (62 the nonservice-connected condition) standard aggravation claims under 38 FR 30547) a proposed rule to amend 38 must be caused by a service-connected U.S.C. 1153, the pre-service level of CFR 3.310 by adding a new paragraph injury or disease. Accordingly, section severity is generally established by a to implement a decision of the United 1110 does not support the commenter’s service entrance examination. If no States Court of Veterans Appeals (now position. In its holding in Tobin v. disabilities are noted on that the United States Court of Appeals for Derwinski, 2 Vet. App. 34 (1991), the examination, the veteran is presumed to Veterans Claims) (CAVC) in the case of CAVC apparently interpreted 38 CFR have been in sound condition when he Allen v. Brown, 7 Vet. App. 439 (1995), 3.310 to require VA to grant ‘‘service or she entered service. If disabilities are that provided for establishing service connection’’ for the portion of the noted on the entrance examination, the connection for that amount of increase nonservice-connected disability examiner should include sufficient in an otherwise nonservice-connected attributable to aggravation by the findings to permit a determination of condition which was caused by service-connected condition. Thus, the degree of disability. If the findings aggravation from a service-connected when read in tandem, the CAVC’s indicate severe disability, the person condition (Allen aggravation). We rulings require VA to service connect would not be allowed on active duty. If received comments from the Disabled the degree of aggravation of a the findings indicate mild to moderate American Veterans and the Vietnam nonservice-connected condition by a disability, an assessment of fitness for Veterans of America, Inc. Based on the service-connected disability and to pay duty would be made. If the person were rationale set forth in the proposed rule compensation for that level of disability allowed on active duty, there should be and in this document, we are adopting attributable to such aggravation. sufficient findings for a later assessment the provisions of the proposed rule as a Although § 3.310 reasonably provides of the pre-service level of disability, final rule with the changes indicated that any disability proximately caused which would be deducted from the below. by a service-connected disease will be post-service level of disability in a

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standard aggravation claim. It is the aggravation, in the absence of any evidence created at any time between Government’s responsibility to conduct contrary evidence, even if there were no the onset of aggravation and the date of the entrance examination and to create evidence of a baseline level of pre- the current claim for purposes of and maintain a record of that aggravation disability. establishing the baseline level of examination. If the Government fails to This comment is premised upon the severity would be more favorable to conduct the examination or fails to incorrect assumption that there is claimants, although claims granted in provide sufficient findings for assessing necessarily a difference under Allen this regard would likely result in the level of pre-service disability, or if between the issue of service connection findings of smaller degrees of the record of the examination is lost or and the degree of disability. As aggravation and less compensation. We destroyed, that should not operate to the indicated, the evidence of baseline are, therefore, amending the proposed disadvantage of the veteran. That is the disability satisfies the initial rule to allow the acceptance, for reason for the language in 38 CFR 3.322 requirement of additional disability baseline purposes, of medical evidence and 4.22, which requires deduction of necessary to establish entitlement, but created at any time between the onset of the pre-service level of disability from also is necessary to demonstrate the aggravation and the receipt of medical the current level of disability only if the level of disability due to aggravation. evidence establishing the current level pre-service level of disability is Because we cannot service connect the of severity. The earlier medical evidence ‘‘ascertainable.’’ entire nonservice-connected condition, will establish the baseline level of The requirement for proof of baseline only the degree of disability resulting severity for comparison with the current disability is much different in an Allen from aggravation may be service level of severity to determine the degree aggravation case. The threshold connected. Therefore, evidence of aggravation that may be service- requirement for entitlement under concerning the degree of disability is connected and compensated. For § 3.310(a) is evidence demonstrating an essential to establish service connection example, if the onset of aggravation was increase in disability of a nonservice- in Allen aggravation claims and it is sometime in 1996, but the veteran can connected disability that is proximately reasonable for VA to require claimant’s only produce medical evidence from due to or the result of service. Thus, to submit proof of a baseline disability 1999, the 1999 medical evidence would evidence of baseline disability is first level. Such a requirement is in be accepted for purposes of establishing necessary to establish entitlement to accordance with VA’s authority under the baseline level of severity. The rule service connection. Plainly stated, such 38 U.S.C. 501 to specify the types of will also state that VA will also accept, evidence of aggravation would proof that are necessary to establish a for baseline purposes, medical evidence necessarily include some demonstration benefit. created before the onset of aggravation. of baseline disability in order to show Finally, in the example suggested by One commenter suggested that the an increase in severity. Once the commenter, if a physician provisions of 38 CFR 3.322 with regard entitlement has been established, such determines that a service-connected to in-service aggravation of pre-service evidence would also be necessary for condition has aggravated a nonservice- disabilities should have equal purposes of determining the level of connected condition, it is reasonable to application in Allen aggravation claims. compensation. In so doing, the veteran expect that that medical opinion would Specifically, § 3.322 provides that no would demonstrate that the nonservice- be based on evidence of the baseline deduction for the pre-service level of connected disability has increased in and the current level of disability of the disability may be made unless that pre- severity because of aggravation from a nonservice-connected condition. Thus, service level is ‘‘ascertainable.’’ It also service-connected condition. Unlike the the requirement to provide proof of a provides that no deduction is to be standard aggravation claim pursuant to baseline level of disability is not as made if the aggravated disability 38 U.S.C. 1153 where the baseline level onerous as contemplated and suggested becomes totally disabling. We do not of severity (referred to in the text of the by this commenter. agree with this suggestion. As proposed rule as ‘‘the pre-aggravation We have, however, reconsidered the mentioned earlier, when a pre-service severity’’) is based on an entrance requirement of ‘‘medical evidence level of disability is not ascertainable, examination, there is no Government extant before the aggravation’’ to the Government has failed to discharge responsibility to create and maintain establish the baseline level of severity its responsibility to conduct, and/or medical records on nonservice- when computing the degree of maintain a record of, an adequate connected conditions for purposes of aggravation. It could be difficult for entrance examination. That failure determining the baseline level of some claimants to identify the date of should not be allowed to disadvantage severity in Allen aggravation claims. onset of the aggravation and then to the veteran in any way. In Allen The veteran must ‘‘support’’ the claim locate medical evidence created before aggravation claims the Government has with medical evidence of the baseline that date to establish the baseline. Thus, no such responsibility. The level of severity of a nonservice- limiting the medical evidence for responsibility for establishing a baseline connected condition which can then be baseline calculation to that which level of disability in such claims rests compared to the current level of severity existed prior to the onset of aggravation with the veteran. If no baseline can be to establish the fact of aggravation and could likely result in unfavorable established, no aggravation can be the degree of disability for which the decisions in several claims. Obviously, demonstrated, and the deduction issue veteran will be compensated. if such records were available, they would be moot. One commenter stated it would be would establish the lowest baseline With respect to the provision unreasonable for VA to require proof of level of severity and, hence, the greatest concerning no deduction when the a baseline level of disability as a degree of aggravation when compared to aggravated disability is totally disabling, condition for granting service the current level of severity. However, we believe such action is prohibited by connection for aggravation. To illustrate, since aggravation is generally an the Allen decision itself. There the the commenter suggested that if a ongoing process, medical evidence Court stated with parenthetical physician opined that a service- establishing the aggravation could be emphasis that ‘‘such veteran shall be connected condition aggravated a created at any time between the onset of compensated for the degree of disability nonservice-connected condition, VA aggravation and the date of the current (but only that degree) over and above would be required to concede claim. VA’s acceptance of medical the degree of disability existing prior to

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the aggravation.’’ Based on that language ‘‘disease or injury’’, in four other medical examiner to distinguish which it is clear that only the incremental instances. The term ‘‘disability’’ is used symptoms are due to the service- increase in disability is to be in 38 U.S.C. 1153 and 38 CFR 3.306 to connected disability and which are due compensated. To hold otherwise could mean the level of disability, rather than to the nonservice-connected disability, lead to absurd results. For example, if, the disease or injury itself. To avoid any such as where two separate disabilities 20 years after service, a Vietnam veteran possible confusion about our intent (to share common symptoms. Where developed a nonservice-connected refer to the disease or injury), we believe various symptoms affecting a single psychosis which was 70 percent it will provide greater clarity to use the body part or system can be separated disabling but also had a service- term ‘‘disease or injury’’ instead of into those attributable to the service- connected disability that aggravated the disability in 3.310(b). We are also connected disability and those psychosis causing it to be totally changing ‘‘rather than’’ to ‘‘and not due attributable to the nonservice-connected disabling, then the application of 38 to’’ to provide a more parallel structure disability, VA evaluates for CFR 3.322 would require payment of for the first sentence of 3.310(b). compensation only those symptoms compensation at the 100 percent rate for One commenter urged VA to include attributable to the service-connected a 70 percent nonservice-connected in this regulation some directions to disability. condition, when the aggravated field personnel on how to evaluate the While VA agrees that the provision percentage is 30 percent. Such a result ‘‘natural progress’’ of a disease referred to by the commenter is pro- could not have been intended by the including the effects of such variables as veteran, it does not stand for the Allen court, and we decline to apply race, age, gender and geographic proposition that VA grants service § 3.322 to Allen aggravation claims in location on such ‘‘progress.’’ The connection for conditions not related to the manner suggested. commenter also opined that VA was military service. No changes are Both commenters suggested that it incapable of providing adequate warranted based on this comment. would be difficult, if not impossible, for directions on this subject. One commenter also referenced the VA to determine, for deduction We do not believe that special principle codified in 38 U.S.C. 1160 and instructions for evaluating ‘‘natural purposes, the degree of increase in a 38 CFR 3.383, which provide for special progress’’ are necessary. Any evidence nonservice-connected condition that is consideration when a specified degree of ‘‘natural progress’’ of a disease would attributable to ‘‘the normal progression of disability is service-connected in be in the form of medical evidence. of the disability’’ and that perhaps that certain organs or extremities and there Since our field personnel are already provision in the proposed rule should is a nonservice-connected disability charged with assessing the credibility just be deleted on the basis of workload affecting the corresponding paired organ and weight of such evidence with regard considerations. While we agree that it or extremity. In this situation, VA is could be difficult to establish the degree to other issues in a claim, it would not authorized to pay disability of increased disability due to ‘‘normal be appropriate to have a separate set of compensation as if the combination of progression,’’ that does not relieve VA instructions for assessing the credibility disabilities in those paired organs or of the responsibility to consider such and weight of medical evidence relating extremities were service-connected. The evidence if it exists. In Allen to ‘‘natural progress’’ of a disease. The commenter expressed the opinion that aggravation claims VA can only pay variables mentioned by the commenter this demonstrates that VA will grant compensation for the increased would be considered by the medical service connection for a nonservice- disability attributable to aggravation professional who was providing the connected disability. from a service-connected condition. evidence of ‘‘natural progress.’’ Any increase attributable to other causes Therefore, no changes in the proposed Section 3.383 does not authorize a is beyond the scope of Allen and may rule are warranted based on this grant of service connection for the not be compensated unless specifically comment. disability affecting the nonservice- authorized by statute. While One commenter noted that VA has connected paired organ or extremity. authoritative medical evidence on the taken a pro-veteran approach to Rather, the disability of the nonservice- degree of increase due to ‘‘normal allowing a veteran to claim the aggregate connected paired organ or extremity progression’’ of a disease is rare, if it disability caused by a service-connected remains nonservice-connected but is exists in an individual case, VA cannot and nonservice-connected condition, compensated as if it was service- ignore it and cannot adopt the demonstrated by § 4.127, which connected. Further, section 3.383 suggestion to delete this provision in the provides that a veteran with a mental merely reiterates statutory provisions in proposed rule. retardation or a personality disorder 38 U.S.C. 1160 and in no way suggests However, in analyzing and may also have a mental disorder that that VA has general authority to grant responding to the above suggestion, we may be service-connected. Section 4.127 service connection for nonservice- noted that the proposed rule uses states that a veteran may have co- connected conditions. Thus, this language different from that found in 38 existing mental disorders, one service- comment is not directly relevant to the U.S.C. 1153 and 38 CFR 3.306. The connectable and the other congenital or subject of the proposed rule. We make proposed rule uses the phrase ‘‘normal developmental, and that the service- no changes based on this comment. progression of the disability’’ whereas connectable disorder should not be One commenter opined that the the cited statute and regulation dealing overlooked because of the congenital or determinations of the level of disability with aggravation use the phrase ‘‘natural developmental disorder. Nothing in must be made by medical personnel and progress of the disease.’’ Although the § 4.127 provides for granting service not Rating Veterans Service choice of words in the proposed rule is connection for the co-existing mental Representatives. This commenter urged slightly different from the statutory retardation or personality disorder. VA to include in the Adjudication phrasing, no change in meaning was While VA will compensate Manual a provision stating this. intended. For purposes of clarity, overlapping symptoms as if the We make no changes based on this however, we will incorporate the overlapping symptoms were all due to suggestion. While the Adjudication statutory phrasing in the first and last the effects of the service-connected Manual may need to be amended to sentences of 3.310(b). The proposed rule condition, we do this in specific reflect the procedures necessary to also uses the term ‘‘disability’’ to mean situations where it is impossible for a implement this regulatory change, the

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suggestion itself is beyond the scope of amendments would not directly affect evidence created before the onset of this rulemaking. any small entities. Only VA aggravation or by the earliest medical Based on our review of the proposed beneficiaries and their survivors could evidence created at any time between amendment, we are making a minor be directly affected. Therefore, pursuant the onset of aggravation and the receipt change in wording. In the first sentence to 5 U.S.C. 605(b), these amendments of medical evidence establishing the of new paragraph (b), we are changing are exempt from the initial and final current level of severity of the ‘‘shall’’ to ‘‘will’’ to reflect VA’s current regulatory flexibility analysis nonservice-connected disease or injury. efforts to write regulations in plain requirements of sections 603 and 604. The rating activity will determine the language. baseline and current levels of severity Catalog of Federal Domestic Assistance Executive Order 12866 under the Schedule for Rating The Catalog of Federal Domestic Disabilities (38 CFR part 4) and Executive Order 12866 directs Assistance program numbers are 64.109, determine the extent of aggravation by agencies to assess all costs and benefits Veterans Compensation for Service- deducting the baseline level of severity, of available regulatory alternatives and, Connected Disability, and 64.110, as well as any increase in severity due when regulation is necessary, to select Veterans Dependency and Indemnity to the natural progress of the disease, regulatory approaches that maximize Compensation for Service-Connected from the current level. net benefits (including potential Death. economic, environmental, public health (Authority: 38 U.S.C. 1110 and 1131) and safety, and other advantages; List of Subjects in 38 CFR Part 3 * * * * * distributive impacts; and equity). The Administrative practice and [FR Doc. E6–14835 Filed 9–6–06; 8:45 am] Order classifies a rule as a significant procedure, Claims, Disability benefits, BILLING CODE 8320–01–P regulatory action requiring review by Health care, Pensions, Radioactive the Office of Management and Budget if materials, Veterans, Vietnam. it meets any one of a number of Approved: May 26, 2006. FEDERAL COMMUNICATIONS specified conditions, including: Having Gordon H. Mansfield, COMMISSION an annual effect on the economy of $100 Deputy Secretary of Veterans Affairs. million or more, creating a serious 47 CFR Parts 1, 90 and 95 inconsistency or interfering with an Editorial Note: This document was [WT Docket 01–90; ET Docket 98–95; RM– action of another agency, materially received at the Office of the Federal Register 9096; FCC 06–110] altering the budgetary impact of on September 1, 2006. entitlements or the rights of entitlement I For the reasons set forth in the Amendment of the Commission’s recipients, or raising novel legal or preamble, VA is amending 38 CFR part Rules Regarding Dedicated Short- policy issues. VA has examined the 3 as set forth below: Range Communications Services in economic, legal, and policy implications the 5.850–5.925 GHz (5.9 GHz Band) of this final rule and has concluded that PART 3—ADJUDICATION AGENCY: Federal Communications it is a significant regulatory action under Commission. Executive Order 12866 because it Subpart A—Pension, Compensation, ACTION: materially alters the rights of and Dependency and Indemnity Final rule. Compensation entitlement recipients based upon a SUMMARY: In this document the court decision. I 1. The authority citation for part 3, Commission takes certain actions in Paperwork Reduction Act subpart A, continues to read as follows: response to four petitions for reconsideration filed by 3M Company, This document contains no provisions Authority: 38 U.S.C. 501(a), unless otherwise noted. ARINC Incorporated, Intelligent constituting a collection of information Transportation Society of America and under the Paperwork Reduction Act (44 I 2. Section 3.310 is amended by John Hopkins University of Applied U.S.C. 3501–3521). revising the section heading; by Physics Laboratory. Each petitioner Unfunded Mandates redesignating paragraph (b) as paragraph seeks reconsideration of the (c); and by adding a new paragraph (b) Commission’s Report and Order, which The Unfunded Mandates Reform Act to read as follows: of 1995 requires, at 2 U.S.C. 1532, that adopted licensing and service rules for agencies prepare an assessment of § 3.310 Disabilities that are proximately the Dedicated Short Range anticipated costs and benefits before due to, or aggravated by, service-connected Communications (DSRC) Service in the issuing any rule that may result in an disease or injury. Intelligent Transportation Systems (ITS) expenditure by State, local, and tribal * * * * * Radio Service, located in the 5.850– governments, in the aggregate, or by the (b) Aggravation of nonservice- 5.925 GHz band (5.9 GHz band) private sector of $100 million or more connected disabilities. Any increase in licensing and service rules for the (adjusted annually for inflation) in any severity of a nonservice-connected Dedicated Short Range Communications given year. This rule would have no disease or injury that is proximately due (DSRC) Service in the Intelligent such effect on State, local, and tribal to or the result of a service-connected Transportation Systems (ITS) Radio governments, or on the private sector. disease or injury, and not due to the Service located in the 5.850–5.925 GHz natural progress of the nonservice- band (5.9 GHz band). Regulatory Flexibility Act connected disease, will be service DATES: Effective November 6, 2006. The Secretary hereby certifies that connected. However, VA will not FOR FURTHER INFORMATION CONTACT: this regulatory amendment will not concede that a nonservice-connected Technical Information: Tim Maguire, have a significant economic impact on disease or injury was aggravated by a [email protected], Public Safety a substantial number of small entities as service-connected disease or injury and Critical Infrastructure Division, they are defined in the Regulatory unless the baseline level of severity of Wireless Telecommunications Bureau, Flexibility Act, 5 U.S.C. 601–612. The the nonservice-connected disease or (202) 418–0680, or TTY (202) 418–7233. reason for this certification is that these injury is established by medical Legal Information: Jeannie Benfaida,

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[email protected], Public from the ASTM E17.51 DSRC Standards registered and clarify that site priority Safety and Critical Infrastructure Writing Group. attaches to prior registered sites that Division, Wireless Telecommunications • Declines to adopt rules governing have fully constructed within the twelve Bureau (202) 418–0680, or TTY (202) frequency coordination between DSRC month construction period; amends the 418–7233. licensees and Fixed Satellite Service antenna height correction factor adopted SUPPLEMENTARY INFORMATION: This is a (FSS) licensees, pending results of for DSRC to increase flexibility and summary of the Federal studies of interference methodology and reduce implementation costs to public Communications Commission’s ongoing industry discussions. safety, and designates Channel 172 Memorandum Opinion and Order, FCC • Declines to adopt a rule establishing (5.855–5.865 GHz) for vehicle-to-vehicle 06–110, adopted July 20, 2006 and a separate class of On-Board Units to be safety communications for accident released on July 26, 2006. The full text used exclusively by public safety avoidance and mitigation, and Channel of this document is available for eligibles, i.e., ‘‘public safety OBUs.’’ 184 (5.915–5.925 GHz) for high-power, inspection and copying during normal • Declines to require dual-band DSRC longer-distance communications for business hours in the FCC Reference devices to be uniquely identified in public safety applications and road Center, 445 12th Street, SW., order to be used to provide DSRC intersection vehicular collision Washington, DC 20554. The complete services in the 5.9 GHz band. mitigation. These rule changes are not expected to affect the cost of DSRC text may be purchased from the I. Procedural Matters Commission’s copy contractor, Best equipment or implementation. Copy and Printing, Inc., 445 12th Street, A. Paperwork Reduction Act Therefore, we certify that the SW., Room CY–B402, Washington, DC 2. The order does not contain any new requirements of this Memorandum 20554. The full text may also be or modified information collection. Opinion and Order will not have a downloaded at: http://www.fcc.gov. significant economic impact on a Alternative formats are available to B. Report to Congress substantial number of small entities. persons with disabilities by contacting 3. The Commission will send a copy 7. The Commission will send a copy Brian Millin at (202) 418–7426 or TTY of this Memorandum Opinion and of the Memorandum Opinion and (202) 418–7365 or at Order in a report to be sent to Congress Order, including a copy of this final [email protected]. and the General Accounting Office certification, in a report to Congress 1. In the Memorandum Opinion and pursuant to the Congressional Review pursuant to the Congressional Review Order, the Commission takes the Act, see 5 U.S.C. 801(a)(1)(A). Act, see U.S.C. 801(a)(1)(A). In addition, following actions: the Memorandum Opinion and Order • Designates Channel 172 C. Supplemental Final Regulatory and this certification will be sent to the (frequencies 5.855–5.865 GHz) Flexibility Analysis Chief Counsel for Advocacy of the Small exclusively for vehicle-to-vehicle safety 4. As required by the Regulatory Business Administration. A copy of this communications for accident avoidance Flexibility Act (RFA), a Supplemental Memorandum Opinion and Order and and mitigation, and safety of life and Final Regulatory Flexibility Analysis (or summaries thereof) will also be property applications; and designate (FRFA) was incorporated in the DSRC published in the Federal Register. Channel 184 (frequencies 5.915–5.925 Report and Order. In view of the fact II. Ordering Clauses GHz) exclusively for high-power, that we have adopted further rule longer-distance communications to be amendments in this Memorandum 8. Pursuant to sections 1, 4(i), 302, used for public safety applications Opinion and Order, we have included 303(f) and (r), and 332 of the involving safety of life and property, this Supplemental Final Regulatory Communications Act of 1934, as including road intersection collision Flexibility Certification. This amended, 47 U.S.C. 1, 154(i), 302, 303(f) mitigation. Certification conforms to the RFA. and (r), and 332, this Memorandum • Requires licensees to file a notice of 5. The RFA requires that regulatory Opinion and Order is adopted. construction with the Commission for flexibility analysis be prepared for 9. It is further ordered that, the each site registered and to clarify that rulemaking proceedings unless the amendments of the Commission’s rules site priority attaches to prior registered agency certifies that ‘‘the rule will not, as set forth in rule changes are adopted sites that have been fully constructed if promulgated, have a significant November 6, 2006. within the requisite twelve-month economic impact on a substantial 10. It is further ordered that the construction period. number of small entities.’’ The RFA Commission’s Consumer and • Amends the power reduction rule generally defines ‘‘small entity’’ as Governmental Affairs Bureau, Reference to only apply to DSRC Roadside Unit having the same meaning as the term Information Center, shall send a copy of antenna height only between eight and ‘‘small business,’’ ‘‘small organization,’’ this Memorandum Opinion and Order, fifteen meters, thereby providing and ‘‘small governmental jurisdiction.’’ including the Supplemental Final increased flexibility and reduced In addition, the term ‘‘small business’’ Flexibility Certification, to the Chief implementation costs. has the same meaning as the term Counsel for Advocacy of the U.S. Small • Declines to adopt rules that would ‘‘small business concern’’ under the Business Administration. implement a software-based prior Small Business Act. A small business List of Subjects in 47 CFR Parts 1, 90, frequency coordination protocol that concern is one which: (1) Is and 95 directs or recommends that licensees independently owned and operated; (2) Communications. use particular service channels, or that is not dominant in its field of operation; would establish a third party database and (3) satisfies any additional criteria Federal Communications Commission. manager to coordinate and maintain site established by the Small Business Marlene H. Dortch, registrations. Administration (SBA). Secretary. • Declines to amend the current 6. This Memorandum Opinion and Rule Changes emission mask applicable to DSRC Class Order amends our rules to require D devices, pending further licensees to file a notice of construction I For the reasons discussed in the developments and recommendations to the Commission for each site preamble, the Federal Communications

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Commission amends 47 CFR parts 1, 90 begun using some, but not all, of the period of the single license. Licensees and 95 to read as follows: authorized transmitters, the notification must notify the Commission in must show to which specific accordance with § 1.946 of this chapter PART 1—PRACTICE AND transmitters it applies. when registered units are placed in PROCEDURE * * * * * operation within their construction I 1. The authority citation for part 1 period. continues to read as follows: PART 90—PRIVATE LAND MOBILE I 5. Section 90.377 is revised to read as RADIO SERVICES Authority: 15 U.S.C. 79 et seq.; 47 U.S.C. follows: 151, 154(i), 154(j), 155, 157, 225, 303(r), and I 3. The authority citation for part 90 § 90.377 Frequencies available; maximum 309. continues to read as follows: EIRP and antenna height, and priority I 2. Section 1.946 is amended by communications. Authority: Sections 4(i), 11, 303(g), 303(r) revising paragraph (d) to read as and 332(c)(7) of the Communications Act of (a) Licensees shall transmit only the follows: 1934, as amended, 47 U.S.C. 154(i), 161, power (EIRP) needed to communicate § 1.946 Construction and coverage 303(g), 303(r), 332(c)(7). with an OBU within the requirements. I 4. Section 90.155 is amended by communications zone and must take * * * * * revising paragraph (i) to read as follows: steps to limit the Roadside Unit (RSU) (d) Licensee notification of signal within the zone to the maximum compliance. A licensee who commences § 90.155 Time in which station must be extent practicable. service or operations within the placed in operation. (b) Frequencies available for construction period or meets its * * * * * assignment to eligible applicants within coverage or substantial services (i) DSRCS Roadside Units (RSUs) in the 5850–5925 MHz band for RSUs and obligations within the coverage period the 5850–5925 MHz band must be the maximum EIRP permitted for an must notify the Commission by filing placed in operation within 12 months RSU with an antenna height not FCC Form 601. The notification must be from the date of registration (see exceeding 8 meters above the roadway filed within 15 days of the expiration of § 90.375) or the authority to operate the bed surface are specified in the table the applicable construction or coverage RSUs cancels automatically (see § 1.955 below. Where two EIRP limits are given, period. Where the authorization is site- of this chapter). Such registration date(s) the higher limit is permitted only for specific, if service or operations have do not change the overall renewal state or local governmental entities.

Frequency range Max. EIRP 1 Channel No. (MHz) (dBm) Channel use

170 ...... 5850–5855 ...... Reserved. 172 ...... 5855–5865 33 Service Channel.2 174 ...... 5865–5875 33 Service Channel. 175 ...... 5865–5885 23 Service Channel.3 176 ...... 5875–5885 33 Service Channel. 178 ...... 5885–5895 33/44.8 Control Channel. 180 ...... 5895–5905 23 Service Channel. 181 ...... 5895–5915 23 Service Channel.3 182 ...... 5905–5915 23 Service Channel. 184 ...... 5915–5925 33/40 Service Channel.4 1 An RSU may employ an antenna with a height exceeding 8 meters but not exceeding 15 meters provided the EIRP specified in the table above is reduced by a factor of 20 log(Ht/8) in dB where Ht is the height of the radiation center of the antenna in meters above the roadway bed surface. The EIRP is measured as the maximum EIRP toward the horizon or horizontal, whichever is greater, of the gain associated with the main or center of the transmission beam. The RSU antenna height shall not exceed 15 meters above the roadway bed surface. 2 Channel 172 is designated for public safety applications involving safety of life and property. 3 Channel Nos. 174/176 may be combined to create a twenty megahertz channel, designated Channel No. 175. Channels 180/182 may be combined to create a twenty-megahertz channel, designated Channel No. 181. 4 Channel 184 is designated for public safety applications involving safety of life and property. Only those entities meeting the requirements of § 90.373(a) are eligible to hold an authorization to operate on this channel.

(c) Except as provided in paragraphs Commission may impose restrictions (d) Safety/public safety priority. The (d) and (e) of this section, non-reserve including specifying the transmitter following access priority governs all DSRCS channels are available on a power, antenna height and direction, DSRCS operations: shared basis only for use in accordance additional filtering, or area or hours of (1) Communications involving the with the Commission’s rules. All operation of the stations concerned. safety of life have access priority over licensees shall cooperate in the Further the use of any channel at a all other DSRCS communications; selection and use of channels in order given geographical location may be (2) Subject to a control channel to reduce interference. This includes denied when, in the judgment of the priority system management strategy monitoring for communications in Commission, its use at that location is progress and any other measures as may (see ASTM E2213–03 DSRC Standard at not in the public interest; use of any be necessary to minimize interference. § 4.1.1.2(4)), DSRCS communications such channel may be restricted as to Licensees of RSUs suffering or causing involving public safety have access specified geographical areas, maximum harmful interference within a priority over all other DSRC communications zone are expected to power, or such other operating communications not listed in paragraph cooperate and resolve this problem by conditions, contained in this part or in (d)(1) of this section. Roadside Units mutually satisfactory arrangements. If the station authorization. (RSUs) operated by state or local the licensees are unable to do so, the governmental entities are presumptively

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engaged in public safety priority (f) Except as otherwise provided in PART 95—PERSONAL RADIO communications. the ASTM–DSRC Standard (see SERVICES (e) Non-priority communications. § 90.379) for the purposes of paragraph DSRCS communications not listed in (e) of this section, objectionable I 6. The authority citation for part 95 paragraph (d) of this section, are non- interference will be considered to exist continues to read as follows: priority communications. If a dispute when the Commission receives a Authority: Sections 4, 303, 48 Stat. 1066, arises concerning non-priority complaint and the difference in signal 1082, as amended; 47 U.S.C. 154, 303. communications, the licensee of the strength between the earlier-registered later-registered RSU must accommodate RSU and the later-registered RSU I 7. Section 95.1511 is revised to read the operation of the early registered (anywhere within the earlier-registered as follows: RSU, i.e., interference protection rights RSU’s communication zone) is 18 dB or § 95.1511 Frequencies available. are date-sensitive, based on the date that less (co-channel). Later-registered RSUs the RSU is first registered (see § 90.375) causing objectionable interference must (a) The following table indicates the and the later-registered RSU must correct the interference immediately channel designations of frequencies modify its operations to resolve the unless written consent is obtained from available for assignment to eligible dispute in accordance with paragraph (f) the licensee of the earlier-registered applicants within the 5850–5925 MHz of this section. RSU. band for On-Board Units (OBUs): 1

Frequency range Channel No. Channel use (MHz)

170 ...... Reserved ...... 5850–5855 172 ...... Service Channel 2 ...... 5855–5865 174 ...... Service Channel ...... 5865–5875 175 ...... Service Channel 3 ...... 5865–5885 176 ...... Service Channel ...... 5875–5885 178 ...... Control Channel ...... 5885–5895 180 ...... Service Channel ...... 5895–5905 181 ...... Service Channel 3 ...... 5895–5915 182 ...... Service Channel ...... 5905–5915 184 ...... Service Channel 4 ...... 5915–5925 1 The maximum output power for portable DSRCS–OBUs is 1.0 mW. See § 95.639(i). 2 Channel 172 is designated for public safety applications involving safety of life and property. 3 Channel Nos. 174/176 may be combined to create a twenty megahertz channel, designated Channel No. 175. Channels 180/182 may be combined to create a twenty-megahertz channel, designated Channel No. 181. 4 Channel 184 is designated for public safety applications involving safety of life and property.

(b) Except as provided in paragraph (c) Safety/public safety priority. The FEDERAL COMMUNICATIONS (c) of this section, non-reserve DSRCS following access priority governs all COMMISSION channels are available on a shared basis DSRCS operations: only for use in accordance with the (1) Communications involving the 47 CFR Part 90 Commission’s rules. All licensees shall safety of life have access priority over [WT Docket No. 02–55; ET Docket No. 00– cooperate in the selection and use of all other DSRCS communications; (2) Subject to a control channel 258; ET Docket No. 95–18, RM-9498; RM– channels in order to reduce interference. 10024; FCC 06–63] This includes monitoring for priority system management strategy communications in progress and any (see ASTM E2213–03 DSRC Standard at Private Land Mobile Services; 800 MHz other measures as may be necessary to § 4.1.1.2(4)), DSRCS communications Public Safety Interference Proceeding minimize interference. Licensees involving public safety have access suffering or causing harmful priority over all other DSRC AGENCY: Federal Communications interference within a communications communications not listed in paragraph Commission. zone are expected to cooperate and (c)(1) of this section. On-Board Units ACTION: Correcting amendments. resolve this problem by mutually (OBUs) operated by state or local SUMMARY: The Federal Communications satisfactory arrangements. If the governmental entities are presumptively Commission published a document in licensees are unable to do so, the engaged in public safety priority the Federal Register on December 28, Commission may impose restrictions, communications. 2005, revising Commission rules. That including specifying the transmitter (d) Non-priority communications. document contained discrepancies power, antenna height and direction, DSRCS communications not listed in between the text of the order and the additional filtering, or area or hours of paragraph (c) of this section, are non- priority communications. If a dispute final rules set forth at § 90.677. This operation of the stations concerned. arises concerning non-priority DSRCS– document corrects the final regulations Further, the use of any channel at a OBU communications with Roadside by revising 47 CFR 90.677. given geographical location may be Units (RSUs), the provisions of denied when, in the judgment of the DATES: Effective September 7, 2006. § 90.377(e) and (f) of this chapter will Commission, its use at that location is FOR FURTHER INFORMATION CONTACT: apply. Disputes concerning non-priority not in the public interest; the use of any Roberto Mussenden, Public Safety and DSRCS–OBU communications not channel may be restricted as to specified Critical Infrastructure Division at (202) associated with RSUs are governed by geographical areas, maximum power, or 418–0838. paragraph (b) of this section. such other operating conditions, SUPPLEMENTARY INFORMATION: This is a contained in this part or in the station [FR Doc. E6–14795 Filed 9–6–06; 8:45 am] summary of a Federal Communications authorization. BILLING CODE 6712–01–P Commission (FCC) Order which, inter

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alia, corrects a Federal Register Critical Infrastructure Division, the DEPARTMENT OF TRANSPORTATION document (70 FR 76704, December 28, Transition Administrator shall forward 2005). Previously, the FCC released a the entire record on any disputed issues, Office of the Secretary of Memorandum Opinion and Order, including such dispositions thereof that Transportation which among other things amended the the Transition Administrator has rules governing dispute resolution considered. Upon receipt of such record 49 CFR Part 1 between licensees who must reconfigure and advice, the Commission will decide [Docket No. OST–1999–6189] their systems to alleviate interference to the disputed issues based on the record RIN 9991–AA50 public safety communications in the submitted. The authority to make such 800 MHz band. decisions is delegated to the Chief of the Organization and Delegation of Powers The Memorandum Opinion and Order Public Safety and Critical Infrastructure and Duties contained discrepancies between the Division of the Wireless text of the order and the final rules in AGENCY: Telecommunications Bureau who may Office of the Secretary of § 90.677 of the rules. In this document Transportation (OST), DOT. decide the disputed issue or designate it we correct those discrepancies. for an evidentiary hearing before an ACTION: Final rule. List of Subjects in 47 CFR Part 90 Administrative Law Judge. If the Chief SUMMARY: This final rule revises Communications. of the Public Safety and Critical delegations of authority to carry out the Infrastructure Division of the Wireless Federal Communications Commission. Federal hazardous material Telecommunications Bureau decides an transportation law, as amended by the Marlene H. Dortch, issue, any party to the dispute wishing Hazardous Materials Transportation Secretary. to appeal the decision may do so by Safety and Security Reauthorization Act I Accordingly, 47 CFR part 90 is filing with the Commission, within ten of 2005 (Title VII of the Safe, corrected by making the following days of the effective date of the initial Accountable, Flexible, Efficient correcting amendments: decision, a Petition for de novo review; Transportation Equity Act: A Legacy for whereupon the matter will be set for an Users or ‘‘SAFETEA–LU’’), and in PART 90—PRIVATE LAND MOBILE accordance with the Norman Y. Mineta RADIO SERVICES evidentiary hearing before an Administrative Law Judge. Any disputes Research and Special Programs I 1. The authority citation for part 90 submitted to the Transition Improvement Act, Public Law 108–426, continues to read as follows: Administrator after the conclusion of 118 Stat. 2423 (November 30, 2004) (Mineta Act) that were previously Authority: Sections 4(i), 11, 303(g), 303(r), the mandatory negotiation period as and 332(c)(7) of the Communications Act of described in § 90.677(c) shall be published in 71 FR 30828 (May 31, 1934, as amended, 47 U.S.C. 154(i), 161, resolved as described in § 90.677(d)(2). 2006). This final rule also adds 303(g), 303(r), 332(c)(7). delegations of authority to the Federal (2) If no agreement is reached during Motor Carrier Safety Administration I 2. Amend § 90.677, by revising either the voluntary or mandatory (FMCSA) and the Research and paragraph (d) to read as follows: negotiating periods, all disputed issues Innovative Technology Administration shall be referred to the Transition § 90.677 Reconfiguration of the 806–824/ (RITA) to carry out certain provisions of 851–869 MHz band in order to separate Administrator, or other mediator, who SAFETEA–LU. cellular systems from non-cellular systems. shall attempt to resolve them. If DATES: Effective Date: September 7, * * * * * disputed issues remain thirty working 2006. (d) Transition Administrator. (1) The days after the end of the mandatory FOR FURTHER INFORMATION CONTACT: Transition Administrator, or other negotiation period, the Transition Rebecca S. Behravesh, Attorney mediator, shall attempt to resolve Administrator shall forward the record Advisor, Office of General Counsel, disputes referred to it before the to the Chief of the Public Safety and Department of Transportation, 400 7th conclusion of the mandatory negotiation Critical Infrastructure Division, together St., SW., Room 10424, Washington, DC period as described in § 90.677(c) with advice on how the matter(s) may 20590–0001; Telephone (202) 366–9314. within thirty working days after the be resolved. The Chief of the Public SUPPLEMENTARY INFORMATION: Transition Administrator has received a Safety and Critical Infrastructure submission by one party and a response Division is hereby delegated the Background from the other party. Any party authority to rule on disputed issues, de The Federal hazardous material thereafter may seek expedited non- novo. If the Chief of the Public Safety transportation law, 49 U.S.C. 5101 et binding arbitration which must be and Critical Infrastructure Division of seq., and the regulations issued completed within thirty days of the the Wireless Telecommunications thereunder apply to the transportation Transition Administrator’s, or other Bureau decides an issue, any party to of hazardous materials by air, railroad, mediator’s recommended decision or the dispute wishing to appeal the highway, and water. In 2004, the Mineta advice. Should issues still remain decision may do so by filing with the Act established the Pipeline and unresolved after mediation or Commission, within ten days of the Hazardous Materials Safety arbitration they shall be referred to the effective date of the initial decision, a Administration (PHMSA) and RITA and Chief of the Public Safety and Critical Petition for de novo review; whereupon transferred Secretarial authorities Infrastructure Division of the Wireless the matter will be set for an evidentiary previously exercised by the Research Telecommunications Bureau within ten hearing before an Administrative Law and Special Programs Administration days of the Transition Administrator’s (RSPA) to PHMSA and RITA. While the Judge. or other mediator’s advice, or if Secretary delegated authorities to arbitration has occurred, within ten * * * * * PHMSA and RITA under the Mineta days of the completion of arbitration. [FR Doc. E6–14788 Filed 9–6–06; 8:45 am] Act, the Mineta Act did not remove, When referring an unresolved matter to BILLING CODE 6712–01–P restrict, divest or restructure any the Chief of the Public Safety and existing authority, including the

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authority to regulate the transportation (administrative authority to conduct and advise the Secretary concerning of hazardous materials, that the Federal inspections and investigations related to transportation policy. Aviation Administration (FAA), Federal the manufacture, fabrication, and Because this rule relates to Railroad Administration (FRA), and maintenance of packagings or containers departmental management, FMCSA previously possessed. and the transportation of a hazardous organization, procedure, and practice, Accordingly, certain authorities that material in commerce); 5122 (civil notice and comment are unnecessary apply only to a single mode of enforcement); 5123 (civil penalties); and under 5 U.S.C. 553(b). Further, this final transportation were previously 5124 (criminal penalties), and is being rule facilitates enforcement of the laws delegated to a modal transportation deleted as superfluous. In the final rule and regulations covered by this agency within DOT, and enforcement published on May 31, 2005, similar delegation. The Acting Secretary finds authority was delegated to PHMSA and superfluous language was removed from good cause under 5 U.S.C. 553(d)(3) for the modal agencies: FAA, FRA, and the delegations to PHMSA in section 1 the final rule to be effective on the date FMCSA. 1.53(b)(1). See 71 FR 30828, 30833. The of publication in the Federal Register. The Hazardous Materials removal of this language is intended to Transportation Safety and Security simplify the regulatory text and does not Regulatory Analysis and Notices Reauthorization Act of 2005, which is amend, change, modify, or revise the Title VII of SAFETEA–LU, Public Law underlying statutory authority that is A. Executive Order 12866 and DOT 109–59, 119 Stat. 1144, 1891 (Aug. 10, delegated to FAA, FRA, FMCSA, and Regulatory Policies and Procedures 2005), amended 49 U.S.C. 5121 to PHMSA. The authority to delegate the The final rule is not considered a provide additional authority to enforce inspection and enforcement authority in significant regulatory action under the Federal hazardous material the Federal hazardous material Executive Order 12866 and the transportation law and the regulations transportation law in this manner is Regulatory Policies and Procedures of issued under that law. The delegations conferred by 49 U.S.C. 108(g). the Department of Transportation (44 FR of authority to FAA, FRA, and FMCSA This rule also removes outdated 49 11034). There are no costs associated are being revised to reflect that CFR 1.47(k), which essentially with this rule. additional authority, which includes duplicates the FAA’s authority in inspecting, investigating, and opening § 1.47(j)(1), but refers to the section B. Executive Order 13132 outer packages suspected of containing numbers of the inspection and This final rule has been analyzed in hazardous materials; having suspected enforcement authority in the Federal accordance with the principles and hazardous materials tested; removing hazardous material transportation law criteria contained in Executive Order from transportation in commerce before the statute was recodified in 13132 (‘‘Federalism’’). This final rule packages that may pose an imminent 1994. See Public Law 103–272, 108 Stat. does not have a substantial direct effect hazard; issuing emergency orders 745 (July 5, 1994). Existing subsection on, or sufficient federalism implications necessary to abate imminent hazards; 1.49(s)(2) is also removed, and for, the States, nor would it limit the and defending the agency’s actions subsection 1.49(s)(1) is redesignated policymaking discretion of the States. before any administrative or section 1.49(s), because the authorities Therefore, the consultation adjudicatory board proceedings related delegated in paragraph (2) are no longer requirements of Executive Order 13132 to the agency’s implementation of this in effect: The rail transportation study do not apply. additional inspection and enforcement mandated in 49 U.S.C. 5105(b) has been authority. completed and was transmitted to C. Executive Order 13175 This rulemaking revises 49 CFR Congress in September 2005 and 1.47(j)(1), 1.49(s)(1), and 1.73(d)(1) to Congress repealed 49 U.S.C. 5111 in This final rule has been analyzed in reflect these delegations. In addition, SAFETEA–LU. In addition, this rule accordance with the principles and this final rule removes from these delegates to RITA and FMCSA authority criteria contained in Executive Order provisions the parallel phrases ‘‘relating to carry out provisions of SAFETEA– 13175 (‘‘Consultation and Coordination to investigations, records, inspections, LU, beyond the delegations contained in with Indian Tribal Governments’’). penalties, and specific relief’’ and the final rule published in the Federal Because this rule does not significantly ‘‘including the manufacture, fabrication, Register on May 31, 2006. See 71 FR or uniquely affect the communities of marking, maintenance, reconditioning, 30830, 30833. the Indian tribal governments and does repair or test of containers which are This rule also revises 49 CFR 1.74(a) not impose substantial direct represented, marked, certified, or sold to reflect the broad role and authority of compliance costs, the funding and for use in the bulk transportation of the Under Secretary for Transportation consultation requirements of Executive hazardous materials by [air, railroad, Policy in all Departmental policy Order 13175 do not apply. and highway, respectively].’’ This matters. See 49 CFR 1.23(b). The Under D. Regulatory Flexibility Act language simply describes the authority Secretary provides leadership in the conferred by 49 U.S.C. 5121 development of all transportation Because no notice of proposed policy, including, but not limited to, rulemaking is required for this rule 1 The United States Coast Guard also exercises authority under the Federal hazardous material matters involving hazardous materials under the Administrative Procedure transportation law under the authority previously transportation and intermodal and Act, 5 U.S.C. 553, the provisions of the delegated to it when it was part of DOT. Under 6 multimodal transportation. In this Regulatory Flexibility Act (5 U.S.C. 601 U.S.C. 468(b) ‘‘the authorities, functions, personnel, capacity, the Under Secretary resolves et seq.) do not apply. We also do not and assets of the Coast Guard * * * including the authorities and functions of the Department of disputes among DOT’s Operating believe this rule would impose any Transportation relating thereto’’ were transferred to Administrations on transportation costs on small entities because it simply the Department of Homeland Security (DHS). See matters, provides oversight, review, and delegates authority from one official to also 6 U.S.C. 551(d)(2) which provides that DHS coordination of policy functions carried another. Therefore, I certify this final ‘‘shall have all functions relating to the agency [transferred to DHS] that any other official could by out by the Operating Administrations, rule will not have a significant law exercise in relation to the agency immediately and performs all other functions economic impact on a substantial before such transfer.’’ necessary to lead policy development number of small entities.

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E. Paperwork Reduction Act particular emphasis on the (1) 49 U.S.C. chapter 313 relating to This final rule contains no transportation or shipment of hazardous commercial motor vehicle operators, information collection requirements materials by railroad. including the requirement of section under the Paperwork Reduction Act of * * * * * 31305(a)(5)(C) that States issue a 1995 (44 U.S.C. 3501–3520). I 6. Revise § 1.53(b) to read as follows: hazardous materials endorsement to a commercial driver’s license only after F. Unfunded Mandates Reform Act § 1.53 Delegations to the Administrator of being informed pursuant to 49 U.S.C. The Department has determined that the Pipeline and Hazardous Materials Safety 5103a that the applicant does not pose the requirements of Title II of the Administration. a security risk warranting denial of the Unfunded Mandates Reform Act of 1995 * * * * * license; and do not apply to this rulemaking. (b) Hazardous materials. Except as (2) Section 4123(c), (d) and (e) of delegated by § 1.74(a): Public Law 109–59, 119 Stat. 1735 (Aug. List of Subjects in 49 CFR Part 1 (1) Carry out the functions vested in 10, 2005) relating to grants, funding, and Authority delegations (Government the Secretary by 49 U.S.C. 5121(a), (b), contract authority and availability, agencies), Organization and functions (c), (d) and (e), 5122, 5123, and 5124, respectively, for commercial driver’s (Government agencies). with particular emphasis on the license information system shipment of hazardous materials and I For the reasons set forth in the modernization. the manufacture, fabrication, marking, preamble, the Office of the Secretary of * * * * * maintenance, reconditioning, repair or Transportation amends 49 CFR part 1 as (q) Carry out the functions vested in test of multi-modal containers that are follows: the Secretary by the following sections represented, marked, certified, or sold of Public Law 109–59, 119 Stat. 1144 PART 1—[AMENDED] for use in the transportation of (Aug. 10, 2005): hazardous materials; and (1) Section 4105(b)(1) relating to the I 1. The authority citation for part 1 (2) Carry out the functions vested in study concerning predatory tow truck continues to read as follows: the Secretary by all other provisions of operations; the Federal hazardous material Authority: 49 U.S.C. 322; 28 U.S.C. 2672; (2) Section 4126 relating to the 31 U.S.C. 3711(a)(2); Public Law 101–552, transportation law (49 U.S.C. 5101 et 104 Stat. 2736; Public Law 106–159, 113 Stat. seq.) except as delegated by §§ 1.47(j)(2) commercial vehicle information systems 1748; Public Law 107–71, 115 Stat. 597; and 1.73(d)(2) of this chapter and by and networks program; Public Law 107–295, 116 Stat. 2064; Public paragraph 2(99) of Department of (3) Section 4128 relating to grants Law 107–295, 116 Stat. 2065; Public Law Homeland Security Delegation No. under the safety data improvement 107–296, 116 Stat. 2135; 41 U.S.C. 414; 0170. program; Public Law 108–426, 118 Stat. 2423; Public * * * * * (4) Section 4129 relating to the Law 109–59, 119 Stat. 1144. operation of commercial motor vehicles I 7. Amend § 1.73 as follows: I by individuals who use insulin to treat 2. Amend § 1.46 by adding new I a. Revise paragraphs (a)(7) and (a)(9); diabetes mellitus; paragraph (n) to read as follows: I b. Revise paragraph (d)(1); (5) Section 4130 relating to the § 1.46 Delegations to the Administrator of I c. Revise paragraph (e); I d. Revise paragraph (q); and operators of vehicles transporting the Research and Innovative Technology agricultural commodities and farm Administration. I e. Remove paragraphs (r) through (y). The revisions read as follows: supplies; * * * * * (6) Section 4131 relating to the (n) Transportation research and § 1.73 Delegations to the Administrator of maximum hours of service for operators development strategic planning. Carry the Federal Motor Carrier Safety of ground water well drilling rigs; out the function vested in the Secretary Administration. (7) Section 4132 relating to hours of by Section 5208 of Public Law 109–59, * * * * * service for operators of utility service 119 Stat. 1144 (Aug. 10, 2005). (a) * * * vehicles; I 3–4. Revise § 1.47(j)(1) and remove (7) Chapter 145, sections 14501, (8) Section 4133 relating to hours of paragraph (k). 14502, 14504, and 14504a relating to service rules for operators providing § 1.47 Delegations to Federal Aviation Federal-State relations, and section transportation to movie production Administrator. 14506 relating to identification of sites; vehicles; * * * * * (9) Section 4134 relating to the grant (j)(1) Except as delegated by § 1.74(a), * * * * * program for persons to train operators of carry out the functions vested in the (9) Chapter 149, sections 14901 commercial motor vehicles; Secretary by 49 U.S.C. 5121(a), (b), (c), through 14912 and 14915 relating to (10) Section 4135 relating to the task and (d), 5122, 5123, and 5124, with civil and criminal penalties for force concerning commercial driver’s particular emphasis on the violations of 49 U.S.C. subtitle IV, part license program; transportation or shipment of hazardous B. (11) Section 4139(a)(1) relating to the materials by air. * * * * * training of and outreach to State * * * * * (d)(1) Except as delegated by § 1.74(a), personnel; section (b)(1) relating to a carry out the functions vested in the I 5. Revise § 1.49(s) to read as follows: review of Canadian and Mexican Secretary by 49 U.S.C. 5121(a), (b), (c), compliance with Federal motor vehicles § 1.49 Delegations to Federal Railroad and (d), 5122, 5123, and 5124, with safety standards; and the first sentence Administrator. particular emphasis on the of section (b)(2) relating to the report * * * * * transportation or shipment of hazardous concerning the findings and conclusions (s) Except as delegated by § 1.74(a), materials by highway. of the review required by section (b)(1); carry out the functions vested in the * * * * * (12) Section 4146 relating to an hours- Secretary by 49 U.S.C. 5121(a), (b), (c) (e) Carry out the functions vested in of-service exception during harvest and (d), 5122, 5123, and 5124, with the Secretary by: periods;

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(13) Section 4147 relating to Atmospheric Administration (NOAA), rex sole, arrowtooth flounder, and emergency conditions requiring Commerce. sablefish. immediate response; ACTION: Temporary rule; closure. After the effective date of this closure (14) Section 4213 relating to the the maximum retainable amounts at establishment of a working group for the SUMMARY: NMFS is prohibiting directed development of practices and § 679.20(e) and (f) apply at any time fishing for species that comprise the during a trip. procedures to enhance Federal-State deep-water species fishery by vessels relations; using trawl gear in the Gulf of Alaska Classification (15) Section 4214 relating to (GOA). This action is necessary to consumer complaint information; prevent exceeding the 2006 Pacific This action responds to the best (16) Section 5503 relating to the motor halibut bycatch allowance specified for available information recently obtained carrier efficiency study; and the deep-water species fishery in the from the fishery. The Assistant (17) Section 5513(a), under the GOA. Administrator for Fisheries, NOAA condition of section (m), relating to the (AA), finds good cause to waive the DATES: research grant for a thermal imaging Effective 1200 hrs, Alaska local requirement to provide prior notice and time (A.l.t.), September 5, 2006, through inspection system demonstration opportunity for public comment project. 1200 hrs, A.l.t., October 1, 2006. pursuant to the authority set forth at 5 I 8. Amend § 1.74 introductory text and FOR FURTHER INFORMATION CONTACT: Josh U.S.C. 553(b)(B) as such requirement is paragraph (a) to read as follows: Keaton, 907–586–7228. impracticable and contrary to the public § 1.74 Delegations to the Under Secretary SUPPLEMENTARY INFORMATION: NMFS interest. This requirement is for Transportation Policy. manages the groundfish fishery in the impracticable and contrary to the public The Under Secretary for GOA exclusive economic zone interest as it would prevent NMFS from Transportation Policy is delegated according to the Fishery Management responding to the most recent fisheries authority to: Plan for Groundfish of the Gulf of data in a timely fashion and would (a) Lead the development of Alaska (FMP) prepared by the North delay the closure of the deep-water transportation policy and serve as the Pacific Fishery Management Council species fishery by vessels using trawl principal adviser to the Secretary on all under authority of the Magnuson- gear in the GOA. NMFS was unable to transportation policy matters. Stevens Fishery Conservation and publish a notice providing time for Management Act. Regulations governing * * * * * public comment because the most fishing by U.S. vessels in accordance recent, relevant data only became Issued this 24th day of August 2006, at with the FMP appear at subpart H of 50 Washington, DC. available as of August 31, 2006. CFR part 600 and 50 CFR part 679. Maria Cino, The 2006 Pacific halibut bycatch The AA also finds good cause to Acting Secretary of Transportation. allowance specified for the deep-water waive the 30-day delay in the effective [FR Doc. E6–14802 Filed 9–6–06; 8:45 am] species fishery in the GOA is 800 metric date of this action under 5 U.S.C. BILLING CODE 4910–9X–P tons as established by the 2006 and 553(d)(3). This finding is based upon 2007 harvest specifications for the reasons provided above for waiver of groundfish of the GOA (71 FR 10870, prior notice and opportunity for public DEPARTMENT OF COMMERCE March 3, 2006). comment. National Oceanic and Atmospheric In accordance with § 679.21(d)(7)(i), This action is required by § 679.21 Administration the Administrator, Alaska Region, and is exempt from review under NMFS, has determined that the 2006 Executive Order 12866. 50 CFR Part 679 Pacific halibut bycatch allowance specified for the trawl deep-water Authority: 16 U.S.C. 1801 et seq. [Docket No. 060216044–6044–01; I.D. species fishery in the GOA has been Dated: September 1, 2006. 090106A] reached. Consequently, NMFS is James P. Burgess, prohibiting directed fishing for the Fisheries of the Economic Exclusive Acting Director, Office of Sustainable deep-water species fishery by vessels Zone Off Alaska; Deep-Water Species Fisheries, National Marine Fisheries Service. using trawl gear in the GOA. Fishery by Vessels Using Trawl Gear in [FR Doc. 06–7491 Filed 9–1–06; 1:10 pm] the Gulf of Alaska The species and species groups that comprise the deep-water species fishery BILLING CODE 3510–22–S AGENCY: National Marine Fisheries are all rockfish of the genera Sebastes Service (NMFS), National Oceanic and and Sebastolobus, deep-water flatfish,

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Proposed Rules Federal Register Vol. 71, No. 173

Thursday, September 7, 2006

This section of the FEDERAL REGISTER the Rules Docket weekdays, except Airbus requested an extension to the 5- contains notices to the public of the proposed Federal holidays, between 7:30 a.m. and year period for type certification in issuance of rules and regulations. The 4 p.m. accordance with 14 CFR 21.17(c). The purpose of these notices is to give interested FOR FURTHER INFORMATION CONTACT: request was for an extension to a 7-year persons an opportunity to participate in the period, using the date of the initial rule making prior to the adoption of the final Holly Thorson, FAA, International rules. Branch, ANM–116, Transport Airplane application letter to the JAA as the Directorate, Aircraft Certification reference date. The reason given by Service, 1601 Lind Avenue, SW., Airbus for the request for extension is DEPARTMENT OF TRANSPORTATION Renton, Washington 98055–4056; related to the technical challenges, telephone (425) 227–1357; facsimile complexity, and the number of new and Federal Aviation Administration (425) 227–1149. novel features on the airplane. On November 12, 1998, the Manager, SUPPLEMENTARY INFORMATION: 14 CFR Part 25 Aircraft Engineering Division, AIR–100, Comments Invited granted Airbus’ request for the 7-year [Docket No. NM352; Notice No. 25–06–08– period, based on the date of application SC] The FAA invites interested persons to participate in this rulemaking by to the JAA. Special Conditions: Airbus Model submitting written comments, data, or In its letter AI/LE–A 828.0040/99 Issue 3, dated July 20, 2001, Airbus A380–800 Airplane, Lithium Ion Battery views. The most helpful comments stated that its target date for type Installation reference a specific portion of the certification of the Model A380–800 has special conditions, explain the reason AGENCY: Federal Aviation been moved from May 2005, to January for any recommended change, and Administration (FAA), DOT. 2006, to match the delivery date of the include supporting data. We ask that first production airplane. In a ACTION: Notice of proposed special you send us two copies of written subsequent letter (AI/L 810.0223/98 conditions. comments. issue 3, January 27, 2006), Airbus stated We will file in the docket all SUMMARY: This notice proposes special that its target date for type certification comments we receive as well as a report conditions for the Airbus A380–800 is October 2, 2006. In accordance with summarizing each substantive public airplane. This airplane will have novel 14 CFR 21.17(d)(2), Airbus chose a new contact with FAA personnel concerning or unusual design features when application date of December 20, 1999, these proposed special conditions. The compared to the state of technology and requested that the 7-year envisioned in the airworthiness docket is available for public inspection certification period which had already standards for transport category before and after the comment closing been approved be continued. The FAA airplanes. The Airbus A380–800 will date. If you wish to review the docket has reviewed the part 25 certification incorporate the use of high capacity in person, go to the address in the basis for the Model A380–800 airplane, lithium ion battery technology in on- ADDRESSES section of this notice and no changes are required based on board systems. For this design feature, between 7:30 a.m. and 4 p.m., Monday the new application date. the applicable airworthiness regulations through Friday, except Federal holidays. The Model A380–800 airplane will be We will consider all comments we do not contain adequate or appropriate an all-new, four-engine jet transport receive on or before the closing date for safety standards regarding lithium ion airplane with a full double-deck, two- comments. We will consider comments batteries. These proposed special aisle cabin. The maximum takeoff filed late, if it is possible to do so conditions contain the additional safety weight will be 1.235 million pounds without incurring expense or delay. We standards that the Administrator with a typical three-class layout of 555 may change the proposed special considers necessary to establish a level passengers. conditions in light of the comments we of safety equivalent to that established receive. Type Certification Basis by the existing airworthiness standards. If you want the FAA to acknowledge Additional special conditions will be Under the provisions of 14 CFR 21.17, receipt of your comments on this issued for other novel or unusual design Airbus must show that the Model A380– proposal, include with your comments features of the Airbus Model A380–800 800 airplane meets the applicable a pre-addressed, stamped postcard on airplane. provisions of 14 CFR part 25, as which the docket number appears. We amended by Amendments 25–1 through DATES: Comments must be received on will stamp the date on the postcard and 25–98. If the Administrator finds that or before October 23, 2006. mail it back to you. the applicable airworthiness regulations ADDRESSES: Comments on this proposal do not contain adequate or appropriate Background may be mailed in duplicate to: Federal safety standards for the Airbus A380– Aviation Administration, Transport Airbus applied for FAA certification/ 800 airplane because of novel or Airplane Directorate, Attention: Rules validation of the provisionally- unusual design features, special Docket (ANM–113), Docket No. NM352, designated Model A3XX–100 in its conditions are prescribed under the 1601 Lind Avenue, SW., Renton, letter AI/L 810.0223/98, dated August provisions of 14 CFR 21.16. Washington 98055–3356; or delivered in 12, 1998, to the FAA. Application for In addition to the applicable duplicate to the Transport Airplane certification by the Joint Aviation airworthiness regulations and special Directorate at the above address. All Authorities (JAA) of Europe had been conditions, the Airbus Model A380–800 comments must be marked: Docket No. made on January 16, 1998, reference AI/ airplane must comply with the fuel vent NM352. Comments may be inspected in L 810.0019/98. In its letter to the FAA, and exhaust emission requirements of

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14 CFR part 34 and the noise issued 14 CFR 25.1353c(5) and c(6), there is a breach of the battery certification requirements of 14 CFR governing nickel-cadmium battery container. part 36. In addition, the FAA must issue installations on large transport category These problems experienced by users a finding of regulatory adequacy airplanes. of lithium ion batteries raise concern pursuant to section 611 of Public Law The proposed use of lithium ion about the use of these batteries in 93–574, the ‘‘Noise Control Act of batteries for the emergency lighting commercial aviation. The intent of the 1972.’’ system on the Airbus A380 airplane has proposed special condition is to Special conditions, as defined in 14 prompted the FAA to review the establish appropriate airworthiness CFR 11.19, are issued in accordance adequacy of these existing regulations. standards for lithium ion battery with 14 CFR 11.38 and become part of Our review indicates that the existing installations in the Airbus A380–800 the type certification basis in regulations do not adequately address airplane and to ensure, as required by accordance with 14 CFR 21.17(a)(2). several failure, operational, and 14 CFR 25.601, that these battery Special conditions are initially maintenance characteristics of lithium installations are not hazardous or applicable to the model for which they ion batteries that could affect the safety unreliable. To address these concerns, are issued. Should the type certificate and reliability of the Airbus A380’s the proposed special conditions adopt for that model be amended later to lithium ion battery installation. the following requirements: include any other model that At present, there is limited experience • Those sections of 14 CFR 25.1353 incorporates the same novel or unusual with use of rechargeable lithium ion that are applicable to lithium ion design feature, the special conditions batteries in applications involving batteries. would also apply to the other model commercial aviation. However, other • The flammable fluid fire protection under the provisions of 14 CFR 21.101. users of this technology, ranging from requirements of 14 CFR 25.863. In the Discussion of Novel or Unusual Design wireless telephone manufacturers to the past, this rule was not applied to Features electric vehicle industry, have noted batteries of transport category airplanes, safety problems with lithium ion since the electrolytes utilized in lead- Statement of Issue batteries. These problems include acid and nickel-cadmium batteries are The Airbus A380–800 airplane will overcharging, over-discharging, and not flammable. • use lithium ion batteries for its flammability of cell components. New requirements to address the hazards of overcharging and over- emergency lighting system. Large, high 1. Overcharging capacity, rechargeable lithium ion discharging that are unique to lithium batteries are a novel or unusual design In general, lithium ion batteries are ion batteries. • feature in transport category airplanes. significantly more susceptible to New maintenance requirements to This type of battery has certain failure, internal failures that can result in self- ensure that batteries used as spares are operational, and maintenance sustaining increases in temperature and maintained in an appropriate state of characteristics that differ significantly pressure (i.e., thermal runaway) than charge. from those of the nickel-cadmium and their nickel-cadmium or lead-acid Applicability lead-acid rechargeable batteries counterparts. This is especially true for currently approved for installation on overcharging which causes heating and As discussed above, these special large transport category airplanes. The destabilization of the components of the conditions are applicable to the Airbus FAA is proposing this special condition cell, leading to the formation (by A380–800 airplane. Should Airbus to require that (1) all characteristics of plating) of highly unstable metallic apply at a later date for a change to the the lithium ion battery and its lithium. The metallic lithium can ignite, type certificate to include another installation that could affect safe resulting in a self-sustaining fire or model incorporating the same novel or operation of the Airbus A380–800 explosion. Finally, the severity of unusual design features, these special airplane are addressed, and (2) thermal runaway due to overcharging conditions would apply to that model as appropriate maintenance requirements increases with increasing battery well under the provisions of § 21.101. are established to ensure the availability capacity due to the higher amount of Conclusion of electrical power from the batteries electrolyte in large batteries. when needed. This action affects only certain novel 2. Over-discharging or unusual design features of the Airbus Background Discharge of some types of lithium A380–800 airplane. It is not a rule of The current regulations governing ion batteries beyond a certain voltage general applicability. installation of batteries in large (typically 2.4 volts) can cause corrosion List of Subjects in 14 CFR Part 25 transport category airplanes were of the electrodes of the cell, resulting in derived from Civil Air Regulations loss of battery capacity that cannot be Aircraft, Aviation safety, Reporting (CAR) Part 4b.625(d) as part of the re- reversed by recharging. This loss of and recordkeeping requirements. codification of CAR 4b that established capacity may not be detected by the The authority citation for these 14 CFR part 25 in February, 1965. The simple voltage measurements special conditions is as follows: new battery requirements, 14 CFR commonly available to flight crews as a Authority: 49 U.S.C. 106(g), 40113, 44701, 25.1353(c)(1) through (c)(4), basically means of checking battery status—a 44702, 44704. reworded the CAR requirements. problem shared with nickel-cadmium Increased use of nickel-cadmium batteries. The Proposed Special Conditions batteries in small airplanes resulted in Accordingly, pursuant to the 3. Flammability of Cell Components increased incidents of battery fires and authority delegated to me by the failures which led to additional Unlike nickel-cadmium and lead-acid Administrator, the Federal Aviation rulemaking affecting large transport batteries, some types of lithium ion Administration (FAA) proposes the category airplanes as well as small batteries use liquid electrolytes that are following special conditions as part of airplanes. On September 1, 1977 and flammable. The electrolyte can serve as the type certification basis for the March 1, 1978, respectively the FAA a source of fuel for an external fire, if Airbus A380–800 airplane.

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In lieu of the requirements of 14 CFR (9) The Instructions for Continued West Flower Garden and Stetson Banks. 25.1353(c)(1) through (c)(4), the Airworthiness must contain The present management plan for the following special conditions apply: maintenance requirements for Sanctuary was completed at the time of Lithium-ion batteries on the Airbus measurements of battery capacity at designation. In accordance with Section Model 380–800 airplane must be appropriate intervals to ensure that 304(e) of the National Marine designed and installed as follows: batteries whose function is required for Sanctuaries Act, as amended, (NMSA) (1) Safe cell temperatures and safe operation of the airplane will (16 U.S.C. 1431 et seq.), the National pressures must be maintained during perform their intended function as long Marine Sanctuary Program (NMSP) of any foreseeable charging or discharging as the battery is installed in the the National Oceanic and Atmospheric condition and during any failure of the airplane. The Instructions for Continued Administration (NOAA) is initiating a charging or battery monitoring system Airworthiness must also contain review of the management plan, to not shown to be extremely remote. The procedures for the maintenance of evaluate substantive progress toward lithium ion battery installation must lithium ion batteries in spares storage to implementing the goals for the preclude explosion in the event of those prevent the replacement of batteries Sanctuary, and to make revisions to the failures. whose function is required for safe plan and regulations as necessary to (2) Design of the lithium ion batteries operation of the airplane with batteries fulfill the purposes and policies of the must preclude the occurrence of self- that have experienced degraded charge NMSA. sustaining, uncontrolled increases in retention ability or other damage due to The proposed revised management temperature or pressure. prolonged storage at a low state of plan will likely involve changes to (3) No explosive or toxic gasses charge. existing policies and regulations of the emitted by any lithium ion battery in Note: These special conditions are not Sanctuary, to address contemporary normal operation or as the result of any intended to replace 14 CFR 25.1353(c) in the issues and challenges, and to better failure of the battery charging system, certification basis of the Airbus A380–800 protect and manage the Sanctuary’s monitoring system, or battery airplane. The special conditions apply only resources and qualities. The review installation—not shown to be extremely to lithium ion batteries and their process is composed of four major remote—may accumulate in hazardous installations. The requirements of 14 CFR stages: Information collection and quantities within the airplane. 25.1353(c) remain in effect for batteries and characterization; preparation and battery installations of the Airbus A380–800 release of a draft management plan/ (4) Installations of lithium ion airplane that do not utilize lithium ion batteries must meet the requirements of batteries. environmental impact statement, and 14 CFR 25.863(a) through (d). any proposed amendments to the (5) No corrosive fluids or gasses that Issued in Renton, Washington, on August regulations; public review and escape from any lithium ion battery may 28, 2006. comment; and preparation and release damage surrounding airplane structure Ali Bahrami, of a final management plan/ or adjacent essential equipment. Manager, Transport Airplane Directorate, environmental impact statement, and (6) Each lithium ion battery Aircraft Certification Service. any final amendments to the installation must have provisions to [FR Doc. E6–14827 Filed 9–6–06; 8:45 am] regulations. NOAA anticipates prevent any hazardous effect on BILLING CODE 4910–13–P completion of the revised management structure or essential systems caused by plan and concomitant documents will the maximum amount of heat the require approximately eighteen to battery can generate during a short DEPARTMENT OF COMMERCE twenty-four months. circuit of the battery or of its individual NOAA will conduct public scoping cells. National Oceanic and Atmospheric meetings to gather information and (7) Lithium ion battery installations Administration other comments from individuals, must have a system to control the organizations, and government agencies charging rate of the battery 15 CFR Part 922 on the scope, types and significance of automatically, so as to prevent battery issues related to the Sanctuary’s overheating or overcharging, and, Initiation of Review of the Management management plan and regulations. The (i) A battery temperature sensing and Plan/Regulations of the Flower Garden scoping meetings are scheduled for over-temperature warning system with a Banks National Marine Sanctuary; October 17, 19, and 24, 2006, as detailed means for automatically disconnecting Intent To Prepare Draft Environmental below. the battery from its charging source in Impact Statement and Management DATES: Written comments should be the event of an over-temperature Plan; Scoping Meetings received on or before November 10, condition, or, AGENCY: National Marine Sanctuary 2006. (ii) A battery failure sensing and Program (NMSP), National Ocean Scoping meetings will be held at: warning system with a means for Service (NOS), National Oceanic and (1) October 17, 7–10 p.m., Webster, automatically disconnecting the battery Atmospheric Administration (NOAA), TX (Houston/Galveston area). from its charging source in the event of Department of Commerce (DOC). (2) October 19, 7–10 p.m., Corpus Christi, TX. battery failure. ACTION: Initiation of review of (3) October 24, 7–10 p.m., New (8) Any lithium ion battery management plan/regulations; intent to Orleans, LA. installation whose function is required prepare environmental impact for safe operation of the airplane must statement; scoping meetings. ADDRESSES: Written comments may be incorporate a monitoring and warning sent to the Flower Garden Banks feature that will provide an indication SUMMARY: The Flower Garden Banks National Marine Sanctuary to the appropriate flight crewmembers, National Marine Sanctuary (FGBNMS or (Management Plan Review), 4700 whenever the state-of-charge of the Sanctuary) was designated in January Avenue U, Building 216, Galveston, batteries has fallen below levels 1992, and consists of three separate Texas 77551. Comments will be considered acceptable for dispatch of areas in the Northwestern Gulf of available for public review at the same the airplane. Mexico, known as East Flower Garden, address.

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Scoping meetings will be held at: fulfill the purposes and policies of the Authority: 16 U.S.C. Section 1431 et seq. (1) Webster Civic Center, 311 NMSA. (Federal Domestic Assistance Catalog Pennsylvania Street, Webster, TX 77598. The proposed revised management Number 11.429 Marine Sanctuary Program) (2) Harte Research Institute for Gulf of plan will likely involve changes to Dated: August 28, 2006. Mexico Studies, Texas A&M existing policies and regulations of the Daniel J. Basta, Sanctuary, to address contemporary University—Corpus Christi, 6300 Ocean Director, National Marine Sanctuary Program. Drive, Corpus Christi, TX 78412. issues and challenges, and to better [FR Doc. 06–7480 Filed 9–6–06; 8:45 am] (3) Audubon Zoo—Dominion protect and manage the Sanctuary’s Learning Center, 6500 Magazine Street, resources and qualities. The review BILLING CODE 3510–08–M New Orleans, LA 70118. process is composed of four major FOR FURTHER INFORMATION CONTACT: stages: information collection and Jennifer Morgan, 409–621–5151 Ext. characterization; preparation and CONSUMER PRODUCT SAFETY 103, [email protected]. release of a draft management plan/ COMMISSION environmental impact statement, and Authority: 16 U.S.C. Section 1431 et seq. any proposed amendments to the 16 CFR Parts 1307, 1410, 1500 and (Federal Domestic Assistance Catalog regulations; public review and 1515 Number 11.429 Marine Sanctuary Program) comment; and preparation and release Dated: August 28, 2006. of a final management plan/ Standards for All Terrain Vehicles and Daniel J. Basta, environmental impact statement, and Ban of Three Wheeled All Terrain Director, National Marine Sanctuary Program. any final amendments to the Vehicles; Notice of Proposed [FR Doc. 06–7481 Filed 9–6–06; 8:45am] regulations. NOAA anticipates Rulemaking; Correction completion of the revised management BILLING CODE 3510–08–M AGENCY: plan and concomitant documents will Consumer Product Safety require approximately eighteen to Commission. DEPARTMENT OF COMMERCE twenty-four months. ACTION: Notice of proposed rulemaking; NOAA will conduct public scoping correction National Oceanic and Atmospheric meetings to gather information and SUMMARY: The Consumer Product Safety Administration other comments from individuals, Commission published a notice of organizations, and government agencies proposed rulemaking in the Federal 15 CFR Part 922 on the scope, types and significance of Register of August 10, 2006, regarding issues related to the Sanctuary’s all terrain vehicles (‘‘ATVs’’). The Initiation of Review of the Management management plan and regulations. The document contained an incorrect e-mail Plan/Regulations of the Thunder Bay scoping meetings are scheduled for address to send comments. National Marine Sanctuary; Intent To September 25, 26, 28 and 29, 2006, as Prepare Draft Environmental Impact detailed below. FOR FURTHER INFORMATION CONTACT: Elizabeth Leland, Project Manager, ATV Statement and Management Plan; DATES: Written comments should be Safety Review, Directorate for Economic Scoping Meetings received on or before October 13, 2006. Analysis, Consumer Product Safety AGENCY: National Marine Sanctuary Scoping meetings will be held at: (1) September 25, 6:30 p.m., Presque Commission, 4330 East West Highway, Program (NMSP), National Ocean Bethesda, Maryland 20814–4408; Service (NOS), National Oceanic and Isle, MI. (2) September 26, 6:30 p.m., Alpena, telephone (301) 504–7706 or e-mail: Atmospheric Administration (NOAA), [email protected]. Department of Commerce (DOC). MI. (3) September 28, 6:30 p.m., Alcona, Correction ACTION: Initiation of Review of MI. Management Plan/Regulations; Intent to (4) September 29, 1 p.m., Lansing, MI. In the Federal Register of August 10, Prepare Environmental Impact 2006, in FR Doc. 06–6703, on page ADDRESSES: Written comments may be Statement; Scoping Meetings. 45904 in the first column, correct the sent to the Thunder Bay National first paragraph under the ADDRESSES SUMMARY: Thunder Bay National Marine Marine Sanctuary (Management Plan caption to read: Review), 500 West Fletcher Street, Sanctuary (TBNMS or Sanctuary) was ADDRESSES: Comments shall be filed by designated on October 7, 2000. The Alpena, MI, 49707. Comments will be available for public review at the same e-mail to [email protected]. Comments present management plan was written also may be filed by telefacsimile to as part of the sanctuary designation address: Scoping meetings will be held at: (301) 504–0127 or they may be mailed process and published in the Final or delivered, preferably in five copies, to Environmental Impact Statement in (1) Presque Isle District Library, 181 East Erie Street, Rogers City, MI 49779. the Office of the Secretary, U.S. 1999. In accordance with section 304(e) Consumer Product Safety Commission, of the National Marine Sanctuaries Act, (2) Great Lakes Maritime Heritage Center, 500 West Fletcher Street, 4330 East West Highway, Bethesda, as amended, (NMSA) (16 U.S.C. 1431 et Maryland 20814–4408; telephone (301) seq.), the National Marine Sanctuary Alpena, MI 49707. (3) Harrisville Courthouse, 106 North 504–7923. Comments should be Program (NMSP) of the National captioned ‘‘ATV NPR.’’ Oceanic and Atmospheric 5th Street, Harrisville, MI 48740. Administration (NOAA) is initiating a (4) Michigan Historical Center, 702 Dated: August 30, 2006. review of the management plan, to West Kalamazoo Street, Lansing, MI Todd Stevenson, evaluate substantive progress toward 48909. Secretary, Consumer Product Safety implementing the goals for the FOR FURTHER INFORMATION CONTACT: Tera Commission. Sanctuary, and to make revisions to the Panknin, 989–356–8805 Ext. 38, [FR Doc. E6–14757 Filed 9–6–06; 8:45 am] plan and regulations as necessary to [email protected]. BILLING CODE 6355–01–P

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Notices Federal Register Vol. 71, No. 173

Thursday, September 7, 2006

This section of the FEDERAL REGISTER the collection of information unless it Total Burden Hours: 3,080. contains documents other than rules or displays a currently valid OMB control proposed rules that are applicable to the number. Ruth Brown, public. Notices of hearings and investigations, Departmental Information Collection committee meetings, agency decisions and Economic Research Service Clearance Officer. rulings, delegations of authority, filing of Title: Rapid Consumer Response [FR Doc. E6–14819 Filed 9–6–06; 8:45 am] petitions and applications and agency statements of organization and functions are Survey. BILLING CODE 3410–18–P examples of documents appearing in this OMB Control Number: 0536–NEW. section. Summary of Collection: The Economic Research Service (ERS), as the DEPARTMENT OF AGRICULTURE lead economic research arm of the U.S. DEPARTMENT OF AGRICULTURE Department of Agriculture, has the Submission for OMB Review; responsibility to conduct economic Comment Request Submission for OMB Review; research supporting the mission of the September 1, 2006. Comment Request Department. This responsibility The Department of Agriculture has September 1, 2006. includes conducting research and providing information to Department submitted the following information The Department of Agriculture has collection requirement(s) to OMB for submitted the following information officials on economic issues related to food safety, nutrition and health review and clearance under the collection requirement(s) to OMB for Paperwork Reduction Act of 1995, review and clearance under the (including factors related to food choices), consumption patterns at and Public Law 104–13. Comments Paperwork Reduction Act of 1995, regarding (a) whether the collection of Public Law 104–13. Comments away from home, food prices, food assistance programs, nutrition information is necessary for the proper regarding (a) whether the collection of performance of the functions of the information is necessary for the proper education, and food industry structure. USDA faces many demands for agency, including whether the performance of the functions of the information will have practical utility; agency, including whether the information about consumer behavior. To better assess issues of importance to (b) the accuracy of the agency’s estimate information will have practical utility; of burden including the validity of the (b) the accuracy of the agency’s estimate consumers and to agriculture, a pilot survey, entitled Rapid Consumer methodology and assumptions used; (c) of burden including the validity of the ways to enhance the quality, utility and methodology and assumptions used; (c) Response Module (RCRM), is being proposed that will address topical clarity of the information to be ways to enhance the quality, utility and collected; (d) ways to minimize the clarity of the information to be issues in consumer behavior. RCRM will burden of the collection of information collected; (d) ways to minimize the enable the Department to assess on those who are to respond, including burden of the collection of information consumer attitudes and reactions to through the use of appropriate on those who are to respond, including market developments and such policy automated, electronic, mechanical, or through the use of appropriate events as the new dietary guidelines, other technological collection automated, electronic, mechanical, or mercury standards for fish, country of techniques or other forms of information other technological collection origin labeling, price or supply shocks technology should be addressed to: Desk techniques or other forms of information in the food distribution system, and Officer for Agriculture, Office of technology should be addressed to: Desk food safety incidents. Information and Regulatory Affairs, Officer for Agriculture, Office of Need and Use of the Information: The Information and Regulatory Affairs, information collected in the RCRM Office of Management and Budget survey will be on consumption, (OMB), Office of Management and Budget _ (OMB), behavior, and consumer reaction to and OIRA [email protected] or [email protected] or opinions about food safety incidents fax (202) 395–5806 and to Departmental fax (202) 395–5806 and to Departmental and diet and health issues. The Clearance Office, USDA, OCIO, Mail Clearance Office, USDA, OCIO, Mail information gained from the RCRM will Stop 7602, Washington, DC 20250– Stop 7602, Washington, DC 20250– help researchers formulate their 7602. Comments regarding these 7602. Comments regarding these hypotheses and provide key indicators information collections are best assured information collections are best assured on consumers’ attitude or perception on of having their full effect if received of having their full effect if received dietary and safety issues. Without the within 30 days of this notification. within 30 days of this notification. information ERS is not able to conduct Copies of the submission(s) may be Copies of the submission(s) may be the proposed surveys, the agency’s obtained by calling (202) 720–8681. obtained by calling (202) 720–8958. ability to have access to timely An agency may not conduct or An agency may not conduct or information about consumer behavior sponsor a collection of information sponsor a collection of information and attitude on diet and health issues unless the collection of information unless the collection of information will be greatly hampered. displays a currently valid OMB control displays a currently valid OMB control Description of Respondents: number and the agency informs number and the agency informs Individuals or households. potential persons who are to respond to potential persons who are to respond to Number of Respondents: 6,600. the collection of information that such the collection of information that such Frequency of Responses: Reporting: persons are not required to respond to persons are not required to respond to Quarterly. the collection of information unless it

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displays a currently valid OMB control builder or dealer/contractor, FOR FURTHER INFORMATION CONTACT: Lee number. authorization for expenditure to resolve Anne Schramel Taylor, Forest the defect with grant funds. Resolution Coordinator, USDA, Plumas National Rural Housing Service could involve expenditure for (1) Forest, P.O. Box 11500/159 Lawrence Title: 7 CFR 1942–A, Community repairing defects; (2) reimbursing for Street, Quincy, CA 95971; (530) 283– Facility Loans. emergency repairs; (3) pay temporary 7850; or by E–Mail. [email protected]. OMB Control Number: 0575–0015. living expenses or (4) convey dwelling SUPPLEMENTARY INFORMATION: Agenda Summary of Collection: The Rural to RHS with release of liability for the items for the September 29 meeting Housing Service (RUS) is a credit RHS loan. include: (1) Forest Service Update; (2) agency within the Rural Development Need and Use of the Information: The Residual funding availability; (3) mission area of the U.S. Department of information is collected from agency Recommendations for funding Agriculture (USDA). The Community borrowers and the local agency office distribution, potentially including Programs Division of the RHS serving the county in which the current Cycle 6 projects not yet administers the Community Facilities dwelling is located. This information is approved; and, (3) Review future program under 7 CFR part 1942, subpart used by Rural Housing Staff to evaluate meeting schedule and agenda. The A. Rural Development provides loan the request and assist the borrower in meetings are open to the public and and grant funds through the Community identifying possible causes and individuals may address the Committee Facilities program to finance many corrective actions. The information is after being recognized by the Chair. types of projects varying in size and collected on a case-by-case basis when Other RAC information including complexity, from large general hospitals initiated by the borrower. Without this previous meeting agendas and minutes to small fire trucks. The facilities information, RHS would be unable to may be obtained at http:// financed are designed to promote the assure that eligible borrowers would www.notes.fs.fed.us:81/r4/ development of rural communities by receive compensation to repair defects payments_to_states. providing the infrastructure necessary to to their newly constructed dwellings. attract residents and rural jobs. RUS will Description of Respondents: Business Dated: August 30, 2006. collect information using several forms. or for-profit. Robert G. Macwhorter, Need and Use of the Information: Number of Respondents: 500. Deputy Forest Supervisor. RUS will collect information to Frequency of Responses: Reporting: [FR Doc. 06–7482 Filed 9–6–06; 8:45 am] determine applicant/borrower On occasion. BILLING CODE 3410–11–M eligibility, project feasibility, and to Total Burden Hours: 200. ensure borrowers operate on a sound Charlene Parker, basis and use loan and grant funds for DEPARTMENT OF AGRICULTURE authorized purposes. Failure to collect Departmental Information Collection Clearance Officer. proper information could result in Grain Inspection, Packers and improper determinations of eligibility, [FR Doc. E6–14818 Filed 9–6–06; 8:45 am] Stockyards Administration BILLING CODE 3410–XT–P improper use of funds, and/or unsound [06–01–S] loans. Description of Respondents: Not-for- DEPARTMENT OF AGRICULTURE Designation for the Pocatello (ID), profit institutions; State, Local or Tribal Lewiston (ID), Evansville (IN), and Utah Government. Forest Service Areas Number of Respondents: 3,768. Frequency of Responses: Plumas County Resource Advisory AGENCY: Grain Inspection, Packers and Recordkeeping; Reporting: On occasion; Committee (RAC) Stockyards Administration, USDA. Annually. ACTION: Notice. Total Burden Hours: 57,177. AGENCY: Forest Service, USDA. ACTION: Notice of meeting. SUMMARY: Grain Inspection, Packers and Rural Housing Service Stockyards Administration (GIPSA) Title: 7 CFR 1924–F, Complaints and SUMMARY: The Plumas County Resource announces designation of the following Compensation Defects. Advisory Committee (RAC) will hold a organizations to provide official services OMB Control Number: 0575–0082. meeting on September 29, 2006, in under the United States Grain Standards Summary of Collection: Section 509 of Quincy, CA. The purpose of the meeting Act, as amended (Act): Idaho Grain Title V of the Housing Act of 1949, as is to discuss residual funding and Inspection Service, Inc. (Idaho); amended, authorizes the Rural Housing recommend how it might be distributed. Lewiston Grain Inspection Service, Inc. Service (RHS) to pay the costs for The funding is available under the Title (Lewiston); Ohio Valley Grain correcting defects or compensate II Provisions of the Secure Rural Inspection, Inc. (Ohio Valley); and Utah borrowers of Section 502 Direct loan Schools and Community Self- Department of Agriculture and Food funds for expenses arising out of defects Determination Act of 2000. Several (Utah). with respect to newly constructed Cycle 6 projects not yet approved will EFFECTIVE DATE: October 1, 2006. dwellings and new manufactured be included in the discussion and could housing units with authorized funds. potentially be recommended to the ADDRESSES: USDA, GIPSA, Karen This regulation provides instruction to Plumas (PNF) or Lassen (LNF) National Guagliardo, Review Branch Chief, all RHS personnel to enable them to Forest Supervisor for funding. Cost Compliance Division, STOP 3604, Room implement a procedure to accept and overruns for other projects will also be 1647–S, 1400 Independence Avenue, process complaints from borrowers/ considered among other alternatives. SW., Washington, DC 20250–3604. owners against builders and dealers/ DATES AND ADDRESSES: The meeting will FOR FURTHER INFORMATION CONTACT: contractors, to resolve the complaint take place from 9–12 at the Mineral Karen Guagliardo at 202–720–7312, e- informally. When the complaint Building—Plumas/Sierra County mail [email protected]. involves structural defects which cannot Fairgrounds, 208 Fairgrounds Road, SUPPLEMENTARY INFORMATION: This be resolved by cooperation of the Quincy, CA. action has been reviewed and

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determined not to be a rule or regulation Applications were due by March 31, determined that Idaho, Lewiston, Ohio as defined in Executive Order 12866 2006. Valley, and Utah are able to provide and Departmental Regulation 1512–1; Idaho, Lewiston, Ohio Valley, and official services in the geographic areas therefore, the Executive Order and Utah were the sole applicants for specified in the March 1, 2006, Federal Departmental Regulation do not apply designation to provide official services Register, for which they applied. These to this action. in the entire area currently assigned to designation actions to provide official In the March 1, 2006 Federal Register them, therefore, GIPSA did not ask for services are effective October 1, 2006 (71 FR 10471), GIPSA asked persons additional comments on them. and terminate September 30, 2009, for interested in providing official services GIPSA evaluated all available Idaho, Lewiston, Ohio Valley, and Utah. in the geographic areas assigned to the information regarding the designation Interested persons may obtain official official agencies named above to submit criteria in Section 7(f)(l)(A) of the Act services by calling the telephone an application for designation. and, according to Section 7(f)(l)(B), numbers listed below.

Official agency Headquarters location and telephone Designation term

Idaho ...... Pocatello, ID; 208–233–8303 ...... 10/01/06–09/30/09 Lewiston ...... Lewiston, ID; 208–746–0451 ...... 10/01/06–09/30/09 Ohio Valley ...... Evansville, IN; 812–423–9010 ...... 10/01/06–09/30/09 Additional Location: Hopkinsville, KY Utah ...... Salt Lake City, UT; 801–392–2292 ...... 10/01/06–09/30/09

Authority: Pub. L. 94–582, 90 Stat. 2867, these agencies to submit an application • E-mail: Send via electronic mail to as amended (7 U.S.C. 71 et seq.). for designation. GIPSA is also asking for [email protected]. • David R. Shipman, comments on the quality of services Mail: Send hardcopy to Karen provided by these currently designated Acting Administrator, Grain Inspection, Guagliardo, Review Branch Chief, Packers and Stockyards Administration. agencies: Champaign-Danville Grain Compliance Division, GIPSA, USDA, Inspection Departments, Inc. [FR Doc. E6–14816 Filed 9–6–06; 8:45 am] STOP 3604, 1400 Independence (Champaign); Detroit Grain Inspection Avenue, SW., Washington, DC 20250– BILLING CODE 3410–KD–P Service, Inc. (Detroit); Eastern Iowa 3604. Grain Inspection and Weighing Service, SUPPLEMENTARY INFORMATION: This DEPARTMENT OF AGRICULTURE Inc. (Eastern Iowa); Enid Grain Inspection Company, Inc. (Enid); Action has been reviewed and determined not to be a rule or regulation Grain Inspection, Packers and Keokuk Grain Inspection Service as defined in Executive Order 12866 Stockyards Administration (Keokuk); Michigan Grain Inspection Services, Inc. (Michigan); Midsouth and Departmental Regulation 1512–1; Opportunity for Designation in the Grain Inspection Service (Midsouth); therefore, the Executive Order and Champaign (IL), Detroit (MI), Eastern and Omaha Grain Inspection Service, Departmental Regulation do not apply Iowa (IA), Enid (OK), Keokuk (IA), Inc. (Omaha). to this Action. Marshall (MI), Memphis (TN) and DATES: Applications and comments Section 7(f)(1) of the United States Omaha (NE), and Request for must be postmarked or electronically Grain Standards Act, as amended (Act), Comments on the Official Agencies dated on or before October 10, 2006. authorizes GIPSA’s Administrator to Serving These Areas ADDRESSES: We invite you to submit designate a qualified applicant to applications and comments on this provide official services in a specified AGENCY: Grain Inspection, Packers and notice. You may submit applications area after determining that the applicant Stockyards Administration, USDA. [06– and comments by any of the following is better able than any other applicant 03–A]. methods: to provide such official services. ACTION: Notice. • Hand Delivery or Courier: Deliver to Section 7(g)(1) of the Act provides Karen Guagliardo, Review Branch Chief, that designations of official agencies SUMMARY: The designations of the Compliance Division, GIPSA, USDA, shall end not later than triennially and official agencies listed below will end in Room 1647–S, 1400 Independence may be renewed according to the March 2007. Grain Inspection, Packers Avenue, SW., Washington, DC 20250. criteria and procedures prescribed in and Stockyards Administration (GIPSA) • Fax: Send by facsimile transmission Section 7(f) of the Act. is asking persons interested in providing to (202) 690–2755, attention: Karen 1. Current designations being official services in the areas served by Guagliardo. announced for renewal.

Designation Designation Official agency Main office start end

Champaign ...... Champaign, IL ...... 4/01/2004 3/31/2007 Detroit ...... Emmett, MI ...... 4/01/2004 3/31/2007 Eastern ...... Iowa Davenport, IA ...... 4/01/2004 3/31/2007 Enid ...... Enid, OK ...... 4/01/2004 3/31/2007 Keokuk ...... Keokuk, IA ...... 4/01/2004 3/31/2007 Michigan ...... Marshall, MI ...... 4/01/2004 3/31/2007 Midsouth ...... Memphis, TN ...... 4/01/2006 3/31/2007 Omaha ...... Omaha, NE ...... 4/01/2006 3/31/2007

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a. Pursuant to Section 7(f)(2) of the Moultrie County; Tabor Grain Company northern Henry and Bureau County Act, the following geographic area, in (3 elevators), Farmer City, Dewitt lines east to State Route 88; State Route the States of Illinois and Indiana, is County; and Topflight Grain Company, 88 south; the southern Bureau County assigned to Champaign. Monticello, Piatt County (located inside line; the eastern and southern Henry In Illinois and Indiana: Decatur Grain Inspection, Inc.’s, area). County lines; the eastern Knox County Bounded on the North by the northern Champaign’s assigned geographic area line; Livingston County line from State Route does not include the following grain Bounded on the South by the 47; the eastern Livingston County line to elevators inside Champaign’s area southern Knox County line; the eastern the northern Ford County line; the which have been and will continue to and southern Warren County lines; the northern Ford and Iroquois County lines be serviced by the following official southern Henderson County line west to east to Interstate 57; Interstate 57 north agency: Titus Grain Inspection, Inc.: the Mississippi River; in Iowa, by the to the northern Will County line; Kentland Elevator and Supply, Boswell, southern Des Moines, Henry, Jefferson, Bounded on the North by the northern Benton County, Indiana; ADM, Dunn, and Wapello County lines; and Will County line from Interstate 57 east Benton County, Indiana; and ADM, Bounded on the West by the western to the Illinois-Indiana State line; the Raub, Benton County, Indiana. and northern Wapello County lines; the Illinois-Indiana State line north to the Champaign’s assigned geographic area western and northern Keokuk County northern Lake County line; the northern does not include the export port lines; the western Iowa County line Lake, Porter, Laporte, St. Joseph, and locations inside Champaign’s area north to Interstate 80. Elkhart County lines; which are serviced by GIPSA. The northern area: Bounded on the East by the eastern b. Pursuant to Section 7(f)(2) of the Bounded on the North, in Iowa, by the and southern Elkhart County lines; the Act, the following geographic area, in northern Delaware and Dubuque County eastern Marshall County line; the State of Michigan, is assigned to lines; in Illinois, by the northern Jo Bounded on the South by the Detroit. Daviess, Stephenson, Winnebago, southern Marshall and Starke County Bounded on the North by the northern Boone, McHenry, and Lake County lines; the eastern Jasper County line Clinton County line; the eastern Clinton lines; south-southwest to U.S. Route 24; U.S. County line south to State Route 21; Bounded on the East by the eastern Route 24 west to Indiana State Route 55; State Route 21 east to State Route 52; Illinois State line south to the northern Indiana State Route 55 south to the State Route 52 north to the Shiawassee Will County line; the northern Will Newton County line; the southern County line; the northern Shiawassee County line west to Interstate 55; Newton County line west to U.S. Route County line east to the Genesee County Interstate 55 southwest to the southern 41; line; the western Genesee County line; Dupage County line; Bounded on the East by U.S. Route 41 the northern Genesee County line east to Bounded on the South by the south to the northern Parke County line; State Route 15; State Route 15 north to southern Dupage, Kendall, Dekalb, and the northern Parke and Putnam County Barnes Road; Barnes Road east to Lee County lines; and lines; the eastern Putnam, Owen and Sheridan Road; Sheridan Road north to Bounded on the West by the western Greene County lines; State Route 46; State Route 46 east to Lee and Ogle County lines; by the Bounded on the South by the State Route 53; State Route 53 north to southern Stephenson and Jo Daviess southern Greene County line; the the Michigan State line; County lines; in Iowa, by the southern southern Sullivan County line west to Bounded on the East by the Michigan Dubuque and Delaware County lines; U.S. Route 41(150); U.S. Route 41(150) State line south to State Route 50; and the western Delaware County line. south to U.S. Route 50; U.S. Route 50 Bounded on the South by State Route In the State of Wisconsin, the entire west across the Indiana-Illinois State 50 west to U.S. Route 127; and State of Wisconsin, for domestic line to Illinois State Route 33; Illinois Bounded on the West by U.S. Route services. State Route 33 north and west to the 127 north to U.S. Route 27; U.S. Route Eastern Iowa’s assigned geographic Western Crawford County line; and 27 north to the northern Clinton County area does not include the export port Bounded on the West by the western line. locations inside Eastern Iowa’s area in Crawford and Clark County lines; the The following grain elevator, located the State of Illinois, which are serviced Southern Coles County line; the western outside of the above contiguous by GIPSA, and in the State of Coles and Douglas County lines; the geographic area, is part of this Wisconsin, which are serviced by western Champaign County line north geographic area assignment: Caldonia Wisconsin. to Interstate 72; Interstate 72 southwest Farmers Elevator, St. Johns, Clinton d. Pursuant to Section 7(f)(2) of the to the Piatt County line; the western County (located inside Michigan Grain Act, the following geographic area, in Piatt County line; the southern McLean Inspection Services, Inc.’s, area). the State of Oklahoma, is assigned to County line west to a point 10 miles c. Pursuant to Section 7(f)(2) of the Enid. west of the western Champaign County Act, the following geographic area, in Adair, Alfalfa, Atoka, Beckham, line, from this point through the States of Illinois, Iowa, and Blaine, Bryan, Caddo, Canadian, Carter, Arrowsmith to Pontiac along a straight Wisconsin, is assigned to Eastern Iowa. Cherokee, Choctaw, Cleveland, Coal, line running north and south which In the States of Illinois and Iowa: Comanche, Cotton, Craig, Creek, Custer, intersects with State Route 116; State The southern area: Delaware, Dewey, Ellis, Garfield, Route 116 east to State Route 47; State Bounded on the North, in Iowa, by Garvin, Grady, Grant, Greer, Harmon, Route 47 north to the northern Interstate 80 from the western Iowa Harper, Haskell, Hughes, Jackson, Livingston County line. County line east to State Route 38; State Jefferson, Johnston, Kay, Kingfisher, Berrien, Cass, and St. Joseph Route 38 north to State Route 130; State Kiowa, Latimer, Le Flore, Lincoln, Counties, Michigan. Route 130 east to Scott County; the Logan, Love, McClain, McCurtain, The following grain elevators, all in western and northern Scott County lines McIntosh, Major, Marshall, Mayes, Illinois, located outside of the above east to the Mississippi River; Murray, Muskogee, Noble, Nowata, contiguous geographic area, are part of Bounded on the East, from the Okfuskee, Oklahoma, Okmulgee, Osage, this geographic area assignment: Mississippi River, in Illinois, by the Ottawa, Pawnee, Payne, Pittsburg, Moultrie Grain Association, Cadwell, eastern Rock Island County line; the Pontotoc, Pottawatomie, Pushmataha,

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Roger Mills, Rogers, Seminole, elevators inside Michigan’s area which east; the western Washington County Sequoyah, Stephens, Tillman, Tulsa, has been and will continue to be line northwest to Nebraska State Route Wagoner, Washington, Washita, Woods, serviced by the following official 91. and Woodward Counties. agencies: Detroit Grain Inspection The following grain elevators, located e. Pursuant to Section 7(f)(2) of the Service, Inc.: Caldonia Farmers Elevator, outside of the above contiguous Act, the following geographic area, in St. Johns, Clinton County, Michigan and geographic area, are part of this the States of Illinois and Iowa, is Northeast Indiana Grain Inspection, geographic area assignment: Hancock assigned to Keokuk. Inc.: E.M.P. Coop, Payne, Paulding Elevator, Elliot, Montgomery County, Adams, Brown, Fulton, Hancock, County, Ohio. Iowa; Hancock Elevator (2 elevators), Mason, McDonough, and Pike g. Pursuant to Section 7(f)(2) of the Griswold, Cass County, Iowa (located (northwest of a line bounded by U.S. Act, the following geographic area, in inside Central Iowa Grain Inspection Route 54 northeast to State Route 107; the States of Arkansas, Mississippi, Service, Inc.’s, area); United Farmers State Route 107 northeast to State Route Tennessee, and Texas, is assigned to Coop, Rising City, Butler County, 104; State Route 104 east to the eastern Midsouth. Nebraska; United Farmers Coop, Shelby, Pike County line) Counties, Illinois. The entire State of Arkansas. Polk County, Nebraska (located inside Davis, Lee, and Van Buren Counties, The entire State of Mississippi, except Fremont Grain Inspection Department, Iowa. those export port locations within the Inc.’s, area); and Goode Seed & Grain, f. Pursuant to Section 7(f)(2) of the State. McPaul, Fremont County, Iowa; Act, the following geographic area, in Carroll, Chester, Crockett, Dyer, Haveman Grain, Murray, Cass County, the States of Michigan and Ohio, is Fayette, Gibson, Hardeman, Haywood, Nebraska (located inside Lincoln assigned to Michigan. Henderson, Lauderdale, Madison, Inspection Service, Inc.’s, area). Bounded on the North by the northern McNairy, Shelby, and Tipton Counties, Michigan State line; Tennessee. Omaha’s assigned geographic area Bounded on the East by the eastern Bowie and Cass Counties, Texas. does not include the following grain Michigan State line south and east to The following grain elevators, located elevators inside Omaha’s area which State Route 53; State Route 53 south to outside of the above contiguous have been and will continue to be State Route 46; State Route 46 west to geographic area, are part of this serviced by the following official Sheridan Road; Sheridan Road south to geographic area assignment: Cargill, agency: Fremont Grain Inspection Barnes Road; Barnes Road west to State Inc., Tiptonville, Lake County, Department, Inc.: Farmers Cooperative, Route 15; State Route 15 south to the Tennessee (located inside Cairo Grain and Krumel Grain and Storage, both in Genesee County line; the northern Inspection Agency, Inc.’s, area). Wahoo, Saunders County, Nebraska. Genesee County line west to the h. Pursuant to Section 7(f)(2) of the 2. Opportunity for designation. Shiawassee County line; the northern Act, the following geographic area, in Interested persons, including Shiawassee County line west to State the States of Iowa and Nebraska, is Champaign, Detroit, Eastern Iowa, Enid, Route 52; State Route 52 south to State assigned to Omaha. Keokuk, Michigan, Midsouth, and Route 21; State Route 21 west to Clinton Bounded on the North by Nebraska Omaha are hereby given the opportunity County; the eastern and northern State Route 91 from the western to apply for designation to provide Clinton County lines west to U.S. Route Washington County line east to U.S. official services in the geographic areas 27; U.S. Route 27 south to U.S. Route Route 30; U.S. Route 30 east to the specified above under the provisions of 127; U.S. Route 127 south to the Missouri River; the Missouri River north Section 7(f) of the Act and section Michigan-Ohio State line. In Ohio, the to Iowa State Route 175; Iowa State 800.196(d) of the regulations issued northern State line east to the eastern Route 175 east to Iowa State Route 37; thereunder. Designation in the specified Fulton County line; the eastern Fulton, Iowa State Route 37 southeast to the geographic areas is for the period Henry, and Putnam County lines; the eastern Monona County line; beginning April 1, 2007, and ending eastern Allen County line south to the Bounded on the East by the eastern March 31, 2010. Persons wishing to northern Hardin County line; the Monona County line; the southern apply for designation should contact the northern Hardin County line east to U.S. Monona County line west to Iowa State Compliance Division at the address Route 68; U.S. Route 68 south to State Route 183; Iowa State Route 183 south listed above for forms and information, Route 47; Bounded on the South by to the Pottawattamie County line; the or obtain applications at the GIPSA Web State Route 47 west-southwest to northern and eastern Pottawattamie site, www.gipsa.usda.gov. Interstate 75 (excluding all of Sidney, County lines; the southern Ohio); Interstate 75 south to the Shelby Pottawattamie County line west to M47; 3. Request for Comments. GIPSA also County line; the southern and western M47 south to Iowa State Route 48; Iowa is publishing this notice to provide Shelby County lines; the southern State Route 48 south to the Montgomery interested persons the opportunity to Mercer County line; and County line; present comments on the quality of Bounded on the West by the Ohio- Bounded on the South by the services for the Champaign, Detroit, Indiana State line from the southern southern Montgomery County line; the Eastern Iowa, Enid, Keokuk, Michigan, Mercer County line to the northern southern Mills County line west to Midsouth, and Omaha official agencies. Williams County line; in Michigan, by Interstate 29; Interstate 29 north to U.S. Substantive comments citing reasons the southern Michigan State line west to Route 34; U.S. Route 34 west to the and pertinent data for support or the Branch County line; the western Missouri River; the Missouri River north objection to the designation of the Branch County line north to the to the Sarpy County line (in Nebraska); applicants will be considered in the Kalamazoo County line; the southern the southern Sarpy County line; the designation process. All comments must Kalamazoo and Van Buren County lines southern Saunders County line west to be submitted to the Compliance west to the Michigan State line; the U.S. Route 77; and Division at the above address. western Michigan State line north to the Bounded on the West by U.S. Route Applications, comments, and other northern Michigan State line. 77 north to the Platte River; the Platte available information will be considered Michigan’s assigned geographic area River southeast to the Douglas County in determining which applicant will be does not include the following grain line; the northern Douglas County line designated.

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Authority: Pub. L. 94–582, 90 Stat. 2867, DEPARTMENT OF COMMERCE Economic Development Administration as amended (7 U.S.C. 71 et seq.). (EDA) has received petitions for Economic Development Administration David R. Shipman, certification of eligibility to apply for Trade Adjustment Assistance from the Acting Administrator, Grain Inspection, Notice of Petitions by Firms for firms listed below. EDA has initiated Packers and Stockyards Administration. Determination of Eligibility To Apply separate investigations to determine [FR Doc. E6–14817 Filed 9–6–06; 8:45 am] for Trade Adjustment Assistance whether increased imports into the BILLING CODE 3410–KD–P AGENCY: Economic Development United States of articles like or directly Administration, Department of competitive with those produced by Commerce. each firm contributed importantly to the ACTION: Notice and opportunity for total or partial separation of the firm’s public comment. workers, or threat thereof, and to a Pursuant to Section 251 of the Trade decrease in sales or production of each Act of 1974 (19 U.S.C. 2341 et seq.), the petitioning firm.

LIST OF PETITIONS RECEIVED BY EDA FOR CERTIFICATION OF ELIGIBILITY TO APPLY FOR TRADE ADJUSTMENT ASSISTANCE FOR THE PERIOD JULY 27, 2006 THROUGH AUGUST 30, 2006

Date Firm Address petition Product accepted

GasTech Engineering, Inc ...... 1007 E. Admiral Boulevard, Tulsa, OK 7/27/06 Oil and gas production equipment. 74145. Norgren, Inc ...... 5400 South Delaware Street, Littleton, 8/4/06 Motion and fluid control equipment. CO 80120. Mega Manufacturing, Inc ...... 401 S. Washington Street, Hutchinson, 8/4/06 Metal shearing and fabrication machinery. KS 67501. COBE Cardiovascular, Inc ...... 14401 W 65th Way, Arvada, CO 80004 .. 8/4/06 Electrosurgical products used in open heart surgery. El Encanto, Inc. dba Bueno Foods (JV) ... 2001 4th Street SW., Albuquerque, NM 8/7/06 Vegetable products, spices, tortillas. 87102. Valley Oak Cabinets, Inc...... 7050 97th Plaza Circle, Omaha, NE 8/14/06 Wood kitchen cabinets and wood doors. 68122. Bra-Vor Tool and Die Company, Inc ...... 11189 Murray Road, Meadville, PA ...... 8/23/06 Stamped metal parts. Alumina Ceramic Components, Inc ...... 4532 Route 982, Latrobe, PA 15650 ...... 8/23/06 Industrial ceramic components. Capps Shoe Company, Inc...... 3715 Mayflower Drive, Lynchburg, VA 8/23/06 Men’s and women’s shoes. 24501. Metal Edge International, Inc ...... 337 West Walnut Street, North Wales, 8/23/06 Specialty packaging products. PA 19454. National Graphics, Inc ...... 2711 Miami Street, St. Louis, MO 63118 8/29/06 Coated inkjet media. Discovery Plastics, LLC...... 3607 28th Avenue, NE., Miami, OK 8/29/06 Automotive plastic injection molding 74354. parts. George Gordon Associates, Inc ...... 12 Continental Boulevard, Merrimack, NH 8/29/06 Packing and wrapping machinery. 03054.

Any party having a substantial Dated: August 30, 2006. conduct a new shipper review of the interest in these proceedings may Barry Bird, antidumping duty order on honey from request a public hearing on the matter. Chief Counsel. the People=s Republic of China (‘‘PRC’’) A written request for a hearing must be [FR Doc. E6–14815 Filed 9–6–06; 8:45 am] from Shanghai Bloom International submitted to the Office of Chief BILLING CODE 3510–24–P Trading Co., Ltd. (‘‘Shanghai Bloom’’). Counsel, Room 7005, Economic We have determined that this request Development Administration, U.S. meets the statutory and regulatory Department of Commerce, Washington, DEPARTMENT OF COMMERCE requirements for the initiation of a new DC 20230, no later than ten (10) shipper review. International Trade Administration calendar days following publication of FOR FURTHER INFORMATION CONTACT: this notice. Please follow the procedures [A–570–863] Carrie Blozy or Anya Naschak, AD/CVD set forth in Section 315.9 of EDA’s Operations, Office 9, Import interim final rule (70 FR 47002) for Honey from the People’s Republic of Administration, International Trade procedures for requesting a public China: Initiation of New Shipper Administration, U.S. Department of hearing. The Catalog of Federal Antidumping Duty Review Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; Domestic Assistance official program AGENCY: Import Administration, telephone: (202) 482–5403 or (202) 482– number and title of the program under International Trade Administration, 6375, respectively. which these petitions are submitted is Department of Commerce. SUPPLEMENTARY INFORMATION: 11.313, Trade Adjustment Assistance. EFFECTIVE DATE: September 7, 2006. SUMMARY: On June 21, 2006, the Background Department of Commerce (‘‘the The Department received a timely Department’’) received a request to request from Shanghai Bloom in

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accordance with section 751(a)(2)(B) of during the POR, and that under (see http://www.cfsan.fda.gov/dms/ the Tariff Act of 1930, as amended (‘‘the ‘‘appropriate’’ circumstances the fsbtac12.html), and requesting that Act’’) and 19 CFR 351.214(c), for a new Department has the flexibility to extend Shanghai Bloom submit a copy of the shipper review of the antidumping duty the POR. Antidumping Duties; completed online FDA Registration that order on honey from the PRC, which has Countervailing Duties; Final Rule, 62 FR generated the FDA Registration number a December annual anniversary month, 27296, 27319–27320 (May 19, 1997). In appearing on Shanghai Bloom’s and a June semi–annual anniversary this instance, Shanghai Bloom’s Producer Certifications.3 On August 11, month. Shanghai Bloom identified itself shipment entered in the month 2006, Shanghai Bloom submitted the as the exporter of honey produced by following the end of the POR. The FDA Registration information, which Linxiang Jindeya Bee–Keeping Co., Ltd. Department does not find that this delay listed Shanghai Bloom as the foreign (‘‘Jindeya’’). As required by 19 CFR prevents the completion of the review facility, and contained the same FDA 351.214(b)(2)(ii) and (b)(2)(ii)(A), within the time limits set by the Registration number appearing on the Shanghai Bloom certified that it did not Department’s regulations. Producer Certification. export honey to the United States On June 22, 2006, we requested from On August 17, 2006, the Department during the period of investigation CBP the entry package for Shanghai requested that Shanghai Bloom explain (‘‘POI’’), and that it has never been Bloom, and we received the entry the discrepancy between the Producer affiliated with any exporter or producer documentation from CBP. However, we Certification that lists Jindeya as the which exported honey to the United found certain discrepancies between the producer, and the FDA Registration States during the POI. Jindeya also documentation provided by Shanghai number that was issued to Shanghai certified that it did not export honey to Bloom in its request for a new shipper Bloom.4 On August 21, 2006, Shanghai the United States during the POI, and review and the entry package we Bloom submitted a revised Producer that it has never been affiliated with any received from CBP.1 On July 20, 2006, Certification, which listed Jindeya’s exporter or producer which exported pursuant to 19 CFR 351.302(b), the recently acquired FDA Registration honey to the United States during the Department extended the time limit to number, and explained that, due to a POI. Furthermore, the two companies initiate this new shipper review until misunderstanding of the requirements have also certified that their activities August 31, 2006, in order to provide of the form, Shanghai Bloom are not controlled by the government of Shanghai Bloom an opportunity to inadvertently put its own name and the PRC, satisfying the requirements of explain or resolve the inconsistencies in FDA Registration number on the 19 CFR 351.214(b)(2)(iii)(B). Pursuant to the entry documentation.2 On August 7, Producer Certificate, but that Jindeya 19 CFR 351.214(b)(2)(iv), Shanghai 2006, we received documentation from was the actual producer of the Bloom submitted documentation Shanghai Bloom, including invoice and merchandise exported to the United establishing the date on which the shipment documentation, to States during the POR. subject merchandise was first entered demonstrate that Jindeya was the Based on the information submitted for consumption in the United States, producer of the subject merchandise, by Shanghai Bloom on August 7, 2006, the volume of that first shipment and and a revised Producer Certificate, August 11, 2006, and August 21, 2006, any subsequent shipments, and the date which contains a Food and Drug we find that Shanghai Bloom has of the first sale to an unaffiliated Administration (‘‘FDA’’) registration sufficiently demonstrated for purposes customer in the United States. number and lists Jindeya as the of initiation that Jindeya was the The Department conducted Customs producer. Shanghai Bloom explained producer of the honey it exported to the database queries and analyzed Customs that listing Shanghai Bloom on the United States. In the course of this new entry packages to confirm that the Producer Certificate was an inadvertent shipper review, we will further examine shipment of Shanghai Bloom had error. this issue. officially entered the United States via On August 9, 2006, the Department assignment of an entry date in the issued a letter to Shanghai Bloom, Initiation of Review Customs database by U.S. Customs and noting that section 801(m) of the Federal In accordance with section Border Protection (‘‘CBP’’). In addition, Food, Drug and Cosmetic Act (21 U.S.C. 751(a)(2)(B) of the Act, and 19 CFR the Department confirmed the existence § 381(m)), amended by section 307 of 351.214(d)(1), and based on information of Shanghai Bloom and its U.S. the Public Health Security and on the record, we are initiating a new customer. We note that although Bioterrorism Preparedness and shipper review for Shanghai Bloom. See Shanghai Bloom submitted Response Act of 2002, requires prior Memorandum to the File through James documentation regarding the volume of notification and the use of an FDA C. Doyle, New Shipper Initiation its shipment, and the date of its first sale registration number, which should be Checklist, dated August 25, 2006. The to an unaffiliated customer in the assigned to ‘‘the owner, operator, or Department will conduct this new United States, CBP entry documents and agent in charge of a domestic or foreign shipper review according to the our Customs database query show that facility that manufactures/processes, deadlines set forth in section Shanghai Bloom’s shipment entered the packs, or holds food for human or 751(a)(2)(B)(iv) of the Act. United States shortly after the animal consumption in the U.S., or an Pursuant to 19 CFR anniversary month. individual authorized by one of them, 351.214(g)(1)(i)(B), the POR for a new Under 19 CFR 351.214(f)(2)(ii), when must register that facility with FDA’’ the sale of the subject merchandise 3‘‘See Letter to Shanghai Bloom from Carrie occurs within the period of review 1 See Memorandum to the File from Anya Blozy: Request for Clarification on Shanghai Bloom (‘‘POR’’), but the entry occurs after the Naschak, Senior Case Analyst, through Carrie International Trading Co., Ltd.’s Request for Blozy, Program Manager, Re: Honey from the Initiation of a New Shipper Review of Honey from normal POR, the POR may be extended People’s Republic of China: Entry Packages from the People’s Republic of China (‘‘PRC’’), dated unless it would be likely to prevent the U.S. Customs and Border Protection (‘‘CBP’’), dated August 9, 2006. completion of the review within the July 20, 2006 (‘‘CBP Memo’’). 4 See Letter to Shanghai Bloom from Carrie Blozy: time limits set by the Department’s 2 See Letter to Shanghai Bloom from Carrie Blozy: Request for Clarification on Shanghai Bloom regulations. The preamble to the Extension of Initiation Date of New Shipper Review International Trading Co., Ltd.’s Request for of Honey from the People’s Republic of China Initiation of a New Shipper Review of Honey from Department’s regulations states that (‘‘PRC’’), dated July 20, 2006 (‘‘Initiation Extension the People’s Republic of China (‘‘PRC’’), dated both the entry and the sale should occur Letter’’). August 17, 2006.

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shipper review, initiated in the month Dated: August 30, 2006. Background immediately following the semi–annual Stephen J. Claeys, On August 1, 2005 the Department anniversary month, will be the six- Deputy Assistant Secretary for Import published a notice of opportunity to month period immediately preceding Administration. request an administrative review of the the semi–annual anniversary month. As [FR Doc. E6–14846 Filed 9–6–06; 8:45 am] antidumping duty order on structural discussed above, under 19 CFR BILLING CODE 3510–DS–S steel beams from Korea. See 351.214(f)(2)(ii), when the sale of the Antidumping or Countervailing Duty subject merchandise occurs within the Order, Finding, or Suspended POR, but the entry occurs after the DEPARTMENT OF COMMERCE Investigation; Opportunity to Request normal POR, the POR may be extended. Administrative Review, 70 FR 44085 International Trade Administration Therefore, the POR for the new shipper (August 1, 2005). On August 31, 2005 review of Shanghai Bloom is December petitioners requested that the 1, 2005, through June 30, 2006. [A–580–841] Department conduct an administrative Pursuant to the Department’s review of DSM, a Korean producer of Structural Steel Beams from Korea: regulations, in cases involving non– subject merchandise. Also, on August Preliminary Results of Antidumping market economies, the Department 31, 2005, DSM and INI requested that Duty Administrative Review requires that a company seeking to the Department conduct an establish eligibility for an antidumping AGENCY: Import Administration, administrative review of their sales of duty rate separate from the country– International Trade Administration, subject merchandise during the POR. wide rate provide evidence of de jure U.S. Department of Commerce. On September 28, 2005 the Department and de facto absence of government published a notice of initiation of a SUMMARY: In response to a request from control over the company’s export review of structural steel beams from the Committee for Fair Beam Imports, activities. Accordingly, we will issue a Korea covering the period August 1, Nucor Corp., Nucor–Yamato Steel Co., questionnaire to Shanghai Bloom, 2004 through July 31, 2005. See Steel Dynamics, Inc. and TXI–Chaparral including a separate rates section. The Initiation of Antidumping and Steel Co., (collectively, petitioners), INI review will proceed if the responses Countervailing Duty Administrative Steel Company (INI), and Dongkuk Steel provide sufficient indication that Reviews and Request for Revocation in Mill Co., Ltd. (DSM), the Department of Shanghai Bloom is not subject to either Part, 70 FR 56631 (September 28, 2005). Commerce (the Department) is de jure or de facto government control On October 3, 2005 the Department conducting an administrative review of with respect to its exports of honey. issued its antidumping duty the antidumping duty order on However, if Shanghai Bloom does not questionnaires to INI and to DSM. structural steel beams from the Republic demonstrate its eligibility for a separate Because we disregarded sales of of Korea (Korea). This review covers INI rate, then the company will be deemed certain products made by INI at prices and DSM, manufacturers and exporters not separate from other companies that below the cost of production (COP) in of the subject merchandise. The period exported during the POI and the new what was, at that time, the most recently of review (POR) is August 1, 2004 shipper review will be rescinded as to completed review of structural steel through July 31, 2005. Shanghai Bloom. beams from Korea (see Structural Steel We preliminarily determine that INI On August 17, 2006, the Pension Beams from Korea; Notice of Final has sold subject merchandise at less Results of Antidumping Duty Protection Act of 2006 (H.R. 4) was than normal value (NV) during the POR. signed into law. Section 1632 of H.R. 4 Administrative Review, 70 FR 6837 We also preliminarily determine that (February 9, 2005)), we had reasonable temporarily suspends the authority of DSM has not sold subject merchandise the Department to instruct CBP to grounds to believe or suspect INI made at less than NV. If these preliminary sales of the foreign like product at prices collect a bond or other security in lieu results are adopted in our final results of a cash deposit in new shipper below the COP, as provided by section of administrative review, we will 773(b)(2)(A)(ii) of the Tariff Act of 1930, reviews. Therefore, the posting of a instruct U.S. Customs and Border bond under Section 751(a)(2)(B)(iii) of as amended (the Tariff Act). Therefore, Protection (CBP) to assess antidumping pursuant to section 773(b)(1) of the the Act in lieu of a cash deposit is not duties on all appropriate entries. available in this case. Importers of Tariff Act, from the outset of this review We invite interested parties to subject merchandise exported by we required INI to respond to section D comment on these preliminary results. Shanghai Bloom and manufactured by of the questionnaire. On November 4, Parties who submit arguments in this Jindeya must continue to post a cash 2005, the Department granted approval segment of the proceeding are requested deposit of estimated antidumping duties of INI’s October 12, 2005 request to shift to submit with the argument: (1) A on each entry of subject merchandise at its cost reporting period for section D. statement of the issue, (2) a brief the current PRC–wide rate of 212.39 The Department had not disregarded summary of the argument and (3) a table percent. sales of structural steel beams made by of authorities. DSM at prices below the COP in the Interested parties that need access to EFFECTIVE DATE: September 7, 2006. most recently completed review of proprietary information in this new DSM; therefore, DSM was not initially shipper review should submit FOR FURTHER INFORMATION CONTACT: required to respond to section D of the applications for disclosure under Maryanne Burke or Steve Bezirganian, questionnaire. However, on December administrative protective orders in AD/CVD Operations, Office 7, Import 19, 2005 petitioners alleged that DSM accordance with 19 CFR 351.305 and Administration, International Trade sold the foreign like product at prices 351.306. Administration, U.S. Department of below its COP. On January 9, 2006, the This initiation notice is issued and Commerce, 14th Street and Constitution Department initiated a cost investigation published in accordance with section Avenue, NW, Room 7866, Washington, of DSM based upon the determination 751(a) of the Act and sections DC 20230; telephone (202) 482–5604 or that petitioners’ allegation established 351.214(d) and 351.221(c)(1)(i) of the (202) 482–1131 respectively. reasonable grounds to believe or suspect Department’s regulations. SUPPLEMENTARY INFORMATION: sales below cost, and instructed DSM to

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respond to section D of the the ‘‘Scope of the Order’’ section of this purposes of this administrative review, questionnaire. notice, supra, which were sold in the INI has classified all of its U.S. sales as From November 2005 through June home market during the reporting EP sales. DSM has classified all of its 2006, INI and DSM submitted timely period for home market sales, to be the U.S. sales as CEP sales. responses to the initial questionnaire foreign like product for the purpose of INI and to the Department’s subsequent determining appropriate product supplemental questionnaires. Because it comparisons to structural steel beams For INI we calculated the price of U.S. was not practicable to complete this products sold in the United States. In sales made prior to importation to review within the normal time frame, on making product comparisons, we unaffiliated purchasers in the United April 17, 2006, we published in the matched products based on the physical States. We made deductions from the Federal Register our notice of the characteristics identified in our reported gross unit price for movement extension of time limits for this review. questionnaire and reported by DSM and expenses in accordance with section Structural Steel Beams from the INI as follows (listed in order of 772(c)(2)(A) of the Tariff Act; these Republic of Korea; Extension of Time preference): hot–formed or cold–formed, included, where appropriate, foreign Limit for Preliminary Results of shape/size (section depth), strength/ inland freight from plant to warehouse, Antidumping Duty Administrative grade and whether or not coated. Where foreign inland freight from plant/ Review, 71 FR 19714 (April 17, 2006). there were no sales of identical warehouse to port of exportation, This extension established the deadline merchandise in the home market to foreign warehousing, international for these preliminary results as August compare to U.S. sales, we compared freight, U.S. duties, and U.S. brokerage 31, 2006. U.S. sales to the next most similar expenses. We made an addition to U.S. foreign like product on the basis of the price for duty drawback pursuant to Period of Review characteristics and reporting section 772(c)(1)(B) of the Tariff Act. The POR is from August 1, 2004 to instructions listed in the questionnaire, See Administrative Review of the July 31, 2005. or to constructed value (CV), as Antidumping Duty Order on Structural appropriate. Steel Beams from Korea: Preliminary Scope of the Order Results for INI Steel Company (INI The products covered by this order Normal Value Comparisons Preliminary Analysis Memorandum) are doubly–symmetric shapes, whether To determine whether sales of from Steve Bezirganian to the File, hot- or cold–rolled, drawn, extruded, structural steel beams from Korea to the dated August 31, 2006. formed or finished, having at least one United States were made at less than DSM dimension of at least 80 mm (3.2 inches NV, we compared the export price (EP) or more), whether of carbon or alloy or the constructed export price (CEP) to For DSM we calculated CEP based on (other than stainless) steel, and whether NV, as described in the ‘‘Export Price,’’ the prices from DSM’s U.S. affiliate, or not drilled, punched, notched, ‘‘Constructed Export Price,’’ and Dongkuk International, Inc. (DKA) to painted, coated or clad. These products ‘‘Normal Value’’ sections of this notice, unaffiliated purchasers in the United include, but are not limited to, wide– below. In accordance with section States. We made deductions for flange beams (‘‘W’’ shapes), bearing 777A(d)(2) of the Tariff Act, we movement expenses in accordance with piles (‘‘HP’’ shapes), standard beams compared the EPs and CEPs of section 772(c)(2)(A) of the Tariff Act; (‘‘S’’ or ‘‘I’’ shapes) and ‘‘M’’ shapes. All individual U.S. transactions to the these included, where appropriate, products that meet the physical and monthly weighted–average NVs of the foreign inland freight from the plant to metallurgical descriptions provided foreign like product where there were the port of export, foreign brokerage and above are within the scope of this order sales at prices above the COP, as handling international freight, marine unless otherwise excluded. The discussed in the ‘‘Cost of Production’’ insurance, other U.S. transportation following products are outside and/or section below. expenses (i.e., U.S. brokerage and specifically excluded from the scope of handling charges), and U.S. customs Export Price and Constructed Export duty. Additionally, we made deductions this order: structural steel beams greater Price than 400 pounds per linear foot or with for expenses that bear a direct a web or section height (also known as Section 772(a) of the Tariff Act relationship to the sale in the United depth) over 40 inches. defines EP as ‘‘the price at which the States (i.e., credit, and other direct The merchandise subject to this subject merchandise is first sold (or selling expenses) pursuant to section review is currently classifiable in the agreed to be sold) before the date of 772(d)(1)(B). We added an amount for Harmonized Tariff Schedule of the importation by the producer or exporter duty drawback pursuant to section United States (HTSUS) at subheadings: of the subject merchandise outside of 772(c)(1)(B) of the Tariff Act. 7216.32.00000, 7216.33.0030, the United States to an unaffiliated For CEP sales we also made an 7216.33.0060, 7216.33.0090, purchaser in the United States or to an adjustment for profit in accordance with 7216.50.0000, 7216.61.0000, unaffiliated purchaser for exportation to section 772 (d)(3) of the Tariff Act. We 7216.69.0000, 7216.99.0010, the United States as adjusted under deducted the profit allocated to 7216.99.0090, 7228.70.3010, subsection (c).’’ Section 772(b) of the expenses deducted under sections 7228.70.3041 and 7228.70.6000. Tariff Act defines CEP as ‘‘the price at 772(d)(1) and 772(d)(2) of the Tariff Act Although the HTSUS subheadings are which the subject merchandise is first in accordance with sections 772(d)(3) provided for convenience and customs sold (or agreed to be sold) in the United and 772(f) of the Tariff Act. In purposes, the written description of the States before or after the date of accordance with section 772(f) of the merchandise is dispositive. importation by or for the account of the Tariff Act, we computed profit based on producer or exporter of such total revenue realized on sales in both Product Comparisons merchandise or by a seller affiliated the U.S. and home markets, less all In accordance with section 771(16) of with the producer or exporter, to a expenses associated with those sales. the Tariff Act, we considered all purchaser not affiliated with the We then allocated profit expenses structural steel beams produced by DSM producer or exporter as adjusted under incurred with respect to U.S. economic and INI covered by the description in subsections (c) and (d).’’ For the activity, based on the ratio of total U.S.

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expenses to total expenses for both the functions and activities of the seller Review of the Antidumping Duty Order U.S. and home markets. should be similar. Conversely, if a party on Structural Steel Beams from Korea: reports LOTs that are different among Preliminary Results for Dongkuk Steel Level of Trade categories of sales, the functions and Mill Company, Ltd. (DSM Preliminary In accordance with section activities should be dissimilar. See Analysis Memorandum) from Maryanne 773(a)(1)(B)(i) of the Tariff Act, to the Porcelain–on-Steel Cookware from Burke to the File, dated August 31, extent practicable, we determine NV Mexico; Final Results of Administrative 2006. Therefore, we found no basis for based on sales in the comparison market Review, 65 FR 30068 (May 10, 2000), accepting a distinct, less advanced LOT at the same level of trade (LOT) as the and accompanying Issues and Decisions for U.S. sales than for home market sales CEP transaction. The NV LOT is that of Memorandum at Comment 6. and conclude no LOT adjustment or the starting–price sales in the In implementing these principles in CEP offset is warranted. comparison market or, when NV is this administrative review, we obtained based on CV, that of the sales from information from INI and DSM about Normal Value which we derive selling, general and the marketing stages involved in its A. Selection of Comparison Market administrative (SG&A) expenses and reported U.S. and home market sales, profit. For EP sales, the LOT is also the including descriptions of the selling To determine whether there is a level of the starting price sale, which is activities performed for each channel of sufficient volume of sales in the home usually from the exporter to the distribution. market to serve as a viable basis for importer. For CEP sales, the LOT is the calculating NV (i.e., the aggregate level of the constructed sale from the INI volume of home market sales of the exporter to the importer. INI indicated its home market sales foreign like product is greater than five To determine whether NV sales are at were made through two channels (sales percent of the aggregate volume of U.S. a different LOT than EP or CEP sales, we to unaffiliated distributors, and sales to sales), we compared the respondents’ examine stages in the marketing process affiliated and unaffiliated end–users) volume of home market sales of the and selling functions along the chain of and its U.S. sales were through one foreign like product to the volume of distribution between the producer and channel (to unaffiliated U.S. customers). U.S. sales of the subject merchandise, in the customer. If the comparison market INI did not claim any distinct LOTs, and accordance with section 773(a)(1)(B) of sales are at a different LOT and that its descriptions of selling functions the Tariff Act. Because both difference affects price comparability (as indicated very little variation across respondents’ aggregate volume of home manifested in a pattern of consistent channels and markets. Based upon the market sales of the foreign like product price differences between the sales on information on record, we have was greater than five percent of their which NV is based and comparison– determined that there is only one LOT aggregate volume of U.S. sales for the market sales at the LOT of the export in both markets for INI. See INI subject merchandise, we determined the transaction), we make an LOT Preliminary Analysis Memorandum. home market was viable for both INI adjustment under section 773(a)(7)(A) of and DSM. See INI’s June 30, 2006 DSM the Tariff Act. Finally, for CEP sales, if supplemental questionnaire response at the NV level is more remote from the DSM claimed one LOT in the home Exhibit A–48 and DSM’s December 2, factory than the CEP level and there is market. DSM reported it sold through 2005 section B response at Exhibit SA– no basis for determining whether the one channel of distribution whereby 1. differences in the levels between NV merchandise was sold directly from its B. Affiliated Party Transactions and and CEP sales affect price factories to unaffiliated customers Arm’s–Length Test comparability, we adjust NV under (distributors and end–users). See DSM’s section 773(a)(7)(B) of the Tariff Act (the November 7, 2005 section A response at The Department may calculate NV CEP offset provision). See, e.g., Final 15. DSM also claimed only one LOT in based on a sale to an affiliated party Determination of Sales at Less Than the U.S. market, reporting it sold only if it is satisfied that the price to the Fair Value: Greenhouse Tomatoes From through one channel of distribution in affiliated party is comparable to the Canada, 67 FR 8781 (February 26, the United States. DSM’s sales were prices at which sales are made to parties 2002), and accompanying Issues and made directly from its production not affiliated with the respondent, (i.e., Decisions Memorandum at Comment 8; facilities in Korea to its U.S. affiliate, sales at arm’s–length). See 19 CFR see also Certain Hot–Rolled Flat–Rolled DKA, which resold the merchandise to 351.403(c). Sales to affiliated customers Carbon Quality Steel Products from the unaffiliated U.S. customer in the home market not made at arm’s– Brazil; Preliminary Results of (classified as an end–user). See DSM’s length prices are excluded from our Antidumping Duty Administrative November 7, 2005 section A response at analysis because we consider them to be Review, 70 FR 17406, 17410 (April 6, 15. outside the ordinary course of trade. See 2005), unchanged in Notice of Final DSM maintains the constructed LOT 19 CFR 351.102(b). Results of Antidumping Duty from DSM to DKA is much less INI reported it had made home market Administrative Review: Certain Hot– advanced than the actual LOT of home sales to affiliated end–users. To test Rolled Flat–Rolled Carbon Quality Steel market sales, claiming DSM performs a whether INI’s sales to affiliates were Products from Brazil, 70 FR 58683 limited range of selling activities on made at arm’s–length prices, we (October 7, 2005). sales to the United States. See DSM’s compared on a model–specific basis the In identifying LOTs for CEP, we November 7, 2005 section A response at starting prices of sales to affiliated and considered only the selling activities 19 and DSM’s January 20, 2006 unaffiliated customers net of all direct reflected in the price after the deduction supplemental questionnaire response at selling expenses, discounts and rebates, of expenses and profit under section Appendix SA–16. However, from our movement charges, and packing. Where 772(d) of the Tariff Act. See Micron analysis of the information on record, applicable, we also made adjustments to Tech., Inc. v. United States, 243 F.3d we have determined that most selling gross unit price for reported billing 1301, 1314–1315 (Fed. Cir. 2001). functions were performed at an equal adjustments. Where prices to the Generally, if the reported LOTs are the level of intensity in both the home and affiliated party were, on average, within same in the home and U.S. markets, the U.S. markets. See Administrative a range of 98 to 102 percent of the price

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of identical or comparable merchandise of a given model were at prices less than Act, we based SG&A expenses and to the unaffiliated parties, we COP, we disregarded the below–cost profit on the amounts incurred and determined the sales made to the sales because: (1) they were made realized by the respondent in affiliated party were at arm’s length. In within an extended period of time in connection with the production and sale accordance with the Department’s ‘‘substantial quantities,’’ in accordance of the foreign like product in the practice, we disregarded sales to with sections 773(b)(2)(B) and (C) of the ordinary course of trade, for affiliated parties that we determined Tariff Act, and (2) based on our consumption in the foreign country. For were not made at arm’s length. See comparison of prices to the weighted– selling expenses, we used the weighted– Antidumping Proceedings: Affiliated average COPs for the POR, they were at average home market direct and indirect Party Sales in the Ordinary Course of prices which would not permit the selling expenses. For these preliminary Trade, 67 FR 69186, 69194 (November recovery of all costs within a reasonable results the Department did not use CV 15, 2002). We found that an INI period of time, in accordance with in its margin calculation analysis for affiliated home market customer failed section 773(b)(2)(D) of the Tariff Act. either INI or DSM. the arm’s–length test and, in accordance To determine whether INI made sales with the Department’s practice, we at prices below COP, we compared the E. Price–to-Price Comparisons excluded sales to this affiliate from our product–specific COP figures to home We calculated NV based on prices to analysis. DSM reported no sales to market prices net of reported billing unaffiliated customers and prices to affiliated parties in the home market. adjustments, discounts and rebates, and affiliated customers we determined to applicable movement expenses of the C. Cost of Production Analysis be at arm’s length for home market sale foreign like product as required under observations that passed the cost test, In accordance with section 773(b)(3) section 773(b) of the Tariff Act. Our cost and made adjustments, where of the Tariff Act, we calculated the test for INI revealed that for home appropriate, for physical differences in weighted–average COP for each model market sales of certain models, less than the merchandise in accordance with based on the sum of material and 20 percent of the sales volume (by section 773(a)(6)(C)(ii) of the Tariff Act. fabrication costs for the foreign like weight) of those models were at prices For INI we made adjustments to gross product, plus amounts for selling below COP. Therefore, we retained all unit price, where applicable, for billing expenses, general and administrative such sales observations in our analysis adjustments, discounts and rebates and (G&A) expenses, interest expenses and and used them in the calculation of NV. made deductions, where applicable, for packing costs. The Department relied on Our cost test also indicated that for foreign inland freight (i.e., inland freight the COP data reported by INI and DSM; other models of subject merchandise from plant to distribution warehouse), however, we made adjustments to INI’s produced by INI, 20 percent or more of warehousing expenses and inland G&A and financial expense ratio the home market sales volume (by freight from plant/distribution (INTEX). See the Department’s Cost of weight) were sold at prices below COP warehouse to customer, pursuant to Production and Constructed Value within an extended period of time and section 773(a)(6)(B) of the Tariff Act. In Calculation Adjustments for the were at prices which would not permit accordance with sections 773(a)(6)(A) Preliminary Results - INI Steel Company the recovery of all costs within a and (B) of the Tariff Act, we deducted from Frederick W. Mines to Neal M. reasonable period of time. Therefore, in home market packing costs and added Halper (INI Cost Calculation accordance with section 773(b)(1) of the U.S. packing expenses. In addition, we Memorandum), dated August 31, 2006. Tariff Act, for INI we excluded these made adjustments for differences in cost For DSM, we made an adjustment to its below–cost sales from our analysis and attributable to differences in physical reported INTEX ratio. See the used the remaining above–cost sales in characteristics of INI merchandise Department’s Cost of Production and the calculation of NV. Constructed Value Calculation To determine whether DSM made pursuant to section 773(a)(6)(C)(ii) of Adjustments for the Preliminary Results sales at prices below COP, we compared the Tariff Act and 19 CFR 351.411. We - Dongkuk Steel Mill Company, Ltd. the product–specific COP figures to also made adjustments for differences in from Trinette Boyd to Neal M. Halper home market prices net of discounts and circumstances of sale (COS), where (DSM Cost Calculation Memorandum), rebates and applicable movement applicable, for commissions, home dated August 31, 2006. In determining charges of the foreign like product as market credit expenses, warranty whether to disregard home market sales required under section 773(b) of the expenses, and U.S. imputed credit made at prices below the COP, we Tariff Act. expenses, in accordance with section examined, in accordance with sections We found DSM did not have any 773(a)(6)(C)(iii) of the Tariff Act and 19 773(b)(1)(A) and (B) of the Tariff Act, models for which 20 percent or more of CFR 351.410. whether, within an extended period of sales volume (by weight) were below For DSM, we based NV on the home time, such sales were made in cost during the POR. Therefore, we did market prices to unaffiliated purchasers. substantial quantities, and whether such not disregard any of DSM’s home We accounted for billing adjustments, sales were made at prices which market sales and included all such sales interest revenue and discounts and permitted the recovery of all costs in our calculation of NV. rebates, where appropriate. We made within a reasonable period of time. deductions for foreign inland freight, Pursuant to section 773(b)(2)(C) of the D. Constructed Value insurance, and handling. We also Tariff Act, where less than 20 percent of In accordance with section 773(e) of removed home market packing costs the respondent’s home market sales of a the Tariff Act, for both INI and DSM, we and added U.S. packing costs in given model were at prices below the calculated CV based on the sum of the accordance with sections 773(a)(6)(A) COP, we did not disregard any below– respondent’s material and fabrication and (B) of the Tariff Act. In addition, we cost sales of that model because we costs, SG&A expenses, profit, and U.S. made adjustments for differences in determined that the below–cost sales packing costs. We calculated the COP COS, where applicable, for imputed were not made within an extended component of CV as described above in credit expenses and warranty expenses period of time in ‘‘substantial the ‘‘Cost of Production Analysis’’ in accordance with section quantities.’’ Where 20 percent or more section of this notice. In accordance 773(a)(6)(C)(iii) of the Tariff Act and 19 of the respondent’s home market sales with section 773(e)(2)(A) of the Tariff CFR 351.410.

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Currency Conversion for merchandise exported by INI and DEPARTMENT OF COMMERCE We made currency conversions into DSM which is subject to this review. International Trade Administration U.S. dollars, in accordance with section The Department will issue appropriate 773A(a) of the Tariff Act, based on the assessment instructions directly to CBP [C–427–810] exchange rates in effect on the dates of within 15 days of publication of the the U.S. sales as certified by the Federal final results of this review. The Preliminary Results of Countervailing Reserve Bank. Department clarified its ‘‘automatic Duty Administrative Review: assessment’’ regulation on May 6, 2003 Corrosion–Resistant Carbon Steel Flat Preliminary Results of Review (68 FR 23954). See Antidumping and Products from France As a result of our review, we Countervailing Duty Proceedings: preliminarily determine the weighted– Assessment of Antidumping Duties, 68 AGENCY: Import Administration, average dumping margins for the period FR 23954 (May 6, 2003). This International Trade Administration, August 1, 2004 through July 31, 2005 to clarification will apply to entries of Department of Commerce. be as follows: subject merchandise during the POR SUMMARY: The Department of Commerce produced by INI and DSM for which (‘‘the Department’’) is conducting an Manufacturer / Exporter Margin they did not know their merchandise administrative review of the would be exported by another company countervailing duty (‘‘CVD’’) order on INI Steel Company ...... 1.91% to the United States. In such instances, corrosion–resistant carbon steel flat Dongkuk Steel Mill Co., Ltd...... 0.00% we will instruct CBP to liquidate products (‘‘CORE’’) from France for the period January 1, 2004, through The Department will disclose unreviewed entries at the All–Others rate if there is no rate for the December 31, 2004. We preliminarily calculations performed within five days find that the net subsidy rate for the of the date of publication of this notice intermediate company(ies) involved in the transaction. company under review is de minimis. in accordance with 19 CFR 351.224(b). See the ‘‘Preliminary Results of Review’’ An interested party may request a Revocation of the Order - Cash Deposits section of this notice, infra. Interested hearing within thirty days of Not Required parties are invited to comment on these publication of these preliminary results. On March 15, 2006, the United States preliminary results. (See the ‘‘Public See 19 CFR 351.310(c). Any hearing, if International Trade Commission (ITC) Comment’’ section, infra). requested, will be held 37 days after the determined that the revocation of the EFFECTIVE DATE: date of publication, or the first business September 7, 2006. antidumping duty orders on structural day thereafter, unless the Department FOR FURTHER INFORMATION CONTACT: steel beams from Korea would not likely alters the date per 19 CFR 351.310(d). Kristen Johnson, AD/CVD Operations, lead to continuation or recurrence of Interested parties may submit case briefs Office 3, Import Administration, material injury to an industry in the or written comments no later than 30 International Trade Administration, United States within a reasonably th days after the date of publication of U.S. Department of Commerce, 14 foreseeable time. Consequently, the these preliminary results of review. Street and Constitution Avenue, NW, Department has revoked this order, Rebuttals to written comments, limited Washington, DC 20230; telephone: (202) effective August 18, 2005. See to issues raised in the case briefs and 482–4793. Revocation of Antidumping and comments, may be filed no later than 35 SUPPLEMENTARY INFORMATION: Countervailing Duty Orders: Structural days after the date of publication of this Steel Beams from Japan and South Background notice. Parties who submit arguments in Korea, 71 FR 15375 (March 28, 2006). these proceedings are requested to On August 17, 1993, the Department Therefore, there will be no need to issue submit with the argument: (1) A published in the Federal Register the new cash deposit instructions for this statement of the issue, (2) a brief CVD order on CORE from France. See administrative review. summary of the argument, and (3) a Countervailing Duty Order and table of authorities. Further, we would Notification to Importers Amendment to Final Affirmative Countervailing Duty Determination: appreciate it if parties submitting case This notice also serves as a Certain Steel Products from France, 58 briefs, rebuttal briefs, and written preliminary reminder to importers of FR 43759 (August 17, 1993). On August comments provided the Department their responsibility under 19 CFR 1, 2005, the Department published a with an additional copy of the public 351.402(f) to file a certificate regarding notice of opportunity to request an version of any such argument on the reimbursement of antidumping administrative review of this CVD order. diskette. The Department will issue duties prior to liquidation of the See Antidumping or Countervailing final results of this administrative relevant entries during this review Duty Order, Finding, or Suspended review, including the results of our period. Failure to comply with this Investigation; Opportunity to Request analysis of the issues in any such case requirement could result in the Administrative Review, 70 FR 44085 briefs, rebuttal briefs, and written Secretary’s presumption that (August 1, 2005). On August 31, 2005, comments or at a hearing, within 120 reimbursement of antidumping duties we received a timely request for review days of publication of these preliminary occurred and the subsequent assessment from Duferco Coating S.A. and Sorral results. of double antidumping duties. S.A. (collectively, ‘‘Duferco Sorral’’), a Assessment We are issuing and publishing this notice in accordance with sections French producer and exporter of subject Upon completion of this review the 751(a)(1) and 777(i)(1) of the Tariff Act. merchandise, and from the United Department will determine, and CBP States Steel Corporation (‘‘the will assess, antidumping duties on all Dated: August 31, 2006. petitioner’’). appropriate entries. In accordance with David M. Spooner, On September 28, 2005, the 19 CFR 351.212(b)(1) we have Assistant Secretary for Import Department initiated an administrative calculated importer–specific (or, where Administration. review of the CVD order on CORE from the importer was unknown, customer– [FR Doc. E6–14848 Filed 9–6–06; 8:45 am] France, covering the period January 1, specific) ad valorem assessment rates BILLING CODE 3510–DS–S 2004, through December 31, 2004. See

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Initiation of Antidumping and 7210.69.0000, 7210.70.6030, corporation that buys and sells steel Countervailing Duty Administrative 7210.70.6060, 7210.70.6090, products of the Duferco Group, Reviews and Request for Revocation in 7210.90.1000, 7210.90.6000, including Duferco Sorral. For sales of Part, 70 FR 56631 (September 28, 2005). 7210.90.9000, 7212.20.0000, CORE to the United States during the On October 4, 2005, the Department 7212.30.1030, 7212.30.1090, POR, Duferco Sorral sold the subject issued a questionnaire to Duferco Sorral, 7212.30.3000, 7212.30.5000, merchandise to Duferco S.A., which the Government of France (‘‘the GOF’’), 7212.40.1000, 7212.40.5000, then resold the products to Duferco and the European Commission (‘‘the 7212.50.0000, 7212.60.0000, Steel, Inc., an affiliated U.S. sales EC’’); we received their respective 7215.90.1000, 7215.90.3000, company. questionnaire responses on December 7, 7215.90.5000, 7217.20.1500, Duferco Belgium purchased Duferco 2005, and December 13, 2005. On April 7217.30.1530, 7217.30.1560, (formerly known as Beautor S.A. 27, June 14, June 21, July 13, July 17, 7217.90.1000, 7217.90.5030, (‘‘Beautor’’))2 and Sorral from Arcelor and August 4, 2006, we issued 7217.90.5060, 7217.90.5090. S.A. in 2003. Arcelor was created supplemental questionnaires to Duferco Included in this order are corrosion– through the merger of the French Sorral, the GOF, and the EC. We resistant flat–rolled products of non– company Usinor S.A. (‘‘Usinor’’)3 with received supplemental questionnaire rectangular cross-section where such the Luxembourg company Arbed S.A. responses from Duferco Sorral on May cross-section is achieved subsequent to and the Spanish company Aceralia 25, July 7, July 26, and August 9, 2006; the rolling process (i.e., products which Corporacion Siderurgica S.A. The from the GOF on May 25, July 7, July have been ‘‘worked after rolling’’) for merger became effective in February 26, and August 18, 2006; and from the example, products which have been 2002, upon approval of the EC. As a EC on May 22, June 27, and July 20, beveled or rounded at the edges. condition for the merger, the EC 2006. Excluded from this order are flat–rolled required the divestiture of certain On April 17, 2006, the Department steel products either plated or coated holdings, including Usinor’s cold– published in the Federal Register an with tin, lead, chromium, chromium rolling and electro–galvanizing facilities extension of the deadline for the oxides, both tin and lead (‘‘terne plate’’), in Beautor, France (i.e., Beautor) and the preliminary results. See Corrosion– or both chromium and chromium oxides hot–dipped galvanized and organic Resistant Carbon Steel Flat Products (‘‘tin–free steel’’), whether or not coating facilities in Strasbourg, France from France and the Republic of Korea: painted, varnished or coated with (i.e., Sorral).4 The purpose of the Extension of Time Limit for Preliminary plastics or other nonmetallic substances divestiture was to ensure that Usinor/ Results of Countervailing Duty in addition to the metallic coating. Also Arcelor no longer controlled the Administrative Reviews, 71 FR 19714 excluded from this order are clad facilities and could not hinder (April 17, 2006). products in straight lengths of 0.1875 competition in the steel industry. In accordance with 19 CFR inch or more in composite thickness According to the EC’s instructions, the 351.213(b), this review covers only and of a width which exceeds 150 purchaser of Beautor and Sorral was to those producers or exporters of the millimeters and measures at least twice be a viable existing or potential subject merchandise for which a review the thickness. Also excluded from this competitor, independent of the parties, was specifically requested. The only order are certain clad stainless flat– and having the incentive to maintain company subject to this review is rolled products, which are three– and develop the divested businesses as Duferco Sorral. This review covers 18 layered corrosion–resistant carbon steel active competitive forces in competition programs. flat–rolled products less than 4.75 with the seller.5 Arcelor proposed Scope of the Order millimeters in composite thickness that Duferco Belgium as a suitable purchaser This order covers cold–rolled (‘‘cold– consist of a carbon steel flat–rolled for Beautor and Sorral. In February reduced’’) carbon steel flat–rolled product clad on both sides with 2003, the EC approved the private–to- carbon steel products, of rectangular stainless steel in a 20%-60%-20% ratio. private sale between Arcelor and shape, either clad, plated, or coated These HTSUS item numbers are Duferco Belgium. with corrosion–resistant metals such as provided for convenience and customs B. Change–in-Ownership zinc, aluminum, or zinc-, aluminum-, purposes. The written descriptions nickel- or iron–based alloys, whether or remain dispositive. 2 Beautor S.A. was transformed into Duferco Coating S.A. on March 31, 2004, by the not corrugated or painted, varnished or Period of Review shareholders. This transformation was retroactive to coated with plastics or other The period for which we are October 1, 2003, the opening day of the company’s fiscal year. nonmetallic substances in addition to measuring subsidies is January 1, 2004, the metallic coating, in coils (whether or 3 Usinor, a formerly government-owned entity, through December 31, 2004. was the only company reviewed in the underlying not in successively superimposed investigation. See Final Affirmative Countervailing layers) and of a width of 0.5 inch or Background and Methodology Duty Determinations: Certain Steel Products from greater, or in straight lengths which, if Information France, 58 FR 37304 (July 9, 1993). Usinor was later of a thickness less than 4.75 millimeters, privatized between 1995 and 1997. See Issues and I. Background Decision Memorandum for the Section 129 are of a width of 0.5 inch or greater and Determination: Corrosion-Resistant Carbon Steel which measures at least 10 times the A. Company History 1 Flat Products from France; Final Results of thickness or if of a thickness of 4.75 Duferco Sorral is wholly owned by Expedited Sunset Review of Countervailing Duty millimeters or more are of a width Duferco Belgium S.A. (‘‘Duferco Order, dated October 24, 2003. which exceeds 150 millimeters and Belgium’’), a Belgian holding company 4 See ‘‘Non-Confidential Version of the Commitments to the European Commission: Case measures at least twice the thickness, as which is part of the Duferco Group, a Swiss conglomerate. Duferco Sorral is No. COMP/ECSC 1351 - Aceralia/Arbed/Usinor,’’ at currently classifiable in the Harmonized 1-2, contained within the June 27, 2006, Tariff Schedule of the United States affiliated with Duferco S.A., a Swiss Memorandum to the File concerning the Placement (‘‘HTSUS’’) under item numbers of Public Documents on the Record of the Review. 1 Duferco is located in the Picardie region, which This public document is available on the public 7210.30.0030, 7210.30.0060, is the northern part of France. Sorral is located in record in the Central Records Unit (‘‘CRU’’), located 7210.41.0000, 7210.49.0030, the Alsace region, which is on the eastern border in the main Commerce Building in room B-099. 7210.49.0090, 7210.61.0000, of France. There are 26 regions in France. 5 Id. at 4-5.

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As explained in the ‘‘Company the authority in Article 130 of the Treaty Because the amount of subsidies is less History’’ section above, Duferco of Rome to reduce regional disparities in than 0.5 percent of the relevant sales, Belgium purchased Beautor and Sorral, socio–economic performance within the we have expensed the benefit from each previously Usinor facilities, from European Community. The ERDF ERDF grant in the year of receipt rather Arcelor. The Department has previously program provides grants to companies than allocate the benefits over the AUL determined that Usinor received located within regions that meet the period. See the August 31, 2006, countervailable subsidies. See Issues criteria of Objective 1 (underdeveloped Memorandum to the File concerning the and Decision Memorandum for the regions), Objective 2 (declining Preliminary Calculations for the 2004 Section 129 Determination: Corrosion– industrial regions), or Objective 5(b) Administrative Review of Corrosion– Resistant Carbon Steel Flat Products (declining agricultural regions). Duferco Resistant Carbon Steel Flat Products from France; Final Results of Expedited Sorral reported that Beautor was from France.8 Therefore, no benefit from Sunset Review of Countervailing Duty approved for an ERDF grant under the ERDF grants was conferred to Order, dated October 24, 2003. In this Objective 2 in 1998 and 1999.6 Duferco Sorral during the POR. review, Duferco Sorral reported that In the Pasta from Italy Investigation, II. Programs Preliminarily Determined Beautor received subsidies over a 15- the Department determined that ERDF Not To Be Countervailable year Average Useful Life (‘‘AUL’’). grants constitute a countervailable For purposes of these preliminarily subsidy within the meaning of section A. Worker Training Contracts9 results, we find that the benefits from 771(5) of the Tariff Act of 1930, as amended (‘‘the Act’’). See Final B. Seine–Normandy Water Agency any allocable, non–recurring, pre–sale Assistance subsidies to Beautor and Sorral from the Affirmative Countervailing Duty GOF and the EC are fully extinguished Determination: Certain Pasta from Italy, The Seine–Normandy Water Agency prior to the POR. Therefore, as this 61 FR 30288, 30294 (June 14, 1996) (‘‘SNWA’’), a public institution with 10 change in ownership could have no (‘‘Pasta from Italy Investigation’’); see financial autonomy, is administered impact on any countervailable subsidy also Certain Pasta from Italy: Final jointly by the Ministries of the 11 benefits in the POR, we are not making Results of the Seventh Countervailing Environment and Finance. The any findings in this review as to the Duty Administrative Review, 69 FR mission of SNWA, one of six water nature or terms of this sale. 70657 (December 7, 2004) (‘‘Pasta from agencies in France, is to reduce and Italy 7th Review’’), and accompanying prevent pollution of the Seine River. To II. Subsidies Valuation Information Issues and Decision Memorandum at that end, SNWA provides financial A. Allocation Period ‘‘European Regional Development Fund assistance in the form of grants and Under 19 CFR 351.524(b), non– Grants’’ within ‘‘Programs Determined loans to companies located along the recurring subsidies are allocated over a to Confer Subsidies During the POR’’ Seine for projects dedicated to period corresponding to the AUL of the section. Specifically, the Department protecting, increasing, and improving renewable physical assets used to determined that the ERDF grants are a the water resources, attaining quality produce the subject merchandise. direct transfer of funds from the requirements, and protecting against Pursuant to 19 CFR 351.524(d)(2), there government bestowing a benefit in the flooding (collectively referred hereto as is a rebuttable presumption that the amount of the grant within the meaning ‘‘pollution prevention program’’).12 AUL will be taken from the U.S. Internal of section 771(5)(D)(i) of the Act. The Pursuant to Article 14 and Article 14– Revenue Service’s 1977 Class Life Asset ERDF grants were also found to be 1 of the Water Law of 1964, all polluting Depreciation Range System (‘‘IRS regionally specific within the meaning Tables’’), as updated by the Department of section 771(5A)(D)(iv) of the Act. In 8 A public version of the document is available on of Treasury. For the subject the Pasta from Italy Investigation, we the public record in the CRU. determined that the ERDF grants are 9 In prior cases, the Department found Worker merchandise, the IRS Tables prescribe Training Contracts not to be countervailable. See an AUL of 15 years. No interested party non–recurring benefits. In this review, Final Affirmative Countervailing Duty has claimed that the AUL of 15 years is no new information was provided on Determination: Stainless Steel Sheet and Strip in unreasonable. this program that would warrant Coils from France, 64 FR 30774, 30782 (June 8, 1999) (‘‘Sheet and Strip from France’’) at ‘‘Work/ Further, for non–recurring subsidies, reconsideration of our determination that these grants confer a Training Contracts.’’ See also Final Affirmative we have applied the ‘‘0.5 percent Countervailing Duty Determination: Certain Cut-to- expense test’’ described in 19 CFR countervailable subsidy or cause us to Length Carbon-Quality Steel Plate from France, 64 351.524(b)(2). Under this test, we depart from treating the grants as non– FR 73277, 73282 (‘‘CTL France’’) at ‘‘Investment/ Operating Subsidies.’’ If a program is determined to compare the amount of subsidies recurring. Therefore, consistent with the Pasta be non-countervailable in a previous proceeding, approved under a given program in a from Italy Investigation and Pasty from the Department will not normally reconsider such particular year to sales (total sales or a determination in future proceedings absent Italy 7th Review, we are treating total export sales, as appropriate) for the evidence potentially contradicting that Beautor’s ERDF grants as non–recurring. determination. We preliminarily find that there is same year. If the amount of subsidies is In accordance with 19 CFR no information on the record of the instant case, less than 0.5 percent of the relevant 351.524(b)(2), we have applied the ‘‘0.5 including this segment of the proceeding, that sales, then the benefits are allocated to warrants a change to our earlier finding that this percent expense test.’’7 The calculations the year of receipt rather than allocated program is not specific and, therefore, not demonstrate that the total amount countervailable. over the AUL period. approved for each grant is less than 0.5 10 See Article L-213-5 of the Environment Code at Analysis of Programs percent of Beautor’s relevant sales (i.e., Annex 1 contained in the GOF’s May 25, 2006, total sales) for the respective year in questionnaire response. I. Program Preliminarily Determined Not 11 See Chapter 19 entitled ‘‘Seine-Normandy which each grant was approved. st To Confer Countervailable Benefits Basin, France’’ of UNESCO’s study ‘‘The 1 World Water Development Report: Water for People, Water During the POR 6 See Duferco Sorral’s December 7, 2005, for Life,’’ at footnote 17 on page 438, which is A. European Regional Development questionnaire response at 12. See also the GOF’s contained within the June 27, 2006, Memorandum December 7, 2005, questionnaire response at to the File concerning ‘‘Placement of Public Fund ‘‘European Development Regional Fund’’ section. Documents on the Record of the Review.’’ The European Regional Development 7 For more information, see ‘‘Allocation Period,’’ 12 See the GOF’s July 7, 2006, questionnaire Fund (‘‘ERDF’’) was created pursuant to supra. response at Annex 2.

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companies having plants located in the low of 0.4 percent in 2003.16 During the D. Financing from the Caisse des basin of the Seine River, regardless of POR, steel companies received Depots et Consignations their sector of activity, have the legal assistance of ÷ 69,000 for surface E. Preferential Loans from Local obligation to enter into the SNWA treatment, which was approximately 2.0 Economic (Regional) Development consortium and fund its activities percent of the assistance provided by Agencies through the payment of levies.13 Article SNWA to companies in the Picardie 14–1 establishes that the levies are region.17 For 2004, the industrial groups F. Regional Development Incentives proportional to the quantity of polluting located in the eight regions that G. European Coal and Steel waste the company is likely to produce compose SNWA’s territory received Community Article 54 Loans during the production cycle. Companies pollution assistance totaling ÷ 48.6 H. European Social Fund I. ECSC Article 56 Conversion Loans, which are in arrears are ineligible to million, of which ÷ 25.8 million was Interest Rebates, and Restructuring receive assistance for pollution loans and ÷ 22.8 million was grants.18 Grants reduction projects. Duferco Sorral Economic activity along the Seine River reported that Beautor received grants is diverse, consisting of the agro–food, J. Export Financing and long–term loans from SNWA over a automobile, chemical, metallurgy, oil K. Grants from the River Dock Agency 15-year AUL, and that Duferco Sorral refining, and paper industries in L. Loans from the Ministry of itself received a grant in 2004. addition to farming and wine– Research & Industry We analyzed whether the benefits production.19 M. New Community Investment provided by SNWA’s pollution On this basis of these facts, we Loans prevention program are specific ‘‘in law preliminarily find that the pollution or fact’’ within the meaning of section prevention program is not limited based N. Tax Subsidies under Article 39 771(5A) of the Act. We preliminarily on the number of users nor is Duferco O. Youthstart. determine that, under section Sorral or the steel industry a Preliminary Results of Review 771(5A)(D)(ii) of the Act, the program is predominant or disproportionate not de jure specific according to the recipient of the total funding. In accordance with 19 CFR 351.221(b)(4)(i), we have calculated a criteria for determining which Accordingly, we preliminarily subsidy rate for Duferco Sorral for companies are eligible for benefits. determine that this program is not calendar year 2004. We preliminarily These criteria are set forth in the Water specific and, therefore, we do not reach determine that the net countervailable Act of 1964 and companion legislation. the issue of whether there is a financial subsidy rate is 0.00 percent ad valorem. We next examined whether the contribution or benefit. Therefore, this program does not confer countervailable If the final results of this review pollution prevention assistance remain the same as these preliminary distributed by SNWA is de facto subsidies within the meaning of section 771(5) of the Act.20 results, the Department intends to specific. Pursuant to section instruct U.S. Customs and Border 771(5A)(D)(iii) of the Act, a subsidy is III. Programs Preliminarily Determined Protection (‘‘CBP’’) within 15 days of de facto specific if one or more of the Not To Be Used publication of the final results of this following factors exists: (1) the number We preliminarily determine that review, to liquidate without regard to of enterprises, industries, or groups countervailing duties all shipments of which use a subsidy is limited; (2) there Duferco Sorral did not apply for or receive benefits under these programs subject merchandise produced by is predominant use of a subsidy by an Duferco Sorral entered, or withdrawn enterprise, industry, or group; (3) an during the POR: A. Investment Subsidies from warehouse, for consumption from enterprise, industry, or group receives a B. Long–Term Loans from Fonds de January 1, 2004, through December 31, disproportionately large amount of the Developpement Economique et 2004. The Department will also instruct subsidy; or (4) the manner in which the Social and Caisse Francaise de CBP not to collect cash deposits of authority providing a subsidy has Developpement Industriel estimated countervailing duties on all exercised discretion indicates that an C. Assistance from Delegation a shipments of the subject merchandise enterprise, industry, or group is favored l’Amenagement du Territoire et a produced by Duferco Sorral, entered, or over others. l’Action Regionale withdrawn from warehouse, for For the Picardie region,14 where consumption on or after the date of Beautor/Duferco is located, the GOF 16 See the GOF’s July 26, 2006, questionnaire publication of the final results of this reported the number of companies response for 2001 at Annex 1, and July 7, 2006, review. which received assistance from SNWA questionnaire response for 2004 at Annex 1. We will also instruct CBP to continue for the years 2001, 2002, 2003, and 17 See the GOF’s May 25, 2006, questionnaire to collect cash deposits for non– response ‘‘Assistance provided by the Seine- 2004. With the exception of 2003, in Normandy Water Agency’’ section and Annex 2. reviewed companies at the most recent which 47 companies received 18 See August 10, 2006, Memorandum to the File company–specific or country–wide rate assistance, 60 companies or more were concerning ‘‘Placement of Public Documents on the applicable to the company. Accordingly, recipients of assistance provided by Record of the Review – Seine-Normandy Water the cash deposit rates that will be SNWA in each of the other years.15 The Agency’s Annual Report.’’ applied to non–reviewed companies 19 See Chapter 19 entitled ‘‘Seine-Normandy GOF also reported that no applicant was Basin, France’’ of UNESCO’s study ‘‘The 1st World covered by this order are those rejected. The amount of assistance Water Development Report: Water for People, Water established in the most recently provided to the steel industry ranged for Life,’’ at page 432, which is contained within the completed administrative proceeding. from a high of 8.5 percent in 2001 to a June 27, 2006, Memorandum to the File concerning See Certain Steel Products from France: ’’Placement of Public Documents on the Record of the Review.’’ Notice of Final Court Decision and 13 See the GOF’s May 25, 2006, questionnaire 20 Even if we were preliminarily to determine that Amended Final Determination of response at Annex 1 for Article 14 and 14-1. the program was specific for years prior to 2001, the Countervailing Duty Investigation, 64 FR 14 Picardie is one of the 26 regions of France and grants which Beautor received would have been 67561 (December 2, 1999). These rates one of the eight regions in SNWA’s territory. expensed in the year of receipt with no benefits 15 See the GOF’s July 26, 2006, questionnaire allocable to the POR and the benefit provided by shall apply to all non–reviewed response at ‘‘Assistance provided by the Seine- the long-term loans is less than 0.005 percent of companies until a review of a company Normandy Water Agency’’ section. Duferco Sorral’s total sales for the POR. assigned these rates is requested.

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Public Comment DEPARTMENT OF COMMERCE Scope of Order Pursuant to 19 CFR 351.224(b), the International Trade Administration Covered by the order are shipments of Department will disclose to parties to certain non–egg dry pasta in packages of the proceeding any calculations [C–489–806] five pounds (2.27 kilograms) or less, whether or not enriched or fortified or performed in connection with these Certain Pasta from Turkey: Final preliminary results within five days containing milk or other optional Results of Countervailing Duty ingredients such as chopped vegetables, after the date of the public Administrative Review announcement of this notice. Pursuant vegetable purees, milk, gluten, diastases, to 19 CFR 351.309, interested parties AGENCY: Import Administration, vitamins, coloring and flavorings, and up to two percent egg white. The pasta may submit written comments in International Trade Administration, covered by this order is typically sold in response to these preliminary results. Department of Commerce. the retail market, in fiberboard or Unless otherwise indicated by the SUMMARY: On June 9, 2006, the U.S. cardboard cartons or polyethylene or Department, case briefs must be Department of Commerce (‘‘the polypropylene bags, of varying submitted within 30 days after the date Department’’) published in the Federal dimensions. of publication of this notice. Rebuttal Register its preliminary results of the Excluded from the order are briefs, limited to arguments raised in administrative review of the countervailing duty order on certain refrigerated, frozen, or canned pastas, as case briefs, must be submitted no later well as all forms of egg pasta, with the than five days after the time limit for pasta from Turkey for the period January 1, 2004, through December 31, exception of non–egg dry pasta filing case briefs, unless otherwise containing up to two percent egg white. specified by the Department. Parties 2004. See Certain Pasta From Turkey: Preliminary Results of Countervailing The merchandise under review is who submit argument in this proceeding currently classifiable under subheading are requested to submit with the Duty Administrative Review, 71 FR 33439 (June 9, 2006) (‘‘Preliminary 1902.19.20 of the Harmonized Tariff argument: (1) a statement of the issues, Schedule of the United States and (2) a brief summary of the Results’’). We preliminarily found that Gidasa Sabanci Gida Sanayi ve Ticaret (‘‘HTSUS’’). Although the HTSUS argument. Parties submitting case and/ A.S. (‘‘Gidasa’’) did not receive subheading is provided for convenience or rebuttal briefs are requested to countervailable subsidies during the and customs purposes, our written provide to the Department copies of the period of review. We did not receive description of the scope of the order is public version on disk. Case and any comments on our preliminary dispositive. rebuttal briefs must be served on results, and we have made no revisions. interested parties in accordance with 19 Scope Ruling EFFECTIVE DATE: September 7, 2006. CFR 351.303(f). Also, pursuant to 19 To date, the Department has issued CFR 351.310, within 30 days of the date FOR FURTHER INFORMATION CONTACT: the following scope ruling: of publication of this notice, interested Audrey Twyman or Brandon Farlander, On October 26, 1998, the Department parties may request a public hearing on AD/CVD Operations, Office 1, Import self–initiated a scope inquiry to arguments to be raised in the case and Administration, International Trade determine whether a package weighing rebuttal briefs. Unless the Secretary Administration, U.S. Department of over five pounds as a result of allowable specifies otherwise, the hearing, if Commerce, 14th Street and Constitution industry tolerances may be within the requested, will be held two days after Avenue, NW, Washington, DC 20230; scope of the countervailing duty order. the date for submission of rebuttal telephone: (202) 482–3534 and (202) On May 24, 1999, we issued a final briefs, that is, 37 days after the date of 482–0182, respectively. scope ruling finding that, effective publication of these preliminary results. SUPPLEMENTARY INFORMATION: October 26, 1998, pasta in packages Representatives of parties to the Background weighing or labeled up to (and including) five pounds four ounces is proceeding may request disclosure of On July 24, 1996, the Department proprietary information under within the scope of the countervailing published in the Federal Register the duty order. See Memorandum from John administrative protective order no later countervailing duty order on certain than 10 days after the representative’s Brinkmann to Richard Moreland, dated pasta from Turkey. See Notice of May 24, 1999, which is on file in the client or employer becomes a party to Countervailing Duty Order: Certain Central Records Unit (‘‘CRU’’) in Room the proceeding, but in no event later Pasta from Turkey, 61 FR 38546 (July B–099 of the main Commerce building. than the date the case briefs, under 19 24, 1996). On June 9, 2006, the CFR 351.309(c)(ii), are due. See 19 CFR Department published in the Federal Period of Review 351.305(b)(3). The Department will Register its preliminary results of the The period of review (‘‘POR’’) for publish the final results of this administrative review of the which we are measuring subsidies is administrative review, including the countervailing duty order on certain from January 1, 2004, through December results of its analysis of arguments made pasta from Turkey for the period 31, 2004. in any case or rebuttal briefs. January 1, 2004, through December 31, This administrative review is issued 2004. See Preliminary Results. In Final Results of Review and published in accordance with accordance with 19 CFR 351.213(b), this As noted above, the Department section 751(a)(1) and 777(i)(1) of the review of the order covers Gidasa, a received no comments concerning the Act. producer and exporter of subject preliminary results; consistent with the merchandise. preliminary results, we find that Gidasa Dated: August 31, 2006. In the Preliminary Results, we invited did not receive countervailable David M. Spooner, interested parties to submit briefs or subsidies during the POR. As there have Assistant Secretary for Import request a hearing. The Department did been no changes or comments from the Administration. not conduct a hearing in this review preliminary results we are not attaching [FR Doc. E6–14847 Filed 9–6–06; 8:45 am] because none was requested, and no a Decision Memorandum to this Federal BILLING CODE 3510–DS–S briefs were received. Register notice. For further details of the

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programs included in this proceeding, DEPARTMENT OF COMMERCE Conservation and Management Act, see the Preliminary Results. those issues may not be the subject of National Oceanic and Atmospheric formal panel action during this meeting. Company Ad valorem rate Administration Panel action will be restricted to those [I.D. 083106E] issues specifically identified in the Gidasa Sabanci Gida agenda listed as available by this notice. Sanayi ve Ticaret Gulf of Mexico Fishery Management A copy of the agenda can be obtained A.S...... 0.00 percent Council; Public Meetings by calling (813) 348–1630. Assessment Rates/Cash Deposits AGENCY: National Marine Fisheries Special Accommodations Service (NMFS), National Oceanic and This meeting is physically accessible Because Gidasa did not receive Atmospheric Administration (NOAA), to people with disabilities. Requests for countervailable subsidies during the Commerce. sign language interpretation or other POR, we will instruct U.S. Customs and ACTION: Notice of a public meeting. auxiliary aids should be directed to Tina Border Protection (‘‘CBP’’) to liquidate Trezza at the Council (see ADDRESSES) at all of Gidasa’s entries without regard to SUMMARY: The Gulf of Mexico Fishery least 5 working days prior to the countervailing duties. Also, since Management Council will convene a meeting. Gidasa has a zero countervailable public meeting of the Habitat Protection Dated: September 1, 2006. subsidy rate, the Department will Advisory Panel (AP). Tracey L. Thompson, instruct CBP to continue to suspend DATES: The meeting will convene at 9 Acting Director, Office of Sustainable liquidation of entries, but to collect no a.m. on Tuesday, September 26, 2006 Fisheries, National Marine Fisheries Service. cash deposits of estimated and conclude no later than 4 p.m. [FR Doc. E6–14786 Filed 8–6–06; 8:45 am] countervailing duties for Gidasa on all ADDRESSES: This meeting will be held at BILLING CODE 3510–22–S shipments of the subject merchandise the Hilton Houston Hobby Airport, 8181 that are entered, or withdrawn from Airport Blvd., Houston, TX 77061; warehouse, for consumption on or after telephone: (713) 645–3000. CORPORATION FOR NATIONAL AND the date of publication of the final Council address: Gulf of Mexico COMMUNITY SERVICE results of this administrative review. Fishery Management Council, 2203 North Lois Avenue, Suite 1100, Tampa, Information Collection; Submission for For all non–reviewed companies, the FL 33607. OMB Review, Comment Request Department has instructed CBP to assess FOR FURTHER INFORMATION CONTACT: Jeff countervailing duties at the cash deposit Rester, Habitat Support Specialist, Gulf ACTION: Notice. rates in effect at the time of entry, for States Marine Fisheries Commission; entries between January 1, 2004, and SUMMARY: The Corporation for National telephone: (228) 875–5912. December 31, 2004. The cash deposit and Community Service (hereinafter the SUPPLEMENTARY INFORMATION: rates for all companies not covered by The Texas ‘‘Corporation’’), has submitted a public group is part of a three unit Habitat information collection request (ICR) this review are not changed by the Protection Advisory Panel (AP) of the entitled the Longitudinal Evaluation of results of this review. Gulf of Mexico Fishery Management AmeriCorps to the Office of Return or Destruction of Proprietary Council. The principal role of the Management and Budget (OMB) for Information advisory panels is to assist the Council review and approval in accordance with in attempting to maintain optimum the Paperwork Reduction Act of 1995, This notice serves as a reminder to conditions within the habitat and Pub. L. 104–13, (44 U.S.C. Chapter 35). parties subject to administrative ecosystems supporting the marine Copies of this ICR, with applicable protective order (‘‘APO’’) of their resources of the Gulf of Mexico. supporting documentation, may be responsibility concerning the Advisory panels serve as a first alert obtained by calling the Corporation for disposition of proprietary information system to call to the Council’s attention National and Community Service, Ms. disclosed under APO in accordance proposed projects being developed and Lillian Dote at (202) 606–6984. with 19 CFR 351.305(a)(3). Timely other activities which may adversely Individuals who use a written notification of return or impact the Gulf marine fisheries and telecommunications device for the deaf destruction of APO materials or their supporting ecosystems. The panels (TTY-TDD) may call (202) 565–2799 conversion to judicial protective order is may also provide advice to the Council between 8:30 a.m. and 5 p.m. eastern hereby requested. Failure to comply on its policies and procedures for time, Monday through Friday. with the regulations and the terms of an addressing environmental affairs. ADDRESSES: Comments may be APO is a sanctionable violation. At this meeting, the AP will submitted, identified by the title of the tentatively discuss deepening of the information collection activity, to the We are issuing and publishing these Matagorda Ship Channel, the Bahia Office of Information and Regulatory results in accordance with sections Grande restoration project, the Texas Affairs, Attn: Ms. Katherine Astrich, 751(a)(1) and 777(i)(1) of the Act. Artificial Reef Program, the Beacon Port OMB Desk Officer for the Corporation Dated: August 31, 2006. Liquified Natural Gas (LNG) project, for National and Community Service, by David M. Spooner, dredging associated with the Calhoun any of the following two methods LNG facility in LaVaca Bay, review of Assistant Secretary for Import within 30 days from the date of the Council’s Ecosystem Management Administration. publication in this Federal Register: Plan, and an update on the Sabine- (1) By fax to: (202) 395–6974, [FR Doc. E6–14844 Filed 9–6–06; 8:45 am] Neches waterway deepening project. Attention: Ms. Katherine Astrich, OMB BILLING CODE 3510–DS–S Although other issues not on the Desk Officer for the Corporation for agenda may come before the panel for National and Community Service; and discussion, in accordance with the (2) Electronically by e-mail to: Magnuson-Stevens Fishery [email protected].

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SUPPLEMENTARY INFORMATION: The OMB Dated: August 30, 2006. to present to the Commandant a report is particularly interested in comments Robert Grimm, of their findings and recommendations which: Director, Office of Research and Policy concerning these programs. • Evaluate whether the proposed Development. FOR FURTHER INFORMATION CONTACT: collection of information is necessary [FR Doc. E6–14763 Filed 9–6–06; 8:45 am] Contact Ms. Beverly Houtz, Academic for the proper performance of the BILLING CODE 6050–$$–P Affairs Office, Air Force Institute of functions of the Corporation, including Technology, (937) 255–6565 ext 4424. whether the information will have Bao-Anh Trinh, practical utility; DEPARTMENT OF DEFENSE • Air Force Federal Register Liaison Officer. Evaluate the accuracy of the [FR Doc. E6–14811 Filed 9–6–06; 8:45 am] agency’s estimate of the burden of the Department of the Air Force BILLING CODE 5001–05–P proposed collection of information, U.S. Air Force Air University Board of including the validity of the Visitors Meeting methodology and assumptions used; DEPARTMENT OF EDUCATION • Propose ways to enhance the AGENCY: Department of the Air Force, quality, utility, and clarity of the Air University Headquarters. Notice of Proposed Information information to be collected; and ACTION: Notice of meeting. Collection Requests • Propose ways to minimize the SUMMARY: The Air University Board of AGENCY: burden of the collection of information Department of Education. Visitors will hold an open meeting on ACTION: Correction notice. on those who are to respond, including 12–15 November 2006 and 15–18 April through the use of appropriate 2007. The first business session of each SUMMARY: On August 28, 2006, the automated, electronic, mechanical, or meeting will begin in the Air University Department of Education published a other technological collection Commander’s Conference Room at notice in the Federal Register (page techniques or other forms of information Headquarters Air University, Maxwell 50901, column 2) for the information technology, e.g., permitting electronic Air Force Base, Alabama, (5 seats collection, ‘‘Child Care Survey of submissions of responses. available). The purpose of the meeting Postsecondary Institutions.’’ This notice Comments is to give the board an opportunity to hereby amends the Burden Hours for the review Air University educational collection from 688 to 1,376. The IC A 60-day public comment Notice was programs and to present to the Clearance Official, Regulatory published in the Federal Register on Commander, a report of their findings Information Management Services, February 3, 2006. This comment period and recommendations concerning these Office of the Chief Information Officer, ended April 4, 2006. No public programs. hereby issues a correction notice as comments were received from this FOR FURTHER INFORMATION CONTACT: required by the Paperwork Reduction notice. Contact Dr. Dorothy Reed, Chief of Act of 1995. Description: AmeriCorps is a national Academic Affairs, Air University Dated: August 31, 2006. service program that provides grants to Headquarters, Maxwell Air Force Base, Dianne Novick, nonprofit organizations and government Alabama 36112–6335, telephone (334) entities to support members and Acting Leader, Information Policy and 953–5159. Standards Team, Regulatory Information volunteers serving in national and local Bao-Anh Trinh, Management Services, Office of the community service programs. The Management. Air Force Federal Register Liaison Officer. Corporation is seeking approval for the [FR Doc. E6–14801 Filed 9–6–06; 8:45 am] Longitudinal Study of AmeriCorps, an [FR Doc. E6–14810 Filed 9–6–06; 8:45 am] BILLING CODE 4000–01–P evaluation of the impacts of AmeriCorps BILLING CODE 5001–05–P service on program participants. Type of Review: New Information DEPARTMENT OF EDUCATION DEPARTMENT OF DEFENSE Collection. Federal Family Education Loan Agency: Corporation for National and Department of the Air Force Community Service. Program Title: Longitudinal Study of AFIT Subcommittee of the Air AGENCY: Federal Student Aid, AmeriCorps. University Board of Visitors Meeting Department of Education. OMB Number: None. AGENCY: Department of the Air Force, ACTION: Notice of interest rates for the Agency Number: None. Air University Headquarters, DoD. Federal Family Education Loan Program for the period July 1, 2006 through June Affected Public: Participants in ACTION: Notice of meeting. 30, 2007. Longitudinal Study of AmeriCorps. SUMMARY: The Air Force Institute of Total Respondents: 4,153. Technology Subcommittee of the Air SUMMARY: The Chief Operating Officer Frequency: Periodically. University Board of Visitors will hold for Federal Student Aid announces the interest rates for the period July 1, 2006 Average Time Per Response: 45 an open meeting on 12–14 March 2007, through June 30, 2007 for loans made minutes. with the first business session beginning at 0830 in the Superintendent’s under the Federal Family Education Estimated Total Burden Hours: 3,115 Conference Room, Building 642, Wright- Loan (FFEL) Program. hours. Patterson Air Force Base, Ohio (5 seats FOR FURTHER INFORMATION CONTACT: Don Total Burden Cost (capital/startup): available). The purpose of the meeting Watson, U.S. Department of Education, None. is to give the board an opportunity to room 114I2, UCP, 400 Maryland Total Burden Cost (operating/ review Air Force Institute of Avenue, SW., Washington, DC 20202– maintenance): None. Technology’s educational programs and 5400. Telephone: (202) 377–4008.

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If you use a telecommunications Interest Rates for ‘‘Converted’’ before July 1, 1998—the interest rate device for the deaf (TDD), you may call Variable-Rate FFEL Stafford Loans may not exceed 8.25 percent: the Federal Relay Service (FRS) at 1– 1. Under section 427A(i)(7) of the (a) During the in-school, grace, or 800–877–8339. HEA (20 U.S.C. 1077a (i)(7)), loans that deferment period: The interest rate for Individuals with disabilities may were originally made with a fixed the period from July 1, 2006, through obtain this document in an alternative interest rate of eight percent with an June 30, 2007, is 7.34 percent (4.84 format (e.g., Braille, large print, increase to ten percent four years after percent plus 2.5 percent); and audiotape, or computer diskette) on (b) During all other periods: The commencement of the repayment period request to the contact person listed interest rate for the period from July 1, were converted to a variable interest rate under FOR FURTHER INFORMATION 2006, through June 30, 2007, is 7.94 that may not exceed ten percent: The CONTACT. percent (4.84 percent plus 3.1 percent). interest rate for these loans for the SUPPLEMENTARY INFORMATION: 4. FFEL Stafford loans, first disbursed period from July 1, 2006, through June on or after July 1, 1998, but before July General 30, 2007, is 8.09 percent (4.84 percent 1, 2006—the interest rate may not plus 3.25 percent). Under title IV, part B of the Higher exceed 8.25 percent: 2. Loans with fixed interest rates of (a) During the in-school, grace, and Education Act of 1965, as amended seven percent, eight percent, nine (HEA), 20 U.S.C. Section 1071, et seq., deferment periods: The interest rate for percent, or eight percent with an the period from July 1, 2006, through most loans made to student and parent increase to ten percent four years after borrowers under the FFEL Program have June 30, 2007, is 6.54 percent (4.84 commencement of the repayment percent plus 1.7 percent); and variable interest rates. period, that were subject to the The formulas for determining the (b) During all other periods: The provisions of section 427A(i)(3) of the interest rate for the period from July 1, interest on variable-rate, FFEL Program HEA (20 U.S.C. 1077a(i)(3)) and were loans are established in section 427A of 2006, through June 30, 2007, is 7.14 converted to variable-rate loans—the percent (4.84 percent plus 2.3 percent). the HEA (20 U.S.C. 1077a). interest rate may not exceed seven The interest rates on variable-rate percent, eight percent, nine percent, or Interest Rates for Fixed-Rate FFEL loans are determined annually and ten percent, respectively. For loans with Stafford Loans apply to the following 12-month period fixed interest rates of seven percent that beginning July 1 and ending June 30. 1. FFEL Stafford loans for which the were converted to variable-rate loans, As described below, interest rate caps first disbursement was made on or after the interest rate for the period from July apply to most FFEL Program loans. July 1, 2006—the interest rate is fixed at FFEL interest rate formulas use the 1, 2006, through June 30, 2007, is the 6.80 percent. maximum interest rate of 7.00 percent bond equivalent rate of 91-day Treasury Interest Rates for FFEL PLUS and FFEL bills auctioned at the final auction held (4.84 percent plus 3.1 percent). For loans with fixed interest rates of eight Supplemental Loans for Students (SLS) before June 1 of each year plus a Loans statutorily established add-on to percent, nine percent, or eight percent determine the variable interest rate for— with an increase to ten percent that 1. Variable-rate FFEL PLUS and FFEL • FFEL fixed-rate Stafford loans first were converted to variable-rate loans, SLS loans first disbursed before October disbursed before October 1, 1992 that the interest rate for the period from July 1, 1992—the interest rate may not have been converted to variable-rate 1, 2006, through June 30, 2007, is 7.94 exceed 12 percent: The interest rate for loans; percent (4.84 percent plus 3.1 percent). the period from July 1, 2006, through • June 30, 2007, is 8.49 percent (5.24 All FFEL Subsidized and Interest Rates for Variable-Rate FFEL percent plus 3.25 percent). Unsubsidized Stafford Loans first Stafford Loans disbursed on or after October 1, 1992; 2. FFEL SLS loans first disbursed on • FFEL PLUS loans first disbursed on 1. FFEL Stafford loans made to ‘‘new’’ or after October 1, 1992, for a period of or after July 1, 1998; and borrowers for which the first enrollment beginning before July 1, • FFEL Consolidation Loans for disbursement was made (a) on or after 1994—the interest rate may not exceed which the Consolidation Loan October 1, 1992, but before July 1, 1994, 11 percent: The interest rate for the application was received by the lender or (b) on or after July 1, 1994, for a period from July 1, 2006, through June on or after November 13, 1997 and period of enrollment ending before July 30, 2007, is 8.34 percent (5.24 percent before October 1, 1998. 1, 1994 (i.e. a late disbursement)—the plus 3.10 percent). The bond equivalent rate of the 91- interest rate may not exceed nine 3. FFEL PLUS loans first disbursed on day Treasury bills auctioned on May 30, percent: The interest rate for the period or after October 1, 1992, but before July 2006, which is used to calculate the from July 1, 2006, through June 30, 1, 1994—the interest rate may not interest rates for the one-year period 2007, is 7.94 percent (4.84 percent plus exceed ten percent: The interest rate for beginning on July 1, 2006, is 4.843 3.1 percent). the period from July 1, 2006, through percent, which is rounded to 4.84 2. FFEL Stafford loans made to all June 30, 2007, is 8.34 percent (5.24 percent. borrowers, regardless of prior percent plus 3.10 percent). For FFEL PLUS loans first disbursed borrowing, for periods of enrollment 4. FFEL PLUS loans first disbursed on before July 1, 1998, interest rates are that include or begin on or after July 1, or after July 1, 1994, but prior to July 1, calculated based on the weekly average 1994, for which the first disbursement 1998—the interest rate may not exceed of a 1-year constant maturity Treasury was made on or after July 1, 1994, but nine percent: The interest rate for the yield, as published by the Board of before July 1, 1995—the interest rate period from July 1, 2006, through June Governors of the Federal Reserve may not exceed 8.25 percent: The 30, 2007, is 8.34 percent (5.24 percent System, for the last calendar week interest rate for the period from July 1, plus 3.10 percent). ending on or before June 26. 2006, through June 30, 2007, is 7.94 5. FFEL PLUS loans first disbursed on The weekly average of the 1-year percent (4.84 percent plus 3.1 percent). or after July 1, 1998, and before July 1, constant maturity Treasury yield for the 3. FFEL Stafford loans made to all 2006—the interest rate may not exceed last calendar week ending on or before borrowers, regardless of prior nine percent: The interest rate for the June 26, 2006 is 5.24 percent. borrowing, on or after July 1, 1995, but period from July 1, 2006, through June

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30, 2007, is 7.94 percent (4.84 percent following site: www.ed.gov/news/ Loans), Federal Direct PLUS Loans plus 3.1 percent). federegister. (Direct PLUS Loans), and Federal Direct 6. FFEL PLUS loans first disbursed on To use PDF you must have Adobe Consolidation Loans (Direct or after July 1, 2006—the interest rate is Acrobat Reader, which is available free Consolidation Loans). fixed at 8.50 percent. at this site. If you have questions about The Direct Loan Program includes using PDF, call the U.S. Government loans with variable interest rates and Interest Rates for FFEL Consolidation Printing Office (GPO), toll free at 1–888– loans with fixed interest rates. Most Loans 293–6498; or in the Washington, DC loans made under the Direct Loan 1. FFEL Consolidation loans for area at (202) 512–1530. Program have variable interest rates that which the consolidation loan was made Note: The official version of this document change each year. The variable interest by the lender before July 1, 1994—the is the document published in the Federal rate formula that applies to a particular interest rate is the weighted average of Register. Free Internet access to the official loan depends on the date of the first the interest rates on the loans edition of the Federal Register and the Code disbursement of the loan. The variable consolidated, rounded to the nearest of Federal Regulations is available on GPO rates are determined annually and are whole percent, but may not be less than Access at: www.gpoaccess.gov/nara/ effective for each 12-month period nine percent. index.html. beginning July 1 of one year and ending June 30 of the following year. Pursuant 2. FFEL Consolidation loans for Program Authority: 20 U.S.C. 1087 et seq. which the consolidation loan was made to section 455(b) of the HEA, 20 U.S.C. by the lender on or after July 1, 1994, Dated: August 31, 2006. 1087e(b), the interest rate for Direct and before November 13, 1997—the Theresa S. Shaw, Subsidized Loans and Direct interest rate is the weighted average of Chief Operating Officer, Federal Student Aid. Unsubsidized Loans that are first the interest rates on the loans [FR Doc. E6–14799 Filed 9–6–06; 8:45 am] disbursed on or after July 1, 2006, have consolidated, rounded to the nearest BILLING CODE 4000–01–P a fixed interest rate of 6.80 percent. In whole percent. addition, Direct PLUS Loans that are 3. FFEL Consolidation loans for first disbursed on or after July 1, 2006, which the consolidation loan DEPARTMENT OF EDUCATION have a fixed interest rate of 7.90 percent. In the case of some Direct application was received by the lender William D. Ford Federal Direct Loan Consolidation Loans, the interest rate is on or after November 13, 1997, and Program determined by the date on which the before October 1, 1998—the interest rate Direct Consolidation Loan application may not exceed 8.25 percent: The AGENCY: Federal Student Aid, was received. Direct Consolidation interest rate for the period from July 1, Department of Education. Loans for which the application was 2006, through June 30, 2007, is 7.94 ACTION: Notice of interest rates for the received on or after February 1, 1999 percent (4.84 percent plus 3.1 percent). William D. Ford Federal Direct Loan have a fixed interest rate based on the 4. FFEL Consolidation loans for Program for the period July 1, 2006 weighted average of the loans that are which the consolidation loan through June 30, 2007. consolidated, rounded up to the nearest application was received by the lender higher 1⁄8 of one percent. SUMMARY: The Chief Operating Officer on or after October 1, 1998, and before Pursuant to section 455(b) of the HEA, for Federal Student Aid announces the July 1, 2006—the interest rate may not 20 U.S.C. 1087e(b), the Direct Loan interest rates for the period July 1, 2006 exceed 8.25 percent: The interest rate is interest rate formulas use the bond through June 30, 2007 for loans made the weighted average of the interest equivalent rates of the 91-day Treasury under the William D. Ford Federal rates on the loans consolidated, rounded bills at the final auction held before Direct Loan (Direct Loan) Program. to the nearest higher 1/8 of one percent. June 1 of each year plus a statutory add- 5. If a portion of a Consolidation loan FOR FURTHER INFORMATION CONTACT: Don on percentage to determine the variable is attributable to a loan made under Watson, U.S. Department of Education, interest rate for all Direct Subsidized subpart I of part A of title VII of the room 114I2, UCP, 400 Maryland Loans and Direct Unsubsidized Loans; Public Health Service Act, the Avenue, SW., Washington, DC 20202– Direct Consolidation Loans for which maximum interest rate for that portion 5400. Telephone: (202) 377–4008. the application was received on or after of a Consolidation loan is determined If you use a telecommunications July 1, 1998 and before February 1, annually, for each 12-month period device for the deaf (TDD), you may call 1999; and Direct PLUS Loans disbursed beginning on July 1 and ending on June the Federal Relay Service (FRS) at 1– on or after July 1, 1998. 30. The interest rate equals the average 800–877–8339. The bond equivalent rate of the 91- of the bond equivalent rates of the 91- Individuals with disabilities may day Treasury bills auctioned on May 30, day Treasury bills auctioned for the obtain this document in an alternative 2006, which is used to calculate the quarter ending prior to July 1, plus three format (e.g., Braille, large print, interest rates on these loans, is 4.843 percent. For the quarter ending before audiotape, or computer diskette) on percent, which is rounded to 4.84 July 1, 2006, the average 91-day request to the contact person listed percent. Treasury bill rate was 4.828 percent under FOR FURTHER INFORMATION In addition, pursuant to section 455(b) (rounded to 4.83 percent). The CONTACT. of the HEA, 20 U.S.C. 1087e(b), as maximum interest rate for the period SUPPLEMENTARY INFORMATION: Section amended by Public Law 106–554, the from July 1, 2006, through June 30, 455(b) of the Higher Education Act of Consolidated Appropriations Act, 2001, 2007, is 7.83 percent (4.83 percent plus 1965, as amended (HEA), 20 U.S.C. the interest rate for Direct PLUS Loans 3.0 percent). 1087e(b), provides formulas for that were disbursed on or after July 1, Electronic Access to This Document: determining the interest rates charged to 1994 and on or before July 1, 1998, is You may view this document, as well as borrowers for loans made under the calculated based on the weekly average all other documents of this Department Direct Loan Program including, Federal of a 1-year constant maturity Treasury published in the Federal Register, in Direct Stafford Loans (Direct Subsidized yield, as published by the Board of text or Adobe Portable Document Loans), Federal Direct Unsubsidized Governors of the Federal Reserve Format (PDF) on the Internet at the Stafford Loans (Direct Unsubsidized System, for the last calendar week

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ending on or before June 26 plus a before June 1 plus 3.1 percent. However, Direct PLUS Consolidation Loans that statutory add-on percentage. during in-school, grace, and deferment were disbursed on or after July 1, 1998, The last calendar week ending on or periods, the interest rate formula is the and before October 1, 1998, is 7.94 before June 26, 2006 began on June 18, bond equivalent rate of the 91-day percent during all periods. 2006 and ended on June 24, 2006. On Treasury bills auctioned at the final For Direct Subsidized Loans, Direct June 26, 2006, the Board of Governors auction held before June 1 plus 2.5 Unsubsidized Loans, Direct PLUS Loans of the Federal Reserve System published percent. These interest rates may not first disbursed on or after October 1, the 1-year constant maturity Treasury exceed 8.25 percent during any period. 1998, and before July 1, 2006: The yield average as 5.24 percent. From July 1, 2006, to June 30, 2007, the interest rate for Direct Subsidized Loans Below is specific information on the interest rate for Direct Subsidized and Direct Unsubsidized Loans is the calculation of the interest rates for the Loans, Direct Unsubsidized Loans, and bond equivalent rate of the 91-day Direct Loan Program. This information Direct Subsidized and Unsubsidized Treasury bills auctioned at the final is listed in order by the date a loan was Consolidation Loans that were first auction held before June 1 plus 2.3 first disbursed or by the date that the disbursed on or after July 1, 1995, and percent. However, during in-school, Consolidation Application was before July 1, 1998, is 7.34 percent grace, and deferment periods, the received. during in-school, grace, and deferment interest rate formula is the bond In addition, a summary of the interest periods and 7.94 percent during all equivalent rate of the 91-day Treasury rates that are effective for the period other periods. bills plus 1.7 percent. These interest July 1, 2006 through June 30, 2007, is The interest rate for Direct PLUS rates may not exceed 8.25 percent included on charts at the end of this Loans and Direct PLUS Consolidation during any period. From July 1, 2006, to notice. These charts are organized by Loans is the weekly average of a 1-year June 30, 2007, the interest rate for Direct loan type. In each chart, the interest constant maturity Treasury yield, as Subsidized Loans and Direct rates are arranged by the date a loan was published by the Board of Governors of Unsubsidized Loans that were disbursed first disbursed or by the date that the the Federal Reserve System, for the last after July 1, 1998, and before July 1, consolidation application was received. calendar week ending on or before June 2006, is 6.54 percent during in-school, For Direct Loan Program Loans first 26 plus 3.1 percent. These interest rates grace, and deferment periods and 7.14 disbursed on or after July 1, 1994, and may not exceed 9.0 percent during any percent during all other periods. before July 1, 1995: The interest rate for period. From July 1, 2006, to June 30, The interest rate for Direct PLUS Direct Subsidized Loans, Direct 2007, the interest rate for Direct PLUS Loans is the bond equivalent rate of the Unsubsidized Loans, and Direct Loans and Direct PLUS Consolidation 91-day Treasury bills auctioned at the Subsidized and Unsubsidized Loans that were first disbursed on or final auction held before June 1 plus 3.1 Consolidation Loans is the bond after July 1, 1995 and before July 1, percent. These interest rates may not equivalent rate of the 91-day Treasury 1998, is 8.34 percent during all periods. exceed 9.0 percent during any period. bills auctioned at the final auction held For Direct Loans first disbursed on or From July 1, 2006, to June 30, 2007, the before June 1 plus 3.1 percent. These after July 1, 1998, and before October 1, interest rate for Direct PLUS Loans that interest rates may not exceed 8.25 1998: The interest rate for Direct were disbursed after July 1, 1998, and percent during any period. From July 1, Subsidized Loans, Direct Unsubsidized before July 1, 2006, is 7.94 percent 2006, to June 30, 2007, the interest rate Loans, and Direct Subsidized and during all periods. for Direct Subsidized Loans, Direct Unsubsidized Consolidation Loans is For Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct the bond equivalent rate of the 91-day Unsubsidized Loans, and Direct PLUS Subsidized and Unsubsidized Treasury bills auctioned at the final Loans first disbursed on or after July 1, Consolidation Loans that were first auction held before June 1 plus 2.3 2006: The interest rate for Direct disbursed on or after July 1, 1994, and percent. However, during in-school, Subsidized Loans and Direct before July 1, 1995, is 7.94 percent grace, and deferment periods, the Unsubsidized Loans that were first during all periods. interest rate formula is the bond disbursed on or after July 1, 2006 is a The interest rate for Direct PLUS equivalent rate of the 91-day Treasury fixed interest rate of 6.80 percent during Loans and Direct PLUS Consolidation bills auctioned at the final auction held all periods. Loans is the weekly average of a 1-year before June 1 plus 1.7 percent. These The interest rate for Direct PLUS constant maturity Treasury yield, as interest rates may not exceed 8.25 Loans that were first disbursed on or published by the Board of Governors of percent during any period. From July 1, after July 1, 2006 is a fixed interest rate the Federal Reserve System, for the last 2006, to June 30, 2007, the interest rate of 7.90 percent during all periods. calendar week ending on or before June for Direct Subsidized Loans, Direct For Direct Consolidation Loans first 26 plus 3.1 percent. These interest rates Unsubsidized Loans, and Direct disbursed on or after October 1, 1998 may not exceed 9.0 percent during any Subsidized and Unsubsidized and for which the application was period. From July 1, 2006, to June 30, Consolidation Loans that were first received before October 1, 1998: The 2007, the interest rate for Direct PLUS disbursed on or after July 1, 1998 and interest rate for Direct Subsidized and Loans and Direct PLUS Consolidation before October 1, 1998, is 6.54 percent Unsubsidized Consolidation Loans is Loans that were first disbursed on or during in-school, grace, and deferment the bond equivalent rate of the 91-day after July 1, 1994 and before July 1, periods and 7.14 percent during all Treasury bills auctioned at the final 1995, is 8.34 percent for all periods. other periods. auction held before June 1 plus 2.3 For Direct Loan Program Loans first The interest rate for Direct PLUS percent. However, during in-school, disbursed on or after July 1, 1995, and Loans and Direct PLUS Consolidation grace, and deferment periods, the before July 1, 1998: The interest rate for Loans is the bond equivalent rate of the interest rate formula is the bond Direct Subsidized Loans, Direct 91-day Treasury bills auctioned at the equivalent rate of the 91-day Treasury Unsubsidized Loans, and Direct final auction held before June 1 plus 3.1 bills auctioned at the final auction held Subsidized and Unsubsidized percent. These interest rates may not before June 1 plus 1.7 percent. These Consolidation Loans is the bond exceed 9.0 percent during any period. interest rates may not exceed 8.25 equivalent rate of the 91-day Treasury From July 1, 2006, to June 30, 2007, the percent during any period. From July 1, bills auctioned at the final auction held interest rate for Direct PLUS Loans and 2006, to June 30, 2007, the interest rate

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for Direct Subsidized and Unsubsidized October 1, 1998 and before February 1, text or Adobe Portable Document Consolidation Loans that were first 1999 is the bond equivalent rate of the Format (PDF) on the Internet at the disbursed on or after July 1, 1998 and 91-day Treasury bills auctioned at the following site: www.ed.gov/news/ before October 1, 1998, is 6.54 percent final auction held before June 1 plus 2.3 federegister. during in-school, grace, and deferment percent. These interest rates may not To use PDF you must have Adobe periods and 7.14 percent during all exceed 8.25 percent during any period. Acrobat Reader, which is available free other periods. From July 1, 2006, to June 30, 2007, the at this site. If you have questions about The interest rate for Direct PLUS interest rate for Direct Consolidation using PDF, call the U.S. Government Consolidation Loans is the bond Loans for which the application was Printing Office (GPO), toll free at 1–888– equivalent rate of the 91-day Treasury received on or after October 1, 1998 and bills auctioned at the final auction held before February 1, 1999, is 7.14 percent 293–6498; or in the Washington, DC, before June 1 plus 3.1 percent. These during all periods. area at (202) 512–1530. interest rates may not exceed 9.0 For Direct Consolidation Loans for Note: The official version of this document percent during any period. From July 1, which the application was received on is the document published in the Federal 2006, to June 30, 2007, the interest rate or after February 1, 1999: The interest Register. Free Internet access to the official for Direct PLUS Loans and Direct PLUS rate for Direct Consolidation Loans for edition of the Federal Register and the Code Consolidation Loans that were which the application was received on of Federal Regulations is available on GPO disbursed on or after July 1, 1998, and or after February 1, 1999, and before Access at: www.gpoaccess.gov/nara/ before October 1, 1998, is 7.94 percent July 1, 2006, is the lesser of 8.25 index.html. during all periods. percent, or the weighted average of the For Direct Consolidation Loans for loans consolidated, rounded to the Program Authority: 20 U.S.C. 1087 et seq. which the application was received on 1 8 nearest higher ⁄ of one percent. Dated: August 31, 2006. or after October 1, 1998, and before Electronic Access to This Document: February 1, 1999: The interest rate for You may view this document, as well as Theresa S. Shaw, Direct Consolidation Loans for which all other documents of this Department Chief Operating Officer, Federal Student Aid. the application was received on or after published in the Federal Register, in BILLING CODE 4000–01–P

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[FR Doc. E6–14800 Filed 9–6–06; 8:45 am] DATES: Comments, protests or requests On September 5, 1996, in docket EA– BILLING CODE 4000–01–C to intervene must be submitted on or 98–C, the Office of Fossil Energy (FE) of before September 22, 2006. the Department of Energy (DOE) ADDRESSES: Comments, protests, or authorized 42 members of the WSPP to export electric energy to Canada. In DEPARTMENT OF ENERGY requests to intervene should be addressed as follows: Office Electricity several subsequent proceedings in the Delivery and Energy Reliability (Mail EA–98 docket, the list members [Docket No. EA–98–J] Code OE–20), U.S. Department of authorized to export was modified to add, delete, or reflect corporate name Application To Export Electric Energy; Energy, 1000 Independence Avenue, changes. The most recent order in the Western Systems Power Pool SW., Washington, DC 20585–0350 (FAX 202–586–5860). docket, EA–98–I, was issued on August AGENCY: Office Electricity Delivery and 6, 2002, and authorized 26 WSPP FOR FURTHER INFORMATION CONTACT: Energy Reliability, DOE. member companies individually to Ellen Russell (Program Office) 202–586– ACTION: Notice of Application. transmit electric energy to Canada. The 9624 or Michael Skinker (Program international transmission facilities Attorney) 202–586–2793. SUMMARY: The Western Systems Power utilized for these exports are owned by Pool (WSPP) has applied, on behalf of SUPPLEMENTARY INFORMATION: Exports of the Bonneville Power Administration, certain of its members, to renew their electricity from the United States to a also a WSPP member. The facilities authority to transmit electric energy foreign country are regulated and consist of two 500–kV transmission from the United States to Canada require authorization under section lines and one 230–kV transmission line pursuant to section 202(e) of the Federal 202(e) of the Federal Power Act (FPA) that interconnect with facilities of BC Power Act. (16 U.S.C. 824a(e)). Hydro, and one 230–kV line that

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interconnects with West Kootenay Issued in Washington, DC, on August 30, 202(e) of the Federal Power Act (FPA) Power, Limited. The construction and 2006. (16 U.S.C. 824a(e)). operation of these international Anthony J. Como, On March 20, 2006, the Office of transmission facilities was previously Director, Permitting and Siting, Office of Electricity Delivery and Energy authorized by Presidential Permits PP– Electricity Delivery and Energy Reliability. Reliability (OE) of DOE received an 10, PP–46, and PP–36, respectively. The [FR Doc. E6–14798 Filed 9–6–06; 8:45 am] application from Evergreen to transmit current WSPP authorization to export BILLING CODE 6450–01–P electric energy from the U.S. to Canada. electric energy to Canada will expire on Notice of the application appeared in September 5, 2006. the Federal Register on April 18, 2006 On August 1, 2006, WSPP submitted DEPARTMENT OF ENERGY (71 FR 19880) requesting any comments, an application on behalf of 13 member protests, or petitions to intervene. None companies to renew the export authority [Docket No. EA–309] were received. Evergreen supplemented contained in Order EA–98–I. The its application in filings received by following WSPP member companies are Amended Application To Export DOE on July 31, 2006, regarding the the only WSPP members that now seek Electric Energy; Evergreen Wind higher power transfer limit, and on authorization to export electric energy Power, LLC August 21, 2006, regarding the removal to Canada: Avista Corporation; Candela of the annual energy limit. AGENCY: Office of Electricity Delivery Evergreen is proposing to construct a Energy Corporation; Edison Mission and Energy Reliability, DOE. Marketing and Trading, Inc.; Idaho 49.5-megawatt (MW) wind generation Power Company; Kansas City Power & ACTION: Notice of Amended Application. facility, the Mars Hill Project, in Light; Northern States Power Company; Aroostook, Maine, and will sell the SUMMARY: Evergreen Wind Power, LLC electrical output of the facility within Pacific Northwest Generating (Evergreen) has submitted Cooperative; PacifiCorp; Powerex the U.S. and/or to customers in Canada. supplementary information and a The electric energy to be exported to Corporation; Portland General Electric clarification to its application filed with Company; Public Service of Colorado; Canada would be transmitted over the the Department of Energy (DOE) for international transmission facilities Puget Sound Energy; and TransCanada authorization to transmit electric energy Energy Ltd. owned by MPS and authorized by from the United States to Canada Presidential Permits PP–12 and PP–29. WSPP has also requested DOE pursuant to section 202(e) of the Federal Exports over the PP–12 and PP–29 expedite the processing of its Power Act. Evergreen has clarified its facilities are presently limited to a total application in order to avoid a lapse in application to request that DOE grant its of 40,000 MWh per year with a power the export authority of its members. export authorization without the annual transfer limit of 40.8 MW. Evergreen has Accordingly, DOE has shortened the energy limit presently associated with submitted technical information which public comment period to 15 days. the international transmission lines demonstrates that the power transfer Procedural Matters: Any person owned by Maine Public Service limit for the combination of the PP–12 desiring to become a party to this Company (MPS) that Evergreen and PP–29 facilities is now 97.8 MW, proceeding or to be heard by filing proposes to use for the export. not the 40.8 MW previously authorized. comments or protests to this application Evergreen also has submitted technical Evergreen also asserts that if it were should file a petition to intervene, information demonstrating that the subject to the existing 40,000–MWh comment or protest at the address power transfer limit associated with annual energy limit it would severely provided above in accordance with these transmission lines is actually hinder its ability to maximize the output §§ 385.211 or 385.214 of the Federal higher than that previously authorized of the Mars Hill Project. Energy Regulatory Commission’s Rules by DOE and requests its authorization DOE proposes to issue an export of Practice and Procedures (18 CFR be granted at the higher limit. DOE authorization to Evergreen at the 98.7– 385.211, 385.214). Fifteen copies of each hereby gives notice that, based on the MW power transfer limit and without petition and protest should be filed with submitted information, it plans to the annual energy limits. DOE notes that DOE on or before the date listed above. remove the annual energy limit on the it has previously authorized numerous Comments on the WSPP application MPS lines and allow the higher transfer entities to export over the PP–12 and to export electric energy to Canada rates for all exports over those lines. PP–29 facilities and that each of those should be clearly marked with Docket DATES: Comments, protests, or requests authorizations contained the 40,000– EA–98–J. Additional copies are to be to intervene must be submitted on or MWh energy limit and the 40.8–MW filed directly with Michael E. Small, before September 22, 2006. power transfer limit. DOE further General Counsel to the WSPP and proposes that all entities previously Matthew K. Segers, Associate, Wright & ADDRESSES: Comments, protests, or requests to intervene should be authorized by DOE to export over the Talisman, P.C., 1200 G Street, NW., PP–12 and PP–29 facilities would be Suite 600, Washington, DC 20005–3802. addressed as follows: Office Electricity Delivery and Energy Reliability (Mail permitted to export at the higher power A final decision will be made on this transfer limit with no annual energy application after the environmental Code OE–20), U.S. Department of Energy, 1000 Independence Avenue, limit. impacts have been evaluated pursuant Evergreen has also requested DOE SW., Washington, DC 20585–0350 (FAX to the National Environmental Policy expedite the processing of its 202–586–5860). Act of 1969, and a determination is application in order that Evergreen may made by DOE that the proposed action FOR FURTHER INFORMATION CONTACT: complete certain scheduled financing will not adversely impact on the Ellen Russell (Program Office) 202–586– transactions. Accordingly, DOE has reliability of the U.S. electric power 9506 or Michael Skinker (Program shortened the public comment period to supply system. Attorney) 202–586–2793. 15 days. Copies of this application will be SUPPLEMENTARY INFORMATION: Exports of Procedural Matters: Any person made available, upon request, by electricity from the United States to a desiring to become a party to this emailing Odessa Hopkins at foreign country are regulated and proceeding or to be heard by filing [email protected]. require authorization under section comments or protests to this application

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should file a petition to intervene, Independence Avenue, SW., inspection and copying at the address comment or protest at the address Washington, DC 20585–0350 (FAX 202– provided above or you may send an e- provided above in accordance with 586–5860). mail to Odessa Hopkins at §§ 385.211 or 385.214 of the Federal FOR FURTHER INFORMATION CONTACT: [email protected]. Energy Regulatory Commission’s Rules Ellen Russell (Program Office) 202–586– Issued in Washington, DC, on August 31, of Practice and Procedures (18 CFR 9624 or Michael Skinker (Program 2006. 385.211, 385.214). Fifteen copies of each Attorney) 202–586–2793. Anthony J. Como, petition and protest should be filed with SUPPLEMENTARY INFORMATION: Exports of Director, Permitting and Siting, Office of DOE on or before the date listed above. electricity from the United States to a Electricity Delivery and Energy Reliability. Comments on the Evergreen foreign country are regulated and [FR Doc. E6–14804 Filed 9–6–06; 8:45 am] application to export electric energy to require authorization under section BILLING CODE 6450–01–P Canada should be clearly marked with 202(e) of the Federal Power Act (FPA) Docket EA–309. Additional copies are to (16 U.S.C. 824a(e)). be filed directly with Peter Gish, On September 4, 2003, the DEPARTMENT OF ENERGY General Counsel, Evergreen Wind Department of Energy (DOE) issued Power, LLC, 100 Wells Avenue, Suite Order No. EA–284 authorizing SES to Federal Energy Regulatory 201, Newton, MA 02459, and David L. transmit electric energy from the United Commission Schwartz, Natasha Gianvecchio, Sue States to Mexico for a three-year term. Wang, Latham & Watkins LLP, 555 That authorization will expire on [Docket No. RR06–3–000] Eleventh Street, NW., Suite 1000, September 4, 2006. North American Electric Reliability Washington, DC 20004. On August 12, 2006, SES filed an Council; North American Electric A final decision will be made on this application with DOE for renewal of the Reliability Corporation; Notice of Filing application after the environmental export authority contained in Order No. impacts have been evaluated pursuant EA–284. SES proposes to export electric August 25, 2006. to the National Environmental Policy energy to Mexico and to arrange for the Take notice that on August 23, 2006, Act of 1969, and a determination is delivery of those exports over the North American Electric Reliability made by DOE that the proposed action international transmission facilities Corporation submitted for filing will not adversely impact on the presently owned San Diego Gas & pursuant to Commission’s Regulations reliability of the U.S. electric power Electric Company. 18 CFR 39.4 its initial business plan and supply system. SES has also requested DOE expedite budget as the electric reliability Copies of this application will be the processing of its application in order organization for the year ending that SES may continue to meet made available, upon request, for public December 31, 2007. contractual agreements with inspection and copying at the address Any person desiring to intervene or to counterparts in Mexico. Accordingly, provided above or by emailing Odessa protest this filing must file in DOE has shortened the public comment Hopkins at [email protected]. accordance with Rules 211 and 214 of period to 15 days. Issued in Washington, DC, on August 31, Procedural Matters: Any person the Commission’s Rules of Practice and 2006. desiring to become a party to these Procedure (18 CFR 385.211, 385.214). Anthony J. Como, proceedings or to be heard by filing Protests will be considered by the Director, Permitting and Siting, Office of comments or protests to this application Commission in determining the Electricity Delivery and Energy Reliability. should file a petition to intervene, appropriate action to be taken, but will [FR Doc. E6–14803 Filed 9–6–06; 8:45 am] comment or protest at the address not serve to make protestants parties to BILLING CODE 6450–01–P provided above in accordance with the proceeding. Any person wishing to §§ 385.211 or 385.214 of the Federal become a party must file a notice of Energy Regulatory Commission’s Rules intervention or motion to intervene, as DEPARTMENT OF ENERGY of Practice and Procedures (18 CFR appropriate. Such notices, motions, or [OE Docket No. EA–284–A] 385.211, 385.214). Fifteen copies of each protests must be filed on or before the petition and protest should be filed with comment date. On or before the Application to Export Electric Energy; the DOE on or before the dates listed comment date, it is not necessary to Sempra Energy Solutions above. serve motions to intervene or protests Comments on the SES application to on persons other than the Applicant. AGENCY: Office of Electricity Delivery export electric energy to Mexico should The Commission encourages and Energy Reliability, DOE. be clearly marked with Docket EA–284– electronic submission of protests and ACTION: Notice of Application. A. Additional copies are to be filed interventions in lieu of paper using the directly with Theodore E. Roberts, ‘‘eFiling’’ link at http://www.ferc.gov. SUMMARY: Sempra Energy Solution (SES) Attorney for Sempra Energy Solutions, Persons unable to file electronically has applied to renew its authority to 101 Ash Street, HQ13D, San Diego, CO should submit an original and 14 copies transmit electric energy from the United 92101. of the protest or intervention to the States to Canada pursuant to section A final decision will be made on this Federal Energy Regulatory Commission, 202(e) of the Federal Power Act. application after the environmental 888 First Street, NE., Washington, DC DATES: Comments, protests, or requests impacts have been evaluated pursuant 20426. to intervene must be submitted on or to the National Environmental Policy This filing is accessible on-line at before September 22, 2006. Act of 1969, and a determination is http://www.ferc.gov, using the ADDRESSES: Comments, protests, or made by DOE that the proposed action ‘‘eLibrary’’ link and is available for requests to intervene should be will not adversely impact on the review in the Commission’s Public addressed as follows: Office of reliability of the U.S. electric power Reference Room in Washington, DC. Electricity Delivery and Energy supply system. There is an ‘‘eSubscription’’ link on the Reliability, Mail Code: OE–20, U.S. Copies of this application will be Web site that enables subscribers to Department of Energy, 1000 made available, upon request, for public receive e-mail notification when a

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document is added to a subscribed (866) 208–3676 (toll free). For TTY, call amended facilities. However, due to the docket(s). For assistance with any FERC (202) 502–8659. increased diameter of the pipeline, Online service, please e-mail Comment Date: 5 p.m. Eastern Time Golden Pass is requesting additional [email protected], or call on September 20, 2006. temporary workspaces at certain (866) 208–3676 (toll free). For TTY, call Magalie R. Salas, locations. (202) 502–8659. This notice announces the opening of Comment Date: 5 p.m. eastern time on Secretary. September 13, 2006. [FR Doc. E6–14767 Filed 9–6–06; 8:45 am] the scoping period that will be used to BILLING CODE 6717–01–P gather environmental input from the Magalie R. Salas, public and interested agencies on the Secretary. Project. Please note that the scoping [FR Doc. E6–14768 Filed 9–6–06; 8:45 am] DEPARTMENT OF ENERGY period will close on September 25, BILLING CODE 6717–01–P 2006. Details on how to submit Federal Energy Regulatory comments are provided in the Public Commission Participation section of this notice. DEPARTMENT OF ENERGY [ Docket No. CP04–400–002] This notice is being sent to potentially affected landowners along the Project Federal Energy Regulatory Golden Pass Pipeline LP; Notice of route; Federal, state, and local Commission Intent To Prepare an Environmental government agencies; elected officials; Assessment for the Proposed Northern Tennessee Valley Authority; Notice of environmental and public interest Segment Amendment Project and Filing groups; Native American tribes; and Request for Comments on local libraries and newspapers. August 25, 2006. Environmental Issues Take notice that on August 21, 2006, With this notice, we 2 are asking August 25, 2006. Tennessee Valley Authority filed a Federal, state, and local agencies with The staff of the Federal Energy revised Interconnection Agreement with jurisdiction and/or special expertise Regulatory Commission (FERC or East Kentucky Power Cooperative, Inc., with respect to environmental issues to Commission) will prepare an in compliance with the Commission’s cooperate with us in the preparation of environmental assessment (EA) that order issued July 20, 2006. the EA. These agencies may choose to Any person desiring to intervene or to discusses the environmental impacts of participate once they have evaluated the protest this filing must file in Golden Pass Pipeline LP’s (Golden Pass) proposal relative to their accordance with Rules 211 and 214 of proposed Northern Segment responsibilities. Agencies which would the Commission’s Rules of Practice and Amendment Project (Northern Segment like to request cooperating status should Procedure (18 CFR 385.211, 385.214). Amendment or Project) which involves follow the instructions for filing Protests will be considered by the design and workspace changes to the comments described later in this notice. Commission in determining the pipeline facilities previously approved We encourage government appropriate action to be taken, but will as part of the Golden Pass LNG representatives to notify their 1 not serve to make protestants parties to Terminal and Pipeline Project. In the constituents of this planned project and the proceeding. Any person wishing to Northern Segment Amendment, Golden encourage them to comment on their become a party must file a notice of Pass proposes the following changes to areas of concern. the previously authorized facilities: (1) intervention or motion to intervene, as Some affected landowners may be appropriate. Such notices, motions, or Replace the authorized, but not yet constructed, 36-inch-diameter pipeline contacted by a project representative protests must be filed on or before the about the acquisition of an easement to comment date. Anyone filing a motion with a 42-inch-diameter pipeline between approximate milepost (MP) construct, operate, and maintain the to intervene or protest must serve a copy proposed pipeline. If so, the company of that document on the Applicant and 42.81 and MP 77.87, at the American Electric Power Texoma Pipeline (AEP should seek to negotiate a mutually all the parties in this proceeding. acceptable agreement. In the event that The Commission encourages Texoma) interconnect and the the Project is certificated by the electronic submission of protests and Transcontinental Gas Pipe Line Commission, that approval conveys the interventions in lieu of paper using the Corporation (Transco) interconnect, ‘‘eFiling’’ link at http://www.ferc.gov. respectively; (2) relocate a mainline right of eminent domain for securing Persons unable to file electronically valve (MLV) from MP 54.11 to 52.50 and easements for the pipeline. Therefore, if should submit an original and 14 copies install a 42-inch MLV rather than a 36- easement negotiations fail to produce an of the protest or intervention to the inch MLV; (3) remove from the agreement, the company could initiate Federal Energy Regulatory Commission, approved facilities the 36-inch pig condemnation proceedings in 888 First Street, NE., Washington, DC receiver and launcher at the AEP accordance with state law. 20426. Texoma interconnect; and (4) install a A fact sheet prepared by the FERC This filing is accessible online at 42-inch pig receiver and MLV at the entitled ‘‘An Interstate Natural Gas http://www.ferc.gov, using the Transco interconnect. The pipeline Facility On My Land? What Do I Need ‘‘eLibrary’’ link and is available for route would not change as a result of the To Know?’’ addresses a number of review in the Commission’s Public typically asked questions, including the Reference Room in Washington, DC. 1 On July 6, 2005, the Commission approved the use of eminent domain and how to Golden Pass LNG Terminal and Pipeline Project in There is an ‘‘eSubscription’’ link on the Docket Nos. CP04–386–000, CP04–400–000, CP04– participate in the Commission’s Web site that enables subscribers to 401–000, and CP04–402–000. The Golden Pass LNG proceedings. It is available for viewing receive e-mail notification when a Terminal and Pipeline Project included a liquefied on the FERC Internet Web site document is added to a subscribed natural gas (LNG) terminal and associated LNG (www.ferc.gov). facilities, 77.8 miles of 36-inch diameter mainline docket(s). For assistance with any FERC pipeline, 42.8 miles of 36-inch diameter looping Online service, please e-mail pipeline that would be constructed adjacent to the 2 ‘‘We,’’ ‘‘us,’’ and ‘‘our’’ refer to the [email protected], or call mainline, and associated pipeline facilities. environmental staff of the Office of Energy Projects.

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Summary of the Proposed Project Certificate of Public Convenience and facilities and the environmental In the Commission’s July 6, 2005 Necessity under Section 7 of the Natural information provided by Golden Pass. Order, Golden Pass was authorized to Gas Act. NEPA also requires us to This preliminary list of issues may be construct and operate approximately discover and address concerns the changed based on your comments and 77.8 miles of 36-inch-diameter public may have about proposals. This our analysis. process is referred to as ‘‘scoping’’. The • Water Resources. mainline, 42.8 miles of 36-inch- • diameter loop, and 1.8 miles of 24-inch- main goal of the scoping process is to Impact on water quality. • Impact on wetlands. diameter pipeline and related pipeline focus the analysis in the EA on the • Endangered and Threatened facilities. These facilities (or the important environmental issues. By this Notice of Intent, the Commission staff Species. Authorized Pipeline) will be used to • Land use. transport natural gas on an open-access requests public comments on the scope basis from the Golden Pass LNG of the issues to address in the EA. All Public Participation Terminal on the Port Arthur ship comments received are considered during the preparation of the EA. By You can make a difference by channel to various interstate and providing us with your specific intrastate pipelines in Texas and this notice, we are also asking Federal, state, and local agencies with comments or concerns about the Project. Louisiana. The EA prepared for the By becoming a commentor, your Project will incorporate by reference jurisdiction and/or special expertise with respect to environmental issues to concerns may be addressed in the EA information provided in the and considered by the Commission. You environmental impact statement formally cooperate with us in the preparation of the EA. Agencies that should focus on the potential prepared for the Golden Pass LNG environmental effects of the proposal, Terminal and Pipeline Project. would like to request cooperating status should follow the instructions for filing alternatives to the proposal (including Golden Pass presently has a pending alternative locations and routes), and application for the Optimized Pipeline comments below. In the EA we will discuss impacts that measures to avoid or lessen Project (OP Project) by which it environmental impact. The more proposes to construct and operate a could occur as a result of the construction and operation of the specific your comments, the more useful single 42-inch-diameter pipeline, in they may be. Please carefully follow place of the 42.8 miles of dual 36-inch- proposed Project under these general headings: these instructions to ensure that your diameter pipelines and to shorten the • comments are received in time and pipeline route. That proposal would Land use. • Water resources, fisheries, and properly recorded: involve only those pipeline facilities in • wetlands. Send an original and two copies of Jefferson and Orange Counties, Texas, • Cultural resources. your letter to: Magalie R. Salas, south of approximate MP 42.81. An • Vegetation and wildlife. Secretary, Federal Energy Regulatory environmental assessment of the OP • Endangered and threatened species. Commission, 888 First St., NE., Room Project was issued on August 15, 2006. We will also evaluate possible 1A, Washington, DC 20426. The Northern Segment Amendment alternatives to the proposed Project or • Label one copy of the comments for would affect the authorized pipeline portions of the Project, and make the attention of Gas Branch 2. north of MP 42.81. A map illustrating recommendations on how to lessen or • Reference Docket No. CP04–400– the authorized facilities and the avoid impacts on the various resource 002 on the original and both copies. proposed Project is provided in areas. • Mail your comments so that they Appendix 1.3 Our independent analysis of the will be received in Washington, DC, on Non-Jurisdictional Facilities issues will be included in the EA. or before September 25, 2006. Depending on the comments received Please note that we are continuing to There are no proposed non- during the scoping process, the EA experience delays in mail deliveries jurisdictional facilities associated with would be published and mailed to from the U.S. Postal Service. As a result, this proposal. Federal, state, and local agencies, Native we will include all comments that we Land Requirements for Construction American tribes, public interest groups, receive within a reasonable time frame in our environmental analysis of this Construction of the Project would not interested individuals, affected project. However, the Commission change the permanent pipeline right-of- landowners, newspapers, libraries, and strongly encourages electronic filing of way, but it would require additional the Commission’s official service list for any comments or interventions or temporary construction workspace at this proceeding. A comment period protests to this proceeding. See 18 CFR certain waterbody, road, and pipeline would be allotted for review of the EA. 385.2001(a)(1)(iii) and the instructions crossings. The total increase in All comments received on the EA would on the Commission’s Web site at http:// temporary land requirements would be be considered before we make our www.ferc.gov under the ‘‘e-Filing’’ link about 4.89 acres. recommendations to the Commission. The EA is used by the Commission in and the link to the User’s Guide. Before The EA Process its decision-making process to you can file comments, you will need to NEPA requires the Commission to determine whether the Project is in the open a free account which can be take into account the environmental public convenience and necessity. created online. To ensure your comments are impacts that could result from an action Becoming an Intervenor whenever it considers the issuance of a considered, please carefully follow the instructions in the public participation In addition to involvement in the EA 3 The appendices referenced in this notice are not section described later in this notice. scoping process, you may want to being printed in the Federal Register. Copies are become an official party to the available on the Commission’s Internet Web site Currently Identified Environmental proceeding known as an ‘‘intervenor’’. (http://www.ferc.gov) at the ‘‘eLibrary’’ link or from Issues Intervenors play a more formal role in the Commission’s Public Reference and Files Maintenance Branch at 1–202–502–8371. For We have identified several issues that the process. Among other things, instructions on connecting to eLibrary refer to the we think deserve attention based on a intervenors have the right to receive Additional Information section of this notice. preliminary review of the proposed copies of case-related Commission

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documents and filings by other EventCalendar/EventsList.aspx along powerhouse containing two proposed intervenors. Likewise, each intervenor with other related information. generating unit with an installed must send one electronic copy (using capacity of 500 kilowatts, (4) an existing Magalie R. Salas, the Commission’s eFiling system) or 14 100 feet long and 50 feet wide tailrace, paper copies of its filings to the Secretary. (5) a proposed 60-foot-long, 12.5 Secretary of the Commission and must [FR Doc. E6–14769 Filed 9–6–06; 8:45 am] kilovolt transmission line, and (6) send a copy of its filings to all other BILLING CODE 6717–01–P appurtenant facilities. The proposed parties on the Commission’s service list project would have an average annual for this proceeding. If you want to generation of 2.575 gigawatt-hours, become an intervenor you must file a DEPARTMENT OF ENERGY which would be sold to a local utility. motion to intervene according to Rule Federal Energy Regulatory l. Locations of Applications: A copy of 214 of the Commission’s Rules of Commission the application is available for Practice and Procedure (18 CFR inspection and reproduction at the 385.214, see Appendix 2). Only Notice of Application Accepted for Commission in the Public Reference intervenors have the right to seek Filing and Soliciting Motions To Room, located at 888 First Street, NE., rehearing of the Commission’s decision. Intervene, Protests, and Comments Room 2A, Washington, DC 20426, or by Affected landowners and parties with calling (202) 502–8371. This filing may environmental concerns may be granted August 28, 2006. also be viewed on the Commission’s intervenor status upon showing good Take notice that the following Web site at http://www.ferc.gov using cause by stating that they have a clear hydroelectric application has been filed the ‘‘eLibrary’’ link. Enter the docket and direct interest in this proceeding with the Commission and is available number excluding the last three digits in which would not be adequately for public inspection: the docket number field to access the represented by any other parties. You do a. Type of Application: Preliminary document. For assistance, call toll-free not need intervenor status to have your Permit. 1–866–208–3676 or e-mail environmental comments considered. b. Project No.: 12703–000. [email protected]. For TTY, c. Date filed: June 28, 2006. Environmental Mailing List call (202) 502–8659. A copy is also d. Applicant: Goshen Hydroelectric available for inspection and If you do not want to send comments Power LLC. reproduction at the address in item h at this time, but still want to remain on e. Name of Project: Goshen above. our mailing list, please return the Hydroelectric Project. m. Individuals desiring to be included attached Mailing List Retention Form f. Location: The project would be on the Commission’s mailing list should (Appendix 3). If you do not return the located on the Elkhart River in Elkhart so indicate by writing to the Secretary form, you will be taken off the mailing County, Indiana. The project would use of the Commission. list. the Goshen Dam owned by the Elkhart County Parks and Recreation. n. Competing Preliminary Permit: Additional Information g. Filed Pursuant to: Federal Power Anyone desiring to file a competing Additional information about the Act, 16 U.S.C. 791(a)–825(r). application for preliminary permit for a Project is available from the h. Applicant Contact: Mr. William proposed project must submit the Commission’s Office of External Affairs, Stockhausen, 218 W. Dunlap Street, competing application itself, or a notice at 1–866–208–FERC or on the FERC Northville, MI 48167 (248) 349–2833. of intent to file such an application, to Internet Web site (www.ferc.gov) using i. FERC Contact: Patricia W. Gillis at the Commission on or before the the eLibrary link. Click on the eLibrary (202) 502–8735. specified comment date for the link, click on ‘‘General Search’’ and j. Deadline for filing comments, particular application (see 18 CFR 4.36). enter the docket number excluding the protests, and motions to intervene: 60 Submission of a timely notice of intent last three digits in the Docket Number days from the issuance date of this allows an interested person to file the field. Be sure you have selected an notice. competing preliminary permit appropriate date range. For assistance, The Commission’s Rules of Practice application no later than 30 days after please contact FERC Online Support at and Procedure require all intervenors the specified comment date for the [email protected] or toll free filing documents with the Commission particular application. A competing at 1–866–208–3676, or for TTY, contact to serve a copy of that document on preliminary permit application must 1–202–502–8659. The eLibrary link also each person in the official service list conform with 18 CFR 4.30(b) and 4.36. provides access to the texts of formal for the project. Further, if an intervenor o. Competing Development documents issued by the Commission, files comments or documents with the Application: Any qualified development such as orders, notices, and Commission relating to the merits of an applicant desiring to file a competing rulemakings. issue that may affect the responsibilities development application must submit to In addition, the Commission now of a particular resource agency, they the Commission, on or before a offers a free service called eSubscription must also serve a copy of the document specified comment date for the which allows you to keep track of all on that resource agency. particular application, either a formal issuances and submittals in k. Description of Project: The competing development application or a specific dockets. This can reduce the proposed project would consist of the notice of intent to file such an amount of time you spend researching following: (1) The existing 130-foot- application. Submission of a timely proceedings by automatically providing wide, 5-foot-high Goshen Dam owned notice of intent to file a development you with notification of these filings, by the Elkhart County Park and application allows an interested person document summaries and direct links to Recreation, (2) an existing to file the competing application no the documents. Go to www.ferc.gov/ impoundment having a surface area of later than 120 days after the specified esubscribenow.htm. 765 acres with a storage capacity of comment date for the particular Finally, public meetings or site visits 3100 acre-feet and normal water surface application. A competing license will be posted on the Commission’s elevation of 790.9 feet mean sea level, application must conform with 18 CFR calendar located at www.ferc.gov/ (3) a proposed reconstructed 4.30(b) and 4.36.

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p. Notice of Intent: A notice of intent t. Agency Comments: Federal, state, following: (1) The existing 130-foot- must specify the exact name, business and local agencies are invited to file wide, 4-foot-high Baintertown Dam address, and telephone number of the comments on the described application. owned by the Elkhart County Parks and prospective applicant, and must include A copy of the application may be Recreation, (2) an existing concrete and an unequivocal statement of intent to obtained by agencies directly from the rock fill spillway with mean crest submit, if such an application may be Applicant. If an agency does not file elevation of 803 feet mean sea level, (3) filed, either a preliminary permit comments within the time specified for a proposed reconstructed powerhouse application or a development filing comments, it will be presumed to containing one proposed generating unit application (specify which type of have no comments. One copy of an with an installed capacity of 325 application). A notice of intent must be agency’s comments must also be sent to kilowatts, (4) an existing 500 feet long served on the applicant(s) named in this the Applicant’s representatives. and 50 feet wide tailrace, (5) a proposed public notice. 200-foot-long, 12.5 kilovolt transmission q. Proposed Scope of Studies Under Magalie R. Salas, line, and (6) appurtenant facilities. The Permit: A preliminary permit, if issued, Secretary. proposed project would have an average does not authorize construction. The [FR Doc. E6–14770 Filed 9–6–06; 8:45 am] annual generation of 870 megawatt- term of the proposed preliminary permit BILLING CODE 6717–01–P hours, which would be sold to a local would be 36 months. The work utility. proposed under the preliminary permit l. Locations of Applications: A copy of would include economic analysis, DEPARTMENT OF ENERGY the application is available for preparation of preliminary engineering inspection and reproduction at the plans, and a study of environmental Federal Energy Regulatory Commission in the Public Reference impacts. Based on the results of these Commission Room, located at 888 First Street, NE., studies, the Applicant would decide Room 2A, Washington, DC 20426, or by Notice of Application Accepted for whether to proceed with the preparation calling (202) 502–8371. This filing may Filing and Soliciting Motions To of a development application to also be viewed on the Commission’s Intervene, Protests, and Comments construct and operate the project. Web site at http://www.ferc.gov using r. Comments, Protests, or Motions to August 28, 2006. the ‘‘eLibrary’’ link. Enter the docket Intervene: Anyone may submit Take notice that the following number excluding the last three digits in comments, a protest, or a motion to hydroelectric application has been filed the docket number field to access the intervene in accordance with the with the Commission and is available document. For assistance, call toll-free requirements of Rules of Practice and for public inspection: 1–866–208–3676 or e-mail Procedure, 18 CFR 385.210, 385.211, a. Type of Application: Preliminary [email protected]. For TTY, 385.214. In determining the appropriate Permit. call (202) 502–8659. A copy is also action to take, the Commission will b. Project No.: 12702–000. available for inspection and consider all protests or other comments c. Date filed: June 28, 2006. reproduction at the address in item h filed, but only those who file a motion d. Applicant: Baintertown above. to intervene in accordance with the Hydroelectric Power LLC. m. Individuals desiring to be included Commission’s Rules may become a e. Name of Project: Baintertown on the Commission’s mailing list should party to the proceeding. Any comments, Hydroelectric Project. so indicate by writing to the Secretary protests, or motions to intervene must f. Location: The project would be of the Commission. be received on or before the specified located on the Elkhart River in Elkhart n. Competing Preliminary Permit: comment date for the particular County, Indiana. The project would use Anyone desiring to file a competing application. the Baintertown Dam owned by the application for preliminary permit for a Comments, protests and interventions Elkhart County Parks and Recreation. proposed project must submit the may be filed electronically via the g. Filed Pursuant to: Federal Power competing application itself, or a notice Internet in lieu of paper; See 18 CFR Act, 16 U.S.C. 791(a)–825(r). of intent to file such an application, to 385.2001(a)(1)(iii) and the instructions h. Applicant Contact: Mr. William the Commission on or before the on the Commission’s Web site under ‘‘e- Stockhausen, 218 W. Dunlap Street, specified comment date for the filing’’ link. The Commission strongly Northville, MI 48167 (248) 349–2833. particular application (see 18 CFR 4.36). encourages electronic filing. i. FERC Contact: Patricia W. Gillis at Submission of a timely notice of intent s. Filing and Service of Responsive (202) 502–8735. allows an interested person to file the Documents: Any filings must bear in all j. Deadline for filing comments, competing preliminary permit capital letters the title ‘‘Comments’’, protests, and motions to intervene: 60 application no later than 30 days after ‘‘Recommendations for Terms and days from the issuance date of this the specified comment date for the Conditions’’, ‘‘Protest’’, or ‘‘Motion to notice. particular application. A competing Intervene’’, as applicable, and the The Commission’s Rules of Practice preliminary permit application must Project Number of the particular and Procedure require all intervenors conform with 18 CFR 4.30(b) and 4.36. application to which the filing refers. filing documents with the Commission o. Competing Development Any of the above-named documents to serve a copy of that document on Application: Any qualified development must be filed by providing the original each person in the official service list applicant desiring to file a competing and the number of copies provided by for the project. Further, if an intervenor development application must submit to the Commission’s regulations to: The files comments or documents with the the Commission, on or before a Secretary, Federal Energy Regulatory Commission relating to the merits of an specified comment date for the Commission, 888 First Street, NE., issue that may affect the responsibilities particular application, either a Washington, DC 20426. A copy of any of a particular resource agency, they competing development application or a motion to intervene must also be served must also serve a copy of the document notice of intent to file such an upon each representative of the on that resource agency. application. Submission of a timely Applicant specified in the particular k. Description of Project: The notice of intent to file a development application. proposed project would consist of the application allows an interested person

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to file the competing application no Energy Regulatory Commission, 888 issue that may affect the responsibilities later than 120 days after the specified First Street, NE., Washington, DC 20426. of a particular resource agency, they comment date for the particular A copy of any motion to intervene must must also serve a copy of the document application. A competing license also be served upon each representative on that resource agency. application must conform with 18 CFR of the Applicant specified in the k. Description of Project: The 4.30(b) and 4.36. particular application. proposed project would consist of the p. Notice of Intent: A notice of intent t. Agency Comments: Federal, State, following: (1) The existing 130-foot- must specify the exact name, business and local agencies are invited to file wide, 5-foot-high Benton Dam owned by address, and telephone number of the comments on the described application. the Elkhart County Department of Parks prospective applicant, and must include A copy of the application may be and Recreation, (2) an existing concrete an unequivocal statement of intent to obtained by agencies directly from the and rock fill spillway with mean crest submit, if such an application may be Applicant. If an agency does not file elevation of 822 feet mean sea level, (3) filed, either a preliminary permit comments within the time specified for a proposed reconstructed powerhouse application or a development filing comments, it will be presumed to containing one proposed generating unit application (specify which type of have no comments. One copy of an with an installed capacity of 325 application). A notice of intent must be agency’s comments must also be sent to kilowatts, (4) an existing 700 feet long served on the applicant(s) named in this the Applicant’s representatives. and 50 feet wide tailrace, (5) an existing public notice. one-mile-long, 12.5 kilovolt q. Proposed Scope of Studies Under Magalie R. Salas, transmission line, and (6) appurtenant Permit: A preliminary permit, if issued, Secretary. facilities. The proposed project would does not authorize construction. The [FR Doc. E6–14771 Filed 9–6–06; 8:45 am] have an average annual generation of 1.7 term of the proposed preliminary permit BILLING CODE 6717–01–P gigawatt-hours, which would be sold to would be 36 months. The work a local utility. proposed under the preliminary permit l. Locations of Applications: A copy of would include economic analysis, DEPARTMENT OF ENERGY the application is available for preparation of preliminary engineering inspection and reproduction at the plans, and a study of environmental Federal Energy Regulatory Commission in the Public Reference impacts. Based on the results of these Commission Room, located at 888 First Street, NE., studies, the Applicant would decide Room 2A, Washington DC 20426, or by whether to proceed with the preparation Notice of Application Accepted for calling (202) 502–8371. This filing may of a development application to Filing and Soliciting Motions To also be viewed on the Commission’s construct and operate the project. Intervene, Protests, and Comments Web site at http://www.ferc.gov using r. Comments, Protests, or Motions to August 28, 2006. the ‘‘eLibrary’’ link. Enter the docket Intervene: Anyone may submit Take notice that the following number excluding the last three digits in comments, a protest, or a motion to hydroelectric application has been filed the docket number field to access the intervene in accordance with the with the Commission and is available document. For assistance, call toll-free requirements of Rules of Practice and for public inspection: 1–866–208–3676 or e-mail Procedure, 18 CFR 385.210, 385.211, a. Type of Application: Preliminary [email protected]. For TTY, 385.214. In determining the appropriate Permit. call (202) 502–8659. A copy is also action to take, the Commission will b. Project No.: 12701–000. available for inspection and consider all protests or other comments c. Date filed: June 28, 2006. reproduction at the address in item h filed, but only those who file a motion d. Applicant: Benton Hydroelectric above. to intervene in accordance with the Power LLC. m. Individuals desiring to be included Commission’s Rules may become a e. Name of Project: Benton on the Commission’s mailing list should party to the proceeding. Any comments, Hydroelectric Project. so indicate by writing to the Secretary protests, or motions to intervene must f. Location: The project would be of the Commission. be received on or before the specified located on the Elkhart River in Elkhart n. Competing Preliminary Permit: comment date for the particular County, Indiana. The project would use Anyone desiring to file a competing application. the Benton Dam owned by the Elkhart application for preliminary permit for a Comments, protests and interventions County Parks and Recreation. proposed project must submit the may be filed electronically via the g. Filed Pursuant to: Federal Power competing application itself, or a notice Internet in lieu of paper; See 18 CFR Act, 16 U.S.C. 791(a)–825(r). of intent to file such an application, to 385.2001(a)(1)(iii) and the instructions h. Applicant Contact: Mr. William the Commission on or before the on the Commission’s Web site under ‘‘e- Stockhausen, 218 W. Dunlap Street, specified comment date for the filing’’ link. The Commission strongly Northville, MI 48167 (248) 349–2833. particular application (see 18 CFR 4.36). encourages electronic filing. i. FERC Contact: Patricia W. Gillis at Submission of a timely notice of intent s. Filing and Service of Responsive (202) 502–8735. allows an interested person to file the Documents: Any filings must bear in all j. Deadline for filing comments, competing preliminary permit capital letters the title COMMENTS, protests, and motions to intervene: 60 application no later than 30 days after RECOMMENDATIONS FOR TERMS days from the issuance date of this the specified comment date for the AND CONDITIONS, PROTEST, OR notice. particular application. A competing MOTION TO INTERVENE, as The Commission’s Rules of Practice preliminary permit application must applicable, and the Project Number of and Procedure require all intervenors conform with 18 CFR 4.30(b) and 4.36. the particular application to which the filing documents with the Commission o. Competing Development filing refers. Any of the above-named to serve a copy of that document on Application: Any qualified development documents must be filed by providing each person in the official service list applicant desiring to file a competing the original and the number of copies for the project. Further, if an intervenor development application must submit to provided by the Commission’s files comments or documents with the the Commission, on or before a regulations to: The Secretary, Federal Commission relating to the merits of an specified comment date for the

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particular application, either a application to which the filing refers. necessary to assure access to the competing development application or a Any of the above-named documents equipment. Receipt of fax transmittals notice of intent to file such an must be filed by providing the original will not be acknowledged, except that application. Submission of a timely and the number of copies provided by the sender may request confirmation of notice of intent to file a development the Commission’s regulations to: The receipt by calling the Executive application allows an interested person Secretary, Federal Energy Regulatory Secretariat staff at (202) 663–4070 to file the competing application no Commission, 888 First Street, NE., (voice) or (202) 663–4074 (TTY). (These later than 120 days after the specified Washington, DC 20426. A copy of any are not toll-free telephone numbers.) comment date for the particular motion to intervene must also be served Copies of comments submitted by the application. A competing license upon each representative of the public will be available to review at the application must conform with 18 CFR Applicant specified in the particular Commission’s library, Room 6502, 1801 4.30(b) and 4.36. application. L Street, NW., Washington, DC 20507 p. Notice of Intent: A notice of intent t. Agency Comments: Federal, State, between the hours of 9:30 a.m. and 5 must specify the exact name, business and local agencies are invited to file p.m. address, and telephone number of the comments on the described application. FOR FURTHER INFORMATION CONTACT: prospective applicant, and must include A copy of the application may be Cynthia Pierre, Director, Field an unequivocal statement of intent to obtained by agencies directly from the submit, if such an application may be Management Programs, Office of Field Applicant. If an agency does not file Programs, 1801 L Street, NW., filed, either a preliminary permit comments within the time specified for application or a development Washington, DC 20507, (202) 663–7115 filing comments, it will be presumed to (voice). This notice is available in the application (specify which type of have no comments. One copy of an application). A notice of intent must be following formats: large print, braille, agency’s comments must also be sent to audio tape and electronic file on served on the applicant(s) named in this the Applicant’s representatives. public notice. computer disk. Requests for this notice q. Proposed Scope of Studies Under Magalie R. Salas, in an alternative format should be made Permit: A preliminary permit, if issued, Secretary. to the Publications Center at 1–800– does not authorize construction. The [FR Doc. E6–14772 Filed 9–6–06; 8:45 am] 699–3362. term of the proposed preliminary permit BILLING CODE 6717–01–P SUPPLEMENTARY INFORMATION: The Equal would be 36 months. The work Employment Opportunity Commission proposed under the preliminary permit (EEOC) enforces Title VII of the Civil would include economic analysis, EQUAL EMPLOYMENT OPPORTUNITY Rights Act of 1964, the Equal Pay Act, preparation of preliminary engineering COMMISSION the Age Discrimination in Employment plans, and a study of environmental Act, the Rehabilitation Act, Title I of the impacts. Based on the results of these Agency Information Collection Americans with Disabilities Act, and the studies, the Applicant would decide Activities: Proposed Collection; Pregnancy Employment Discrimination whether to proceed with the preparation Comment Request Act. Pursuant to its authority under of a development application to those statutes, EEOC created a National construct and operate the project. AGENCY: Equal Employment Contact Center to provide the public r. Comments, Protests, or Motions To Opportunity Commission. with 24-hour access to EEOC and Intervene: Anyone may submit ACTION: Notice of information information about equal employment comments, a protest, or a motion to collection—new: EEOC National rights and responsibilities. The EEOC intervene in accordance with the Contact Center Customer Service National Contact Center provides the requirements of Rules of Practice and Survey. public with a centralized point of access Procedure, 18 CFR 385.210, 385.211, for reaching the EEOC and offers several SUMMARY: In accordance with the 385.214. In determining the appropriate choices for communicating with the Paperwork Reduction Act of 1995 (Pub. action to take, the Commission will EEOC, such as phone, TTY, e-mail, L. 104–13, 44 U.S.C. chapter 35), the consider all protests or other comments facsimile, and standard mail. In an effort Commission announces its intent to filed, but only those who file a motion to ensure continued quality service, submit to the Office of Management and to intervene in accordance with the EEOC proposes this customer Budget (OMB) a request to approve a Commission’s Rules may become a satisfaction survey in order to request new information collection as described party to the proceeding. Any comments, each person who uses the National below. protests, or motions to intervene must Contact Center to respond to three be received on or before the specified DATES: Written comments on this notice questions about the service they comment date for the particular must be submitted on or before received. This constitutes a collection of application. November 6, 2006. information under the Paperwork Comments, protests and interventions ADDRESSES: Comments should be Reduction Act. may be filed electronically via the submitted to Stephen Llewellyn, Pursuant to the Paperwork Reduction Internet in lieu of paper; See 18 CFR Executive Officer, Executive Secretariat, Act of 1995, 44 U.S.C. Chapter 35, and 385.2001(a)(1)(iii) and the instructions Equal Employment Opportunity OMB regulation 5 CFR 1320.8(d)(1), the on the Commission’s Web site under ‘‘e- Commission, 10th Floor, 1801 L Street, Commission solicits public comment on filing’’ link. The Commission strongly NW., Washington, DC 20507. As a its proposed survey to enable it to: encourages electronic filing. convenience to commentators, the (1) Evaluate whether the proposed s. Filing and Service of Responsive Executive Secretariat will accept collection of information is necessary Documents: Any filings must bear in all comments transmitted by facsimile (fax) for the proper performance of the capital letters the title ‘‘Comments’’, machine. The telephone number of the functions of the agency, including ‘‘Recommendations for Terms and fax receiver is (202) 663–4114. (This is whether the information will have Conditions’’, ‘‘Protest’’, or ‘‘Motion to not a toll-free number.) Only comments practical utility; Intervene’’, as applicable, and the of six or fewer pages will be accepted (2) Evaluate the accuracy of the Project Number of the particular via fax transmittal. This limitation is agency’s estimate of the burden of the

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proposed collection of information, Management and Budget (OMB) control information collected; and (d) ways to including the validity of the number. This collection of information minimize the burden of the collection of methodology and assumptions used; is approved under OMB number ll information on the respondents, (3) Enhance the quality, utility, and (Expiration Date: ll ). The obligation including the use of automated clarity of the information to be to respond to this information collection collection techniques or other forms of collected; and is voluntary; The average time to information technology. (4) Minimize the burden of the respond to this information collection is DATES: Persons wishing to comment on collection of information on those who estimated to be 5 minutes. Submit this information collection should are to respond, including through the comments regarding this estimate; submit comments by November 6, 2006. use of appropriate automated, including suggestions for reducing If you anticipate that you will be electronic, mechanical, or other response time to the U.S. Equal submitting comments, but find it technological collection techniques or Employment Opportunity Commission, difficult to do so within the period of other forms of information technology, Office of the Chair, 1801 L Street, NW., time allowed by this notice, you should e.g., permitting electronic submission of Washington, DC 20507. Please reference advise the contact listed below as soon responses. to OMB Number ll . We are very as possible. The remainder of this SUPPLEMENTARY interested in your thoughts and ADDRESSES: You may submit your INFORMATION section provides the public suggestions about your experience in Paperwork Reduction Act (PRA) with information it will need to responding to the Equal Employment comments by email or U.S. postal mail. comment on the EEOC proposal. It Opportunity Commission’s National To submit your comments by e-mail contains an overview of the information Contact Center Customer Satisfaction send them to: [email protected]. To submit collection and the proposed survey. Survey. Your comments will be very your comments by U.S. mail, mark it to Overview of This Information useful to the Commission in making the attention of Judith B. Herman, Collection improvements in our National Contact Federal Communications Commission, Center. 445 12th Street, SW., Room 1–B441, Collection Title: EEOC National Dated: August 30, 2006. Washington, DC 20554. Contact Center Customer Satisfaction Survey. For the Commission. FOR FURTHER INFORMATION CONTACT: For OMB-Number: None. Cari M. Dominguez, additional information about the Description of Affected Public: Chair. information collection(s) send an e-mail Individuals or households; Businesses [FR Doc. E6–14813 Filed 9–6–06; 8:45 am] to [email protected] or contact Judith B. or other for profit, not-for-profit BILLING CODE 6570–01–P Herman at 202–418–0214. If you would institutions; state or local governments. like to obtain or view a copy of this Number of Responses: Unknown. information collection after this 60 day Estimated Reporting Time Per FEDERAL COMMUNICATIONS comment period, you may do so by Respondent: 5 minutes. COMMISSION visiting the FCC PRA Web page at: Total Burden Hours: Unknown. http://www.fcc.gov/omd/pra. Federal Cost: None. Notice of Public Information SUPPLEMENTARY INFORMATION: Form: Collection(s) Being Reviewed by the OMB Control No.: 3060–0782. Federal Communications Commission Title: Petition for Limited Customer Satisfaction Survey Questions for Extension Under Delegated Modification of LATA Boundaries to EEOC National Contact Center Authority Provide Expanded Local Calling Service (To be used with persons who call, e-mail, (ELCS) at Various Locations. fax, or write the Contact Center) August 29, 2006. Form No.: N/A. Question 1: Overall, I was satisfied with the SUMMARY: The Federal Communications Type of Review: Extension of a quality of service that I received. Commission, as part of its continuing currently approved collection. A. Strongly Agree effort to reduce paperwork burden Respondents: Business or other for- B. Agree invites the general public and other profit. C. Neutral Federal agencies to take this Number of Respondents: 20 D. Disagree opportunity to comment on the respondents; 100 responses. E. Strongly Disagree following information collection(s), as Question 2: The Customer Service Estimated Time per Response: 8 hours Representative who assisted me was required by the Paperwork Reduction (5 times/year). helpful. Act of 1995, Public Law 104–13. An Frequency of Response: On occasion A. Strongly Agree agency may not conduct or sponsor a reporting requirement. B. Agree collection of information unless it Total Annual Burden: 800 hours. C. Neutral displays a currently valid control Annual Cost Burden: N/A. D. Disagree number. No person shall be subject to Privacy Act Impact Assessment: N/A. E. Strongly Disagree any penalty for failing to comply with Needs and Uses: This collection will Question 3: I would use the EEOC National a collection of information subject to the be submitted as an extension (no change Contact Center again. Paperwork Reduction Act (PRA) that in reporting requirements) after this 60 A. Strongly Agree B. Agree does not display a valid control number. day comment period to Office of C. Neutral Comments are requested concerning (a) Management and Budget (OMB) in order D. Disagree whether the proposed collection of to obtain the full three year clearance. E. Strongly Disagree information is necessary for the proper The Commission, pursuant to the performance of the functions of the provisions of the Communications Act Paperwork Reduction Act Notice Commission, including whether the of 1934, as amended (‘‘the Act’’), (Public Law 104–13) information shall have practical utility; requests that Bell Operating Companies Persons are not required to respond to (b) the accuracy of the Commission’s (BOCs) provide certain information to a collection of information unless it burden estimate; (c) ways to enhance the Commission regarding BOC requests displays a currently valid Office of the quality, utility, and clarity of the for limited modification of local access

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and transport area (LATA) boundaries to FEDERAL COMMUNICATIONS Title: Annual Survey of Cable provide extended local calling service COMMISSION Industry Prices (‘‘Price Survey’’). (ELCS). The Commission has provided Form Number: Not applicable. voluntary guidelines for filing ELCS. Notice of Public Information Type of Review: Revision of a These guidelines will allow the Collection(s) Being Reviewed by the currently approved collection. Commission to conduct smooth and Federal Communications Commission, Respondents: Business or other for- continuous processing of these requests. Comments Requested profit entities; State, Local or Tribal The collection of information will Government. August 23, 2006. Number of Respondents: 780. enable the Commission to determine if SUMMARY: Estimated Time per Response: 8 there is a public need for expanded The Federal Communications Commission, as part of its continuing hours. local calling service in each area subject effort to reduce paperwork burden Frequency of Response: Annual to the request. invites the general public and other reporting requirement. OMB Control No.: 3060–0786. Federal agencies to take this Total Annual Burden: 6,240 hours. opportunity to comment on the Total Annual Cost: None. Title: Petition for LATA Association Privacy Impact Assessment: No Changes by Independent Telephone following information collection(s), as required by the Paperwork Reduction impact(s). Companies. Needs and Uses: Section 623(k) of the Act (PRA) of 1995, Public Law 104–13. Cable Television Consumer Protection Form No.: N/A. An agency may not conduct or sponsor and Competition Act of 1992 requires Type of Review: Extension of a a collection of information unless it the Commission to publish annually a currently approved collection. displays a currently valid control statistical report on average rates for number. No person shall be subject to Respondents: Business or other for- basic cable service, cable programming any penalty for failing to comply with profit. service, and equipment. The report must a collection of information subject to the compare the prices charged by cable Number of Respondents: 20. Paperwork Reduction Act that does not operators subject to ‘‘effective Estimated Time per Response: 6 display a valid control number. competition’’ and those not subject to hours. Comments are requested concerning (a) effective competition. The data needed whether the proposed collection of Frequency of Response: On occasion to prepare this report is collected using information is necessary for the proper reporting requirement. the annual cable industry Price Survey. performance of the functions of the Total Annual Burden: 120 hours. Commission, including whether the Federal Communications Commission. Annual Cost Burden: N/A. information shall have practical utility; Marlene H. Dortch, Privacy Act Impact Assessment: N/A. (b) the accuracy of the Commission’s Secretary. burden estimate; (c) ways to enhance [FR Doc. E6–14789 Filed 9–6–06; 8:45 am] Needs and Uses: This collection will the quality, utility, and clarity of the BILLING CODE 6712–10–P be submitted as an extension (no change information collected; and (d) ways to in reporting requirements) after this 60 minimize the burden of the collection of day comment period to Office of information on the respondents, FEDERAL COMMUNICATIONS Management and Budget (OMB) in order including the use of automated COMMISSION to obtain the full three year clearance. collection techniques or other forms of The Commission, pursuant to the information technology. Notice of Public Information Collection(s) Being Submitted for provisions of the Communications Act DATES: Written Paperwork Reduction of 1934, as amended (‘‘the Act’’), Review to the Office of Management Act (PRA) comments should be and Budget requests that independent telephone submitted on or before November 6, companies (ITCs) and Bell Operating 2006. If you anticipate that you will be August 23, 2006. Companies (BOCs) provide certain submitting comments, but find it SUMMARY: The Federal Communications information to the Commission difficult to do so within the period of Commission, as part of its continuing regarding ITC requests for changes in time allowed by this notice, you should effort to reduce paperwork burden local access and transport areas (LATA) advise the contact listed below as soon invites the general public and other association and modification of LATA as possible. Federal agencies to take this boundaries to permit the change in ADDRESSES: You may submit your all opportunity to comment on the association. The Commission has Paperwork Reduction Act (PRA) following information collection(s), as provided voluntary guidelines for filing comments by email or U.S. postal mail. required by the Paperwork Reduction LATA association change requests. To submit your comments by e-mail Act (PRA) of 1995, Public Law 104–13. These guidelines will allow the send them to [email protected]. To submit An agency may not conduct or sponsor Commission to conduct smooth and your comments by U.S. mail, mark them a collection of information unless it continuous processing of these requests. to the attention of Cathy Williams, displays a currently valid control The collection of information will Federal Communications Commission, number. No person shall be subject to enable the Commission to determine if Room 1–C823, 445 12th Street, SW., any penalty for failing to comply with there is a public need for changes in Washington, DC 20554. a collection of information subject to the LATA association in each area subject to Paperwork Reduction Act (PRA) that FOR FURTHER INFORMATION CONTACT: For the request. does not display a valid control number. additional information about the Comments are requested concerning (a) Federal Communications Commission. information collection(s) send an e-mail whether the proposed collection of Marlene H. Dortch, to [email protected] or contact Cathy information is necessary for the proper Williams at (202) 418–2918. Secretary. performance of the functions of the [FR Doc. E6–14785 Filed 9–6–06; 8:45 am] SUPPLEMENTARY INFORMATION: Commission, including whether the BILLING CODE 6712–01–P OMB Control Number: 3060–0647. information shall have practical utility;

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(b) the accuracy of the Commission’s Specialized Mobile Radio (SMR) pursuant to biennial regulatory review burden estimate; (c) ways to enhance spectrum may request an extended responsibilities. The Commission the quality, utility, and clarity of the period of time within which to modified section 90.693 to eliminate the information collected; and (d) ways to construct their radio systems provided necessity of incumbent 800 SMR minimize the burden of the collection of that they demonstrate such additional licensees filing notifications of minor information on the respondents, time is needed and provide a timetable modifications in certain circumstances. including the use of automated for completing such construction; (2) Specifically, notification of minor collection techniques or other forms of licensees authorized to use a specific modifications is no longer required information technology. block of 800 MHz SMR frequencies where a license locates its facilities DATES: Written Paperwork Reduction within one of 175 Economic Areas closer than the minimum required Act (PRA) comments should be (EAs), must notify the Commission of distance separation but nonetheless falls submitted on or before November 6, the technical parameters for any base within the parameters of the Short 2006. If you anticipate that you will be stations operating on channels within Space Separation Table under 47 CFR submitting PRA comments, but find it their respective spectrum blocks that 90.621. difficult to do so within the period of have been added, removed, relocated, or The information will be used by the time allowed by this notice, you should otherwise modified in accordance with Commission for the following purposes: advise the contact listed below as soon the Commission’s rules; (3) licensees (a) To update the Commission’s as possible. operating on 800 MHz SMR frequencies licensing database and thereby facilitate the successful coexistence of EA ADDRESSES: Direct all Paperwork who do not hold EA licenses must notify the Commission of the technical licensees and incumbents in the 800 Reduction Act (PRA) comments to MHz SMR band; and (b) to determine Judith B. Herman, Federal parameters for any base stations which they operate that have been added, whether an applicant is eligible for Communications Commission, Room 1– special provisions for small businesses B441, 445 12th Street, SW., Washington, removed, relocated, or otherwise modified in accordance with the provided for applicants in the 800 MHz DC 20554 or via the Internet to service. [email protected]. If you would like to Commission’s rules; (4) incumbent obtain or view a copy of this licensees operating at multiple sites may Federal Communications Commission. information collection, you may do so exchange their multiple site licenses for Marlene H. Dortch, by visiting the FCC PRA Web page at: a single license after the completion of Secretary. http://www.fcc.gov/omd/pra. the auction for the spectrum blocks [FR Doc. E6–14790 Filed 9–6–06; 8:45 am] within which their frequencies are FOR FURTHER INFORMATION CONTACT: For BILLING CODE 6712–01–P included provided they submit a additional information or copies of the showing that their authorized facilities information collection(s), send an e-mail have been constructed and placed in to [email protected] or contact Judith B. FEDERAL COMMUNICATIONS operation and the contours associated Herman at 202–418–0214. If you would COMMISSION with these facilities are contiguous and like to obtain or view a copy of this overlapping; (5) EA licensees must Notice of Public Information information collection, you may do so submit proof of their notification to Collection(s) Being Submitted for by visiting the FCC PRA Web page at: incumbents operating on frequencies Review to the Office of Management http://www.fcc.gov/omd/pra. included within the EA licensees’ and Budget SUPPLEMENTARY INFORMATION: spectrum blocks of their intention to August 14, 2006. OMB Control No.: 3060–0307. relocate such incumbents; (6) auction SUMMARY: The Federal Communications Title: Amendment of Pat 90 of the winners claiming status as a small Commission, as part of its continuing Commission’s Rules to Facilitate business must submit detailed Development of SMR Systems in the effort to reduce paperwork burden ownership and gross revenue invites the general public and other 800 MHz Frequency Band. information necessary to determine they Form Nos.: N/A. Federal agencies to take this qualify as a small business pursuant to Type of Review: Revision of a opportunity to comment on the the Commission’s rules; (7) auction currently approved collection. following information collection(s), as Respondents: Business or other for- winners must disclose the terms of any required by the Paperwork Reduction profit, not-for-profit institutions, and joint bidding agreements, if any, with Act (PRA) of 1995, Public Law 104–13. state, local or tribal government. other auction participants, and (8) EA An agency may not conduct or sponsor Number of Respondents: 1,042. licensees who transfer or assign their a collection of information unless it Estimated Time Per Response: 2–4.5 license within three years are required displays a currently valid control hours. to file, together with a transfer number. No person shall be subject to Frequency of Response: On occasion application, a statement indicating that any penalty for failing to comply with reporting requirement and third party the license was obtained through a collection of information subject to the disclosure requirement. competitive bidding, as well as the Paperwork Reduction Act (PRA) that Total Annual Burden: 524 hours. associated contracts for sale, option does not display a valid control number. Total Annual Cost: $304,313. agreements, management agreements Comments are requested concerning (a) Privacy Act Impact Assessment: N/A. and all other documents disclosing the whether the proposed collection of Needs and Uses: This collection will total consideration received in return for information is necessary for the proper be submitted as a revision after this 60 the transfer or assignment of the license. performance of the functions of the day comment period to Office of The Commission has revised this Commission, including whether the Management and Budget (OMB) in order collection because on July 22, 2005, the information shall have practical utility; to obtain the full three year clearance. Commission adopted a Report and (b) the accuracy of the Commission’s There are eight reporting Order and Further Notice of Proposed burden estimate; (c) ways to enhance requirements in this information Rulemaking (20 FCC Rcd 16293) to the quality, utility, and clarity of the collection. They are: (1) Applicants in streamline and harmonize licensing information collected; and (d) ways to the specific categories of 800 provisions in the wireless radio services minimize the burden of the collection of

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information on the respondents, what constitutes a valid PSAP request invites the general public and other including the use of automated so as to trigger a wireless carrier’s Federal agencies to take this collection techniques or other forms of obligation to provide service to a PSAP opportunity to comment on the information technology. within six months. The Commission’s following information collection(s), as DATES: Written Paperwork Reduction actions were intended to facilitate the required by the Paperwork Reduction Act (PRA) comments should be E911 implementation process by Act (PRA) of 1995, Public Law 104–13. submitted on or before October 10, encouraging parties to communicate An agency may not conduct or sponsor 2006. If you anticipate that you will be with each other early in the a collection of information unless it submitting PRA comments, but find it implementation process, and to displays a currently valid control difficult to do so within the period of maintain a constructive, on-going dialog number. No person shall be subject to time allowed by this notice, you should throughout the implementation process. any penalty for failing to comply with advise the contact listed below as soon OMB Control No.: 3060–0233. a collection of information subject to the as possible. Title: Part 36—Separations. Paperwork Reduction Act that does not ADDRESSES: Direct all Paperwork Form Nos.: N/A. display a valid control number. Reduction Act (PRA) comments to Type of Review: Extension of a Comments are requested concerning (a) Judith B. Herman, Federal currently approved collection. whether the proposed collection of Communications Commission, Room 1- Respondents: Business or other for- information is necessary for the proper B441, 445 12th Street, SW., Washington, profit. performance of the functions of the DC 20554 or via the Internet to Number of Respondents: 1,804 Commission, including whether the [email protected]. If you would like to respondents; 5,788 responses. information shall have practical utility; obtain or view a copy of this Estimated Time Per Response: 22 (b) the accuracy of the Commission’s information collection, you may do so hours. burden estimate; (c) ways to enhance by visiting the FCC PRA Web page at: Frequency of Response: On occasion, the quality, utility, and clarity of the http://www.fcc.gov/omd/pra. annual and quarterly reporting information collected; and (d) ways to minimize the burden of the collection of FOR FURTHER INFORMATION CONTACT: For requirements and third party disclosure information on the respondents, additional information or copies of the requirement. including the use of automated information collection(s), send an e-mail Total Annual Burden: 58,418 hours. collection techniques or other forms of to [email protected] or contact Judith B. Total Annual Cost: N/A. information technology. Herman at 202–418–0214. Privacy Act Impact Assessment: N/A. Needs and Uses: In order to allow DATES: SUPPLEMENTARY INFORMATION: Written Paperwork Reduction OMB Control No.: 3060–1031. determination of the study areas that are Act (PRA) comments should be Title: Commission Rules to Ensure entitled to an expense adjustment, and submitted on or before November 6, Compatibility with Enhanced 911 the wire centers that are entitled to 2006. If you anticipate that you will be Emergency Calling Systems—Petition of high-cost universal service support, submitting comments, but find it the City of Richardson, TX, Order on incumbent and competitive difficult to do so within the period of Reconsideration II. telecommunications carriers must time allowed by this notice, you should Form No.: N/A. provide certain data to the National advise the contact listed below as soon Type of Review: Extension of a Exchange Carrier Association (NECA) or as possible. currently approved collection. the Universal Service Administrative ADDRESSES: You may submit all your Respondents: Business or other for- Company (USAC) annually and/or Paperwork Reduction Act (PRA) profit, not-for-profit institutions, and quarterly. Local telecommunications comments by e-mail or U.S. postal mail. state, local or tribal government. carriers that want to participate in the To submit your comments by e-mail Number of Respondents: 1,158. federal universal service program must send them to [email protected]. To submit Estimated Time Per Response: 4–20 make certain informational showings to your comments by U.S. mail, mark them hours. demonstrate eligibility. Without such to the attention of Cathy Williams, Frequency of Response: On occasion information, NECA and USAC would Federal Communications Commission, reporting requirement and third party not be able to calculate such payments Room 1–C823, 445 12th Street, SW., disclosure requirement. to eligible carriers. Washington, DC 20554. Total Annual Burden: 6,576 hours. Federal Communications Commission. FOR FURTHER INFORMATION CONTACT: For Total Annual Cost: N/A. Marlene H. Dortch, additional information about the Privacy Act Impact Assessment: N/A. Secretary. information collection(s) send an e-mail Needs and Uses: This collection will to [email protected] or contact Cathy be submitted as an extension (no change [FR Doc. E6–14791 Filed 9–6–06; 8:45 am] Williams at (202) 418–2918. in reporting or third party disclosure BILLING CODE 6712–01–P requirements) after this 30 day comment SUPPLEMENTARY INFORMATION: period to Office of Management and OMB Control Number: 3060–1045. FEDERAL COMMUNICATIONS Title: Operator: Operator, Mail Budget (OMB) in order to obtain the full COMMISSION three year clearance. Address and Operational Information Under the Commission’s E911 rules, a Notice of Public Information Changes. wireless carrier must provide E911 Collection(s) Being Reviewed by the Form Number: FCC Form 324. service to a particular Public Safety Federal Communications Commission Type of Review: Extension of a Answering Point (PSAP) within six for Extension Under Delegated currently approved collection. months only if that PSAP makes a Authority Respondents: Business or other for- request for the service and is capable of profit entities; Not-for-profit receiving and utilizing the information August 30, 2006. institutions. provided. In the City of Richardson, TX, SUMMARY: The Federal Communications Number of Respondents: 5,000. Order on Reconsideration II, the Commission, as part of its continuing Estimated Time per Response: 0.5 Commission adopted rules clarifying effort to reduce paperwork burden hours (30 minutes).

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Frequency of Response: On occasion Advisory Opinion 2006–22: Wallace for Buckhead (in organization), both of reporting requirement. Congress by counsel, Andrius R. Atlanta, Georgia. Total Annual Burden: 2,500 hours. Knotrimas. Board of Governors of the Federal Reserve Total Annual Cost: None. Routine Administrative Matters. System, September 1, 2006. Privacy Impact Assessment: No FOR FURTHER INFORMATION CONTACT: Mr. Robert deV. Frierson, impact(s). Robert Biersack, Press Officer, Deputy Secretary of the Board. Needs and Uses: On March 13, 2003, Telephone: (202) 694–1220. the Commission adopted a Report and [FR Doc. E6–14777 Filed 9–6–06; 8:45 am] Order (R&O), Amendment of the Mary W. Dove, BILLING CODE 6210–01–S Commission’s Rules for Implementation Secretary of the Commission. of its Cable Operations and Licensing [FR Doc. 06–7528 Filed 9–5–06; 2:58 pm] FEDERAL RESERVE SYSTEM System (COALS) to Allow for Electronic BILLING CODE 6715–01–M Filing of Licensing Applications, Forms, Notice of Proposals to Engage in Registrations and Notifications in the Permissible Nonbanking Activities or Multichannel Video and Cable FEDERAL RESERVE SYSTEM to Acquire Companies that are Television Service and the Cable Engaged in Permissible Nonbanking Television Relay Service, FCC 03–55. Formations of, Acquisitions by, and Activities This R&O provided for electronic filing Mergers of Bank Holding Companies and standardized information The companies listed in this notice The companies listed in this notice collections. Under 47 CFR 76.1610, have given notice under section 4 of the cable operators must notify the have applied to the Board for approval, pursuant to the Bank Holding Company Bank Holding Company Act (12 U.S.C. Commission of changes in ownership 1843) (BHC Act) and Regulation Y (12 information or operating status within Act of 1956 (12 U.S.C. 1841 et seq.) (BHC Act), Regulation Y (12 CFR Part CFR Part 225) to engage de novo, or to 30 days of such change using FCC Form acquire or control voting securities or 324. FCC Form 324 will cover a variety 225), and all other applicable statutes and regulations to become a bank assets of a company, including the of changes related to cable operators, companies listed below, that engages replacing the requirement of a letter holding company and/or to acquire the assets or the ownership of, control of, or either directly or through a subsidiary or containing approximately the same other company, in a nonbanking activity information. Every Form 324 filing will the power to vote shares of a bank or bank holding company and all of the that is listed in § 225.28 of Regulation Y require biographical information about (12 CFR 225.28) or that the Board has the operator and system—the additional banks and nonbanking companies owned by the bank holding company, determined by Order to be closely information required depending largely related to banking and permissible for upon the nature of the change. including the companies listed below. The applications listed below, as well bank holding companies. Unless Federal Communications Commission. as other related filings required by the otherwise noted, these activities will be Marlene H. Dortch, Board, are available for immediate conducted throughout the United States. Secretary. inspection at the Federal Reserve Bank Each notice is available for inspection [FR Doc. E6–14807 Filed 9–6–06; 8:45 am] indicated. The application also will be at the Federal Reserve Bank indicated. BILLING CODE 6712–01–P available for inspection at the offices of The notice also will be available for the Board of Governors. Interested inspection at the offices of the Board of persons may express their views in Governors. Interested persons may FEDERAL ELECTION COMMISSION writing on the standards enumerated in express their views in writing on the the BHC Act (12 U.S.C. 1842(c)). If the question whether the proposal complies Sunshine Act Notices proposal also involves the acquisition of with the standards of section 4 of the a nonbanking company, the review also BHC Act. Additional information on all DATE AND TIME: Tuesday, September 12, includes whether the acquisition of the bank holding companies may be 2006 at 10 a.m. nonbanking company complies with the obtained from the National Information PLACE: 999 E Street, NW., Washington, standards in section 4 of the BHC Act Center Web site at http://www.ffiec.gov/ DC. (12 U.S.C. 1843). Unless otherwise nic/. STATUS: This meeting will be closed to noted, nonbanking activities will be Unless otherwise noted, comments the public. conducted throughout the United States. regarding the applications must be ITEMS TO BE DISCUSSED: Additional information on all bank received at the Reserve Bank indicated Compliance matters pursuant to 2 holding companies may be obtained or the offices of the Board of Governors U.S.C. 437g. from the National Information Center not later than September 21, 2006. Audits conducted pursuant to 2 U.S.C. Web site at www.ffiec.gov/nic/. A. Federal Reserve Bank of Chicago 437g, 438(b), and Title 26, U.S.C. Unless otherwise noted, comments (Patrick M. Wilder, Assistant Vice Matters concerning participation in civil regarding each of these applications President) 230 South LaSalle Street, actions or proceedings or arbitration. must be received at the Reserve Bank Chicago, Illinois 60690-1414: Internal personnel rules and procedures indicated or the offices of the Board of Lincoln Bancorp, Plainfield, Indiana; or matters affecting a particular Governors not later than October 2, to engage de novo in lending activities, employee. 2006. pursuant to section 225.28(b)(1) of A. Federal Reserve Bank of Atlanta DATE AND TIME: Thursday, September 14, Regulation Y. (Andre Anderson, Vice President) 1000 2006 at 10 a.m. Place: 999 E Street, NW., Peachtree Street, NE., Atlanta, Georgia Board of Governors of the Federal Reserve Washington, DC (ninth floor). 30309: System, September 1, 2006. STATUS: This meeting will be open to the 1. Private Bancshares, Inc., Atlanta, Robert deV. Frierson, public. Georgia; to become a bank holding Deputy Secretary of the Board. ITEMS TO BE DISCUSSED: company by acquiring 100 percent of [FR Doc. E6–14776 Filed 9–6–06; 8:45 am] Correction and Approval of Minutes. the voting shares of Private Bank of BILLING CODE 6210–01–S

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DEPARTMENT OF HEALTH AND care system so that every American has DEPARTMENT OF HEALTH AND HUMAN SERVICES the ability to obtain quality, affordable HUMAN SERVICES health care coverage; (2) provide for a Agency for Healthcare Research and nationwide public debate about Centers for Disease Control and Quality improving the health care system; and, Prevention (3) submit its recommendations to the Meeting of the Citizens’ Health Care President and the Congress. Decision To Evaluate a Petition To Working Group Designate a Class of Employees at The Citizens’ Health Care Working Bethlehem Steel Corporation, Buffalo, AGENCY: Agency for Healthcare Research Group is composed of 15 members: the NY, To Be Included in the Special and Quality (AHRQ), HHS. Secretary of HHS is designated as a ACTION: Notice of public meeting. member by statute. The Comptroller Exposure Cohort General of the U.S. Government SUMMARY: In accordance with section AGENCY: Centers for Disease Control and Accountability Office (GAO) was 10(a) of the Federal Advisory Committee Prevention (CDC), Department of Health directed to name the remaining 14 Act, this notice announces a meeting of and Human Services (HHS). the Citizens’ Health Care Working members whose appointments were Group (Working Group) mandated by announced on February 28, 2005. ACTION: Notice. section 1014 of the Medicare Working Group Meeting Agenda Modernization Act. SUMMARY: The Department of Health and DATES: A business meeting of the The Working Group meeting on Human Services (HHS) gives notice as Working Group will be held on September 13 and September 14, will be required by 42 CFR 83.12(e) of a Wednesday September 13, 2006 and devoted to ongoing Working Group decision to evaluate a petition to Thursday September 14, 2006. On business. The principal topic to be designate a class of employees at the September 13, the session will begin at addressed will be completing work on Bethlehem Steel Corporation, Buffalo, 8:30 a.m. and end at 4 p.m. On the Working Group’s final New York, to be included in the Special September 14, the session will begin at recommendations and planning for their Exposure Cohort under the Energy 8:30 a.m. and end at 2 p.m. release later in September. Interim Employees Occupational Illness ADDRESSES: The meeting will take place recommendations were posted on the Compensation Program Act of 2000. The at the conference room of the United Working Group’s Web site http:// initial proposed definition for the class Food and Commercial Workers www.citizenshealthcare.gov on June 2, being evaluated, subject to revision as International Union. The office is 2006. The comment period for the warranted by the evaluation, is as located at 1775 K Street, NW., interim recommendations ended August follows: Washington, DC 20006. The main 31, 2006 and the target date for release receptionist area is located on the 7th of final recommendations is September Facility: Bethlehem Steel Corporation. floor; the conference room is coated on 26, 2006. Location: 10 inch Bar Mill and the 11th floor. The meeting is open to blooming Mill. Submission of Written Information the public. Job Titles and/or Job Duties: FOR FURTHER INFORMATION CONTACT: To fulfill its charge described above, Millwrights, welders, electricians, Caroline Taplin, Citizens’ Health Care the Working Group has been conducting bricklayers, carpenters, all maintenance, Working Group, at (301) 443–1514 or a public dialogue on health care in testers, rollers, supervisors, crane [email protected]. If sign America through public meetings held operators, hookers, clean-up crews, language interpretation or other across the country and through grinders. reasonable accommodation for a comments received on its Web site. The Period of Employment: 1949–1952. disability is needed, please contact Mr. Working Group invites members of the Donald L. Inniss, Director, Office of public to the Web site to be part of that FOR FURTHER INFORMATION CONTACT: Equal Employment Opportunity dialogue and encourages comments on Larry Elliott, Director, Office of Program, Program Support Center, on the interim recommendations. Compensation Analysis and Support, (301) 443–1144. National Institute for Occupational The agenda for this Working Group Further, the Working Group will accept written submissions for Safety and Health, 4676 Columbia meeting will be available on the Parkway, MS C–46, Cincinnati, OH Citizens’ Working Group Web site, consideration at the Working Group 45226, Telephone 513–533–6800 (this is http://www.citizenshealthcare.gov. Also business meeting listed above. In not a toll-free number). Information available at that site is a roster of general, individuals or organizations Working Group members. When a wishing to provide written information requests can also be submitted by e-mail summary of this meeting is completed, for consideration by the Citizens’ Health to [email protected]. Care Working Group at this meeting it will also be available on the Web site. John Howard, should submit information SUPPLEMENTARY INFORMATION: Section Director, National Institute for Occupational 1014 of Pub. L. 108–173, (known as the electronically to [email protected]. Safety and Health, Centers for Disease Control Medicare Modernization Act) directs the and Prevention. Secretary of the Department of Health This notice is published less than 15 [FR Doc. 06–7484 Filed 9–6–06; 8:45 am] days in advance of the meeting date due and Human Services (HHS), acting BILLING CODE 4163–19–M through the Agency for Healthcare to logistical difficulties. Research and Quality, to establish a Dated: August 30, 2006. Citizens’ Health Care Working Group (Working Group). This statutory Carolyn M. Clancy, provision, codified at 42 U.S.C. 299 n., Director. directs the Working Group to: (1) [FR Doc. 06–7478 Filed 9–6–06; 8:45 am] identify options for changing our health BILLING CODE 4160–90–M

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DEPARTMENT OF HEALTH AND DEPARTMENT OF HEALTH AND requests can also be submitted by e-mail HUMAN SERVICES HUMAN SERVICES to [email protected].

Centers for Disease Control and Centers for Disease Control and John Howard, Prevention Prevention Director, National Institute for Occupational Safety and Health, Centers for Disease Control Designation of a Class of Employees Designation of a Class of Employees and Prevention. for Addition to the Special Exposure for Addition to the Special Exposure [FR Doc. 06–7486 Filed 9–6–06; 8:45 am] Cohort Cohort BILLING CODE 4160–17–M AGENCY: Centers for Disease Control and AGENCY: Centers for Disease Control and Prevention (CDC), Department of Health DEPARTMENT OF HEALTH AND Prevention (CDC), Department of Health and Human Services (HHS). HUMAN SERVICES ACTION: Notice. and Human Services (HHS). ACTION: Notice. Centers for Disease Control and SUMMARY: The Department of Health and Prevention Human Services (HHS) gives notice of a SUMMARY: decision to designate a class of The Department of Health and National Institute for Occupational employees at the Ames Laboratory, in Human Services (HHS) gives notice of a Safety and Health (NIOSH); Advisory Ames, Iowa as an addition to the decision to designate a class of Board on Radiation and Worker Health Special Exposure Cohort (SEC) under employees at the Y–12 Plant, in Oak the Energy Employees Occupational Ridge, Tennessee as an addition to the In accordance with section 10(a)(2) of Illness Compensation Program Act of Special Exposure Cohort (SEC) under the Federal Advisory Committee Act 2000. On August 8, 2006, the Secretary the Energy Employees Occupational (Pub. L. 92–463), the Centers for Disease of HHS designated the following class of Illness Compensation Program Act of Control and Prevention announces the employees as an addition to the SEC: 2000. On August 8, 2006, the Secretary following committee meeting: of HHS designated the following class of Name: Advisory Board on Radiation Department of Energy (DOE) employees or and Worker Health (ABRWH), National DOE contractor or subcontractor employees employees an addition to the SEC: who worked at the Ames Laboratory in one Institute for Occupational Safety and Department of Energy (DOE) employees or Health and Subcommittee for Dose or more of the following facilities/locations: DOE contractor or subcontractor employees Reconstruction and Site Profile Reviews Chemistry Annex 1 (also known as ‘‘the old who were monitored or should have been women’s gymnasium’’ and ‘‘Little Ankeny’’), (SDRSPR). monitored for: Chemistry Annex 2, Chemistry Building (also Subcommittee Meeting Time and (1) Thorium exposures while working in known as ‘‘Gilman Hall’’), Research Building, Date: 9 a.m.–12 p.m., September 19, Building 9201–3, 9202, 9204–1, 9204–3, or the Metallurgical Building (also known as 2006. 9206, or 9212 at Y–12 for a number of work ‘‘Harley Wilhelm Hall’’) from January 1, 1942 Committee Meeting Times and Dates: through December 31, 1954 for a number of days aggregating at least 250 work days from work days aggregating at least 250 work days, January 1948 through December 1957 or in 1 p.m.–4:45 p.m., September 19, 2006. or in combination with work days within the combination with work days within the 8:30 a.m.–5 p.m., September 20, 2006. parameters (excluding aggregate work day parameters (excluding aggregate work day 8:30 a.m.–5 p.m., September 21, 2006. requirements) established for one or more requirements) established for one or more Public Comment Times and Dates: classes of employees in the SEC, and who classes of employees in the SEC; or were monitored or should have been 5 p.m.–6 p.m., September 19, 2006. monitored. (2) Radionuclide exposures associated with 7:30 p.m.–8:30 p.m., September 20, cyclotron operations in Building 9201–2 at 2006. This designation will become Y–12 for a number of work days aggregating Place: Westin Casuarina, 160 E. effective on September 7, 2006, unless at least 250 work days from January 1948 Congress provides otherwise prior to the Flamingo Road, Las Vegas, Nevada through December 1957 or in combination 89169. Phone 702.836.5900, Fax effective date. After this effective date, with work days within the parameters HHS will publish a notice in the 702.836.5990. (excluding aggregate work day requirements) Status: Open to the public, limited Federal Register reporting the addition established for one or more classes of only by the space available. The meeting of this class to the SEC or the result of employees in the SEC. any provision by Congress regarding the space accommodates approximately 75 decision by HHS to add the class to the This designation will become to 100 people. SEC. effective on September 7, 2006, unless Background: The Advisory Board was established under the Energy Employees FOR FURTHER INFORMATION CONTACT: Congress provides otherwise prior to the Larry Elliott, Director, Office of effective date. After this effective date, Occupational Illness Compensation Compensation Analysis and Support, HHS will publish a notice in the Program Act of 2000 to advise the National Institute for Occupational Federal Register reporting the addition President on a variety of policy and Safety and Health, 4676 Columbia of this class to the SEC or the result of technical functions required to Parkway, MS C–46, Cincinnati, OH any provisions by Congress regarding implement and effectively manage the 45226, Telephone 513–533–6800 (this is the decision by HHS to add the class to new compensation program. Key not a toll-free number). Information the SEC. functions of the Advisory Board include requests can also be submitted by e-mail providing advice on the development of FOR FURTHER INFORMATION CONTACT: to [email protected]. probability of causation guidelines Larry Elliott, Director, Office of which have been promulgated by the John Howard, Compensation Analysis and Support; Department of Health and Human Director, National Institute for Occupational National Institute for Occupational Services (HHS) as a final rule, advice on Safety and Health, Centers for Disease Control Safety and Health, 4676 Columbia methods of dose reconstruction which and Prevention. Parkway, MS C–46, Cincinnati, OH have also been promulgated by HHS as [FR Doc. 06–7485 Filed 9–6–06; 8:45 am] 45226, Telephone 513–533–6800 (this is a final rule, advice on the scientific BILLING CODE 4160–17–M not a toll-free number). Information validity and quality of dose estimation

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and reconstruction efforts being should be submitted to the contact your request to 301–443–8818. See the performed for purposes of the person below well in advance of the SUPPLEMENTARY INFORMATION section for compensation program, and advice on meeting, and the comments will be information on electronic access to the petitions to add classes of workers to the provided at the meeting. guidance. Special Exposure Cohort (SEC). For Further Information Contact: Dr. Submit written comments concerning In December 2000, the President Lewis V. Wade, Executive Secretary, this draft guidance to the Division of delegated responsibility for funding, NIOSH, CDC, 4676 Columbia Parkway, Dockets Management (HFA–305), Food staffing, and operating the Advisory Cincinnati, Ohio 45226, Telephone and Drug Administration, 5630 Fishers Board to HHS, which subsequently 513.533.6825, Fax 513.533.6826. Lane, rm. 1061, Rockville, MD 20852. delegated this authority to the CDC. The Director, Management Analysis Submit electronic comments to http:// NIOSH implements this responsibility and Services Office, has been delegated www.fda.gov/dockets/ecomments. for CDC. The charter was issued on the authority to sign Federal Register Identify comments with the docket August 3, 2001, renewed at appropriate notices pertaining to announcements of number found in brackets in the intervals, and will expire on August 3, meetings and other committee heading of this document. 2007. management activities, for both CDC FOR FURTHER INFORMATION CONTACT: Purpose: This Advisory Board is and the Agency for Toxic Substances Courtney C. Harper, Center for Devices charged with (a) providing advice to the and Disease Registry. and Radiological Health (HFZ–440), Secretary, HHS, on the development of Dated: August 31, 2006. Food and Drug Administration, 2098 guidelines under Executive Order Gaither Rd., Rockville, MD 20850, 240– Alvin Hall, 13179; (b) providing advice to the 276–0490. Director, Management Analysis and Services Secretary, HHS, on the scientific SUPPLEMENTARY INFORMATION: validity and quality of dose Office, Centers for Disease Control and reconstruction efforts performed for this Prevention. I. Background program; and (c) upon request by the [FR Doc. E6–14787 Filed 9–6–06; 8:45 am] FDA is providing this guidance in Secretary, HHS, advise the Secretary on BILLING CODE 4163–18–P order to eliminate confusion regarding whether there is a class of employees at particular marketing practices among any Department of Energy facility who ASR manufacturers. ASRs are the DEPARTMENT OF HEALTH AND were exposed to radiation but for whom building blocks of laboratory-developed HUMAN SERVICES it is not feasible to estimate their tests and are defined and classified in a radiation dose, and on whether there is Food and Drug Administration rule codified at § 864.4020 (21 CFR reasonable likelihood that such 864.4020). With this draft guidance radiation doses may have endangered [Docket No. 2006D–0336] document, FDA seeks to advise ASR the health of members of this class. manufacturers that it views certain Matters to be Discussed: The agenda Draft Guidance for Industry and Food practices as being inconsistent with the for the Subcommittee meeting includes and Drug Administration Staff; marketing of an ASR, as defined in Individual Dose Reconstruction Reviews Commercially Distributed Analyte § 864.4020. Some manufacturers have and Procedures Reviews; Subcommittee Specific Reagents (ASRs): Frequently believed that when they combine a Operations and Future Plans. The Asked Questions; Availability Class I ASR, which is exempt from agenda for the Advisory Board meeting AGENCY: Food and Drug Administration, premarket notification requirements includes Presentation of SEC Petitions HHS. under section 510(l) of the Federal for Oak Ridge Institute of Nuclear Food, Drug, and Cosmetic Act (the act), ACTION: Notice. Studies (ORINS), Chapman Valve, S–50 (21 U.S.C. 360(l)), with other products, Thermal, and Los Alamos National SUMMARY: The Food and Drug or with instructions for use in a specific Laboratory (LANL) (Radioactive Administration (FDA) is announcing the test, the product remains exempt Lanthanum Exposure); Updates on SEC availability of the draft guidance because of the presence of an ASR. Petitions for Nevada Test Site (NTS), entitled ‘‘Commercially Distributed However, as explained in this draft Pacific Proving Ground (PPG), Ames Analyte Specific Reagents (ASRs): guidance, when an ASR is marketed in Laboratory, and Rocky Flats Plant; Frequently Asked Questions.’’ This certain ways, FDA views the product as Working Group Reports on the guidance document is intended to no longer being an ASR within the Savannah River Site (SRS) Profile, NTS clarify the regulations regarding ASRs meaning of § 860.4020. Site Profile, and SEC Petitions; and the role and responsibilities of ASR Individual Dose Reconstruction II. Significance of Guidance manufacturers. Reviews; Procedures Review; NIOSH This draft guidance is being issued Conflict of Interest Policy; Board DATES: Submit written or electronic consistent with FDA’s good guidance Conflict of Interest Policy; Status and comments on this draft guidance by practices regulation (21 CFR 10.115). Future Funding of Sanford Cohen & December 6, 2006. The draft guidance, when finalized will Associates (SC&A) Contract; Science ADDRESSES: Submit written requests for represent the agency’s current thinking Issues Updates; Charter for New single copies of the guidance document on commercially distributed ASRs. It Subcommittee; Working Group and entitled ‘‘Commercially Distributed does not create or confer any rights for Subcommittee Assignments; NIOSH, Analyte Specific Reagents (ASRs): or on any person and does not operate Office of Compensation Analysis and Frequently Asked Questions’’ to the to bind FDA or the public. An Support (OCAS) and Department of Division of Small Manufacturers, alternative approach may be used if Labor (DOL) Status Reports; Board International, and Consumer Assistance such approach satisfies the Correspondence; Board Future Plans, (HFZ–220), Center for Devices and requirements of the applicable statute and Board Working Time. The agenda is Radiological Health, Food and Drug and regulations. subject to change as priorities dictate. Administration, 1350 Piccard Dr., In the event an individual cannot Rockville, MD 20850. Send one self- III. Electronic Access attend, written comments may be addressed adhesive label to assist that Persons interested in obtaining a copy submitted. Any written comments office in processing your request, or fax of the draft guidance may do so by using

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the Internet. To receive ‘‘Commercially Class II or III ASRs must bear the algorithm that usually, but not Distributed Analyte Specific Reagents statement, ‘‘Analyte Specific Reagent. necessarily, runs on software, to (ASRs): Frequently Asked Questions, ‘‘ Except as a component of the approved/ generate a result that diagnoses a you may either send an e-mail request cleared test (name of approved/cleared disease or condition or is used in the to [email protected] to receive an test), analytical and performance cure, mitigation, treatment, or electronic copy of the document or send characteristics are not established’’ prevention of disease. a fax request to 240–276–3151 to receive (§ 809.30(d)(2) and (d)(3)). The DATES: Submit written or electronic a hard copy. Please use the document disclaimer and these statements do not comments on this draft guidance by number 1590 to identify the guidance constitute ‘‘collections of information’’ December 6, 2006. you are requesting. under the PRA. Rather, they are ‘‘public ADDRESSES: Submit written requests for CDRH maintains an entry on the disclosure of information originally single copies of the draft guidance Internet for easy access to information supplied by the Federal government to document entitled ‘‘Draft Guidance for including text, graphics, and files that the recipient for the purpose of Industry, Clinical Laboratories, and FDA may be downloaded to a personal disclosure to the public’’ (5 CFR Staff on In Vitro Diagnostic Multivariate computer with Internet access. Updated 1320.3(c)(2)). Index Assays’’ to the Division of Small on a regular basis, the CDRH home page Manufacturers, International, and includes device safety alerts, Federal V. Comments Consumer Assistance (HFZ–220), Center Register reprints, information on Interested persons may submit to the for Devices and Radiological Health, premarket submissions (including lists Division of Dockets Managment (see Food and Drug Administration, 1350 of approved applications and ADDRESSES), written or electronic Piccard Dr., Rockville, MD 20850. Send manufacturers’ addresses), small comments regarding this document. one self-addressed adhesive label to manufacturer’s assistance, information Submit a single copy of electronic assist that office in processing your on video conferencing and electronic comments or two paper copies of any request, or fax your request to 240–276– submissions, Mammography Matters, mailed comments, except that 3151. See the SUPPLEMENTARY and other device-oriented information. individuals may submit one paper copy. The CDRH Web site may be accessed at Comments are to be identified with the INFORMATION section for information on http://www.fda.gov/cdrh. A search docket number found in brackets in the electronic access to the guidance. Submit written comments concerning capability for all CDRH guidance heading of this document. Recieved this draft guidance to the Division of documents is available at http:// comments may be seen in the Division Dockets Management (HFA–305), Food www.fda.gov/cdrh/guidance.html. of Dockets Management between 9 a.m. and Drug Administration, 5630 Fishers Guidance documents are also available and 4 p.m., Monday through Friday. Lane, rm. 1061, Rockville, MD 20852. on the Division of Dockets Management Dated: September 1, 2006. Submit electronic comments to http:// Internet site at http://www.fda.gov/ Jeffrey Shuren, ohrms/dockets. www.fda.gov/dockets/ecomments. Assistant Commissioner for Policy. Identify comments with the docket IV. Paperwork Reduction Act of 1995 [FR Doc. 06–7500 Filed 9–5–06; 4:00 pm] number found in brackets in the This draft guidance refers to BILLING CODE 4160–01–S heading of this document. previously approved collections of FOR FURTHER INFORMATION CONTACT: information found in FDA regulations. Courtney Harper, Center for Devices and DEPARTMENT OF HEALTH AND These collections of information are Radiological Health (HFZ- 440), Food HUMAN SERVICES subject to review by the Office of and Drug Administration, 2098 Gaither Management and Budget (OMB) under Food and Drug Administration Rd., Rockville, MD 20850, 240–276– the Paperwork Reduction Act of 1995 0490, ext. 162. (44 U.S.C. 3501–3520). The collections [Docket No. 2006D–0347] SUPPLEMENTARY INFORMATION: of information in 21 CFR 807.87 have been approved under OMB control Draft Guidance for Industry, Clinical I. Background number 0910–0120; the collections of Laboratories, and FDA Staff on In Vitro The definition of a device is set forth information in 21 CFR 809.10 and Diagnostic Multivariate Index Assays; at section 201(h) of the Federal Food, 809.30 (§ 809.30) have been approved Availability Drug and Cosmetic Act (the act) (21 under OMB control number 0910–0485; AGENCY: Food and Drug Administration, U.S.C. 321(h)). It provides in relevant and the collections of information in 21 HHS. part: ‘‘The term ‘device’ * * * means an CFR 814.20 have been approved under ACTION: Notice. instrument, apparatus, implement, OMB control number 0910–0231. machine, contrivance, implant, in vitro The draft guidance includes SUMMARY: The Food and Drug reagent, or other similar or related discussion of the restrictions on the Administration (FDA) is announcing the article, including any component, part, sale, distribution, and use of ASRs availability of the draft guidance or accessory, which is * * * (2) intended (§ 809.30). Under this regulation, a entitled ‘‘Draft Guidance for Industry, for use in the diagnosis of disease or laboratory that develops an in-house test Clinical Laboratories, and FDA Staff on other conditions, or in the cure, using an ASR must add a disclaimer In Vitro Diagnostic Multivariate Index mitigation, treatment, or prevention of when reporting the test result to the Assays.’’ This draft guidance addresses disease, in man or other animals * * *’’ practitioner (§ 809.30(e)). Advertising the definition and regulatory status of a (21 U.S.C. 321(h)). An IVDMIA is a test and promotional materials for ASRs class of in vitro diagnostic devices system that employs data, derived in must not make any statement regarding referred to as In Vitro Diagnostic part from one or more in vitro assays, analytical or clinical performance Multivariate Index Assays (IVDMIAs). and an algorithm that usually, but not (§ 809.30(d)(4)). In addition, the labeling The guidance also addresses premarket necessarily, runs on software, to for Class I, exempt ASRs must bear the and postmarket requirements with generate a result that diagnoses a statement, ‘‘Analyte Specific Reagent. respect to IVDMIAs. An IVDMIA disease or condition or is used in the Analytical and performance employs data, derived in part from one cure, mitigation, treatment, or characteristics are not established.’’ or more in vitro assays, and an prevention of disease. An IVDMIA is

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therefore a device within the meaning of Also, as stated previously, FDA The CDRH Web site may be accessed at the act. decided to exclude laboratory- http://www.fda.gov/cdrh. A search FDA is aware of some confusion about developed tests from the ASR rule due capability for all CDRH guidance the regulation of IVDMIAs that are to its confidence in high-complexity documents is available at http:// developed by and used in a laboratory. laboratories’ ability to use ASRs. The www.fda.gov/cdrh/guidance.html. We believe this confusion derives in manufacture of an IVDMIA involves Guidance documents are also available part from FDA’s approach to regulation steps that are not synonymous with the on the Division of Dockets Management of laboratory-developed tests that use use of ASRs and that are not within the Internet site at http://www.fda.gov/ commercially available ASRs and other ordinary ‘‘expertise and ability’’ of ohrms/dockets. commercially available, FDA-regulated laboratories that FDA referred to when components. FDA seeks to dispel the it issued the ASR rule. Therefore, IV. Paperwork Reduction Act of 1995 existing confusion and clarify its IVDMIAs do not fall within the scope of approach to regulation of IVDMIAs with laboratory-developed tests over which This draft guidance refers to this guidance document. FDA has generally exercised previously approved collections of Some of the apparent confusion is enforcement discretion. FDA intends to information found in FDA regulations. associated with the rules that classify issue guidance regarding those These collections of information are and regulate analyte specific reagents laboratory-developed tests over which it subject to review by the Office of (ASRs) that move in commerce has in the past generally exercised, and Management and Budget (OMB) under (hereinafter ASR rule) (§§ 864.4020, over which it intends to continue to the Paperwork Reduction Act of 1995 809.10(e), and 809.30 (21 CFR parts 864 exercise, enforcement discretion. (44 U.S.C. 3501–3520). The collections and 809)). The ASR rule does not extend IVDMIAs must meet pre- and post- of information in 21 CFR 807.87 have to tests developed in-house by clinical market device requirements under the been approved under OMB control laboratories using commercially act and FDA regulations, including number 0910–0120; the collections of available ASRs and used exclusively by premarket review requirements in the information in §§ 809.10 and 809.30 that laboratory, or ASRs created in- case of class II and III devices. have been approved under OMB control house and used exclusively by that number 0910–0485; the collections of laboratory for in-house testing. II. Significance of Guidance (November 21, 1997 Federal Register, This draft guidance is being issued information in 21 CFR 814.20 have been 62 FR 62243, 62249.) While FDA stated consistent with FDA’s good guidance approved under OMB control number in the preamble to the final ASR rule practices regulation (21 CFR 10.115). 0910–0231; the collections of that ‘‘clinical laboratories that develop The draft guidance, when finalized will information in 21 CFR part 812 have [in-house] tests are acting as represent the agency’s current thinking been approved under OMB control manufacturers of medical devices and on IVDMIAs. It does not create or confer number 0910–0078; the collections of are subject to FDA jurisdiction under any rights for or on any person and does information in 21 CFR part 820 have the act,’’ 62 FR 62249, FDA chose not not operate to bind FDA or the public. been approved under OMB control to extend the rule to such tests and it An alternative approach may be used if number 0910–0073; and the collections has generally exercised enforcement such approach satisfies the of information in 21 CFR part 803 have discretion over laboratory-developed requirements of the applicable statute been approved under OMB control ASRs and laboratory-developed tests and regulations. number 0910–0437. that use commercially available and III. Electronic Access laboratory-developed ASRs. V. Comments FDA took this approach because it Persons interested in obtaining a copy believed it was regulating ‘‘the primary of the draft guidance may do so by using Interested persons may submit to the ingredients of most in-house developed the Internet. To receive ‘‘Draft Guidance Division of Dockets Management (see tests,’’ and because it believed that for Industry, Clinical Laboratories, and ADDRESSES), written or electronic laboratories certified as high complexity FDA Staff on In Vitro Diagnostic comments regarding this document. under the Clinical Laboratory Multivariate Index Assays,’’ you may Submit a single copy of electronic Improvement Amendments, 42 U.S.C. either send an e-mail request to comments or two paper copies of any 263a, ‘‘have demonstrated expertise and [email protected] to receive an mailed comments, except that ability to use ASRs in test procedures electronic copy of the document or send individuals may submit one paper copy. and analyses.’’ (62 FR 62249 (emphasis a fax request to 240–276–3151 to receive Comments are to be identified with the added)). a hard copy. Please use the document docket number found in brackets in the FDA believed it was regulating the number 1610 to identify the guidance heading of this document. Received primary ingredients of most in-house you are requesting. comments may be seen in the Division tests because it was regulating the CDRH maintains an entry on the of Dockets Management between 9 a.m. common elements of in-house tests, Internet for easy access to information and 4 p.m., Monday through Friday. including most ASRs (§ 864.4020), including text, graphics, and files that general purpose reagents (§ 864.4010), may be downloaded to a personal Dated: September 1, 2006. general purpose laboratory equipment computer with Internet access. Updated Jeffrey Shuren, (21 CFR 862.2050), other laboratory on a regular basis, the CDRH home page Assistant Commissioner for Policy. instrumentation (21 CFR part 864, includes device safety alerts, Federal [FR Doc. 06–7499 Filed 9–5–06; 4:00 pm] subpart D), and controls (21 CFR Register reprints, information on BILLING CODE 4160–01–S 862.1660). IVDMIAs include elements, premarket submissions (including lists as described in the section on of approved applications and ‘‘Definition and Regulatory Status of manufacturers’ addresses), small IVDMIAs’’ of this guidance, that are not manufacturer’s assistance, information among these primary ingredients of in- on video conferencing and electronic house tests and that, therefore, raise submissions, Mammography Matters, safety and effectiveness concerns. and other device-oriented information.

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DEPARTMENT OF HEALTH AND thereby optimizing patient response to elevated levels have been found in HUMAN SERVICES stroke therapies. children with Fabry disease and point to Market: the need for preventive therapies. National Institutes of Health 1. Annually, fifteen billion people Additionally, this test can be routinely suffer from strokes worldwide, and an utilized for evaluation of specific and Government-Owned Inventions; estimated 700,000 individuals have non-specific therapies that aid in Availability for Licensing first-time or recurrent strokes each year minimizing the complications AGENCY: National Institutes of Health, in the United States alone. associated with Fabry disease. 2. Almost three-fourth of all strokes Public Health Service, HHS. Applications: occur in individuals over 65 years of ACTION: Notice. 1. Rapid diagnostic test to identify age. person at risk for Fabry disease. 3. In 2006, the projected indirect and SUMMARY: The inventions listed below 2. Reliable diagnostic test to identify are owned by an agency of the U.S. direct costs of stroke are $57.9 billion. subject response to Fabry disease Development Status: This technology Government and are available for therapy. requires clinical validation studies. licensing in the U.S. in accordance with Market: Individuals genetically Inventors: Alison Baird (NINDS) et al. susceptible to Fabry disease. 35 U.S.C. 207 to achieve expeditious Patent Status: U.S. Provisional Development Status: This technology commercialization of results of Application No. 60/807,027 filed 11 Jul requires analytic validation. federally-funded research and 2006 (HHS Reference No. E–197–2006/ development. Foreign patent 0–US–01). Inventors: Raphael Schiffmann applications are filed on selected Licensing Status: Available for non- (NINDS) et al. inventions to extend market coverage exclusive or exclusive licensing. Related Publications: for companies and may also be available Licensing Contact: Fatima Sayyid, 1. DF Moore, H Li, N Jeffries, V for licensing. M.H.P.M.; 301/435–4521; Wright, RA Cooper Jr, A Elkahloun, MP ADDRESSES: Licensing information and [email protected]. Gelderman, E Zudaire, G Blevins, H Yu, copies of the U.S. patent applications Collaborative Research Opportunity: E Goldin, AE Baird. Using peripheral listed below may be obtained by writing NINDS is also seeking statements of blood mononuclear cells to determine a to the indicated licensing contact at the capability or interest from parties gene expression profile of acute Office of Technology Transfer, National interested in collaborative research to ischemic stroke: a pilot investigation. Institutes of Health, 6011 Executive further develop, evaluate, or Circulation. 2005 Jan 18; 111(2):212– Boulevard, Suite 325, Rockville, commercialize this assay for 221. Maryland 20852–3804; telephone: 301/ determining hemorrhagic stroke victims. 2. Y Okada, H Sakai, E Kohiki, E Suga, 496–7057; fax: 301/402–0220. A signed For additional information, please Y Yanagisawa, K Tanaka, S Hadano, H Confidential Disclosure Agreement will contact: Heather Gunas, J.D., M.P.H; Osuga, JE Ikeda. A dopamine D4 be required to receive copies of the NINDS c/o NCI TTB; 6120 Executive receptor antagonist attenuates ischemia- patent applications. Blvd., Suite 450, Rockville, MD 20852; induced neuronal cell damage via Phone: 301–451–3944; Fax: 301–402– upregulation of neuronal apoptosis Differential Expression of Molecules 2117; E-mail: [email protected]. inhibitory protein. J Cereb Blood Flow Associated With Intra-Cerebral Metab. 2005 Jul; 25(7):794–806. Hemorrhage Diagnosis and Prognosis of Fabry 3. N Inohara, M Chamaillard, C Description of Technology: Stroke Disease by Detecting Neuronal McDonald, G Nun˜ ez. NOD–LRR affects 15 million people worldwide Apoptosis Inhibitor Protein (NAIP) proteins: role in host-microbial each year, and is the number three Expression interactions and inflammatory disease. leading cause of morbidity in the United Description of Technology: Fabry Annu Rev Biochem. 2005 Jul; 74:355– States. Although most forms of stroke disease is a severe metabolic disorder 383. are ischemic in nature, approximately that affects the vascular system of Patent Status: U.S. Provisional 10–15% of strokes are hemorrhagic. At multiple tissues and organs. An Application No. 60/806,295 filed 30 Jun present, clinical applications for estimated 1 in 40,000 individuals 2006 (HHS Reference No. E–196–2006/ distinguishing between these two forms inherit this rare disease, and suffer from 0–US–01). of stroke do not exist. various complications including stroke, Licensing Status: Available for non- The present invention describes a renal failure, and cardiac arrest. At exclusive or exclusive licensing. highly predictive, cost-effective present, molecular markers that directly Licensing Contact: Fatima Sayyid, diagnostic assay capable of detecting measure cellular dysfunction to not M.H.P.M.; 301/435–4521; whether an individual has suffered from exist, thus, prognosis for Fabry disease [email protected]. an intracerebral hemorrhagic stroke and therapy can not be assessed. Novel Treatment of Vascular Cognitive the likelihood of neurological recovery. Available for licensing and Impairment It comprises a rapid screening device for commercial development is a rapid measuring differential expression diagnostic assay to identify individuals Description of Technology: Available patterns of nucleic acid molecules or with Fabry disease and an effective for licensing are methods and proteins of at least four hemorrhagic mechanism of evaluating enzyme formulations for treating or preventing stroke-related genes. Accurate replacement therapy. It provides a Vascular Cognitive Impairment (VCI) prediction of hemorrhagic stroke will quick, inexpensive device for through mucosal administration of E- improve rapid diagnosis and aid in determining expression patterns of the selectin, an inducible adhesion determining early treatment regimens. neuronal apoptosis inhibitor protein molecule on endothelial cells. Vascular Applications: (NAIP). Peripheral blood white cells of dementia is defined as the loss of 1. Gene expression profile assay for Fabry disease patients are analyzed for cognitive function resulting from determining hemorrhagic stroke victims. elevated levels of the marker NAIP, ischemic, ischemic-hypoxic, or 2. Means of differentiating between which is over-expressed in patients hemorrhagic brain lesions as a result of hemorrhagic stroke and ischemic stroke suffering from acute strokes. These cerebrovascular diseases and pathologic

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changes. Presently no adequate medical High plasma concentration of HDL contamination during lyophilization treatment exists for VCI. cholesterol is associated with reduced and a simple means to prevent Cerebrovascular disease causes risk of cardiovascular diseases (such as contamination. It affords a convenient proinflammatory cytokines such as IL– ischemic stroke and myocardial system for gas venting and exchange 1 and TNF to induce the expression of infarction). In contrast, low levels of utilizing a microcentrifuge tube fitted E-selectin on human endothelium. E- HDL are associated with increased risk with a cap incorporating a filter selectin mediates the adhesion of of atherosclerotic diseases. The plasma membrane. In a related technology, a various leukocytes, including protein enzyme LCAT plays a critical unique, cost-effective multi-well plate neutrophils, monocytes, eosinophils, role in the metabolism of HDL and it assembly provides for simultaneous natural killer cells, and a subset of T facilitates the removal of cholesterol lyophilization of small sample volumes cells to the activated endothelium. from the body. Individuals with a for high-throughput operations. Thus, Activation of vascular endothelial cells mutation in the LCAT gene have low these technologies are well-suited for by proinflammatory cytokines is HDL plasma levels and exhibit an researchers concerned about believed to be involved in conversion of increased risk for atherosclerosis. contamination during the lyophilization the luminal surface of endothelium from Therefore, upregulation of LCAT process. Given the spillage often anticoagulant and anti-inflammatory to function has been proposed as an HDL– occurring within centrifugal freeze- procoagulant and pro-inflammatory. C increasing therapy, and may have dryers, these technologies are also These vascular changes are thought to atheroprotective effects. This invention useful even when sterility is not needed, underlie the development of VCI. provides for several methods of as they prevent contamination from the Mucosally administered antigens can administering LCAT polypeptide to often-dirty interiors of laboratory inhibit immune responses in an antigen decrease cholesterol accumulation in centrifugal freeze-dryers, as well as specific fashion by inducing a subset of arteries. cross-contamination between samples lymphocytes to produce anti- Development Status: Animal data undergoing lyophilization. In addition, inflammatory cytokines in the presence available. by extending shelf-lives, these of the antigen. This type of tolerance has Inventors: Silvia Santamarina-Fojo, technologies enable researchers to been termed ‘‘bystander suppression’’. Jeffrey M. Hoeg, H. Bryan Brewer purchase expensive biomolecules and In an animal model of VCI, intranasal (NHLBI). pharmaceuticals in money-saving bulk administered E-selectin suppressed Relevant Publication: JM Hoeg et al. quantities. Furthermore, these activation of vessel segments beginning Overexpression of lecithin:cholesterol technologies permit cells to be grown to express E-selectin and thus prevented acyltransferase in transgenic rabbits and stored axenically, in small the development of VCI. prevents diet-induced atherosclerosis. quantities, with or without Immunosuppression via antigen-specific Proc Natl Acad Sci USA. 1996 Oct lyophilization. modulation of the immune response 15;93(21):11448–11453. Applications: Patent Status: U.S. Patent No. (mucosal tolerance) should have no 1. Maximizes the shelf-lives of 6,635,641 issued on 21 Oct 2003 (HHS systemic immunosuppressive effects. expensive biomolecules and Reference No. E–007–1996/0–US–03); Inventors: John M. Hallenbeck et al. pharmaceuticals. PCT Application No. PCT/US96/18159 (NINDS). 2. Makes practical the bulk purchase filed 09 Sep 1996, which was published Patent Status: U.S. Provisional of expensive biomolecules and as WO 1997/17434 on 15 May 1997 pharmaceuticals by extending shelf- Application No. 60/712,359 filed 30 (HHS Reference No. E–007–1996/0– Aug 2005 (HHS Reference No. E–271– lives. PCT–02); Australian Patent No. 728257 3. Makes possible the axenic storage 2005/0–US–01). issued on 19 Apr 2001; and National Licensing Status: Available for non- of cells via aseptic freeze-drying. Stage filings in Canada and Europe. 4. Makes possible the production and exclusive or exclusive licensing. Licensing Status: Available for non- use of small, sterile aliquots of precious Licensing Contact: Norbert Pontzer, exclusive or exclusive licensing. materials by eliminating unnecessary Ph.D., J.D.; 301/435–5502; Licensing Contact: filtration steps. [email protected]. [email protected]; 301/496–7057. 5. Makes possible the sterile growth of Collaborative Research Opportunity: cells in small volumes. The NINDS Stroke Branch is seeking Devices for Aseptic Lyophilization of Biological Samples Market: statements of capability or interest from 1. Researchers worldwide who utilize parties interested in collaborative Description of Technology: Biological sterile, labile compounds. research to further develop, evaluate, or materials are often lyophilized and 2. Researchers who utilize microbial, commercialize the use of E-selectin for stored in small aliquots for long-term plant, or animal cell cultures. treatment of VCI. For more information, preservation as a means of improving Development Status: Development is please contact: Laurie Arrants, NINDS stability and expanding shelf life. At complete and invention has been Technology Transfer Office, 301–435– present, sterility of solutions cannot be successfully tested. 3112; [email protected]. preserved throughout the lyophilization Inventors: Geoffrey Kidd (NCI). process, and reconstituted samples must Patent Status: U.S. Patent 5,958,778 Use of LCAT To Reduce Cholesterol be filtered to remove contaminants such issued 28 Sep 1999 (HHS Reference No. and Prevent Atherosclerosis as fungi or bacteria, resulting in E–015–1995/2–US–01); U.S. Patent Description of Technology: Available considerable loss of expensive sample 6,503,455 issued 07 Jan 2003 (HHS for licensing and commercial via absorption by the filter. Thus, there Reference No. E–015–1995/2–US–02); development is a method of decreasing exists a need for a device that eliminates U.S. Patent Application 10/238,147 filed accumulation of cholesterol in arteries microbial contamination throughout the 09 Sep 2002 (HHS Reference No. E– of humans by administering lecithin- lyophilization process and provides 304–2003/0–US–01). cholesterol acyltransferase (LCAT). This materials that are ready to use following Licensing Status: Available for method is useful for the therapeutic lyophilization. exclusive or non-exclusive licensing. treatment of subjects at risk for This technology offers a functional Licensing Contact: developing atherosclerosis. method to prevent microbial [email protected]; 301/496–7057.

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Dated: August 29, 2006. identification of ‘‘new’’ disease- Patent Status: U.S. Provisional Steven M. Ferguson, associated viruses. Application No 60/797,334 filed 02 May Director, Division of Technology Development The novel method is based on a viral 2006 (HHS Reference No. E–206–2006/ and Transfer, Office of Technology Transfer, microarray containing 10,000 0–US–01). National Institutes of Health. immobilized DNA oligonucleotide Licensing Status: Available for non- [FR Doc. E6–14753 Filed 9–6–06; 8:45 am] features, representing all known exclusive or exclusive licensing. BILLING CODE 4140–01–P mammalian and avian pathogenic Licensing Contact: Cristina viruses (approximately 600). Software Thalhammer-Reyero, PhD, MBA; 301/ was also developed to analyze the viral 435–4507; [email protected] DEPARTMENT OF HEALTH AND microarray results. The oligonucleotide Collaborative Research Opportunity: HUMAN SERVICES features in this system are 60-mer long The NCI-Laboratory of Molecular and distributed across both conserved Technology is seeking statements of National Institutes of Health and non-conserved regions of known capability or interest from parties Government-Owned Inventions; viral sequences. This design serves the interested in collaborative research to Availability for Licensing dual purpose of: (1) Facilitating further develop, evaluate, or validation via redundant signals commercialize this oligo microarray for AGENCY: National Institutes of Health, associated with each represented virus identification and detection of all Public Health Service, HHS. and (2) allowing for the discovery of known mammalian and avian ACTION: Notice. new viruses, which arise due to pathogenic viruses. Please contact Betty recombination. In addition, positive and Tong, PhD at 301–594–4263 or SUMMARY: The inventions listed below negative controls against human and [email protected] for more are owned by an agency of the U.S. mouse housekeeping genes are included information. Government and are available for along with software for analysis of virus licensing in the U.S. in accordance with microarray results. Novel Monoclonal Antibody 35 U.S.C. 207 to achieve expeditious Further advantages of the viral Microarray commercialization of results of microarray include: (a) The use of Description of Technology: Gene federally-funded research and sample inputs as little as 10ng of either expression profiling at the mRNA level development. Foreign patent total DNA or RNA extracted from virus has proven to be a powerful and useful applications are filed on selected infected cells, representing as few as 20 tool, however this approach suffers from inventions to extend market coverage viral particles; (b) detection of viruses of inherent limitations: (1) The mRNA for companies and may also be available both DNA and RNA classes; (c) a abundance does not typically correlate for licensing. capacity for high-throughput screening well with protein abundance and (2) ADDRESSES: Licensing information and of various sample types including protein structure, activity, and function copies of the U.S. patent applications serum, saliva and biopsy tissues; and (d) can be altered and regulated by post- listed below may be obtained by writing analysis of a large number of samples in translational modifications. Thus, there to the indicated licensing contact at the parallel on identical arrays. is growing recognition that these Office of Technology Transfer, National The detection of viral DNA is unique approaches should be complemented by Institutes of Health, 6011 Executive to this technology, as other available profiles of the gene products or proteins Boulevard, Suite 325, Rockville, technologies only detect viral genomic themselves. The present invention Maryland 20852–3804; telephone: 301/ RNA or viral mRNA transcripts. provides methods for constructing and 496–7057; fax: 301/402–0220. A signed Additionally, the viral chip was found using a novel Monoclonal Antibody Confidential Disclosure Agreement will to be highly specific and sensitive for Microarray which allows high- be required to receive copies of the detecting different viral genomic throughput determination of protein patent applications. sequences in cell lines and multiple expression profiles from serum, tissue, viral constructs co-infection in cultured and cultured cells. Oligo Microarray for Detection of All cells. The Monoclonal Antibody Microarray Known Mammalian and Avian Applications: (1) Detection and consists of more than 1000 different Pathogenic Viruses identification of viruses that cause antibodies immobilized on a glass slide, Description of Technology: The disease; (2) Efficient discovery of new which recognize antigens from several spectrum of pathogenic viruses of pathogenic viruses; (3) Diagnosis of groups of proteins, including cytokines, importance in human disease, human and animal disease outbreaks; kinases, apoptotic proteins, growth agriculture and biology is not only large (4) Identification of viral agents used in factor receptors, tumor suppressors, and and diverse, but continually evolving. bioterrorism. oncoproteins. Protein samples to be The identification or isolation of viral Development Status: (1) The pre- identified and quantified are labeled pathogens, in correlation with the clinical performance of the viral with fluorescence and hybridized to the presence of specific disease phenotypes, microarray was evaluated by application antibodies immobilized on the arrays. is of paramount importance both to of four virally positive infected cell By differentially labeling two protein diagnosis of disease and the subsequent lines (JSC–1-harboring EBV and KSHV, samples (dual-color labeling) and co- management or treatment of viral BCBL–1 harboring KSHV, HeLa- hybridizing to the same microarray, a infection. The limitations of current harboring HPV18, Cem X 174 harboring direct comparative analysis of protein viral detection methods, such as PCR SIV). (2) Clinical performance was expression can be performed using as and immunoassays, led to the tested and validated through analysis of little as 100 µg of total protein. This development of a novel microarray total RNA from cold (swab), Japanese method allows a large number of system for specific detection of viruses. Encephalitis, Dengue, Ebola and West samples to be screened in parallel on The technology offered here for Nile virus samples. identical arrays. licensing provides a method for high- Inventors: Cassio S. Baptista (NCI), Applications: (1) High-throughput throughput screening of known Xiaolin Wu (NCI), David J. Munroe analysis of protein expression; (2) Direct pathogenic viruses along with (NCI). measurement of protein expression at

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the gene product or post-translational commercialization of results of published as WO 2006/023209 on 02 levels. federally-funded research and Mar 2006 (HHS Reference No. E–262– Development Status: (1) The development. Foreign patent 2003/0–PCT–02). microarrays’ performance was tested by applications are filed on selected Licensing Status: Available for proteomic profiling of two NCI–60 inventions to extend market coverage exclusive or non-exclusive licensing. cancer cell lines (Renal UO–31 and for companies and may also be available Licensing Contact: Tara L. Kirby, Leukemia HL–60), demonstrating a high for licensing. Ph.D.; 301/435–4426; level of reproducibility. (2) The ADDRESSES: Licensing information and [email protected]. microarrays’ performance was further copies of the U.S. patent applications A Nurr1-Knockout Mouse Model for evaluated by analysis of the protein listed below may be obtained by writing Parkinson’s Disease and Stem Cell expression profiles of 12 Borderline to the indicated licensing contact at the Differentiation ovarian and 9 Adenocarcinoma ovarian Office of Technology Transfer, National tumors using normal ovarian surface Institutes of Health, 6011 Executive Description of Technology: The epithelial cells as a reference cell line. Boulevard, Suite 325, Rockville, researchers have generated Nurr1- It was possible to detect 77 proteins that Maryland 20852–3804; telephone: 301/ knockout mice via genomic locus showed statistically significant (p<0.05) 496–7057; fax: 301/402–0220. A signed inactivation using homologous differences distinguishing Borderline Confidential Disclosure Agreement will recombination. tumors and Adenocarcinoma tumors, be required to receive copies of the Transcription factor Nurr1 is an demonstrating that the novel patent applications. obligatory factor for neurotransmitter microarrays described are useful tools Methods for Enhancing Beta Cell dopamine biosynthesis in ventral for proteomics. Function in Diabetes midbrain. From a neurological and Inventors: Cassio S. Baptista, Lionel clinical perspective, it suggests an Best, David J. Munroe (NCI). Description of Technology: Diabetes entirely new mechanism for dopamine Patent Status: U.S. Provisional results when beta cell performance is depletion in a region where dopamine is Application No. 60/797,301 filed 02 compromised through loss of cells or by known to be involved in Parkinson’s May 2006 (HHS Reference No. E–207– reduced cell function. Anti-diabetic disease. Activation of Nurr1 may be 2006/0–US–01). drugs that stimulate insulin production, therapeutically useful for Parkinson’s Licensing Status: Available for non- such as sulfonylureas and meglitinides, disease patients; therefore, the mice exclusive or exclusive licensing. have limited efficacy when beta cell would be useful in Parkinson’s disease Licensing Contact: Cristina responsiveness is deficient. There exists research. Thalhammer-Reyero, PhD, MBA; 301/ a critical need, therefore, for new Additionally, Nurr1 has been shown 435–4507; [email protected]. diagnostics and therapeutics that focus to be critical for development of Collaborative Research Opportunity: on beta cell responsiveness in diabetes. midbrain dopaminergic neurons, and The NCI-Laboratory of Molecular This technology describes methods thus may contribute to stem cell-based Technology is seeking statements of for improving pancreatic endocrine therapies for neurological disorders. capability or interest from parties function and delaying the onset of Nurr1 is also important for osteoblast interested in collaborative research to diabetes by enhancing beta cell function differentiation, suggesting a general role further develop, evaluate, or using ligands and/or regulators of Notch in stem cell differentiation and growth. receptors. These methods are directed commercialize this novel monoclonal Applications: (1) Research and drug not only to mature beta cells, but to antibody microarray. Please contact testing for Parkinson’s disease and other immature beta cells and to beta cells Betty Tong, PhD at 301–594–4263 or neurological disorders; (2) Stem cell formed from differentiation of stem [email protected] for more research relating to neurological and cells. This technology also describes information. other disorders and bone formation. isolated pancreatic progenitor cells, and Dated: August 31, 2006. Inventor: Dr. Vera Nikodem (NIDDK). offers an effective method for Relevant Publication: SO Castillo, JS Steven M. Ferguson, identifying and isolating these cells Baffi, M Palkovits, DS Goldstein, IJ Director, Division of Technology Development using Notch receptor markers. and Transfer, Office of Technology Transfer, Applications: (1) Treatment for Kopin, J Witta, MA Magnuson, VM National Institutes of Health. diabetes that enhances beta cell function Nikodem. Dopamine biosynthesis is [FR Doc. E6–14831 Filed 9–6–06; 8:45 am] or replaces lost beta cells; (2) Isolation selectively abolished in substantia BILLING CODE 4140–01–P and expansion of pancreatic progenitor nigra/ventral tegmental area but not in cells for diabetes therapy; (3) Diagnostic hypothalamic neurons in mice with test to monitor beta cell function targeted disruption of the Nurr1 gene. DEPARTMENT OF HEALTH AND Market: (1) Over 20 million people Mol Cell Neurosci. 1998 May, 11(1– HUMAN SERVICES suffer from diabetes in the United 2):36–46. States, and approximately 170 million Related Publications: National Institutes of Health people are affected worldwide. (2) There 1. MK Lee, H Choi, M Gil, VM Nikodem. Regulation of osteoblast Government-Owned Inventions; are an estimated 6.2 million differentiation by Nurr1 in MC3T3-E1 Availability for Licensing undiagnosed cases of diabetes in the United States. cell line and mouse calvarial AGENCY: National Institutes of Health, Development Status: Pre-clinical data osteoblasts. J Cell Biochem. 2006 June 1 Public Health Service, HHS. are available. [Epub ahead of print, doi:10.1002/ ACTION: Notice. Inventors: Josephine M. Egan, et al. jcb.20990]. (NIA). 2. J Jankovic, S Chen, WD Le. The role SUMMARY: The inventions listed below Patent Status: U.S. Provisional of Nurr1 in the development of are owned by an agency of the U.S. Application No. 60/590,281 filed 22 Jul dopaminergic neurons and Parkinson’s Government and are available for 2004 (HHS Reference No. E–262–2003/ disease. Prog Neurobiol. 2005 Sep-Oct, licensing in the U.S. in accordance with 0–US–01); PCT Application No. PCT/ 77(1–2):128–138. Epub 2005 Oct 21, 35 U.S.C. 207 to achieve expeditious US2005/026207 filed 22 Jul 2005, which doi:10.1016/j.pneurobio.2005.09.001.

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Patent Status: HHS Reference No. E– Date: September 21, 2006. Contact Person: Paul A. Amstad, PhD, 024–1999/0—Research Tool. Time: 12 p.m. to 2 p.m. Scientific Review Administrator, Scientific Licensing Status: This technology is Agenda: To review and evaluate grant Review Program, Division of Extramural available under a Biological Materials applications. Activities, National Institutes of Health/ Place: National Institutes of Health, 6100 NIAID/DHHS, 6700B Rockledge Drive, MSC License. 7616, Bethesda, MD 20892–7616, 301–402– Licensing Contact: Tara L. Kirby, Executive Boulevard, Room 5B01, Rockville, MD 20852, (Telephone Conference Call). 7098, [email protected]. Ph.D.; 301/435–4426; Contact Person: Michele C. Hindi- (Catalogue of Federal Domestic Assistance [email protected]. Alexander, PhD, Division of Scientific Program Nos. 93.855, Allergy, Immunology, Dated: August 31, 2006. Review, National Institutes of Health, and Transplantation Research; 93.856, Steven M. Ferguson, National Institute for Child Health and Microbiology and Infectious Diseases Human Development, 6100 Executive Research, National Institutes of Health, HHS) Director, Division of Technology Development Boulevard, Room 5B01, Bethesda, MD and Transfer, Office of Technology Transfer, 20812–7510, (301) 435–8382, Dated: August 30, 2006. National Institutes of Health. [email protected]. Anna Snouffer, [FR Doc. E6–14832 Filed 9–6–06; 8:45 am] This notice is being published less than 15 Acting Director, Office of Federal Advisory BILLING CODE 4140–01–P days prior to the meeting due to the timing Committee Policy. limitations imposed by the review and [FR Doc. 06–7465 Filed 9–6–06; 8:45am] funding cycle. BILLING CODE 4140–01–M DEPARTMENT OF HEALTH AND (Catalogue of Federal Domestic Assistance HUMAN SERVICES Program Nos. 93.864, Population Research; 93.865, Research for Mothers and Children; DEPARTMENT OF HEALTH AND National Institutes of Health 93.929, Center for Medical Rehabilitation HUMAN SERVICES Research; 93.209, Contraception and National Institute of Child Health and Infertility Loan Repayment Program, National National Institutes of Health Human Development; Notice of Closed Institutes of Health, HHS) Meetings Dated: August 30, 2006. National Institute on Deafness and Pursuant to section 10(d) of the Anna Snouffer, Other Communication Disorders; Federal Advisory Committee Act, as Acting Director, Office of Federal Advisory Notice of Meeting Committee Policy. amended (5 U.S.C. Appendix 2), notice Pursuant to section 10(d) of the is hereby given of the following [FR Doc. 06–7463 Filed 9–6–06; 8:45am] Federal Advisory Committee Act, as meetings. BILLING CODE 4140–01–M amended (5 U.S.C. Appendix 2), notice The meetings will be closed to the is hereby given of a meeting of the public in accordance with the Board of Scientific Counselors, NIDCD. provisions set forth in sections DEPARTMENT OF HEALTH AND The meeting will be open to the 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., HUMAN SERVICES public as indicated below, with as amended. The grant applications and National Institutes of Health attendance limited to space available. the discussions could disclose Individuals who plan to attend and confidential trade secrets or commercial National Institutes of Allergy and need special assistance, such as sign property such as patentable material, Infectious Diseases; Notice of Closed language interpretation or other and personal information concerning Meeting reasonable accommodations, should individuals associated with the grant notify the Contact Person listed below applications, the disclosure of which Pursuant to section 10(d) of the in advance of the meeting. The meeting would constitute a clearly unwarranted Federal Advisory Committee Act, as will be closed to the public as indicated invasion of personal privacy. amended (5 U.S.C. Appendix 2), notice below in accordance with the provisions Name of Committee: National Institute of is hereby given of the following set forth in section 552b(c)(6), Title 5 Health and Human Development Special meeting. U.S.C., as amended for the review, Emphasis Panel; Graduate Training in The meeting will be closed to the discussion, and evaluation of individual Demography. public in accordance with the intramural programs and projects Date: September 19, 2006. provisions set forth in sections Time: 12 p.m. to 2 p.m. conducted by the National Institute on 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Deafness and Other Communication Agenda: To review and evaluate grant as amended. The contract proposals and applications. Disorders, including consideration of Place: National Institutes of Health, 6100 the discussions could disclose personnel qualifications and Executive Boulevard, Room 5B01, Rockville, confidential trade secrets or commercial performance, and the competence of MD 20852, (Telephone Conference Call). property such as patentable material, individual investigators, the disclosure Contact Person: Michele C. Hindi- and personal information concerning of which would constitute a clearly Alexander, PhD, Division of Scientific individuals associated with the contract unwarranted invasion of personal Review, National Institutes of Health, proposals, the disclosure of which privacy. National Institute for Child Health and would constitute a clearly unwarranted Human Development, 6100 Executive invasion of personal privacy. Name of Committee: Board of Scientific Boulevard, Room 5B01, Bethesda, MD Counselors, NIDCD. 20812–7510, (301) 435–8382, Name of Committee: National Institute of Date: October 27, 2006. [email protected]. Allergy and Infectious Diseases Special Open: 7:30 a.m. to 8:15 a.m. This notice is being published less than 15 Emphasis Panel, Collaborative Network for Agenda: Reports from Institute staff. days prior to the meeting due to the timing Clinical Research on Immune Tolerance. Place: National Institutes of Health, 5 limitations imposed by the review and Date: September 25, 2006. Research Court, 1A07, Rockville, MD 20850. funding cycle. Time: 8 a.m. to 5 p.m. Closed: 8:15 a.m. to 3 p.m. Name of Committee: National Institute of Agenda: To review and evaluate contract Agenda: To review and evaluate personal Child Health and Human Development proposals. qualifications and performance, and Special Emphasis Panel, Love, Money and a Place: Holiday Inn Georgetown, 2101 competence of individual investigators. Dad for my Kids: Low Income Women and Wisconsin Avenue, NW., Washington, DC Place: National Institutes of Health, 5 Marriage. 20007. Research Court, 1A07, Rockville, MD 20850.

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Contact Person: Robert J. Wenthold, PhD, Dated: August 29, 2006. and Hematology Research, National Institutes Director, Division of Intramural Research, Anna Snouffer, of Health, HHS) National Institute on Deafness and Other Acting Director, Office of Federal Advisory Dated: August 29, 2006. Communication Disorders, 5 Research Court, Committee Policy. Room 2B28, Rockville, MD 20852. 301–402– Anna Snouffer, 2829. [FR Doc. 06–7471 Filed 9–6–06; 8:45 am] Acting Director, Office of Federal Advisory (Catalogue of Federal Domestic Assistance BILLING CODE 4140–01–M Committee Policy. Program Nos. 93.173, Biological Research [FR Doc. 06–7472 Filed 9–6–06; 8:45 am] Related to Deafness and Communicative BILLING CODE 4140–01–M Disorders, National Institutes of Health, HHS) DEPARTMENT OF HEALTH AND HUMAN SERVICES Dated: August 29, 2006. Anna Snouffer, DEPARTMENT OF HEALTH AND National Institutes of Health HUMAN SERVICES Acting Director, Office of Federal Advisory Committee Policy. National Institute of Diabetes and National Institutes of Health [FR Doc. 06–7469 Filed 9–6–06; 8:45am] Digestive and Kidney Diseases; Notice BILLING CODE 4140–01–M of Closed Meetings National Library of Medicine; Notice of Pursuant to section 10(d) of the Meeting DEPARTMENT OF HEALTH AND Federal Advisory Committee Act, as Notice is hereby given of the second HUMAN SERVICES amended (5 U.S.C. Appendix 2), notice meeting of the Working Group on is hereby given of the following Chemical Information Resource National Institutes of Health meetings. Coordination under the National Library The meetings will be closed to the of Medicine’s (NLM) Board of Scientific National Institute of Diabetes and public in accordance with the Counselors, National Center for Digestive and Kidney Diseases; Notice provisions set forth in sections Biotechnology Information (NCBI). of Closed Meeting 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., The meeting will be open to the as amended. The contract proposals and public, with attendance limited to space Pursuant to section 10(d) of the the discussions could disclose available. Individuals who plan to Federal Advisory Committee Act, as confidential trade secrets or commercial attend and need special assistance, such amended (5 U.S.C. Appendix 2), notice property such as patentable material, as sign language interpretation or other is hereby given of the following and personal information concerning reasonable accommodations, should meeting. individuals associated with the contract notify the Contact Person listed below The meeting will be closed to the proposals, the disclosure of which in advance of the meeting. public in accordance with the would constitute a clearly unwarranted The mission of the Working Group on provisions set forth in sections invasion of personal privacy. Chemical Information Resource 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Name of Committee: National Institute of Coordination is to advise the Board of as amended. The contract proposals and Diabetes and Digestive and Kidney Diseases Scientific Counselors, NCBI, on the discussions could disclose Special Emphasis Panel, USRDS interactions with private sector confidential trade secrets or commercial Coordinating Center proposal review. information providers in the property such as patentable material, Date: September 25, 2006. development of the PubChem database. and personal information concerning Time: 8:30 a.m. to 10 a.m. PubChem is a publicly available individuals associated with the contract Agenda: To review and evaluate contract proposals. database that includes information proposals, the disclosure of which Place: Bethesda Marriott Suites, 6711 about the biological activities of would constitute a clearly unwarranted Democracy Boulevard, Bethesda, MD 20817. chemical compounds, and is designed invasion of personal privacy. Contact Person: Lakshmanan Sankaran, to facilitate more integrated access to Name of Committee: National Institute of PhD, Scientific Review Administrator, these information resources for Diabetes and Digestive and Kidney Diseases Review Branch, DEA, NIDDK, National biomedical researchers. The working Special Emphasis Panel, RFP NIH–NIDDK– Institutes of Health, Room 755, 6707 group will: (1) Establish a process for 06–05, Liver Tissue and Cell Distribution Democracy Boulevard, Bethesda, MD 20892– retrospective evaluation of the System (LTCDS). 5452, (301) 594–7799, [email protected]. biomedical relevance of compounds Date: September 18, 2006. Name of Committee: National Institute of entered into PubChem, (2) Ensure the Time: 2 p.m. to 3:30 p.m. Diabetes and Digestive and Kidney Diseases provenance of the data (i.e., whether Agenda: To review and evaluate contract Special Emphasis Panel, USRDS Special proposals. Studies Centers Contract Proposals Review. private data are being improperly Place: National Institutes of Health, Two Date: September 25, 2006. deposited into PubChem), (3) Ensuring Democracy Plaza, 6707 Democracy Time: 10 a.m. to 1:30 p.m. the high quality of data in PubChem, (4) Boulevard, Bethesda, MD 20892 (Telephone Agenda: To review and evaluate contract Monitoring the effect of PubChem on Conference Call). proposals. scientific progress, (5) Improving/ Contact Person: Paul A. Rushing, PhD, Place: Bethesda Marriott Suites, 6711 Integrating interactions with Scientific Review Administrator, Review Democracy Boulevard, Bethesda, MD 20817. commercial information providers, and Branch, DEA, NIDDK, National Institutes of Contact Person: Lakshmanan Sankaran, (6) Avoiding unnecessary duplication Health, Room 747, 6707 Democracy PhD, Scientific Review Administrator, with commercial information providers. Boulevard, Bethesda, MD 20892–5452. (301) Review Branch, DEA, NIDDK, National 594–8895. [email protected]. Institutes of Health, Room 755, 6707 This working group supports part of the National Institutes of Health’s Roadmap, (Catalogue of Federal Domestic Assistance Democracy Boulevard, Bethesda, MD 20892– Program Nos. 93.847, Diabetes, 5452, (301) 594–7799, [email protected]. called the Molecular Libraries Initiative. Endocrinology and Metabolic Research; (Catalogue of Federal Domestic Assistance Name of Committee: Working Group on 93.848, Digestive Diseases and Nutrition Program Nos. 93.847, Diabetes, Chemical Information Resource Research; 93.849, Kidney Diseases, Urology Endocrinology and Metabolic Research; Coordination. and Hematology Research, National Institutes 93.848, Digestive Diseases and Nutrition Date: October 16, 2006. of Health, HHS) Research; 93.849, Kidney Diseases, Urology Time: 10 a.m. to 3 p.m.

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Agenda: Discussion on the NLM/NCBI Agenda: To review and evaluate personal Agenda: Review and Analysis of Systems. PubChem Database. qualifications and performance, and Place: National Library of Medicine, Place: National Library of Medicine, competence of individual investigators. Building 38, 2nd Floor, Board Room, 8600 Building 38, Board Room, 2nd Floor, 8600 Place: National Library of Medicine, Rockville Pike, Bethesda, MD 20892. Rockville Pike, Bethesda, MD 20894. Building 38, Board Room, 2nd Floor, 8600 Contact Person: David J. Lipman, MD, Contact Person: David J. Lipman, M.D., Rockville Pike, Bethesda, MD 20892. Director, Natl Ctr for Biotechnology Director, National Center for Biotechnology Open: 2 p.m. to 5 p.m. Information, National Library of Medicine, Information, National Library of Medicine, Agenda: Program Discussion. Building 38, Room 8N805, Bethesda, MD NIH, Building 38A, Room 8N803, Bethesda, Place: National Library of Medicine, 20894. 301–435–5985. MD 20894, 301–496–2475. Building 38, Board Room, 2nd Floor, 8600 [email protected]. Any interested person may file written Rockville Pike, Bethesda, MD 20892. Any interested person may file written comments with the committee by forwarding Contact Person: David J. Lipman, MD, comments with the committee by forwarding the statement to the Contact Person listed on Director, Natl Ctr for Biotechnology the statement to the Contact Person listed on this notice. The comments should include Information, National Library of Medicine, this notice. The statement should include the the name, address, telephone number and, Department of Health and Human Services, name, address, telephone number and when when applicable, the business or professional Building 38A, Rom 8N805, Bethesda, MD applicable, the business or professional affiliation of the interested person. 20894, 301–435–5985, affiliation of the interested person. [email protected]. In the interest of security, NIH has Dated: August 30, 2006. Any interested person may file written instituted stringent procedures for entrance Anna Snouffer, comments with the committee by forwarding onto the NIH campus. All visitor vehicles, Acting Director, Office of Federal Advisory the statement to the Contact Person listed on including taxicabs, hotel, and airport shuttles Committee Policy. this notice. The statement should include the will be inspected before being allowed on name, address, telephone number and when [FR Doc. 06–7466 Filed 9–6–06; 8:45 am] campus. Visitors will be asked to show one applicable, the business or professional form of identification (for example, a BILLING CODE 4140–01–M affiliation of the interested person. government-issued photo ID, driver’s license, In the interest of security, NIH has or passport) and to state the purpose of their instituted stringent procedures for entrance visit. DEPARTMENT OF HEALTH AND onto the NIH campus. All visitor vehicles, Information is also available on the HUMAN SERVICES including taxicabs, hotel, and airport shuttles Institute’s/Center’s home page: http:// will be inspected before being allowed on www.pubmedcentral.nih.gov/about/nac.html, National Institutes of Health campus. Visitors will be asked to show one where an agenda and any additional form of identification (for example, a information for the meeting will be posted National Library of Medicine; Notice of government-issued photo Id, driver’s license, when available. Meeting or passport) and to state the purpose of their (Catalogue of Federal Domestic Assistance visit. Program Nos. 93,879, Medical Library Pursuant to section 10(d) of the (Catalogue of Federal Domestic Assistance Assistance, National Institutes of Health, Federal Advisory Committee Act, as Program Nos. 93.879, Medical Library HHS) amended (5 U.S.C. Appendix 2), notice Assistance, National Institutes of Health, Dated: August 30, 2006. is hereby given of a meeting of the HHS) Anna Snouffer, Board of Scientific Counselors, National Dated: August 30, 2006. Acting Director, Office of Federal Advisory Center for Biotechnology Information. Anna Snouffer, The meeting will be open to the Committee Policy. Acting Director, Office of Federal Advisory [FR Doc. 06–7468 Filed 9–6–06; 8:45 am] public as indicated below, with Committee Policy. attendance limited to space available. BILLING CODE 4140–01–M [FR Doc. 06–7467 Filed 9–6–06; 8:45 am] Individuals who plan to attend and need special assistance, such as sign BILLING CODE 4140–01–M language interpretation or other DEPARTMENT OF HEALTH AND HUMAN SERVICES reasonable accommodations, should DEPARTMENT OF HEALTH AND notify the Contact Person listed below HUMAN SERVICES National Institutes of Health in advance of the meeting. The meeting will be closed to the National Institutes of Health Office of the Director, National public as indicated below in accordance Institutes of Health; Amended Notice with the provisions set forth in section National Library of Medicine; Notice of of Meeting 552b(c)(6), Title 5 U.S.C., as amended Meeting for the review, discussion, and Notice is hereby given of a change in Pursuant to section 10(d) of the evaluation of individuals conducted by the meeting of the Recombinant DNA Federal Advisory Committee Act, as the National Library of Medicine, Advisory Committee, September 20, amended (5 U.S.C. Appendix 2), notice including consideration of personnel 2006, 1 p.m. to 5 p.m., National is hereby given of a meeting of the qualifications and performance, and the Institutes of Health, Natcher Building, PubMed Central National Advisory competence of individual investigators, 45 Center Drive, Conference Room D, Committee. the disclosure of which would Bethesda, MD 20892 which was The meeting will be open to the published in the Federal Register on constitute a clearly unwarranted public, with attendance limited to space invasion of personal privacy. August 18, 2006, 71 FR 160 page 47821. available. Individuals who plan to The meeting will be held from 12 p.m. Name of Committee: Board of Scientific attend and need special assistance, such Counselors, National Center for to 6 p.m. instead of 1 p.m. to 5 p.m. The as sign language interpretation or other meeting is open to the public. Biotechnology Information. reasonable accommodations, should Date: October 17, 2006. notify the Contact Person listed below Dated: August 30, 2006. Open: 8:30 a.m. to 12 p.m. Anna Snouffer, Agenda: Program Discussion. in advance of the meeting. Acting Director, Office of Federal Advisory Place: National Library of Medicine, Name of Committee: PubMed Central Committee Policy. Building 38, Board Room, 2nd Floor, 8600 National Advisory Committee, Rockville Pike, Bethesda, MD 20892. Date: October 26, 2006. [FR Doc. 06–7464 Filed 9–6–06; 8:45 am] Closed: 12 p.m. to 2 p.m. Time: 9:30 a.m. to 4 p.m. BILLING CODE 4140–01–M

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DEPARTMENT OF HEALTH AND Scientific Review, National Institutes of Agenda: To review and evaluate grant HUMAN SERVICES Health, 6701 Rockledge Drive, Room 5186, applications. MSC 7844, Bethesda, MD 20892. 301–435– Place: Doubletree Bethesda, 8120 National Institutes of Health 2212. [email protected]. Wisconsin Ave., Bethesda, MD 20814. Name of Committee: Biological Chemistry Contact Person: Michael A. Steinmetz, Center for Scientific Review; Notice of and Macromolecular Biophysics Integrated PhD, Scientific Review Administrator, Center Closed Meetings Review Group, Enabling Bioanalytical and for Scientific Review, National Institutes of Biophysical Technologies Study Section. Health, 6701 Rockledge Drive, Room 5172, Pursuant to section 10(d) of the Date: October 2, 2006. MSC 7844, Bethesda, MD 20892. 301–435– Federal Advisory Committee Act, as Time: 8:30 a.m. to 6:30 p.m. 1247. [email protected]. amended (5 U.S.C. Appendix 2), notice Agenda: To review and evaluate grant Name of Committee: Respiratory Sciences is hereby given of the following applications. Integrated Review Group, Lung Injury, Place: One Washington Circle Hotel, One Repair, and Remodeling Study Section. meetings. Date: October 3–4, 2006. The meetings will be closed to the Washington Circle, Washington, DC 20037. Contact Person: Vonda K. Smith, PhD, Time: 8 a.m. to 5 p.m. public in accordance with the Scientific Review Administrator, Center for Agenda: To review and evaluate grant provisions set forth in sections Scientific Review, National Institutes of applications. 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Health, 6701 Rockledge Drive, Room 4172, Place: Hyatt Regency Bethesda, One as amended. The grant applications and MSC 7806, Bethesda, MD 20892. 301–435– Bethesda Metro Center, 7400 Wisconsin the discussions could disclose 1789. [email protected]. Avenue, Bethesda, MD 20814. confidential trade secrets or commercial Name of Committee: Center for Scientific Contact Person: Ghenima Dirami, PhD, Scientific Review Administrator, Center for Review Special Emphasis Panel, Surgery, property such as patentable material, Scientific Review, National Institutes of Anesthesia, and Trauma Member Conflict. and personal information concerning Health, 6701 Rockledge Drive, Room 2159A, Date: October 2, 2006. individuals associated with the grant MSC 7818, Bethesda, MD 20892. (301) 594– Time: 2 p.m. to 5 p.m. applications, the disclosure of which 1321. [email protected]. Agenda: To review and evaluate grant would constitute a clearly unwarranted applications. Name of Committee: Cell Biology invasion of personal privacy. Place: National Institutes of Health, 6701 Integrated Review Group, Intercellular Interactions. Name of Committee: Center for Scientific Rockledge Drive, Bethesda, MD 20892 Date: October 3–4, 2006. Review Special Emphasis Panel, PAR06–293 (Telephone Conference Call). Time: 8 a.m. to 6:30 p.m. Quick Trial on Imaging and Image-guided Contact Person: Roberto J. Matus, MD, Scientific Review Administrator, Center for Agenda: To review and evaluate grant Intervention. applications. Date: September 29, 2006. Scientific Review, National Institutes of Health, 6701 Rockledge Drive, Room 5108, Place: Hyatt Regency Bethesda, One Time: 1 p.m. to 5 p.m. Bethesda Metro Center, 7400 Wisconsin Agenda: To review and evaluate grant MSC 7854, Bethesda, MD 20892 301–435– 2204. [email protected]. Avenue, Bethesda, MD 20814. applications. Contact Person: Noni Byrnes, PhD, Place: National Institutes of Health, 6701 Name of Committee: Integrative, Scientific Review Administrator, Center for Rockledge Drive, Bethesda, MD 20892 Functional and Cognitive Neuroscience Scientific Review, National Institutes of (Virtual Meeting). Integrated Review Group, Neurobiology of Health, 6701 Rockledge Drive, Room 5130, Contact Person: Eileen W. Bradley, DSC, Motivated Behavior Study Section. MSC 7840, Bethesda, MD 20892. (301) 435– Scientific Review Administrator, Center for Date: October 3–4, 2006. 1023. [email protected]. Scientific Review, National Institutes of Time: 8 a.m. to 5 p.m. Name of Committee: Center for Scientific Health, 6701 Rockledge Drive, Room 5100, Agenda: To review and evaluate grant Review Special Emphasis Panel, MSC 7854, Bethesda, MD 20892. 301–435– applications. Bioengineering Research Partnership. 1179. [email protected]. Place: Hyatt Regency Bethesda, One Date: October 3, 2006. Name of Committee: Integrative, Bethesda Metro Center, 7400 Wisconsin Time: 2 p.m. to 4:30 p.m. Functional and Cognitive Neuroscience Avenue, Bethesda, MD 20814. Agenda: To review and evaluate grant Integrated Review Group, Somatosensory and Contact Person: Gamil C. Debbas, PhD, applications. Chemosensory Systems Study Section. Scientific Review Administrator, Center for Place: National Institutes of Health, 6701 Date: October 2–3, 2006. Scientific Review, National Institutes of Rockledge Drive, Bethesda, MD 20892 Time: 8 a.m. to 5 p.m. Health, 6701 Rockledge Drive, Room 5170, (Virtual Meeting). Agenda: To review and evaluate grant MSC 7844, Bethesda, MD 20892. 301–435– Contact Person: Pushpa Tandon, PhD, applications. 1018. [email protected]. Scientific Review Administrator, Center for Place: Hilton Washington Embassy Row, Name of Committee: Integrative, Scientific Review, National Institutes of 2015 Massachusetts Ave., NW., Washington, Functional and Cognitive Neuroscience Health, 6701 Rockledge Drive, Room 5104, DC 20036. Integrated Review Group, Sensorimotor MSC 7854, Bethesda, MD 20892. (301) 435– Contact Person: Daniel R. Kenshalo, PhD, Integration Study Section. 2397. [email protected]. Scientific Review Administrator, Center for Date: October 3, 2006. Name of Committee: Digestive Sciences Scientific Review, National Institutes of Time: 8 a.m. to 5 p.m. Integrated Review Group, Gastrointestinal Health, 6701 Rockledge Drive, Room 5182, Agenda: To review and evaluate grant Mucosal Pathobiology Study Section. MSC 7844, Bethesda, MD 20892. 301–435– applications. Date: October 4, 2006. 1255. [email protected]. Place: One Washington Circle Hotel, One Time: 8 a.m. to 6 p.m. Name of Committee: Integrative, Washington Circle, Washington, DC 20037. Agenda: To review and evaluate grant Functional and Cognitive Neuroscience Contact Person: John Bishop, PhD, applications. Integrated Review Group, Neurotoxicology Scientific Review Administrator, Center for Place: Courtyard by Marriott—Embassy and Alcohol Study Section. Scientific Review, National Institutes of Row, 1600 Rhode Island Avenue, NW., Date: October 2–3, 2006. Health, 6701 Rockledge Drive, Room 5180, Washington, DC 20036. Time: 8 a.m. to 5 p.m. MSC 7844, Bethesda, MD 20892. 301–435– Contact Person: Peter J. Perrin, PhD, Agenda: To review and evaluate grant 1250. [email protected]. Scientific Review Administrator, Center for applications. Name of Committee: Integrative, Scientific Review, National Institutes of Place: Renaissance Mayflower Hotel, 1127 Functional and Cognitive Neuroscience Health, 6701 Rockledge Drive, Room 2180, Connecticut Avenue, NW., Washington, DC Integrated Review Group, Cognitive MSC 7818, Bethesda, MD 20892. (301) 435– 20036. Neuroscience Study Section. 0682. [email protected]. Contact Person: Joseph G. Rudolph, PhD, Date: October 3–4, 2006. Name of Committee: Digestive Sciences Scientific Review Administrator, Center for Time: 8 a.m. to 5 p.m. Integrated Review Group, Xenobiotic and

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Nutrient Disposition and Action Study Place: Holiday Inn Georgetown, 2101 Mental Health Services funded grant Section. Wisconsin Avenue, NW., Washington, DC initiative, the Options Program. The Date: October 4–5, 2006. 20007. Options Program was one of 5 funded Time: 8 a.m. to 4 p.m. Contact Person: Weihua Luo, MD, PhD, Agenda: To review and evaluate grant Scientific Review Administrator, Center for sites across the country. Each site applications. Scientific Review, National Institutes of received four years of funding to build Place: St. Gregory Hotel, 2033 M Street, Health, 6701 Rockledge Drive, Room 5114, comprehensive supports that help NW., Washington, DC 20036. MSC 7854, Bethesda, MD 20892. 301–435– adolescents with serious emotional Contact Person: Patricia Greenwel, PhD, 1170. [email protected]. disturbance and their families make the Scientific Review Administrator, Center for Name of Committee: Center for Scientific difficult transition from adolescent to Scientific Review, National Institutes of Review Special Emphasis Panel, MEDI/BMIT adult functioning through the age of 25. Health, 6701 Rockledge Drive, Room 2174, Conflict Meeting. MSC 7818, Bethesda, MD 20892. (301) 435– This grant program, called the Date: October 4, 2006. Partnerships for Youth Transition, aims 1169. [email protected]. Time: 8 p.m. to 10 p.m. Name of Committee: Molecular, Cellular Agenda: To review and evaluate grant to remediate some of the most difficult and Developmental Neuroscience Integrated applications. system barriers that interfere with Review Group, Neural Degenerative Place: Holiday Inn Chevy Chase, 5520 transition system building by providing Disorders and Glial Biology Study Section. Wisconsin Avenue, Chevy Chase, MD 20815. community leaders and advocates Date: October 4–5, 2006. Contact Person: Weihua Luo, MD, PhD, funding for direct services and Time: 8 a.m. to 4 p.m. Scientific Review Administrator, Center for Agenda: To review and evaluate grant infrastructure building, technical Scientific Review, National Institutes of assistance to help shape the vision, and applications. Health, 6701 Rockledge Drive, Room 5114, Place: Wyndham Washington, DC, 1400 M MSC 7854, Bethesda, MD 20892. 301–435– time to establish programs and Street, NW., Washington, DC 20005. 1170. [email protected]. interagency relationships. Since no Contact Person: Toby Behar, PhD, (Catalogue of Federal Domestic Assistance single site in the country has ever Scientific Review Administrator, Center for successfully built a transition support Scientific Review, National Institutes of Program Nos. 93.306, Comparative Medicine; Health, 6701 Rockledge Drive, Room 4136, 93.333, Clinical Research; 93.306, 93.333, system we do not know whether MSC 7850, Bethesda, MD 20892. (301) 435– 93.337, 93.393–93.396, 93.837–93.844, combining the resources of this grant, 4433. [email protected]. 93.846–93.878, 93.892, 93.893, National with the resources of the community are Institutes of Health, HHS) Name of Committee: Biological Chemistry sufficient to make significant strides in and Macromolecular Biophysics Integrated Dated: August 29, 2006. transition system building. It is Review Group, Synthetic and Biological Anna Snouffer, imperative to answer this question Chemistry A Study Section. Acting Director, Office of Federal Advisory systematically and rigorously in order to Date: October 4–5, 2006. Committee Policy. guide future efforts. Time: 8 a.m. to 5 p.m. Agenda: To review and evaluate grant [FR Doc. 06–7470 Filed 9–6–06; 8:45 am] There have been 110 agencies applications. BILLING CODE 4140–01–M identified in Clark County that could Place: Churchill Hotel, 1914 Connecticut potentially serve youth or young adults Avenue, NW., Washington, DC 20009. with serious mental, emotional and Contact Person: Kathryn M. Koeller, PhD, DEPARTMENT OF HEALTH AND behavioral disorders. This study will Scientific Review Administrator, Center for HUMAN SERVICES Scientific Review, National Institutes of conduct network analysis by Health, 6701 Rockledge Drive, Room 4156, Substance Abuse and Mental Health interviewing one key informant from MSC 7806, Bethesda, MD 20892. 301–435– Services Administration each of these programs about their 2681. [email protected]. organization’s professional relationship Name of Committee: Renal and Urological Agency Information Collection with other social services. The Social Studies Integrated Review Group, Urologic Activities: Submission for OMB Network Questionnaire was previously and Kidney Development and Genitourinary Review; Comment Request developed for use in several studies in Diseases Study Section. Date: October 4–5, 2006. mental health and homeless services. Periodically, the Substance Abuse and Questions focus on aspects of Time: 8:30 a.m. to 3 p.m. Mental Health Services Administration Agenda: To review and evaluate grant professional relationship such as how applications. (SAMHSA) will publish a summary of often clients are referred to another Place: Bethesda Marriott Suites, 6711 information collection requests under agency and how often staff meet for Democracy Boulevard, Bethesda, MD 20817. OMB review, in compliance with the client planning purposes with staff from Contact Person: Aftab A. Ansari, PhD, Paperwork Reduction Act (44 U.S.C. another agency, as well as some Scientific Review Administrator, Center for Chapter 35). To request a copy of these Scientific Review, National Institutes of background information about the documents, call the SAMHSA Reports agency and the quality of services Health, 6701 Rockledge Drive, Room 4108, Clearance Officer on (240) 276–1243. MSC 7814, Bethesda, MD 20892. 301–594– offered. An additional 10 items focus on 6376. [email protected]. Project: Social Network Analysis of a whether the program is following Name of Committee: Surgical Sciences, Service System for Transition Aged guidelines for exemplary practice with Biomedical Imaging and Bioengineering Youth—New transition aged youth. Findings will be Integrated Review Group, Surgery, SAMHSA’s, Center for Mental Health compared to data collected prior to Anesthesiology and Trauma Study Section. program initiation. Date: October 4–5, 2006. Services will seek information about the Time: 1 p.m. to 1 p.m. change in the network of social services The following table summarizes the Agenda: To review and evaluate grant in one community, Clark County estimated response burden for this applications. Washington, as a result of a Center for project.

Number of Responses/ Total Hours per Total hour Respondent respondents respondent responses response burden

Key informants from social services in Clark County ...... 110 1 110 1.25 137.5

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Written comments and Road, Room 5–1036, Rockville, MD 20857. Definitions of the terms used in the Web recommendations concerning the Telephone: (240) 276–1692. FAX: (240) 276– site appear in 33 CFR 158.120. proposed information collection should 1690. E-mail: The Web site contains a list of ports be sent by October 10, 2006 to: [email protected]. and terminals possessing valid COAs SAMHSA Desk Officer, Human Dated: August 31, 2006. issued under 33 CFR part 158, Subpart Resources and Housing Branch, Office Toian Vaughn, B (Criteria for Reception Facilities: Oily of Management and Budget, New Committee Management Officer, Substance Mixtures). The list provides the names, Executive Office Building, Room 10235, Abuse and Mental Health, Services locations, telephone numbers, and Washington, DC 20503; due to potential Administration. quantities of oily waste that these delays in OMB’s receipt and processing [FR Doc. E6–14809 Filed 9–6–06; 8:45 am] facilities can accept. of mail sent through the U.S. Postal BILLING CODE 4162–20–P The Web site also contains a list of Service, respondents are encouraged to ports and terminals holding COAs submit comments by fax to: 202–395– issued under 33 CFR part 158, subpart 6974. C (Criteria for Certifying That a Port’s or DEPARTMENT OF HOMELAND Dated: August 28, 2006. Terminal’s Facilities Are Adequate for SECURITY Receiving NLS Residue). The list Anna Marsh, Coast Guard provides the names, locations, Director, Office of Program Services. telephone numbers, and types of various [FR Doc. E6–14812 Filed 9–6–06; 8:45 am] [USCG–2006–24860] NLS waste that these facilities can BILLING CODE 4162–20–P accept. MARPOL—List of Ports and Terminals Finally, the Web site contains a list of Holding Certificates of Adequacy for ports and terminals holding valid COAs DEPARTMENT OF HEALTH AND Reception Facilities issued under 33 CFR part 158, subpart HUMAN SERVICES D (Criteria for Adequacy of Reception AGENCY: Coast Guard, DHS. Substance Abuse and Mental Health Facilities: Garbage). The list provides ACTION: Notice. Services Administration the names, locations, and telephone numbers of these ports and terminals. SUMMARY: The Coast Guard announces Center for Substance Abuse the electronic publication of lists of all Dated: August 14, 2006. Treatment; Notice of Meeting U.S. ports and terminals holding valid J.G. Lantz, Pursuant to Public Law 92–463, Certificates of Adequacy (COAs). COAs Director of National and International notice is hereby given of the meeting of are issued as evidence that a U.S. Standards, Assistant Commandant for the Center for Substance Abuse terminal or port meets the requirements Prevention. Treatment (CSAT) National Advisory of Annexes I, II, and V of the 1978 [FR Doc. E6–14837 Filed 9–6–06; 8:45 am] Council in September 2006. Protocol to the International Convention BILLING CODE 4910–15–P The meeting will be open and will for the Prevention of Pollution from include discussion of the Center’s Ships (MARPOL 73/78). The Coast policy issues and current Guard expects that greater knowledge of DEPARTMENT OF HOMELAND administrative, legislative, and program these facilities will reduce discharge of SECURITY developments. oil, noxious liquid substances, and Federal Emergency Management Attendance by the public will be garbage into the marine environment. Agency limited to space available. Public DATES: This notice is effective on comments are welcome. Please September 7, 2006. The lists at the Web Agency Information Collection communicate with the CSAT Council site listed below include all COAs Activities: Proposed Collection; Executive Secretary, Ms. Cynthia issued and effective as of September 7, Comment Request Graham (see contact information below), 2006. to make arrangements to comment or to AGENCY: Federal Emergency FOR FURTHER INFORMATION CONTACT: If request special accommodations for Management Agency, Department of you have questions regarding this persons with disabilities. Homeland Security. notice, contact Lieutenant Commander Substantive program information, a ACTION: Josh McTaggart, U.S. Coast Guard, Notice and request for summary of the meeting, and a roster of comments. Council members may be obtained after telephone 202–267–0514 or e-mail the meeting by contacting Ms. Graham [email protected]. SUMMARY: The Federal Emergency or by accessing the SAMHSA Council SUPPLEMENTARY INFORMATION: Management Agency, as part of its Web site at http://www.samhsa.gov. The Publication of Certificate of Adequacy continuing effort to reduce paperwork transcript for the meeting will also be (COA) lists is authorized by 33 U.S.C. and respondent burden, invites the available on the SAMHSA Council Web 1905(d), and is intended to aid owners, general public and other Federal site within 3 weeks after the meeting. operators, and agents of ships to identify agencies to take this opportunity to comment on a proposed new Committee Name: Substance Abuse and ports and terminals that have been Mental Health Services Administration, certified by the Coast Guard as having information collection. In accordance Center for Substance Abuse Treatment facilities adequate for accepting residues with the Paperwork Reduction Act of National Advisory Council. and mixtures containing oil or noxious 1995, this notice seeks comments Dates/Time: Open: September 20—9 a.m.– liquid substances (NLSs), or for concerning acquisition and relocation of 5 p.m. Open: September 21—9 a.m.–1 p.m. accepting garbage from seagoing ships. properties for open space. Place: 1 Choke Cherry Road, Sugar Loaf The list of ports and terminals holding SUPPLEMENTARY INFORMATION: FEMA and Seneca Conference Rooms, Rockville, Maryland 20857. COAs is available on the Internet at submitted an interim final rule for the Contact: Ms. Cynthia Graham, M.S., http://cgmix.uscg.mil/default.aspx, by Property Acquisition and Relocation for Executive Secretary, SAMHSA/CSAT clicking on the Web site link entitled Open Space (proposed 44 CFR Part 80) National Advisory Council, 1 Choke Cherry ‘‘MARPOL Certificates of Adequacy.’’ that will govern property acquisitions

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for the creation of open space under all and conforming amendment to the Collection of Information of FEMA mitigation grant programs Mitigation Planning requirements (44 Title: Property Acquisition and authorized under both the Robert T. CFR Part 201) to include program Relocation for Open Space. Stafford Disaster Relief and Emergency requirements under the Bunning- Type of Information Collection: New Assistance Act as amended, and the Bereuter-Blumenauer Flood Insurance Collection. National Flood Insurance Act of 1968 Reform Act of 2004, Public Law 108– (42 U.S.C. 4001, et seq.), as amended. OMB Number: 1660–New23. 264. This Act includes specific Form Numbers: None. Acquisition and relocation of property requirements for the SRL program on for open space use is one of the most Abstract: FEMA and State and local how property values, and consequently recipients of FEMA mitigation grant common mitigation activities, and is an the amount offered to a property owner eligible activity type authorized for programs will use the information for acquisition, are to be determined. Federal grant funds under all of FEMA collected under the Property Since all of FEMA mitigation grant mitigation grant programs. This Acquisition requirements to implement collection of information is necessary to programs allow property acquisition acquisition activities under the terms of establish uniform requirements for State activities, FEMA has determined that it grant agreements for acquisition and and local implementation of acquisition is in the best interest of property relocation activities. FEMA and State/ activities, and to enforce open space owners, State and local grant recipients, local grant recipients will also use the maintenance and monitoring and FEMA grant managers to establish information to monitor and enforce the requirements for properties acquired a uniform set of regulations for open space requirements for all with FEMA mitigation grant funds. acquisition activities that can apply to properties acquired with FEMA This new collection of information is all FEMA mitigation grant programs. mitigation grants. being submitted with an interim final This collection serves as an extension of Affected Public: State, local, or tribal rule for the Flood Mitigation Assistance information specifically for acquisition government and individuals or (FMA) and Severe Repetitive Loss (SRL) and relocation activities conducted households. programs (proposed 44 CFR Part 79), under FEMA Mitigation grant programs. Estimated Time per Respondent:

ANNUAL BURDEN HOURS

Number of Frequency of Burden hours Annual Total annual Project/activity (survey, form(s), focus group, etc.) respondents responses per respondent responses burden hours

(A) (B) (C) (A×B) (C×B)

Property Owners Voluntary Participation Statements ..... 2200 1 1 2200 2200 Local Officials Review and Submit Voluntary Participa- tion Statements ...... 500 4.4 1 2200 2200 Local Officials Record Deed Restrictions ...... 500 4 .4 3 2200 6600 States Review and Submit Deed Restrictions ...... 56 39 .28 4.0 2200 8800 Local Officials Monitoring and Reporting Requirements 500 4 .4 0 .25 2200 550 State Officials Reporting Requirements ...... 56 1 4 .0 56 224 Transfer Certification ...... ** ** ** ** ** Enforcement Notices ...... *** ** ** ** **

Total ...... 56 ...... 13.25 2,200 20,574

Estimated Cost: The total annual collected; and (d) minimize the burden Management Branch for copies of the estimated costs to States Officials, Local of the collection of information on those proposed collection of information at Officials and individuals/households who are to respond, including through facsimile number (202) 646–3347 or e- (Property Owners) using wage rate the use of appropriate automated, mail address: FEMA-Information- categories, for information collection electronic, mechanical, or other [email protected]. associated with the Property technological collection techniques or Acquisition requirements is other forms of information technology, Dated: September 1, 2006. $1,018,437.52. Response to this e.g., permitting electronic submission of John A. Sharetts-Sullivan, information collection will require no responses. Comments must be Chief, Records Management and Privacy additional investment on the part of submitted on or before November 6, Information Resources Management Branch, participants other than the normal and 2006. Information Technology Services Division. routine business/operational expenses. ADDRESSES: Interested persons should [FR Doc. E6–14820 Filed 9–6–06; 8:45 am] Comments: Written comments are submit written comments to Chief, BILLING CODE 9110–41–P solicited to (a) evaluate whether the Records Management and Privacy, proposed data collection is necessary for Information Resources Management the proper performance of the agency, Branch, Information Technology including whether the information shall Services Division, Federal Emergency have practical utility; (b) evaluate the Management Agency, 500 C Street, SW., accuracy of the agency’s estimate of the Room 316, Washington, DC 20472. burden of the proposed collection of FOR FURTHER INFORMATION CONTACT: information, including the validity of Contact Kathleen Wissmann, Program the methodology and assumptions used; Specialist, Mitigation Division, (202) (c) enhance the quality, utility, and 646–4372 for additional information. clarity of the information to be You may contact the Records

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DEPARTMENT OF HOMELAND Reduction Act of 1995, this notice seeks Collection of Information SECURITY comments concerning an informal Title: National Flood Insurance appeals process to allow policyholders Claims Appeal Process. Federal Emergency Management to request an appeal for an Agency Type of Information Collection: unsatisfactory decision on flood Extension of a currently approved insurance claims. Agency Information Collection collection. Activities: Proposed Collection; SUPPLEMENTARY INFORMATION: Section OMB Number: 1660–0095. Comment Request 205 of the Bunning-Bereuter- Form Numbers: None. Blumenauer Flood Insurance Reform Abstract: This information collection AGENCY: Federal Emergency Act of 2004, Public Law 108–264, Management Agency, Department of implements the mandates of section 205 Homeland Security. requires FEMA to establish by of the Bunning-Bereuter-Blumenauer regulation a formal process for the Flood Insurance Reform Act of 2004 to ACTION: Notice and request for appeal of decisions of flood insurance establish an appeal process for NFIP comments. claims issued through the National policyholders in cases of unsatisfactory SUMMARY: The Federal Emergency Flood Insurance Program (NFIP). The decisions on claims, proof of loss, and Management Agency, as part of its appeals process is available after the loss estimates made by any insurance continuing effort to reduce paperwork issuance of the insurer’s final claim company, agent, adjuster, or FEMA and respondent burden, invites the determination, which is the insurer’s employee or contractor. general public and other Federal written denial, in whole or in part, of Affected Public: Individuals or agencies to take this opportunity to the insured’s claim. An insured must households and Business or other for comment on a proposed extension of a file an appeal within 60 days after profit. currently approved collection. In receiving the insurer’s final claim Estimated Total Annual Burden accordance with the Paperwork determination. Hours:

ANNUAL BURDEN HOURS

Burden hours Project/activity (survey, form(s), focus group, worksheet, Number of Frequency of per respond- Annual Total annual etc.) respondents responses ent responses burden hours

(A) (B) (C) (D) = (A×B) (E) = (C×D)

Appeal Letter ...... 2,000 1 2 2,000 4,000

Total ...... 2,000 ...... 2 2,000 4,000

Estimated Cost: Total cost to all Branch, Information Technology DEPARTMENT OF HOMELAND respondents combined is estimated at Services Division, Federal Emergency SECURITY $56,000. with an average cost per Management Agency, 500 C Street, SW., respondent of $28.00/appeal. Room 316, Washington, DC 20472. Federal Emergency Management Agency Comments: Written comments are FOR FURTHER INFORMATION CONTACT: solicited to (a) evaluate whether the Contact Priscilla Scruggs, Section Chief, proposed data collection is necessary for Agency Information Collection Mitigation Division, (202) 646–4155 for the proper performance of the agency, Activities: Submission for OMB additional information. You may including whether the information shall Review; Comment Request contact the Records Management have practical utility; (b) evaluate the AGENCY: accuracy of the agency’s estimate of the Branch for copies of the proposed Federal Emergency burden of the proposed collection of collection of information at facsimile Management Agency, Department of information, including the validity of number (202) 646–3347 or e-mail Homeland Security. address: FEMA-Information- the methodology and assumptions used; ACTION: Notice and request for (c) enhance the quality, utility, and [email protected]. comments. clarity of the information to be Dated: September 1, 2006. collected; and (d) minimize the burden John A. Sharetts-Sullivan, SUMMARY: The Federal Emergency of the collection of information on those Chief, Records Management and Privacy Management Agency (FEMA) has who are to respond, including through Information Resources Management Branch, submitted the following information the use of appropriate automated, Information Technology Services Division. collection to the Office of Management electronic, mechanical, or other [FR Doc. E6–14822 Filed 9–6–06; 8:45 am] and Budget (OMB) for review and technological collection techniques or BILLING CODE 9110–11–P clearance in accordance with the other forms of information technology, requirements of the Paperwork e.g., permitting electronic submission of Reduction Act of 1995. The submission responses. Comments must be describes the nature of the information submitted on or before November 6, collection, the categories of 2006. respondents, the estimated burden (i.e., ADDRESSES: Interested persons should the time, effort and resources used by submit written comments to Chief, respondents to respond) and cost, and Records Management and Privacy, includes the actual data collection Information Resources Management instruments FEMA will use.

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Title: Crisis Counseling Assistance Dated: August 31, 2006. Street, SW., Washington, DC 20410; e- and Training Program—Immediate John A. Sharetts-Sullivan, mail [email protected] or Services Program. Chief, Records Management and Privacy telephone (202) 708–2374. This is not a OMB Number: 1660–0085. Information Resources Management Branch, toll-free number. Copies of available Information Technology Services Division. documents submitted to OMB may be Abstract: FEMA requires that the [FR Doc. E6–14823 Filed 9–6–06; 8:45 am] obtained from Ms. Deitzer or from State complete an Immediate Services BILLING CODE 9110–10–P HUD’s Web site at Program Standard Application for the http://hlannwp031.hud.gov/po/i/icbts/ Crisis Counseling Program that includes collectionsearch.cfm. the following: (i) The geographical areas DEPARTMENT OF HOUSING AND SUPPLEMENTARY INFORMATION: This within the designated disaster area for URBAN DEVELOPMENT which services will be provided; (ii) An notice informs the public that the estimate of the number of disaster [Docket No. FR–5037–N–59] Department of Housing and Urban victims requiring assistance; (iii) A Development has submitted to OMB a description of the State and local Notice of Submission of Proposed request for approval of the information resources and capabilities, and an Information Collection to OMB; collection described below. This notice explanation of why these resources Request for Approval of Advance of is soliciting comments from members of cannot meet the need; (iv) A description Escrow Funds the public and affecting agencies concerning the proposed collection of of response activities from the date of AGENCY: Office of the Chief Information the disaster incident to the date of information to: (1) Evaluate whether the Officer, HUD. proposed collection of information is application; (v) A plan of services to be ACTION: Notice. provided to meet the identified needs; necessary for the proper performance of the functions of the agency, including and (vi) A detailed budget, showing the SUMMARY: The proposed information whether the information will have cost of proposed services separately collection requirement described below practical utility; (2) Evaluate the from the cost of reimbursement for any has been submitted to the Office of accuracy of the agency’s estimate of the eligible services provided prior to Management and Budget (OMB) for burden of the proposed collection of application. review, as required by the Paperwork information; (3) Enhance the quality, Reduction Act. The Department is Affected Public: State, local, or tribal utility, and clarity of the information to soliciting public comments on the government. be collected; and (4) Minimize the subject proposal. burden of the collection of information Number of Respondents: 56. The information is collected to ensure on those who are to respond; including Estimated Time per Respondent: 82 that escrowed funds are disposed of through the use of appropriate hours. correctly for completion of offsite automated collection techniques or facilities, construction changes, Estimated Total Annual Burden other forms of information technology, construction cost not paid at final Hours: 1,910 hours. e.g., permitting electronic submission of endorsement, non-critical repairs and responses. Frequency of Response: On occasion. capital needs assessment. The mortgagor This notice also lists the following Comments: Interested persons are uses the data to request withdrawal of information: invited to submit written comments on escrowed funds for each item through a Title of Proposal: Request for the proposed information collection to depository (mortgagee), and the HUD Approval of Advance of Escrow Funds. the Office of Information and Regulatory staff must use the information to OMB Approval Number: 2502–0018. Affairs, Office of Management and approve the withdrawal of escrowed Form Numbers: HUD–92464. Budget, Attention: Nathan Lesser, Desk funds for each item. Description of the Need for the Officer, Department of Homeland DATES: Comments Due Date: October 10, Information and Its Proposed Use: The Security/FEMA, and sent via electronic 2006. information is collected to ensure that mail to [email protected] ADDRESSES: Interested persons are escrowed funds are disposed of or faxed to (202) 395–6874. Comments invited to submit comments regarding correctly for completion of offsite must be submitted on or before October this proposal. Comments should refer to facilities, construction changes, 10, 2006. the proposal by name and/or OMB construction cost not paid at final FOR FURTHER INFORMATION CONTACT: approval Number (2502–0018) and endorsement, non-critical repairs and Requests for additional information or should be sent to: HUD Desk Officer, capital needs assessment. The mortgagor copies of the information collection Office of Management and Budget, New uses the data to request withdrawal of should be made to Chief, Records Executive Office Building, Washington, escrowed funds for each item through a Management, FEMA, 500 C Street, SW., DC 20503; fax: 202–395–6974. depository (mortgagee), and the HUD Room 316, Washington, DC 20472, FOR FURTHER INFORMATION CONTACT: staff must use the information to facsimile number (202) 646–3347, or e- Lillian Deitzer, Reports Management approve the withdrawal of escrowed mail address FEMA-Information- Officer, QDAM, Department of Housing fund for each item. [email protected]. and Urban Development, 451 Seventh Frequency of Submission: Monthly.

Number of re- Annual re- × Hours per re- spondents sponses sponse = Burden hours

Reporting Burden: ...... 624 3 0.43 819

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Total Estimated Burden Hours: 819. reflect location differences for the information to: (1) Evaluate whether the Status: Reinstatement, with change, of continued operation of this housing. proposed collection of information is previously approved collection. The collected cost data will be used to necessary for the proper performance of Authority: Section 3507 of the Paperwork analyze the AEL factor in the current the functions of the agency, including Reduction Act of 1995, 44 U.S.C. 35, as Indian Housing Block Grant formula. whether the information will have amended. DATES: Comments Due Date: October 10, practical utility; (2) Evaluate the Dated: August 31, 2006. 2006. accuracy of the agency’s estimate of the Lillian L. Deitzer, ADDRESSES: Interested persons are burden of the proposed collection of Department Paperwork Reduction Act Officer, invited to submit comments regarding information; (3) Enhance the quality, Office of the Chief Information Officer. this proposal. Comments should refer to utility, and clarity of the information to [FR Doc. E6–14754 Filed 9–6–06; 8:45 am] the proposal by name and/or OMB be collected; and (4) Minimize the burden of the collection of information BILLING CODE 4210–67–P approval Number (2577–New) and should be sent to: HUD Desk Officer, on those who are to respond; including Office of Management and Budget, New through the use of appropriate DEPARTMENT OF HOUSING AND Executive Office Building, Washington, automated collection techniques or URBAN DEVELOPMENT DC 20503; fax: 202–395–6974. other forms of information technology, e.g., permitting electronic submission of [Docket No. FR–5037–N–58] FOR FURTHER INFORMATION CONTACT: Lillian Deitzer, Reports Management responses. Notice of Submission of Proposed Officer, QDAM, Department of Housing This notice also lists the following Information Collection to OMB; Indian and Urban Development, 451 Seventh information: Housing Operating Cost Study Street, SW, Washington, DC 20410; e- Title of Proposal: Indian Housing mail [email protected] or Operating Cost Study. AGENCY: Office of the Chief Information telephone (202) 708–2374. This is not a OMB Approval Number: 2577–New. Officer, HUD. toll-free number. Copies of available Form Numbers: None. ACTION: Notice. documents submitted to OMB may be Description of the Need for the obtained from Ms. Deitzer or from SUMMARY: The proposed information Information and Its Proposed Use: This collection requirement described below HUD’s Web site at is a collection of cost data on the costs has been submitted to the Office of http://hlannwp031.hud.gov/po/i/icbts/ of operating housing developed by Management and Budget (OMB) for collectionsearch.cfm. Indian Housing Authorities under review, as required by the Paperwork SUPPLEMENTARY INFORMATION: This provisions or the Housing Act of 1937 Reduction Act. The Department is notice informs the public that the and an examination of how these data soliciting public comments on the Department of Housing and Urban reflect location differences for the subject proposal. Development has submitted to OMB a continued operation of this housing. This is a collection of cost data on the request for approval of the information The collected cost data will be used to costs of operating housing developed by collection described below. This notice analyze the AEL factor in the current Indian Housing Authorities under is soliciting comments from members of Indian Housing Block Grant formula. provisions of the Housing Act of 1937 the public and affecting agencies Frequency of Submission: On and an examination of how these data concerning the proposed collection of occasion.

Number of re- Annual re- × Hours per re- spondents sponses sponse = Burden hours

Reporting burden ...... 261 1.03 3 975

Total Estimated Burden Hours: 975. ACTION: Notice of meeting. historic and natural resources. The Status: New Collection. Commission reports to the Secretary of SUMMARY: This notice announces an the Interior and to Congress. Authority: Section 3507 of the Paperwork upcoming meeting of the Delaware & Reduction Act of 1995, 44 U.S.C. 35, as Lehigh National Heritage Corridor SUPPLEMENTARY INFORMATION: The amended. Commission. Notice of this meeting is Delaware & Lehigh National Heritage Dated: August 30, 2006. required under the Federal Advisory Corridor Commission was established Lillian L. Deitzer, Committee Act (Pub. L. 92–463). by Public Law 100–692, November 18, Department Paperwork Reduction Act Officer, MEETING DATE AND TIME: Friday, 1988 and extended through Public Law Office of the Chief Information Officer. September 8, 2006—1:30 p.m. to 4 p.m. 105–355, November 13, 1998. [FR Doc. E6–14755 Filed 9–6–06; 8:45 am] ADDRESSES: Emrick Technology Center, FOR FURTHER INFORMATION CONTACT: C. BILLING CODE 4210–67–P 2750 Hugh Moore Park Road, Easton, Allen Sachse, Executive Director, PA 18042. Delaware & Lehigh National Heritage The agenda for the meeting will focus Corridor Commission, 2750 Hugh Moore on implementation of the Management Park Road, Easton PA 18042, (610) 923– DEPARTMENT OF THE INTERIOR Action Plan for the Delaware and 3548. Lehigh National Heritage Corridor and Office of the Secretary State Heritage Park. The Commission Dated: August 31, 2006. C. Allen Sachse, Delaware & Lehigh National Heritage was established to assist the Executive Director, Delaware & Lehigh Corridor Commission Meeting Commonwealth of Pennsylvania and its political subdivisions in planning and National Heritage Corridor Commission. AGENCY: Department of the Interior, implementing an integrated strategy for [FR Doc. 06–7483 Filed 9–6–06; 8:45 am] Office of the Secretary. protecting and promoting cultural, BILLING CODE 6820–PE–M

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DEPARTMENT OF THE INTERIOR purpose of enhancement of the survival Basin pygmy rabbits (CBPR) that could of the species. result from activities associated with Fish and Wildlife Service ranching, farming, recreation, Applicant: Southwest Fisheries Science residential upkeep, conservation Center, National Marine Fisheries Receipt of Applications for Permit programs, and shrub steppe Service, La Jolla, CA, PRT–844694 AGENCY: Fish and Wildlife Service, maintenance, restoration, and Interior. The applicant requests re-issuance of enhancement on an undeterminable their permit to import biological ACTION: Notice of receipt of applications number of non-Federal properties. The samples taken from Kemp’s ridley sea for permit. area covered by the proposed turtle (Lepidochelys kempii), olive Agreement (Covered Area) includes SUMMARY: The public is invited to ridley sea turtle (Lepidochelys olivacea), portions of 6 counties in central comment on the following applications hawksbill sea turtle (Eretmochelys Washington and totals approximately to conduct certain activities with imbricata), green sea turtle (Chelonia 2,650,000 acres. However, eligible endangered species. mydas), and leatherback sea turtle properties that occur within the Covered DATES: Written data, comments or (Dermochelys coriacea), collected in the Area and are most likely to be enrolled requests must be received by October wild from worldwide locations, for the under the Agreement would primarily 10, 2006. purpose of scientific research. This include those that have existing shrub notification covers activities to be ADDRESSES: Documents and other steppe habitat and/or soil conditions conducted by the applicant over a five- information submitted with these that may be capable of supporting the year period. applications are available for review, species, either currently or in the subject to the requirements of the Applicant: Ziccolone and Carrasco foreseeable future. These lands, as well Privacy Act and Freedom of Information Productions, Inc., Las Vegas, NV, PRT– as adjacent properties that may receive Act, by any party who submits a written 123261 intermittent use by CBPRs, such as for request for a copy of such documents exploratory behavior or dispersal The applicant requests a permit to between suitable habitats, total within 30 days of the date of publication import five (2 male and 3 female) of this notice to: U.S. Fish and Wildlife approximately 750,000 acres. captive born tigers (Panthera tigris) from Implementation of the proposed Service, Division of Management Mexico to Las Vegas, Nevada for the Authority, 4401 North Fairfax Drive, Agreement would provide the purpose of enhancement of the species opportunity for interested non-Federal Room 700, Arlington, Virginia 22203; through conservation education, and fax 703/358–2281. and non-WDFW landowners and return them to Mexico within a five-year managers to voluntarily enroll their FOR FURTHER INFORMATION CONTACT: period. lands under the Agreement and receive Division of Management Authority, an enhancement of survival permit telephone 703/358–2104. Dated: August 18, 2006. Monica Farris, pursuant to section 10(a)(1)(A) of the SUPPLEMENTARY INFORMATION: Senior Permit Biologist, Branch of Permits, Endangered Species Act of 1973, as Endangered Species Division of Management Authority. amended (ESA). In exchange for the incidental take authority that would be The public is invited to comment on [FR Doc. E6–14765 Filed 9–6–06; 8:45 am] provided by issuance of permits, the following applications for a permit BILLING CODE 4310–55–P participants who enroll their lands to conduct certain activities with under this Agreement would implement endangered species. This notice is conservation measures that would be provided pursuant to Section 10(c) of DEPARTMENT OF THE INTERIOR expected to provide a net conservation the Endangered Species Act of 1973, as Fish and Wildlife Service benefit to the CBPR. The duration of the amended (16 U.S.C. 1531 et seq.). proposed Agreement is 20 years. The Written data, comments, or requests for Draft Template Safe Harbor duration of associated permits could be copies of these complete applications Agreement, Draft Environmental for shorter periods, but would not should be submitted to the Director Assessment, and Receipt of exceed the duration of the Agreement. (address above). Applications for Enhancement of More detailed descriptions of the Applicant: Matson’s Laboratory, Survival Permits background biological information, Milltown, MT, PRT–096048 AGENCY: Fish and Wildlife Service, Covered Area, proposed covered The applicant requests renewal and Interior. activities, conservation measures, and expected net conservation benefits are amendment of a permit to import ACTION: Notice of availability and provided in the draft Agreement and in samples such as teeth from wood bison receipt of applications; request for the SUPPLEMENTARY INFORMATION section (Bison bison athabascae) from comments. government-managed herds such as the below. Mackenzie Sanctuary herd and the SUMMARY: As part of ongoing recovery This also announces the receipt and Nahanni population in Canada for the efforts for the endangered Columbia availability for public review and purpose of scientific research. This Basin distinct population segment of the comment three applications for notification covers activities to be pygmy rabbit (Brachylagus idahoensis), incidental take permits for the conducted by the applicant over a five- this notice advises the public that the enhancement of survival for the CBPR year period. U.S. Fish and Wildlife Service (Service in conjunction with the Agreement. or we), in cooperation with the These applications have been received Applicant: Animal Source Texas, Washington Department of Fish and from The Nature Conservancy, Mr. Dave Krum, TX, PRT–120288 Wildlife (WDFW), is making available Billingsley and Mr. Peter Lancaster The applicant requests a permit to for public review and comment a draft (Applicants). Issuance of these permits export six live captive-born lemurs Template Safe Harbor Agreement would authorize incidental take of (Lemur catta) to Leofoo Village Theme (Agreement). The proposed Agreement CBPRs above the existing baseline Park—Animal Kingdom, Taiwan for the addresses incidental take of Columbia conditions of enrolled properties that

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may result from the Applicants’ your comment. All comments received the captive population. The inclusion of proposed activities. Additional from organizations, businesses, or intercrossed animals with some minor applications are expected in the near individuals representing organizations level of non-Columbia Basin ancestry is future from other non-Federal and non- or businesses, are available for public considered necessary to achieve Federal WDFW landowners and managers who inspection in their entirety. recovery objectives for the CBPR in the propose to enroll their lands under the Background wild. Agreement. Future applications WDFW, in conjunction with the received by the Service from other The pygmy rabbit is the smallest Service, proposes to reintroduce captive prospective participants to the rabbit species, and one of only two CBPRs into suitable habitats at two Agreement will be provided for public rabbit species that digs its own burrows, recovery emphasis areas: one in review in future notices. in North America. They are typically southern Douglas County; and one in In accordance with Service found in shrub-steppe habitats that northern Grant County, Washington. responsibilities pursuant to the National include tall, dense stands of sagebrush The Service and WDFW anticipate that, Environmental Policy Act (NEPA), this (Artemisia spp.) and that occur in as a likely result of planned notice also announces the availability, relatively deep, loose soils suitable for reintroduction efforts, CBPRs may for public review, of a draft the species’ burrowing behavior. Pygmy become established on non-Federal and/ Environmental Assessment (EA) rabbits are highly dependent on or non-WDFW properties, which developed in conjunction with the sagebrush for food, particularly during prompted development of the proposed proposed Agreement. the winter, and, along with their Agreement. burrows, for shelter and escape We request comments from the public The primary objective of the throughout the year. on the proposed Agreement, current Agreement is to facilitate collaboration permit applications, and the draft EA, The historic distribution of the pygmy rabbit included portions of Montana, between the Service, WDFW, and all of which are available for public prospective participants to voluntarily review and comment. To review the Idaho, Wyoming, Utah, Nevada, California, Oregon, and Washington. implement conservation measures to documents, see ‘‘Availability of benefit the CBPR. An additional Documents’’ in the SUPPLEMENTARY The pygmy rabbit has been present within the Columbia Basin, a geographic objective of the Agreement is to provide INFORMATION section below. incidental take coverage to participants DATES: All comments from interested area that extends from northern Oregon through eastern Washington, for over through issuance of enhancement of parties must be received on or before survival permits, which will relieve October 10, 2006. 100,000 years. This population segment, referred to as the CBPR and which is the them of additional section 9 liability ADDRESSES: Written comments subject of the Agreement, historically under the ESA if implementation of the concerning this notice should be occurred only in central Washington conservation measures results in addressed to Susan Martin, Supervisor, and is believed to have been disjunct increased numbers or distribution of U.S. Fish and Wildlife Service, Upper from the remainder of the species’ range CBPRs on their enrolled properties. Columbia Fish and Wildlife Office, for at least 10,000 years. The The proposed Agreement is a 11103 East Montgomery Drive, Spokane, distribution and abundance of the CBPR ‘‘template’’ in that it establishes general Washington 99206. You may also send has declined dramatically since the guidelines and identifies minimum comments by facsimile at (509) 891– mid-1990s. Surveys of the last known management responsibilities for non- 6748, or by electronic mail at occupied site, located in southern Federal/non-WDFW landowners and [email protected]. Douglas County, have not detected any managers to participate in the FOR FURTHER INFORMATION CONTACT: animals since mid-2004, indicating that Agreement. In addition, the proposed Chris Warren at (509) 893–8020, or the population may now be extirpated Agreement documents background Michelle Eames at (509) 893–8010. from the wild. biological information on the CBPR, SUPPLEMENTARY INFORMATION: In 2001, WDFW captured as many of ongoing conservation actions and the remaining CBPRs as possible from Federal recovery objectives for the Availability of Documents the last known subpopulation and began species, expected net conservation Copies of the draft documents and a captive breeding program. The Service benefits, and the types of land use permit applications are available for emergency-listed the CBPR under the activities and eligible properties that public inspection, by appointment, ESA in 2001, and fully listed it as may be covered by the Agreement. If the during normal business hours at the endangered in 2003. Major past threats Agreement is signed by the Service and Upper Columbia Fish and Wildlife to the CBPR include the loss and WDFW following public review and Office (see ADDRESSES), or they may be fragmentation of suitable shrub-steppe comment, the process to consider viewed on the internet at the following habitats. Major current threats are subsequent permit applications in the address: http://www.fws.gov/ associated with the extremely small size future will be significantly streamlined easternwashington/. You may also of the remaining population, which has as permit applicants will be able to request copies of the documents by made it vulnerable to loss of genetic reference the approved Agreement. contacting the Service’s Upper diversity and inbreeding depression. NEPA compliance also may be tiered. Columbia Fish and Wildlife Office [see Inbreeding depression was evidenced in By streamlining the process and FOR FURTHER INFORMATION CONTACT]. The the captive population by the poor minimizing the time it requires to Service is furnishing this notice to reproductive performance, declining process additional ESA section provide the public, other State and genetic diversity, increased 10(a)(1)(A) permit applications Federal agencies, and tribes an susceptibility to disease, and, possibly, consistent with the Agreement, the opportunity to review and comment on skeletal abnormalities in the purebred Service and WDFW anticipate that more these documents. All comments animals. Intercrossing CBPRs with private landowners will be likely to received will become part of the public pygmy rabbits of the same taxonomic participate and implement proactive record. If you wish us to withhold your classification from Idaho helped to conservation measures, which will name and/or address, you must state restore the genetic diversity and reduce enhance State and Federal recovery this prominently at the beginning of the effects of inbreeding depression in efforts for the CBPR.

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The proposed Agreement clarifies considered for enrollment and be DEPARTMENT OF THE INTERIOR management responsibilities and secured for captive breeding and/or expectations of the Service, WDFW, and translocation efforts, which will Fish and Wildlife Service prospective participants. When signed, improve the overall recovery outlook for the Agreement may serve as the basis for the species; (5) monitoring and future Issuance of Permits additional enhancement of survival collection of biological information permit applications. To be considered concerning the CBPR (e.g., dispersal, AGENCY: Fish and Wildlife Service, for a permit, each participant will need survival, productivity) will be improved Interior. to complete and submit to the Service through cooperative management efforts ACTION: Notice of issuance of permits for a Federal Fish and Wildlife Permit on enrolled properties; (6) research and marine mammals. Application Form. An issued permit adaptive management for the CBPR can would authorize incidental take of be made more comprehensive if CBPRs that are above the baseline implemented at a broader scale through SUMMARY: The following permits were conditions of their enrolled property. facilitated access to enrolled properties; issued. In addition to submitting a Permit and (7) successful implementation of ADDRESSES: Documents and other application, prospective participants cooperative, voluntary conservation information submitted with these would also need to develop a Site Plan, measures will increase public awareness applications are available for review, in cooperation with the Service, that and support for CBPR recovery efforts. identifies the specific properties to be This notice is provided pursuant to subject to the requirements of the enrolled and documents the baseline section 10(c) of the ESA and NEPA Privacy Act and Freedom of Information conditions, existing and proposed future regulations (40 CFR 1506.6). The Act, by any party who submits a written land-use activities, and agreed-upon Service will evaluate the permit request for a copy of such documents to: conservation measures that would be applications, associated documents, and U.S. Fish and Wildlife Service, Division expected to provide a net conservation comments submitted thereon to of Management Authority, 4401 North benefit for the CBPR on the enrolled determine whether the proposed Fairfax Drive, Room 700, Arlington, properties. Each prospective participant Agreement and permit applications Virginia 22203; fax 703/358–2281. and the Service would need to sign the meet the requirements of NEPA FOR FURTHER INFORMATION CONTACT: completed Site Plan, which will remain regulations and section 10(a) of the ESA. within the scope of, and tiered to, the If it is determined that the requirements Division of Management Authority, proposed Agreement. are met, the Agreement will be finalized telephone 703/358–2104. We anticipate that the proposed and signed and these permits will be SUPPLEMENTARY INFORMATION: Notice is Agreement would result in the issued to the Applicants for incidental hereby given that on the dates below, as following benefits to the CBPR: (1) take of the covered species. The final authorized by the provisions of the Appropriate habitats will be maintained NEPA and permit determinations will Marine Mammal Protection Act of 1972, on enrolled properties and be available not be completed until after the end of as amended (16 U.S.C. 1361 et seq.), the for use by CBPRs released at the the 30-day comment period, and will Fish and Wildlife Service issued the recovery emphasis areas; (2) habitats on fully consider all public comments requested permits subject to certain enrolled properties will facilitate received during the comment period. dispersal of newly released CBPRs and conditions set forth therein. Dated: August 14, 2006. enhance connectivity of recovery Marine Mammals emphasis areas; (3) new subpopulations Carolyn A. Bohan, of CBPRs may form on enrolled Acting Deputy Regional Director, Fish and Wildlife Service, Region 1, Portland, Oregon. properties through natural population expansion; (4) additional wild CBPRs [FR Doc. E6–14773 Filed 9–6–06; 8:45 am] may be located on properties being BILLING CODE 4310–55–P

Permit Permit issuance number Applicant Receipt of application Federal Register notice date

121219 ...... Michael J. Wilmet ...... 71 FR 28881; May 18, 2006 ...... August 16, 2006. 123246 ...... Richard J. Edelen ...... 71 FR 31197; June 1, 2006 ...... August 14, 2006. 123490 ...... Gibson D. Lewis ...... 71 FR 31197; June 1, 2006 ...... August 14, 2006. 125092 ...... John W. Hoose, Jr...... 71 FR 31197; June 1, 2006 ...... August 14, 2006. 125138 ...... Carl O. Clapp, III ...... 71 FR 31197; June 1, 2006 ...... August 15, 2006.

Dated: August 18, 2006. DEPARTMENT OF THE INTERIOR SUMMARY: In accordance with the Monica Farris, National Environmental Policy Act of Senior Permit Biologist, Branch of Permits, Bureau of Land Management 1969 (NEPA, 42 U.S.C. 4321 et seq.) and Division of Management Authority. [CO–140–1610–DT–009C] the Federal Land Policy and [FR Doc. E6–14764 Filed 9–6–06; 8:45 am] Management Act of 1976 (FLPMA, 43 U.S.C. 1701 et seq.), the Bureau of Land BILLING CODE 4310–55–P Notice of Availability of the Proposed Roan Plateau Resource Management Management (BLM) has prepared a Plan Amendment/Final Environmental Proposed Resource Management Plan Impact Statement, Colorado Amendment/Final Environmental Impact Statement (PRMPA/FEIS) for the AGENCY: Bureau of Land Management, Roan Plateau planning area. Interior. DATES: The BLM Planning Regulations ACTION: Notice of Availability. (43 CFR 1610.5–2) state that any person

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who participated in the planning management was transferred from the requiring phased and clustered process, and has an interest which is or U.S. Department of Energy (DOE) to development within an Undivided may be adversely affected, may protest BLM in 1997. The Planning Area, which Federal Unit on the upper plateau. BLM’s approval or amendment of a is in west-central Colorado, includes Mitigation under the CDNR proposal RMP. You must file a protest within 30 approximately 73,602 acres of land would also result from limiting the days of the date that the Environmental (Federal surface, Federal mineral estate, amount of land in a disturbed condition Protection Agency publishes this Notice or both), and is located in Garfield at any one time to approximately 1 of Availability in the Federal Register. County with a small portion in southern percent of the total area of the upper Instructions for filing of protests are Rio Blanco County. The Planning Area plateau (350 acres). described on the inside front cover of lies north of Interstate 70 (I–70) between Alternatives considered represent the PRMPA/FEIS and in the the towns of Rifle and Parachute. possible amendments to the current Supplementary Information section of Transfer of NOSRs 1 and 3 from DOE management direction provided by the this notice. to BLM was effected by the National 1984 Resource Management Plan (RMP) ADDRESSES: To obtain a copy of the Defense Authorization Act for Fiscal for the Glenwood Springs Resource Area document, visit the Web site at Year 1998, Public Law 105–85 (the (GSRA), revised in 1988 and amended http:www.blm.gov/rmp/co/roanplateau ‘‘Transfer Act’’). The Roan Plateau RMP in 1991, 1996, 1997, 1999, and 2002, and follow the instructions, or write to: Amendment/EIS analyzes options for and the 1997 White River Resource Area Roan Plateau Request, Glenwood implementing the Transfer Act, which (WRRA) RMP. Springs Field Office, Bureau of Land directed the BLM to enter into leases, as The overarching goal of the PRMP/ Management, 50629 Highways 6 & 24, soon as practicable, with one or more FEIS is to protect key ecological, visual, Glenwood Springs, Colorado 81601. private entities for the purpose of and recreational values while allowing FOR FURTHER INFORMATION CONTACT: Greg exploration, development, and for the leasing and development of oil Goodenow—Planning and production of petroleum. In addition, and gas resources under strict and Environmental Coordinator, Steve the Transfer Act stipulates that the performance-based standards: Bennett—Associate Field Manager, or transferred lands are to be managed in • The PRMP/FEIS would designate Jamie Connell—Field Manager at the accordance with the Federal Land four Areas of Critical Environmental Glenwood Springs Field Office, Bureau Policy and Management Act (FLPMA) Concern (ACECs), including East Fork of Land Management, 50629 Highways and other laws applicable to public Parachute Creek and Trapper/ 6 & 24, Glenwood Springs, Colorado lands. Northwater Creek atop the plateau and Five alternatives were published in 81601. The Glenwood Springs Field Magpie Gulch and Anvil Points along the Draft RMPA/EIS in November 2004 Office telephone number is (970) 947– and below the cliffs, with a combined ranging from leaving 44,267 acres of the 2800. All three can be reached via e- area of 21,034 acres. 73,602 acre planning area closed to oil mail at • and gas leasing (No Action Alternative) The upper area of the plateau [email protected]. to the most development-oriented would be identified as the Parachute SUPPLEMENTARY INFORMATION: Copies of alternative (Alternative V). All Creek Watershed Management Area to the PRMPA/FEIS have been sent to alternatives would have allowed some meet the special management affected Federal, State, tribal, and local development, and would have provided requirements of this particular resource government agencies and to interested and encompasses 33,575 acres. some environmental safeguards. • parties. Copies of the PRMPA/FEIS are Alternative III (Preferred) would have Protection of stream segments available for public inspection at the deferred leasing atop the plateau until found eligible for designation as Wild BLM Glenwood Springs Field Office the lower elevations were substantially and Scenic Rivers (WSRs) would also be (50629 Highways 6 & 24, Glenwood developed, and would have provided provided. • Springs, Colorado) or the White River substantial environmental mitigation Motorized and mechanized travel Field Office (73544 Highway 64, atop the plateau. Following the 90-day would be limited to designated routes Meeker, Colorado, 81641) during normal public comment period (extended to throughout the Planning Area, except working hours (7:45 a.m. to 4:30 p.m., 120 days), BLM continued to work with for over-snow travel by snowmobile except weekends and holidays). Cooperating Agencies, including the with at least 12 inches of snow cover, Interested persons may also review Colorado Department of Natural and an existing area of concentrated the PRMPA/FEIS on the Internet at Resources (and its agencies the Colorado OHV use to be designated as the http:www.blm.gov/rmp/co/roanplateau. Division of Wildlife, Colorado Oil and Hubbard Mesa OHV Riding Area. Comments on the Draft RMP Gas Conservation Commission, the Instructions for filing a protest with Amendment/EIS received from the Colorado Geological Survey, and the Director of the BLM regarding the public and internal BLM review Colorado Division of Parks), Garfield PRMP/FEIS may be found at 43 CFR comments were incorporated into the County, Rio Blanco County, City of 1610.5–2. A protest may only raise those PRMPA/FEIS. Public comments resulted Rifle, Town of Parachute, and City of issues which were submitted for the in the addition of clarifying text, and Glenwood Springs. As a result of the record during the planning process. E- development of a new alternative with Cooperating Agency meetings and mail and faxed protests will not be impacts within the range of impacts of discussion, the Colorado Department of accepted as valid protests unless the the alternatives analyzed in the Roan Natural Resources (CDNR) proposed an protesting party also provides the Plateau Draft RMP Amendment/EIS. innovative approach to oil and gas original letter by either regular or The Roan Plateau Resource development atop the plateau intended overnight mail postmarked by the close Management Plan Amendment (RMPA) to accommodate the development of the of the protest period. Under these and Environmental Impact Statement underlying gas resource while providing conditions, the BLM will consider the e- (EIS) presents options for management substantial levels of natural resource mail or faxed protest as an advance copy of BLM administered lands in the Roan protection. The CDNR approach, which and it will receive full consideration. If Plateau Planning Area. This includes has been adopted by the BLM as the you wish to provide BLM with such Naval Oil Shale Reserves (NOSRs) preferred alternative, would mitigate advance notification, please direct faxed Numbers 1 and 3, for which impacts to sensitive resources by protests to the attention of the BLM

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protest coordinator at 202–452–5112, DEPARTMENT OF THE INTERIOR and environmental impact statement is and e-mails to Brenda_Hudgens- to support long-term protection, [email protected]. Please direct the National Park Service preservation, and restoration of native follow-up letter to the appropriate vegetation and other natural resources White-tailed Deer Management Plan/ address provided below. The protest within the park. A deer management Environmental Impact Statement, must contain: plan is needed at this time to address Valley Forge National Historical Park, browsing by an increasing number of (1) The name, mailing address, King of Prussia, PA deer over the past two decades and telephone number and interest of the AGENCY: National Park Service, Interior. resulting changes in the species person filing the protest; composition, abundance, and ACTION: Notice of intent to prepare a (2) A statement of the issue or issues distribution of native plant communities White-tailed Deer Management Plan/ and associated wildlife. The plan will being protested; Environmental Impact Statement, Valley also provide opportunities for (3) A statement of the part or parts of Forge National Historical Park, King of coordinating management actions with the plan amendment (Proposed Plan) Prussia, Pennsylvania. other jurisdictional entities. The plan being protested; SUMMARY: Under the provisions of the will develop an informed, scientifically- (4) A copy of all documents National Environmental Policy Act of based approach to deer management addressing the issue or issues that were 1969, the National Park Service (NPS) that will maintain a white-tailed deer submitted during the planning process will prepare a White-tailed Deer population within the park while by the protesting party or an indication Management Plan/Environmental ensuring the natural resources that of the date the issue or issues were Impact Statement (EIS) for Valley Forge support the purposes of Valley Forge discussed for the record; and National Historical Park (NHP), King of National Historical Park remain in good (5) A concise statement explaining Prussia, Pennsylvania. The purpose of condition. A set of objectives further describing why the State Director’s decision is this plan and EIS is to support long-term the purpose of the plan will be included believed to be wrong. protection, preservation, and restoration of native vegetation and other natural in the public scoping brochure. A list of All protests must be in writing and resources within the park. A scoping preliminary alternatives that will be mailed to one of the following brochure will be prepared that details considered to meet the purpose and addresses: the issues identified to date, and need, including continuation of current Regular Mail: Director (210), possible alternatives to be considered. management (no-action alternative) also Attention: Brenda Williams, P.O. Box Brochures may be obtained from will be provided. Persons commenting on the purpose, 66538, Washington, DC 20035. Kristina Heister, Natural Resources need, objectives, preliminary Manager, Valley Forge NHP or from the Overnight Mail: Director (210), alternatives, or any other issues Valley Forge NHP Web site (http:// Attention: Brenda Williams, 1620 L associated with the plan, may submit www.nps.gov/vafo). Street, NW., Suite 1075, Washington, comments by any one of several DC 20036. DATES: The NPS will accept comments methods (see below). The dates and from the public regarding this Notice of Individual respondents may request times of public scoping meetings will be Intent until October 10, 2006. In confidentiality. If you wish to withhold advertised a minimum of 15 days in addition, several public scoping your name or street address from public advance. Notice of the meetings will be meetings will be conducted in the posted in local newspapers, libraries, on review or from disclosure under the Valley Forge area beginning in Fall Freedom of Information Act, you must the park Web site and the Planning, 2006. Please check local newspapers, Environment and Public Comment state this prominently at the beginning the park Web site or contact Kristina of your protest. Such requests will be (PEPC) Web site. In addition, a public Heister. scoping brochure will be mailed to honored to the extent allowed by law. ADDRESSES: Information will be interested parties. All protests from organizations and Comments may be mailed to Natural businesses, and from individuals available for public review and comment at the Valley Forge NHP Resource Management, Valley Forge identifying themselves as library by appointment (Contact NHP, 1400 North Outer Line Drive, King representatives or officials of [email protected]), local public of Prussia, Pennsylvania 19406 or sent organizations or businesses, will be libraries, park Web site at http:// via the Internet at http:// available for public inspection in their www.nps.gov/vafo, and the Planning, parkplanning.nps.gov. Please submit entirety. The Director will promptly Environment and Public Comment Internet comments as a text file avoiding render a decision on protests. The (PEPC) Web site at http:// the use of special characters and any decision will be in writing and will be parkplanning.nps.gov. form of encryption. Please put ‘‘Deer sent to the protesting party by certified Management’’ in the subject line and FOR FURTHER INFORMATION CONTACT: mail, return receipt requested. The include your name and return address decision of the Director is the final Kristina Heister, Natural Resources in your Internet message. If persons decision of the Department of the Manager, Valley Forge NHP, 1400 North commenting do not receive a receipt Outer Line Drive, King of Prussia, Interior. confirmation from the system, please Pennsylvania 19406, or Dated: May 17, 2006. _ contact Kristina Heister. kristina [email protected]. Our practice is to make comments, Jamie E. Connell, SUPPLEMENTARY INFORMATION: A major including names, home addresses, home Field Manager. purpose of Valley Forge National phone numbers, and e-mail addresses of Historical Park is preservation of the respondents, available for public This document was received at the Office of the Federal Register on August 31, 2006. ‘‘cultural and natural resources that review. Individual respondents may embody and commemorate the Valley request that we withhold their names [FR Doc. E6–14695 Filed 9–6–06; 8:45 am] Forge experience and the American and/or home addresses, etc., but if you BILLING CODE 4310–JB–P Revolution.’’ The purpose of this plan wish us to consider withholding this

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information you must state this booking packages for Federal law Such common data (certain data prominently at the beginning of your enforcement agencies that routinely elements) have been identified by law comments. In addition, you must bring their suspects to the USMS for enforcement as those case and present a rationale for withholding this booking. The strategic goal of the JABS biographical data routinely collected by information. This rationale must Program is to facilitate electronic access the law enforcement community during demonstrate that disclosure would to IAFIS for any Federal law the booking process, e.g., name, date constitute a clearly unwarranted enforcement agency/office that has a and place of birth, citizenship, hair and invasion of privacy. Unsupported requirement to submit fingerprints to eye color, height and weight, assertions will not meet this burden. In the FBI. occupation, social security number, the absence of exceptional, Title 5 U.S.C. 552a(e)(4) and (11) place, date and time of arrest and jail documentable circumstances, this provide that the public be given a 30- location, charge, disposition, any other information will be released. We will day period in which to comment on the pertinent information related to known always make submissions from revised system of records. The Office of activities relevant or unique to the organizations or businesses, and from Management and Budget (OMB), which subject. Finally, such data may include individuals identifying themselves as has oversight responsibility under the electronic fingerprints, mugshots, and representatives of or officials of Act, requires that it be given a 40-day pictures of applicable scars, marks, and organizations or businesses, available period in which to review the system tattoos. for public inspection in their entirety. notice. AUTHORITY FOR MAINTENANCE OF THE SYSTEM: Dated: August 30, 2006. Therefore, please submit any Mary Bomar, comments by October 17, 2006. The 8 U.S.C. 1324 and 1357(f) and (g); 28 U.S.C. 534, 564, 566; 5 U.S.C. 301 and Regional Director, Northeast Region. public, OMB, and the Congress are invited to send written comments to 44 U.S.C. 3101; 18 U.S.C. 3621, 4003, [FR Doc. E6–14783 Filed 9–6–06; 8:45 am] Mary Cahill, Management and Planning 4042, 4082, 4086; 26 U.S.C. 7608; and BILLING CODE 4310–DJ–P Staff, Justice Management Division, Comprehensive Drug Abuse Prevention Department of Justice, Washington, DC and Control Act of 1970 (Pub. L. 91– 20530 (Room 1400, National Place 513), 21 U.S.C. 801 et seq. and DEPARTMENT OF JUSTICE Building), (202) 307–1823. Reorganization Plan No. 2 of 1973. [AAG/A Order No. 014–2006] A description of the system of records PURPOSE: is provided below. Privacy Act of 1974; System of In accordance with 5 U.S.C. 552a(r), Nationwide JABS enables the conduct Records DOJ has provided a report on the of automated booking procedures by revised system to OMB and the participating law enforcement Pursuant to the Privacy Act of 1974 (5 Congress. organizations and provides an U.S.C. 552a), notice is hereby given that automated capability to transmit Dated: August 29, 2006. the Justice Management Division (JMD), fingerprint and image data to the Department of Justice (DOJ), proposes to Lee J. Lofthus, Federal Bureau of Investigation’s (FBI) revise a system of records entitled Acting Assistant Attorney General for Integrated Automated Fingerprint ‘‘Nationwide Joint Automated Booking Administration. Identification System (IAFIS), Justice/ System (JABS), Justice/DOJ–005,’’ last JUSTICE/DOJ–005 FBI–009 Fingerprint Identification published April 23, 2001 (66 FR 20478). Records Systems (FIRS). JABS maintains JABS is an important Department of SYSTEM NAME: a repository of common offender data Justice (Department) information Nationwide Joint Automated Booking elements for identification of arrestees sharing project among its law System (JABS). by participating federal law enforcement enforcement components: Bureau of organizations. JABS eliminates SECURITY CLASSIFICATION: Prisons (BOP), Drug Enforcement repetitive booking of offenders for a Administration (DEA), Federal Bureau Sensitive but Unclassified. single arrest and booking, and thereby of Investigation (FBI), U.S. Marshals SYSTEM LOCATION: eliminates the need for duplicate Service (USMS), and the Bureau of bookings, i.e., the collection of much the Alcohol, Tobacco, Firearms, and JABS Program Management Office, Department of Justice, Washington, DC same data by multiple agencies in Explosives (ATF). Additionally, the prisoner processing activities involving customs and border security functions 20530 with data collection sites in multiple federal locations. such agencies from arrest through within the Border and Transportation incarceration. In addition, JABS Security (BTS) Directorate of the CATEGORIES OF INDIVIDUALS COVERED BY THE standardized booking data elements, Department of Homeland Security SYSTEM: enabling cross-agency sharing of (DHS) are using JABS. Alleged criminal offenders who have booking information, enhancing The JABS Program directly supports been detained, arrested, booked, or cooperation among law enforcement the President’s Homeland Security incarcerated. The remainder of this agencies, and reducing the threat to law initiative by automating the booking notice will refer to all persons covered enforcement officials and the public by process and providing a secure by the System as ‘‘alleged criminal facilitating the rapid and positive mechanism to rapidly and positively offender’’ or ‘‘arrestee’’. identification of offenders. identify an individual based on a fingerprint submission to the IAFIS. The CATEGORIES OF RECORDS IN THE SYSTEM: ROUTINE USES OF RECORDS MAINTAINED IN THE JABS Program is a multi-agency Records may include certain generic SYSTEM, INCLUDING CATEGORIES OF USERS AND initiative that is not restricted to or ‘‘common’’ data elements which have THE PURPOSES OF SUCH USES: Department of Justice users. In June been collected by an arresting federal Where necessary and/or appropriate, 2004, the USMS added the Inter-Agency agency at its automated booking station the DOJ may disclose relevant booking functionality to their (ABS). An agency may book an alleged information from the JABS repository Automated Booking System (ABS) to criminal offender on behalf of another and may allow electronic access as provide automated submission of agency which performed the arrest. follows:

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a. To authorized federal law information to a former employee of the of court orders for expunction when enforcement agencies to input and Department for purposes of: Responding accompanied by necessary identifying retrieve booking and arrests data on to an official inquiry by a federal, state, information. criminal offenders. In addition, the or local government entity or SYSTEM MANAGER(S) AND ADDRESS(ES): JABS repository may be electronically professional licensing authority, in accessed by these agencies for other law accordance with applicable Department JABS Program Management Office, enforcement purposes such as to learn regulations; or facilitating U.S. Department of Justice, Washington, about the arrest of a fugitive wanted in communications with a former DC 20530. several jurisdictions, to verify the employee that may be necessary for NOTIFICATION PROCEDURE: identity of an arrestee, or to assist in the personnel-related or other official Same as ‘‘Record Access Procedure.’’ criminal investigation activities. purposes where the Department requires b. To other judicial/law enforcement information and/or consultation RECORD ACCESS PROCEDURE: agencies, i.e., courts, probation, and assistance from the former employee Inquiries must be addressed in parole agencies, for direct electronic regarding a matter within that person’s writing and should be sent to the JABS access to JABS to obtain applicable data former area of responsibility. Program Management Office, at above which will assist them in performing address. Provide name, assigned their official duties. DISCLOSURE TO CONSUMER REPORTING computer location, and a description of c. To any criminal, civil, or regulatory AGENCIES: information being sought, including the law enforcement authority (whether Not Applicable. time frame during which the record(s) federal, state, local, territorial, tribal, or POLICIES AND PRACTICES FOR STORING, may have been generated. Provide foreign) where the information is RETRIEVING, ACCESSING, RETAINING, AND verification of identity as instructed in relevant to the recipient entity’s law DISPOSING OF RECORDS IN THE SYSTEM: 28 CFR 16.41(d). enforcement responsibilities. STORAGE: d. In an appropriate proceeding before CONTESTING RECORDS PROCEDURE: a court, or administrative or Records are stored in computerized Same as above. media and printed copies. Any paper adjudicative body, when the RECORDS SOURCE CATEGORIES: Department of Justice determines that records kept by individuals will be appropriately secured. The record subject; federal law the records are arguably relevant to the enforcement personnel; the courts; and proceeding; or in an appropriate RETRIEVABILITY: medical personnel. proceeding before an administrative or Data may be retrieved by name, EXEMPTIONS CLAIMED FOR THE SYSTEM: adjudicative body when the adjudicator identifying number, or other data determines the records to be relevant to elements. Pursuant to 5 U.S.C. 552a(j)(2) and the proceeding. (k)(2), the Attorney General has e. To complainants and/or victims to SAFEGUARDS: exempted records in this system from the extent necessary to provide such Nationwide JABS has a combination subsections (c)(3) and (4), (d), (e)(1), (2) persons with information and of technical elements that, together, and (3), (4)(G) and (H), (e)(5), (e)(8), (f) explanations concerning the progress integrate into a total security and (g) of the Privacy Act. Rules were and/or results of the investigation or infrastructure to ensure access is limited promulgated in accordance with the case arising from the matters of which to only pre-authorized users. The key requirements of 5 U.S.C. 553(b), (c), and they complained and/or of which they technical design elements of this (e) and are codified at 28 CFR 16.131. were a victim. architecture include: Encrypted user [FR Doc. E6–14828 Filed 9–6–06; 8:45 am] f. To contractors, grantees, experts, authentication, redundant firewalls, BILLING CODE 4410–ET–P consultants, students, and others virtual private networks, performing or working on a contract, nonrepudiation, data encryption, anti- service, grant, cooperative agreement, or virus content inspection, and intrusion DEPARTMENT OF LABOR other assignment for the Federal detection capabilities. Access to the Government, when necessary to systems equipment is limited to pre- Office of the Secretary accomplish an agency function related authorized personnel through physical to this system of records. access safeguards that are enforced 24 Submission for OMB Review: g. To a Member of Congress or staff hours a day, seven (7) days a week. Comment Request acting upon the Member’s behalf when Facilities and offices which house the Member or staff requests the computer systems are protected at all August 31, 2006. information on behalf of, and at the times by appropriate locks, security The Department of Labor (DOL) has request of, the individual who is the guards, and/or alarm systems. submitted the following public subject of the record. information collection request (ICR) to h. To the news media and the public, RETENTION AND DISPOSAL: the Office of Management and Budget pursuant to 28 CFR 50.2, unless it is a. Temporary. Delete from the JABS (OMB) for review and approval in determined that release of the specific data base 99 years after the date of the accordance with the Paperwork information in the context of a first entry. Reduction Act of 1995 (Pub. L. 104–13, particular case would constitute an b. Fingerprints submitted by law 44 U.S.C. chapter 35). A copy of this unwarranted invasion of personal enforcement agencies are removed from ICR, with applicable supporting privacy. the system and destroyed upon the documentation, may be obtained from i. To the National Archives and request of the submitting agencies. The RegInfo.gov at http://www.reginfo.gov/ Records Administration (NARA) for destruction of fingerprints under this public/do/PRAMain or by contacting purposes of records management procedure results in the deletion from Darrin King on 202–693–4129 (this is inspections conducted under the the system of all arrest information not a toll-free number)/e-mail: authority of 44 U.S.C. 2904 and 2906. related to those fingerprints. [email protected]. j. The Department of Justice may c. Fingerprints and related arrest data Comments should be sent to Office of disclose relevant and necessary are removed from the JABS upon receipt Information and Regulatory Affairs,

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Attn: OMB Desk Officer for the whether the information will have e.g., permitting electronic submission of Employment Standards Administration practical utility; responses. (ESA), Office of Management and • Evaluate the accuracy of the Agency: Employment Standards Budget, Room 10235, Washington, DC agency’s estimate of the burden of the Administration. 20503, Telephone: 202–395–7316/Fax: proposed collection of information, Type of Review: Revision of currently 202–395–6974 (these are not a toll-free including the validity of the approved collection. numbers), within 30 days from the date methodology and assumptions used; Title: Labor Organization and • Enhance the quality, utility, and of this publication in the Federal Auxiliary Reports. clarity of the information to be Register. collected; and OMB Number: 1215–0188. The OMB is particularly interested in • Minimize the burden of the Frequency: Annually and Semi- comments which: collection of information on those who annually. Type of Response: Reporting and • Evaluate whether the proposed are to respond, including through the Recordkeeping. collection of information is necessary use of appropriate automated, Affected Public: Not-for-profit for the proper performance of the electronic, mechanical, or other technological collection techniques or institutions. functions of the agency, including other forms of information technology, Number of Respondents: 27,849.

REPORTING AND RECORDKEEPING BURDEN HOURS

Hours per Hours per Forms Responses respondent for Reporting bur- respondent for Recordkeeping Total hours reporting den hours recordkeeping burden hours

LM–1 ...... 255 0.83 212 0.08 20 232 LM–2 ...... 3,827 146.00 558,742 390.00 1,492,530 2,051,272 LM–3 ...... 10,812 52.00 562,224 64.00 691,968 1,254,192 LM–4 ...... 6,355 8.00 50,840 2.00 12,710 63,550 LM–10 ...... 1,766 0.50 883 0.08 141 1,024 LM–15 ...... 354 1.50 531 0.33 117 648 LM–15A ...... 68 0.33 22 0.03 2 24 LM–16 ...... 95 0.33 31 0.02 2 33 LM–20 ...... 90 0.33 30 0.03 3 33 LM–21 ...... 11 0.50 6 0.08 1 7 LM–30 ...... 3,494 0.50 1,747 0.08 280 2,027 S–1 ...... 179 0.50 90 0.08 14 104 SARF* ...... 543 0.17 92 0.03 16 108

Total ...... 27,849 ...... 1,175,450 ...... 2,197,804 3,373,254 Note: Some numbers may not add due to rounding. * Simplified Annual Report Format.

Total Annualized capital/startup provides that the reports are public SUMMARY: The National Aeronautics and costs: $0. information. Space Administration (NASA) Total Annual Costs (operating/ The Office of Labor-Management announces a meeting of the Planetary maintaining systems or purchasing Standards (OLMS) administers the Protection Subcommittee of the NASA services): $0. reporting provisions of the LMRDA to Advisory Council (NAC). This the statute (29 U.S.C. 431 et seq.) and Subcommittee reports to the Science Description: Congress enacted the the implementing and interpreting Committee of the NAC. The meeting Labor-Management Reporting and regulations (29 CFR Chapter IV). will be held for the purpose of soliciting Disclosure Act of 1959, as amended from the scientific community and other Ira L. Mills, (LMRDA), to provide for the disclosure persons scientific and technical of information on the financial Departmental Clearance Officer. information relevant to program transactions and administrative [FR Doc. E6–14833 Filed 9–6–06; 8:45 am] planning. practices of labor organizations. The BILLING CODE 4510–23–P statute also provides, under certain DATES: Thursday, September 28, 2006, circumstances, for reporting by labor 8:30 a.m. to 5:30 p.m., and Friday, organization officers and employees, September 29, 8:30 a.m. to 5 p.m. employers, labor relations consultants, NATIONAL AERONAUTICS AND Eastern Daylight Time. SPACE ADMINISTRATION and surety companies. Section 208 of ADDRESSES: Marriott Georgetown the LMRDA authorizes the Secretary to University Conference Center, 3800 issue rules and regulations prescribing [Notice (06–064)] Reservoir Road, NW., Washington, DC the form of the required reports. The 20057. reporting provisions were devised to NASA Advisory Council; Science implement a basic tenet of the LMRDA: Committee; Planetary Protection FOR FURTHER INFORMATION CONTACT: Ms. The guarantee of democratic procedures Subcommittee; Meeting Marian Norris, Science Mission and safeguards within labor AGENCY: National Aeronautics and Directorate, NASA Headquarters, organizations that are designed to Space Administration. Washington, DC 20546, (202) 358–4452, protect the basic rights of union fax (202) 358–4118, or ACTION: Notice of meeting. members. Section 205 of the LMRDA [email protected].

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SUPPLEMENTARY INFORMATION: The terminate NRC oversight at the Unit 1 Administration, U.S. Department of agenda for the meeting includes the and Unit 4 site area. The proposed Energy, and the State of Washington. following topics: action is in response to Energy This agreement, approved by the four • Status of NASA Planetary Northwest’s request dated August 9, parties in December 2003, stipulated Exploration Activities/Implementations. 2005, supplemented by letter dated July restoration activities in two phases— • The COSPAR Assembly in Beijing. 7, 2006. near term (within 18 to 24 months) and • Special Regions Concept to Mars final restoration (within approximately The Need for the Proposed Action Planetary Protection Requirements. 26 years, or by the end of 2029). The • Protection Requirements for The proposed action is needed to NRC staff assessed the scope of the Humans on Mars and Lunar allow the permitee to undertake other restoration activities addressed in the Opportunities for Preliminary activities (aside from the construction Resolution and has determined that the Preparation. and possible future operation of a goals and objectives of such activities, • Preliminary Protection Future nuclear power plant) at the WNP–1 and when carried out, would achieve an Planning, Responsibilities, and WNP–4 site area. For example, Energy environmentally stable and aesthetically International Cooperation. Northwest is investigating the possible acceptable site. Energy Northwest has The meeting will be open to the use of the WNP–1⁄4 site for an industrial stated that all near term activities have public up to the seating capacity of the park. An application for an operating been completed. room. Findings and recommendations license was filed with the NRC for Near term restoration activities that developed by the Subcommittee during WNP–1; the Operating License have been completed at the WNP–1 and its meeting will be submitted to the Proceeding was terminated by the WNP–4 site area include: removal of Science Committee of the NAC. Atomic Safety and Licensing Board on hazardous materials (such as asbestos, It is imperative that the meeting be July 26, 2000. The construction permit mercury vapor lights, transformer held on these dates to accommodate the for Unit 1 would have expired on June mineral oil or polychlorinated scheduling priorities of the key 1, 2011. Energy Northwest requested the biphenyls [PCBs], diesel fuel, lubricants, participants. Attendees will be termination of the WNP–1 construction and solvents); installation of secure requested to sign a visitor’s register. permit because it has determined that it access doors or permanent sealing of Dated: August 30, 2006. will not complete construction of either points of entry to the remaining P. Diane Rausch, WNP–1 or WNP–4; it has terminated the structures on the sites; relocation of construction of the nuclear power plants fencing and installation of new fencing Advisory Committee Management Officer, National Aeronautics and Space as well as the maintenance of layup to minimize the land area and to reduce Administration. activities such that neither unit can be unauthorized entry potential such that [FR Doc. E6–14841 Filed 9–6–06; 8:45 am] operated as a utilization facility. security patrols are not required; installation of ‘‘No Trespassing’’ signs; BILLING CODE 7510–13–P Environmental Impacts of the Proposed Action elimination of fall hazards; fencing of exterior substations and distribution The WNP–1 and adjacent WNP–4 load centers to minimize the potential NUCLEAR REGULATORY sites are located on a portion of the for entry; and removal of temporary COMMISSION Hanford Reservation in Washington buildings that are neither safe nor [Docket No. 50–460; Nuclear Project No. 1 State that the permittee has leased from feasible for reuse. (WNP–1)] U.S. Department of Energy. The The Unit 1 Containment Building has environmental impacts associated with been cleaned to remove trash, debris, Energy Northwest; Environmental the construction of the facility have overhead hazards, scaffolding, and Assessment and Finding of No been previously discussed and formwork. Under the Resolution, this Significant Impact evaluated in the Final Environmental building will remain intact as Statement (FES) prepared as part of the The U.S. Nuclear Regulatory constructed—no further actions will be NRC staff’s review of the construction Commission (NRC) is terminating needed for the Unit 1 containment at the permit application, NUREG–75/012, final restoration phase. Construction Permit No. CPPR–134 March 1975. Construction was The Unit 4 Containment Building has issued to Washington Public Power suspended on the partially-completed been cleaned to remove trash, debris, Supply System (permittee, now doing WNP–1 Project in 1982. overhead hazards, scaffolding, and business as Energy Northwest) for the The construction of WNP–1 was formwork. This building was filled with Nuclear Project No. 1 (WNP–1). The approximately 65 percent complete; compacted earth to elevation 479′ and a facility is located at Energy Northwest’s therefore, most of the construction 6″ thick concrete floor was poured at site on the Department of Energy’s impacts discussed in the FES have that level. (The ground elevation around Hanford Reservation in Benton County, already occurred. This action would the containment and general services Washington, approximately 8 miles terminate the authorization to conduct buildings at WNP–1 and WNP–4 is north of Richland, Washington. any of the remaining construction approximately 455′ above mean sea Environmental Assessment activities described in the FES and level.) Openings in the Unit 4 would also terminate NRC’s oversight Containment Building were either Identification of Proposed Action for activities at the site area. sealed or fitted with anti-bird roosting The proposed action is issuance of an Restoration of the site is being screens; building protrusions were Order that would terminate conducted in accordance with minimized or fitted with anti-bird Construction Permit No. CPPR–134 for Washington State Energy Facility Site roosting screens. Provision was made the partially completed and previously Evaluation Council (EFSEC) Resolution for water drainage. Under the deferred WNP–1 facility. Because the No. 302 (Resolution). This resolution Resolution, this building will remain in construction permit for Unit 4 (WNP–4) contains the requirements and schedule its existing condition—no further was effectively subsumed in the Unit 1 for restoration of the WNP–1 and WNP– actions will be needed for the Unit 4 construction permit on November 27, 4 sites, as agreed to by Energy containment at the final restoration 1985, the proposed action would Northwest, Bonneville Power phase.

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The Unit 1 General Services Building Services Buildings, and turbine poses no significant hazard to persons has had concrete roofs poured at pedestals) will be removed. The landfill onsite. The facility cannot be operated elevations 518′ and 543′. Under the will be closed and capped, the large in its present condition. Because this Resolution, this building will remain underground circulating water lines will proposed action would only terminate intact as constructed. The upper levels be backfilled, all roads and rail lines the construction permit, it does not of the Unit 4 General Services Building will be removed and graded, and all involve any different impacts or involve interior has been cleaned to remove yard areas will be cleaned, contoured, a significant change to those impacts trash, debris, overhead hazards, graded and seeded implementing best described and analyzed in the FES. scaffolding, and formwork. The lower management practices. After the final Consequently, an environmental impact areas of the Unit 4 General Services restoration activities have been statement addressing the proposed Building, where no access is required, completed, the structures remaining action is not required. will not be cleaned. The walls have permanently in place at the sites will be Because the proposed construction been demolished to the 501′ elevation. limited to the Units 1 and 4 permit termination Order is for a project Metal roofing with a (painted Containment Buildings, General that was suspended 24 years ago, the polystyrene) coating has been installed Services Buildings, and turbine action is judged to be administrative in at elevations 501′ and 479′ to seal the pedestals. nature and would have no significant building. Under the Resolution, both The permit issued by the Army Corps environmental impact. It does not buildings will remain in their current of Engineers for the submerged river involve any different impacts as configuration—no further actions will water intake structure requires that if described and analyzed in the Staff’s be needed for the Unit 1 or the Unit 4 Energy Northwest decides to abandon FES and will not involve any impacts General Services Building at the final the intake structure, Energy Northwest beyond those already described and restoration phase. must restore the area to a condition analyzed in the FES. The proposed The interior of the Unit 1 Turbine- satisfactory to the district engineer. At action will terminate the NRC’s Generator Building has been cleaned to this time, the river intake structure may involvement on the project. remove trash, debris, and overhead be a part of future plans for use of the hazards. This building will be site and abandonment is not under Alternatives to the Proposed Action demolished and removed at the Final consideration. The only alternative to the proposed Restoration phase. Under the The NRC staff conducted an audit of action would be to deny the request, i.e., Resolution, the Unit 1 turbine pedestal the site area encompassing WNP–1 and the ‘‘no action’’ alternative. This will remain after demolition and WNP–4 on April 24 and 25, 2006, to alternative would still result in the removal of the building. determine whether posession of source, conduct of the activities prescribed for Construction of the WNP–4 Turbine- byproduct or special nuclear material final restoration in the four-party Generator Building was halted following was controlled as authorized, to agreement dated December 3, 2003. This completion of the building shell determine whether the site area is being alternative would necessitate continued (structural steel, floor slabs, walls, roof, maintained in a safe and stable manner, oversight by NRC of a project that has exterior siding, etc.). These elements and to assess key environmental aspects ceased construction and has no were demolished in 1990 prior to the of the site. The staff observed selected likelihood of completion; that will not restoration agreement with EFSEC. Only portions of the Containment Buildings, be operated as a utilization facility; that the turbine pedestal and portions of the General Services Buildings, spray has stable environmental conditions; ground floor slab remain. Under the ponds, cooling towers, the Unit 1 and that continues to be subject to Resolution, the Unit 4 turbine pedestal Turbine-Generator Building, Pump oversight by other regulatory agencies— will remain intact as constructed—no House Buildings, and other site all with no significant environmental further actions will be needed for the buildings. The staff also observed that benefit. The environmental impacts of Unit 4 turbine pedestal at the final erosion controls were being maintained. the proposed action and the ‘‘no action’’ restoration phase. The staff assessed the effectiveness of alternative are similar. The Unit 1 and Unit 4 spray ponds the measures already taken under the have had separate fences installed near term phase of site restoration plan Alternative Use of Resources around the ponds. The interiors of the and concluded that restoration activities This action does not involve the use Unit 1 and Unit 4 Pump House appear to meet the goals and objectives of resources not previously considered Buildings have been cleaned to remove of Washington State EFSEC Resolution in the FES for WNP–1. trash, debris, overhead hazards, No. 302. scaffolding, and formwork. Under the Based on the foregoing, the NRC staff Agencies and Persons Contacted Resolution, final restoration for these has concluded that the proposed action In accordance with its stated policy, structures will consist of removal of the would have no significant on August 31, 2006, the staff consulted buildings and backfilling of the spray environmental impact. The staff also with the Washington State Official, Mr. ponds. concluded that there is reasonable Richard Cowley, regarding the The Unit 1 and Unit 4 cooling towers assurance that the remaining site environmental impact of the proposed have had chain link fences with locked restoration activities under the action. The State official had no gates installed to secure access to the Resolution will achieve an comments. cooling tower stairwells. Anti-bird environmentally stable and aesthetically screens have been added to minimize acceptable site for whatever non-nuclear Finding of No Significant Impact access by birds. Under the Resolution, use may conform with local zoning laws On the basis of the environmental final restoration activities for the Unit 1 and Department of Energy assessment, the NRC concludes that this and Unit 4 cooling towers will include authorizations. action will not have a significant effect demolition of the existing structures to The site area cannot be used for the on the quality of the human grade and removal of the basin slabs. utilization facility envisioned under environment. Accordingly, the NRC has During the final restoration phase, all CPPR–134. No nuclear fuel was ever determined not to prepare an slabs and most structures (except for the received on site. The site area is in an environmental impact statement for this Containment Buildings, General environmentally stable condition that action.

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For further details with respect to this Members of the public desiring to ‘‘Standard Format and Content of Safety action, see the licensee’s request for provide oral statements and/or written Analysis Reports for Nuclear Power construction permit termination dated comments should notify the Designated Plants (LWR Edition),’’ which the August 9, 2005, supplemented by letter Federal Official, Mr. Antonio F. Dias nuclear industry has since used in dated July 7, 2006. Documents may be (Telephone: 301/415–6805) between preparing applications for construction examined, and/or copied for a fee, at the 8:15 a.m. and 5 p.m. (ET) five days prior permits and operating licenses for new NRC’s Public Document Room, located to the meeting, if possible, so that nuclear power plants. The NRC most at One White Flint North, 11555 appropriate arrangements can be made. recently revised Regulatory Guide 1.70 Rockville Pike (first floor), Rockville, Electronic recordings will be permitted in November 1978 and, since that time, Maryland. Publicly available records only during those portions of the the Commission has established a new will be accessible electronically from meeting that are open to the public. process for licensing new reactors. That the Agency wide Documents Access and Further information regarding this process, described in detail in 10 CFR Management Systems (ADAMS) Public meeting can be obtained by contacting Part 52, allows an applicant to reference Electronic Reading Room on the internet the Designated Federal Official between an early site permit (ESP), a design at the NRC Web site, http:// 8:15 a.m. and 5:00 p.m. (ET). Persons certification (DC), both, or neither, in a www.nrc.gov/reading-rm/adams.html. planning to attend this meeting are COL application. The NRC has Persons who do not have access to urged to contact the above named developed Draft Regulatory Guide DG– ADAMS or who encounter problems in individual at least two working days 1145 to provide guidance to applicants accessing the documents located in prior to the meeting to be advised of any who plan to use this new process. ADAMS should contact the NRC PDR potential changes in the agenda. The NRC initially issued 10 CFR Part Reference staff by telephone at 1–800– Dated: August 31, 2006. 52 in April 1989 to offer alternative 397–4029 or 301–415–4737, or send an Michael R. Snodderly, licensing (ESP, standard DC, COL, and e-mail to [email protected]. Branch Chief, ACRS/ACNW. manufacturing license) processes for Dated at Rockville, Maryland this 31st day [FR Doc. 06–7504 Filed 9–5–06; 10:18 am] new nuclear power plants. More of August 2006. BILLING CODE 7590–01–P recently, the agency proposed a revision For the Nuclear Regulatory Commission. of the rule on March 13, 2006, (71 FR Brian J. Benney, 12782), to clarify the applicability of various requirements to each of the Project Manager, Plant Licensing Branch IV, NUCLEAR REGULATORY Division of Operating Reactor Licensing, COMMISSION licensing processes. This Draft Office of Nuclear Reactor Regulation. Regulatory Guide, DG–1145, is based on Draft Regulatory Guide: Issuance, [FR Doc. E6–14774 Filed 9–6–06; 8:45 am] the proposed revised rule. The specific Availability requirements pertaining to technical BILLING CODE 7590–01–P The U.S. Nuclear Regulatory requirements for content of applications Commission (NRC) has issued for public are contained in proposed 10 CFR 52.79, NUCLEAR REGULATORY comment a draft of a new guide in the ‘‘Contents of applications, general COMMISSION agency’s Regulatory Guide Series. This requirements’’ and proposed 10 CFR series has been developed to describe 52.80, ‘‘Contents of applications, Advisory Committee on Nuclear and make available to the public such additional technical information.’’ The Waste; Meeting on Planning and information as methods that are final Regulatory Guide will be Procedures; Notice of Meeting acceptable to the NRC staff for conformed to the final rule that is implementing specific parts of the adopted by the Commission, and will be The Advisory Committee on Nuclear NRC’s regulations, techniques that the issued when that final rule is available. Waste (ACNW) will hold a Planning and staff uses in evaluating specific At this time, the NRC staff is soliciting Procedures meeting on September 18, problems or postulated accidents, and comments on Draft Regulatory Guide 2006, Room T–2B1, 11545 Rockville data that the staff needs in its review of DG–1145. Comments may be Pike, Rockville, Maryland. The entire applications for permits and licenses. accompanied by relevant information or meeting will be open to public The draft regulatory guide, entitled supporting data, and should mention attendance, with the exception of a ‘‘Combined License Applications for DG–1145 in the subject line. Comments portion that may be closed pursuant to Nuclear Power Plants (LWR Edition),’’ is submitted in writing or in electronic 5 U.S.C. 552b(c)(2) and (6) to discuss temporarily identified by its task form will be made available to the organizational and personnel matters number, DG–1145, which should be public in their entirety through the that relate solely to internal personnel mentioned in all related NRC’s Agencywide Documents Access rules and practices of ACNW, and correspondence. This proposed and Management System (ADAMS). information the release of which would regulatory guide contains guidance for Personal information will not be constitute a clearly unwarranted use in submitting combined license removed from your comments. You may invasion of personal privacy. (COL) applications in compliance with submit comments by any of the The agenda for the subject meeting the Commission’s regulations in Title 10 following methods. shall be as follows: Part 52 of the Code of Federal Mail comments to: Rules and Directives Branch, Office of Monday, September 18, 2006—8:30 Regulations (10 CFR Part 52), ‘‘Early Administration, U.S. Nuclear Regulatory a.m.–9:30 a.m. Site Permits; Design Certifications; and Combined Licenses for Nuclear Power Commission, Washington, DC 20555– The Committee will discuss proposed Plants.’’ Specifically, 10 CFR Part 52 0001. ACNW activities and related matters. governs the issuance of early site E-mail comments to: The purpose of this meeting is to gather permits, standard design certifications, [email protected]. You may also submit information, analyze relevant issues and and combined licenses for nuclear comments via the NRC’s rulemaking facts, and formulate proposed positions power plants. Web site at http://ruleforum.llnl.gov/cgi- and actions, as appropriate, for In February 1972, the NRC initially bin/rulemake?source=rg&st=draftrg. deliberation by the full Committee. published Regulatory Guide 1.70, Address questions about our rulemaking

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Web site to Carol A. Gallagher at (301) the U.S. Nuclear Regulatory Dealers, Inc. (‘‘NASD’’) (together with 415–5905 or by e-mail to [email protected]. Commission, Washington, DC 20555– the NYSE Arca, the ‘‘Parties’’). Hand-deliver comments to: Rules and 0001, Attention: Reproduction and Accordingly, NASD shall assume, in Directives Branch, Office of Distribution Services Section; by e-mail addition to the regulatory responsibility Administration, U.S. Nuclear Regulatory to [email protected]; or by fax to it has under the Act, the regulatory Commission, 11555 Rockville Pike, (301) 415–2289. Telephone requests responsibilities allocated to it under the Rockville, Maryland 20852, between cannot be accommodated. Plan. At the same time, NYSE Arca is 7:30 a.m. and 4:15 p.m. on Federal Regulatory guides are not relieved of those regulatory workdays. copyrighted, and Commission approval responsibilities allocated to NASD Fax comments to: Rules and is not required to reproduce them. under the Plan. Directives Branch, Office of Administration, U.S. Nuclear Regulatory (5 U.S.C. 552(a)) I. Introduction Commission at (301) 415–5144. Dated at Rockville, Maryland, this 1st day Section 19(g)(1) of the Act,6 among Requests for technical information of September, 2006. other things, requires every self- about Draft Regulatory Guide DG–1145 For the U.S. Nuclear Regulatory regulatory organization (‘‘SRO’’) may be directed to the NRC Project Commission. registered as either a national securities Manager, Eric Oesterle, at (301) 415– Charles E. Ader, exchange or registered securities 1365 or [email protected]. Acting Director, Division of Risk Assessment association to examine for, and enforce Comments would be most helpful if and Special Projects, Office of Nuclear compliance by, its members and persons received by October 21, 2006. Regulatory Research. associated with its members with the Comments received after that date will [FR Doc. E6–14865 Filed 9–6–06; 8:45 am] Act, the rules and regulations be considered if it is practical to do so, BILLING CODE 7590–01–P thereunder, and the SRO’s own rules, but the NRC is able to ensure unless the SRO is relieved of this consideration only for comments responsibility pursuant to Section received on or before this date. 7 8 SECURITIES AND EXCHANGE 17(d) or 19(g)(2) of the Act. Section Although a time limit is given, 9 COMMISSION 17(d)(1) of the Act was intended, in comments and suggestions in part, to eliminate unnecessary multiple connection with items for inclusion in [Release No. 34–54394; File No. 4–523] examinations and regulatory guides currently being developed or duplication for those broker-dealers that improvements in all published guides Program for Allocation of Regulatory maintain memberships in more than one are encouraged at any time. Responsibilities Pursuant to Rule 17d– SRO (‘‘common members’’).10 With Electronic copies of Draft Regulatory 2; Order Approving and Declaring respect to a common member, Section Guide DG–1145 are available through Effective a Plan for Allocation of 17(d)(1) authorizes the Commission, by the NRC’s public Web site under Draft Regulatory Responsibilities Between rule or order, to relieve an SRO of the Regulatory Guides in the Regulatory NYSE Arca, Inc. and the National responsibility to receive regulatory Guides document collection of the Association of Securities Dealers, Inc. reports, to examine for and enforce NRC’s Electronic Reading Room at compliance with applicable statutes, http://www.nrc.gov/reading-rm/doc- August 31, 2006. rules, and regulations, or to perform collections/. Electronic copies are also Notice is hereby given that the other specified regulatory functions. available in ADAMS Securities and Exchange Commission To implement Section 17(d)(1), the (http://www.nrc.gov/reading-rm/ (‘‘Commission’’) has issued an Order, Commission adopted two rules: Rule adams.html), under Package Accession pursuant to Sections 17(d) 1 and 17d–1 11 and Rule 17d–2 under the #ML061800499. 11A(a)(3)(B) 2 of the Securities Exchange Act.12 Rule 17d–2 permits SROs to In addition, Draft Regulatory Guide Act of 1934 (‘‘Act’’), granting approval propose joint plans for the allocation of DG–1145 and other related publicly and declaring effective a revised regulatory responsibilities, other than available documents, including public amended and restated plan for the financial responsibility rules, with comments received, can be viewed allocation of regulatory responsibilities respect to their common members. electronically on computers in the (‘‘Plan’’) 3 that was filed pursuant to Under paragraph (c) of Rule 17d–2, the NRC’s Public Document Room (PDR), Rule 17d–2 under the Act 4 by NYSE Commission may declare such a plan which is located at 11555 Rockville Arca, Inc.5 (‘‘NYSE Arca’’) and the effective if, after providing for notice Pike, Rockville, Maryland. The PDR National Association of Securities and comment, it determines that the reproduction contractor will make plan is necessary or appropriate in the copies of documents for a fee. The 1 15 U.S.C. 78q(d). public interest and for the protection of PDR’s mailing address is USNRC PDR, 2 15 U.S.C. 78k–1(a)(3)(B). investors, to foster cooperation and Washington, DC 20555–0001. The PDR 3 On January 20, 2006, the Parties submitted an amended and restated 17d–2 plan for review and can also be reached by telephone at 6 15 U.S.C. 78s(g)(1). approval by the Commission. On July 25, 2006, the (301) 415–4737 or (800) 397–4205, by 7 Parties submitted a revised amended and restated 15 U.S.C. 78q(d). fax at (301) 415–3548, and by e-mail to plan (‘‘Plan’’), which was noticed for public 8 15 U.S.C. 78s(g)(2). [email protected]. comment. See infra note 13. 9 15 U.S.C. 78q(d)(1). Please note that the NRC does not 4 17 CFR 240.17d–2. 10 See Securities Act Amendments of 1975, intend to distribute printed copies of 5 NYSE Arca, Inc. was formerly called the Pacific Report of the Senate Committee on Banking, Draft Regulatory Guide DG–1145, unless Exchange, Inc. (‘‘PCX’’). On March 6, 2006, PCX Housing, and Urban Affairs to Accompany S. 249, filed with the Commission a proposed rule change, S. Rep. No. 94–75, 94th Cong., 1st Session 32 specifically requested on an individual which was effective upon filing, to change the name (1975). basis. Such requests for single copies of of the PCX, as well as several other related entities, 11 17 CFR 240.17d–1. Rule 17d–1 authorizes the draft or final guides (which may be to reflect Archipelago Holdings, Inc.’s Commission to name a single SRO as the designated reproduced) or for placement on an (‘‘Archipelago’’) recent acquisition of PCX and the examining authority (‘‘DEA’’) to examine common merger of the New York Stock Exchange, Inc. with members for compliance with the financial automatic distribution list for single Archipelago. See Securities Exchange Act Release responsibility requirements imposed by the Act, or copies of future draft guides in specific No. 53615 (April 7, 2006), 71 FR 19226 (April 13, by Commission or SRO rules. divisions should be made in writing to 2006). 12 17 CFR 240.17d–2.

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coordination among the SROs, to or appropriate in the public interest and Rule 17d–1 of the Act; 19 and (4) any remove impediments to, and foster the for the protection of investors, fosters rules of NYSE Arca that do not qualify development of, a national market cooperation and coordination among as Common Rules, except that NASD system and a national clearance and SROs, and removes impediments to and shall be responsible for such rules with settlement system, and is in conformity fosters the development of the national respect to any broker-dealer subsidiary with the factors set forth in Section market system. In particular, the of Archipelago. With respect to broker- 17(d) of the Act. Upon effectiveness of Commission believes that the proposed dealer subsidiaries of Archipelago, a plan filed pursuant to Rule 17d–2, an Plan could reduce unnecessary apparent violations of any NYSE Arca SRO is relieved of those regulatory regulatory duplication by allocating to rules by any broker-dealer subsidiary of responsibilities for common members NASD certain responsibilities for Archipelago will be processed by that are allocated by the plan to another common members that would otherwise NASD, and NASD will conduct any SRO. be performed by both NYSE Arca and enforcement proceedings. The effect of On August 2, 2006, the Commission NASD. Accordingly, the proposed Plan these provisions is that regulatory published notice of the Plan filed by promotes efficiency by reducing costs to oversight and enforcement NYSE Arca and NASD.13 The common members. Furthermore, responsibilities for Archipelago Commission received no comments on because NYSE Arca and NASD will Securities, L.L.C., which acts as the the Plan. The Plan is intended to replace coordinate their regulatory functions in outbound router for the NYSE Arca and supersede the current 17d–2 plan accordance with the Plan, the Plan Marketplace, will be vested with NASD. between NASD and NYSE Arca and all should promote investor protection. These provisions should help avoid any prior amendments thereto in their The Commission notes that, under the potential conflicts of interest that could entirety,14 and is intended to reduce Plan, NYSE Arca and NASD have arise if NYSE Arca was primarily regulatory duplication for firms that are allocated regulatory responsibility for responsible for regulating its affiliated common members of NYSE Arca and all NYSE Arca rules that are outbound router.20 NASD. The text of the Plan allocates substantially similar to NASD rules in According to the Plan, NYSE Arca regulatory responsibilities among the that NYSE Arca’s rule would not require will perform a review of the Parties with respect to common NASD to develop one or more new Certification, at least annually, or more members. Included in the Plan is an examination standards, modules, frequently if required by changes in attachment (‘‘NYSE Arca Rules procedures, or criteria in order to either the rules of NYSE Arca or NASD, Certification for 17d–2 Agreement with analyze the application of the rule, or a to add NYSE Arca rules not included on NASD,’’ referred to herein as the dual member’s activity, conduct, or the then-current list of Common Rules ‘‘Certification’’) that lists every NYSE output in relation to such rule that are substantially similar to NASD Arca rule and Federal securities law and (‘‘Common Rules’’). These Common rules (i.e., new rules that qualify as rule and regulation thereunder for Rules are specifically listed in the Common Rules or existing rules that which, under the Plan, NASD would Certification.17 In addition, the NASD have been amended so that they now bear responsibility for examining, and would assume regulatory responsibility qualify as Common Rules); delete NYSE enforcing compliance by, common for any provisions of the Federal Arca rules included in the then-current members. securities laws and the rules and list of Common Rules that are no longer regulations thereunder that are set forth substantially similar to NASD rules (i.e., II. Discussion in the Certification.18 amended rules that cease to be Common The Commission finds that the The Plan further provides that NASD Rules); and confirm that the remaining proposed Plan is consistent with the shall not assume regulatory rules on the list of Common Rules factors set forth in Section 17(d) of the responsibility, and NYSE Arca will continue to be NYSE Arca rules that are Act 15 and Rule 17d–2(c) thereunder 16 retain full responsibility, for: (1) substantially similar to NASD rules. in that the proposed Plan is necessary Surveillance and enforcement with NASD will then confirm in writing respect to trading activities or practices whether the rules listed in any updated 13 See Securities Exchange Act Release No. 54224 involving NYSE Arca’s own list are Common Rules as defined in the (July 27, 2006), 71 FR 43823. marketplace; (2) registration pursuant to Plan. The Commission is hereby 14 The Parties currently operate pursuant to a 17d- NYSE Arca’s applicable rules of declaring effective and approving a plan 2 plan in which the NASD assumed certain associated persons (i.e., registration inspection, examination, and enforcement that, among other things, allocates responsibility for common members with respect to rules that are not Common Rules); (3) regulatory responsibility to NASD for certain applicable laws, rules, and regulations (the NYSE Arca’s duties as a DEA under the oversight and enforcement of all ‘‘current NASD–NYSE Arca 17d–2 plan’’). See NYSE Arca rules that are substantially Securities Exchange Act Release Nos. 14095 17 NYSE Arca has represented that there are no (October 25, 1977), 42 FR 57198 (November 1, 1977) similar to the rules of the NASD for NYSE Arca rules that are substantially similar to common members of NYSE Arca and (File No. 4–267) (notice of 1977 Agreement); 15191 NASD rules that are not included in the (September 26, 1978), 43 FR 46093 (October 5, Certification. See Telephone call between Janet 1978) (File No. 4–267) (order granting temporary Angstadt, Acting General Counsel, NYSE Arca, and 19 17 CFR 240.17d–1. approval); 15722 (April 12, 1979), 44 FR 23616 Richard Holley III, Special Counsel, Division of 20 This provision was a condition in the (April 20, 1979) (File No. 4–267) (extension of time Market Regulation, Commission, on August 24, Commission’s approval of a proposed rule change to file amendments); 15941 (June 21, 1979) (File No. 2006. Further, the Certification notes that, with submitted by the PCX (the predecessor to NYSE 4–267), SEC Docket, Vol. 17, no. 14, page 995 (July respect to several of the NYSE Arca rules, NYSE Arca) relating to the acquisition of PCX Holdings, 3, 1979) (further extension of time to file required Arca will be responsible for any significant Inc. by Archipelago. See Securities Exchange Act amendments); 16462 (January 2, 1980), 45 FR 2121 difference between its rule and the comparable Release No. 52497 (September 22, 2005), 70 FR (January 10, 1980) (File No. 4–267) (order granting NASD rule, until such time that amendments to 56949 (September 29, 2005) (SR–PCX–2005–90). In temporary approval); 16591 (February 20, 1980), 45 such rule(s) may be filed with and approved by the that filing, PCX committed to amend the current FR 12573 (February 26, 1980) (File No. 4–267) Commission. NYSE Arca has represented that it NASD–NYSE Arca 17d–2 plan within 90 days of (notice of 1980 Amendment); 16719 (April 2, 1980), shortly intends to file the proposed rule changes the Commission’s approval of that filing. The 90- 45 FR 23841 (April 8, 1980) (File No. 4–267) (order necessary to conform the entirety of these rules to day requirement was subsequently extended three granting temporary approval); and 16858 (May 30, the corresponding NASD rules. See id. times. See Securities Exchange Act Release Nos. 1980), 45 FR 37927 (June 5, 1980) (File No. 4–267) 18 As proposed currently, there is only one 52995 (December 21, 2005), 70 FR 77232 (December (approval order). Federal securities law rule listed on the 29, 2005); 53545 (March 23, 2006), 71 FR 16183 15 15 U.S.C. 78q(d). Certification—Rule 200 of Regulation SHO, 17 CFR (March 30, 2006); and 54046 (June 26, 2006), 71 FR 16 15 U.S.C. 78q(d) and 17 CFR 240.17d–2(c). 242.200. 37965 (July 3, 2006).

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NASD. Therefore, modifications to the It is therefore ordered that NYSE Arca The Securities Industry Association Certification need not be filed with the is relieved of those responsibilities (‘‘SIA’’) has requested that the Commission as an amendment to the allocated to the NASD under the Plan in Commission exempt certain qualified Plan, provided that the Parties are only File No. 4–523. contingent trades from Rule 611(a) of 6 adding to, deleting from, or confirming For the Commission, by the Division of Regulation NMS. According to the SIA changes to NYSE Arca rules in the Market Regulation, pursuant to delegated Exemption Request, a contingent trade Certification in conformance with the authority.22 ‘‘is a multi-component trade involving definition of Common Rules provided in Jill M. Peterson, orders for a security and a related the Plan. However, should NYSE Arca Assistant Secretary. derivative, or, in the alternative, orders or NASD decide to add a NYSE Arca for related securities, that are executed [FR Doc. E6–14784 Filed 9–6–06; 8:45 am] rule to the Certification that is not at or near the same time.’’ 7 The SIA substantially similar to an NASD rule; BILLING CODE 8010–01–P notes that the economics of a contingent delete a NYSE Arca rule from the trade are based on the relationship Certification that is substantially similar SECURITIES AND EXCHANGE between the prices of the security and to an NASD rule; or leave on the COMMISSION the related derivative or security, and Certification a NYSE Arca rule that is no that the execution of one order is longer substantially similar to an NASD [Release No. 34–54389] contingent upon the execution of the rule, then such a change would other order. The SIA states that the constitute an amendment to the Plan, Order Granting an Exemption for sought-after spread or ratio between the which must be filed with the Qualified Contingent Trades From Rule relevant instruments is known and Commission pursuant to Rule 17d–2 611(a) of Regulation NMS Under the specified at the time of the order, and under the Act and noticed for public Securities Exchange Act of 1934 this spread or ratio stands regardless of comment. the prevailing price at the time of As noted above, NYSE Arca and August 31, 2006. execution. Therefore, the parties to NASD have also set forth in the I. Introduction these transactions are focused on the Certification the Federal securities laws, spread or ratio between the transaction and the rules and regulations Pursuant to Rule 611(d) 1 of prices for each of the component thereunder, for which NASD will bear Regulation NMS 2 under the Securities instruments, rather than on the absolute responsibility under the Plan for Exchange Act of 1934 (‘‘Exchange Act’’), price of any single component examining, and enforcing compliance the Securities and Exchange instrument. Because the focus of such by, common members. The Commission Commission (‘‘Commission’’), by order, trades is on the relative prices of the notes that any changes to this list of may exempt from the provisions of Rule component instruments, the price of a Federal securities laws, and the rules 611 of Regulation NMS (‘‘Rule 611’’ or component of a particular trade may or and regulations thereunder, would ‘‘Rule’’), either unconditionally or on may not correspond to the prevailing constitute an amendment to the Plan, specified terms and conditions, any market price of the security. For which must be filed with the person, security, transaction, quotation, contingent trades, the parties to the Commission pursuant to Rule 17d–2 or order, or any class or classes of trade will not execute one side of the under the Act and noticed for public persons, securities, quotations, or trade without the other component or comment. orders, if the Commission determines components being executed in full (or in The Plan also permits NYSE Arca and that such exemption is necessary or ratio) and at the specified spread or NASD to terminate the Plan, subject to appropriate in the public interest, and is ratio.8 notice, for various reasons. The consistent with the protection of The SIA states that contingent trades Commission notes, however, that while investors.3 As discussed below, the play an important role in the investment the Plan permits the Parties to terminate Commission is exempting each NMS and trading strategies of investors. They the Plan, the Parties cannot by stock component of certain qualified are the mechanism through which large themselves reallocate the regulatory contingent trades (as defined below) institutional and broker-dealer responsibilities set forth in the Plan, from Rule 611(a) of Regulation NMS. proprietary traders enter and exit the since Rule 17d–2 under the Act requires market for many securities, including II. Background that any allocation or re-allocation of those that are involved in a merger, regulatory responsibilities be filed with The Commission adopted Regulation those representing different classes of the Commission.21 NMS in June 2005. 4 Rule 611 addresses shares of the same issuer, those with III. Conclusion intermarket trade-throughs of quotations convertible securities that are related to in NMS stocks.5 The Rule applies only the common stock, and those with This Order gives effect to the Plan to quotations that are immediately actively traded equity derivatives such filed with the Commission in File No. accessible through automatic execution. as options.9 The SIA believes that, as a 4–523. The Parties shall notify all general rule, the market view on what members affected by the Plan of their 22 17 CFR 200.30–3(a)(34). constitutes an appropriate spread or rights and obligations under the Plan. 1 17 CFR 242.611(d). It is therefore ordered, pursuant to 2 17 CFR 242.600 et seq. 6 Letter to Nancy M. Morris, Secretary, Sections 17(d) and 11A(a)(3)(B) of the 3 See also 15 U.S.C. 78mm(a)(1) (providing Commission, from Andrew Madoff, SIA Trading Act, that the Plan in File No. 4–523, general authority for Commission to grant Committee, SIA, dated June 21, 2006 (‘‘SIA between NYSE Arca and NASD, filed exemptions from provisions of Exchange Act and Exemption Request’’). 7 pursuant to Rule 17d–2 under the Act, rules thereunder). SIA Exemption Request at 2. 4 See Securities Exchange Act Release No. 51808 8 See SIA Exemption Request at 2. is approved and declared effective. (June 9, 2005), 70 FR 37496 (June 29, 2005) 9 See SIA Exemption Request at 2. In an appendix (‘‘Regulation NMS Adopting Release’’). to its letter, the SIA provided detailed discussions 21 The Commission notes that paragraphs 3 and 5 An ‘‘NMS stock’’ means any security or class of of three types of contingent trades, namely, a risk 13 of the Plan reflect the fact that NASD’s securities, other than an option, for which or merger arbitrage transaction, a convertible responsibilities under the Plan will continue in transaction reports are collected, processed, and security transaction, and a stock option transaction, effect until the Commission approves the made available pursuant to an effective transaction and how these trades would be affected by Rule termination of the Plan. reporting plan. See 17 CFR 242.600(b)(46) and (47). 611. See SIA Exemption Request at 8–12.

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ratio between related securities is less noted that the requirement that the NMS has a market value of at least volatile than the quoted prices for the stock component of a contingent trade $200,000.17 stocks that are part of these contingent be of block size further reduces the risk The Commission notes that a trading trades and, consequently, contingent that the exemption will used center must meet all of the foregoing trades act as a stabilizing factor in the inappropriately for transactions of retail elements of a qualified contingent trade markets.10 size.14 to qualify for the exemption. The To effectively execute a contingent exemption is not restricted to dealers or trade, its component orders must be III. Discussion the over-the-counter market. It can be executed in full or in ratio 11 at its After careful consideration and for the used by any trading center that meets predetermined spread or ratio. reasons discussed below, the the terms of the exemption. According to the SIA, parties seeking to Commission hereby grants an Rule 611 requires trading centers to effect contingent trades involving NMS exemption from Rule 611(a) for any establish, maintain, and enforce written stocks in many instances would be able trade-throughs caused by the execution policies and procedures that are to comply with the Rule, but in other of an order involving one or more NMS reasonably designed to prevent trade- instances—such as trades involving two stocks (each an ‘‘Exempted NMS Stock throughs, or, if relying on one of the or more NMS stocks or circumstances in Transaction’’) that are components of a Rule’s exceptions, that are reasonably which there was insufficient flexibility qualified contingent trade. A ‘‘qualified designed to assure compliance with the 18 to adjust the execution price of the non- contingent trade’’ is a transaction exception. In addition, a trading NMS stock component of a contingent consisting of two or more component center is required to regularly surveil to trade—compliance with Rule 611 would orders, executed as agent or principal, ascertain the effectiveness of its policies not be possible. In such instances, if the where: and procedures and to take prompt designated price of an NMS stock that action to remedy deficiencies.19 The (1) At least one component order is in was a component order of a proposed Rule also includes a number of an NMS stock; contingent trade was inferior to a exceptions, such as intermarket sweep protected bid or offer, as relevant, the (2) All components are effected with orders 20 and orders executed at Rule would require the better protected a product or price contingency that ‘‘benchmark’’ prices that were not bids or offers to be satisfied prior to the either has been agreed to by the reasonably determinable at the time the execution of the NMS stock component respective counterparties or arranged for commitment to execute the order was of the contingent trade, thus preventing by a broker-dealer as principal or agent; made.21 Without an exemption, the trade from being executed in (3) The execution of one component however, qualified contingent trades accordance with the original terms. The is contingent upon the execution of all generally would be subject to the Rule. SIA believes that, by breaking up one or other components at or near the same As discussed in the Regulation NMS more components of the contingent time; Adopting Release, the Commission trade and requiring that such (4) The specific relationship between previously considered comments component(s) be separately executed the component orders (e.g., the spread favoring a general exception from the from the entire trade package and at between the prices of the component Rule for broad categories of transactions, prices inappropriate for the desired orders) is determined at the time the variously described as ‘‘contingency’’ trading strategy, Rule 611 would contingent order is placed; transactions, ‘‘arbitrage’’ transactions, effectively undermine the contingent (5) The component orders bear a ‘‘spread’’ transactions, and transactions 22 aspect of the trade and leave one or derivative relationship to one another, priced with reference to derivatives. It more parties to the trade ‘‘out of represent different classes of shares of noted, however, that any exception for hedge.’’ 12 the same issuer, or involve the securities such a broad category of transactions Without an exemption from Rule 611, of participants in mergers or with potentially could unduly detract from the SIA believes that customers might intentions to merge that have been the objectives of Rule 611. Therefore, be unable to complete contingent trades. announced or since cancelled; 15 when adopting Regulation NMS, the In particular, dealers might be unable to Commission stated that the most (6) The Exempted NMS Stock commit capital to those customers who appropriate process to handle Transaction is fully hedged (without requested it, which could reduce or suggestions that specific types of regard to any prior existing position) as eliminate this type of trading activity transactions should be excluded from a result of the other components of the and remove liquidity from the market. the coverage of the Rule would be contingent trade; 16 and The SIA believes that such a result through the exemptive procedure set would disadvantage the market as a (7) The Exempted NMS Stock forth in paragraph (d) of the Rule. whole.13 Transaction that is part of a contingent The Commission recognizes that In its exemption request, the SIA trade involves at least 10,000 shares or contingent trades can be useful trading states that the requested relief is tools for investors and other market narrowly drawn, noting that the number 14 See SIA Exemption Request at 6. participants, particularly those who of qualified contingent trades is small in 15 Transactions involving securities of trade the securities of issuers involved comparison to the overall number of participants in mergers or with intentions to merge that have been announced would meet this aspect in mergers, different classes of shares of trades executed in NMS stocks. It of the requested exemption. Transactions involving the same issuer, convertible securities, therefore believes that the number of cancelled mergers, however, would constitute and equity derivatives such as options. possible exempted trade-throughs qualified contingent trades only to the extent they involve the unwinding of a pre-existing position in would similarly be small. The SIA also 17 See 17 CFR 242.600(b)(9) (defining ‘‘block size’’ the merger participants’ shares. Statistical arbitrage with respect to an order as at least 10,000 shares transactions, absent some other derivative or merger 10 or $200,000 in market value). See SIA Exemption Request at 2–3. arbitrage relationship between component orders, 18 11 ‘‘In ratio’’ clarifies that component orders of a would not satisfy this element of the definition of See 17 CFR 242.611(a)(1). contingent trade do not necessarily have to be a qualified contingent trade. 19 See 17 CFR 242.611(a)(2). executed in full, but any partial executions must be 16 A trading center may demonstrate that an 20 See 17 CFR 242.611(b)(5) and (6). in a predetermined ratio. Exempted NMS Stock Transaction is fully hedged 21 See 17 CFR 242.611(b)(7). 12 See SIA Exemption Request at 3. under the circumstances based on the use of 22 Regulation NMS Adopting Release, 70 FR at 13 See SIA Exemption Request at 4. reasonable risk-valuation methodologies. 37528.

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Those who engage in contingent trades components of the contingent trade.23 In IV. Conclusion can benefit the market as a whole by addition, there must be a specified It is hereby ordered, pursuant to Rule studying the relationships between the relationship between the instruments 611(d) of Regulation NMS, that each prices of such securities and executing involved in the component orders. The NMS stock component of qualified contingent trades when they believe component orders must bear a contingent trades, as defined above, such relationships are out of line with derivative relationship to one another, shall be exempt from Rule 611(a) of what they believe to be fair value. represent different classes of shares of Regulation NMS. Contingent trades therefore are one the same issuer, or involve the securities of participants in mergers or with For the Commission, by the Division of example of a wide variety of trades that Market Regulation, pursuant to delegated intentions to merge that have been contribute to the efficient functioning of authority.26 announced or since cancelled.24 The the securities markets and the price Nancy M. Morris, exemption does not apply to contingent discovery process. The Commission trades, such as statistical arbitrage Secretary. believes that qualified contingent trades transactions, if their components do not [FR Doc. E6–14806 Filed 9–6–06; 8:45 am] potentially could become too risky and involve instruments with a specified BILLING CODE 8010–01–P costly to be employed successfully if relationship. Finally, the Exempted they were required to meet the trade- NMS Stock Transaction must be of through provisions of Rule 611. Absent block-size, involving at least 10,000 SECURITIES AND EXCHANGE an exemption, participants in shares or having a market value of at COMMISSION contingent trades often would need to least $200,000. This element further [Release No. 34–54386; File No. SR–Amex– use the Rule’s intermarket sweep order limits the exemption to those 2006–75] exception and route orders to execute transactions where an exemption is against protected quotations with better likely to be most needed to facilitate the Self-Regulatory Organizations; prices than an NMS stock component of trading strategies of informed American Stock Exchange LLC; Notice the contingent trade. Any executions of customers. of Filing and Immediate Effectiveness these routed orders could throw the Accordingly, the exemption should of Proposed Rule Change Relating to participants ‘‘out of hedge’’ and provide appropriate relief in those the Extension of a Pilot Program That necessitate additional transactions in an circumstances where compliance with Increases Position and Exercise Limits attempt to correct the imbalance. As a Rule 611 could be most difficult as a for Equity Options and Options on the practical matter, the difficulty of practical matter, but also is limited to a Nasdaq-100 Tracking Stock maintaining a hedge, and the risk of small number of transactions that August 30, 2006. falling out of hedge, could dissuade should not unduly undermine the Pursuant to Section 19(b)(1) of the participants from engaging in contingent objectives of Rule 611.25 In this regard, Securities Exchange Act of 1934 the Commission notes that the trades, or at least raise the cost of such (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 exception is premised on an expectation trades. The elimination or reduction of notice is hereby given that on August that qualified contingent trades will this trading strategy potentially could 15, 2006, the American Stock Exchange continue to be used for essentially the remove liquidity from the market. The LLC (‘‘Amex’’ or ‘‘Exchange’’) filed with same valid trading purposes as they are Commission therefore has determined to the Securities and Exchange currently and as described in the SIA exempt qualified exempted trades from Commission (‘‘Commission’’) the Exemption Request. A material change Rule 611. proposed rule change as described in in the nature or frequency of such trades To minimize the effect of an Items I and II below, which Items have could cause the Commission to exemption on the objectives of Rule 611, been prepared by the Amex. The reconsider the terms of the exemption. Exchange has filed the proposal as a the exemption is narrowly drawn to For the foregoing reasons, the ‘‘non-controversial’’ rule change encompass only those trades most in Commission finds that granting an pursuant to Section 19(b)(3)(A) of the need of relief to remain part of a viable exemption from Rule 611 for qualified Act 3 and Rule 19b–4(f)(6) thereunder,4 trading strategy and where execution of contingent trades, as defined above, is which renders it effective upon filing the NMS stock component at a trade- necessary and appropriate in the public with the Commission. The Commission through price is reasonably necessary to interest, and is consistent with the is publishing this notice to solicit effect the contingent trade. In particular, protection of investors. elements (1) through (6) of the comments on the proposed rule change from interested persons. exemption, as set forth above, require a 23 The requirement that an Exempted NMS Stock close connection between any Exempted Transaction be fully hedged should significantly I. Self-Regulatory Organization’s NMS Stock Transaction and the other limit the scope of the exemption. For example, a Statement of the Terms of Substance of components of a qualified contingent contingent trade would not qualify for the exemption if an NMS stock transaction was the the Proposed Rule Change trade. This close connection should purchase or sale of 50,000 shares, and the only both significantly limit the number of other component was the purchase or sale of a The Exchange seeks a six-month Exempted NMS Stock Transactions and small quantity of options on the NMS stock. A extension of its pilot program increasing help assure that the exemption applies trading center may demonstrate that an Exempted the standard position and exercise NMS Stock Transaction is fully hedged under the limits for options on the QQQQ and only to those trades most in need of circumstances based on the use of reasonable risk- flexibility to be executed efficiently. For valuation methodologies. equity option classes traded on the example, the execution of one 24 Transactions involving cancelled mergers Exchange (‘‘Pilot Program’’). The text of component of the transaction must be would be qualified contingent trades only to the the proposed rule change is available on extent that they involve the unwinding of a pre- the Amex’s Web site (http:// contingent upon the execution of all existing position in the merger participants’ shares. other components at or near the same 25 See SIA Exemption Request at 5–6 26 17 CFR 200.30–3(a)(82). time, and the Exempted NMS Stock (representing that the number of qualified 1 15 U.S.C. 78s(b)(1). Transaction must be fully hedged contingent trades is small in comparison to the overall number of trades executed in NMS stocks 2 17 CFR 240.19b–4. (without regard to any prior existing and, therefore, the overall number of possible 3 15 U.S.C. 78s(b)(3)(A). position) as a result of the other exempted trade-throughs is similarly small). 4 17 CFR 240.19b–4(f)(6).

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www.amex.com), at the Amex’s may be examined at the places specified standard position and exercise limits for principal office, and at the in Item IV below. The Exchange has options on the QQQQ and equity option Commission’s Public Reference Room. prepared summaries, set forth in classes traded on the Exchange for a Sections A, B, and C below, of the most II. Self-Regulatory Organization’s time period of six months from significant aspects of such statements. Statement of the Purpose of, and September 1, 2006, through and Statutory Basis for, the Proposed Rule A. Self-Regulatory Organization’s including March 1, 2007. Change Statement of the Purpose of, and In March 2005, the Exchange In its filing with the Commission, the Statutory Basis for, the Proposed Rule established the Pilot Program for a six- Amex included statements concerning Change month period.5 Under the Pilot the purpose of and basis for the 1. Purpose Program, position and exercise limits for proposed rule change and discussed any options on the QQQQ and equity comments it received on the proposed The Exchange is requesting to extend options classes traded on the Exchange rule change. The text of these statements its current Pilot Program increasing the were increased to the following levels:

Current equity option contract limit 6 Pilot program equity option contract limit

13,500 25,000 22,500 50,000 231,500 75,000 60,000 200,000 75,000 250,000

Current QQQQ option contract limit Pilot program QQQQ option contract limit

300,000 900,000 6 Except when the Pilot Program is in effect.

The standard position limits were last The Exchange has not encountered necessary or appropriate in furtherance increased on December 31, 1998.7 Since any problems or difficulties relating to of the purposes of the Act. that time there has been a steady the Pilot Program since its inception. C. Self-Regulatory Organization’s The instant proposed rule change makes increase in the number of accounts that: Statement on Comments on the no substantive change to the Pilot (a) Approach the position limit; (b) Proposed Rule Change Received From Program other than to extend it for six exceed the position limit; and (c) are Members, Participants, or Others granted an exemption to the standard months through and including March 1, limit. Several member firms have 2007. No written comments were solicited petitioned the options exchanges to 2. Statutory Basis or received by the Exchange on this either eliminate position limits, or in proposal. lieu of total elimination, increase the The Exchange believes that its proposal is consistent with Section 6(b) III. Date of Effectiveness of the current levels and expand the available of the Act 8 in general and furthers the Proposed Rule Change and Timing for hedge exemptions. A review of available objective of Section 6(b)(5) of the Act 9 Commission Action data indicates that the majority of in particular, in that it is designed to accounts that maintain sizable positions prevent fraudulent and manipulative Because the foregoing rule change are in those option classes subject to the acts and practices, to promote just and does not: (1) Significantly affect the 60,000 and 75,000 tier limits. There also equitable principles of trade, to foster protection of investors or the public has been an increase in the number of cooperation and coordination with interest; (2) impose any significant accounts that maintain sizable positions persons engaged in facilitating burden on competition; and (3) become in the lower three tiers. In addition, transactions in securities, and to remove operative for 30 days from the date of overall volume in the options market impediments to and perfect the this filing, or such shorter time as the has continually increased over the past mechanism of a free and open market Commission may designate, it has five years. The Exchange believes that and a national market system. become effective pursuant to Section the increase in options volume and lack 19(b)(3)(A) of the Act 10 and Rule 19b– B. Self-Regulatory Organization’s 11 of evidence of market manipulation 4(f)(6) thereunder. Statement on Burden on Competition occurrences over the past twenty years A proposed rule change filed under justifies the proposed increases in the The Exchange believes that the Rule 19b–4(f)(6) normally may not position and exercise limits. proposed rule change would impose no become operative prior to 30 days after burden on competition that is not

5 See Securities Exchange Act Release No. 51316 of File No. SR–Amex–2006–07); and 52260 (August 7 See Securities Exchange Act Release No. 40875 (March 3, 2005), 70 FR 12251 (March 11, 2005) 15, 2005), 70 FR 48991 (August 22, 2005) (notice (December 31, 1998), 64 FR 1842 (January 12, 1999) (notice of filing and immediate effectiveness of File of filing and immediate effectiveness of File No. (File No. SR–Amex–98–22) (approval of increase in No. SR–Amex–2005–029). The Pilot Program was SR–Amex–2005–082). Telephone conversation position limits and exercise limits). extended twice and is due to expire on September between Nyieri Nazarian, Assistant General 8 15 U.S.C. 78f(b). 1, 2006. See Securities Exchange Act Release Nos. Counsel, Amex, and Theodore S. Venuti, Attorney, 9 15 U.S.C. 78f(b)(5). 53349 (February 22, 2006), 71 FR 10571 (March 1, Division of Market Regulation, Commission, on 10 15 U.S.C. 78s(b)(3)(A). 2006) (notice of filing and immediate effectiveness August 16, 2006. 11 17 CFR 240.19b–4(f)(6).

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the date of filing.12 However, Rule 19b– with respect to the proposed rule Act 3 and Rule 19b–4(f)(6) thereunder,4 4(f)(6)(iii) 13 permits the Commission to change that are filed with the which renders it effective upon filing designate a shorter time if such action Commission, and all written with the Commission. The Commission is consistent with the protection of communications relating to the is publishing this notice to solicit investors and the public interest. The proposed rule change between the comments on the proposed rule change Exchange provided the Commission Commission and any person, other than from interested persons. with written notice of its intent to file those that may be withheld from the I. Self-Regulatory Organization’s this proposed rule change at least five public in accordance with the Statement of the Terms of Substance of business days prior to the date of filing provisions of 5 U.S.C. 552, will be the Proposed Rule Change the proposed rule change. In addition, available for inspection and copying in the Exchange has requested that the the Commission’s Public Reference The BSE proposes to amend the rules Commission waive the 30-day pre- Room. Copies of such filing will also be of the Boston Options Exchange operative delay. The Commission available for inspection and copying at (‘‘BOX’’), an options trading facility of believes that waiving the 30-day pre- the principal office of the Amex. All the BSE, to extend its current pilot operative delay is consistent with the comments received will be posted program to increase the standard protection of investors and in the public without change; the Commission does position and exercise limits for equity interest because it will allow the Pilot not edit personal identifying option contracts and options on the Program to continue uninterrupted.14 information from submissions. You Nasdaq–100 Index Tracking Stock At any time within 60 days of the should submit only information that (‘‘QQQQ’’) (‘‘Pilot Program’’). The text filing of the proposed rule change, the you wish to make available publicly. All of the proposed rule change is available Commission may summarily abrogate submissions should refer to File No. on the BSE’s Web site (http:// such rule change if it appears to the SR–Amex–2006–75 and should be www.bostonstock.com), at the BSE’s Commission that such action is submitted on or before September 28, principal office, and at the necessary or appropriate in the public 2006. Commission’s Public Reference Room. interest, for the protection of investors, or otherwise in furtherance of the Act. For the Commission, by the Division of II. Self-Regulatory Organization’s Market Regulation, pursuant to delegated Statement of the Purpose of, and IV. Solicitation of Comments authority.15 Statutory Basis for, the Proposed Rule Interested persons are invited to Nancy M. Morris, Change Secretary. submit written data, views, and In its filing with the Commission, the arguments concerning the foregoing, [FR Doc. E6–14794 Filed 9–6–06; 8:45 am] BSE included statements concerning the including whether the proposed rule BILLING CODE 8010–01–P purpose of and basis for the proposed change is consistent with the Act. rule change and discussed any Comments may be submitted by any of comments it received on the proposed SECURITIES AND EXCHANGE the following methods: rule change. The text of these statements COMMISSION Electronic Comments may be examined at the places specified • Use the Commission’s Internet in Item IV below. The Exchange has [Release No. 34–54388; File No. SR–BSE– prepared summaries, set forth in comment form (http://www.sec.gov/ 2006–32] rules/sro.shtml); or Sections A, B, and C below, of the most • Send an e-mail to rule- Self-Regulatory Organizations; Boston significant aspects of such statements. [email protected]. Please include File Stock Exchange, Inc.; Notice of Filing A. Self-Regulatory Organization’s No. SR–Amex–2006–75 on the subject and Immediate Effectiveness of Statement of the Purpose of, and line. Proposed Rule Change Relating to Its Statutory Basis for, the Proposed Rule Paper Comments Boston Options Exchange Trading Change Rules Regarding the Extension of a • Send paper comments in triplicate Pilot Program That Increases the 1. Purpose to Nancy M. Morris, Secretary, Standard Position and Exercise Limits The Pilot Program provides for an Securities and Exchange Commission, for Certain Options Traded increase to the standard position and Station Place, 100 F Street, NE, exercise limits for equity option Washington, DC 20549–1090. August 30, 2006. contracts and for options on QQQQs for All submissions should refer to File No. Pursuant to Section 19(b)(1) of the a six-month period.5 Specifically, the SR–Amex–2006–75. This file number Securities Exchange Act of 1934 Pilot Program increased the applicable should be included on the subject line (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 position and exercise limits for equity if e-mail is used. To help the notice is hereby given that on August Commission process and review your 18, 2006, the Boston Stock Exchange, 3 15 U.S.C. 78s(b)(3)(A). comments more efficiently, please use Inc. (‘‘BSE’’ or ‘‘Exchange’’) filed with 4 17 CFR 240.19b–4(f)(6). only one method. The Commission will the Securities and Exchange 5 The Pilot Program, which commenced on March post all comments on the Commission’s 3, 2005, was extended on August 15, 2005 and Commission (‘‘Commission’’) the February 22, 2006, and is set to expire on Internet Web site (http://www.sec.gov/ proposed rule change as described in September 1, 2006. See Securities Exchange Act rules/sro.shtml). Copies of the Items I and II below, which Items have Release Nos. 51317 (March 3, 2005), 70 FR 12254 submission, all subsequent been prepared by the BSE. The (March 11, 2005) (notice of filing and immediate amendments, all written statements effectiveness of File No. SR–BSE–2005–10) (‘‘Pilot Exchange has filed the proposal as a Program Notice’’); 52264 (August 15, 2005), 70 FR ‘‘non-controversial’’ rule change 48992 (August 22, 2005) (notice of filing and 12 17 CFR 240.19b–4(f)(6)(iii). pursuant to Section 19(b)(3)(A) of the immediate effectiveness of File No. SR–BSE–2005– 13 Id. 37, which extended the Pilot Program); and 53347 14 For purposes only of waiving the pre-operative (February 22, 2006), 71 FR 10573 (March 1, 2006) delay, the Commission has considered the proposed 15 17 CFR 200.30–3(a)(12). (notice of filing and immediate effectiveness of File rule’s impact on efficiency, competition, and capital 1 15 U.S.C. 78s(b)(1). No. SR–BSE–2006–07, which extended the Pilot formation. 15 U.S.C. 78c(f). 2 17 CFR 240.19b–4. Program).

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options and options on the QQQQ to the following levels:

Pilot program equity option contract limit6 Pilot program equity option contract limit

13,500 25,000 22,500 50,000 31,500 75,000 60,000 200,000 75,000 250,000

Current QQQQ option contract limit Pilot program QQQQ option contract limit

300,000 900,000

The Exchange believes that extending Commission may designate, it has • Send an e-mail to rule- the Pilot Program for six months is become effective pursuant to Section [email protected]. Please include File warranted due to positive feedback from 19(b)(3)(A) of the Act 10 and Rule 19b– No. SR–BSE–2006–32 on the subject members and for the reasons cited in the 4(f)(6) thereunder.11 line. original rule filing that proposed the A proposed rule change filed under Paper Comments adoption of the Pilot Program.7 In Rule 19b–4(f)(6) normally may not addition, BOX has not encountered any become operative prior to 30 days after • Send paper comments in triplicate problems or difficulties relating to the the date of filing.12 However, Rule 19b– to Nancy M. Morris, Secretary, Pilot Program since its inception. For 4(f)(6)(iii) 13 permits the Commission to Securities and Exchange Commission, these reasons, the BSE requests that the designate a shorter time if such action Station Place, 100 F Street, NE, Commission extend the Pilot Program is consistent with the protection of Washington, DC 20549–1090. for an additional six months, through investors and the public interest. The All submissions should refer to File No. and including March 1, 2007. Exchange provided the Commission SR–BSE–2006–32. This file number 2. Statutory Basis with written notice of its intent to file should be included on the subject line this proposed rule change at least five if e-mail is used. To help the The Exchange believes that its business days prior to the date of filing Commission process and review your proposal is consistent with Section 6(b) the proposed rule change. In addition, comments more efficiently, please use of the Act,8 in general, and furthers the the Exchange has requested that the only one method. The Commission will objective of Section 6(b)(5) of the Act,9 Commission waive the 30-day pre- post all comments on the Commission’s in particular, in that it is designed to operative delay. The Commission Internet Web site (http://www.sec.gov/ promote just and equitable principles of believes that waiving the 30-day pre- rules/sro.shtml). Copies of the trade and to protect investors and the operative delay is consistent with the submission, all subsequent public interest. protection of investors and in the public amendments, all written statements B. Self-Regulatory Organization’s interest because it will allow the Pilot with respect to the proposed rule Statement on Burden on Competition Program to continue uninterrupted.14 change that are filed with the The Exchange does not believe that At any time within 60 days of the Commission, and all written the proposed rule change will impose filing of the proposed rule change, the communications relating to the any burden on competition. Commission may summarily abrogate proposed rule change between the such rule change if it appears to the Commission and any person, other than C. Self-Regulatory Organization’s Commission that such action is those that may be withheld from the Statement on Comments on the necessary or appropriate in the public public in accordance with the Proposed Rule Change Received From interest, for the protection of investors, provisions of 5 U.S.C. 552, will be Members, Participants, or Others or otherwise in furtherance of the Act. available for inspection and copying in The Exchange has neither solicited IV. Solicitation of Comments the Commission’s Public Reference nor received comments on the proposed Room. Copies of such filing will also be rule change. Interested persons are invited to available for inspection and copying at submit written data, views, and the principal office of the BSE. All III. Date of Effectiveness of the arguments concerning the foregoing, comments received will be posted Proposed Rule Change and Timing for including whether the proposed rule without change; the Commission does Commission Action change is consistent with the Act. not edit personal identifying Because the foregoing rule change Comments may be submitted by any of information from submissions. You does not: (1) Significantly affect the the following methods: should submit only information that protection of investors or the public you wish to make available publicly. All Electronic Comments interest; (2) impose any significant submissions should refer to File No. burden on competition; and (3) become • Use the Commission’s Internet SR–BSE–2006–32 and should be operative for 30 days from the date of comment form (http://www.sec.gov/ submitted on or before September 28, this filing, or such shorter time as the rules/sro.shtml); or 2006.

6 Except when the Pilot Program is in effect. 10 15 U.S.C. 78s(b)(3)(A). 14 For purposes only of waiving the pre-operative 7 See Pilot Program Notice, supra note 5. 11 17 CFR 240.19b–4(f)(6). delay, the Commission has considered the proposed 8 15 U.S.C. 78f(b). 12 17 CFR 240.19b–4(f)(6)(iii). rule’s impact on efficiency, competition, and capital 9 15 U.S.C. 78f(b)(5). 13 Id. formation. 15 U.S.C. 78c(f).

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For the Commission, by the Division of II. Self-Regulatory Organization’s III. Date of Effectiveness of the Market Regulation, pursuant to delegated Statement of the Purpose of, and Proposed Rule Change and Timing for authority.15 Statutory Basis for, the Proposed Rule Commission Action Nancy M. Morris, Change The foregoing rule change has become Secretary. In its filing with the Commission, the effective pursuant to Section [FR Doc. E6–14792 Filed 9–6–06; 8:45 am] Exchange included statements 19(b)(3)(A)(ii) of the Act 7 and BILLING CODE 8010–01–P concerning the purpose of, and basis for, subparagraph (f)(2) of Rule 19b–4 the proposed rule change and discussed thereunder 8 because it establishes or any comments it received on the changes a due, fee, or other charge. At SECURITIES AND EXCHANGE proposal. The text of these statements any time within 60 days of the filing of COMMISSION may be examined at the places specified the proposed rule change, the in Item IV below. The Exchange has Commission may summarily abrogate prepared summaries, set forth in such rule change if it appears to the [Release No. 34–54383; File No. SR–CBOE– Sections A, B, and C below, of the most Commission that such action is 2006–75] significant aspects of such statements. necessary or appropriate in the public interest, for the protection of investors, Self-Regulatory Organizations; A. Self-Regulatory Organization’s or otherwise in furtherance of the Chicago Board Options Exchange, Statement of the Purpose of, and purposes of the Act. Inc.; Notice of Filing and Immediate Statutory Basis for, the Proposed Rule Effectiveness of a Proposed Rule Change IV. Solicitation of Comments Change Relating to the Extension of Its 1. Purpose Interested persons are invited to Dividend, Merger, and Short Stock submit written data, views, and The Exchange currently caps market- Interest Strategies Fee Cap Pilot arguments concerning the foregoing, maker, firm, and broker-dealer Program including whether the proposed rule transaction fees associated with change is consistent with the Act. dividend, merger and short stock August 30, 2006. Comments may be submitted by any of interest strategies, as described in Pursuant to Section 19(b)(1) of the the following methods: Footnote 13 of the CBOE Fees Schedule Securities Exchange Act of 1934 (‘‘Strategy Fee Cap’’). The Strategy Fee Electronic Comments (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Cap is in effect as a pilot program that • Use the Commission’s Internet notice is hereby given that on August is due to expire on September 1, 2006. 29, 2006, the Chicago Board Options comment form (http://www.sec.gov/ The Exchange proposes to extend the rules/sro.shtml); or Exchange, Inc. (‘‘CBOE’’ or ‘‘Exchange’’) Strategy Fee Cap program until March 1, • Send an e-mail to rule- filed with the Securities and Exchange 2007. No other changes are proposed. [email protected]. Please include File Commission (‘‘Commission’’) the The Exchange believes that extension of Number SR–CBOE–2006–75 on the proposed rule change as described in the Strategy Fee Cap program should subject line. Items I and II below, which items have attract additional liquidity and permit been prepared by CBOE. CBOE has the Exchange to remain competitive for Paper Comments designated the proposed rule change as these types of strategies. • Send paper comments in triplicate one establishing or changing a due, fee, 2. Statutory Basis to Nancy M. Morris, Secretary, or other charge, pursuant to Section Securities and Exchange Commission, The Exchange believes that its 19(b)(3)(A)(ii) of the Act 3 and Rule 19b– 100 F Street, NE., Washington, DC proposal to amend its schedule of fees 4(f)(2) thereunder,4 which renders the 20549–1090. is consistent with Section 6(b) of the All submissions should refer to File proposal effective upon filing with the Act 5 in general, and furthers the Number SR–CBOE–2006–75. This file Commission. The Commission is objectives of Section 6(b)(4) of the Act 6 number should be included on the publishing this notice to solicit in particular, in that it is designed to subject line if e-mail is used. To help the comments on the proposed rule change provide for the equitable allocation of Commission process and review your from interested persons. reasonable dues, fees, and other charges comments more efficiently, please use among CBOE members and other I. Self-Regulatory Organization’s only one method. The Commission will persons using its facilities. Statement of the Terms of Substance of post all comments on the Commission’s the Proposed Rule Change B. Self-Regulatory Organization’s Internet Web site (http://www.sec.gov/ Statement on Burden on Competition rules/sro.shtml). Copies of the CBOE proposes to amend its Fees submission, all subsequent Schedule to extend until March 1, 2007, CBOE does not believe that the proposed rule change will impose any amendments, all written statements the dividend, merger and short stock burden on competition that is not with respect to the proposed rule interest strategies fee cap program. The necessary or appropriate in furtherance change that are filed with the text of the proposed rule change is of the purposes of the Act. Commission, and all written available on CBOE’s Web site at communications relating to the http://www.cboe.com, at the Office of C. Self-Regulatory Organization’s proposed rule change between the the Secretary at CBOE, and at the Statement on Comments on the Commission and any person, other than Commission’s Public Reference Room. Proposed Rule Change Received From those that may be withheld from the Members, Participants, or Others public in accordance with the No written comments were solicited provisions of 5 U.S.C. 552, will be 15 17 CFR 200.30–3(a)(12). or received on the proposed rule available for inspection and copying in 1 15 U.S.C. 78s(b)(1). change. the Commission’s Public Reference 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 5 15 U.S.C. 78f(b). 7 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 6 15 U.S.C. 78f(b)(4). 8 17 CFR 240.19b–4(f)(2).

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Room. Copies of such filing also will be On August 11, 2006, the Exchange compliance date for Regulation NMS available for inspection and copying at filed Amendment No. 2 to the proposed under the Act (‘‘Regulation NMS’’) 10 the principal office of CBOE. All rule change.5 On August 18, 2006, the has been reached, the System would comments received will be posted Exchange filed Amendment No. 3 to the permit orders to be marked as without change; the Commission does proposed rule change.6 This order intermarket sweep orders (‘‘ISOs’’) not edit personal identifying approves the proposed rule change, as pursuant to Regulation NMS and also information from submissions. You amended by Amendment No. 1. permit incoming ISOs from other should submit only information that Simultaneously, the Commission is trading centers.11 Proposed NSX Rule you wish to make available publicly. All providing notice of filing of Amendment 11.12 sets forth restrictions for cross submissions should refer to File Nos. 2 and 3 and granting accelerated messages (‘‘Crosses’’) generally, as well Number SR–CBOE–2006–75 and should approval of Amendment Nos. 2 and 3. as additional requirements for Midpoint be submitted on or before September 28, Crosses,12 Clean Crosses,13 and Cross/ II. Description 2006. Sweeps.14 For the Commission, by the Division of The Exchange proposes to amend its Proposed NSX Rule 11.13 would Market Regulation, pursuant to delegated rules in order to implement a new permit participation in the System via authority.9 trading System to replace the automatic execution or order delivery. Nancy M. Morris, Exchange’s current NSTS. Specifically, To be eligible for the order delivery Secretary. the proposed System would provide a functionality, a participant would have [FR Doc. E6–14805 Filed 9–6–06; 8:45 am] new trading platform and structure for to demonstrate to the Exchange that it the Exchange with price-time priority BILLING CODE 8010–01–P could automatically process an inbound execution without any priority of order and respond immediately. execution distinction made for principal Proposed Interpretation and Policy .01 SECURITIES AND EXCHANGE or agency orders.7 The Exchange to Rule 11.13 would define COMMISSION proposes to substantially revise Chapter ‘‘immediately’’ as having system XI (Trading Rules) of its rules in order response times ‘‘that generally meet or [Release No. 34–54391; File No. SR–NSX– to incorporate new priority rules and 2006–08] exceed industry standards,’’ which NSX other features within the System. These believes currently to be 100 Self-Regulatory Organizations; rules relate to: hours of trading; units of milliseconds.15 National Stock Exchange, Inc.; Order trading; price variations; securities In its proposed revisions to Chapter Approving a Proposed Rule Change eligible for trading; registration of XI of its rules, the Exchange also and Amendment No. 1 Thereto and market makers; obligations of market incorporated a number of provisions Notice of Filing and Order Granting maker authorized traders; registration of relating to Regulation NMS—in addition Accelerated Approval to Amendment market makers in a security; obligations to ISOs—including proposed NSX Rule Nos. 2 and 3 Thereto to Amend Its of market makers; access; authorized 11.22 relating to locking or crossing Trading Rules to Provide for a Price- traders; orders and modifiers; cross quotations in NMS stocks. Also, Time Priority Market and Other Related messages; proprietary and agency proposed NSX Rule 11.15(d) provides Changes orders, and modes of order interaction; that the System would be operated as an priority of orders; order execution; trade ‘‘automated market center’’ (as defined August 31, 2006. execution and reporting; clearance and by Regulation NMS) and would display I. Introduction settlement; limitation of liability; clearly ‘‘automated quotations’’ (as defined by erroneous executions; trading halts due Regulation NMS) at all times except in On June 6, 2006, the National Stock to extraordinary market volatility; short Exchange, Inc. (‘‘NSX’’ or ‘‘Exchange’’) the event that a systems malfunction sales; locking or crossing quotations in renders the System incapable of filed with the Securities and Exchange NMS stocks; and riskless principal Commission (‘‘Commission’’), pursuant displaying automated quotations. In transactions.8 such a case, the Exchange would to Section 19(b)(1) of the Securities Under proposed NSX Rule 11.11, the 1 communicate to ETP Holders its Exchange Act of 1934 (‘‘Act’’) and Rule System would include a number of new 2 procedures concerning a change from 19b–4 thereunder, a proposed rule order types, including different types of change to amend its rules in order to automated to manual quotations. sweep orders (e.g., Protected Sweep In addition to substantially revising incorporate a price-time priority Orders, Full Sweep Orders, Destination automatic execution trading system Chapter XI, the Exchange also made Sweep Orders) 9 that direct the revisions and proposed new rules in (‘‘System’’) to replace the Exchange’s Exchange to route an order, or a relevant current system, the National Securities other chapters of its rules. Proposed portion thereof, to away trading centers. NSX Rule 1.4 details the effective time Trading System (‘‘NSTS’’). On June 22, In addition, once the relevant 2006, the Exchange filed Amendment for certain rules while proposed NSX No. 1 to the proposed rule change. The Rule 1.5 includes new definitions for a Execution Services Holdings, Inc. (‘‘OES’’), to number of terms including, among proposed rule change, as amended, was Nancy M. Morris, Secretary, Commission, dated published for comment in the Federal July 19, 2006 (‘‘OES Letter’’). others, ‘‘Authorized Trader,’’ ‘‘Protected Register on July 6, 2006.3 The 5 The text of Amendment No. 2 is available on NBBO,’’ ‘‘protected quotation,’’ Commission received one comment NSX’s Web site (http://www.nsx.com), at the ‘‘Sponsored Participants,’’ and 4 principal office of NSX, and at the Commission’s ‘‘Sponsoring ETP Holder.’’ letter on the proposal. Public Reference Room. See Section II, infra, for a discussion of Amendment No. 2. 9 17 CFR 200.30–3(a)(12). 6 The text of Amendment No. 3 is available on 10 17 CFR 242.600 et seq. See 17 CFR 242.610 and 1 15 U.S.C. 78s(b)(1). NSX’s Web site (http://www.nsx.com), at the 17 CFR 242.611. 2 17 CFR 240.19b–4. principal office of NSX, and at the Commission’s 11 See proposed NSX Rule 11.11(c)(7)(iv) and 3 See Securities Exchange Act Release No. 54044 Public Reference Room. See Section II, infra, for a (c)(8). (June 26, 2006), 71 FR 38452 (‘‘Trading Rules discussion of Amendment No. 3. 12 See proposed NSX Rule 11.12(c). Notice’’). 7 See proposed NSX Rules 11.13 and 11.14. 13 See proposed NSX Rule 11.12(d). 4 See letter from Michael A. Barth, Senior Vice 8 See proposed NSX Rules 11.1–11.23. 14 See proposed NSX Rule 11.12(f). President, Exchanges and Market Centers, Order 9 See proposed NSX Rule 11.11(c)(7). 15 See Amendment No. 2, supra, note 5.

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The Trading Rules Notice also found in NSX Rule 12.6 applied to of the self-help provisions of Regulation included a request by the Exchange for Cross/Sweep messages. NMS. the Commission to approve its wholly- In Amendment No. 2, NSX also stated In Amendment No. 2, the Exchange owned subsidiary, NSX Securities, LLC that it would review its current also described its proposed phase-in (‘‘NSX Securities’’), as a facility of the regulatory allocation plan with NASD plan for the new System. According to Exchange. NSX Securities’ only function (as permitted by Rule 17d–2 under the the Exchange, the System is currently would be to route orders to other Act 16) to ensure that the NASD, and not undergoing testing and is scheduled to securities exchanges, facilities of the Exchange, has responsibility for become operational on or about securities exchanges, automated trading such regulatory functions for NSX September 5, 2006. NSX stated that it systems, electronic communications Securities. NSX also added new plans to phase-in the System as follows: networks (‘‘ECNs’’), or other brokers or proposed NSX Rule 2.11(b) which states first, beginning the week of September dealers (collectively, ‘‘Trading Centers’’) that the books, records, premises, 5, 2006, a small group of Nasdaq-listed from the Exchange (such function officers, agents, directors and employees stocks would be transitioned to the referred to as the ‘‘Outbound Router’’). of NSX Securities as a facility of the System from NSTS. Several additional Proposed NSX Rule 2.11 contains the Exchange would be deemed to be the groups of Nasdaq-listed stocks would be undertakings of NSX Securities books, records, premises, officers, transitioned to the System over the including, among other things, that: agents, directors and employees of the following five weeks, so that all Nasdaq- NSX would regulate the Outbound Exchange for purposes of, and subject to listed stocks would have been Router as a facility of the Exchange that oversight pursuant to, the Act, and that transitioned to the System by is subject to Section 6 of the Act, and the books and records of NSX Securities approximately mid-October, 2006. would be responsible for filing with the as a facility of the Exchange would be Following the transition of Nasdaq- Commission rules and fees relating to subject at all times to inspection and listed stocks, NSX plans to transition all the Outbound Router; the NASD would copying by the Exchange and the non-Nasdaq-listed securities to the be responsible for regulatory oversight Commission. System. NSX stated that it plans to monitor implementation and adjust the and enforcement as the Outbound In addition, in Amendment No. 2, schedule as needed to maintain an Router’s Designated Examining NSX revised its rules to reflect the orderly transition. Amendment No. 2 Authority (‘‘DEA’’) pursuant to Rule extension of certain compliance dates also contained a number of non- 17d–1 of the Act; use of NSX Securities relating to Regulation NMS. NSX by ETP Holders would be optional; and substantive changes and technical proposed to modify certain rules such corrections to clarify the original NSX Securities would not engage in any that their effectiveness would coincide business other than its Outbound Router proposal, as amended by Amendment with the Regulation NMS compliance No. 1. Finally, Amendment No. 2 function, unless approved by the dates announced by the Commission. Commission. contained a response to the comment The Exchange also modified other rules letter received on the original proposal, On August 11, 2006, the Exchange to include different rule provisions as amended by Amendment No. 1.18 filed Amendment No. 2 to the proposed applicable prior to and following the On August 18, 2006, the Exchange rule change, which made certain relevant Regulation NMS compliance filed Amendment No. 3 to the proposed revisions to the original proposal, as dates.17 NSX also proposed a new NSX rule change. Amendment No. 3 revised amended by Amendment No. 1. NSX Rule 11.16(b) which requires the proposed NSX Rule 11.16(b) to clarify revised proposed NSX Rule 11.13’s Exchange to, following the compliance that trades executed pursuant to both requirements for order delivery date for Rule 611 of Regulation NMS, the intermarket sweep order exception functionality eligibility. Under ‘‘identify all trades executed pursuant to of Rule 611(b)(5) or (6) of Regulation subsection (b)(2), a User (i.e., an ETP an exception or exemption from Rule NMS and the self-help exception of Rule Holder or Sponsored Participant) must 611 of Regulation NMS in accordance 611(b)(1) of Regulation NMS would be demonstrate to the Exchange that the with specifications approved by the identified as executed pursuant to the User’s system can automatically process operating committee of the relevant intermarket sweep order exception. inbound orders and respond national market system plan for an NMS immediately; new Interpretation and stock.’’ In addition, the Exchange III. Discussion and Commission Policy .01 to proposed NSX Rule 11.13 revised proposed NSX Rule 11.15 to Findings would define ‘‘immediately’’ as having indicate that it intends to take advantage After careful review, the Commission system response times ‘‘that generally finds that the proposed rule change, as meet or exceed industry standards,’’ 16 17 CFR 240.17d–2. amended, is consistent with the which NSX believes currently to be 100 17 For example, NSX revised the proposed requirements of the Act and the rules milliseconds. NSX also amended its definition of ‘‘protected quotation’’ to mean, prior and regulations thereunder applicable to to the compliance date for Rule 611 of Regulation a national securities exchange 19 and, in rules to make certain revisions relating NMS, a bid or offer in a stock that is the best bid to cross messages. The Exchange revised or best offer of a national securities exchange or particular, the requirements of Section 6 proposed NSX Rule 11.12(d) to delete association; provided, however, that the term of the Act 20 and the rules and the requirement that a Clean Cross be ‘‘protected quotation’’ would not include a bid or regulations thereunder. The offer in a stock that is subject to the ITS Plan if Commission finds that the proposed executed only if neither side of the trading through such bid or offer would be Cross is for the account of the User permitted under NSX Rule 14.9(b) or by an rule change, as amended, is consistent entering the Cross, and amended exemption available under the securities laws or with Section 6(b)(5) of the Act 21 in that proposed NSX Rule 11.3(b) to permit otherwise granted by the Commission or its staff. it is designed to prevent fraudulent and Following the compliance date for Rule 611 of manipulative acts and practices, to Cross executions in subpenny Regulation NMS, the definition of ‘‘protected increments so long as they improve the quotation’’ would mean a bid or offer in a stock that Exchange’s top of book (‘‘Top of Book’’) (i) is displayed by an automated trading center; (ii) 18 See Section III.B., infra. by at least a penny per share, as well as is disseminated pursuant to a national market 19 The Commission has considered the proposed system plan approved by the Commission; and (iii) rule’s impact on efficiency, competition and capital Clean Cross executions in subpenny is an automated quotation that is the best bid or best formation. 15 U.S.C. 78c(f). increments. In addition, the Exchange offer of a national securities exchange or 20 15 U.S.C. 78f. clarified that its customer priority rules association. 21 15 U.S.C. 78f(b)(5).

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promote just and equitable principles of 611 of Regulation NMS) if it is equal to proposed by the Exchange relating to trade, to remove impediments to and or better than the Protected NBBO. Clean Crosses.25 perfect the mechanism of a free and Crosses must improve each side of the B. Order Interaction and Order Delivery open market and a national market Top of Book by at least one penny a system, and, in general, to protect share, except in the cases of Midpoint Pursuant to proposed NSX Rule 11.13, investors and the public interest. Crosses and Clean Crosses. A Midpoint the System offers two modes of order As previously stated, NSX proposes to Cross may improve the Top of Book by interaction: (1) Automatic execution and replace its current trading system, as little as one-half the minimum (2) order delivery and automated NSTS, with a new trading System that increment provided in NSX Rule response. Every User would be eligible would provide for price-time priority 11.3(a), if it is priced at the midpoint of to use the automatic execution mode to execution. The Exchange proposes to the Protected NBBO (or, prior to the participate in the System, in which the revise its rules, including Chapter XI compliance date for Rule 611 of System would match and execute like- priced orders. However, to be eligible (relating to trading rules), in connection Regulation NMS, if it is priced at the for the order delivery functionality, a with this new market structure. midpoint of the best bid and offer on the User would have to demonstrate to the Exchange).22 A Clean Cross may be A. Order Types Exchange that it could automatically executed on the System at a price equal Pursuant to proposed NSX Rule 11.11, process an inbound order and respond Users would be able to enter market to or better than the Top of Book if (i) immediately. In new Interpretation and orders and limit orders into the System it is for at least 5,000 shares and has an Policy .01 to proposed NSX Rule 11.13, with various time-in-force terms and aggregate value of at least $100,000, (ii) NSX defines ‘‘immediately’’ as having other modifiers. Specific order types the size of the Cross is greater than the system response times ‘‘that generally permitted by the System include: ITS size of the total interest on NSX at the meet or exceed industry standards,’’ Orders, Reserve Orders, Odd Lot Orders, Cross price, and (iii) following the which NSX believes currently to be 100 Mixed Lot Orders, Post Only Orders, compliance date for Rule 611 of milliseconds. In addition, if the NSX Only Orders, Sweep Orders Regulation NMS, it is at a price equal to Exchange does not receive a response to (including Protected Sweep Orders, Full or better than the Protected NBBO.23 an inbound order within 500 Sweep Orders, and Destination Sweep Proposed NSX Rule 11.12(e) requires milliseconds, the User’s displayed order Orders), Destination Specific Orders, that all Users entering a Proprietary will be cancelled. and, following the compliance date for Cross comply with the Exchange’s The industry standard for such Rule 611 of Regulation NMS, Incoming Customer Priority rule (i.e., the price of response times will undoubtedly change Intermarket Sweep Orders. the Cross must be better than any over time and become shorter and, The Exchange’s proposed Sweep customer order the User is holding by at therefore, the Commission notes that Orders would allow a User to ‘‘sweep’’ least $0.01). A User may also post a NSX must periodically review inbound the market by matching the order for ‘‘Cross/Sweep’’ message that enters a order response time to determine what execution in the NSX Book, and Sweep Order for the account of the User constitutes the current industry simultaneously converting the order sweeping all protected quotations that standard and update its parameters into one or more limit orders and are superior to the Cross price, and accordingly. The Commission believes routing such orders to away trading simultaneously executes the Cross. In that the Exchange’s order delivery centers for execution against quotations connection with any Cross/Sweep, the functionality, as proposed, is consistent in accordance with the terms of the User must fully disclose the material with the Act. Sweep Order. Specifically, a Protected facts relating to the Sweep Order to any Sweep Order would only execute C. Priority of Orders and Order customer for whose account either side against orders in the NSX Book and Execution of the Cross is being executed.24 In protected quotations at away trading Proposed NSX Rules 11.14 and 11.15 addition, proposed NSX Rule 11.12(f) centers. A Full Sweep Order would set forth the priority and execution makes clear that NSX Rule 12.6, which execute against the best available parameters of the System. Pursuant to restricts trading ahead of customer quotations in the NSX Book and at away NSX Rule 11.14, orders are prioritized orders, applies to the entire Cross/ trading centers (automated and manual on a price-time basis, first by price and Sweep transaction. The Commission 26 quotations). A Destination Sweep Order then by time. Incoming orders (other would first be matched for execution notes that the User must provide the than Sweep Orders) are first matched for against the NSX Book and then routed customer with the benefit of any execution against orders in the NSX to a User-specified trading center for superior price received by executing Book.27 Proposed NSX Rule 11.15 execution. The Commission believes such Sweep Order against NSX reflects the requirements of Rule 611 of that the proposed order types are quotations for the corresponding portion Regulation NMS 28 by requiring that, for consistent with the Act. The of the Cross. any execution on NSX to occur during Commission notes that a number of the The Commission finds that the Regular Trading Hours (i.e., between proposed order types will have different proposed rules relating to cross 8:30 a.m. and 3 p.m. Central Time), the definitions prior to and following the messages are consistent with the Act price must be equal to or better than the relevant Regulation NMS compliance and should provide Users flexibility in Protected NBBO unless the order is dates, which should enable Users to executing transactions which meet the marked as an intermarket sweep order make use of the trading and routing specified requirements of each type of or unless another exception to Rule strategies of such order types prior to Cross, while still ensuring that customer 611(b) of Regulation NMS is available. when full compliance with Rules 610 priority principles are upheld. The Orders that cannot be executed within and 611 of Regulation NMS is required. Commission notes that it has approved 25 Pursuant to proposed NSX Rule 11.12, rules substantially similar to those See, e.g., Securities Exchange Act Release No. 46568 (September 27, 2002), 67 FR 62276 (October Users may post a Cross on the System 4, 2002) (approving File No. SR–Amex–2002–23). if the price of such trade is better than 22 See proposed NSX Rule 11.12(c). 26 See proposed NSX Rule 11.14(a). the best bid and offer on NSX, and 23 See proposed NSX Rule 11.12(d). 27 See proposed NSX Rule 11.15(a)(i). (following the compliance date for Rule 24 See proposed NSX Rule 11.12(f). 28 17 CFR 242.611.

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these parameters are eligible for routing regulate the Outbound Router function Exchange for purposes of, and subject to to away trading centers for execution at of NSX Securities as a facility, subject oversight pursuant to, the Act, and the the Protected NBBO. to Section 6 of the Act. In particular, books and records of NSX Securities as Unless the terms of the order direct and without limitation, under the Act, a facility of the Exchange would be otherwise, any order other than a Sweep the Exchange would be responsible for subject at all times to inspection and Order that cannot be executed on the filing with the Commission rule changes copying by the Exchange and the Exchange would be converted into one and fees relating to the Outbound Commission. or more limit orders, as necessary, to Router function of NSX Securities and The Commission received one match the price of each protected NSX Securities would be subject to comment letter regarding the proposed quotation at the Protected NBBO exchange non-discrimination rule change, as amended.34 In its available at away markets, and these requirements. Second, NASD, a self- comment letter, OES questioned limit orders would be routed to the regulatory organization unaffiliated with whether NSX Securities’ routing applicable market for execution against the Exchange or any of its affiliates, functionality should be part of the the applicable protected quotation at the would carry out oversight Exchange.35 In addition, OES believed Protected NBBO.29 Unless the terms of responsibilities as the Designated that the Exchange, through its direct the order direct otherwise, any order not Examining Authority designated by the affiliation with NSX Securities, would executed in full on the Exchange which Commission pursuant to Rule 17d–1 of be in direct competition with other by its terms is not eligible for routing the Act with the responsibility for broker-dealer participants of NSX that away, or which is not executed in full examining NSX Securities for provide similar routing services and when routed away, would be ranked in compliance with the applicable would ‘‘potentially be positioned to the NSX Book in accordance with order financial responsibility rules.32 In hold unfair competitive advantages priority rules of proposed NSX Rule addition, NSX has stated that it would through its regulatory and operational 11.14.30 review its current regulatory allocation positions as a [self-regulatory Sweep Orders would be matched for agreement with NASD to ensure that the organization] and an exchange.’’ 36 execution in the NSX Book, and NASD, and not the Exchange, has In Amendment No. 2, NSX responded simultaneously converted into one or responsibility for regulatory functions to the OES Letter. NSX stated that the more limit orders and routed to away for NSX Securities under such undertakings set forth in proposed NSX markets to be matched for execution regulatory allocation agreement, Rule 2.11 are specifically designed to against quotations in accordance with including the responsibility to receive mitigate potential conflicts of interest the terms of the Sweep Order.31 In regulatory reports from NSX Securities, the Exchange might have with regard to addition, pursuant to proposed NSX to examine NSX Securities for NSX Securities. NSX noted that, under Rule 11.15(d), NSX intends to operate compliance, and to enforce compliance its proposed rules, an ETP Holder’s use the System as an ‘‘automated market by NSX Securities with, specified of NSX Securities to route orders to center’’ within the meaning of provisions of the Act, the rules and another trading center would be Regulation NMS, such that the System regulations thereunder, and the rules of optional, and the only function of NSX would display automated quotations at the Exchange and the NASD, and to Securities would be to act as an all times except in the event that a carry out other specified regulatory outbound router unless the Commission systems malfunction renders it functions with respect to NSX approves otherwise. In addition, NSX incapable of displaying automated Securities. Third, an ETP Holder’s use noted that the Commission has quotations. The Exchange would of NSX Securities to route orders to previously approved a similar communicate to its ETP Holders its another Trading Center would be arrangement between an exchange and procedures relating to any change from optional. Any ETP Holder that does not an affiliated broker-dealer for outbound automated to manual quotations in the wish to use NSX Securities would be routing with substantially similar 37 event of such a systems malfunction. able to utilize other routers to route undertakings. The Commission believes that the orders to other trading centers.33 Fourth, The Commission notes that, because proposed rules relating to order priority NSX Securities would not engage in any NSX Securities is a facility of the and order execution are consistent with business other than (1) its Outbound Exchange, the operation of the router is the Act. The Commission believes that Router function and (2) any other a function of the Exchange. Although the System’s price-time priority and activities it may engage in as approved the Commission is concerned about automatic execution functionality may by the Commission. Finally, the books, potential unfair competition and encourage Users to participate in the records, premises, officers, agents, conflicts of interest between an new System, which should promote directors and employees of NSX exchange’s self-regulatory obligations competition and efficiencies on the new Securities as a facility of the Exchange and its commercial interests when the System and in the national market would be deemed to be the books, exchange is affiliated with one of its system in general. records, premises, officers, agents, members, the Commission believes that directors and employees of the it is appropriate and consistent with the D. Outbound Router Act to permit NSX to own NSX In the Trading Rules Notice, NSX 32 NSX has stated that NSX Securities is in the Securities in its capacity as a facility of requested that the Commission approve process of registering as a broker-dealer, has applied NSX that routes orders from NSX to its wholly-owned subsidiary, NSX for membership in the NASD, and is applying to other trading centers, in light of the Securities, as a facility of the Exchange. become an ETP Holder. See Trading Rules Notice protections afforded by the conditions at 38479. The Commission expects NSX to complete NSX Securities would be subject to this process prior to beginning operation of its new several conditions and undertakings System. 34 34 OES Letter, supra note 4. which are reflected in proposed NSX 33 For example, an ETP Holder may choose to 35 Id. at 1. Rule 2.11. First, the Exchange would enter an Immediate-or-Cancel Order, which 36 Id. provides that, if the order is not executable on the 37 See Securities Exchange Act Release No. 52497 System, the order would be cancelled and returned (September 22, 2005), 70 FR 56949 (September 29, 29 See proposed NSX Rule 11.15(a)(ii). to the ETP Holder, at which time the ETP Holder 2005) (relating to the use of Archipelago Securities, 30 See proposed NSX Rule 11.15(a)(iii). could choose to route the order to another market. LLC as an outbound router for NYSE Arca, Inc. (f/ 31 See proposed NSX Rule 11.15(b). See proposed NSX Rule 11.11(b)(1). k/a the Pacific Exchange, Inc.)).

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described above. Accordingly, the 600(b)(3) of Regulation NMS.42 The 611 of Regulation NMS during the Pilots Commission approves the proposed Commission believes that NSX’s Stock Phase and All Stocks Phase.45 rules regarding NSX Securities. proposed immediate-or-cancel Such rules include proposed NSX Rule functionality 43 is consistent with Rule 1.4(c) (pertaining to the effective time of E. Transition to New System 600(b)(3) of Regulation NMS. The certain NSX rules, including order NSX proposes to phase the new Commission also notes that proposed execution, locking and crossing System into its market structure as NSX Rule 11.15(d) addresses situations quotations in NMS stocks, and display follows: First, beginning the week of where NSX has reason to believe it is of automated quotations), and proposed September 5, 2006, a small group of not capable of displaying automated NSX Rule 1.5(P)(3) (pertaining to Nasdaq-listed stocks would be quotations, including communicating to protected quotations). The Commission transitioned to the System from NSTS. ETP Holders its procedures concerning finds good cause to accelerate approval Several additional groups of Nasdaq- a change from automated to manual of these changes prior to the thirtieth listed stocks would be transitioned to quotations. day after publication in the Federal the System over the following five Register. The Commission believes this G. Other Rules weeks, so that all Nasdaq-listed stocks is a reasonable approach in light of the would have been transitioned to the In addition to the rules described in extension of Regulation NMS System by mid-October 2006. Following detail above, the proposed rule change compliance dates and should help to the transition of Nasdaq-listed stocks, would amend a number of other ensure that the appropriate NSX rules NSX would transition all non-Nasdaq- Exchange rules that address, among are in place at the time that Regulation listed securities (i.e., securities listed on other things, the effective time of certain NMS compliance is required. the New York Stock Exchange, rules, hours of trading, units of trading, In Amendment No. 2, NSX modifies American Stock Exchange, and other price variations, securities eligible for the proposed rule language regarding exchanges) to the System. NSX has trading, market makers, authorized the requirements for order delivery stated that it plans to monitor this traders, access, trade execution and functionality eligibility. Specifically, implementation and adjust the schedule reporting, clearance and settlement, NSX is modifying proposed NSX Rule as needed to maintain an orderly limitation of liability, clearly erroneous 11.13 to require Users to demonstrate to transition. The Commission believes executions trading halts, short sales, and the Exchange that the User’s system can that the Exchange’s phased approach to riskless principal transactions. The automatically process inbound orders transitioning from NSTS to the new Commission believes that these rules are and respond immediately; new System should provide it with time to appropriate and consistent with the Act. Interpretation and Policy .01 to test its System in a real trading proposed NSX Rule 11.13 would define IV. Accelerated Approval of environment while only trading a ‘‘immediately’’ as having system Amendment Nos. 2 and 3 limited number of securities. The response times ‘‘that generally meet or Commission believes that this approach As set forth below, the Commission exceed industry standards,’’ which NSX is appropriate and should help maintain finds good cause to approve believes currently to be 100 an orderly transition to the System. Amendment No. 2 to the proposed rule milliseconds. The Commission finds change prior to the thirtieth day after good cause to accelerate approval of this F. Regulation NMS Amendment No. 2 is published for change prior to the thirtieth day after The Commission believes that the comment in the Federal Register publication in the Federal Register. The proposed rule change is consistent with pursuant to Section 19(b)(2) of the Commission notes that NSX had the requirements of Regulation NMS.38 Act.44 Many of the revisions in originally proposed a response time of In proposed NSX Rule 11.22, NSX Amendment No. 2 are modeled on 500 milliseconds for Users using the proposes to adopt a rule with regard to existing rules of other exchanges or are Exchange’s order delivery functionality. locked and crossed markets, as required intended to clarify the proposal. The In Amendment No. 2, NSX modifies its by Rule 610(d) of Regulation NMS.39 Commission believes that accelerating proposal to require immediate The Exchange has also designed its approval of these rules is appropriate responses. proposed rules relating to orders, because the revisions do not raise new In Amendment No. 2, NSX modifies modifiers, and order execution 40 rules regulatory issues. certain proposed rule language relating to comply with the requirements of In Amendment No. 2, NSX modifies to cross messages. Specifically, NSX Regulation NMS. These proposed rules the proposed rule language to reflect the deletes the requirement from proposed include marking certain orders meeting Commission’s extension of certain NSX Rule 11.12(d) that a Clean Cross be the requirements of Rule 600(b)(30) of compliance dates relating to Regulation executed only if neither side of the Regulation NMS 41 as intermarket sweep NMS. Specifically, NSX is modifying Cross is for the account of the User orders and accepting orders marked as proposed rules to reflect that such rules entering the Cross, and amends intermarket sweep orders, which would would not become effective until the proposed NSX Rule 11.3(b) to permit allow orders so designated to be compliance date for the applicable Cross executions in subpenny automatically matched and executed sections of Regulation NMS. The increments so long as they improve the without reference to protected Commission notes that February 5, 2007 Top of Book by at least a penny per quotations at other trading centers. In represents the beginning of the ‘‘Trading share, as well as Clean Cross executions addition, as mentioned above in Section Phase’’ and the final date for full in subpenny increments. In Amendment III.B., NSX has designed its trading rules operation of Regulation NMS-compliant No. 2, NSX also clarifies that its so that the Exchange would display only trading systems of all automated trading customer priority rules found in NSX automated quotations and qualify as an centers, including SRO trading facilities, Rule 12.6 applies to Cross/Sweep automated trading center under Rule that intend to qualify their quotations messages. The Commission finds good for trade-through protection under Rule cause to accelerate approval of these 38 See supra note 10. changes prior to the thirtieth day after 39 17 CFR 242.610(d). 42 17 CFR 242.600(b)(3). 40 See proposed NSX Rules 11.11 and 11.15. 43 See proposed NSX Rule 11.11(b)(1). 45 See Securities Exchange Act Release No. 53829 41 17 CFR 242.600(b)(30). 44 15 U.S.C. 78s(b)(2). (May 18, 2006), 71 FR 30038 (May 24, 2006).

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publication in the Federal Register York Stock Exchange, American Stock Paper Comments because they clarify the application of Exchange, and regional exchange-listed • NSX Rule 12.6 to Cross, Clean Cross, stocks) to the System. The Commission Send paper comments in triplicate and Cross/Sweep messages, all of which finds good cause to accelerate approval to Nancy M. Morris, Secretary, were published for comment in the of this change prior to the thirtieth day Securities and Exchange Commission, Trading Rules Notice. after publication in the Federal Register 100 F Street, NE., Washington, DC In Amendment No. 2, NSX states that because the phase-in period should help 20549–1090. it would review its current regulatory to ensure that there is an orderly All submissions should refer to File allocation plan with NASD (as transition to the new System. Number SR–NSX–2006–08. This file permitted by Rule 17d–2 under the In Amendment No. 2, NSX also makes number should be included on the Act 46) to ensure that NASD, and not the technical corrections to the proposed subject line if e-mail is used. To help the Exchange, would be responsible for rule change, for example, fixing Commission process and review your such regulatory functions with respect incorrect rule citations. These changes comments more efficiently, please use to NSX Securities. In addition, NSX are non-substantive and technical in only one method. The Commission will adds new subsection (b) to proposed nature and are necessary to clarify the post all comments on the Commission’s NSX Rule 2.11 regarding the Exchange’s proposal. The Commission finds good Internet Web site (http://www.sec.gov/ relationship with NSX Securities for cause to accelerate approval of these rules/sro.shtml). Copies of the purposes of the Act. The Commission changes prior to the thirtieth day after submission, all subsequent finds good cause to accelerate approval publication in the Federal Register amendments, all written statements of these changes prior to the thirtieth because they better clarify NSX’s with respect to the proposed rule day after publication in the Federal proposal. change that are filed with the Register because allocation of NSX’s The Commission also finds good Commission, and all written regulatory functions with regard to NSX cause to approve Amendment No. 3 to communications relating to the Securities to NASD would be an the proposed rule change prior to the proposed rule change between the extension of this current plan permitted thirtieth day after Amendment No. 3 is Commission and any person, other than under Rule 17d–2 of the Act. In published for comment in the Federal those that may be withheld from the addition, NSX modified its proposed Register pursuant to Section 19(b)(2) of public in accordance with the rule language to provide that the books, the Act.47 Amendment No. 3 revises provisions of 5 U.S.C. 552, will be records, premises, officers, agents, proposed NSX Rule 11.16(b) to clarify available for inspection and copying in directors and employees of NSX that trades executed pursuant to both the Commission’s Public Reference Securities as a facility of the Exchange the intermarket sweep order exception Room. Copies of the filing also will be would be deemed to be the books, of Rule 611(b)(5) or (6) of Regulation available for inspection and copying at records, premises, officers, agents, NMS and the self-help exception of Rule the principal office of NSX. All directors and employees of the 611(b)(1) of Regulation NMS would be comments received will be posted Exchange for purposes of, and subject to identified as executed pursuant to the without change; the Commission does oversight pursuant to, the Act, and that intermarket sweep order exception. The not edit personal identifying the books and records of NSX Securities Commission finds good cause to information from submissions. You as a facility of the Exchange would be accelerate approval of this change prior should submit only information that subject at all times to inspection and to the thirtieth day after publication in you wish to make available publicly. All copying by the Exchange and the the Federal Register because it clarifies submissions should refer to File Commission. The Commission finds the identification of trades which are Number SR–NSX–2006–08 and should good cause to accelerate approval of executed pursuant to both the be submitted on or before September 28, these changes prior to the thirtieth day intermarket sweep order and self-help 2006. after publication in the Federal Register exceptions of Rule 611(b) of Regulation because they are substantially similar to NMS. VI. Conclusion rules relating to the administration of V. Solicitation of Comments It is therefore ordered, pursuant to facilities of other national securities Section 19(b)(2) of the Act,48 that the exchanges. Interested persons are invited to proposed rule change (File No. SR– In Amendment No. 2, NSX describes submit written data, views, and NSX–2006–08), as amended by a phase-in plan for the new System. The arguments concerning Amendment Nos. Amendment No. 1, be, and hereby is, Exchange states that the System is 2 and 3, including whether Amendment approved, and that Amendment Nos. 2 currently undergoing testing and is Nos. 2 and 3 are consistent with the Act. and 3 to the proposed rule change be, scheduled to become operational on or Comments may be submitted by any of and hereby are,49 approved on an about September 5, 2006. NSX would the following methods: accelerated basis. initially transition a small group of Nasdaq-listed stocks to the System, Electronic Comments For the Commission, by the Division of followed by several additional groups of • Use the Commission’s Internet Market Regulation, pursuant to delegated authority. Nasdaq-listed stocks over the next five comment form (http://www.sec.gov/ weeks, leading to the inclusion of all rules/sro.shtml); or Nancy M. Morris, Nasdaq-listed stocks by mid-October. • Send an e-mail to rule- Secretary. Following the transition of Nasdaq- [email protected]. Please include File [FR Doc. E6–14808 Filed 9–6–06; 8:45 am] listed stocks, NSX would transition all Number SR–NSX–2006–08 on the BILLING CODE 8010–01–P non-Nasdaq-listed securities (i.e., New subject line. 48 15 U.S.C. 78s(b)(2). 46 17 CFR 240.17d–2. 47 15 U.S.C. 78s(b)(2). 49 17 CFR 200.30–3(a)(12).

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SECURITIES AND EXCHANGE 2007, a pilot program applicable to Position limits impose a ceiling on the COMMISSION Exchange Rule 1001, Position Limits, number of option contracts in each class which increases the standard position [Release No. 34–54387; File No. SR–Phlx– on the same side of the market relating 2006–48] and exercise limits for equity option to the same underlying security that can contracts and options on the Nasdaq- be held or written by an investor or Self-Regulatory Organizations; 100 Index Tracking Stock 5 (‘‘QQQQ’’) group of investors acting in concert. Philadelphia Stock Exchange, Inc.; (‘‘Pilot Program’’). The text of the Exchange Rule 1002 (not proposed to be Notice of Filing and Immediate proposed rule change is available on the amended herein) establishes Effectiveness of Proposed Rule Phlx’s Web site (http://www.phlx.com), corresponding exercise limits. Exercise Change Relating to the Extension of a at the Phlx’s principal office, and at the limits prohibit an investor or group of Pilot Program Concerning Option Commission’s Public Reference Room. investors acting in concert from Position Limits II. Self-Regulatory Organization’s exercising more than a specified number August 30, 2006. Statement of the Purpose of, and of puts or calls in a particular class Pursuant to Section 19(b)(1) of the Statutory Basis for, the Proposed Rule within five consecutive business days. Securities Exchange Act of 1934 Change Exchange Rule 1001 subjects equity (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 options to one of five different position In its filing with the Commission, the notice is hereby given that on August limits depending on the trading volume Phlx included statements concerning 16, 2006, the Philadelphia Stock and outstanding shares of the the purpose of and basis for the Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) underlying security. Exchange Rule filed with the Securities and Exchange proposed rule change and discussed any comments it received on the proposed 1002 establishes exercise limits for the Commission (‘‘Commission’’) the corresponding options at the same proposed rule change as described in rule change. The text of these statements levels as the corresponding security’s Items I and II below, which Items have may be examined at the places specified position limits.7 been prepared by the Phlx. The in Item IV below. The Exchange has Exchange has filed the proposal as a prepared summaries, set forth in Standard Position and Exercise Limit ‘‘non-controversial’’ rule change Sections A, B, and C below, of the most pursuant to Section 19(b)(3)(A) of the significant aspects of such statements. The Pilot Program increases the 3 4 standard position and exercise limits for Act and Rule 19b–4(f)(6) thereunder, A. Self-Regulatory Organization’s equity options traded on the Exchange which renders it effective upon filing Statement of the Purpose of, and with the Commission. The Commission Statutory Basis for, the Proposed Rule and for options overlying QQQQ to the is publishing this notice to solicit Change following levels: comments on the proposed rule change from interested persons. 1. Purpose I. Self-Regulatory Organization’s The purpose of the proposed rule Statement of the Terms of Substance of change is to extend the Pilot Program, the Proposed Rule Change which is scheduled to expire September The Phlx proposes to extend, for a 1, 2006,6 for an additional six-month period of six months, through March 1, period, through March 1, 2007.

Standard equity option contract limit 8 Pilot program equity option contract limit

13,500 25,000 22,500 50,000 31,500 75,000 60,000 200,000 75,000 250,000

Standard QQQQ option contract limit Pilot Program QQQQ option contract limit

300,000 900,000

1 15 U.S.C. 78s(b)(1). in modifying in any way its method for account of any partner, officer, director or employee 2 17 CFR 240.19b–4. determining, comprising, or calculating the Index in thereof or for the account of any customer, a long 3 15 U.S.C. 78s(b)(3)(A). the future. position in any option contract of a class of options 4 17 CFR 240.19b–4(f)(6). 6 See Securities Exchange Act Release Nos. 51322 dealt in on the Exchange (or, respecting an option 5 The Nasdaq-100, Nasdaq-100 Index, Nasdaq, (March 4, 2005), 70 FR 12260 (March 11, 2005) not dealt in on the Exchange, another exchange if The Nasdaq Stock Market, Nasdaq-100 SharesSM, (notice of filing and immediate effectiveness of File the member or member organization is not a Nasdaq-100 TrustSM, Nasdaq-100 Index Tracking No. SR–Phlx–2005–17); 52261 (August 15, 2005), 70 member of that exchange) if as a result thereof such StockSM, and QQQSM are trademarks or service FR 49004 (August 22, 2005) (notice of filing and member or member organization, or partner, officer, immediate effectiveness of File No. SR–Phlx–2005– marks of The NASDAQ Stock Market LLC director or employee thereof or customer, acting 51, which extended the Pilot Program); and 53388 (‘‘Nasdaq’’) and have been licensed for use for alone or in concert with others, directly or (February 28, 2006), 71 FR 11458 (March 7, 2006) certain purposes by the Phlx pursuant to a License indirectly, has or will have exercised within any Agreement (‘‘License’’) with Nasdaq. The Nasdaq- (notice of filing and immediate effectiveness of File five (5) consecutive business days aggregate long 100 Index (‘‘Index’’) is determined, composed, and No. SR–Phlx–2006–13, which extended the Pilot calculated by Nasdaq without regard to the Program). positions in that class (put or call) as set forth as Licensee, the Nasdaq-100 TrustSM, or the beneficial 7 Exchange Rule 1002 states, in relevant part, the position limit in Rule 1001, in the case of owners of Nasdaq-100 SharesSM. Nasdaq has ‘‘* * * no member or member organization shall options on a stock or on an Exchange-Traded Fund complete control and sole discretion in exercise, for any account in which such member or Share * * *’’ determining, comprising, or calculating the Index or member organization has an interest or for the 8 Except when the Pilot Program is in effect.

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To date, the Exchange believes that the proposed rule change. In addition, available for inspection and copying in there have been no adverse affects on the Exchange has requested that the the Commission’s Public Reference the market as a result of these increases Commission waive the 30-day pre- Room. Copies of such filing will also be in the limits for equity option contracts operative delay. The Commission available for inspection and copying at and options overlying QQQQ. believes that waiving the 30-day pre- the principal office of the Phlx. All operative delay is consistent with the comments received will be posted 2. Statutory Basis protection of investors and in the public without change; the Commission does The Exchange believes that its interest because it will allow the Pilot not edit personal identifying proposal is consistent with Section 6(b) Program to continue uninterrupted.15 information from submissions. You of the Act 9 in general, and furthers the At any time within 60 days of the should submit only information that objective of Section 6(b)(5) of the Act 10 filing of the proposed rule change, the you wish to make available publicly. All in particular, in that it is designed to Commission may summarily abrogate submissions should refer to File No. promote just and equitable principles of such rule change if it appears to the SR–Phlx–2006–48 and should be trade, to remove impediments to and Commission that such action is submitted on or before September 28, perfect the mechanisms of a free and necessary or appropriate in the public 2006. open market and the national market interest, for the protection of investors, system, and, in general to protect For the Commission, by the Division of or otherwise in furtherance of the Act. Market Regulation, pursuant to delegated investors and the public interest, by authority.16 extending the Pilot Program for IV. Solicitation of Comments Jill M. Peterson, approximately an additional six months. Interested persons are invited to Assistant Secretary. submit written data, views, and B. Self-Regulatory Organization’s [FR Doc. E6–14793 Filed 9–6–06; 8:45 am] Statement on Burden on Competition arguments concerning the foregoing, including whether the proposed rule BILLING CODE 8010–01–P The Exchange does not believe that change is consistent with the Act. the proposed rule change will impose Comments may be submitted by any of any burden on competition that is not the following methods: necessary or appropriate in furtherance SMALL BUSINESS ADMINISTRATION of the purposes of the Act. Electronic Comments C. Self-Regulatory Organization’s • Use the Commission’s Internet [Disaster Declaration # 10597 and # 10598] Statement on Comments on the comment form (http://www.sec.gov/ New Mexico Disaster # NM–00004 Proposed Rule Change Received From rules/sro.shtml); or • Members, Participants, or Others Send an e-mail to rule- AGENCY: U.S. Small Business No written comments were either [email protected]. Please include File Administration. No. SR–Phlx–2006–48 on the subject solicited or received. ACTION: Notice. line. III. Date of Effectiveness of the SUMMARY: This is a Notice of the Proposed Rule Change and Timing for Paper Comments Presidential declaration of a major Commission Action • Send paper comments in triplicate disaster for the State of New Mexico Because the foregoing rule change to Nancy M. Morris, Secretary, (FEMA–1659–DR), dated 08/30/2006. Securities and Exchange Commission, does not: (1) Significantly affect the Incident: Severe Storms and Flooding. Station Place, 100 F Street, NE., protection of investors or the public Incident Period: 07/26/2006 and Washington, DC 20549–1090. interest; (2) impose any significant continuing. burden on competition; and (3) become All submissions should refer to File No. Effective Date: 08/30/2006. operative for 30 days from the date of SR–Phlx–2006–48. This file number Physical Loan Application Deadline this filing, or such shorter time as the should be included on the subject line Date: 10/30/2006. Commission may designate, it has if e-mail is used. To help the Economic Injury (Eidl) Loan become effective pursuant to Section Commission process and review your Application Deadline Date: 05/30/2007. 19(b)(3)(A) of the Act 11 and Rule 19b– comments more efficiently, please use 4(f)(6) thereunder.12 only one method. The Commission will ADDRESSES: Submit completed loan A proposed rule change filed under post all comments on the Commission’s applications to: U.S. Small Business 19b–4(f)(6) normally may not become Internet Web site (http://www.sec.gov/ Administration, National Processing operative prior to 30 days after the date rules/sro.shtml). Copies of the And Disbursement Center, 14925 of filing.13 However, Rule 19b– submission, all subsequent Kingsport Road, Fort Worth, TX 76155. 4(f)(6)(iii) 14 permits the Commission to amendments, all written statements FOR FURTHER INFORMATION CONTACT: A. designate a shorter time if such action with respect to the proposed rule Escobar, Office of Disaster Assistance, is consistent with the protection of change that are filed with the U.S. Small Business Administration, investors and the public interest. The Commission, and all written 409 3rd Street, SW., Suite 6050, Exchange provided the Commission communications relating to the Washington, DC 20416. with written notice of its intent to file proposed rule change between the SUPPLEMENTARY INFORMATION: Notice is this proposed rule change at least five Commission and any person, other than hereby given that as a result of the business days prior to the date of filing those that may be withheld from the President’s major disaster declaration on public in accordance with the 9 08/30/2006, applications for disaster 15 U.S.C. 78f(b). provisions of 5 U.S.C. 552, will be loans may be filed at the address listed 10 15 U.S.C. 78f(b)(5). 11 above or other locally announced 15 U.S.C. 78s(b)(3)(A). 15 For purposes only of waiving the pre-operative 12 locations. 17 CFR 240.19b–4(f)(6). delay, the Commission has considered the proposed 13 17 CFR 240.19b–4(f)(6)(iii). rule’s impact on efficiency, competition, and capital 14 Id. formation. 15 U.S.C. 78c(f). 16 17 CFR 200.30–3(a)(12).

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The following areas have been And Disbursement Center, 14925 DEPARTMENT OF TRANSPORTATION determined to be adversely affected by Kingsport Road, Fort Worth, TX 76155. the disaster: Federal Aviation Administration FOR FURTHER INFORMATION CONTACT: A. Primary Counties (Physical Damage and Escobar, Office of Disaster Assistance, Change Notice for RTCA Program Economic Injury Loans): Dona Ana. U.S. Small Business Administration, Management Committee Contiguous Counties (Economic Injury 409 3rd Street, SW., Suite 6050, Washington, DC 20416. AGENCY: Federal Aviation Loans Only): New Mexico: Luna, Otero, Administration (FAA), DOT. Sierra. Texas: El Paso. SUPPLEMENTARY INFORMATION: The notice ACTION: Notice of RTCA Program The Interest Rates are: of the President’s major disaster Management Committee meeting. declaration for the State of Percent Pennsylvania, dated 07/04/2006, is SUMMARY: The FAA is issuing this notice hereby amended to extend the deadline to advise the public of a meeting of the For Physical Damage: for filing applications for physical RTCA Program Management Committee. Homeowners with credit available elsewhere ...... 6.250 damages as a result of this disaster to DATES: The meeting will be held Homeowners without credit 10/03/2006. September 19, 2006 starting at 9 a.m. available elsewhere ...... 3.125 All other information in the original ADDRESSES: The meeting will be held at Businesses with credit avail- declaration remains unchanged. RTCA, Inc., 1828 L Street, NW., Suite able elsewhere ...... 7.934 805, Washington, DC 20036. Other (including non-profit or- (Catalog of Federal Domestic Assistance ganizations) with credit Numbers 59002 and 59008). FOR FURTHER INFORMATION CONTACT: available elsewhere ...... 5.000 RTCA Secretariat, 1828 L Street, NW., Businesses and non-profit or- Herbert L. Mitchell, Suite 850, Washington, DC 20036; ganizations without credit Associate Administrator for Disaster telephone (202) 833–9339; fax (202) available elsewhere ...... 4.000 Assistance. 833–9434; Web site http://www.rtca.org. For Economic Injury: [FR Doc. E6–14780 Filed 9–6–06; 8:45 am] SUPPLEMENTARY INFORMATION: Pursuant Businesses & small agricul- tural cooperatives without BILLING CODE 8025–01–P to section 10(a)(2) of the Federal credit available elsewhere 4.000 Advisory Committee Act (Pub. L. 92– 463, 5 U.S.C., Appendix 2), notice is The number assigned to this disaster SMALL BUSINESS ADMINISTRATION hereby given for a Program Management for physical damage is 10597 6 and for Committee meeting. The revised agenda Public Federal Regulatory economic injury is 10598 0. will include: Enforcement Fairness Hearing; Region • September 19: (Catalog of Federal Domestic Assistance VIII Regulatory Fairness Board • Numbers 59002 and 59008) Opening Session (Welcome and Introductory Remarks, Review/ Herbert L. Mitchell, The U.S. Small Business Approve Summary of Previous Associate Administrator for Disaster Administration (SBA) Region VIII Meeting). Assistance. Regulatory Fairness Board and the SBA • Publication Consideration/Approval: [FR Doc. E6–14778 Filed 9–6–06; 8:45 am] Office of the National Ombudsman will • Final Draft, Change 3 to DO–210, BILLING CODE 8025–01–P hold a public hearing on Tuesday, Minimum Operational Performance September 26, 2006, at 9 a.m. The Standards (MOPS) for meeting will take place at the Colorado Geosynchronous Orbit Aeronautical SMALL BUSINESS ADMINISTRATION District Office, 721 19th Street, Room Mobile Satellite Services (AMSS) 426, Maroom Bells Conference Center, [Disaster Declaration # 10515 and # 10516] Avionics, RTCA Paper No. 182–06/ Denver, CO 80202–2508. The purpose of PMC–465, prepared by SC–208. Pennsylvania Disaster Number PA– the meeting is to receive comments and • Discussion: 00004 testimony from small business owners, • Special Committee Chairman’s small government entities, and small Reports. AGENCY: U.S. Small Business non-profit organizations concerning • Request to Revise DO–239–MOPS for Administration. regulatory enforcement and compliance Traffic Information Service Data ACTION: Amendment 6. actions taken by Federal agencies. Link Communications—Discussion. • Action Item Review: SUMMARY: This is an amendment of the Anyone wishing to attend or to make • a presentation must contact Amy Synthetic Vision Systems (SVS)— Presidential declaration of a major Discussion—Possible New McDowell, in writing or by fax, in order disaster for the State of Pennsylvania Committee Request. to be placed on the agenda. Amy (FEMA–1649–DR), dated 07/04/2006. • SC–147—Traffic Alert & Collision McDowell, Business Development Incident: Severe Storms, Flooding, Avoidance System—Discussion— and Mudslides. Assistant, SBA, 721 19th Street, Room Updates. Incident Period: 06/23/2006 through 426, Denver, CO 80202, phone (303) • SC–203—Unmanned Aircraft 07/10/2006. 844–2607, Ext. 209 and fax (303) 844– Systems (UAS)—Discussion— Effective Date: 08/31/2006. 6539, e-mail: [email protected]. Schedule—Status Review. Physical Loan Application Deadline For more information, see our Web • SC–205–Software Considerations— Date: 10/03/2006. site at http://www.sba.gov/ombudsman. Discussion—Status. EIDL Loan Application Deadline Date: • Cabin Management Systems— 04/04/2007. Thomas M. Dryer, Discussion—Status. ADDRESSES: Submit completed loan Acting Committee Management Officer. • Closing Session (Other Business, applications to: U.S. Small Business [FR Doc. E6–14779 Filed 9–6–06; 8:45 am] Document Production, Date and Administration, National Processing BILLING CODE 8025–01–P Place of Next Meeting, Adjourn).

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Attendance is open to the interested SUPPLEMENTARY INFORMATION: Pursuant Automatic Dependent Surveillance— public but limited to space availability. to section 10(a)(2) of the Federal Broadcast (ADS–B). With the approval of the chairmen, Advisory Committee Act (P.L. 92–463, 5 DATES: The meeting will be held members of the public may present oral U.S.C., Appendix 2), notice is hereby September 25–29, 2006 starting at 9 a.m. statements at the meeting. Persons given for a Special Committee 203 (unless stated otherwise). wishing to present statements or obtain meeting. The agenda will include: • ADDRESSES: The meeting will be held at information should contact the person September 26: RTCA, Inc., 1828 L Street, NW., Suite FOR FURTHER INFORMATION • Opening Plenary Session (Welcome listed in the 805, Washington, DC 20036. CONTACT section. Members of the public and Introductory Remarks, Approval of may present a written statement to the Sixth Plenary Summary). FOR FURTHER INFORMATION CONTACT: committee at any time. • Review status and progress of RTCA Secretariat, 1828 L Street, NW., Suite 805, Washington, DC 20036; Dated: Issued in Washington, DC, on Guidance Material and Considerations for Unmanned Aircraft for Final Review telephone (202) 833–9339; fax (202) August 29, 2006. 833–9434; Web site http://www.rtca.org. Francisco Estrada C., and Comment (FRAC). • Review SC–203 Progress Since SUPPLEMENTARY INFORMATION: Pursuant RTCA Advisory Committee. Sixth Plenary: Status from Workgroups to section 10(a)(2) of the Federal [FR Doc. 06–7488 Filed 9–6–06; 8:45 am] 1, 2 and 3. Advisory Committee Act (Pub. L. 92– BILLING CODE 4910–13–M • Plenary adjourns until September 463, 5 U.S.C., Appendix 2), notice is 28 (at adjournment of Plenary, hereby given for a Special Committee Workgroups 1, 2, and 3 go into session. 186 meeting. DEPARTMENT OF TRANSPORTATION • September 27: • September 25: • Federal Aviation Administration Workgroups 1, 2 and 3 in session. • RFG–NRA. • September 28: • RFG–AD. Seventh Meeting: RTCA Special • Workgroups 1, 2 and 3 in session • September 26: Committee 203/Minimum Performance until 12 p.m. • RFG–NRA. Standards for Unmanned Aircraft • Plenary reconvenes at 1 p.m. • RFG–AD. • Systems and Unmanned Aircraft Approve Guidance Material and • September 27: Considerations for Unmanned Aircraft • RFG–NRA. AGENCY: Federal Aviation for FRAC, if ready. • RFG–AD. • Administration (FAA), DOT. Workgroups 1, 2 and 3 Report Outs. • September 28: • ACTION: Notice of RTCA Special Closing Plenary Session (Action • Opening Plenary Session Committee 203, Minimum Performance Item Review, Other Business, Date, (Chairman’s Introductory Remarks, Standards for Unmanned Aircraft Place and Time of Next Plenary, Review of Meeting Agenda, Review/ Systems and Unmanned Aircraft. Adjourn). Approval of the Thirty Seventh Attendance is open to the interested Meeting Summary, RTCA Paper No. SUMMARY: The FAA is issuing this notice public but limited to space availability. 150–06/SC–186–237). to advise the public of a meeting of With the approval of the chairmen, • SC–186 Activity Reports: RTCA Special Committee 203, members of the public may present oral • WG–1, Operations & Minimum Performance Standards for statements at the meeting. Persons Implementation. Unmanned Aircraft Systems and wishing to present statements or obtain • WG–2, TIS–B. Unmanned Aircraft and Working information should contact the person • WG–3, 1090 MHz MOPS. Groups 1–3. listed in the FOR FURTHER INFORMATION • WG–4, Application Technical DATES: The meeting will be held CONTACT section. Members of the public Requirements. September 26–28, 2006, starting at 9 may present a written statement to the • WG–5, UAT MOPS. a.m. committee at any time. • WG–6, ADS–B MASPS. • ADDRESSES: The meeting will be held at Dated: Issued in Washington, DC, on Requirements Focus Group. The MITRE Corporation, 75515 Colshire August 25, 2006. • EUROCAE WG–51 Activity Report. Dr., Building 2, Main Entrance, Room Francisco Estrada C., • STP MOPS—Review Status. 1N100, McLean, Virginia 22102–7508. RTCA Advisory Committee. • Final Review/Approval-Proposed [FR Doc. 06–7489 Filed 9–6–06; 8:45 am] Final Draft—Safety, Performance & Note: Workgroup 1 will convene at BILLING CODE 4910–13–M Interoperability Requirements Northrop Grumman Information Document for ADS–B–NRA Technologies (directly across the street from MITRE) located at: 7575 Colshire Drive, Application, RTCA Paper No. 162– DEPARTMENT OF TRANSPORTATION 06/SC–186–238. McLean, VA 22102–7508. On-site contact: • Qudsia Askaryar; telephone (703) 556–1326. Discussion—TIS–B Management You will be required to show a valid photo Federal Aviation Administration Messages/TIS–B MOPS. id (driver’s license; passport) upon entrance • Closing Plenary Session (New into the Northrop Grumman facility. RTCA Special Committee 186: Business, Other Business, Review Company policy precludes cameras or cell Automatic Dependent Surveillance— Action Items/Work Program, Date, phones that take photos. Dress is business Broadcast (ADS–B) Place and Time of Next Meeting, casual. AGENCY: Federal Aviation Adjourn). • FOR FURTHER INFORMATION CONTACT: (1) Administration (FAA), DOT. September 29: • RFG–Plenary Session. RTCA Secretariat, 1828 L Street, NW., ACTION: Notice of RTCA Special Suite 805, Washington, DC, 20036; Committee 186 meeting. Note: AD—Application Development. telephone (202) 833–9339; fax (202) ASAS—Aircraft Surveillance 833–9434; Web site http://www.rtca.org. SUMMARY: The FAA is issuing this notice Applications System. (2) On-site contact: Mr. Matthew to advise the public of a meeting of ASSAP—Airborne Surveillance & DeGarmo; telephone (703) 983–7320. RTCA Special Committee 186: Separation Assurance Processing.

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CDTI—Cockpit Display of Traffic 2 interchange east of downtown along Issued on: August 31, 2006. Information. the shore of Lake Erie. Victoria Peters, MOPS—Minimum Operational On September 18, 2001 the FHWA Office Director, Office of Engineering and Performance Standards. issued a Notice of Intent, (66 FR 49448, Operations, Federal Highway Administration, Columbus, Ohio. NRA—Non-Radar Airspace. Sep. 27, 2001), for the Cleveland [FR Doc. E6–14814 Filed 9–6–06; 8:45 am] RFG—Requirements Focus Group. Innerbelt action, which was in the STP—Surveillance Transmit planning phase of project development, BILLING CODE 4910–22–P Processing. indicating that an Environmental Attendance is open to the interested Assessment or EIS would be prepared. public but limited to space availability. DEPARTMENT OF TRANSPORTATION Since 2001 project development and With the approval of the chairmen, public involvement activities have been Federal Motor Carrier Safety members of the public may present oral Administration statements at the meeting. Persons ongoing. To effectively and efficiently wishing to present statements or obtain manage the Cleveland Innerbelt Project [Docket No. FMCSA–2003–15818] information should contact the person the FHWA, in cooperation with the listed in the FOR FURTHER INFORMATION ODOT, has decided to prepare an EIS Exemption to Allow Werner CONTACT section. Members of the public for the proposed Project. Enterprises, Inc. To Use Global may present a written statement to the The purpose of the Cleveland Positioning System (GPS) Technology committee at any time. Innerbelt Project is to improve the To Monitor and Record Drivers’ Hours of Service Issued in Washington, DC, August 29, physical condition of the existing bridge 2006. decks and roadway pavements, improve AGENCY: Federal Motor Carrier Safety Francisco Estrada C., the operational performance of the Administration (FMCSA), DOT. RTCA Advisory Committee. roadway system, improve the safety of ACTION: Renewal of exemption; request [FR Doc. 06–7490 Filed 9–6–06; 8:45 am] the roadway system, and improve the for comments. BILLING CODE 4910–13–M access provided by the roadway system, while supporting community goals and SUMMARY: The FMCSA announces its objectives. Alternatives under decision to renew Werner Enterprises, DEPARTMENT OF TRANSPORTATION consideration include: (1) the no-build Inc.’s (Werner) exemption from the (Defined as: maintaining/reconstructing Agency’s requirement that drivers of Federal Highway Administration the facility in kind); and (2) commercial motor vehicles (CMVs) operating in interstate commerce rehabilitation/upgrading of the existing Environmental Impact Statement: City prepare handwritten records of duty infrastructure combined with of Cleveland, Cuyahoga County, OH status (RODS). Werner has requested construction of new facilities on that its exemption be renewed so that it AGENCY: Federal Highway modified alignment(s). may continue its practice of monitoring Administration (FHWA), DOT. Letters describing the proposed the hours of service (HOS) of its drivers ACTION: Notice of Intent. Project and soliciting comments will be by means of GPS technology and sent to appropriate Federal, and State, complementary computer programs. SUMMARY: The FHWA is issuing this agencies known to have interest in this Werner proposes in this application that notice to advise the public that an the terms and conditions of the current Environmental Impact Statement (EIS) proposal. Moreover, public involvement exemption remain in place for a second will be prepared for a proposed project activities will continue to facilitate the two-year period. The FMCSA believes in the City of Cleveland, Cuyahoga further development of alternatives, and that with the terms and conditions in County, Ohio. to identify and quantify the social, economic, and environmental impacts place, Werner will maintain a level of FOR FURTHER INFORMATION CONTACT: of the proposed Project. A public safety that is equivalent to, or greater Victoria Peters, Office Director, Office of hearing will be held. Public notice will than, the level of safety that would be Engineering and Operations, Federal obtained by complying with the Highway Administration, 200 N. High be given of the time and place of the hearing. The Draft EIS will be available requirement for a written RODS. Street, Room 328, Columbus, Ohio DATES: This decision is effective 43215, Telephone: (614) 280–6896. for public and agency review and comment prior to the public hearing. September 7, 2006. Comments must be SUPPLEMENTARY INFORMATION: The received on or before October 10, 2006. To ensure that the full range of issues FHWA, in cooperation with the Ohio ADDRESSES: You may submit comments Department of Transportation (ODOT), relating to this proposed Project are to the DOT Docket Management System will prepare an EIS for proposed addressed, and all significant issues (DMS), referencing Docket Number improvements to Interstates 71, 77 and identified, comments and suggestions FMCSA–2003–15818, using any of the 90, and connecting radial freeways and are invited from all interested parties. following methods: local roadways, known as the Cleveland Comments or questions concerning this • Web Site: http://dmses.dot.gov. Innerbelt. The Cleveland Innerbelt is proposed Project and the EIS should be Follow the instructions for submitting routed across the Cuyahoga River valley sent to the FHWA at the address comments on the DOT electronic docket and around the south and east sides of provided above. site. downtown Cleveland, Ohio. The project • (Catalog of Federal Domestic Assistance Fax: 1–202–493–2251. termini are located approximately at the • Mail: Docket Management Facility; Program Number 20.205, Highway Planning merge/diverse point of State Route 176, U.S. Department of Transportation, 400 and Construction. The regulations (the Jennings Freeway) and Interstate 71 implementing Executive Order 12372 Seventh Street, SW., Nassif Building, southwest of downtown, south of the regarding intergovernmental consultation on Room PL–401, Washington, DC 20590– existing Interstate 90/77 Central 0001. Federal programs and activities apply to this • Interchange on I–77 south of downtown, program.) Hand Delivery: Room PL–401 on and east of the Interstate 90/State Route the plaza level of the Nassif Building,

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400 Seventh Street, SW., Washington, Agency stated its belief that GPS renew the exemption for a two-year DC, between 9 a.m. and 5 p.m., Monday technology and certain complementary period. through Friday, except Federal holidays. safety-management computer systems Terms and Conditions of the Exemption • Federal eRulemaking Portal: Go to then being used by the motor carrier http://www.regulations.gov. Follow the industry provided at least the same System Operation online instructions for submitting degree of HOS monitoring accuracy as (a) System defaults must record truck comments. the automatic on-board recorders stationary time as ‘‘on duty, not Instructions: All submissions must permitted by 49 CFR 395.15. Although driving.’’ include the Agency name and docket participation in the Project was open to (b) Movements of the vehicle greater number for this notice. Note that all all interested motor carriers, Werner than two miles must be recorded as comments received will be posted was the only motor carrier to enter into driving time. without change to http://dms.dot.gov, a memorandum of understanding (c) Speed (which is determined by including any personal information (MOU) with the Agency to allow the use time and distance between truck provided. Please see the Privacy Act of GPS technology. A copy of the location updates) that is calculated to be heading for further information. Werner MOU, dated June 10, 1998, is below 10 miles per hour (mph) may be Docket: For access to the docket to included in the docket referenced at the considered invalid. In these instances, read background documents or beginning of this notice. distance traveled may be divided by comments received, go to http:// Following execution of the MOU, average driver mph or average State-to- dms.dot.gov at any time or Room PL– FMCSA closely monitored Werner’s use State mph to derive a rough estimate of 401 on the plaza level of the Nassif of GPS technology. Over the course of the driving time. Werner must Building, 400 Seventh Street, SW., the pilot demonstration project, FMCSA discontinue the use of driving time Washington, DC, between 9 a.m. and 5 conducted on-site reviews of Werner modeling entirely if its GPS provider p.m., Monday through Friday, except and also investigated a complaint made improves the satellite positioning Federal holidays. The DMS is available against Werner. These activities resulted frequency or incorporates other 24 hours each day, 365 days each year. in improvements in Werner’s GPS technology that makes the modeling If you want us to notify you that we system that increased the accuracy of unnecessary. received your comments, please include the RODS of Werner’s drivers and (d) With the exception of a self-addressed, stamped envelope or thereby improved HOS compliance. In automatically recording the driver’s postcard or print the acknowledgement March, 2002, Werner and FMCSA status as ‘‘on duty, not driving’’ when page that appears after submitting amended the MOU to incorporate the driver’s fuel card is inserted into the comments on-line. various modifications of the GPS system card reader, no system defaults are Privacy Act: Anyone may search the designed to improve Werner’s authorized for routine stops (i.e., electronic form of all comments monitoring of its compliance with the deliveries, pickups, rest). Drivers must received into any of our dockets by the HOS rules. A copy of the amended make the correct duty status entry into name of the individual submitting the MOU is also in the docket of this notice. the electronic system. (e) The system must not allow drivers comment (or of the person signing the In 2003, FMCSA exercised its to manipulate the system to conceal comment, if submitted on behalf of an authority under 49 U.S.C. 31315(b) to driving hours. association, business, labor union, etc.). consider Werner for an exemption from You may review the Department of its regulation requiring RODS to be Documentation of System Failures Transportation’s complete Privacy Act maintained in paper form. On December Werner must require each driver to Statement in the Federal Register 11, 2003, the Agency gave the public published on April 11, 2000 (65 FR note immediately any failure of the GPS notice and the opportunity to comment technology or complementary safety 19477; Apr. 11, 2000). This information on the proposal (68 FR 69117). FMCSA is also available at http://dms.dot.gov. management computer systems, and to considered the comments and on immediately begin preparing hard-copy FOR FURTHER INFORMATION CONTACT: Mr. September 21, 2004, granted Werner an driver logs during the period that the Thomas Yager, Chief, Driver and Carrier exemption from 49 CFR 395.8 for a two- technology is inoperative. Werner must Operations Division, Office of Bus and year period, with terms and conditions maintain a centralized record of each Truck Standards and Operations, MC– similar to those of the amended MOU separate failure, including the date, time PSD, Federal Motor Carrier Safety (69 FR 56474). periods, individual driver or operating Administration, 400 Seventh Street, division(s) impacted, and type of SW., Washington, DC 20590–0001. Werner’s Application for an Exemption Renewal failure. Upon request by Federal or State Telephone: 202–366–4009. E-mail: enforcement officials, Werner must [email protected]. Werner has applied for renewal of this provide facsimile copies of its RODS for SUPPLEMENTARY INFORMATION: exemption; a copy of the application has the current day and the previous 7 days been placed in the docket. Under 49 for the driver(s) affected by the failure. Background U.S.C. 31315 and 31136(e), FMCSA may In the event Werner is unable to On April 6, 1998, FMCSA published renew an exemption from the HOS produce these facsimile copies within a notice (63 FR 16697) soliciting motor requirements in 49 CFR 395.8 for a two hours, the driver(s) must manually carriers to participate in a ‘‘pilot period of up to two years if it finds prepare a driver RODS for the current demonstration project’’ (the Project). ‘‘such exemption would likely achieve a day and reconstruct his or her duty The Project was a voluntary program level of safety that is equivalent to, or hours for the previous 7 days. When the under which motor carriers with GPS greater than, the level that would be system becomes operational, a fax of the technology and related safety- achieved absent such exemption.’’ The missing RODS must be forwarded to the management computer systems would procedures for requesting an exemption agreed-upon site as soon as possible. enter into an agreement with the Agency (including renewals) are prescribed in Failure to produce either of these two to use such systems to record and 49 CFR part 381. The FMCSA has types of documents within two hours monitor drivers’ HOS in lieu of the evaluated Werner’s application for a constitutes a violation of this exemption RODS required by 49 CFR 395.8. The renewal on its merits and decided to and 49 CFR 395.8(a).

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Information Required on All CMVs Enforcement of Hours of Service While enforcement personnel who request Operated by Werner the Exemption Is in Effect information, during roadside inspections, concerning its drivers’ Werner must ensure that each CMV it Under the terms and conditions of hours of service. operates has on board and available for this exemption, Werner may require its review by Federal or State enforcement drivers to use the company’s GPS Request for Comments personnel an information packet technology and complementary safety- containing the following three items: management computer systems to In accordance with 49 U.S.C. record their HOS instead of complying 31315(b)(4) and 31136(e), FMCSA (a) An instruction sheet describing in with the requirements of 49 CFR 395.8. requests public comments on the detail how HOS data may be retrieved The FMCSA will also continue, to the from the on-board GPS equipment; approval of Werner’s request for a greatest extent practicable, to renewal of its exemption from the (b) A supply of blank RODS graph- communicate with State, Provincial, requirements of 49 CFR 395.8. The grids sufficient to record the driver’s and local enforcement agencies Agency requests that interested parties duty status and other related regarding the terms and conditions of submit comments by October 10, 2006. information for the duration of each the exemption. The FMCSA will also trip; and The FMCSA will review all comments continue its policy of not divulging to received by this date and determine any third party proprietary information (c) A copy of the exemption issued by whether the renewal of the exemption is related to Werner’s GPS technology or FMCSA authorizing Werner to use GPS consistent with the requirements of 49 technology and complementary related safety management computer U.S.C. 31315 and 31136(e). The FMCSA computer software programs in lieu of systems. believes the requirements for a renewal the RODS required by 49 CFR 395.8. In the event FMCSA conducts a compliance review or any other type of of an exemption under 49 U.S.C. 31315 FMCSA Access to Safety Management motor carrier safety management and 31136(e) can be satisfied by initially Information System investigation of Werner, FMCSA will granting the renewal and then requesting and subsequently evaluating Werner must allow FMCSA personnel review, using its automated hours-of- comments submitted by interested reasonable access to its safety service assessment system, 100 percent management information system(s). If of the applicable operating division’s parties. As indicated above, the Agency FMCSA requests access to the system(s), hours-of-service records for compliance previously published a notice of final Agency personnel will determine the with the maximum driving time disposition announcing its decision to scope and nature of the assessment. At limitations set forth in 49 CFR 395.3. exempt Werner from the HOS a minimum, access to records will The 100 percent sampling would not requirements of 49 CFR 385.8. The include: extend to any other portion of the decision to renew the exemption is regulations reviewed. With respect to (a) Driver records of duty status based on the merits, and made only after the investigation of the accuracy of careful consideration of the comments created by Werner’s GPS and related hours-of-service records (49 CFR safety management computer systems; submitted in response to the April 30, 395.8(e)), FMCSA reserves the right to 2003 (68 FR 23174) notice. (b) Driver-dispatch ‘‘message sample records in accordance with histories’’ and detailed position FMCSA policies applicable to all motor Interested parties or organizations histories associated with driver records carriers, and Werner retains the right to possessing information that would of duty status; contest the validity of the sample used. otherwise show that Werner’s GPS (c) Driver payroll records associated The Agency does not intend to hold system is not achieving the requisite with driver records of duty status; Werner to a higher standard of statutory level of safety should immediately notify FMCSA. The (d) Driver shipping document records; compliance than the rest of the industry, Agency will evaluate any information and nor would it treat Werner differently in conducting complaince investigations or submitted and, if safety is being (e) Miscellaneous trip expense other types of investigations. At any compromised or if the continuation of records. time during the exemption period, the exemption is not consistent with 49 Reporting of Corrections or FMCSA may conduct compliance U.S.C. 31315(b)(4) and 31136(e), Amendments to Records reviews of Werner, consistent with FMCSA will take immediate steps to standard operating policies applicable revoke the exemption of the driver(s) in Werner must furnish upon request to all motor carriers. These compliance question. information indicating the number of reviews would result in the assignment Issued on: August 31, 2006. times the ‘‘driving’’ time on driver of a safety rating, and the Agency could RODS was changed for each driver, and initiate enforcement action against David H. Hugel, identifying who authorized each altered Werner for serious violations. Deputy Administrator. record. Werner’s drivers and vehicles [FR Doc. E6–14797 Filed 9–6–06; 8:45 am] Documenting Distance Traveled continue to be subject to roadside BILLING CODE 4910–EX–P inspections conducted by FMCSA or Werner must ensure the system for State enforcement personnel during the monitoring and recording drivers’ HOS period of the exemption. The exemption has a means of determining that the does not preclude States from mileage each driver travels is based on continuing to enforce applicable State data from the vehicle’s electronic requirements concerning on-duty and control module or other on-board driving-time limits. It does, however, vehicle system, rather than on less preclude States from requiring Werner accurate methods such as GPS-based drivers to prepare and present RODS. (point-to-point) calculations that may ‘Werner must ensure that its drivers underestimate the distance traveled. cooperate with Federal and State

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DEPARTMENT OF TRANSPORTATION the plaza level of the Nassif Building, however, HOV mode share in 36 of the 400 Seventh Street, SW., Washington, 40 largest metropolitan areas has Federal Transit Administration DC, between 9 a.m. and 5 p.m., Monday steadily declined,3 while both excess [Docket No: FTA–2006–25750] through Friday, except Federal capacity on HOV lanes and congestion Holidays. have increased.4 Policy Statement on When High- Instructions: All submissions must An increasing number of metropolitan Occupancy Vehicle (HOV) Lanes make reference to the ‘‘Federal Transit areas are considering new demand Converted to High-Occupancy/Toll Administration’’ and include the docket management strategies as alternatives to (HOT) Lanes Shall Be Classified as number for this notice set forth above. HOV lanes. One emerging alternative is Fixed Guideway Miles for FTA’s Due to security procedures in effect the variably-priced High-Occupancy/ Funding Formulas and When HOT since October 2001 regarding mail Toll (HOT) lane. HOT lanes combine Lanes Shall Not Be Classified as Fixed deliveries, mail received through the HOV and pricing strategies by allowing Guideway Miles for FTA’s Funding U.S. Postal Service may be subject to Single-Occupant Vehicles (SOVs) to Formulas delays. Parties making submissions access HOV lanes by paying a toll. The responsive to this notice should lanes are ‘‘managed’’ through pricing to AGENCY: Federal Transit Administration consider using an express mail firm to maintain free flow conditions even (FTA), DOT. ensure the prompt filing of any during the height of rush hours. ACTION: Notice of policy statement and submissions not filed electronically or HOT lanes provide multiple benefits request for comment. by hand. Note that all submissions to metropolitan areas that are received, including any personal experiencing severe and worsening SUMMARY: This notice describes the information therein, will be posted congestion and significant terms and conditions on which the without change or alteration to http:// transportation funding shortages. First, Federal Transit Administration (FTA) dms.dot.gov. variably-priced HOT lanes expand proposes to classify High-Occupancy Docket: For access to the DOT docket mobility options in congested urban Vehicle (HOV) lanes that are converted to read materials relating to this notice, areas by providing an opportunity for to High-Occupancy/Toll (HOT) lanes as please go to http://dms.dot.gov at any reliable travel times for users prepared ‘‘fixed guideway miles’’ for purposes of time or to the Docket Management to pay a significant premium for this the transit funding formulas System. service. HOT lanes also improve the administered by FTA. The notice also FOR FURTHER INFORMATION CONTACT: efficiency of HOV facilities by allowing describes when HOT lanes would be toll-paying SOVs to utilize excess lane ineligible for classification as fixed David B. Horner, Esq., Chief Counsel, Federal Transit Administration, U.S. capacity on HOVs. In addition, HOT guideway miles in FTA’s funding lanes generate new revenue which can formulas, clarifies which HOT lanes Department of Transportation, 400 Seventh Street, SW., Washington, DC be used to pay for transportation shall not be eligible for reporting as improvements, including enhanced fixed guideway miles in FTA’s funding 20590–0001. E-mail: [email protected]. Telephone: transit service. formulas, and seeks comment from In August of 2005, recognizing the interested parties. After consideration of (202) 366–4040; or Robert J. Tuccillo, Associate advantages of HOT lanes, Congress the comments, FTA will issue a second Administrator, Office of Budget & enacted section 112 of the Safe, Federal Register notice responding to Policy, Federal Transit Accountable, Flexible, Efficient comments received and noting any Administration, U.S. Department of Transportation Equity Act: A Legacy for changes made to the policy statement as Transportation, 400 Seventh Street, Users (SAFETEA–LU), codified at 23 a result of comments received. SW., Washington, DC 20590–0001. E- U.S.C. 166, to authorize States to permit DATES: Comments must be received by mail: [email protected]. use of HOV lanes by SOVs, so long as October 10, 2006. Late-filed comments Telephone: (202) 366–4050. the performance of the HOV lanes is will be considered to the extent Office hours are from 8:30 a.m. to 6 continuously monitored and continues practicable. p.m., Monday through Friday, except to meet specified performance ADDRESSES: To ensure your comments Federal holidays. 3 Journey to Work Trends in the United States and are not entered more than once into the SUPPLEMENTARY INFORMATION : its Major Metropolitan Areas 1960–2000, DOT Docket, please identify your Background Publication No. FHWA–EP–03–058 Prepared for: submissions by the following docket U.S. Department of Transportation, Federal number: FTA–2006–25750. Please make Since the early 1980s, transportation Highway Administration, Office of Planning, your submissions by only one of the officials have sought to manage traffic Prepared by: Nancy McGuckin, Consultant, Nanda Srinivasan, Cambridge Systematics, Inc. following means: congestion and increase vehicle • 4 Office of Operations, Federal Highway Federal eRulemaking Portal: http:// occupancy by means of High- Administration, U.S. Department of Transportation. www.regulations.gov. Follow the online Occupancy Vehicle (HOV) lanes— Demand for highway travel by Americans continues instructions for making submissions to highway lanes reserved for the exclusive to grow as population increases, particularly in the DOT electronic docket site. use of car pools and transit vehicles. metropolitan areas. Construction of new highway • capacity to accommodate this growth in travel has Web Site: http://dms.dot.gov. Today, there are over 130 freeway HOV not kept pace. Between 1980 and 1999, route miles Follow the online instructions for facilities in metropolitan areas in the of highways increased 1.5 percent while vehicle making submissions to the DOT U.S.,1 of which approximately 10 have miles of travel increased 76 percent. The Texas electronic docket site. received funding through FTA’s Major Transportation Institute estimates that, in 2000, the 75 largest metropolitan areas experienced 3.6 • Fax: 1–202–493–2478. Capital Investment program and • billion vehicle-hours of delay, resulting in 5.7 U.S. Post or Express Mail: Docket approximately 80 are counted as ‘‘fixed billion gallons in wasted fuel and $67.5 billion in Management System, U.S. Department guideway miles’’ for purposes of FTA’s lost productivity. And traffic volumes are projected of Transportation, 400 Seventh Street, formula grant programs.2 Since 1990, to continue to grow. The volume of freight SW., Nassif Building, Room PL–401, movement alone is forecast to nearly double by 2020. Congestion is largely thought of as a big city Washington, DC 20590–001. 1 • Office of Operations, Federal Highway problem, but delays are becoming increasingly Hand Delivery: To the Docket Administration, U.S. Department of Transportation. common in small cities and some rural areas as Management System; Room PL–401 on 2 National Transit Database. well.

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standards. The Department has strongly Miami-Dade County.10 Other Proposed FTA Policy endorsed the conversion of HOV lanes jurisdictions are exploring the potential (a) Purpose of Revised Policy. The to variably-priced HOT lanes, most for HOT lanes with grants provided by proposed FTA policy described below recently in its Initiative to Reduce the Department’s Value Pricing Pilot would help ensure that federal transit 11 Congestion on the Nation’s Program. These include the Port funding for congested urban areas is not Transportation Network. It is the Authority of New York/New Jersey; San decreased when existing HOV facilities Department’s policy to encourage Antonio, Texas; Seattle, Washington; are converted to variably-priced HOT jurisdictions to consider ‘‘HOV-to-HOT’’ Atlanta, Georgia; and Portland, lanes in an effort by localities to reduce 12 conversion as a means of congestion Oregon. congestion, improve air quality, and relief and possible revenue While an increasing number of maximize throughput using excess HOV enhancement. metropolitan planning organizations lane capacity. The revised FTA policy The ability of HOT lanes to introduce and State departments of transportation would also promote a uniform approach additional traffic to existing HOV are studying the HOT lane concept as a by the Department’s operating agencies facilities, while using pricing and other strategy to improve mobility, six HOT management techniques to control the concerning HOV-to-HOT conversions. lane facilities currently operate in the number of additional motorists, In particular, FTA policy would be United States: State Route 91 (SR 91) maintain high service levels and coordinated with the statutes enacted by Express Lanes in Orange County, provide new revenue, make HOT lanes Congress under section 112 of California; the I–15 FasTrak in San an effective means of reducing SAFETEA–LU applicable to the Federal Diego, California; the Katy Freeway congestion and improving mobility. For Highway Administration intended to QuickRide and the Northwest Freeway this reason, and given the new authority simplify conversion of HOV lanes to (US 290) in Harris County, Texas; I–394 enacted by Congress to promote ‘‘HOV- HOT lanes. The policy statement would in Minneapolis and St. Paul, Minnesota; to-HOT’’ conversions, many States, also support the Administration’s policy and I–25 in Denver, Colorado. transportation agencies and of encouraging HOV-to-HOT metropolitan areas are seriously Prior FTA Policy conversions. considering applying variable pricing to (b) Proposed Policy. FTA would both new and existing roadways. For Since 2002, FTA’s policy has been to classify HOT lanes as ‘‘fixed guideway example, the current long-range continue to classify the lanes of an HOV miles’’ for purposes of the funding transportation plan for the Washington, facility converted to HOT lanes as formulas administered under 49 U.S.C. DC, metropolitan area includes four new ‘‘fixed guideway miles’’ for funding § 5307(b) and 49 U.S.C. § 5309(a)(E), so HOT lanes along 15 miles of the Capital formula purposes on the condition that long as each of the following conditions Beltway in Virginia, and six new the facility meets two requirements: (i) is satisfied: variably-priced lanes along 18 miles on The HOT facility manages SOV use so (i) The HOT lanes were previously the Inter-County Connector in that it does not impede the free-flow HOV lanes reported in the National Montgomery and Prince George’s and high speed of transit and high- Transit Database as ‘‘fixed guideway Counties in Maryland.5 Virginia is also occupancy vehicles and (ii) toll miles’’ for purposes of the funding exploring the possibility of converting revenues collected on the facility will be formulas administered by FTA under 49 existing HOV lanes along the I–95/395 used for mass transit purposes.13 FTA U.S.C. 5307(b) and 49 U.S.C. 5309(a)(E). corridor into HOT lanes.6 Maryland is has considered requiring as an Facilities that were not eligible HOV considering express toll lanes along I– additional condition for eligibility that lanes prior to being converted to HOT 495, I–95 and I–270, as well as along the lowest toll payable by SOVs on a lanes would remain ineligible for other facilities.7 Similarly, in San HOT facility be not less than the fare inclusion as fixed guideway miles in Francisco, the Metropolitan charged for transit services on the HOT FTA’s funding formulas. Therefore, Transportation Commission’s facility. neither non-HOV facilities converted Transportation 2030 Plan advocates directly to HOT facilities nor facilities development of a HOT network that 10 Miami-Dade Transportation Plan (to the Year constructed as HOT lanes would be would convert that region’s existing 2030) December 2004, FINAL DRAFT, Page 24. eligible for classification as ‘‘fixed HOV lanes to HOT lanes; 8 Houston’s 11 Federal Highway Administration, U.S. guideway miles.’’ Department of Transportation. The Department’s (ii) The HOT lanes are continuously 2025 Regional Transportation Plan Value Pricing Pilot Program (VPPP), initially includes plans to implement peak authorized by the Intermodal Surface monitored and continue to meet period pricing within the managed HOT Transportation Efficiency Act as the Congestion performance standards that preserve lanes of the major freeway corridors in Pricing Pilot Program and continued as the VPPP free flow traffic conditions as specified 9 under SAFETEA–LU, encourages implementation in 23 U.S.C. 166(d). 23 U.S.C. 166(d) the region; and the Miami-Dade, and evaluation of value pricing pilot projects, Florida 2030 Transportation Plan offering flexibility to encompass a variety of provides operational performance includes conversion of existing HOV innovative applications including areawide pricing, standards for an HOV facility converted lanes to reversible HOV/HOT lanes to pricing of multiple or single facilities or corridors, to a HOT facility. It also requires that provide additional capacity to I–95 in single lane pricing, and implementation of other the performance of the facility be market-based strategies. continuously monitored and that it 12 Federal Highway Administration, U.S. 5 Letter to U.S. Department of Transportation, Department of Transportation. continue to meet specified performance August 28, 2006, from National Capital Region 13 In a Letter to U.S. Representative Randall standards. Due to original project Transportation Planning Board. Cunningham, dated June 10, 2002, concerning the commitments, HOV facilities 6 Letter to U.S. Department of Transportation, I–15 FasTrak facility in San Diego, FTA stated: constructed using capital funds August 28, 2006, from National Capital Region ‘‘* * * FTA will recognize, for formula allocation Transportation Planning Board. purposes, exclusive fixed guideway transit facilities available under 49 U.S.C. 5309(d) or (e) 7 Letter to U.S. Department of Transportation, that permit toll-paying SOVs on an incidental basis could be required, when converted to August 28, 2006, from National Capital Region (often called high occupancy/toll (HOT) lanes) HOT lanes, to achieve a higher Transportation Planning Board. under the following conditions: the facility must be performance standard than required 8 A Vision for the Future Transportation 2030, able to control SOV use so that it does not impede February 2005, Chapter 1, Page 6. the free flow and high speed of transit and HOV under 23 U.S.C. 166(d). Standards for 9 2025 Regional Transportation Plan Houston- vehicles, and the toll revenues collected must be operational performance and Galveston Area, June 2005, Page 31. used for mass transit purposes.’’ determining degradation of operational

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performance for facilities constructed U.S.C. 5307 (Urbanized area formula August 31, 2009. The exemption for the with funds from FTA’s New Starts grants). Bugatti Veyron 16.4 is effective from program would be determined by FTA (d) No Return of Funds under Full September 1, 2006 and will remain in on a case-by-case basis. FTA would Funding Grant Agreements. In the event effect until September 1, 2008. The require real-time monitoring of traffic that an HOV facility is converted to a exemption for the Maserati Coupe/ flows to ensure on-going compliance HOT facility and the HOV facility has Spyder is effective from September 1, with operational performance standards. received funds through FTA’s New 2006 and will remain in effect until (iii) Program income from the HOT Starts program, FTA would not require December 31, 2007. lane facility, including all toll revenue, the grantee to return such funds so long In accordance with the requirements is used solely for ‘‘permissible uses.’’ as the facility complied with the of 49 U.S.C. 30113(b)(2), we published ‘‘Permissible uses’’ could mean any of conditions set forth in this guidance. a notice of receipt of the applications 1 the following uses with respect to any in the Federal Register and asked for James S. Simpson, HOT lane facility, whether operated by public comments.2 We received a public or private entity: (a) Debt Administrator. comments from four of the petitioners service, (b) a reasonable return on [FR Doc. E6–14796 Filed 9–6–06; 8:45 am] (Lamborghini, Lotus, Morgan, and investment of any private financing, (c) BILLING CODE 4910–57–P Maserati), one trade organization, and the costs necessary for the proper one individual. Please note that, as was operation and maintenance of such done with the notice of receipt, we are DEPARTMENT OF TRANSPORTATION facility (including reconstruction and publishing this decision notice for the rehabilitation), and (d) if the operating five applications together to ensure National Highway Traffic Safety efficient use of agency resources and to entity annually certifies that the facility Administration is being adequately operated and facilitate the timely processing of the maintained (including that the [Docket No. NHTSA–2006–25324, Notice 2] applications. However, NHTSA permissible uses described in (a), (b) considered each application and (c) above, if applicable, are being Automobili Lamborghini SpA; Bugatti individually, and our decision regarding duly paid), any other purpose relating to Automobiles S.A.S. and Bugatti the temporary exemption for each a project carried out under Title 49 Engineering GmbH; Group Lotus Plc; company is discussed separately below. U.S.C. 5301 et seq. (‘‘transit law’’). In Morgan Motor Company Limited; DATES: The exemptions from the cases where the HOT lane facility has Maserati; Grant of Applications for a specified provisions of FMVSS No. 208 received (or receives) funding from FTA Temporary Exemption From Advanced for the Lamborghini Murcielago, the and another Federal agency, such that Air Bag Requirements of FMVSS No. Lotus Elise, and the Morgan Aero 8 are use of the facility’s program income is 208 effective September 1, 2006 until August 31, 2009. The exemption for the governed by more than one Federal AGENCY: National Highway Traffic Bugatti Veyron 16.4 is effective from program, FTA’s restrictions concerning Safety Administration (NHTSA), September 1, 2006 until September 1, permissible use would not apply to Department of Transportation (DOT). more than transit’s allocable share 14 of 2008. The exemption for the Maserati ACTION: Grant of applications for Coupe/Spyder is effective from the facility’s program income. FTA temporary exemptions from certain would not require recipients to assign September 1, 2006 until December 31, advanced air bag provisions of Federal 2007. priority in payment to any permissible Motor Vehicle Safety Standard No. 208, use. Occupant Crash Protection. FOR FURTHER INFORMATION CONTACT: Mr. (c) Transit Fares and Tolls on HOT Ed Glancy or Mr. Eric Stas in the Office Lane Facilities. FTA would not SUMMARY: This notice grants the of the Chief Counsel at the National condition reporting of HOT lanes as Automobili Lamborghini SpA Highway Traffic Safety Administration fixed guideway miles following (‘‘Lamborghini’’); Bugatti Automobiles (NCC–112), 400 Seventh Street, SW., conversion from HOV lanes or condition S.A.S. and Bugatti Engineering GmbH Room 5215, Washington, DC 20590 any approval or waiver under a Full (collectively, ‘‘Bugatti’’); Group Lotus (Phone: 202–366–2992; Fax 202–366– Funding Grant Agreement on a grantee’s Plc (‘‘Lotus’’); Morgan Motor Company 3820). adopting transit fare policies or a tolling Limited (‘‘Morgan’’); and Maserati SpA SUPPLEMENTARY INFORMATION authority’s adopting of tolling policies (‘‘Maserati’’) applications for temporary concerning, respectively, the price of exemption from certain advanced air I. Advanced Air Bag Requirements and transit services on the HOT lane facility bag requirements of Federal Motor Small Volume Manufacturers and the tolls payable by SOVs. Instead, Vehicle Safety Standard (FMVSS) No. In 2000, NHTSA upgraded the FTA would allow grantees and tolling 208, Occupant Crash Protection. The requirements for air bags in passenger authorities to develop their own fare exemptions apply to the Lamborghini cars and light trucks, requiring what are structures for transit services and tolls, Murcielago, the Bugatti Veyron 16.4, the commonly known as ‘‘advanced air respectively, on HOT lane facilities. Lotus Elise, the Morgan Aero 8, and the bags.’’ 3 The upgrade was designed to Transit fares would remain subject to 49 Maserati Coupe/Spyder. In accordance meet the goals of improving protection U.S.C. 5332 (Nondiscrimination) and 49 with 49 CFR part 555, the basis for each for occupants of all sizes, belted and grant is that compliance would cause unbelted, in moderate to high speed 14 Transit’s allocable share of the facility’s substantial economic hardship to a crashes, and of minimizing the risks program income shall be an amount equal to the manufacturer that has tried in good faith posed by air bags to infants, children, facility’s total program income, for any period, multiplied by a ratio, (a) the numerator of which to comply with the standard, and the shall be the cumulative amount of funds exemption would have a negligible 1 To view the applications, go to: http:// contributed to the facility through a program impact on motor vehicle safety. dms.dot.gov/search/searchFormSimple.cfm and established by transit law, and (b) the denominator The exemptions for the Lamborghini enter the Docket No. NHTSA–2006–25324. of which shall be the cumulative amount of all 2 See 71 FR 39386 (July 12, 2006) (Docket No. Federal funds contributed to the facility, in each Murcielago, the Lotus Elise, and the NHTSA–2006–25324–6). case at the time transit’s allocable share is Morgan Aero 8 are effective September 3 See 65 FR 30680 (May 12, 2000) (Docket No. calculated. 1, 2006 and will remain in effect until NHTSA–2000–7013).

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and other occupants, especially in low requirements of FMVSS No. 208. The Exempted manufacturers seeking speed crashes. basis for each application is that renewal must bear in mind that the The advanced air bag requirements compliance would cause substantial agency is directed to consider financial were a culmination of a comprehensive economic hardship 4 to a manufacturer hardship as but one factor, along with plan that the agency announced in 1996 that has tried in good faith to comply the manufacturer’s on-going good faith to address the adverse effects of air bags. with the standard. The agency closely efforts to comply with the regulation, This plan also included an extensive examines and considers the information the public interest, consistency with consumer education program to provided by manufacturers in support of Safety Act, generally, as well as, other encourage the placement of children in these factors, and, in addition, pursuant such matters as provided in the statute. rear seats. The new requirements were to 49 U.S.C. 30113(b)(3)(A), determines III. Lamborghini phased in beginning with the 2004 whether exemption is in the public model year. interest and consistent with the Safety Background. Lamborghini is an Italian Small volume manufacturers (i.e., Act.5 corporation formed in 1963 to produce original vehicle manufacturers A manufacturer is eligible to apply for high-performance sports cars. This producing or assembling fewer than a hardship exemption if its total motor application concerns the Lamborghini 5,000 vehicles annually for sale in the vehicle production in its most recent Murcielago, a vehicle which was United States) are not subject to the year of production did not exceed developed in the mid-1990s and which advanced air bag requirements until 10,000 vehicles, as determined by the is now scheduled to continue in September 1, 2006, but their efforts to NHTSA Administrator (49 U.S.C. production until 2009. Originally, bring their respective vehicles into 30113). In determining whether a Lamborghini planned to begin selling compliance with these requirements manufacturer of a vehicle meets that the Murcielago in 1999 and to end began several years ago. However, criterion, NHTSA considers whether a production before September 2006. because the new requirements were second vehicle manufacturer also might However, because of financial hardship challenging, major air bag suppliers be deemed the manufacturer of that and a change in corporate ownership, concentrated their efforts on working vehicle. The statutory provisions the petitioner did not begin sales of the with large volume manufacturers, and, governing motor vehicle safety (49 Murcielago until the very end of 2001, thus, until recently, small volume U.S.C. Chapter 301) do not include any and it is now forced to extend the manufacturers had limited access to provision indicating that a manufacturer product cycle of this vehicle. advanced air bag technology. Because of might have substantial responsibility as Lamborghini has experienced the nature of the requirements for manufacturer of a vehicle simply financial problems for several years. protecting out-of-position occupants, because it owns or controls a second Over the period from 2001 to 2004, the ‘‘off-the-shelf’’ systems could not be manufacturer that assembled that company lost more than $180 million. readily adopted. Further complicating vehicle. However, the agency considers Lamborghini claims this economic matters, because small volume the statutory definition of hardship precluded the timely manufacturers build so few vehicles, the ‘‘manufacturer’’ (49 U.S.C. 30102) to be development of a new vehicle that costs of developing custom advanced air sufficiently broad to include sponsors, could comply with advanced air bag bag systems compared to potential depending on the circumstances. Thus, requirements. With respect to the profits discouraged some air bag NHTSA has stated that a manufacturer Murcielago, Lamborghini also has been suppliers from working with small may be deemed to be a sponsor and thus unable to overcome a number of volume manufacturers. a manufacturer of a vehicle assembled engineering problems associated with The agency has carefully tracked by a second manufacturer if the first installing advanced air bags in the occupant fatalities resulting from air bag manufacturer had a substantial role in current vehicle configuration. If the deployment. Our data indicate that the the development and manufacturing exemption is not granted, the agency’s efforts in the area of consumer process of that vehicle. Murcielago model cannot be sold in the education and manufacturers’ providing Finally, while 49 U.S.C. 30113(b) U.S. during the period 2006–2009, depowered air bags were successful in states that exemptions from a Safety Act which the petitioner stated could reducing air bag fatalities even before standard are to be granted on a further delay the introduction of a fully advanced air bag requirements were ‘‘temporary basis,’’ 6 the statute also compliant vehicle. Thus, Lamborghini implemented. expressly provides for renewal of an asks for a temporary exemption from the As always, we are concerned about exemption on reapplication. advanced air bag requirements for the the potential safety implication of any Manufacturers are nevertheless Murcielago until it is replaced by a temporary exemptions granted by this cautioned that the agency’s decision to brand new vehicle in 2009. agency. In the present case, we are grant an initial petition in no way Eligibility. Lamborghini’s total motor addressing five separate petitions for a predetermines that the agency will vehicle production in the most recent temporary exemption from the repeatedly grant renewal petitions, year of production was less than 10,000 advanced air bag requirements, each of thereby imparting semi-permanent vehicles. More specifically, the which is discussed individually below. exemption from a safety standard. petitioner reported the following The petitioners are all manufacturers of worldwide production and U.S. imports very expensive, low volume, exotic 4 When considering financial matters involving over the past few years: sports cars. companies based in the European Union (EU), it is important to recognize that EU and U.S. accounting Lamborghini Worldwide U.S. II. Overview of Petitions for Economic principles have certain differences in their S.p.A. production imports Hardship Exemption treatment of revenue, expenses, and profits. Public statements by EU manufacturers relating to 2002 ...... 434 cars .... 134 cars. In accordance with 49 U.S.C. 30113 financial results should be understood in this 2003 ...... 702 cars .... 423 cars. and the procedures in 49 CFR part 555, context. This agency analyzes claims of financial 2004 ...... 2038 cars .. 645 cars. hardship carefully and in accordance with U.S. Lamborghini, Bugatti, Lotus, Morgan, accounting principles. 2005 (estimate) 1662 cars .. 665 cars. and Maserati have separately petitioned 5 The Safety Act is codified as Title 49, United the agency for a temporary exemption States Code, Chapter 301. However, in 1998, 100 percent of from certain advanced air bag 6 49 U.S.C. 30113(b)(1). Lamborghini was acquired by Audi, a

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large motor vehicle manufacturer cars produced by Audi. There is no advanced air bag system for the (which is in turn 99.9 percent owned by sharing of engines, transmissions, Murcielago and to also engineer its fully Volkswagen). In discussing its eligibility platforms, or interior systems, and compliant replacement by 2009. for hardship relief, Lamborghini asserts production tooling is unique to Lamborghini initially did not foresee that its relationship with Audi is Lamborghini. Second, Lamborghini has that the Murcielago would still be in ‘‘arm’s-length.’’ Lamborghini operates indicated that it has paid for all services production when advanced air bags independently, and services provided or assistance provided by Audi in became mandatory. It was designed in by Audi or Audi affiliates are paid for ‘‘arms-length’’ transactions. Third, cars the mid-1990s and was intended to be by Lamborghini. are imported and sold through separate launched in 1999, with production In making our determination distribution channels independent of ending in 2006. Due to financial regarding eligibility, we note that the the Audi dealer network. Accordingly, hardship and changes in ownership, the public comment 7 of the Coalition of NHTSA concludes that Audi is not a Murcielago was not offered for sale until Small Volume Auto Manufacturers manufacturer of Lamborghini vehicles late in 2001. Further financial hardship, (COSVAM) raised the issue of whether by virtue of being a sponsor. compounded by shifts in the exchange certain of the petitioners (Bugatti, Requested exemptions. Lamborghini rate between the U.S. dollar and the Lamborghini, Maserati) are eligible for states that it intends to certify the euro and the need to amortize costs of temporary exemptions under part 555, Murcielago as complying with the rigid developing the Murcielago, necessitate in light of their financial relationships barrier belted test requirement using the continued production of that vehicle to larger parent companies which are 50th percentile adult male test dummy until 2009. also vehicle manufacturers. Specifically, set forth in S14.5.1 of FMVSS No. 208. Lamborghini estimates the total cost COSVAM argued that Lamborghini is The petitioner states that it previously of an advanced air bag program to be owned by Audi, a vehicle manufacturer determined the Murcielago’s about $24 million (20 million euros). whose sales in the U.S. market exceeds compliance with rigid barrier unbelted Lamborghini states that the the upper limits for classification as a test requirements using the 50th development of an advanced air bag small volume manufacturer. percentile adult male test dummy system for the Murcielago’s successor Accordingly, the commenter argued that through the S13 sled test using a generic can be funded through the Murcielago’s Lamborghini should be considered a pulse rather than a full vehicle test. continued U.S. sales. brand produced by major vehicle Lamborghini states that it, therefore, If the exemption is denied and U.S. manufacturer Audi, thereby making the cannot at present say with certainty that sales of the Murcielago end on petitioner ineligible for a temporary the Murcielago will comply with the September 1, 2006, Lamborghini exemption under part 555 based upon unbelted test requirement under projects a loss of $12.7 million (10.6 higher production values. S14.5.2, which is a 20–25 mph rigid million euros) for the period between Lamborghini also submitted a public barrier test. September of 2006 and September of comment 8 on its own petition, in which As for the Murcielago’s compliance 2009. it sought to further clarify its with the other advanced air bag Good faith efforts to comply. Once the relationship with its parent company, requirements, Lamborghini states that it petitioner realized that the product life arguing that it is similar to that of does not know whether the Murcielago of the Murcielago would have to Ferrari and its parent company (Fiat). will be compliant because to date it has continue beyond September 2006, According to Lamborghini, the not had the financial ability to conduct Lamborghini undertook efforts for Murcielago does not resemble nor share the necessary testing. development an advanced air bag parts with any vehicle produced by the As such, Lamborghini is requesting an system. As early as 2001, Lamborghini parent company. The petitioner further exemption for the Murcielago from the began contacting air bag manufacturers stated that the parent company did not rigid barrier unbelted test requirement in an effort to develop a compliant assist in the design or engineering of the with the 50th percentile adult male test advanced air bag system. It pursued this Murcielago, nor did it have any role in dummy (S14.5.2), the rigid barrier test matter with at least four suppliers. the manufacturing process for that requirement using the 5th percentile However, none provided a workable vehicle. In fact, the Murcielago was adult female test dummy (belted and solution. The efforts continued until the developed prior to Audi’s acquisition of unbelted, S15), the offset deformable summer of 2005, at which point Lamborghini in 1998. Furthermore, barrier test requirement using the 5th Lamborghini concluded that technical Lamborghini argued that it pays for any percentile adult female test dummy constraints prevented development of testing or similar assistance provided by (S17), the requirements to provide advanced air bags for the Murcielago. Audi. It also stated that Lamborghini protection for infants and children (S19, Specifics of the technical difficulties are has its own CEO and Board of Directors, S21, and S23) and the requirement described in the petition. and that the company has its own using an out-of-position 5th percentile Lamborghini argues that an research and development, Sales- adult female test dummy at the driver exemption would be in the public Marketing, and After-Sales departments. position (S25). interest. The petitioner argues that the The agency examined the relationship Lamborghini is requesting the above number of vehicles affected by an between Lamborghini and Audi. exemption for the Murcielago for the exemption would be very small and will Lamborghini S.p.A. is 100% owned by period from September 1, 2006 to therefore have, at most, a negligible Audi AG (which, in turn is 99.1% August 31, 2009. impact on the overall safety of U.S. owned by Volkswagen AG). We have Economic Hardship. Lamborghini highways. Further, the petitioner asserts concluded that Lamborghini is eligible states that over the four-year period that according to the company’s to apply for a temporary exemption from 2001–2004, it lost over $180 research, the Murcielago is likely to be based on the following factors. First, million (145 million euros), with yearly operated only on a limited basis (an there is no similarity of design between losses averaging approximately $47 average of 5,000 miles per year). the cars produced by Lamborghini and million (37 million euros). Lamborghini Lamborghini also argues that granting asserts that, notwithstanding an exemption will assure proper parts 7 Docket No. NHTSA–2006–25324–15. engineering impracticability described and service are available in the U.S. to 8 Docket No. NHTSA–2006–25324–12. below, it could not afford to develop an support existing owners of Lamborghini

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automobiles, thereby benefiting not only over three years and that these vehicles comment period is required under 5 Lamborghini customers, but also dealers are not normally used for daily CFR 1320.8(d). and service personnel. Finally, it argued transportation, have substantially lower Mr. Blodgett also requested that the that denial of its requested exemption than average annual usage, and typically Office of Management and Budget would decrease consumer choice in the are not used to transport children. The (OMB) and/or a separate independent high-performance vehicle market. company added that its search of contractor be used to evaluate the Summary of Public Comments. The NHTSA’s Fatality Analysis Reporting financial data submitted by the five agency received three comments on the System (FARS) database from 1995– petitioning manufacturers. The Lamborghini petition for a temporary 2003 and the 2004 Annual Report File 9 commenter also faulted the exemption. The first comment was (a period covering both the Murcielago manufacturers for petitioning the agency submitted by Lamborghini itself. In its and its predecessor vehicle (the Diablo)) not long before the September 1, 2006 comment, the company stated that its showed only one crash involving a compliance date for the advanced air situation is similar to Ferrari’s request Lamborghini, in which the adult female bag requirements. He further suggested for a temporary exemption from the occupant survived. According to that it is presumptuous for these advanced air bag provisions of FMVSS Lamborghini, there are no known manufacturers to continue producing No. 208, which the agency granted in a instances of injury or death to infants, vehicles prior to receiving a decision on notice published in the Federal Register children, or other occupants caused by their applications for temporary on May 22, 2006 (71 FR 29389) (Docket air bags, the problem giving rise to the exemption, something which should be No. NHTSA–2005–23093). Specifically, advanced air bag rule. The company taken into account when considering Lamborghini presented the following further argued that given its low sales the manufacturers’ petitions. arguments in support of its petition. volume, it would be aware of such Mr. Blodgett objected to the lack of Like Ferarri, Lamborghini stated that fatalities and injuries if they were supporting documentation from air bag its product cycles must last longer than occurring. Accordingly, the petitioner suppliers to verify that the requirements the industry average due to the high cost argued that its requested exemption for for which the vehicle manufacturers of development and extremely small these vehicles would have a negligible seek an exemption cannot be met. The sales volumes. Lamborghini stated that effect on safety. commenter expressed his opinion that it did not anticipate continued the government should not be production of the Murcielago after In addition, Lamborghini argued that subsidizing uncompetitive businesses September 1, 2006, but the company the continued weakening of the U.S. through the temporary exemption later determined that it would be dollar vis-a`-vis the euro, when process and that granting exemptions necessary to continue production of that combined with competitive pressure to unfairly penalizes other manufacturers model. According to Lamborghini, avoid significant vehicle price increases who concomitantly lose market share. advanced air bag requirements were not in the U.S. market, exacerbates the Mr. Blodgett also objected to the anticipated when designing the economic hardship problems agency’s decision to combine the five Murcielago’s vehicle platform, which confronting the company. applications for temporary exemption arose from a predecessor vehicle The second comment was submitted into a single Federal Register notice, developed circa 1990. However, the by Mr. Steven Blodgett, an individual.10 rather than publishing a separate notice petitioner stated that in order to meet (We note that Mr. Blodgett’s comments for each petitioner. The commenter the advanced air bag requirements, it applied equally to all five manufacturer- argued that this is confusing and is not would face the unique challenge of petitioners. Accordingly, this consistent with the requirements of 49 needing to completely redesign the commenter’s arguments will be set forth U.S.C. 30113(b)(2). vehicle before the end of its life cycle. immediately below, but they will not be The third comment was submitted by Lamborghini stated that it made a good repeated in subsequent discussions the COSVAM. As discussed previously, faith effort to find a practicable way to involving the other four manufacturers.) COSVAM raised the issue of whether comply with the advanced air bag In part, Mr. Blodgett requested a 30-day certain of the petitioners (Bugatti, requirements, but it was unable to do so. extension of the 15-day comment Lamborghini, Maserati) are eligible for As discussed previously, Lamborghini period, arguing that the agency has temporary exemptions under part 555, argued that it is an independent arbitrarily shortened the comment in light of their financial relationships manufacturer eligible for an exemption period. The commenter argued that his to larger parent companies which are under 49 CFR part 555, despite the fact ability to seek an extension of the also vehicle manufacturers (see that the company is owned by Audi (see comment period has been compromised Eligibility section above for details and Eligibility section above for details). by the requirement under 49 CFR 553.19 the agency’s decision on that issue). Lamborghini stated that its vehicle that such requests must be received not Agency Decision on Lamborghini also incorporates additional active and later than 15 days before the time stated Petition. We are granting the passive safety systems, including anti- in the notice. He stated that additional Lamborghini petition to be exempted lock brakes (ABS), traction control, four- time is required to allow for proper from portions of the advanced air bag wheel drive, rollover bars, research in order to verify the regulation required by S14.2 pretensioners, and upgraded rear fuel statements of the manufacturers, as well (specifically S14.5.2, S15, S17, S19, S21, system integrity. The petitioner also as their accompanying financial data. S23, and S25). The exemption does not stated that the vehicle has been Furthermore, he argued that a 60-day extend to the provision requiring a subjected to a frontal pole test at 35 mph belted 50th percentile male barrier and a roof crush resistance test at 2.5 impact test (S14.5.1(a)). In addition to 9 The 2004 FARS data file—the Annual Report times the mass of the vehicle. File—was created in June 2005; however, the 2004 certifying compliance with S14.5.1(a), Furthermore, the company stated that FARS file officially closed in February 2006. This Lamborghini must continue to certify to the Murcielago has been equipped with additional time provided the opportunity for the unbelted 50th percentile male an air bag on-off switch. submission of important variable data requiring barrier impact test in force prior to outside sources, which may lead to changes in the In terms of safety impact, final counts. The updated final counts for 2004 will September 1, 2006 (S5.1.2(a)). We note Lamborghini argued that it intends to be reflected in the 2005 annual report. that the unbelted sled test in S13 is an produce only 380 Murcielago vehicles 10 Docket No. NHTSA–2006–25324–13 and –14. acceptable option for that requirement.

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The agency’s rationale for this decision company, due to the high cost of 2. Itemized costs of each component is as follows. development and its extremely small that would have to be modified in order The advanced air bag requirements sales volumes. to achieve compliance. present a unique challenge because they Based upon the information provided 3. Discussion of alternative means of would require Lamborghini to by the petitioner, we understand that compliance and reasons for rejecting completely redesign its vehicles, in Lamborghini made good faith efforts to these alternatives. order to overcome the engineering bring the Murcielago into compliance 4. List of air bag suppliers that were limitations based upon the basic with the applicable requirements until approached in hopes of procuring configuration of the Murcielago. While such time as it became apparent that necessary components. the petitioner was aware of the new 5. Explanations as to why components there was no practicable way to do so. requirements for some time, its business from newer, compliant vehicle lines No viable alternatives remain. The plans changed, and it was subsequently could not be borrowed. petitioner is unable to design a new determined that the Murcielago’s 6. Corporate income statements and vehicle by the time the new advanced production run would need to be balance sheets for the past three years, air bag requirements go into effect on extended beyond 2006, thereby raising and projected income statements and September 1, 2006. the problem of compliance with the balance sheets if the petition is denied. advanced air bag requirements. After review of the income statements We note that Lamborghini is a well- Lamborghini explained the main provided by the petitioner, the agency established company with a small, but engineering challenges precluding notes that the company has faced not insignificant U.S. presence. We incorporation of advanced air bags into ongoing financial difficulties, having believe that the reduction of sales the Murcielago at this time, as follows. lost over $180 million (145 million revenue resulting from a denial of the First, cockpit space limitations imposed euros) over the period from 2001–2004. company’s requested temporary by the windshield and passenger If the petitioner is forced to discontinue exemption would have a negative compartment height currently prevent selling the current model in the U.S. impact not only on Lamborghini’s the fitting of the six-year-old dummies market, the resulting loss of sales would financial circumstances, but it would into the required out-of-position test cause substantial economic hardship also negatively affect U.S. employment. locations, thereby necessitating a within the meaning of the statute, Specifically, reduction in sales would customized procedure. Second, the potentially amounting to the difference also affect Lamborghini dealers, repair location of the air conditioning system between profitability and ongoing specialists, and several small service precludes installation of the passenger losses. According to Lamborghini, providers that transport Lamborghini air bag module in the top of the absent the exemption, production of the vehicles from the port of entry to the instrument panel, and the manufacturer Murcielago would cease in September rest of the United States. Traditionally, was unable to identify an alternate 2006, because sales in the rest of the the agency has concluded that the location for the air bag module. Third, world would be insufficient to justify public interest is served in affording it was not possible to adapt continued production (as the U.S. continued employment to the Lamborghini’s supplier’s bladder accounts for 35–40 percent of the petitioner’s U.S. work force. technology based upon occupant market for the Murcielago). However, Furthermore, as discussed in previous sensors into the Murcielago’s unique Lamborghini’s problems would be decisions on temporary exemption seating systems. Fourth, another compounded without its requested applications, the agency believes that supplier’s sensor system was unable to temporary exemption, because it needs the public interest is served by affording distinguish between the six-year-old the revenue from sales of the Murcielago consumers a wider variety of motor and 5th-percentile female dummies in over the next three years to finance vehicle choices. the Murcielago environment. Fifth, the development of a fully compliant We also note that the Murcielago manufacturer was confronted with vehicle for delivery to the U.S. market features several advanced ‘‘active’’ cockpit space limitations which in September 2009. Granting the safety features. These features are listed precluded placement of occupant exemption will allow Lamborghini to in the petitioner’s application.11 While sensors in other areas of the seat earn the resources necessary to bridge the availability of these features is not structure, and it was unable to find the gap in terms of development of a critical to our decision, it is a factor in suppliers willing to customize their successor vehicle for the Murcielago considering whether the exemption is in systems to Lamborghini’s specifications. that meets all U.S. requirements. the public interest. Sixth, the top-mounted passenger air While some of the information We believe that this exemption will bag system designed for the new have negligible impact on motor vehicle Lamborghini Gallardo (which will meet submitted by Lamborghini has been granted confidential treatment and is safety because of the limited number of the advanced air bag requirements) vehicles affected (not more than 380 for cannot be retrofitted into the not detailed in this document, the petitioner made a comprehensive the duration of the exemption), and Murcielago. because Lamborghini vehicles are not For a high-speed performance vehicle showing of its good faith efforts to comply with the requirements of S14.2 typically used for daily transportation. such as the Murcielago, aerodynamics Their yearly usage is substantially lower are a major design consideration, so of FMVSS No. 208, and detailed engineering and financial information compared to vehicles used for everyday such vehicles tend to sit very close to transportation. the ground and have minimal cockpit demonstrating that failure to obtain the exemption would cause substantial In addition, Lamborghini has space as essential features of their basic voluntarily included an air bag on-off design. Any significant increase in economic hardship. Specifically, the petitioner provided the following: switch for passenger air bag suppression cockpit dimensions (as might be for the protection of children being required to meet the advanced air bag 1. Chronological analysis of transported in the right front seating requirements) would necessitate a total Lamborghini’s efforts to comply, position. This will enable the passenger vehicle makeover. Lamborghini has showing the relationship to the made clear that such a prospect would rulemaking history of the advanced air 11 See page 23 of Lamborghini’s petition and page pose a unique challenge to the bag requirements. 2 of Lamborghini’s comments.

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air bag to be manually turned off when believe that the addition of a reference We likewise do not agree with Mr. a child is present, which supports our to such provisions by number without Blodgett that it is necessary to submit findings that this exemption would have an indication of its subject matter would the manufacturers’ financial data to a negligible impact on motor vehicle be of little use to consumers, since they OMB or an independent contractor for safety. would not know the subject of those evaluation. NHTSA routinely evaluates Furthermore, the agency examined specific provisions. For these reasons, such information in making its the FARS (1995–2004) and the National we believe the two labels should read in determinations, as it has done with Automotive Sampling System relevant part, ‘‘except for S14.5.2, S15, prior requests for temporary exemption Crashworthiness Data System (NASS S17, S19, S21, S23, and S25 (Advanced under part 555. Furthermore, we do not CDS) (1995–2005) for information on Air Bag Requirements) of Standard No. agree with Mr. Blodgett’s contention the vehicle in question.12 These data 208, Occupant Crash Protection, that negative inferences should be indicate that over that period, there exempted pursuant to * * *.’’ We note drawn from the timing of were no NASS CDS cases for the that the phrase ‘‘Advanced Air Bag manufacturers’ submission of their part Murcielago and one FARS case for the Requirements’’ is an abbreviated form of 555 applications or their continuation of Murcielago predecessor (injured female the title of S14 of Standard No. 208. We manufacturing activities pending the passenger). Thus, there were no believe it is reasonable to interpret agency’s decision. The timing of the children or small women involved in § 555.9 as requiring this language. submission of a manufacturer’s crashes of the later Lamborghini Although our response to the application may be predicated upon Murcielago included in these databases. supplementary comments provided by good faith efforts to achieve compliance We note that, as explained below, the petitioner is reflected above, we with our safety standards, although in prospective purchasers will be notified would offer the following response to the end, those efforts may prove that the vehicle is exempted from the the other public comments received on unsuccessful. Likewise, a company’s specified advanced air bag requirements the Lamborghini petition. business decision to continue of Standard No. 208. Under § 555.9(b), We have decided not to grant Mr. production of vehicles subject to an a manufacturer of an exempted Blodgett’s request for extension of time application for temporary exemption passenger car must affix securely to the to comment on the five applications has no bearing on the agency’s decision windshield or side window of each contained in our July 12, 2006 Federal to grant or deny an application, exempted vehicle a label containing a Register notice announcing receipt of particularly since it is conceivable that statement that the vehicle conforms to those applications. First, the commenter such vehicles could be sold in non-U.S. all applicable Federal motor vehicle pointed to requirements under part 553, markets. safety standards in effect on the date of Rulemaking Procedures (specifically We do not believe that vehicle manufacture ‘‘except for Standard Nos. paragraph 553.19, Petitions for manufacturers seeking an exemption [listing the standards by number and extension of time to comment), which should be required to prove that there title for which an exemption has been states that persons wishing to request are no advanced air bag systems granted] exempted pursuant to NHTSA extension of a comment period must do available which would allow their lll Exemption No. .’’ This label so in writing 15 days prior to expiration vehicles to comply with FMVSS No. notifies prospective purchasers about of the time stated in the notice. 208, because in essence, that would the exemption and its subject. Under However, the notice of receipt in require the companies to prove a § 555.9(c), this information must also be question was issued under part 555, negative. Instead, the companies must included on the vehicle’s certification Temporary Exemption From Motor demonstrate that they made good faith label. Vehicle Safety and Bumper Standards, efforts to comply with the standard and The text of § 555.9 does not expressly which does not contain any time show how they plan to achieve indicate how the required statement on limitations either for the public compliance in the future. By statute, the two labels should read in situations comment period or related requests for manufacturers are entitled to apply for where an exemption covers part but not extension of time. In the present case, a temporary exemption under part 555, all of a Federal motor vehicle safety the agency decided to shorten the length provided that they meet all relevant standard. In this case, we believe that a of the comment period to 15 days, in requirements. statement that the vehicle has been light of the rapidly approaching We likewise do not agree with Mr. exempted from Standard No. 208 deadline for small volume manufacturer Blodgett’s suggestion that the agency generally, without an indication that the compliance with the advanced air bag improperly combined the present five exemption is limited to the specified requirements of FMVSS No. 208. That part 555 applications in one Federal advanced air bag provisions, could be determination reflected our careful misleading. A consumer might balancing of the need to provide an Paperwork Reduction Act of 1995 (44 U.S.C. incorrectly believe that the vehicle has adequate opportunity for public Chapter 35). Those provisions deal with specified been exempted from all of Standard No. comment and the need to issue a types of collections of information from the public 208’s requirements. Moreover, we decision prior to the standard’s (which require OMB approval and clearance), and compliance deadline. Contrary to what the 60-day comment period referenced above is related to such collections of information. 12 For fatalities, the agency has a high level of Mr. Blodgett’s comment suggests, his Furthermore, in defining the term ‘‘information,’’ 5 confidence that we would know if one of the request for an extension of the comment petitioners’ vehicles had been involved in a fatal CFR 1320.3(h)(4) states that that term does not crash due to reporting in FARS. However, the period was received and considered by generally include: agency’s ability to track injuries in this context is the agency, although we decided that it Factors or opinions submitted in response to more limited, primarily because NASS CDS general solicitation of comments from the public, would not be in the public interest to published in the Federal Register or other operates differently. NASS CDS is not a census of 13 all vehicle-related injuries, but instead it is a grant that request. publications, regardless of the form or format statistical sample which is unlikely to randomly thereof, provided that no person is required to capture air bag-related fatalities. Although the 13 We note further that Mr. Blodgett asserted that, supply specific information pertaining to the agency’s Special Crash Investigations office pursuant to 5 U.S.C. 1320.8(d), a 60-day comment commenter, other than that necessary for self- searches for air bag-related deaths and injuries, period is required on the notice of receipt of an identification, as a condition of the agency’s full there may be lesser injuries that go unreported. This application for temporary exemption. However, 5 consideration of the comment. observation applies to all five petitions covered by CFR part 1320, Controlling Paperwork Burdens on Thus, the provision pointed to by the commenter the notice. the Public, implements the provisions of the is not relevant in the present case.

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Register notice or that this somehow Eligibility. Bugatti just began concludes that VW is not a increased burdens on commenters. The producing vehicles and its total manufacturer of Bugatti vehicles by notice of receipt clearly set forth in its production has not reached 100. virtue of being a sponsor. title the companies seeking exemptions However, in 1998, Bugatti was acquired Requested exemptions. Bugatti stated and discussed each of the applicants by Volkswagen AG (VW), a large motor its intention to certify compliance of the separately. In light of the similarity of vehicle manufacturer. According to Veyron model, produced on and after the issues to be addressed, we believe Bugatti, the Veyron 16.4 does not September 1, 2006 for sale in the United that such consolidation was resemble any vehicle built or sold by States, with rigid barrier belted and appropriate. any other VW company. The petitioner unbelted test requirements using the As noted previously, the comments of also states that the Veyron 16.4 was 50th percentile adult male test dummy COSVAM were addressed under the engineered entirely by Bugatti, and that (S14.5.1 and S14.5.2), the rigid barrier discussion of Eligibility above. it will similarly be manufactured and test requirements using the 5th In sum, the agency concludes that marketed solely by Bugatti. Bugatti percentile adult female test dummy Lamborghini has demonstrated good stated that almost all parts for its vehicle (belted and unbelted, S15), and the faith effort to bring the Murcielago into are provided by suppliers that do not offset deformable barrier test compliance with the advanced air bag provide any parts to any other VW requirement using the 5th percentile requirements of FMVSS No. 208, and companies. In discussing its eligibility adult female test dummy (S17). has also demonstrated the requisite for hardship relief, Bugatti asserts that As for the other advanced air bag financial hardship. Further, we find the its relationship with VW is ‘‘arm’s- requirements, Bugatti states that it does exemption to be in the public interest. length.’’ Bugatti operates independently, not know whether the Veyron will be In consideration of the foregoing, we and services provided by Bugatti compliant as it has not had the financial conclude that compliance with the affiliates were paid for by Bugatti. ability to conduct the necessary advanced air bag requirements of In making our determination development and testing. FMVSS No. 208, Occupant Crash regarding eligibility, we note that the Bugatti is requesting an exemption Protection, would cause substantial public comment from COSVAM raised economic hardship to a manufacturer from the requirements to provide the issue of whether certain of the protection for infants and children (S19, that has tried in good faith to comply petitioners (Bugatti, Lamborghini, with the standard. We further conclude S21, and S23) and the requirement Maserati) are eligible for temporary using an out-of-position 5th percentile that granting of an exemption would be exemptions under part 555, in light of adult female test dummy at the driver in the public interest and consistent their financial relationships to larger position (S25). with the objectives of traffic safety. parent companies which are also Bugatti is requesting the above In accordance with 49 U.S.C. vehicle manufacturers. Specifically, exemption for the Veyron 16.4 for the 30113(b)(3)(B)(i), Lamborghini COSVAM argued that Bugatti is owned period from September 1, 2006 to Murcielago is granted NHTSA by VW, a vehicle manufacturer whose September 1, 2008. Temporary Exemption No. EX 06–2, sales in the U.S. market exceeds the from S14.5.2, S15, S17, S19, S23, and upper limits for classification as a small Economic hardship. Publicly S25 of 49 CFR 571.208. The exemption volume manufacturer. COSVAM further available information and also the is effective from September 1, 2006 to questioned why an otherwise advanced financial documents submitted to August 31, 2009. performance vehicle such as the Bugatti NHTSA by the petitioner indicate that the Veyron project will result in IV. Bugatti Veyron 16.4 would be unable to comply with the requirements of FMVSS No. financial losses whether or not Bugatti Background. Bugatti was a 208, particularly when other vehicles obtains a temporary exemption. At the manufacturer of high performance within its ‘‘corporate family’’ are or will time of the application, Bugatti had motor vehicles from 1909 until the be in compliance. Accordingly, the spent over $360 million on the Veyron outbreak of World War II. In the past commenter argued that Bugatti should project—the company’s only model— two decades, several attempts were be considered a brand produced by with little or no return on its made to revive the marquee. Finally, major vehicle manufacturer VW, thereby investment. If the exemption is granted, under the new ownership in 1998, the making the petitioner ineligible for a Bugatti projects a net loss of $3.7 petitioner began designing a new temporary exemption under part 555 million. If the exemption is denied, vehicle called the Veyron 16.4 (Veyron). based upon higher production values. Bugatti projects a net loss of $22.5 Only 300 vehicles are to be made (about The agency examined the relationship million. Further, denial of the petition half of which are expected to be between Bugatti and VW. We have would likely preclude the petitioner imported to the U.S.), each costing in concluded that Bugatti is eligible to from developing new, fully compliant excess of $1,000,000. Bugatti originally apply for a temporary exemption based vehicles. The petitioner argues that a planned to begin selling the vehicle in on the following factors. First, there is denial of this petition could ultimately September of 2003 and to end no similarity of design between the cars put Bugatti out of business. production before the advanced air bag produced by Bugatti and cars produced Good faith efforts to comply. As stated requirements went into effect. However, by VW. Second, Bugatti operated above, Bugatti originally anticipated significant development issues delayed independently from VW in designing that all of the Veyrons destined for the the start of production until September and developing the Veyron 16.4. Third, U.S. market would be manufactured of 2005. Once this shift in the almost all of the parts used in the prior to September 1, 2006. As such, the production schedule became apparent, Veyron production are obtained from company did not believe the vehicles the petitioner argues that it tried in good suppliers that do not supply parts to would need to be equipped with faith but could not bring the vehicle into VW. In addition, when Bugatti has used advanced air bag systems. However, due compliance with the advanced air bag test tracks or other facilities of VW in to delays in completing the design and requirements, and it would incur the course of developing the Veyron, it engineering of the vehicle, Bugatti did substantial economic hardship if it has reimbursed Volkswagen AG for the not begin production of the Veyron until cannot sell approximately 100 vehicles costs of those facilities on an ‘‘arms- the fall of 2005, nearly two years after in the U.S. after September 1, 2006. length’’ basis. Accordingly, NHTSA the anticipated initial start date.

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To install an advanced air bag system comment was submitted by Mr. Steven development and its extremely small on the Veyron, modifications would be Blodgett (see the summary of public sales volumes. In addition, in light of required to the steering wheel, the seats, comments under Lamborghini for a the fact that it projects sales of only 100 the air bag system, the safety belts, the complete discussion of this comment). vehicles per year, the company also knee bolsters, and the instrument panel. Specific to Bugatti, Mr. Blodgett faced difficulties in finding a supplier of Bugatti sought proposals from several requested the OMB and/or a separate advanced restraint systems, because potential suppliers for the development independent contractor be used to such suppliers were focused on large of an advanced air bag system for the evaluate the company’s financial data. volume manufacturers. Veyron, but received only one proposal. The commenter also objected to the lack Based upon the information provided According to the petitioner, the of supporting documentation from air by the petitioner, we understand that proposal showed that the development bag suppliers to verify that the Bugatti made good faith efforts to try to and implementation costs for such a requirements for which the vehicle bring the Veyron 16.4 into compliance system were far beyond its current manufacturer seeks an exemption with the applicable requirements until financial capabilities, particularly when cannot be met. As further factors for such time as it became apparent that considered in terms of amortizing those consideration by the agency in there was no practicable way to do so. costs over a population of just 100 reviewing the company’s temporary No viable alternatives remain. The vehicles. The proposal indicated that exemption request, Mr. Blodgett petitioner is unable to redesign its total development, testing, and highlighted what he perceived to be the vehicle by the time the new advanced implementation of an advanced air bag manufacturer’s delay in submitting a air bag requirements go into effect on system for the Veyron would cost over part 555 petition from the advanced air September 1, 2006. $12 million. More important, bag requirements and its presumed After review of the income statements development would take at least 24 continuation of vehicle production prior provided by the petitioner, the agency months, which would have required to receiving the agency’s decision. notes that the company has faced Bugatti to completely shut down its The second comment was submitted ongoing financial difficulties with its operations. The petitioner argued this by the COSVAM. As discussed manufacturing operations. Even with a scenario is not feasible for a previously, COSVAM raised the issue of temporary exemption, Bugatti projects a manufacturer intending to produce a whether certain of the petitioners net loss of over $3 million for 2006– total of 300 vehicles. For further details, (Bugatti, Lamborghini, Maserati) are 2009, and without an exemption, that see the petition. eligible for temporary exemptions under figure would grow to a loss of Bugatti argues that an exemption part 555, in light of their financial approximately $23 million. If the would be in the public interest. The relationships to larger parent companies petitioner is forced to discontinue petitioner put forth several arguments in which are also vehicle manufacturers selling its current and only model in the favor of a finding that the requested (see Eligibility section above for details U.S. market, the resulting loss of sales exemption is consistent with the public and the agency’s decision on that issue). would cause substantial economic interest. Specifically, Bugatti asserted Agency Decision on Bugatti Petition. hardship within the meaning of the that there is consumer demand in the We are granting the Bugatti petition to statute, potentially driving the company U.S. for the Veyron, and granting this be exempted from portions of the out of business. Bugatti’s problems application will allow the demand to be advanced air bag regulation required by would be compounded without its met. Bugatti also states that granting the S14.2 (specifically S19, S21, S23, and requested temporary exemption, exemption will ‘‘have negligible impact S25). The extent of the exemption is because it needs the revenue from sales on motor vehicle safety because of the limited to those provision requiring of the Veyron 16.4 over the next two limited number of vehicles sold and testing with child dummies (S19, S21 years to finance development of a fully because each vehicle is likely to travel and S23) and the 5th percentile female compliant successor vehicle for delivery on the public roads only infrequently.’’ dummy out-of-position testing (S25). to the U.S. market. Granting the Further, Bugatti states that it is Bugatti must certify to 50th percentile exemption will allow Bugatti to earn the extremely unlikely that young children male barrier testing (S14.5.1 and resources necessary to bridge the gap in would often be passengers in this S14.5.2), 5th percentile female barrier terms of development of a successor vehicle, and, therefore, permitting a testing (S15) and 5th percentile female vehicle for the Veyron 16.4 that meets vehicle to be sold without an air bag offset frontal testing (S17). The agency’s all U.S. requirements. designed to protect small children is rationale for this decision is as follows. While some of the information unlikely to have any adverse impact on The advanced air bag requirements submitted by Bugatti has been granted safety. Finally, Bugatti indicates that the present a unique challenge because they confidential treatment and is not Veyron, which is equipped with would require Bugatti to undertake a detailed in this document, the petitioner standard air bags, also incorporates major redesign of its vehicles. made a comprehensive showing of its many safety features that are not Specifically, incorporation of the good faith efforts to comply with the required by the FMVSSs, including anti- advanced air bags would require requirements of S14.2 of FMVSS No. lock brakes, electronic stability control, significant modifications to the Veyron’s 208, and detailed engineering and all-wheel drive, run-flat tires, a tire steering wheel, seats, air bag system, financial information demonstrating pressure monitoring system (installed safety belts, knee bolsters, and that failure to obtain the exemption ahead of the required date for small instrument panel. While the petitioner would cause substantial economic volume manufacturers under FMVSS was aware of the new requirements for hardship. Specifically, the petitioner No. 138, Tire Pressure Monitoring some time, manufacturing delays provided the following: Systems), and a dynamic rear spoiler required the Veyron 16.4’s production 1. Chronological analysis of Bugatti’s that acts as a ‘‘parachute brake’’ during run to extend beyond 2006, thereby efforts to comply, showing the high speed emergency braking. raising the problem of compliance with relationship to the rulemaking history of Summary of Public Comments. The the advanced air bag requirements. the advanced air bag requirements. agency received two comments on the Bugatti has made clear that such a 2. Itemized costs of each component Bugatti petition for a temporary prospect would pose a unique challenge that would have to be modified in order exemption. As noted above, the first to the company, due to the high cost of to achieve compliance.

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3. Discussion of alternative means of standard. In this case, we believe that a V. Lotus compliance and reasons for rejecting statement that the vehicle has been Background. Lotus, which was these alternatives. exempted from Standard No. 208 founded in 1955, produces small 4. List of air bag suppliers that were generally, without an indication that the quantities of performance cars. The approached in hopes of procuring exemption is limited to the specified company has experienced significant necessary components (including advanced air bag provisions, could be financial difficulties for many years. In original equipment manufacturer (OEM) misleading. A consumer might 1998, Lotus began to develop a fully price-volume quotations). incorrectly believe that the vehicle has compliant vehicle for the U.S. market. 5. Explanations as to why components been exempted from all of Standard No. However, due to lack of capital, the from newer, compliant vehicle lines 208’s requirements. Moreover, we project was cancelled in 2001. The could not be borrowed. believe that the addition of a reference petitioner instead decided to sell a 6. Corporate income statements and to such provisions by number without vehicle designed for the European balance sheets for the past three years, an indication of its subject matter would market, the Lotus Elise, in the U.S. Prior and projected income statements and be of little use to consumers, since they to the U.S. launch of the Elise in 2004 balance sheets if the petition is denied. would not know the subject of those We note that, as discussed in previous (currently Lotus’s only U.S. model), specific provisions. For these reasons, Lotus requested and received a part 555 decisions on temporary exemption we believe the two labels should read in applications, the agency believes that temporary exemption for the bumper relevant part, ‘‘except for S19, S21, S23, standard and certain headlamp the public interest is served by affording and S25 (Advanced Air Bag consumers a wider variety of motor requirements (see 69 FR 5658 (Feb. 5, Requirements) of Standard No. 208, 2004)). Over the last 18 months, the vehicle choices. Occupant Crash Protection, exempted We also note that the Veyron 16.4 petitioner continued to experience pursuant to * * *.’’ We note that the features several advanced ‘‘active’’ economic hardship. Nevertheless, Lotus phrase ‘‘Advanced Air Bag safety features. These features are listed has worked on the development of Requirements’’ is an abbreviated form of in the petitioner’s application.14 While compliant bumpers and headlamps at the title of S14 of Standard No. 208. We the availability of these features is not the cost of $27 million. Compliant believe it is reasonable to interpret critical to our decision, it is a factor in headlamp systems have already been § 555.9 as requiring this language. considering whether the exemption is in put into production, and compliant the public interest. In terms of our response to the bumpers likewise will be put into We believe that this exemption will comment submitted by Mr. Blodgett, we production in advance of the expiration have negligible impact on motor vehicle note that the issues raised in that of Lotus’s existing temporary exemption safety because of the limited number of comment (e.g., extension of the on January 1, 2007. However, the vehicles affected (not more than 300 for comment period, duration of the petitioner has been unable to develop an the duration of the exemption), and comment period, documentation) are advanced air bag system for the Elise because Bugatti vehicles are not identical for all five petitioners. (which has both a coupe and a typically used for daily transportation. Accordingly, please see our decision for convertible version). According to Their yearly usage is also expected to be Lamborghini (Section IV of this notice) Lotus, sales of a fully compliant vehicle substantially lower compared to for the agency’s response to this are slated to begin in 2008, but only if vehicles used for everyday comment submission. As noted it is able to derive revenue from the U.S. transportation. previously, the comments of COSVAM sales of the Elise in the interim. We note that, as explained below, were addressed under the discussion of Eligibility. Lotus produced prospective purchasers will be notified Eligibility above. approximately 5,600 vehicles in 2005. that the vehicle is exempted from the In sum, the agency concludes that More specifically, the petitioner specified advanced air bag requirements Bugatti has demonstrated good faith reported the following worldwide of Standard No. 208. Under § 555.9(b), effort to bring the Veyron 16.4 into production and U.S. imports over the a manufacturer of an exempted compliance with S14.2 of FMVSS No. past few years: passenger car must affix securely to the 208, and has also demonstrated the requisite financial hardship. Further, we Group Lotus Worldwide windshield or side window of each Plc production U.S. imports exempted vehicle a label containing a find the exemption to be in the public statement that the vehicle conforms to interest. 2002 ...... 4810 cars ..... 120 cars. all applicable Federal motor vehicle In consideration of the foregoing, we 2003 ...... 2955 cars ..... 85 cars. safety standards in effect on the date of conclude that compliance with the 2004 ...... 3710 cars ..... 1330 cars. manufacture ‘‘except for Standard Nos. requirements of the advanced air bag 2005 (esti- 5518 cars ..... 3390 cars. [listing the standards by number and requirements of FMVSS No. 208, mate). title for which an exemption has been Occupant Crash Protection, would The issue of Lotus’s eligibility for a granted] exempted pursuant to NHTSA cause substantial economic hardship to financial hardship exemption was Exemption No. lll .’’ This label a manufacturer that has tried in good previously addressed by NHTSA on notifies prospective purchasers about faith to comply with the standard. We three separate occasions.15 Although the exemption and its subject. Under further conclude that granting of an Lotus is owned by Proton Holdings § 555.9(c), this information must also be exemption would be in the public Berhad, Lotus remains an operationally included on the vehicle’s certification interest and consistent with the independent small volume label. objectives of traffic safety. The text of § 555.9 does not expressly In accordance with 49 U.S.C. manufacturer and the material facts indicate how the required statement on 30113(b)(3)(B)(i), the Bugatti Veyron regarding its ownership have not the two labels should read in situations 16.4 is granted NHTSA Temporary changed. Accordingly, NHTSA where an exemption covers part but not Exemption No. EX 06–3, from S19, S21, 15 See 64 FR 61379 (Nov. 10, 1999)(Docket No. all of a Federal motor vehicle safety S23, and S25 of 49 CFR 571.208. The NHTSA–1999–6092); 68 FR 10066 (March 3, exemption is effective from September 2003)(Docket No. NHTSA–2002–13956); 69 FR 5658 14 See page 9 of Bugatti’s petition. 1, 2006 to September 1, 2008. (Feb. 5, 2004)(Docket No. NHTSA–2003–16341).

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concludes that Lotus is eligible to apply required for Lotus to maintain a not now available as a production for a hardship exemption. presence in the U.S. and to compensate solution. Requested exemptions. Lotus states its dealers for no product would not be Lotus argues that an exemption would that its United States vehicle production sustainable. Further, there would not be be in the public interest. First, Lotus on and after September 1, 2006 will funds to develop a new fully compliant asserts that the current Elise standard comply with the rigid barrier belted test vehicle. In short, the company could be air bag system does not pose a safety requirement using the 50th percentile forced entirely out of business. risk. Lotus indicates that it knows of no adult male test dummy (S14.5.1). The Good faith efforts to comply. Lotus injuries or deaths to infants, children, or petitioner states that it previously asserts that it has tried in good faith to other occupants caused by the Elise’s determined the Elise’s compliance with comply with the advanced air bag current standard air bag system. Lotus rigid barrier unbelted test requirements requirements. The development work further notes that the passenger seat is using the 50th percentile adult male test for advanced air bags did not begin until fixed in its rearmost position, thereby dummy through the S13 sled test using June 2003 because Lotus was not reducing air bag risks to children. a generic pulse rather than a full vehicle originally planning on selling the Elise Second, Lotus argues that denial of test. Therefore, Lotus states, it cannot at in the U.S. Instead, as noted above, a the petition would result in loss of jobs present say with certainty that the Elise new fully compliant vehicle was within Lotus and by independent would comply with the unbelted test intended to be sold in the U.S., but that dealers and repair specialists in the U.S. requirement under S14.5.2, which is a project was cancelled. because the petitioner would be forced 20–25 mph rigid barrier test. In seeking an advanced air bag system to abandon the U.S. market, which As for the other advanced air bag for the Elise, Lotus encountered a could also compromise the flow of requirements, Lotus states that it does number of difficulties and has been proper parts and service to existing not know whether the Elise would be unable to acquire an ‘‘off-the-shelf’’ Lotus owners. Lotus also argued that compliant as Lotus has not had the advanced air bag system. First, many consumer choice would be adversely financial ability to conduct the existing advanced air bag designs, affected. necessary research and development. technical specifications, and tooling are Summary of Public Comments. The As such, Lotus is requesting an the intellectual property of the original agency received two comments on the exemption for the Elise from the rigid equipment manufacturer (OEM) and not Lotus petition for a temporary barrier unbelted test requirement with the supplier. Lotus experienced exemption. The first comment was the 50th percentile adult male test reluctance to allow the transfer of this submitted by Lotus itself.17 In its dummy (S14.5.2), the rigid barrier test intellectual property for its use. Second, comment, the company stated that its requirement using the 5th percentile the passenger air bag size, inflator situation is similar to Ferrari’s request adult female test dummy (belted and pressure, venting, and deployment angle for a temporary exemption from the unbelted, S15), the offset deformable in those pre-existing air bag systems advanced air bag provisions of FMVSS barrier test requirement using the 5th have been specifically designed for the No. 208, which the agency granted in a percentile adult female test dummy original OEM vehicle crash pulse and notice published in the Federal Register (S17), the requirements to provide interior geometry. Therefore, to source a on May 22, 2006 (71 FR 29389) (Docket protection for infants and children (S19, passenger air bag requires reverse No. NHTSA–2005–23093). Specifically, S21, and S23) and the requirement engineering, suiting the vehicle’s Lotus presented the following using an out-of-position 5th percentile interior package, and modifying the arguments in support of its petition. adult female test dummy at the driver vehicle crash pulse to suit the OEM air Like Ferarri, Lotus stated that it position (S25). bag. Third, the suppression option for product cycles must last longer than the Lotus is requesting the above compliance was not possible due to the industry average due to the high cost of exemption for the Elise for the period lack of available sensor technology. development and extremely small sales from September 1, 2006 to August 31, Instead, to pursue the low risk volumes. Lotus stated that advanced air 2009. deployment option, Lotus would need a bags were not anticipated when the Economic Hardship. Lotus has top mounted passenger air bag. Elise’s vehicle platform was designed suffered substantial economic hardship However, to package the top mounted (in conjunction with its predecessor for many years. In the past five years, its passenger air bag in the Elise would vehicle (the Elan)), and when the losses have totaled almost $125 million. require a complete redesign of a major advanced air bag requirements were When Lotus successfully petitioned structural part of the extruded established, the company originally NHTSA for an exemption in 2004, it aluminum chassis. At the location planned to introduce advanced air bag forecasted profits for fiscal years 2004 where the passenger air bag would need in the successor vehicle, the Lotus and 2005. However, these profits never to be situated, there is a major structural Esprit, and then to use the same materialized, and Lotus instead lost $13 cross beam that is bonded into the technology for its Elise model. However, million in 2004 and approximately $5 chassis. New tooling for the instrument the company stated that due to million in 2005.16 panel would also be required, along unforeseen circumstances, the Esprit Lotus asserts that if the exemption is with a new air bag cover. The air bag successor vehicle was delayed. Lotus not granted, the company will be forced cover would require a new unique stated that once this situation became out of the U.S. market starting in design to overcome the issues of out-of- clear, the company immediately tried to September 2006 until sometime in 2008 position, small occupant air bag shift its advanced air bag program’s for lack of any product to sell. Without deployments. Fourth, advanced air bag focus to the Elise, with subsequent an exemption, Lotus predicts losses occupant classification systems require introduction into the Esprit successor. totaling over $100 million in the next a compliant seat frame base. The Lotus However, Lotus argued that despite its three years. Lotus argues that the cash Elise has a rigid shell seat with only a good faith efforts, it is not practicable to minimum level of foam; therefore, comply with the advanced air bag 16 Lotus also derives profits from engineering another technical solution would be requirements in time to meet the consulting for other small volume manufacturers. However, that business has declined. Fluctuations required, such as seat frame weight September 1, 2006 deadline. in the value of the dollar have also had a major sensors. Currently, this solution is effect on profits. under development by suppliers but is 17 Docket No. NHTSA–2006–25324–11.

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Lotus argued that it is an independent belted 50th percentile male barrier panel would also be required, along manufacturer eligible for an exemption impact test (S14.5.1(a)). In addition to with a new air bag cover. The air bag under 49 CFR part 555, despite the fact certifying compliance with S14.5.1(a), cover would require a new unique that the company is owned by Proton Lotus must continue to certify to the design to overcome the issues of out-of- Holdings Berhad. The petitioner argued unbelted 50th percentile male barrier position, small occupant air bag that its relationship to its parent impact test in force prior to September deployments. Fourth, advanced air bag company is similar to that of Ferarri and 1, 2006 (S5.1.2(a)). We note that the occupant classification systems require its parent company (Fiat). Lotus also unbelted sled test in S13 is an a compliant seat frame base. The Lotus noted that denial of its exemption acceptable option for the requirement. Elise has a rigid shell seat with only a request would have a negative The agency’s rationale for this decision minimum level of foam; therefore, employment impact on both its U.S. is as follows. another technical solution would be subsidiary and its U.S. dealerships. The advanced air bag requirements required, such as seat frame weight In terms of safety impact, Lotus present a unique challenge because they sensors. Currently, this solution is argued that the Elise would be equipped would require Lotus to completely under development by suppliers but is with standard air bags and that these redesign a major structural part of the not now available as a production vehicles are not typically used for daily extruded aluminum chassis in its solution. Lotus has made clear that such transportation, have substantially lower vehicles. While the petitioner was aware a prospect would pose a unique than average annual usage, and typically of the new requirements for some time, challenge to the company, due to the are not used to transport children. it was not able to introduce a fully high cost of development and its Accordingly, the petitioner argued that compliant vehicle by September 2006 as extremely small sales volumes. its requested exemption for these originally intended. Accordingly, it was Based upon the information provided vehicles would have a negligible effect determined that the Elise model, by the petitioner, we understand that on safety. The company added that its designed for the European market, Lotus made good faith efforts to bring search of NHTSA’s Fatality Analysis would need to be sold in the U.S. the Elise into compliance with the Reporting System (FARS) database from market in order to generate revenue for applicable requirements until such time 1995–2003 and 2004 Annual Report File a successor vehicle that complies with as it became apparent that there was no showed no fatal crashes for Lotus all U.S. requirements, including the practicable way to do so. No viable vehicles after the 1995 model year, no advanced air bag requirements of alternatives remain. The petitioner is crashes for Elise vehicles, and no FMVSS No. 208. Although Lotus unable to redesign its vehicle by the crashes involving children. immediately engaged in homologation time the new advanced air bag In addition, Lotus argued that the efforts, the company experienced a requirements go into effect on continued weakening of the U.S. dollar number of technical challenges September 1, 2006. vis-a`-vis the British Pound, when precluding incorporation of advanced After review of the income statements combined with competitive pressure to air bag into the Elise at this time, as provided by the petitioner, the agency avoid significant vehicle price increases follows. notes that the company has faced in the U.S. market, exacerbates the Lotus has been unable to acquire an ongoing financial difficulties, having economic hardship problems ‘‘off-the-shelf’’ advanced air bag system. lost over $125 million over the past five confronting the company. First, many existing advanced air bag years. If the petitioner is forced to As noted above, the second comment designs, technical specifications, and discontinue selling the current model in was submitted by Mr. Steven Blodgett tooling are the intellectual property of the U.S. market, the resulting loss of (see the summary of public comments the original equipment manufacturer sales would cause substantial economic under Lamborghini for a complete (OEM) and not the supplier. Lotus hardship within the meaning of the discussion of this comment). Specific to experienced reluctance to allow the statute, potentially forcing the company Lotus, Mr. Blodgett requested the OMB transfer of this intellectual property for out of business in the U.S. According to and/or a separate independent its use. Second, the passenger air bag Lotus, absent the exemption, the contractor be used to evaluate the size, inflator pressure, venting, and company would have no product to sell company’s financial data. The deployment angle in those pre-existing in the U.S. until sometime in 2008, and commenter also objected to the lack of air bag systems have been specifically losses could swell to over $100 million supporting documentation from air bag designed for the original OEM vehicle in the next three years. However, suppliers to verify that the requirements crash pulse and interior geometry. Lotus’s problems would be for which the vehicle manufacturer Therefore, to source a passenger air bag compounded without its requested seeks an exemption cannot be met. As requires reverse engineering, suiting the temporary exemption, because it needs further factors for consideration by the vehicles’ interior package, and the revenue from sales of the Elise over agency in reviewing the company’s modifying the vehicle crash pulse to the next three years to finance temporary exemption request, Mr. suit the OEM air bag. Third, the development of a fully compliant Blodgett highlighted what he perceived suppression option for compliance was vehicle for delivery to the U.S. market. to be the manufacturer’s delay in not possible due to the lack of available Granting the exemption will allow Lotus submitting a part 555 petition from the sensor technology. Instead, to pursue to earn the resources necessary to bridge advanced air bag requirements and its the low risk deployment option, Lotus the gap in terms of development of a presumed continuation of vehicle would need a top mounted passenger air successor vehicle for the Elise that production prior to receiving the bag. However, to package the top meets all U.S. requirements. agency’s decision. mounted passenger air bag in the Elise While some of the information Agency Decision on Lotus Petition. would require a complete redesign of a submitted by Lotus has been granted We are granting the Lotus petition to be major structural part of the extruded confidential treatment and is not exempted from portions of the advanced aluminum chassis. At the location detailed in this document, the petitioner air bag regulation required by S14.2 where the passenger air bag would need made a comprehensive showing of its (specifically S14.5.2, S15, S17, S19, S21, to be situated, there is a major structural good faith efforts to comply with the S23, and S25). The exemption does not cross beam that is bonded into the requirements of S14.2 of FMVSS No. extend to the provision requiring a chassis. New tooling for the instrument 208, and detailed engineering and

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financial information demonstrating that the vehicle is exempted from the FMVSS No. 208, and has also that failure to obtain the exemption specified advanced air bag requirements demonstrated the requisite financial would cause substantial economic of Standard No. 208. Under § 555.9(b), hardship. Further, we find the hardship. Specifically, the petitioner a manufacturer of an exempted exemption to be in the public interest. provided the following: passenger car must affix securely to the In consideration of the foregoing, we 1. Chronological analysis of Lotus’s windshield or side window of each conclude that compliance with the efforts to comply, showing the exempted vehicle a label containing a advanced air bag requirements of relationship to the rulemaking history of statement that the vehicle conforms to FMVSS No. 208, Occupant Crash the advanced air bag requirements. all applicable Federal motor vehicle Protection, would cause substantial 2. Itemized costs of each component safety standards in effect on the date of economic hardship to a manufacturer that would have to be modified in order manufacture ‘‘except for Standard Nos. that has tried in good faith to comply to achieve compliance. [listing the standards by number and with the standard. We further conclude 3. Discussion of alternative means of title for which an exemption has been that granting of an exemption would be compliance and reasons for rejecting granted] exempted pursuant to NHTSA in the public interest and consistent these alternatives. Exemption No. lll.’’ This label with the objectives of traffic safety. 4. List of air bag suppliers that were notifies prospective purchasers about In accordance with 49 U.S.C. approached in hopes of procuring the exemption and its subject. Under 30113(b)(3)(B)(i), the Lotus Elise is necessary components (including OEM § 555.9(c), this information must also be granted NHTSA Temporary Exemption price-volume quotations). included on the vehicle’s certification No. EX 06–4, from S14.5.2, S15, S17, 5. Explanations as to why components label. S19, S21, S23, and S25 of 49 CFR from newer, compliant vehicle lines The text of § 555.9 does not expressly 571.208. The exemption is effective could not be borrowed. indicate how the required statement on from September 1, 2006 to August 31, 6. Corporate income statements and the two labels should read in situations 2009. balance sheets for the past three years, where an exemption covers part but not VI. Morgan 18 and projected income statements and all of a Federal motor vehicle safety balance sheets if the petition is denied. standard. In this case, we believe that a Background. Founded in 1909, We note that Lotus is a well- statement that the vehicle has been Morgan is a small privately-owned established company with a small, but exempted from Standard No. 208 vehicle manufacturer producing not insignificant U.S. presence. We generally, without an indication that the approximately 600 specialty sports cars believe that the reduction of sales exemption is limited to the specified per year. Morgan manufactures several revenue resulting from a denial of the advanced air bag provisions, could be models, but only sells the Aero 8 in the company’s requested temporary misleading. A consumer might U.S. Morgan intended to produce a exemption would have a negative incorrectly believe that the vehicle has vehicle line specific to the U.S. market, impact not only on Lotus’s financial been exempted from all of Standard No. with Ford supplying the engine and circumstances, but it would also 208’s requirements. Moreover, we transmission. However, for technical negatively affect U.S. employment. believe that the addition of a reference reasons, the project did not work out, Specifically, reduction in sales would to such provisions by number without and Morgan temporarily stopped selling also affect not only employees of Lotus an indication of its subject matter would vehicles in the U.S. in 2004. In May of Cars USA, but also Lotus dealers and be of little use to consumers, since they 2005, Morgan obtained a temporary repair specialists. Traditionally, the would not know the subject of those exemption from the Bumper Standard agency has concluded that the public specific provisions. For these reasons, and began selling the Aero 8 in the U.S. interest is served in affording continued we believe the two labels should read in Morgan now asks for a temporary employment to the petitioner’s U.S. relevant part, ‘‘except for S14.5.2, S15, exemption from advanced air bag work force. Furthermore, as discussed S17, S19, S21, S23, and S25 (Advanced requirements because of financial in previous decisions on temporary Air Bag Requirements) of Standard No. hardship. If its exemption request is exemption applications, the agency 208, Occupant Crash Protection, granted, the company anticipates believes that the public interest is exempted pursuant to * * *.’’ We note importing into the U.S. 25 vehicles in served by affording consumers a wider that the phrase ‘‘Advanced Air Bag 2006, 250 vehicles in 2007, 250 in 2008, variety of motor vehicle choices. Requirements’’ is an abbreviated form of and 200 vehicles in 2009. We believe that this exemption will the title of S14 of Standard No. 208. We Eligibility. Morgan produces have negligible impact on motor vehicle believe it is reasonable to interpret approximately 600 vehicles per year. safety, because Lotus vehicles are not § 555.9 as requiring this language. Morgan is an independent company. typically used for daily transportation. Although our response to the Accordingly, NHTSA concludes that The agency examined the FARS supplementary comments provided by Morgan is eligible to apply for a (1995–2004) and the National the petitioner is reflected above, in hardship exemption. Automotive Sampling System terms of our response to the comment Requested exemptions. Morgan stated Crashworthiness Data System (NASS submitted by Mr. Blodgett, we note that that it intends for its U.S. Aero 8 CDS) (1995–2005) for information on the issues raised in that comment (e.g., the vehicle in question. These data extension of the comment period, 18 We note that Morgan submitted a supplement to its application, seeking a temporary exemption indicate that over that period, there duration of the comment period, from all FMVSS No. 208 air bag requirements for were no NASS CDS cases for the Elise documentation) are identical for all five a separate vehicle (i.e., its traditional Roadster and three fatalities in FARS for the Elise petitioners. Accordingly, please see our model) (see Docket No. NHTSA–2006–25324–4 (included with original application)). Although the predecessor (two adult male and one decision for Lamborghini (Section IV of Morgan Roadster previously had been equipped adult female occupants). There were no this notice) for the agency’s response to with standard air bags, the company stated that it children or small women involved in this comment submission. has lost its original supplier for air bags for this crashes of the later Lotus Elise included In sum, the agency concludes that vehicle and has been unable to find an alternate Lotus has demonstrated good faith effort supplier. Due to the different issues involved, the in these databases. agency will be addressing the supplemental request We note that, as explained below, to bring the Elise into compliance with involving the Morgan Roadster in a separate prospective purchasers will be notified the advanced air bag requirements of Federal Register notice.

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production on and after September 1, program for a future vehicle or return to comment, the company stated that its 2006 to comply with the rigid barrier profitability. For the period between situation is similar to Ferrari’s request belted test requirement using the 50th 2006 and 2009, Morgan projects that the for a temporary exemption from the percentile adult male test dummy outcome of the agency’s decision on its advanced air bag provisions of FMVSS (S14.5.1) and the rigid barrier belted test exemption request will amount to the No. 208, which the agency granted in a requirement using the 5th percentile difference between a profit of over $3 notice published in the Federal Register adult female test dummy (S15.1). million and a loss of over $6 million. on May 22, 2006 (71 FR 29389) (Docket Morgan states that the Aero 8’s Morgan further asserts that if the No. NHTSA–2005–23093). Specifically, compliance with the rigid barrier petition is denied, it could soon become Morgan presented the following unbelted test requirement using the 50th insolvent. arguments in support of its petition. percentile adult male test dummy was Good faith efforts to comply. Morgan Like Ferrari, Morgan stated that its determined through the S13 sled test has been working with the air bag product cycles must last longer than the using a generic pulse, rather than a full supplier Siemens to develop an industry average due to the high cost of vehicle test. This petitioner further advanced air bag system for the Aero 8. development and extremely small sales states that it cannot at present say with However, a lack of funds and technical volumes. Morgan stated that it did not certainty that the Aero 8 would comply problems precluded the timely anticipate sale of the Aero 8 in the U.S., with the unbelted test requirement implementation of an advanced air bag but the company later determined that under S14.5.2, which is a 20–25 mph system for the Aero 8. The minimum it would be necessary to market this rigid barrier test. time needed to develop an advanced air vehicle in the U.S. Once such decision As for the other advanced air bag bag system (provided that there is a was made, Morgan stated that it made requirements, Morgan states that it does source of revenue) is two years. With no a good faith effort to find a practicable not know whether the Aero 8 would be other product to sell in the meantime, way to comply with the advanced air compliant, as Morgan has not had the Morgan needs to rely on Aero 8 sales to bag requirements, but it was unable to financial ability to conduct the finance this project. do so. However, the petitioner stated necessary development and testing. Specific technical challenges include that in order to meet the advanced air Morgan is requesting an exemption the following. Morgan does not have bag requirements, it would face the for the Aero 8 from the rigid barrier access to necessary sensor technology to unique challenge of needing to pursue the ‘‘full suppression’’ passenger unbelted test requirement with the 50th completely redesign the vehicle before air bag option. Due to the design of the percentile adult male test dummy the end of its life cycle. Aero 8 platform dashboard, an entirely (S14.5.2), the rigid barrier unbelted test Morgan stated that its vehicle also new interior solution and design must requirement using the 5th percentile incorporates additional active and be developed. Chassis modifications are adult female test dummy (S15.2), the passive safety systems, including load offset deformable barrier test anticipated due to the originally stiff chassis design. limiters, electronic brakeforce requirement using the 5th percentile distribution (EBD), ABS, drag torque adult female test dummy (S17), the Morgan argues that an exemption would be in the public interest. Morgan control (for stability), and a tire pressure requirements to provide protection for monitoring system (in advance of the infants and children (S19, S21, and S23) put forth several arguments in favor of a finding that the requested exemption compliance date for small volume and the requirement using an out-of- manufacturers under FMVSS No. 138, position 5th percentile adult female test is consistent with the public interest. Specifically, Morgan asserts the current Tire Pressure Monitoring Systems). dummy at the driver position (S25). In terms of safety impact, Morgan Morgan is requesting the above Aero 8’s standard air bag system does not pose a safety risk. Morgan knows of argued that it intends to produce only exemption for the Aero 8 for the period 400 Aero 8 vehicles over three years and from September 1, 2006 to August 31, no injuries caused by the Aero 8’s current standard air bag system. If the that these vehicles are not typically 2009. used for daily transportation, have Economic Hardship. Morgan argues exemption is denied and Morgan stops substantially lower than average annual that meeting the advanced air bag U.S. sales, Morgan’s U.S. dealers would usage, and typically are not used to requirements is estimated to cost unavoidably have numerous lay-offs, transport children. Accordingly, the between $3,196,179 and $5,066,938 and resulting in decreased U.S. petitioner argued that its requested is not within the financial capability of unemployment. Denial of an exemption exemption for these vehicles would the company.19 would reduce the consumer choice in Morgan’s financial have a negligible effect on safety. The submission indicates the company’s the specialty sports car market sector into which Morgan cars are offered. The company added that its search of losses over the last five years have NHTSA’s Fatality Analysis Reporting totaled more than $3.6 million. In its Aero 8 will not be used extensively by owners, and is unlikely to carry small System (FARS) database from 1995– initial petition, Morgan stated that it 2003 and 2004 Annual Report File did made a small profit in 2004 for the first children. Finally, according to Morgan, granting an exemption would assure the not show any crashes involving time in three years. However, Morgan Morgan’s vehicle during that timeframe. later supplied the agency with updated continued availability of proper parts In addition, Morgan argued that the financial information for 2004 and 2005, and service support for existing Morgan continued weakening of the U.S. dollar which showed net losses for both of owners. Without an exemption, Morgan vis-a-vis the British Pound, when those fiscal years. would be forced from the U.S. market, combined with competitive pressure to Without an exemption, Morgan would and Morgan dealers will find it difficult avoid significant vehicle price increases be forced once again to withdraw from to support existing customers. in the U.S. market, exacerbates the the U.S. market. With no income from Summary of Public Comments. The economic hardship problems U.S. sales, Morgan asserts that it will agency received two comments related confronting the company. Morgan also not be able to fund an advanced air bag to the Morgan petition for a temporary exemption. The first comment was argued that denial of its exemption 20 19 When costs for interior redesign, crash cars, submitted by Morgan itself. In its request would have a negative and tooling are included, the estimate rises to employment impact on its U.S. between $5,648,679 and $7,519,438. 20 Docket No. NHTSA–2006–25324–9. dealerships.

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As noted above, the second comment the Aero 8 platform dashboard, an the Aero 8 that meets all U.S. was submitted by Mr. Steven Blodgett entirely new interior solution and requirements. (see the summary of public comments design must be developed, and chassis While some of the information under Lamborghini for a complete modifications are anticipated due to the submitted by Morgan has been granted discussion of this comment). Specific to originally stiff chassis design. The confidential treatment and is not Morgan, Mr. Blodgett requested the petitioner states that it would take detailed in this document, the petitioner OMB and/or a separate independent approximately two years to resolve made a comprehensive showing of its contractor be used to evaluate the these technical issues surrounding good faith efforts to comply with the company’s financial data. The advanced air bags, given adequate requirements of S14.2 of FMVSS No. commenter also objected to the lack of funding. Morgan has made clear that 208, and detailed engineering and supporting documentation from air bag such a prospect would pose a unique financial information demonstrating suppliers to verify that the requirements challenge to the company, due to the that failure to obtain the exemption for which the vehicle manufacturer high cost of development and its would cause substantial economic seeks an exemption cannot be met. As extremely small sales volumes. hardship. Specifically, the petitioner further factors for consideration by the Based upon the information provided provided the following: agency in reviewing the company’s by the petitioner, we understand that 1. Chronological analysis of Morgan’s temporary exemption request, Mr. Morgan made good faith efforts to bring efforts to comply, showing the Blodgett highlighted what he perceived the Aero 8 into compliance with the relationship to the rulemaking history of to be the manufacturer’s delay in applicable requirements until such time the advanced air bag requirements. submitting a part 555 petition from the as it became apparent that there was no 2. Itemized costs of each component advanced air bag requirements and its practicable way to do so. The company that would have to be modified in order presumed continuation of vehicle had a difficult time in gaining access to to achieve compliance. production prior to receiving the advanced air bag technology (which 3. List of air bag suppliers that were agency’s decision. presumably reflects suppliers’ initial approached in hopes of procuring Agency Decision on Morgan Petition. focus on meeting the needs of large necessary components (including OEM We are granting the Morgan petition to volume manufacturers), and this further price-volume quotations). be exempted from portions of the reduced the lead time available for 4. Explanations as to why components advanced air bag regulation required by development. Furthermore, because from newer, compliant vehicle lines S14.2 (specifically S15.2, S17, S19, S21, Morgan is a fully independent company, could not be borrowed. S23, and S25). The extent of the there was no possibility of technology 5. Corporate income statements and exemption is limited to those provision transfer from a larger parent company. balance sheets for the past three years, requiring an unbelted 5th percentile Consequently, no viable alternatives and projected income statements and female barrier impact (S15.2), a belted remain. The petitioner is unable to balance sheets if the petition is denied. 5th percentile female offset frontal We note that reduction of sales redesign its vehicle by the time the new impact (S17), testing with child revenue resulting from a denial of the advanced air bag requirements go into dummies (S19, S21 and S23) and the company’s requested temporary effect on September 1, 2006. 5th percentile female dummy out-of- exemption would have a negative position testing (S25). Morgan must After review of the income statements impact not only on Morgan’s financial certify to 50th percentile male barrier provided by the petitioner, the agency circumstances, but it would also testing (S14.5.1(a) and S14.5.2), and 5th notes that the company has faced negatively affect U.S. employment. percentile female belted barrier testing ongoing financial difficulties, Specifically, reduction in sales would (S15.1). The agency’s rationale for this experiencing financial losses of about $4 also affect Morgan dealers and repair decision is as follows. million over the past five years (2001– specialists, negatively impacting their The advanced air bag requirements 2005). If the petitioner is forced to ability to provide parts and services to present a unique challenge because they discontinue selling the current model in current Morgan owners. Traditionally, would require Morgan to undertake a the U.S. market, the resulting loss of the agency has concluded that the major redesign of its vehicles, in order sales would cause substantial economic public interest is served in affording to overcome the engineering limitations hardship within the meaning of the continued employment to the of the Aero 8. While the petitioner was statute, potentially amounting to the petitioner’s U.S. work force. aware of the new requirements for some difference between a profit of over $3 Furthermore, as discussed in previous time, its business plans to introduce a million and a loss of over $6 million decisions on temporary exemption fully U.S. compliant vehicle did not over the period from 2006–2009. applications, the agency believes that materialize due to technical problems. Ultimately, denial of the exemption the public interest is served by affording As a result, Morgan subsequently request could threaten the company’s consumers a wider variety of motor determined that it would be necessary solvency. vehicle choices. to introduce the Aero 8 into the U.S. According to Morgan, absent the We also note that the Aero 8 features market in order to finance the exemption, the company anticipates several advanced ‘‘active’’ safety development of a fully compliant being forced to withdraw from the U.S. features. These features are listed in the successor vehicle, thereby raising the market. However, Morgan’s problems petitioner’s application.21 While the problem of compliance with the would be compounded without its availability of these features is not advanced air bag requirements. requested temporary exemption, critical to our decision, it is a factor in Morgan explained the main because it needs the revenue from sales considering whether the exemption is in engineering challenges precluding of the Aero 8 over the next three years the public interest. incorporation of advanced air bag into to finance development of a fully We believe that this exemption will the Aero 8 at this time, as follows. The compliant vehicle for delivery to the have negligible impact on motor vehicle company does not have access to U.S. market. Granting the exemption safety because of the limited number of necessary sensor technology to pursue will allow Morgan to earn the resources the ‘‘full suppression’’ passenger air bag necessary to bridge the gap in terms of 21 See page 12 of Morgan’s petition and page 1 of option. In addition, due to the design of development of a successor vehicle for Morgan’s comments.

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vehicles affected (approximately 400 Bag Requirements) of Standard No. 208, Worldwide imported for the duration of the Occupant Crash Protection, exempted Maserati S.p.A production U.S. imports exemption), and because Morgan pursuant to * * *.’’ We note that the vehicles are not typically used for daily phrase ‘‘Advanced Air Bag 2003 ...... 2900 cars .... 1073 cars. transportation. Their annual usage Requirements’’ is an abbreviated form of 2004 ...... 4722 cars .... 1747 cars. 2005 ...... 5571 cars .... 2061 cars. (approximately 5,000 miles per year) is the title of S14 of Standard No. 208. We substantially lower compared to believe it is reasonable to interpret vehicles used for everyday § 555.9 as requiring this language. However, Maserati is owned by Fiat, transportation. Our response to the supplementary a large vehicle manufacturer. The Furthermore, the agency examined comments provided by the petitioner is petitioner stated that there is no the FARS (1995–2004) and the National reflected above. In terms of our response similarity of design between the cars Automotive Sampling System to the comment submitted by Mr. produced by Maserati and Fiat, and that Crashworthiness Data System (NASS Blodgett, we note that the issues raised Maserati designed and engineered the CDS) (1995–2005) for information on in that comment (e.g., extension of the Coupe/Spyder without the direct the vehicle in question (which began comment period, duration of the involvement of Fiat. In addition, sales in May 2005) or its predecessor comment period, documentation) are Maserati stated that its vehicles are vehicle (the Plus 8). These data indicate identical for all five petitioners. imported and sold though its own that over that period, there were no Accordingly, please see our decision for dealer networks, not those of Fiat. In NASS CDS and no FARS cases for the Lamborghini (Section IV of this notice) sum, Maserati asserts that its Aero 8 or its predecessor. Thus, there for the agency’s response to this relationship with Fiat is ‘‘arm’s-length.’’ were no children or small women comment submission. Maserati operates independently, and involved in crashes of these Morgan In sum, the agency concludes that services provided by Fiat are paid for by vehicles included in these databases. Morgan has demonstrated good faith Maserati. We note that, as explained below, effort to bring the Aero 8 into In making our determination prospective purchasers will be notified compliance with the advanced air bag regarding eligibility, we note that the that the vehicle is exempted from the requirements of FMVSS No. 208, and public comment of the COSVAM raised specified advanced air bag requirements has also demonstrated the requisite the issue of whether certain of the of Standard No. 208. Under § 555.9(b), financial hardship. Further, we find the petitioners (Bugatti, Lamborghini, a manufacturer of an exempted exemption to be in the public interest. Maserati) are eligible for temporary passenger car must affix securely to the In consideration of the foregoing, we exemptions under part 555, in light of windshield or side window of each conclude that compliance with the their financial relationships to larger exempted vehicle a label containing a advanced air bag requirements of parent companies which are also statement that the vehicle conforms to FMVSS No. 208, Occupant Crash vehicle manufacturers. Specifically, all applicable Federal motor vehicle Protection, would cause substantial COSVAM argued that the Maserati safety standards in effect on the date of economic hardship to a manufacturer vehicle has been engineered by Ferrari manufacture ‘‘except for Standard Nos. that has tried in good faith to comply and that the technology for compliance [listing the standards by number and with the standard. We further conclude with the requirements of FMVSS No. title for which an exemption has been that granting of an exemption would be 208 should be readily available. The granted] exempted pursuant to NHTSA in the public interest and consistent commenter asserted that at one point, lll Exemption No. .’’ This label with the objectives of traffic safety. the two companies shared the same staff notifies prospective purchasers about In accordance with 49 U.S.C. for certification (homologation) and that the exemption and its subject. Under 30113(b)(3)(B)(i), the Morgan Aero 8 is the two companies have a long history § 555.9(c), this information must also be granted NHTSA Temporary Exemption of technology sharing. COSVAM stated included on the vehicle’s certification No. EX 06–5, from S15.2, S17, S19, S21, that the two companies’ recent label. S23, and S25 of 49 CFR 571.208. The corporate separation was defined in the The text of § 555.9 does not expressly exemption is effective from September public record as ‘‘administrative rather indicate how the required statement on 1, 2006 to August 31, 2009. than technological,’’ and it stated that the two labels should read in situations Maserati continues to use powertrains where an exemption covers part but not VII. Maserati and other engineering equipment all of a Federal motor vehicle safety Background. Maserati is a small standard. In this case, we believe that a developed by and for Ferrari (which is volume Italian automobile manufacturer majority-owned by Fiat S.p.A.). Thus, statement that the vehicle has been formed in 1914 that produces exempted from Standard No. 208 the commenter expressed doubt as to performance sports cars and luxury whether Maserati would be unable to generally, without an indication that the automobiles. Over the years, Maserati exemption is limited to the specified comply with the advanced air bag has experienced frequent changes in requirements of FMVSS No. 208. advanced air bag provisions, could be ownership and financial hardship. The misleading. A consumer might Accordingly, the commenter argued that exemption is being sought for the incorrectly believe that the vehicle has Maserati should be considered ineligible Maserati Coupe/Spyder 22 for a period of been exempted from all of Standard No. for a temporary exemption under part 16 months. 208’s requirements. Moreover, we 555. Eligibility. Maserati produced less believe that the addition of a reference Maserati also submitted a public than 6,000 vehicles in the most recent to such provisions by number without comment 23 on its own petition, in year of production. More specifically, an indication of its subject matter would which it sought to clarify its the petitioner reported the following be of little use to consumers, since they relationship with its parent company, worldwide production and U.S. imports would not know the subject of those arguing that it is similar to that of over the past few years: specific provisions. For these reasons, Ferrari which is also majority-owned by Fiat. we believe the two labels should read in 22 The Maserati vehicles in question differ only in relevant part, ‘‘except for S15.2, S17, that one is a hardtop version (the Coupe) and the S19, S21, S23, and S25 (Advanced Air other is a convertible softtop version (the Spyder). 23 Docket No. NHTSA–2006–25324–10.

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The agency examined the relationship have the resources to fund advanced air injuries caused by the Coupe/Spyder’s between Maserati and Fiat (and its bag development for both the Coupe/ current standard air bag system. If the subsidiary Ferrari). We have concluded Spyder and the successor vehicle due in exemption is denied and Maserati stops that Maserati is eligible to apply for a 2008, and that an advanced air bag U.S. sales, Maserati states that its temporary exemption based on the system tailored to the one vehicle could goodwill with its U.S. dealers would be following factors. First, there is no not be subsequently used in the other, negatively impacted. Further, Maserati similarity of design between the cars due to completely different vehicle asserts that denial of an exemption produced by Maserati and cars platforms. Furthermore, even if it were would reduce consumer choice in the produced by Fiat (or Ferrari), and technically possible to install advanced specialty sports car market sector into Maserati has stated that its Coupe/ air bags in the Coupe/Spyder, Maserati which Maserati cars are offered. Spyder was designed without assistance stated that the added cost on a per- Masearti asserts that the Coupe/Spyder from Fiat (or Ferrari). Second, Maserati vehicle basis would price the model out will not be used extensively by owners, cars are imported and sold through of the market. If the exemption is and is unlikely to carry small children. separate distribution channels denied, the petitioner anticipates Finally, according to Maserati, granting independent of Fiat, which does not sell layoffs, negative impacts for Maserati an exemption would assure the vehicles in the U.S, and of Ferrari. dealers and owners in the U.S., and a continued availability of proper parts Accordingly, NHTSA concludes that delay in introducing a new, fully and service support for existing Fiat (and Ferrari) are not manufacturers complaint vehicle. Maserati owners. of Maserati vehicles by virtue of being Good faith efforts to comply. Maserati Summary of Public Comments. The a sponsor. states that it has been unable to agency received three comments on the Requested exemptions. Maserati overcome engineering problems Maserati petition for a temporary stated that it intends for the Coupe/ associated with installing advanced air exemption. The first comment was Spyder produced for the United States bags in the current Coupe/Spyder, a submitted by Maserati itself. In its market on and after September 1, 2006 vehicle platform that is soon to go out comment, the company stated that its to comply with the rigid barrier belted of production. The design of the current situation is similar to Ferrari’s request and unbelted test requirements using Coupe/Spyder started in 1996, before for a temporary exemption from the the 50th percentile adult male test the advanced air bag rule was advanced air bag provisions of FMVSS dummy (S14.5). promulgated. In the late 1990s, when No. 208, which the agency granted in a As for the Coupe/Spyder’s Maserati decided to re-enter the U.S. notice published in the Federal Register compliance with the other advanced air market, it made the decision that the on May 22, 2006 (71 FR 29389) (Docket bag requirements, Maserati states that it Coupe/Spyder would have a life span in No. NHTSA–2005–23093). Specifically, does not know whether the Coupe/ the U.S. of five years, from 2002 through Maserati presented the following 2006. This decision was based on the Spyder will be compliant as it has not arguments in support of its petition. fact that the model was introduced in had the financial ability to conduct the Like Ferarri, Maserati stated that it Europe in 1997, and that the basic necessary development and testing. product cycles must last longer than the Accordingly, Maserati is requesting an platform would, therefore, have a total industry average due to the high cost of exemption from the rigid barrier test life span of nine years. Only in late development and extremely small sales requirement using the 5th percentile 2005, Maserati concluded that it had to volumes. Maserati stated that it did not adult female test dummy (belted and extend the life span of the Coupe/ anticipate continued production of the unbelted, S15), the offset deformable Spyder, by 16 months beyond the Coupe/Spyder after September 1, 2006, barrier test requirement using the 5th planned 2006 end date, because a fully but the company later determined that percentile adult female test dummy compliant vehicle is not yet ready. it would be necessary to continue (S17), the requirements to provide According to Maserati, it tried, but production of that model. According to protection for infants and children (S19, could not overcome the technical Maserati, advanced air bag requirements S21, and S23) and the requirement challenges associated with borrowing were not anticipated when designing using an out-of-position 5th percentile the advanced air bag system from the Coupe/Spyder’s vehicle platform, adult female test dummy at the driver Maserati’s other model, the which arose from a predecessor vehicle position (S25). Quattroporte, because the steering Maserati is requesting the above column and steering wheel are developed circa 1995. However, the exemption for the Coupe/Spyder for the incompatible with the electrical system petitioner stated that in order to meet period from September 1, 2006 to in the Coupe/Spyder. Use of the the advanced air bag requirements, it December 31, 2007. Quattroporte’s passenger air bag would would face the unique challenge of Economic hardship. Over the period require redesigning the entire Coupe/ needing to completely redesign the of 2000–2005, the company lost Spyder dashboard. To position the vehicle before the end of its life cycle. $385,195,998 (320,996,665 euros).24 The Quattroporte’s sensors in the Coupe/ Maserati stated that it made a good faith petitioner argues that an exemption is Spyder, it would have been necessary to effort to find a practicable way to needed in order to avoid massive change the seats. The sensors also could comply with the advanced air bag disruptions to the Maserati production not be packaged in the Coupe/Spyder requirements, but it was unable to do so. system and loss of revenue until a fully- due to space problems, and the sensor As discussed previously, Maserati compliant model is introduced in early software was incompatible with the argued that it is an independent 2008. The exempted vehicles will Coupe/Spyder’s electrical system. manufacturer eligible for an exemption ‘‘bridge the gap’’ between the current Maserati argues that an exemption under 49 CFR part 555, despite the fact Coupe/Spyder, with standard air bags, would be in the public interest. Maserati that the company is majority-owned by and the next version of the model line put forth several arguments in favor of Fiat. The petitioner argued that its arriving in 2008 with advanced air bags. a finding that the requested exemption relationship to its parent company is The petitioners stated that it does not is consistent with the public interest. similar to that of Ferarri, which is also Specifically, Maserati asserts the current majority-owned by Fiat. Maserati also 24 The dollar-euro exchange rate used herein is 1 Coupe/Spyder’s air bag system does not noted that denial of its exemption euro = $1.20. pose a safety risk. Maserati knows of no request would have a negative

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employment impact on both its U.S. The third comment was submitted by due to space problems, and the sensor subsidiary and its U.S. dealerships. COSVAM. As discussed previously, software was incompatible with the Maserati stated that in addition to COSVAM raised the issue of whether Coupe/Spyder’s electrical system. Thus, standard air bags, its vehicle also certain of the petitioners (Bugatti, Maserati has made clear that such a incorporates additional active and Lamborghini, Maserati) are eligible for prospect would pose a unique challenge passive safety systems, including temporary exemptions under part 555, to the company, due to the high cost of electronic stability control, ABS, side air in light of their financial relationships development and its extremely small bags, and a fixed rollover bar on the to larger parent companies which are sales volumes. convertible. Furthermore, the company also vehicle manufacturers (see Based upon the information provided stated that the Coupe/Spyder has been Eligibility section above for details and by the petitioner, we understand that equipped with an air bag on-off switch. the agency’s decision on that issue). Maserati made good faith efforts to bring In terms of safety impact, Maserati Agency Decision on Maserati Petition. the Coupe/Spyder into compliance with argued that it intends to produce only We are granting the Maserati petition to the applicable requirements until such about 700 Coupe/Spyder vehicles over be exempted from portions of the time as it became apparent that there 16 months and that these vehicles are advanced air bag regulation required by was no practicable way to do so. No not typically used for daily S14.2 (specifically S15, S17, S19, S21, viable alternatives remain. The transportation, have substantially lower S23, and S25). The exemption does not petitioner is unable to redesign its than average annual usage, and typically extent to the provisions requiring 50th vehicle by the time the new advanced are not used to transport children. percentile male barrier impact tests air bag requirements go into effect on Accordingly, the petitioner argued that (S14.5.1(a) and S14.5.2). Thus, Maserati September 1, 2006. must certify to S14.5.1(a) and S14.5.2. its requested exemption for these After review of the income statements vehicles would have a negligible effect The agency’s rationale for this decision is as follows. provided by the petitioner, the agency on safety. The company added that its notes that the company has faced search of NHTSA’s Fatality Analysis The advanced air bag requirements present a unique challenge because they ongoing financial difficulties, having Reporting System (FARS) database from lost over $385 million (320 million 1995–2003 and 2004 Annual Report File would require Maserati to conduct a major redesign its vehicles, in order to euros) over the period from 2001–2005. showed no accident involving a If the petitioner is forced to discontinue Maserati vehicle built by the ownership- overcome the existing engineering and 25 technical limitations based upon design selling the current model in the U.S. management post-DeTomaso. market, the resulting loss of sales and In addition, Maserati argued that the of the Coupe/Spyder. While the revenue would cause substantial continued weakening of the U.S. dollar petitioner was aware of the new economic hardship within the meaning vis-a-vis the euro, when combined with requirements for some time, its business of the statute. However, Maserati’s competitive pressure to avoid plans changed, and it was subsequently problems would be compounded significant vehicle price increases in the determined that the Coupe/Spyder’s without its requested temporary U.S. market, exacerbates the economic production run would need to be exemption, because it needs the revenue hardship problems confronting the extended beyond 2006 (i.e., for an from sales of the Coupe/Spyder over the company. additional 16 months) because a next 16 months to finance development The second comment was submitted successor vehicle is not ready, thereby of a fully compliant vehicle for delivery by Mr. Steven Blodgett (see the raising the problem of compliance with to the U.S. market in 2008. Granting the summary of public comments under the advanced air bag requirements. The exemption will allow Maserati to earn Lamborghini for a complete discussion petitioner requested a temporary the resources necessary to bridge the of this comment). Specific to Maserati, exemption in order to prevent a gap in gap in terms of development of a Mr. Blodgett requested the OMB and/or its U.S. product portfolio, thereby successor vehicle for the Coupe/Spyder a separate independent contractor be maintaining its market position in the that meets all U.S. requirements. used to evaluate the company’s U.S. and avoiding financial harm to its financial data. The commenter also dealer network. While some of the information Maserati explained the main objected to the lack of supporting submitted by Maserati has been granted engineering challenges precluding documentation from air bag suppliers to confidential treatment and is not incorporation of advanced air bag into verify that the requirements for which detailed in this document, the petitioner the Coupe/Spyder at this time, as made a comprehensive showing of its the vehicle manufacturer seeks an follows. After examining available exemption cannot be met. As further good faith efforts to comply with the options, Maserati determined that its requirements of S14.2 of FMVSS No. factors for consideration by the agency best chance of meeting the advanced air in reviewing the company’s temporary 208, and detailed engineering and bag requirements would involve financial information demonstrating exemption request, Mr. Blodgett borrowing the advanced air bag system highlighted what he perceived to be the that failure to obtain the exemption from Maserati’s other model, the would cause substantial economic manufacturer’s delay in submitting a Quattroporte. However, this strategy did part 555 petition from the advanced air hardship. Specifically, the petitioner not work, because the Quattroporte’s provided the following: bag requirements and its presumed steering column and steering wheel are 1. Chronological analysis of Maserati’s continuation of vehicle production prior incompatible with the electrical system efforts to comply, showing the to receiving the agency’s decision. in the Coupe/Spyder. Furthermore, it relationship to the rulemaking history of was determined that use of the 25 the advanced air bag requirements. According to the petitioner, Maserati operated Quattroporte’s passenger air bag would under one corporate ownership-management 2. Discussion of alternative means of structure (DeTomaso), which last produced vehicles require redesigning the entire Coupe/ for sale in the U.S. during model year 1991. The Spyder dashboard and that to position compliance and reasons for rejecting company was subsequently sold to its current the Quattroporte’s sensors in the Coupe/ these alternatives. leadership, which resumed sales in the U.S. in 3. Explanations as to why components 2001. According to the petitioner, the two Spyder, it would have been necessary to generations of vehicles were significantly different, change the seats. The sensors also could from newer, compliant vehicle lines although both shared the same Maserati name. not be packaged in the Coupe/Spyder could not be borrowed.

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4. Corporate incomes statements and miles per year on average) is would not know the subject of those balance sheets for the past three years.26 substantially lower compared to specific provisions. For these reasons, Although Maserati did not supply vehicles used for everyday we believe the two labels should read in OEM price-volume quotation from air transportation. relevant part, ‘‘except for S15, S17, S19, bag suppliers in terms of a compliant In addition, Maserati has voluntarily S21, S23, and S25 (Advanced Air Bag system for the Coupe/Spyder, we included an air bag on-off switch for Requirements) of Standard No. 208, nevertheless believe that such passenger air bag suppression for the Occupant Crash Protection, exempted discussions took place, as the company protection of children being transported pursuant to * * *.’’ We note that the explored the alternatives of either in the right front seating position. This phrase ‘‘Advanced Air Bag upgrading the existing standard air bag will enable the passenger air bag to be Requirements’’ is an abbreviated form of on the Coupe/Spyder or adapting the manually turned off when a child is Quattroporte’s advanced air bag system present, which supports our findings the title of S14 of Standard No. 208. We to that vehicle. Neither of these that this exemption would have a believe it is reasonable to interpret alternatives proved feasible, either negligible impact on motor vehicle § 555.9 as requiring this language. developmentally or commercially. safety. Although our response to the We note that Maserati is a well- Furthermore, the agency examined supplementary comments provided by established company with a small, but the FARS (1995–2004) and the National the petitioner is reflected above, we not insignificant U.S. presence. We Automotive Sampling System would offer the following response to believe that the reduction of sales Crashworthiness Data System (NASS the other public comments received on revenue resulting from a denial of the CDS) (1995–2005) for information on the Maserati petition. In terms of our company’s requested temporary the vehicle in question. These data response to the comment submitted by exemption would have a negative indicate that over that period, there Mr. Blodgett, we note that the issues were no NASS CDS cases and one FARS impact not only on Maserati’s financial raised in that comment (e.g., extension circumstances, but it would also case for a model year 1987 Coupe/ of the comment period, duration of the negatively affect U.S. employment. Spyder (male driver). Thus, there were comment period, documentation) are Specifically, reduction in sales would no children or small women involved in identical for all five petitioners. also affect Maserati’s U.S. subsidiaries, crashes of the Maserati Coupe/Spyder dealers, and repair specialists, which included in these databases. Accordingly, please see our decision for could in turn negatively impact the We note that, as explained below, Lamborghini (Section IV of this notice) availability of parts and services to prospective purchasers will be notified for the agency’s response to this existing Maserati owners. Traditionally, that the vehicle is exempted from the comment submission. As noted the agency has concluded that the specified advanced air bag requirements previously, the comments of COSVAM public interest is served in affording of Standard No. 208. Under § 555.9(b), were addressed under the discussion of continued employment to the a manufacturer of an exempted Eligibility above. petitioner’s U.S. work force. passenger car must affix securely to the In sum, the agency concludes that Furthermore, as discussed in previous windshield or side window of each Maserati has demonstrated good faith exempted vehicle a label containing a decisions on temporary exemption effort to bring the Coupe/Spyder into statement that the vehicle conforms to applications, the agency believes that compliance with the advanced air bag all applicable Federal motor vehicle the public interest is served by affording requirements of FMVSS No. 208, and safety standards in effect on the date of consumers a wider variety of motor has also demonstrated the requisite vehicle choices. manufacture ‘‘except for Standard Nos. [listing the standards by number and financial hardship. Further, we find the We also note that the Coupe/Spyder exemption to be in the public interest. features several advanced ‘‘active’’ title for which an exemption has been safety features. These features are listed granted] exempted pursuant to NHTSA In consideration of the foregoing, we in the petitioner’s application.27 While Exemption No. lll.’’ This label conclude that compliance with the the availability of these features is not notifies prospective purchasers about advanced air bag requirements of critical to our decision, it is a factor in the exemption and its subject. Under FMVSS No. 208, Occupant Crash considering whether the exemption is in § 555.9(c), this information must also be Protection, would cause substantial the public interest. included on the vehicle’s certification economic hardship to a manufacturer We believe that this exemption will label. that has tried in good faith to comply have negligible impact on motor vehicle The text of § 555.9 does not expressly with the standard. We further conclude safety because of the limited number of indicate how the required statement on that granting of an exemption would be vehicles affected (not more than 700 for the two labels should read in situations in the public interest and consistent the duration of the exemption), and where an exemption covers part but not with the objectives of traffic safety. because Maserati vehicles are not all of a Federal motor vehicle safety standard. In this case, we believe that a In accordance with 49 U.S.C. typically used for daily transportation. 30113(b)(3)(B)(i), the Maserati Coupe/ Their annual usage (less than 10,000 statement that the vehicle has been exempted from Standard No. 208 Spyder is granted NHTSA Temporary Exemption No. EX 06–6, from S15, S17, 26 Because the company is wholly owned by Fiat generally, without an indication that the and does not publish financial statements, Maserati exemption is limited to the specified S19, S21, S23, and S25 of 49 CFR did not include pro forma projected statements. advanced air bag provisions, could be 571.208. The exemption is effective Nevertheless, the financial statements for prior misleading. A consumer might from September 1, 2006 to December 31, years provided by Maserati suggest that the company has a ways to go before achieving incorrectly believe that the vehicle has 2007. profitability on its operations. Given its cumulative been exempted from all of Standard No. Issued on: August 31, 2006. losses, the company is not in a position to incur the 208’s requirements. Moreover, we costs of a new development program to be spread believe that the addition of a reference Nicole R. Nason, over only 700 units, thereby raising the retail price Administrator. of the Coupe/Spyder significantly. to such provisions by number without 27 See page 13 of Maserati’s petition and page 1 an indication of its subject matter would [FR Doc. 06–7487 Filed 9–6–06; 8:45 am] of Maserati’s comments. be of little use to consumers, since they BILLING CODE 4910–59–P

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DEPARTMENT OF TRANSPORTATION approximately 1500 Saleen Mustangs in were challenging, major air bag model year 2005. It indicated that sales suppliers concentrated their efforts on National Highway Traffic Safety of these vehicles are expected to working with large-scale manufacturers Administration increase in 2006. Saleen also stated that and thus, until recently, small volume [Docket No. NHTSA–2006–25323; Notice 2] it is adding new models such as the manufacturers had limited access to 2007 Ford 150-based Saleen S331. advanced air bag technology. Because of Saleen, Inc.; Response to Application Saleen will also be considered an alterer the nature of the requirements for for Temporary Exemption From Certain for these new vehicles (other than the protecting out-of-position occupants, Provisions of Federal Motor Vehicle S7). ‘‘off-the-shelf’’ systems could not be Safety Standard No. 208 In June 2001, NHTSA granted Saleen readily adopted. Further complicating a two-year hardship exemption from the matters, because small volume AGENCY: National Highway Traffic automatic restraint requirements of manufacturers build so few vehicles, the Safety Administration (NHTSA), FMVSS No. 208, expiring on April 16, costs of developing custom advanced air Department of Transportation (DOT). 2003 (66 FR 33298; June 21, 2001). On bag systems compared to potential ACTION: Grant in part and denial in part January 22, 2004, we granted a renewal profits discouraged some air bag of application for temporary exemption of the exemption for an additional three suppliers from working with small from certain provisions of Federal Motor years, expiring on September 1, 2006.1 volume manufacturers. Vehicle Safety Standard No. 208, In September of 2005, Saleen The agency has carefully tracked Occupant Crash Protection. submitted an application for further occupant fatalities resulting from air bag exemption from the automatic restraint deployment. Our data indicate that the SUMMARY: This document grants in part requirements of FMVSS No. 208, as well agency’s efforts in the area of consumer and denies in part the Saleen as an exemption from the advanced air education and manufacturers’ providing application for an extension of a bag requirements of the standard. Saleen de-powered air bags were successful in temporary exemption from the subsequently withdrew the petition, and reducing air bag fatalities even before automatic restraint requirements of later resubmitted the application in advanced air bag requirements were Federal Motor Vehicle Safety Standard January of 2006. Saleen then provided implemented. (FMVSS) No. 208, Occupant Crash supplemental information on May 11, As indicated above, Saleen requested Protection, and grants an additional 2006. In its petition, Saleen requested not only an exemption from the exemption from the advanced air bag that both the further exemption for the advanced air bag requirements, but also requirements of that standard, both for automatic restraint requirements a continued exemption from the the Saleen S7. The basis for the request (‘‘basic’’ air bag requirements) and the automatic restraint requirements was that compliance would cause exemption for the advanced air bag altogether. substantial economic hardship to a low- requirements remain in effect for three On July 12, 2006, NHTSA published volume manufacturer that has tried in years, i.e., until September 1, 2009. in the Federal Register (71 FR 39392) a good faith to comply with the standard. We note that, in 2000, NHTSA notice of receipt of Saleen’s application The extension of the exemption from upgraded the requirements for air bags for temporary exemption, and invited the automatic restraint requirements is in passenger cars and light trucks, public comments. effective September 1, 2006 and will requiring what is commonly known as II. Saleen’s Statement of Need and remain in effect until August 31, 2007. ‘‘advanced air bags.’’ 2 The upgrade was The exemption from the advanced air designed to meet the goals of improving Good Faith Effort bag requirements is effective September protection for occupants of all sizes, Saleen stated that its previous 1, 2006 and will remain in effect until belted and unbelted, in moderate to exemption extension request was August 31, 2009. high speed crashes, and of minimizing intended to provide sufficient time for FOR FURTHER INFORMATION CONTACT: Ed the risks posed by air bags to infants, Saleen to sell and ship the Saleen S7 Glancy or Eric Stas in the Office of Chief children, and other occupants, vehicles to generate the necessary cash Counsel, NCC–112, (Phone: 202–366– especially in low speed crashes. flow to support the development of an 2992; Fax 202–366–3820). The advanced air bag requirements air bag system that would be compliant SUPPLEMENTARY INFORMATION: were a culmination of a comprehensive with the advanced air bag requirements. plan that the agency announced in 1996 The applicant stated that it intended to I. Background to address the adverse effects of air bags. produce and sell a total of 36 vehicles Under 49 U.S.C. 30113(b), NHTSA This plan also included an extensive by the end of 2003, with production may grant a temporary exemption from consumer education program to slowly increasing to a rate of 50 vehicles a motor vehicle safety standard in encourage the placement of children in per year. Saleen projected that this sales situations where compliance would rear seats. The new requirements were rate would have generated cause substantial economic hardship to phased in beginning with the 2004 approximately $12.8 million in annual a low-volume manufacturer that has model year. gross revenue by the end of 2003, which tried in good faith to comply with the Small volume manufacturers are not would then increase to approximately standard. A manufacturer is eligible to subject to the advanced air bag $17.8 million in annual gross revenue apply for an economic hardship requirements until September 1, 2006, with the annual production of 50 exemption if its total motor vehicle but their efforts to bring their respective vehicles. Saleen presented its actual production in its most recent year of vehicles into compliance with these annual sales as 13 vehicles, 8 vehicles, production does not exceed 10,000, as requirements began several years ago. and 14 vehicles, in model years 2003, determined by the NHTSA However, because the new requirements 2004, and 2005, respectively. Administrator (49 U.S.C. 30113(d)). In the January 2006 application, Saleen has manufactured less than 20 1 In accordance with 49 CFR 555.8(e), Saleen’s Saleen stated that it intended to sell a Saleen S7’s a year between model years original exemption remained in effect until the total of 25 vehicles in the United States publication of the 2004 grant notice because the 2003 and 2005. The applicant’s other application for renewal was filed more than 60 days per year, and an additional 10 vehicles line of business consists of altering prior to the expiration of the exemption. in Europe. Maintaining an annual sales vehicles. Saleen stated that it produced 2 See 65 FR 30680; May 12, 2000. level of 35 vehicles, Saleen would

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generate a total of approximately $17.8 private individuals, and all favored 208 by September 1, 2006. 69 FR 3192, million. Saleen subsequently revised granting the petition. January 22, 2004. these projections stating that it was Commenters argued that S7 is Since this type of exemption is uncertain whether it would manufacture constructed to provide driver and temporary, and given the important the Saleen S7 for international sale, as passenger safety at levels well above safety benefits provided by air bags, in European homologation is pending. those of other passenger vehicles. They evaluating Saleen’s latest application we However, Saleen stated that increased cited a fully welded roll cage, aluminum particularly considered whether a sales of its other products in honeycomb passenger compartment, further extension would be in the public conjunction with the sales of the Saleen and carbon fiber bodywork. They stated interest and consistent with the Safety S7 will allow it to develop an air bag that the vehicle is used in racing Act, and whether Saleen has continued system that is compliant with FMVSS applications. They cited the extremely to make good faith efforts to comply No. 208 by the end of calendar year small number of S7’s that are produced, with this requirement. 2008 at a cost of approximately $3.8 and that they are driven very few miles. In considering this issue, we million. Saleen stated that this They cited economic hardship to Saleen recognize that Saleen was only able to timeframe does not account for any if the petition is denied, and stated that take limited advantage of the original delays, and as such, it is requesting a jobs would be lost. exemption, granted on June 21, 2001, three year exemption, expiring V. Agency Decision due to production delays. Sales did not September 1, 2009. commence until March of 2003, only a NHTSA has decided to grant Saleen’s Saleen noted that in its previous few months before the July 1, 2003 petition in part and deny it in part. In application it explained that Saleen’s expiration date for the original particular, we are granting Saleen a one- relationship with Ford Motor Company exemption. We also recognize that by year extension of its existing exemption in assisting in the manufacture of the September 1, 2006, Saleen faced the from the automatic restraint Ford GT, an exotic sports car, would need (absent a new temporary requirements of FMVSS 208, and allow Saleen to rely on many of the exemption) to meet the advanced air bag denying its request as to the additional components from the Ford GT. requirements. two years. This extension will begin on However, Saleen stated that the Ford GT That company indicated in its September 1, 2006 and will remain in was not manufactured as complying petition that it considered implementing effect through August 31, 2007. We are with the advanced air bag requirements. a ‘‘basic’’ air bag system. However, it granting Saleen’s request for a three year As such, Saleen stated that it was not determined that ‘‘such a system would exemption from the standard’s able to rely on the advanced air bag only provide approximately $500,000.00 advanced air bag requirements. This technology used in the Ford GT. in savings, with a resulting estimated exemption will begin September 1, development cost of $3,300,000.00.’’ Since the original air bag exemption, 2006, and remain in effect through Saleen stated that it has hired an Saleen concluded that this cost was August 31, 2009. prohibitive, given that the system would engineering project manger responsible In discussing this decision, we begin be outdated as of September 1, 2006. for air bag development, has been by noting that, in order to grant an working with engineers at Takata, economic hardship petition, the agency While we understand that Saleen Autoliv, and Bosch in researching all of must, under 49 U.S.C. 30113(b), find prefers for economic reasons to go the program requirements as well as both that compliance with a standard directly to advanced air bags, NHTSA developing a test plan and component would cause substantial economic must also consider the safety benefits designs for development of a system hardship and that the manufacturer has provided by ‘‘basic’’ air bags in compliant with the advanced air bag tried to comply with the standard in assessing whether a further extension of requirement. Saleen also stated that it is good faith, as well as that the exemption the exemption from the ‘‘basic’’ air bag working with Kettering University in is in the public interest and consistent requirements is consistent with the Safety Act and the public interest, and Flint Michigan for additional research with the Safety Act.3 and testing. In this case, Saleen has previously in whether Saleen has made good faith received a temporary exemption from efforts to meet these particular III. Saleen’s Statement of Public requirements. Interest FMVSS No. 208’s automatic restraint requirements (the standard’s ‘‘basic’’ air Given the facts before us, including The applicant put forth several bag requirements), as well as an the previous exemptions granted to arguments in favor of a finding that the extension of that temporary exemption. Saleen, and taking account of all of the requested exemption is consistent with These previous exemptions covered the efforts Saleen has made, we have the public interest. Specifically, Saleen period from June 2001 through August decided to grant a one year extension of stated that the Saleen S7 is a unique 31, 2006. Saleen’s exemption from FMVSS No. vehicle designed and produced in the In granting the first application in 208’s ‘‘basic’’ air bag requirements, and United States utilizing many domestic June 2001, NHTSA noted that Saleen to deny its request as to the additional sourced components. If an exemption estimated that it would take up to 20 two years. We believe that extending were granted, Saleen stated that it months to fully develop an automatic this exemption further would not be in would be able to maintain its current restraint system. 66 FR 33298, June 21, the public interest or consistent with the payroll of 150 full time employees and 2001. In granting the application for Safety Act. We believe that there is a continue the purchase of domestic extension of that exemption in January considerable difference between sourced components. Further, Saleen 2004, NHTSA noted that Saleen then providing a company such as Saleen stated that the Saleen S7 otherwise anticipated that it would be able to some additional time to develop an air conforms to all applicable FMVSSs. begin developing advanced air bags by bag system, and granting repeated ‘‘temporary’’ exemptions. With the one- IV. Public Comments July 2004 and expected full compliance with the requirements of FMVSS No. year extension, Saleen will have had an NHTSA received eight comments exemption for a full six years, and been concerning Saleen’s application for a 3 The Safety Act is codified as Title 49, United producing vehicles under it for about temporary exemption. All were from States Code, Chapter 301. four and one-half years.

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As to advanced air bags, and as We are granting Saleen a three-year it to meet specified performance indicated above, Saleen has hired an exemption from the advanced air bag requirements in a belted crash test. The engineering project manager responsible requirements, beginning September 1, relevant paragraph for the advanced air for air bag development, has been 2006. As indicated above, we are also bag requirements is S14.2. working with engineers at Takata, granting that company an extension of We also note that prospective Autoliv, and Bosch in researching all of the exemption from the ‘‘basic’’ air bag purchasers will be notified that the the program requirements as well as requirements for the first of the three vehicle is exempted from the air bag developing a test plan and component years. Saleen’s ability to utilize the final requirements of Standard No. 208. designs for development of a system two years of the exemption from the Under § 555.9(b), a manufacturer of an compliant with the advanced air bag advanced air bag requirements will be exempted passenger car must affix requirement. Saleen is also working dependent on whether it implements an securely to the windshield or side with Kettering University in Flint air bag system that enables the S7 to at window of each exempted vehicle a Michigan for additional research and least meet FMVSS No. 208’s ‘‘basic’’ air label containing a statement that the testing. bag requirements. vehicle conforms to all applicable We have concluded that Saleen has Given the discussion presented above, Federal motor vehicle safety standards made good faith efforts to meet the we conclude that Saleen has made in effect on the date of manufacture advanced air bag requirements. We note sufficient good faith efforts to comply ‘‘except for Standards Nos. [listing the that Saleen’s situation in needing with FMVSS No. 208 to support these standards by number and title for which additional time to meet the advanced air exemptions for the prescribed time an exemption has been granted] bag requirements, which apply to low periods, that requiring immediate exempted pursuant to NHTSA volume manufacturers beginning compliance would cause substantial Exemption No. lll.’’ This label September 1, 2006, is not unlike that of economic hardship, and that the notifies prospective purchasers about several other low volume exemptions are in the public interest the exemption and its subject. Under manufacturers. and consistent with the Safety Act. We § 555.9(c), this information must also be If the petition were denied, the sale of note that while this document includes included on the vehicle’s certification S7 automobiles would cease some discussion of those good faith label. immediately. In evaluating Saleen’s efforts and economic hardship, NHTSA In accordance with 49 U.S.C. current situation, the agency finds that has also considered additional 30113(b)(3)(B)(i), Saleen S7 is granted information submitted by Saleen which to require immediate compliance with NHTSA Temporary Exemption No. EX has been determined to be confidential. Standard No. 208 would cause the 06–7, from S4.1.5.1(a)(1) and S4.1.5.3. We should caution that manufacturers petitioner substantial economic This exemption is effective September that receive temporary exemptions 1, 2006 to August 31, 2007. Saleen S7 hardship. While Saleen also alters motor should not assume that the agency will is granted NHTSA Temporary vehicles, the S7 is the only model that necessarily grant extensions. On this Exemption No. EX 06–8, from S14.2 of Saleen manufactures. basic issue, we note that Saleen cited in § 571.208. This exemption is effective Traditionally, the agency has found its petition a particular sales rate that it September 1, 2006 to August 31, 2009. that the public interest is served in needs to sustain in order to continue to affording continued employment to a fund the development of advanced air (49 U.S.C. 30113; delegations of authority at small volume manufacturer’s work force bags for implementation by September 49 CFR 1.50. and 501.8) and to those of its U.S.-sourced 1, 2009. See p. 2 of Saleen’s petition. Issued on: August 31, 2006. component suppliers. The agency has The petitioner should not assume that if Nicole R. Nason, also found that the public interest is it is unable to maintain a particular served by affording the consumers a Administrator. sales rate or for other reasons does not [FR Doc. E6–14829 Filed 9–6–06; 8:45 am] wider variety of motor vehicles. In this continue to fund the development of BILLING CODE 4910–59–P instance, denial of the petition would advanced air bags, that the agency will put in jeopardy the jobs of 150 full time then grant an extension of the employees at Saleen dedicated to the exemption for advanced air bags DEPARTMENT OF TRANSPORTATION design, manufacture, and certification of provided in this document. the S7. Denial of the petition could also As to the specific paragraphs of Pipeline and Hazardous Materials affect the payrolls of U.S.-sourced FMVSS No. 208 that will be covered by Safety Administration component suppliers. the exemptions, we note that the The vehicle in question will be original exemption for Saleen cited [Docket No. PHMSA—2006–24058; manufactured in extremely limited S4.1.5.3 of 49 CFR 571.208. On review, Notice 1] quantities. Saleen anticipates selling no we believe that it would be clearer to Pipeline Safety: Petition for Waiver; more than 25 of the vehicles per year in cite both S4.1.5.1(a)(1) and S4.1.5.3. The TransCanada Pipelines Limited the United States. The current former paragraph requires passenger Manufacturer’s Suggested Retail Price is cars, at each front outboard seating AGENCY: Pipeline and Hazardous $555,000. The vehicles are also driven position, to meet specified frontal crash Materials Safety Administration on an extremely limited basis. Saleen protection requirements ‘‘by means that (PHMSA), Department of Transportation stated that the vehicles generally do not require no action by vehicle occupants.’’ (DOT). accrue more than 2,000 miles per year. S4.1.5.3 then requires that passenger ACTION: Notice; petition for waiver. In light of these factors, the agency cars meet that requirement by means of anticipates that the S7 vehicles will inflatable restraint systems. Since the SUMMARY: TransCanada Pipelines have a negligible impact on the overall intent of the exemption is to exempt the Limited, operator of the Portland safety of U.S. highways. The agency also S7 from automatic crash protection Natural Gas Transmission System notes that Saleen has indicated that the requirements, we believe that (PNGTS), requests a waiver of vehicle subject to this petition complies S4.1.5.1(a)(1) should be cited. We note compliance from PHMSA regulations with all other applicable Federal motor that the S7 is still subject, among other for selected gas transmission pipeline vehicle safety standards. things, to S4.1.5.1(a)(3), which requires segments in Windham, Maine. These

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regulations require pipeline operators to using geometry and magnetic flux excavated and investigated during the confirm or revise the maximum leakage in-line inspection tools; (2) summer of 2005. allowable operating pressure (MAOP) of annual close interval cathodic PNGTS’s mainline valves (MLV) are a pipeline after a class location change. protection surveys; (3) direct current equipped with remote controlled valve DATES: Persons interested in submitting voltage gradient (DCVG) surveys; (4) actuators. Each valve assembly contains written comments on the waiver direct assessment on anomalies; (5) an upstream and downstream pressure proposed in this notice must do so by additional aerial patrols; and (6) transmitter that communicates with October 10, 2006. Comments filed late installation of buried excavation PNGTS’s supervisory control and data will be considered as practicable. warning tape over the pipeline. PNGTS acquisition (SCADA) system and Gas asserts that these alternative risk control Control Center. The primary ADDRESSES: You may submit written activities will provide an equal or communication method is through a comments by mailing or delivering an higher level of safety than currently satellite link with a backup modem original and two copies to the Dockets provided by the pipeline safety system. If PNGTS’s SCADA system Facility, U.S. Department of regulations. detects operating pressures outside the Transportation, Room PL–401, 400 Federal pipeline safety regulations at pre-established pressure limits, the Seventh Street, SW., Washington, DC § 192.611 require a gas pipeline operator system activates an alarm which notifies 20590–0001. The dockets facility is to confirm or revise the MAOP of its the gas control operator. The gas control open from 10 a.m. to 5 p.m., Monday pipeline if the hoop stress operator has the capability of operating through Friday, except on Federal corresponding to the established MAOP the MLV remotely or isolating the holidays when the facility is closed. of a segment of pipeline is not pipeline completely. Alternatively, you may submit written commensurate with the present class PNGTS proposes to perform comments to the docket electronically at location and the segment is in alternative risk control activities rather the following Web address: http:// satisfactory physical condition. than lowering the MAOP of the system dms.dot.gov. PNGTS’s waiver request involves two or replacing the two segments of Class All written comments should identify locations on its 24-inch pipeline in 1 pipe (totaling 5551 feet). PNGTS the docket and notice number stated in Windham, Maine. Both locations were believes that the following alternative the heading of this notice. Anyone who hydrotested to 1846 pounds per square risk control activities are consistent wants confirmation of mailed comments inch gauge (psig) in December of 1998: with pipeline safety and will maintain must include a self-addressed stamped Location 1: Consists of 785 feet of or exceed the margin of safety and postcard. To file written comments Class 1 pipe, 24-inch outside diameter, environmental protection provided by electronically, after logging on to http:// 0.343-inch wall, American Petroleum 49 CFR § 192.611: dms.dot.gov, click on ‘‘Comment/ Institute (API) 5L/Grade X70 steel pipe, 1. Perform a cathodic protection CIS Submissions.’’ You can also read and 2128 feet of Class 3 pipe, 24-inch on the requested waiver segments. The comments and other material in the outside diameter, 0.494-inch wall, API cathodic protection CIS will be docket at http://dms.dot.gov. General 5L/Grade X70 steel pipe, for a total performed annually and include 1000 information about our pipeline safety length of 2913 feet of pipe. feet upstream and downstream of the program is available at http:// Location 2: Consists of 4766 feet of requested waiver segments. phmsa.dot.gov. Class 1 pipe, 24-inch outside diameter, 2. Perform a DCVG survey on the Anyone is able to search the 0.343-inch wall, and API 5L/Grade X70 requested waiver segments of the electronic form of all comments steel pipe. pipeline. PNGTS proposes to include an received in any of our dockets by the With regard to location 1, PNGTS additional 1000 feet of pipeline in its name of the individual submitting the requests this waiver because the survey. The additional 1000 feet of comment (or signing the comment, if development or conversion of an active pipeline is located upstream and submitted on behalf of an association, gravel pit in an industrial park will downstream of the requested waiver business, labor union, etc.). You may change the 785 feet of Class 1 to Class segments. review DOT’s complete Privacy Act 3 pipe. With regard to location 2, 3. Perform a direct assessment on all Statement in the Federal Register PNGTS requests the waiver because the anomalies or corrosion indications published on April 11, 2000 (65 FR development of a residential identified by the internal inspection 19477) or you may visit http:// subdivision is expected to change the survey or the cathodic protection CIS. dms.dot.gov. entire 4766 feet of Class 1 to Class 3 The direct assessment will be performed pipe. Therefore, both locations will on the requested waiver segments FOR FURTHER INFORMATION CONTACT: change from Class 1 to Class 3. The regardless of size or depth of anomaly James Reynolds by phone at 202–366– pipelines were constructed during 1998 indication, and include an additional 2786, by fax at 202–366–4566, by mail and 1999 and began operating on March 1000 feet of pipe upstream and at DOT, PHMSA, 400 Seventh Street, 10, 1999; according to PNGTS, these downstream of the requested waiver SW., Room 2103, Washington, DC, pipelines are in excellent condition. segments. 20590, or by e-mail at PNGTS performs an annual close 4. Perform weekly aerial patrols over [email protected]. interval survey (CIS) on 15% to 20% of the entire PNGTS 24-inch mainline and SUPPLEMENTARY INFORMATION: PNGTS its pipeline system and in the summer 12-inch lateral pipeline. Aerial patrols requests a waiver from compliance with of 2000, PNGTS performed a base line will also observe pipeline surface 49 CFR 192.611 for selected gas CIS of its entire pipeline system. This conditions for indications of transmission pipeline segments in CIS revealed zero low potentials or construction activity that could affect Windham, Maine. Specifically, PNGTS anomalies at the requested waiver the safe operation of the pipeline. In requests a waiver from the requirement locations. PNGTS also performed a addition, and at a minimum, PNGTS to revise the MAOP or upgrade the baseline high-resolution magnetic flux will also perform quarterly road pipeline segments after a class location leakage internal inspection (smart pig) crossing patrols and leak surveys using change. If this waiver is granted, PNGTS on its mainline in November of 2002. leak detection equipment at all road will conduct risk control activities that Two minor anomalies were identified crossings located within the requested include: (1) Internal pipeline inspection during the inspection and were later waiver segments and all corresponding

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Class 3 locations over the entire length insure the integrity of the cathodic Issued in Washington, DC on August 30, of the requested waiver segments. protection and fusion bond epoxy 2006. 5. Install buried excavation warning coating systems, thereby minimizing the Jeffrey D. Wiese, tape over the pipelines, and throughout risk of future corrosion and maximizing Acting Deputy Associate Administrator for the entire requested waiver segments, to the opportunity for prompt Pipeline Safety. further alert excavators of the existence identification of corrosion-related [FR Doc. E6–14826 Filed 9–6–06; 8:45 am] of PNGTS’s pipelines. deficiencies. BILLING CODE 4910–60–P Finally, PNGTS believes the Authority: 49 U.S.C. 60118(c) and 2015; additional cathodic protection CIS will and 49 CFR 1.53.

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Corrections Federal Register Vol. 71, No. 173

Thursday, September 7, 2006

This section of the FEDERAL REGISTER DEPARTMENT OF COMMERCE August 29, 2006, make the following contains editorial corrections of previously correction: published Presidential, Rule, Proposed Rule, National Oceanic and Atmospheric and Notice documents. These corrections are Administration § 404.4 [Corrected] prepared by the Office of the Federal On page 51137, in the first column, in Register. Agency prepared corrections are DEPARTMENT OF THE INTERIOR § 404.4(b)(1), in the second line, issued as signed documents and appear in ‘‘nwhi.notifications@commat;noaa.gov’’ the appropriate document categories elsewhere in the issue. Fish and Wildlife Service should read ‘‘[email protected]’’. 50 CFR Part 404 [FR Doc. C6–7235 Filed 9–6–06; 8:45 am] [Docket No. 060824225–6225–01] BILLING CODE 1505–01–D RIN 0648–AU82

Northwestern Hawaiian Islands Marine National Monument Correction In rule document 06–7235 beginning on page 51134 in the issue of Tuesday,

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Part II

Department of the Treasury Internal Revenue Service

26 CFR Part 1 Income and Currency Gain or Loss With Respect to a Section 987 QBU; Proposed Rule

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DEPARTMENT OF THE TREASURY Paperwork Reduction Act of 1995 (44 liabilities as well as exchange rates used U.S.C. 3507(d)). Comments on the for foreign currency translation Internal Revenue Service collection of information should be sent purposes. Section 1.987–10 provides to the Office of Management and rules for transitioning to the method 26 CFR Part 1 Budget, Attn: Desk Officer for the provided under the new proposed [REG–208270–86] Department of Treasury, Office of regulations for determining section 987 Information and Regulatory Affairs, gain or loss and provides certain RIN 1545–AM12 Washington, DC 20503, with copies to corresponding reporting rules. The the Internal Revenue Service, Attn: IRS collection of information contained in Income and Currency Gain or Loss Reports Clearance Officer, this regulation facilitates the With Respect to a Section 987 QBU SE:W:CAR:MP:T:T:SP, Washington, DC identification of the prior method used AGENCY: Internal Revenue Service (IRS), 20224. Comments on the collection of by the taxpayer to determine section 987 Treasury. information should be received by gain or loss. The collections of ACTION: Withdrawal of notice of November 6, 2006. information are mandatory. The likely proposed rulemaking, notice of Comments are requested specifically respondents are taxpayers with foreign proposed rulemaking and notice of concerning: qualified business units. Whether the proposed collection of public hearing. Estimated total annual reporting information is necessary for the proper burden: 12,000. SUMMARY: This document contains performance of the functions of the Estimated average annual burden proposed regulations that provide Internal Revenue Service, including hours per respondent: 12. guidance under section 987 of the whether the information will have Estimated number of respondents: Internal Revenue Code (Code) regarding practical utility; 1,000. the determination of the items of The accuracy of the estimated burden Estimated annual frequency of income or loss of a taxpayer with associated with the proposed collection responses: annually. respect to a section 987 qualified of information (see below); An agency may not conduct or business unit (section 987 QBU) as well How the quality, utility, and clarity of sponsor, and a person is not required to as the timing, amount, character and the information to be collected may be respond to, a collection of information source of any section 987 gain or loss. enhanced; unless it displays a valid control How the burden of complying with It withdraws proposed regulations number assigned by the Office of the proposed collection of information under section 987 that were published Management and Budget. may be minimized, including through in the Federal Register on September Books and records relating to a the application or automated collection 25, 1991 (56 FR 48457). These collection of information must be techniques or other forms of information regulations are necessary to provide retained as long as their contents may technology; and become material in the administration guidance under section 987. Taxpayers Estimates of capital or start-up costs of any internal revenue law. Generally, affected by these regulations are and costs of operation, maintenance, tax returns and tax return information corporations and individuals with and purchase of service to provide are confidential, as required by 26 qualified business units subject to information. section 987. The collection of information in these U.S.C. 6103. DATES: Written or electronic comments proposed regulations is in §§ 1.987– Background must be received by December 6, 2006. 1(b)(1)(ii),1.987–1(b)(2)(ii), 1.987– Outlines of topics to be discussed at the 1(c)(1)(ii), 1.987–1(f), 1.987–3(b)(1), A. Overview public hearing scheduled for November 1.987–9, 1.987–10 and 1.987–11. As part of the Tax Reform Act of 1986, 21, 2006, must be received by October Section 1.987–1(b)(1)(ii) allows a Public Law 99–514, 100 Stat. 2085 31, 2006. partner to make an election not to take (October 22, 1986), 1986–3 CB Vol.1, 1, ADDRESSES: Send submissions to: section 987 gain or loss into account. see § 601.601(d)(2), Congress enacted CC:PA:LPD:PR (REG–208270–86), Section 1.987–1(b)(2)(ii) allows a comprehensive reforms to the tax Internal Revenue Service, PO Box 7604, taxpayer to make an election to group treatment of foreign currency Ben Franklin Station, Washington, DC certain QBUs with the same functional transactions by adding new subpart J. 20044. Submissions may be sent currency as a single QBU. Sections Those reforms included, among other electronically, via the IRS Internet site 1.987–1(c)(1)(ii) and –3(b)(1) allow a things, the introduction of the at http://www.irs.gov/regs or via the taxpayer to make an election to use a functional currency concept, which Federal eRulemaking Portal at http:// convention for exchange rates. Section generally distinguishes taxpayers on the www.regulations.gov (IRS REG–208270– 1.987–11(b) allows a taxpayer to elect to basis of the primary currency in which 86). apply these regulations to taxable years they keep their books and records and FOR FURTHER INFORMATION CONTACT: beginning after the date of publication conduct their business. Reforms also Concerning the proposed regulations, of a Treasury decision adopting this rule included the addition of the qualified Sheila Ramaswamy at (202) 622–3870; as a final regulation in the Federal business unit (QBU) concept, which concerning submissions of comments, Register. The preceding elections are to generally provides a basis for allowing Kelly Banks at (202) 622–7180 (not toll- be made pursuant to § 1.987–1(f) by a taxpayer with a separate unit that free numbers). attaching a statement to the taxpayer’s conducts business and keeps books and SUPPLEMENTARY INFORMATION: tax return describing the election to be records in a currency other than the made. Section 1.987–9 contains functional currency of the taxpayer to Paperwork Reduction Act recordkeeping rules to establish a account for the results of operation of The collection of information qualified business unit’s income and the separate unit in the unit’s own contained in this notice of proposed section 987 gain or loss. This collection functional currency. Against that rulemaking has been submitted to the of information is required to establish conceptual background, section 988 Office of Management and Budget for the qualified business unit’s income, provides rules for the treatment of review in accordance with the gain, deduction or loss and assets and transactions in a currency other than the

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taxpayer’s functional currency. Section and translating such income or loss at gain or loss on current items. However, 986 generally provides rules for the appropriate exchange rate. Section the net worth method does not identify translating into U.S. dollars the earnings 987 further requires the taxpayer to separate items of income and expense and profits and foreign taxes of a foreign make ‘‘proper adjustments’’ (as because it is based solely on a balance corporation whose functional currency prescribed by the Secretary) for transfers sheet comparison and does not use a is not the U.S. dollar (dollar). Section of property between QBUs having profit and loss statement. 987, in turn, generally provides rules for different functional currencies Rev. Rul. 75–107 (1975–1 CB 32), see determining and translating income and including treating post-1986 remittances § 601.601(d)(2), provides for the use of currency gain and loss with respect to from each such unit as made on a pro a ‘‘profit and loss’’ method. Under this operations of a branch whose functional rata basis out of post-1986 accumulated method, the branch computes taxable currency is other than the functional earnings; treating section 987 gain or income by translating the local currency currency of the taxpayer. As discussed loss as ordinary income or loss; and profit and loss statement (adjusted for below, an already complex area of law sourcing such gain or loss by reference U.S. tax principles) into dollars. Any was made even more complicated when to the source of the income giving rise portion of the profit and loss remitted to the entity classification rules under to post-1986 accumulated earnings. the home office during the year is § 301.7701–1 through 301.7701–3 (the translated at the exchange rate on the ‘‘check the box’’ regulations) were C. The Legislative History date of the remittance, and the promulgated in 1997. 1. Prior Law remainder is translated at the year-end On September 25, 1991, the IRS and exchange rate. No exchange gain or loss As described in the applicable the Treasury Department issued 1 is recognized on a remittance. proposed regulations under section 987 legislative history, section 987 was The net worth method of Rev. Rul. (the 1991 proposed regulations). See 56 enacted against a background of, and 75–106 and the profit and loss method FR 48457. In light of subsequent IRS partly in reaction to, perceived of Rev. Rul. 75–107 each suffered from experience with taxpayer claims of large shortcomings with prevailing law. The infirmities. The net worth method non-economic currency losses under prevailing law at that time was fairly resulted in the realization of foreign section 987, the IRS and the Treasury limited. It consisted primarily of two currency gain and loss that was not Department issued Notice 2000–20 revenue rulings that provided consistent with the general realization (2000–1 CB 851). See § 601.601(d)(2). alternative methods for calculating principles of the Code; it also failed to This notice expressed serious concern branch taxable income. accurately characterize items of income, that the 1991 proposed regulations had Rev. Rul. 75–106 (1975–1 CB 31), see gain, deduction or loss of the branch. not fully achieved the original goal of § 601.601(d)(2), provides for the use of The profit and loss method, in turn, did facilitating recognition of true economic a ‘‘net worth’’ method. Under this not take into account foreign currency foreign currency gain and loss under method, taxable income of a branch of gain and loss inherent in the assets and appropriate circumstances and a domestic corporation engaged in liabilities on the balance sheet as part of requested comments on this issue and business in a foreign country is defined such method. Both methods failed to other matters. generally as the difference between the account for foreign currency gain or loss This document withdraws the 1991 branch’s opening and closing net worth in the event of a remittance. proposed regulations and provides new as reflected on the branch’s balance The legislative history states that proposed regulations based on the sheets for the taxable year. Under this under section 987, a taxpayer with a ‘‘foreign exchange exposure pool’’ method, the branch’s balance sheet is QBU whose functional currency is other method. The IRS and the Treasury translated into U.S. dollars. In general, than the functional currency of the Department believe that this method the values of current items (such as cash taxpayer will be required to use a profit more accurately reflects foreign or cash flows denominated in foreign and loss method, rather than the net currency gain and loss than the 1991 currency) are translated at the year-end worth method (as this method was proposed regulations and does so in a exchange rate, and the values of understood at the time). House Report manner consistent with statutory historical items (such as equipment) are (1986–3 CB Vol. 2, 479); Senate Report authority and legislative intent. These translated at the exchange rate for the (1986–3 CB Vol. 3, 470); and Conference new proposed regulations are designed period in which the item was acquired Report (1986–3 CB Vol. 4, 675). See to prescribe more precisely foreign or incurred. The translation of an item § 601.601(d)(2). However, this currency gain and loss that is at the year-end rate causes changes in legislative history is not properly read economically realized, while the item’s value due to currency as an explicit rejection of the net worth minimizing or eliminating the fluctuations to be taken into account method in its entirety. Instead, it is realization of non-economic currency annually, and the translation of an item more accurately viewed as a rejection of gain and loss. at the historical rate generally precludes certain aspects of the law prevailing at The following background discussion recognition of fluctuations in value due that time. Importantly, the method describes section 987, its legislative to changing exchange rates. In this way, provided in section 987 as enacted history, the 1991 proposed regulations, the net worth method was able to actually represents a blend of the Notice 2000–20, and the general identify items considered economically separate methods, as it has aspects of approach that provides the basis for the exposed to fluctuations in exchange both a net worth method and a profit foreign exchange exposure pool method. rates. The total change in net worth and loss method. It also has at least one identified by the net worth method is feature absent from each method—that B. The Statute equal to the sum of the operating profit is, section 987 includes the remittance Section 987 generally provides that in or loss of the branch and the exchange recognition concept. Consistent with a the case of a taxpayer having a QBU profit and loss method, sections 987(1) with a functional currency other than 1 H. Rep. No. 99–426, 99th Cong., 1st Sess. (1985); and (2) generally determine the items of that of the taxpayer, the taxable income 1986–3 CB Vol 2, 449. S. Rep. No 99–313, 99th income or loss of a QBU based on its Cong., 2d Sess. (1986); 1986–3 CB Vol. 3, 443. H.R. of the taxpayer with respect to the QBU Conf. Rep. No. 99–841, 99th Cong., 2d Sess. (1986); profit and loss statement as determined is determined by computing the taxable 1986–3 CB Vol. 4, 659. Later citations are to the in its functional currency. Such items income or loss of the QBU separately Cumulative Bulletin. See § 601.601(d)(2). are then translated into the taxpayer’s

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functional currency at the appropriate reduction for remittances from the branch The same translation rule applies to the rate.2 Consistent with a net worth during the year. The committee anticipates earnings and profits of a foreign corporation method, section 987(3) requires that that regulations will provide rules that will and the income or loss of a branch or other exchange gain or loss be computed with limit the deduction of branch losses to the QBU. An entity that uses a nonfunctional taxpayer’s dollar basis in the branch (that is, currency to measure the results of operation respect to certain branch assets and the original dollar investment plus is required to use a profit and loss method liabilities (as prescribed by the subsequent capital contributions and to translate income or loss into functional Secretary). Unlike either method, unremitted earnings). currency. * * * These translation rules apply without regard to the form of section 987(3)(A) provides that A taxpayer will recognize exchange gain or exchange gain or loss is recognized enterprise through which the taxpayer loss on remittances (without regard to conducts business (e.g., sole proprietorship, upon a remittance. whether or when the remittances are The blending of features of both a partnership, or corporation) as long as such converted to dollars), to the extent the value form of enterprise rises to the level of a QBU. profit and loss method and of a net of the currency at the time of the remittance worth method in section 987 is differs from the value when earned. Conference Report, 1986–3 CB Vol. 4, significant. Together with more specific Remittances of foreign branch earnings (and 670. See § 601.601(d)(2). The suggestion principles identified in the legislative interbranch transfers involving branches with in comments is to apply this general history, this blending of methods different functional currencies) after 1986 principle such that section 987 would informs the Congressionally stated will be treated as paid pro rata out of post- require the recognition of exchange gain 1986 accumulated earnings of the branch. preference for the profit and loss or loss only with respect to branch The committee anticipates that, for purposes earnings and not with respect to method. The House Report states: of calculating exchange gain or loss on remittances, the value of the currency will be contributed capital. A profit and loss method can be viewed as Despite the broad statements of being more consistent with the functional determined by translating the currency at the currency concept than a net worth method. rate in effect on the date of remittance. principle quoted above, Congress Under a profit and loss method, the Exchange gains and losses on such provided more specific guidance functional currency is used as the measure of remittances will be deemed to be ordinary regarding the treatment of branches in income or loss, so that earnings determined and domestic source. this regard. The Conference Report for U.S. tax purposes would bear a close Senate Report (1986–3 CB Vol. 3, states that a remittance by a QBU ‘‘will relation to taxable income computed by the 470). Importantly, the Conference trigger exchange gain or loss inherent in foreign jurisdiction. In contrast, a net worth accumulated earnings or branch method takes unrealized exchange gains and Report modifies the House and Senate reports by stating that a remittance by a capital.’’ Conference Report, 1986–3 CB losses into account. Further, a profit and loss Vol. 4, 675. See § 601.601(d)(2). method minimizes the accounting QBU ‘‘will trigger exchange gain or loss procedures that otherwise would be required inherent in accumulated earnings or Similarly, despite the stated to make the item-by-item translations under branch capital.’’ Conference Report, requirement that QBUs must use a a net worth method. Finally, in the case of 1986–3 CB Vol. 4, 675. notional profit and loss method to a branch, the net worth method as applied determine branch taxable income, the under present law fails to characterize From section 987 and the foregoing specific method actually provided in accurately items of income or loss that are legislative history, several principles emerge: section 987 and described in the subject to special U.S. tax rules. For example, 1. A branch profit and loss computation is required in order to properly characterize legislative history represents a blend of although there are limitations on the a net worth method and a profit and loss deductibility of long-term capital losses, such items of branch income or loss, which is taken into account in the year earned. method. Accordingly, the IRS and the a loss incurred by a branch would be given Treasury Department believe that the tax effect because it would be reflected as an 2. Exchange gain or loss is recognized upon adjustment to the balance sheet. a remittance, in an amount prescribed by the more specific statements made by Secretary. Congress regarding the treatment of House Report at 469. 3. Both branch earnings and branch capital branch exchange gain or loss reflect an The House and Senate reports are can give rise to exchange gain or loss under intention that the methodologies of generally uniform in describing section 987. section 986(c) and section 987 not be Congressional intent with regard to the 4. Regulations under section 987 should identical. computations required under section seek to minimize complexity regarding item- 987 as illustrated by the Senate Report. by-item translations. D. The 1991 Proposed Regulations 5. The currency gain or loss taken into Under the bill, a taxpayer with a branch account under section 987 is only the The 1991 proposed regulations whose functional currency is a currency economic gain or loss ‘‘inherent in’’ the provide generally that the net income of other than the U.S. dollar will be required to assets and liabilities of a QBU. a QBU having a functional currency use the profit and loss method to compute different than the taxpayer is branch income. Thus, the net worth method 2. Relationship Between Section 986(c) determined annually. Such will no longer be an acceptable method of and 987 determination is based on the profit and computing income or loss of a foreign branch Comments to the IRS and the loss appearing on the QBU’s books and for tax purposes, and only realized exchange gains and losses on branch capital will be Treasury Department have suggested records, adjusted to conform to U.S. tax reflected in taxable income. that the computation under section 987 principles, and translated into the For each taxable year, the taxpayer will of exchange gain or loss for a branch is functional currency of the taxpayer compute income or loss separately for each intended to operate in the same manner using the weighted average exchange qualified business unit in the business unit’s as the computation under section 986(c) rate for the taxable year. The 1991 functional currency, converting this amount of certain exchange gain or loss of a proposed regulations also provide for to U.S. dollars using the weighted average foreign corporation. In general, section the recognition of exchange gain or loss exchange rate for the taxable period over 986(c) provides for the recognition of upon a remittance from the QBU’s which the income or loss accrued. This exchange gain or loss only with respect equity pool. In general, the equity pool amount will be included in income without to distributions of previously taxed consists of the undistributed capital and earnings and profits (as described in earnings of the QBU, determined in the 2 Section 989(b)(4) provides that, ‘‘except as provided in regulations,’’ the appropriate exchange section 959 or 1293(c)). The Conference QBU’s functional currency. The 1991 rate is the average exchange rate for the taxable year Report includes the following general proposed regulations also provide for a of the QBU. statement about the translation rules: basis pool, which consists of the basis

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of the capital and earnings in the equity the basis pool, expressed in the generally determined according to the pool, expressed in the functional functional currency of the taxpayer, that following formula: currency of the taxpayer. The portion of is attributable to a remittance is

Amount remitted in the QBU’s functional currency Basis pool in the taxpayer’s × functional currency reduuced by Equity pool in the QBU’s prior remittances functional currency reduced by prior remittancces

Section 987 gain or loss is the loss to all equity of a QBU whether or have large non-economic gains built difference between the value of the not the assets of the QBU are into the equity pool. The IRS and the remittance from the QBU translated into economically exposed to changes in the Treasury Department believe that the taxpayer’s functional currency at the value of the functional currency of the Congress did not intend for section 987 spot rate on the date the remittance is QBU. The IRS has faced many cases in to generate non-economic foreign made, less the basis associated with the which taxpayers have claimed currency gains or losses. remittance as determined above. One substantial non-economic exchange In light of the entity-classification important consequence of the equity losses largely on the basis of the 1991 rules and the potential for the equity pool paradigm is that all branch equity proposed regulations. An example may pool paradigm to generate non- gives rise to exchange gain or loss, be instructive. Assume that a domestic economic currency gains and losses, the regardless of whether or not that equity corporation (US Corp) with the dollar as IRS and the Treasury Department issued is held in a form that actually exposes its functional currency forms a foreign Notice 2000–20, 2000–1 CB 851. See the QBU’s owner to currency corporation in Country X and then § 601.601(d)(2). Among other things, the fluctuations (compare assets such as elects under the check the box notice indicated that the IRS and the cash or indebtedness to assets such as regulations to treat that corporation as a Treasury Department were concerned equipment). DE. The DE conducts mineral extraction that the proposed regulations may not Under the 1991 proposed regulations, and owns all the necessary equipment. have achieved their original goal of a taxpayer must determine the source The equipment owned by the DE was recognizing economic exchange gains and character of section 987 gain or loss contributed by US Corp. The DE has no and losses under appropriate for all purposes of the Code, including employees and contracts with a circumstances. The notice requested sections 904(d), 907, and 954, by using subsidiary of US Corp for the employees comments on this and other issues. the same method the taxpayer uses to needed in the business of extraction. US Several comments were received in allocate and apportion its interest Corp, as the entity’s sole owner, claims response to the notice and raised a expense under section 861, with certain that the DE is a QBU for purposes of number of important points. Two of modifications. section 987. The DE has minimal those comments suggested replacing the financial assets and conducts no equity pool paradigm in the 1991 E. Concerns Regarding the 1991 activities other than mineral extraction. proposed regulations with a paradigm Proposed Regulations; Notice 2000–20 US Corp claims that the DE’s functional that recognizes exchange gain or loss Effective January 1, 1997, the IRS and currency is Country X currency. A only on the earnings of a QBU and not the Treasury Department issued the decline in the value of Country X its capital. As described above, the IRS check the box regulations implementing currency relative to the dollar does not and the Treasury Department believe new elective entity-classification rules. produce any economic loss for US Corp that such an approach is inconsistent These regulations made it possible for because the assets of the DE are not with Congressional intent as expressed certain entities with a single owner to be financial assets subject to currency in the legislative history to section 987. treated for federal income tax purposes fluctuation. Nevertheless, US Corp An earnings-only approach also would as an entity disregarded as separate from claims under the 1991 proposed fail to address the core problem of its owner (a disregarded entity or DE). regulations that the equity of the DE, distinguishing between items that As a result, businesses that had which consists almost exclusively of economically give rise to exchange gain previously operated through equipment, gives rise to a substantial and loss and those that do not. subsidiaries could operate through non-economic exchange loss and that Additionally, an earnings-only approach structures treated for tax purposes as terminating the DE (for example, by would produce different results for branches. The effect of the check the another check the box election) triggers QBUs with the same net assets, box regulations was a dramatic increase recognition of such loss. Taxpayers have depending upon whether the net assets in the number of branches resulting claimed similar results under other fact were funded with capital or earnings. from DE elections that are subject to patterns. The IRS and the Treasury Finally, an earnings-only approach fails section 987. This increase has greatly Department have serious concerns about to take into account any foreign exacerbated the already existing these types of transactions. currency exposure on capital and so problems of the 1991 proposed Although the foregoing example could disadvantage banks and other regulations, especially the ability of concerns the claiming of non-economic financial institutions, much of whose taxpayers to trigger non-economic losses losses, the equity pool approach in the QBUs’ capital may be subject to such (and the corresponding trap for the 1991 proposed regulations can also give exposure. unwary taxpayer with non-economic rise to non-economic gains. Recently, gains). the value of the US dollar has declined F. The Foreign Exchange Exposure Pool As indicated above, the equity pool against many foreign currencies. It is Method paradigm in the 1991 proposed likely that under these circumstances, The IRS and the Treasury Department regulations imputes currency gain or taxpayers subject to section 987 may believe that Congress did not intend

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section 987 to permit the largely into account is an amount equal to the solely for this purpose, leasing uninhibited recognition of non- product of the owner’s portion of the companies, finance coordination economic exchange gain or loss. The section 987 QBU’s net unrecognized centers, regulated investment 1991 proposed regulations, together exchange gain or loss, multiplied by the companies, and real estate investment with the check the box regulations, have owner’s remittance proportion. The trusts). The IRS and the Treasury combined to permit taxpayers to trigger owner’s remittance proportion generally Department plan to apply the foreign non-economic losses with relative ease. is equal to the quotient of the amount exchange exposure pool method Accordingly, the 1991 proposed of the remittance, divided by the adopted in the proposed regulations to regulations are withdrawn and are aggregate basis of the section 987 QBU’s such entities in subsequent guidance replaced with new proposed regulations gross assets (as reflected on its year-end but believe it is appropriate to request that adopt the ‘‘foreign exchange balance sheet), without reduction for the comments regarding how the rules of exposure pool method.’’ In general, the remittance. the proposed regulations need to be foreign exchange exposure pool method The source and character of exchange precisely tailored to address issues provides that the income of a QBU that gain or loss recognized under section unique to financial entities. Financial is subject to section 987 (‘‘section 987 987 for all purposes of the Code, entities are urged to make necessary QBU’’) is determined by reference to the including sections 904(d), 907 and 954, comments to help tailor the planned items of income, gain, deduction and is determined by reference to the source extension of the foreign exchange loss booked to the QBU in its functional and character of the income derived exposure pool method to such entities. currency, adjusted to reflect US tax from the section 987 QBU’s assets. Specifically, in the context of banks, principles. With certain exceptions, The IRS and the Treasury Department the IRS and the Treasury Department items of income, gain, deduction and believe that the foreign exchange request comments on whether special loss of a section 987 QBU are translated exposure pool method is consistent with rules are needed for the global dealing into the functional currency of the section 987 and legislative intent for of currencies and securities. Comments QBU’s owner at the average exchange several reasons. First, the foreign are also requested on the relationship of rate for the year. However, the basis of exchange exposure pool method uses a sections 987 and 988 for banks. Finally, historic assets and deductions for profit and loss statement to determine comments are requested on whether the depreciation, depletion, and the items of income, gain, deduction use of exchange rate conventions is amortization of such assets are and loss of a section 987 QBU in its appropriate for banks and finance translated at the historic exchange rate. functional currency. This allows proper entities and, if so, how such Translating these items at the historic characterization of items of income, conventions should be determined. In exchange rate differs from the approach gain, deduction and loss. Second, the context of insurance companies, the taken in the 1991 proposed regulations, exchange gain or loss must be taken into IRS and the Treasury Department which instead uses the average account only with respect to items of request comments on the proper exchange rate. Although using the branch capital and earnings whose treatment of insurance reserves, surplus, average exchange rate for translating value fluctuates with changes in and investment assets held by the such items might be simpler than using exchange rates by reference to the separate trades or business of an the historic exchange rate, it leads to the owner’s functional currency. This insurance company. In particular, generation of non-economic foreign comports both with Congressional comments are requested on the proper currency gains or losses described in intent that taxpayers recognize exchange treatment of stock held in separate this preamble. gain or loss (but only economic accounts of a section 987 QBU of a life The foreign exchange exposure pool exchange gain or loss) inherent in insurance company and the related method uses a balance sheet approach branch capital and branch earnings and insurance reserves established for those to determine exchange gain or loss, with authority granted under section separate accounts. In the context of which is then recognized upon a 987(3) to identify appropriate leasing companies, comments are remittance. Use of a balance sheet translation rates. Third, exchange gain requested regarding the treatment of approach allows taxpayers and the IRS or loss is recognized under section 987 stock in other leasing companies to distinguish between those items only upon a remittance. Finally, the recorded on the books and records of a whose value fluctuates with respect to foreign exchange exposure pool method section 987 QBU and how the rules of changes in the functional currency of is an appropriate interpretation of the sections 986 and 987 can be reconciled the owner and those which do not. ‘‘blended’’ approach of section 987— if stock is treated as a ‘‘marked asset’’ in Under this method, exchange gain or that is, it incorporates certain aspects of this setting. Until regulations are issued loss with respect to ‘‘marked items’’ is the profit and loss method and the net applying the foreign exchange exposure identified annually but is pooled and worth method. pool method to financial entities, such deferred until a remittance is made. The entities must comply with section 987 Explanation of Provisions IRS and the Treasury Department under a reasonable method, consistently believe that section 988(c) identifies the A. Section 1.987 1 Scope, Definitions applied. For this purpose, reasonable items that should be treated as giving and Special Rules methods include using the method rise to exchange gain or loss for described in the 1991 proposed 1. Scope in General purposes of section 987. Accordingly, a regulations and a method that imputes marked item is generally defined as an The proposed regulations provide section 987 gain or loss to earnings but asset or liability that would generate rules for determining the section 987 not capital. section 988 gain or loss if such asset or taxable income or loss of a taxpayer The proposed regulations also do not liability were held or entered into with respect to a section 987 QBU as apply to trusts, estates and S directly by the owner of the section 987 well as the timing, amount, character, corporations. The IRS and the Treasury QBU. and source of section 987 gain or loss Department plan to apply the foreign When a section 987 QBU makes a recognized with respect to such QBU. exchange exposure pool method remittance, a portion of the pooled and The proposed regulations do not apply adopted in the proposed regulations to deferred exchange gain or loss is to banks, insurance companies, and such entities but believe it is recognized. In general, the amount taken similar financial entities (including, appropriate to request comments

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regarding how the rules of the proposed With respect to partnerships, the IRS exchange exposure pool method is regulations should be applied to such and the Treasury Department recognize applied with respect to those assets and entities. The IRS and the Treasury that issues often arise as to whether the liabilities. In addition, the proposed Department request comments regarding international tax provisions of the Code regulations provide rules for converting whether principles similar to those operate on an aggregate or an entity the items of section 987 taxable income applied to partnerships should apply to basis. The legislative history of or loss of a section 987 QBU into the these entities. subchapter K of chapter 1 of the Code functional currency of the partner provides that, for purposes of (when necessary), and rules 2. Taxpayers Subject to Section 987 and interpreting Code provisions outside of coordinating this aggregate approach Related Definitions that subchapter, a partnership may be with other provisions of subchapter K. The IRS and the Treasury Department treated as either an entity separate from Section 1.987–1(b)(2)(ii) allows an believe that section 987 should only its partners or an aggregate of its owner to elect to treat certain section apply where an individual or partners, depending on which 987 QBUs with the same functional corporation (whether foreign or characterization is more appropriate to currency as a single section 987 QBU. domestic) has activities that constitute a carry out the purpose of the particular The purpose of this rule is to simplify trade or business under § 1.989(a)–1(c) section under consideration. H.R. Conf. section 987 calculations by reducing the and the trade or business has a Rep. No. 2543, 83rd Cong. 2d. Sess. 59 number of interbranch transactions that functional currency different from the (1954). would be considered as ‘‘transfers’’ of individual or corporation. In such cases, In the case of section 987, the assets and liabilities. This election the individual or corporation will be calculations under the foreign exchange applies only to certain section 987 subject to the rules of the proposed exposure pool method would differ QBUs of the owner. The IRS and the regulations if the individual or dramatically based on whether an Treasury Department request comments corporation is the owner of a section aggregate or an entity approach is regarding whether such election should 987 QBU. A section 987 QBU is defined adopted. For example, if the foreign be available to treat section 987 QBUs in § 1.987–1(b)(2) as an eligible QBU exchange exposure pool method is of owners that are members of a that has a functional currency different applied at the entity level, the consolidated group as a single section from its owner. partnership will make the method’s 987 QBU and how this should be An eligible QBU is defined in § 1.987– calculations by reference to the technically effectuated. 1(b)(3) of the proposed regulations. partnership’s functional currency. Section 1.987–1(b)(5) provides that Generally, an eligible QBU is an activity Under this approach, any foreign the term ‘‘owner’’ for section 987 of an individual, corporation, currency gain or loss will be an item of purposes does not include an eligible partnership or DE that is a trade or the partnership and will be allocated QBU or section 987 QBU of an owner. business as defined in § 1.989(a)–1(c); among the partners in accordance with Under this rule, a tiered ownership maintains separate books and records as the partnership agreement, to the extent structure of eligible QBUs and/or defined in § 1.989(a)–1(d) and assets such allocation is consistent with the section 987 QBUs will not be respected and liabilities used in conducting such provisions of subchapter K. If, in the as distinct tiers of QBUs for purposes of activities are reflected on such books alternative, the foreign exchange section 987. Rather, tiers of eligible and/ and records; and the activities are not exposure pool method is applied under or section 987 QBUs will be treated as subject to the dollar approximate an aggregate approach, each partner will a ‘‘flat’’ structure, with each QBU in the separate transaction (DASTM) rules of make its own foreign exchange exposure tier considered as owned directly by the § 1.985–3. A corporation is not an pool calculations by reference to the ultimate non-QBU owner. For example, eligible QBU. An individual is not a partner’s functional currency and such if a domestic corporation is the holder QBU under § 1.989(a)–1(b)(2)(i) and amounts will not be subject to separate of the interests in a section 987 DE therefore cannot be an eligible QBU. In allocation under subchapter K. (section 987 DE1) and that DE owns the addition, and as discussed in this The IRS and the Treasury Department interests in another section 987 DE preamble, neither a partnership nor a believe that, on balance, an aggregate (section 987 DE2) for purposes other DE is an eligible QBU. approach is more appropriate for section than U.S. tax law, the structure will not In the case of ownership other than 987 purposes. Applying the foreign be treated as a tier of QBUs for purposes through a partnership (that is, direct exchange exposure pool method directly of section 987. Rather, the domestic ownership), the individual or at the partner level will more corporation will be considered the corporation is treated as the owner of an appropriately preserve the correct direct holder of the interests in the eligible QBU if the individual or amounts of exchange gain or loss. In section 987 branches of section 987 DE1 corporation is the tax owner of the addition, such approach will measure and DE2. This flat structure, which is assets and liabilities of the eligible QBU. the foreign currency exposure by consistent with the general approach For purposes of determining direct reference to the functional currencies of taken in the proposed dual consolidated ownership, an individual or corporation the persons who generally bear the loss regulations (70 FR 29868–29907), is will be treated as a direct owner of the economic risk from such exposure. As a expected to be easier to administer for assets and liabilities of an eligible QBU result, the proposed regulations provide both taxpayers and the IRS and to if it owns a DE that holds an eligible that for purposes of applying the foreign provide more appropriate results under QBU. In such case, because the DE is exchange exposure pool method each the section 987 rules. not recognized as a separate entity, it individual or corporation that is a cannot be a QBU under section 989 and, partner in a partnership will be 3. De Minimis Rule for Certain therefore, is not treated as an eligible considered to own indirectly an eligible Indirectly Owned Section 987 QBUs QBU under the proposed regulations. QBU consisting of a portion of the assets The IRS and the Treasury Department However, the activities of the DE, which and liabilities of the partnership recognize that it may be are treated for purposes of the Code as allocated to it under § 1.987–7. If such administratively burdensome for carried on directly by its owner, can eligible QBU has a different functional taxpayers to apply certain aspects of the qualify as an eligible QBU of the DE’s currency from the partner and therefore proposed regulations to section 987 owner. is a section 987 QBU, the foreign QBUs indirectly owned through

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relatively small interests in the spot rate conventions used under which the election is relevant, and must partnerships. As a result, the proposed FAS 52 for financial accounting be made by attaching a statement to a regulations provide a de minimis purposes. This is intended to simplify timely filed tax return for such taxable election for certain indirectly owned the calculations required under section year. Elections under section 987 are section 987 QBUs. Under this rule, an 987. treated as methods of accounting and individual or corporation that owns a In a similar attempt to simplify are governed by the general rules section 987 QBU indirectly through a calculations, § 1.987–1(c)(2) defines the regarding changes in methods of partnership may elect not to take into yearly average exchange rate as an accounting. account the section 987 gain or loss of average exchange rate for the taxable The IRS and the Treasury Department such section 987 QBU, provided such year computed under any reasonable believe that a reasonable cause standard individual or corporation owns, directly method that is consistently applied. should be applied to determine whether or indirectly, less than five percent of Finally, § 1.987–1(c)(3) defines the taxpayers that fail to make a timely the section 987 partnership. historic exchange rate by reference to election are eligible for an extension of Constructive ownership rules apply for the spot rate on the day that assets are time to file elections pursuant to purposes of determining whether the transferred to (or acquired by) the § 1.987–1(f) of the proposed regulations. less than five percent ownership section 987 QBU, or on the day that As a result, extensions of time under threshold is satisfied. liabilities are assumed (or entered into) §§ 301.9100–1 through 301.9100–3 will This de minimis exception only by the section 987 QBU. The reference not be granted for filings under the applies to recognition of section 987 to the spot rate as defined in § 1.987– proposed regulations. See § 301.9100– gain or loss with respect to a section 987 1(c)(1)(i) and (ii) allows taxpayers to 1(d). QBU. Thus, owners of section 987 QBUs elect to use spot rate conventions for Under the reasonable cause standard, that qualify under the de minimis these purposes. if an owner that is permitted to file an election under the proposed regulations exception must comply with all other 5. Definitions of a Section 987 Marked fails to make such a filing in a timely aspects of the proposed regulations, Item and a Section 987 Historic Item including the requirement to take into manner, the owner is considered to have account the section 987 taxable income The definitions of a section 987 satisfied the timeliness requirement or loss with respect to such section 987 marked item and a section 987 historic with respect to such filing if it QBUs. item are central to the foreign exchange demonstrates, to the satisfaction of the An individual or corporation that exposure pool method. When taken into Area Director, Field Examination, Small qualifies for the election (that is, account in the context of the calculation Business/Self Employed or the Director, because they owned less than five of net unrecognized section 987 gain or Field Operations, Large and Mid-Size percent of a section 987 partnership) loss under § 1.987–4, the definitions Business (Director) having jurisdiction subsequently may fail to qualify as a distinguish those items that generate of the taxpayer’s return for the taxable result of an increase in their interest in section 987 gain or loss from those that year, that such failure was due to a section 987 partnership. In such a do not. The IRS and the Treasury reasonable cause and not willful case, taxpayers must begin taking into Department believe that section 988 neglect. Once the owner becomes aware account the section 987 gain or loss identifies those items properly treated of the failure, the owner must with respect to section 987 QBUs owned as giving rise to exchange gain or loss demonstrate reasonable cause and must through such partnerships. Similarly, for purposes of section 987. Thus, a satisfy the filing requirement by taxpayers that were required to take into marked item as defined in § 1.987–1(d) attaching the election to an amended tax account section 987 gain or loss with is an asset or liability reflected on the return (that amends the tax return to respect to an indirectly owned section books and records of the section 987 which the election should have been 987 QBU may reduce their ownership QBU that both (1) Would generate attached). A written statement must be such that they become eligible for the de section 988 gain or loss if held or included that explains the reasons for minimis exception and, as a result, may entered into directly by the owner of the the failure to comply. elect to no longer take into account section 987 QBU and (2) is not a section In determining whether the taxpayer section 987 gain or loss. The IRS and the 988 transaction to the section 987 QBU. has reasonable cause, the Director shall Treasury Department recognize that It is important to exclude section 988 consider whether the taxpayer acted transition issues will arise when transactions of a section 987 QBU reasonably and in good faith. Whether interests in section 987 partnerships because section 988 already requires the the taxpayer acted reasonably and in change such that individuals or section 987 QBU to recognize gain or good faith will be determined after corporations no longer qualify (or are loss from such transactions. Thus, considering all the facts and able to qualify) for the de minimis treating such transactions as marked circumstances. The Director shall notify exception. The IRS and the Treasury items for purposes of section 987 would the person in writing within 120 days of Department are considering such result in double counting. Marked items the filing if it is determined that the transition rules and request comments give rise to exchange gain or loss under failure to comply was not due to as to their application. section 987. Historic items, which are reasonable cause or if additional time defined in § 1.987–1(e) as items other will be needed to make such 4. Exchange Rates than marked items, do not give rise to determination. If the Director fails to Section 1.987–1(c)(1)(i) defines the exchange gain or loss under section 987. notify the owner within 120 days of the spot rate as the rate determined under filing, the owner shall be considered to the principles of § 1.988–1(d)(1), (2) and 6. Elections Under Section 987 have demonstrated to the Director that (4) on the relevant day. Section 1.987– Section 1.987–1(f) provides rules for such failure was due to reasonable cause 1(c)(1)(ii) allows taxpayers to elect to making elections under section 987. In and not willful neglect. use spot rate conventions that general, the elections made under The proposed regulations provide that reasonably approximate the spot rate on section 987 must be made by the owner elections under section 987 cannot be a particular day. It is anticipated that of the section 987 QBU. The elections revoked without the consent of the taxpayers will be able to conform the must be made with respect to a section Commissioner. In addition, the spot rate convention for section 987 to 987 QBU for the first taxable year in proposed regulations provide that the

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Commissioner will consider allowing to a section 987 QBU to determine the and records method is administrable for revocation of such an election if the QBU’s section 987 taxable income or both taxpayers and the Commissioner. taxpayer demonstrates significantly loss. Similarly, no explicit rules are This is the case because the books and changed circumstances, or other provided in the statute or legislative records method should be consistent circumstances that demonstrate a history for attributing a taxpayer’s assets with the taxpayer’s accounting substantial non-tax business reason for or liabilities to a section 987 QBU to treatment of the items and, unlike the such revocation. Finally, the IRS and determine the section 987 gain or loss methods discussed above, it does not the Treasury Department are of such QBU. require a complex and factually considering an exception to the general Other provisions of the Code provide intensive analysis of the circumstances revocation rule where a section 987 various methods for attributing or and activities of the eligible QBU. QBU is acquired in certain transactions allocating a taxpayer’s assets and For the reasons described above, the that do not result in the termination of liabilities, or items of income, gain, proposed regulations adopt a books and such QBU. Comments are requested as deduction and loss (items) for particular records method for allocating items to to whether such an exception is purposes. These provisions provide an eligible QBU. The proposed warranted and, if so, the appropriate complex rules for making such regulations provide that, subject to scope of such an exception. determinations and, in many cases, certain exceptions, items are attributable require a detailed analysis of various to an eligible QBU to the extent they are B. Section 1.987–2 Attribution of Items factors and relationships involving reflected on the separate set of books to an Eligible QBU; the Definition of a income, assets, and activities of the and records of such eligible QBU, as Transfer, and Related Rules taxpayer. For example, section 864(c) defined in § 1.989(a)–1(d). The proposed 1. Attribution of Items to an Eligible and the regulations thereunder provide regulations make clear that these rules QBU rules for determining the income, gain, apply solely for purposes of section 987. deduction, or loss of a nonresident alien Thus, for example, the attribution rules i. Overview individual or foreign corporation which contained in the proposed regulations A section 987 QBU is not itself a are treated as effectively connected with do not apply for purposes of allocating taxpayer and does not have its own the conduct of a trade or business and apportioning interest expense under taxable income. Items of income, gain, within the United States. Other section 864(e). deduction and loss must nonetheless be examples are §§ 1.882–5, 1.861–8 and iii. Exception for Non-Portfolio Stock, attributed to such section 987 QBU for 1.861–9T through 1.861–13T. These Interests in Partnerships and Certain purposes of determining the owner’s regulations provide rules for the Acquisition Indebtedness taxable income. The items of income, allocation and apportionment of gain, deduction and loss attributed to a expenses, losses, and other deductions As discussed above, the IRS and the section 987 QBU are generally of a taxpayer. Finally, section 884(c)(2) Treasury Department believe that the determined in the functional currency and § 1.884–1(d) and (e) provide rules assets and liabilities reflected on the of the section 987 QBU and then for determining U.S. assets and U.S. books and records of an eligible QBU translated into the functional currency liabilities of a foreign corporation for are a reasonable approximation of the of the owner. The aggregate translated purposes of the branch profits tax. As assets and liabilities that are used in the amount is the section 987 taxable discussed below, the IRS and the trade or business of the eligible QBU income or loss of the section 987 QBU. Treasury Department do not believe and, therefore, should be taken into Thus, attribution rules are necessary to these complex methodologies are account for purposes of section 987. determine which items of income, gain, appropriate for purposes of section 987. However, the IRS and the Treasury deduction and loss are attributed to the Department believe that certain assets section 987 QBU. ii. Books and Records Method—General and liabilities should not be attributed Under section 987(3), assets and Rule to an eligible QBU, even if such assets liabilities must be attributed to a section The IRS and the Treasury Department and liabilities are reflected on the books 987 QBU in order to determine the believe that items should be attributed and records of such QBU. The IRS and amount of section 987 gain or loss of to an eligible QBU (and, if all or a the Treasury Department believe that such QBU. In some cases, a section 987 portion of such eligible QBU has a non-portfolio stock and interests in QBU of a taxpayer will not be held different functional currency than its partnerships (and liabilities to acquire through an entity separate from the owner, to a section 987 QBU of such such assets), even if reflected on the taxpayer that can legally own assets and owner) to the extent they are reflected books and records of the eligible QBU, incur liabilities. In addition, not all the on the books and records of the eligible should not be attributed to such QBU assets and liabilities of an entity that is QBU (books and records method). The for purposes of section 987. This is separate from the taxpayer may be IRS and the Treasury Department consistent with the principle stated attributable to a section 987 QBU for believe that using a books and records above that a section 987 QBU cannot be purposes of section 987. Moreover, method for attributing items under an owner of another section 987 QBU. assets and liabilities may constitute a section 987 is consistent with other Excluding non-portfolio stock is also section 987 QBU of a taxpayer even provisions of the Code involving foreign consistent with the principle that non- when such assets and liabilities are currency transactions. For example, it is portfolio stock cannot be used in, or owned or incurred by separate legal consistent with the requirement under held for the use in, the conduct of a entities. As a result, assets and liabilities section 989(a) that a QBU maintain trade or business in the United States. of the taxpayer (or of entities owned by books and records separate from the See § 1.864–4(c)(2)(iii). the taxpayer that are not themselves taxpayer. It is also consistent with the As a result, the proposed regulations taxpayers) must be attributed to the requirement under section 985(b)(1) provide that stock of a corporation section 987 QBU. that, in order to have a functional (whether domestic or foreign) and an Neither section 987 nor the currency other than the dollar, a QBU interest in a partnership (whether underlying legislative history provides must keep its books and records in such domestic or foreign) are not considered explicit rules for attributing a taxpayer’s currency. Moreover, the IRS and the to be on the books and records of an items of income, gain, deduction, or loss Treasury Department believe the books eligible QBU. The proposed regulations

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provide an exception, however, for 2. Certain Assets and Liabilities of the local law owner of certain assets or portfolio stock where the owner of the Partnerships and DEs Not Attributable the local law obligor on certain eligible QBU owns (directly or to an Eligible QBU liabilities, which are not reflected on the constructively) less than ten percent of Section 988 applies to certain books and records of an eligible QBU the total voting power or value of the transactions described in section 988(c) held by the DE. The proposed stock of such corporation. The proposed if the transaction is denominated (or regulations provide that the regulations also provide that determined by reference to) a currency determination of whether section 988 indebtedness incurred to acquire stock that is not the functional currency of the (rather than section 987) applies with or a partnership interest that is not taxpayer or QBU of the taxpayer. Thus, respect to transactions involving assets treated as being reflected on the books in order to determine if a transaction is and liabilities of a DE that are not and records of an eligible QBU should subject to section 988, it must be attributable to an eligible QBU is similarly be excluded from the books determined whether a transaction is determined by reference to the functional currency of the owner of and records. Finally, the proposed attributable to the taxpayer or a QBU of such DE. regulations provide that items of the taxpayer. income, gain, deduction and loss arising Under the current section 989 3. Definition of a Transfer regulations, a partnership is a QBU even from ownership of stock, a partnership i. Overview interest, or related acquisition if it does not have activities that indebtedness that is excluded from the constitute a trade or business (‘‘per se Section 987(3) provides, in part, that general books and records rule, shall QBU’’). As a result, a partnership may taxable income of a taxpayer shall be have a functional currency different determined by making proper similarly not be treated as being on the than its partners and section 988 is adjustments (as prescribed by the books and records of the eligible QBU. applied at the partnership level with Secretary) for transfers of property iv. Coordination With Source Rules respect to section 988 transactions between qualified business units of the Under Section 988 properly attributable to the partnership. taxpayer having different functional These regulations propose to amend currencies. Similarly, the legislative Section 988(a)(3) provides that the section 989 to provide that a partnership history to section 987 refers to source of gain or loss recognized under is no longer a per se QBU of its partners, contributions to, and remittances from, section 988(a)(1) is determined by but instead the activities of such QBUs. See, H.R. Conf. Rep. No. 841, reference to the residence of the partnership may be treated as a QBU. 99th Cong. 2d. Sess. II 673–76 (1986). taxpayer or the QBU of the taxpayer on As discussed above, the IRS and the However, neither the statute nor the whose books the asset, liability, or item Treasury Department will generally legislative history defines the terms of income or expense is properly apply either an entity or an aggregate ‘‘transfer,’’ ‘‘contribution,’’ or reflected. Section 1.988–4(b)(2) provides approach with respect to partnerships ‘‘remittance.’’ that, in general, the determination of depending on which approach more As noted above, section 987 QBUs can whether an asset, liability, or item of appropriately carries out the purpose of be divisions of an owner that have no income or expense is properly reflected the particular Code section under legal distinction separate from their on the books of a QBU is a question of consideration. Following the owner. Section 987 QBUs can also be fact. The regulations under section 988 amendments made by the proposed owned indirectly through partnerships, further provide that such items are regulations, and because only certain where they have legal distinction presumed not to be properly reflected activities of a partnership (and not the separate from their owners. Moreover, partnership itself) can qualify as a on the books and records for this as a result of the entity classification section 987 QBU, the IRS and the regulations, a section 987 QBU held purpose if inconsistent booking Treasury Department believe that it is through a DE can have legal distinction practices are employed with respect to appropriate, in cases where an asset or separate from its owner, even though the same or similar items. Finally, the liability of a partnership is not reflected the section 987 QBU is treated as a regulations provide that if such items on the books and records of an eligible division of the owner for federal income are not properly reflected on the books QBU of the partnership, to determine tax purposes. As a result, assets and of the QBU, the Commissioner may whether section 988 applies by liabilities can be transferred between an allocate the item between or among the reference to the functional currencies of owner and a section 987 QBU in a taxpayer and its QBUs to properly the partners. The IRS and the Treasury manner that has legal significance (that reflect the source (or realization) of Department believe that this rule will is, a distribution from a section 987 exchange gain or loss. have limited application and will apply, partnership), or in a manner that has no The IRS and the Treasury Department for example, where the only activity of legal significance because the transfers believe that rules for determining a partnership is the incurrence of a are simply between divisions of the whether items are properly reflected on liability used to acquire stock that is same legal entity (that is, a transfer the books of a QBU for purposes of held by the partnership. The proposed involving divisions of a taxpayer that is sourcing section 988 gain or loss should regulations provide examples reflected through accounting entries). be consistent with the rules for illustrating the application of this rule. As discussed above, the proposed ii. Disregarded Transactions attributing items to an eligible QBU regulations provide that a DE itself is The definition of a transfer under the under section 987. As a result, the not an eligible QBU and, instead, certain proposed regulations includes proposed regulations modify the activities of the DE will be treated as an transactions that are regarded for both sourcing rules in the section 988 eligible QBU of the owner to the extent legal and tax purposes, and transactions regulations to provide that the a separate set of books and records with that are regarded for legal purposes, but principles of § 1.987–2(b) apply in respect to such activities are disregarded as transactions for tax determining whether an asset, liability, maintained. Thus, an issue similar to purposes (‘‘disregarded transactions’’). or item of income or expense is properly that discussed above with respect to For this purpose, the term disregarded reflected on the books of a QBU. partnerships will arise where the DE is transaction is treated as including the

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recording of an asset or liability on one section 987 QBU. For example, a direct 4. Adjustments to Items Reflected on the set of books and records, if the recording owner of a section 987 QBU that is Books and Records is the result of such asset or liability owned through a section 987 DE can As noted above, a section 987 QBU of being removed from another set of books change to being an indirect owner of all a taxpayer may not be an entity separate and records of the same person or entity or a portion of such section 987 QBU, from the taxpayer that can legally own (including a DE or partnership). if the interests in the section 987 DE are assets and incur liabilities. As a result, The proposed regulations provide that transferred to a partnership. recording (or failing to record) an asset an asset or liability is treated as or liability on the books and records transferred to or from a section 987 QBU Changes in form of ownership of a may, other than for purposes of section if, as a result of a disregarded section 987 QBU can occur through 987, have little significance for tax or transaction, such asset or liability is actual or deemed transactions involving legal purposes. In addition, transfers reflected, or is not reflected, the section 987 QBU itself, or actual or between section 987 QBUs of the same respectively, on the books and records deemed transactions involving interests owner that are divisions of the same of the section 987 QBU. For example, if in a section 987 DE or section 987 legal entity may have no legal an owner of a section 987 DE loans cash partnership that owns such QBU. For significance and are accomplished only to the section 987 QBU held by the example, certain conversions of DEs to through journal entries on the books and section 987 DE, the loan is disregarded partnerships, or partnerships to DEs, records of such section 987 QBUs. As a for Federal income tax purposes. result in deemed transactions pursuant result, the IRS and the Treasury However, as a result of such disregarded to Rev. Ruls. 99–5, 1999–1 CB 434, and Department are concerned that, in transaction, the loaned cash is reflected 99–6, 1999–1 CB 432. See certain circumstances, transfers to or on the books and records of the section § 601.601(d)(2). Deemed transactions from a section 987 QBU may be 987 QBU and, therefore, is treated as with respect to partnerships also occur structured solely to achieve advantages transferred to such section 987 QBU. pursuant to section 708(b) and the under section 987, especially given that iii. Certain Contributions to, and regulations thereunder. such transfers may have little or no Distributions From, Partnerships The IRS and the Treasury Department significance from a legal or business The proposed regulations also provide believe that changes in form of perspective. that transfers to and from section 987 ownership should result in a transfer In Notice 2000–20, the IRS and the QBUs include certain contributions of only to the extent such change affects Treasury Department expressed similar assets to, or distributions of assets from, the assets and liabilities attributable to concerns in connection with taxpayers a section 987 partnership. For example, the section 987 QBU of the owner. As taking positions that certain contributions and distributions triggered an asset contributed by a partner to a a result, the proposed regulations foreign currency losses prematurely section 987 partnership is treated as provide that a mere change in form of with respect to transactions that were transferred to an indirectly owned ownership of a section 987 QBU does section 987 QBU of the partner if the undertaken for tax purposes, but lacked not result in a transfer to or from the meaningful non-tax economic asset is reflected on the section 987 section 987 QBU. Instead, the proposed QBU’s books and records following such consequences. The notice provided that regulations provide that the the IRS and the Treasury Department contribution. The proposed regulations determination of whether a transfer has provide similar rules for assumptions of believe that circular cash flows and occurred in such cases should be made similar transactions lacking economic liabilities between a section 987 under the general transfer rules, partnership and its partners. substance will not result in recognition discussed above. Moreover, the of foreign currency losses under general iv. Certain Acquisitions and proposed regulations clarify that tax principles because such transactions Dispositions of Interests in DEs and deemed transactions (for example, are not properly treated as transfers or Partnerships pursuant to Rev. Ruls. 99–5 and 99–6) remittances under section 987. The proposed regulations also provide shall not be taken into account for The IRS and the Treasury Department that transfers to or from a section 987 purposes of determining whether there continue to be concerned about QBU may occur as a result of certain is a transfer. transactions that are undertaken for tax acquisitions (including by contribution) purposes and lack meaningful non-tax vi. General Tax Law Principles and dispositions of interests in DEs and economic consequences. As a result, the partnerships. For example, if a partner The proposed regulations clarify that proposed regulations provide the Commissioner the ability to allocate in a section 987 partnership sells a general tax law principles, including the assets and liabilities, and items of portion of its interest in such circular cash flow, step-transaction, and income, gain, deduction and loss, where partnership, the sale results in a transfer substance-over-form doctrines apply for from the partner’s indirectly owned a principal purpose of recording (or purposes of determining whether there failing to record) an item on the books section 987 QBU to the extent assets and is a transfer of an asset or liability to or liabilities are not reflected on the books and records of an eligible QBU from a QBU. For example, if a and records of such QBU as a result of (including an eligible QBU owned shareholder of a corporation that such sale. indirectly through a partnership) is the directly owns a section 987 QBU avoidance of U.S. tax under section 987. v. Change in Form of Ownership transfers property to the corporation and The proposed regulations also provide The owner of a section 987 QBU can the property is recorded on the books various factors that indicate whether change its form of ownership in all or and records of the corporation’s section recording (or failing to record) an item a portion of such section 987 QBU. Such 987 QBU, the shareholder is first treated on books and records has as a principal changes in form of ownership often as transferring the property to the purpose the avoidance of U.S. tax under occur in a manner that does not affect corporation, and then the corporation is section 987. For example, factors the operation of the eligible QBU (or its treated as transferring the property to indicating that such tax avoidance was status as an eligible QBU), but rather the section 987 QBU in a disregarded not a principal purpose of recording (or only changes the owner’s interest in its transaction. not recording) an item include doing so

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for a substantial and bona fide business provided in § 1.987–3(b). Items of foreign exchange exposure pool method. purpose, or in a manner that is income, gain, deduction or loss of a In summary, § 1.987–4 uses a balance consistent with the economics of the section 987 QBU that are denominated sheet to distinguish the items of a underlying transaction. in (or determined by reference to) the section 987 QBU that give rise to section functional currency of the owner are not 987 gain or loss (section 987 marked 5. Translation of Items Transferred to a translated and are not treated as section items) from those that do not (section Section 987 QBU 988 transactions to the section 987 QBU. 987 historic items). This approach The proposed regulations provide Transactions denominated in (or avoids the distortions caused by the translation rules for the transfer of assets determined by reference to) a currency 1991 proposed regulations that impute and liabilities to a section 987 QBU. that is neither the functional currency of section 987 gain or loss to all assets of Under the proposed regulations, if an the owner nor of the section 987 QBU a section 987 QBU, even those assets the asset or a liability is transferred to a are subject to the generally applicable value of which does not fluctuate with section 987 QBU, such items are rules under section 988 determined currency movements. Generally, annual translated into the QBU’s functional with respect to the functional currency comparison of the change in the value currency at the spot rate on the day of of the section 987 QBU. of section 987 marked items on the transfer. No translation is required for When basis recovery is required with opening and closing balance sheets due assets or liabilities denominated in the respect to an historic asset, either in to changes in exchange rates gives rise functional currency of the section 987 computing gain or loss on the sale or to unrecognized section 987 gain or loss. QBU. exchange of such asset, or in This unrecognized section 987 gain or The proposed regulations provide determining cost recovery deductions loss is aggregated with similar amounts special rules for items transferred to a (such as depreciation or depletion), the determined for prior years (to the extent section 987 QBU where such items are proposed regulations require the use of not previously taken into account) and denominated in (or determined by the historical exchange rate associated is taken into account by the owner reference to) the owner’s functional with the particular asset. Thus, for under the rules of § 1.987–5 upon a currency. Such items are not translated example, where a section 987 QBU sells remittance by the section 987 QBU. and instead are carried on the balance an historic asset, the amount realized Under § 1.987–4(a) and (b), net sheet in the owner’s functional currency will be translated into the owner’s unrecognized section 987 gain or loss is since no foreign currency exposure with functional currency using the yearly computed annually and is equal to the respect to the owner is created by such average exchange rate (or, if properly sum of the ‘‘unrecognized section 987 items. elected, the spot rate), but the adjusted gain or loss for the current taxable year’’ basis will be translated using the and the ‘‘net accumulated unrecognized 6. Interaction With Other Foreign historic exchange rate associated with section 987 gain or loss for all prior Currency Provisions that asset. The use of different exchange taxable years.’’ A section 987 QBU’s net The IRS and the Treasury Department rates for amount realized and adjusted accumulated unrecognized section 987 are considering whether the attribution basis is designed to more closely reflect gain or loss for all prior taxable years is and transfer rules provided under the the economic gain or loss to the owner the aggregate of the unrecognized proposed regulations should apply with of the section 987 QBU than the 1991 section 987 gain or loss determined respect to other foreign currency proposed regulations. The same is true under § 1.987–4(d) for all prior taxable provisions in the Code. For example, the for depreciation or other cost recovery years (to which these regulations apply) IRS and the Treasury Department are deductions that are claimed with reduced by the amounts taken into considering whether the attribution respect to historic assets of a section 987 account under § 1.987–5 upon a rules under the proposed regulations QBU. remittance for all such taxable years. For should apply to determine the Special translation rules are provided section 987 QBUs in existence prior to functional currency of a QBU under with respect to the disposition of the effective date of these regulations, a section 985. As a result, comments are marked assets (other than functional section 987 QBU’s net accumulated requested on the interaction of these currency cash of the section 987 QBU). unrecognized section 987 gain or loss rules with other foreign currency Generally, the amount realized and includes amounts taken into account provisions. basis are translated at the same under the transition rules of § 1.987–10. exchange rates. The purpose of these Unrecognized section 987 gain or loss C. Section 1.987–3 Determination of special rules is to assure that foreign is determined under a seven step the Items of Aection 987 Taxable currency gain or loss (as opposed to gain calculation. Under the first step in Income or Loss of an Owner of a Section or loss not related to movements in § 1.987–4(d)(1), the ‘‘owner functional 987 QBU exchange rates) is reflected through the currency net value’’ of the section 987 In general, the term ‘‘section 987 balance sheet calculations of § 1.987–4 QBU is determined under § 1.987–1(e) taxable income’’ refers to the items of and not through the profit and loss at the close of the taxable year in the income, gain, deduction or loss calculations of § 1.987–3. Cash is not functional currency of the owner. This attributed to the section 987 QBU under included in these special rules because is a balance sheet calculation under § 1.987–2(b), translated into the the disposition of cash cannot generate which the basis (or amount, in the case functional currency of the owner. The profit or loss to the section 987 QBU for of a liability) of each section 987 marked allocation of expenses such as interest purposes of § 1.987–3. item is translated into the owner’s under other provisions are not taken functional currency at the spot rate on into account for this purpose. Section D. Section 1.987–4 Determination of the last day of the taxable year. Section 987 taxable income is calculated by Net Unrecognized Section 987 Gain or 987 historic items are translated into the determining each item of income, gain, Loss of a Section 987 QBU owner’s functional currency at the deduction or loss in the section 987 Section 1.987–4 provides the historic exchange rate and, therefore, do QBU’s functional currency under mechanics for determining ‘‘net not give rise to exchange gain or loss. § 1.987–3(a), and then translating those unrecognized section 987 gain or loss’’ The amount of liabilities determined in items into the owner’s functional and, when combined with § 1.987–5, the owner’s functional currency is currency using the exchange rates form the mathematical core of the subtracted from the value of the assets

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determined in the owner’s functional 987 QBU during the owner’s taxable annual netting rule will help to reduce currency to result in the owner year. Generally, the owner’s remittance complexity and administrative burden functional currency net value of the proportion is equal to the quotient of the for taxpayers and the IRS by treating the section 987 QBU at the close of the amount of the remittance divided by the net amount of transfers as a single taxable year. The owner functional aggregate adjusted basis of the section annual remittance. For purposes of currency net value of the section 987 987 QBU’s gross assets (as reflected on determining the annual remittance, only QBU at the close of the preceding its year end balance sheet), without assets and liabilities considered taxable year is subtracted from the reduction for the remittance. transferred pursuant to § 1.987–2(c) will owner functional currency net value of The 1991 proposed regulations define be taken into account. the section 987 QBU at the close of the a remittance as the amount of any The remittance is divided by the total current taxable year to yield the change transfer from a QBU branch to the extent adjusted basis of section 987 gross in owner functional currency net value the amount of transfers during the year assets, expressed in the functional of the section 987 QBU for the taxable does not exceed the year end balance of currency of the owner, reflected on the year expressed in the owner’s functional the equity pool. Transfers are limited in section 987 QBU balance sheet pursuant currency. the 1991 proposed regulations by a daily to § 1.987–2 (increased by the amount of Generally, three components are netting rule that takes into account only the remittance) to determine the reflected in the change in owner the amount of property distributed from remittance proportion. The IRS and the functional currency net value of the the QBU branch that exceeds the Treasury Department considered a section 987 QBU for a taxable year. amount of property transferred by the number of different measures for First, taxable income or loss of the taxpayer to the QBU branch in a single determining the amount of section 987 section 987 QBU will result in increases day. The IRS and the Treasury gain or loss triggered upon a remittance. or decreases in net assets, and will Department believe that the daily The adjusted basis of gross section 987 therefore affect net value. Second, netting rule of the 1991 proposed QBU assets was selected as the measure transfers of assets or liabilities to or regulations is not easily administered because it avoids administrative from the section 987 QBU will affect net and causes distortions in the amount of concerns raised by alternative methods value. Finally, any remaining change in a remittance. For example, taxpayers and limits the potential volatility net value (as measured in the owner’s have taken the position that a associated with the recognition of functional currency) results from remittance followed a short time later by section 987 gain or loss. In particular, changes in the value of the section 987 an equal contribution to a QBU branch the adjusted basis of gross section 987 QBU’s marked assets and liabilities. In can trigger recognition of section 987 QBU assets measure avoids the order to isolate the change in value due gain or loss even though there has been significant administrative burdens to foreign currency movements with no economic change in position of the associated with a section 987 QBU respect to section 987 marked assets and QBU branch. The IRS and the Treasury accumulated earnings approach that liabilities, the other changes must be Department believe this approach is would require taxpayers to maintain reversed out. That is the function of inappropriate and provides incentives post-1986 accumulated earnings pools steps 2 through 7 of § 1.987–4(d). for circular cash flows used to for each section 987 QBU. The IRS and The unrecognized section 987 gain or manipulate amounts of remittances. the Treasury Department also loss when aggregated with similar This daily netting rule is eliminated in considered the use of net section 987 amounts for prior years (that were not the proposed regulations to reduce QBU assets as a potential measure. previously taken into account) yields a administrative burdens on both the IRS Although the net section 987 QBU pool of ‘‘net unrecognized section 987 and taxpayers, and to eliminate both assets measure does not raise the same gain or loss’’ all or part of which is to taxpayer favorable and taxpayer administrative burdens as an earnings be triggered upon a remittance or unfavorable distortions that it can based approach, the IRS and the termination. create. Treasury Department were concerned Section 1.987–5(c) of the proposed E. Section 1.987–5 Recognition of about the volatility of recognizing regulations defines a remittance as the Section 987 Gain or Loss section 987 gain or loss using a net asset excess of total transfers from the section measure. For example, if a section 987 Section 1.987–5 of the proposed 987 QBU to the owner determined in QBU’s gross assets are equal to its regulations provides the method for the owner’s functional currency on an liabilities, section 987 gain or loss determining the amount of section 987 annual basis over total transfers from would be deferred. On the other hand, gain or loss a taxpayer must recognize the owner to the section 987 QBU a small amount of income could in a taxable year. Generally, the amount determined on an annual basis. Solely increase section 987 QBU net assets of section 987 gain or loss recognized in for purposes of determining the amount slightly above zero and all accumulated a taxable year equals the net of a remittance under § 1.987–5(c), the section 987 gains or losses could be unrecognized section 987 gain or loss of amount of liabilities transferred from triggered with a very small remittance. the section 987 QBU determined under the owner to the section 987 QBU is The IRS and the Treasury Department § 1.987–4 on the last day of such taxable treated as a transfer of assets from the believe that gross assets is a reasonable year, multiplied by the owner’s section 987 QBU to the owner. proxy for post-1986 accumulated remittance proportion. The pool of net Similarly, the amount of liabilities earnings in this context, can be unrecognized section 987 gain or loss transferred from the section 987 QBU to administered relatively easily, and will includes both unrecognized section 987 the owner is treated as a transfer of reduce the volatility and potential for gain or loss on marked items for the assets from the owner to the section 987 distortion described in this preamble. current year and unrecognized section QBU. The IRS and the Treasury 987 gain or loss on marked items for Department recognize that section 987 F. Section 1.987–6 Character and prior years (that has not yet been taken QBUs actively engaged in business may Source into account). A portion of the § 1.987– have a significant number of Section 987(3)(B) requires that a 4 pool of unrecognized section 987 gain transactions that are treated as transfers taxpayer make proper adjustments (as or loss is triggered by a net transfer or to and from the owner pursuant to prescribed by the Secretary) for certain ‘‘remittance’’ to the owner by a section § 1.987–2(c). It is anticipated that the transfers of property between QBUs of

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the taxpayer, including treating section QBU’s accumulated earnings and will regulations thereunder, including 987 gain or loss as ordinary income or significantly minimize complexity. The section 704(b) and § 1.701–2. loss and sourcing such gain or loss by tax book value method set forth in The IRS and the Treasury Department reference to the source of income giving § 1.861–9T(g) as applied to section 987 believe that this general rule is rise to post-1986 accumulated earnings. QBUs has been amended to provide appropriate because it will allocate the Section 987 is silent on the method of greater consistency with the proposed assets and liabilities consistent with the characterizing section 987 gain or loss regulations. The modified gross income partners’ economic arrangement. The for purposes of the Code. Nevertheless, method described in § 1.861–9T(j) IRS and the Treasury Department the IRS and the Treasury Department cannot be used to characterize section recognize that any rule which attempted believe that it is necessary to 987 gain or loss as the IRS and the to allocate the assets and liabilities characterize section 987 gain or loss for Treasury Department believe that gross without regard to such economic the proper operation of certain other income earned in a single year is not a arrangement would have the effect of sections of the Code. For example, the sufficient proxy for accumulated distorting each partner’s section 987 character of section 987 gain must be earnings. gain or loss attributable to its section determined for purposes of determining The IRS and the Treasury Department 987 QBU and, as a result, would be whether all or a portion of such gain recognize that the characterization rule inappropriate. Moreover, the IRS and qualifies as subpart F income under contained in the proposed regulations the Treasury Department are concerned section 954. This characterization is applies to provisions other than the that taxpayers could attempt to necessary to prevent section 987 from international tax rules. In addition, the inappropriately shift a partner’s share of being used as a vehicle to avoid the IRS and the Treasury Department the underlying assets and liabilities of a rules of section 954(c)(1)(D) with respect recognize that special considerations section 987 QBU owned indirectly to certain section 988 transactions. In may arise in connection with applying through a section 987 partnership to addition, section 987 gain or loss must this characterization rule to various distort the partner’s section 987 gain or be characterized for purposes of domestic provisions. For example, loss. As a result, the Commissioner may determining the foreign tax credit special considerations may arise when review such allocations to ensure that limitation under section 904(d). As a characterizing section 987 gain or loss they are consistent with the economic result, and pursuant to sections 987(3) for rules that apply to regulated arrangement of the partners and the and 989(c)(5), the proposed regulations investment companies (RICs) and real principles of subchapter K of Chapter 1 characterize section 987 gain or loss for estate investment trusts (REITs). The of the Code and the applicable all purposes of the Code, including for IRS and the Treasury Department are regulations, including section 704(b) purposes of sections 904(d), 907 and studying the application of the and § 1.701–2. 954. characterization rules to these other Moreover, the IRS and the Treasury In accordance with section 987(3)(B), provisions and request comments. As a Department are considering whether it § 1.987–6(a) provides that section 987 result, the proposed regulations reserve would be appropriate, when these gain or loss is ordinary income or loss. on the method for characterizing and regulations are finalized, to provide a safe harbor. Under such a safe harbor, Moreover, the IRS and the Treasury sourcing section 987 gain or loss for the assets and liabilities of an eligible Department believe that rules governing purposes of RICs and REITs. the source and character of section 987 QBU would be deemed to be allocated gain or loss for other Code sections G. Section 1.987–7 Partnership Rules in a manner which appropriately reflects each partner’s share of the should be consistent. The IRS and the 1. Scope Treasury Department are concerned, economic benefits and burdens if however, that sourcing and Section 1.987–7 provides rules for certain conditions are satisfied. For characterizing section 987 gain or loss determining a partner’s share of the example, the safe harbor could provide by reference to post-1986 accumulated assets and liabilities of an eligible QBU that the assets and liabilities are deemed earnings would give rise to substantial held indirectly through a section 987 to be allocated in a manner consistent complexity by requiring taxpayers to partnership. It also provides rules with each partner’s share of the track the earnings of section 987 QBUs coordinating the application of section underlying economic benefits and in section 904(d) categories over 987 with subchapter K of chapter 1 of burdens provided the assets, to the prolonged periods. The compliance the Code. extent of a partner’s share of partnership burden would be considerable for 2. Allocation of Assets and Liabilities capital, are allocated in accordance with taxpayers with large numbers of section such capital and any excess assets 987 QBUs. Accordingly, the IRS and the In order to apply the foreign exchange (assets in excess of partnership capital) Treasury Department believe that it is exposure pool method at the partner are allocated consistent with the manner appropriate to use the average tax book level, as discussed above, each partner in which the partners have agreed to value of assets in the year of remittance must determine its share of the assets share the economic burden of the as determined under § 1.861–9T(g) as a and liabilities of an eligible QBU and, to liabilities incurred to acquire such proxy for post-1986 accumulated the extent applicable, a section 987 QBU assets. The IRS and the Treasury earnings in the context of section 987.3 owned indirectly through the section Department request comments as to In the context of section 987, use of a 987 partnership. Section 1.987–7 whether a safe harbor should be single year’s assets should generally provides a general rule that requires the included and, if so, what form such safe reflect the activities of a section 987 allocation of the assets and liabilities of harbor should take. QBU that give rise to a section 987 the partnership’s eligible QBUs to the partners in a manner that is consistent 3. Coordination with subchapter K 3 Notably, because section 987 gain or loss may with the manner in which the partners A partner must take into account its be derived from assets acquired with earnings and have agreed to share the economic share of the items of income, gain, capital of a section 987 QBU (or from liabilities benefits and burdens corresponding to deduction, or loss of its section 987 entered into by the QBU), using post-1986 accumulated earnings to characterize exchange gain such assets and liabilities, taking into QBU owned indirectly through a or loss under section 987 may not reflect all items account the rules and principles of partnership and, under § 1.987–3, must giving rise to such gain or loss. sections 701 through 761 and the convert such items into its functional

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currency. In addition, a partner must assumption) or the historic exchange ceases to be a CFC because at that point take into account any section 987 gain rate (on the date the liability was any section 987 gain or loss cannot be or loss of the section 987 QBU originally incurred by the partner). In subpart F income and may be deferred determined in the partner’s functional addition, this issue raises concerns as to indefinitely. currency. In both situations, the how section 988 would operate upon 2. Exceptions for Certain Section 381 partner’s adjusted basis in its such assumption. The IRS and Treasury Transactions partnership interest must be adjusted in Department request comments on this order to avoid the duplication of income issue and whether provisions should be Section 987 gain or loss generally or loss attributable to the section 987 included in section 988 to better arises during the period that an owner QBU. Section 1.987–7 provides a rule coordinate the operation of section 987 has a section 987 QBU. The section 987 regarding the appropriate adjustments and section 988 in this context. In gain or loss is analogous in some which must be made to the partner’s addition, comments are requested on respects to a tax attribute under section adjusted basis in the section 987 whether provisions should be included 381. As a result, the proposed partnership to ensure that no such in section 988 in order to coordinate the regulations provide that a termination duplication occurs. aggregate approach, adopted in these does not generally occur when other tax A partner is also required under proposed regulations, with respect to attributes under section 381 are carried section 752 to adjust its basis in its certain assets and liabilities that are not over in a liquidation under section 332 interest in the section 987 partnership to reflected on an eligible QBU of the or an asset reorganization under section take into account liabilities of the partnership. 368(a). However, inbound and outbound section 987 partnership. As a result, the In addition to the issues specifically liquidations and reorganizations proposed regulations provide rules for addressed in the proposed regulations, terminate a section 987 QBU because determining the appropriate the IRS and the Treasury Department these transactions materially change the adjustments to such basis required request comments on additional circumstances in which section 987 gain under section 752 in the case of an provisions which should be included to or loss is taken into account. increase or a decrease in such partner’s coordinate the provisions of section 987 3. Treatment of Inbound Liquidations share of the liabilities of the partnership with subchapter K of chapter 1 of the and Inbound Asset Reorganizations reflected on the books and records of a Code. Specifically, comments are section 987 QBU. In addition, the Although the proposed regulations requested as to how capital accounts treat inbound liquidations under section proposed regulations provide rules for maintained under section 704 should be determining the amount of such 332 and inbound asset reorganizations adjusted to take into account section under section 368(a) as terminations, liability, as determined in the partner’s 987 gain or loss. In addition, comments functional currency, which must be the IRS and the Treasury Department are requested as to whether section 987 are considering whether such treatment taken into account on the sale or loss should be subject to the limitation exchange of a partnership interest under is appropriate in all cases. provided under section 704(d) and, if The IRS and the Treasury Department section 752(d). so, how such limitation might be The proposed regulations also clarify, believe that the better view, taking into applied. Finally, comments are account various policies, is to support consistent with section 985(a), that a requested as to any other provisions of partner’s adjusted basis in its the treatment of inbound transactions as subchapter K of chapter 1 of the Code terminations. For example, such partnership interest is determined in the on which guidance should be provided. functional currency of the partner. treatment may prevent the importation Moreover, the proposed regulations H. Section 1.987–8 Termination of a of a tax attribute that was generated provide that the fluctuations between Section 987 QBU offshore. Concerns over such attribute the partner’s functional currency and importation are similar to those that 1. General termination rules the functional currency of the section were addressed in § 1.367(b)–3(e) and (f) 987 QBU do not affect such partner’s The proposed regulations set forth and section 362(e). In addition, treating adjusted basis in its partnership interest. circumstances in which a section 987 inbound asset transactions as Instead, such fluctuations are taken into QBU will terminate. For purposes of terminations is consistent with the account under the foreign exchange § 1.987–5, a termination of a section 987 results that would obtain if the foreign exposure pool method of § 1.987–4. QBU is treated as a remittance of all the currency gain or loss attributable to the gross assets of the section 987 QBU to QBU were taken into account under 4. Comments its owner. The termination rules section 988, rather than section 987. The proposed regulations do not recognize that an owner carries on a The IRS and the Treasury Department address the adjustments which would trade or business through its section 987 acknowledge, however, that other occur under section 752 when there is QBU and when the owner stops policies may support the position that an assumption by a partnership of a conducting that trade or business such inbound transactions should not partner’s liability that is denominated in through its section 987 QBU, any be terminations. One of the reasons the a functional currency different from the section 987 gain or loss should be proposed regulations treat certain partner and which, as a result, is subject recognized in full. Thus, a termination section 381 transactions as terminations to section 988 in the hands of the generally occurs when: (1) The activities is because amounts taken into account partner. In such cases, the partner will of the section 987 QBU cease; (2) under section 987 (that is, section 987 be deemed to receive a distribution of substantially all of the assets (as defined taxable income or loss, and section 987 money, under section 752(b), regardless in section 368(a)(1)(C)) of the section gain or loss) generally become subject to of whether, following the assumption, 987 QBU are transferred to its owner; or a lesser degree of U.S. taxation after the the liability is reflected on the books (3) the owner of the section 987 QBU section 381 transaction than was the and records of the partnership’s ceases to exist. case before the transaction (that is, qualified business unit. In such cases, it In addition, a termination occurs when the section 987 QBU goes from is unclear whether the amount of the when a foreign corporation that is a being owned by a domestic corporation distribution should be determined by controlled foreign corporation (CFC) to being owned by a foreign reference to the spot rate (on the date of that is the owner of a section 987 QBU corporation). This is not the case in

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certain inbound transactions because not such taxpayer made determinations deemed termination is solely for amounts taken into account under required under section 987 in prior purposes of measuring section 987 gain section 987 are generally subject to a years. A taxpayer that failed to make or loss in order to transition to the greater degree of U.S. taxation after the required determinations under section foreign exchange exposure pool method inbound transaction (when the section 987 in prior years or that used an and does not apply for any other 987 QBU is owned by a domestic unreasonable method in prior years can purpose. Section 987 gain or loss corporation) than was the case before only use the fresh start transition determined on the deemed termination the transaction (when the section 987 method of § 1.987–10(c)(4) as described is not immediately recognized. Rather, it QBU was owned by a foreign in this preamble. Generally, use of the is deferred by treating it as net corporation). 1991 proposed section 987 regulations unrecognized section 987 gain or loss of The IRS and the Treasury Department method (see, Examples 1 and 3 of the relevant section 987 QBU. Such gain request comments on whether it is § 1.987–10(d)) or an ‘‘earnings only’’ or loss will be recognized under the appropriate to treat these inbound asset section 987 method (see, Example 2 of remittance rules of § 1.987–5 for periods transactions as terminations. Such § 1.987–10(d)) will be considered a after the transition date. The owner of comments should take into account the reasonable method for purposes of a qualified business unit that is deemed policy concerns discussed in this § 1.987–10. However, for example, the to terminate under these rules is treated preamble. recognition of section 987 gain or loss as having transferred all of the assets with respect to stock under any method, 4. Section 351 Exchanges and and liabilities attributable to the where the gain or loss does not reflect qualified business unit to a new section Transactions Within a Consolidated economic gain or loss derived from the Group 987 QBU on the transition date. In order movements in exchange rates, will be to avoid double counting, § 1.987– The proposed regulations provide that carefully scrutinized by the IRS and 10(c)(3)(ii) provides that the exchange a termination occurs when the owner of may be considered unreasonable based rates used to determine the amount of a section 987 QBU transfers the QBU to on the facts and circumstances of the an asset or liability transferred from the another corporation in exchange for particular case. owner to the new section 987 QBU on stock in a transaction qualifying under The transition date is the first day of the transition date (that is, for purposes section 351. The termination occurs the first taxable year to which these of making later calculations under because the owner no longer has a section 987 regulations apply. § 1.987–4) is determined with reference section 987 QBU. Comments are requested on the to the historic exchange rates on the day The IRS and the Treasury Department application of these transition rules to the asset was acquired or liability are studying ways to apply the partnerships which were, under the entered into by the qualified business intercompany transaction rules of current proposed regulations, treated as unit deemed terminated. That exchange qualified business units for purposes of § 1.1502–13 to section 987 transactions rate is then adjusted to take into account section 987. Comments are also within a consolidated group. For an allocation of section 987 gain or loss requested on the treatment of qualified example, the IRS and the Treasury determined under the deferral transition business units of such partnerships. Department are considering whether method. If the taxpayer is not able to transfers qualifying under section 351 Generally, § 1.987–10(c) allows a taxpayer to transition to the foreign trace an historic exchange rate to a which would trigger a remittance or particular asset or liability, then the termination under the proposed exchange exposure pool method set forth in these regulations under one of exchange rate must be determined regulations should qualify for deferral under a reasonable allocation method, under § 1.1502–13. The IRS and the two methods (the ‘‘deferral transition method’’ or the ‘‘fresh start transition consistently applied, that takes into Treasury Department request comments account an allocation of the aggregate on the interplay between § 1.1502–13 method’’). Under the conformity rules of § 1.987–10(c)(2), this election must be basis and an allocation of the deferred and the proposed regulations and the section 987 gain or loss. timing of the inclusion of the deferred applied with respect to all members that section 987 gain or loss. file a consolidated return with the Under the fresh start transition taxpayer and any controlled foreign method of § 1.987–10(c)(4), on the I. Section 1.987–9 Recordkeeping corporation as defined in section 957 in transition date all qualified business Rules which the taxpayer owns more than 50 units of the taxpayer subject to section Given the detailed nature of the percent of the voting power or stock (as 987 are deemed terminated on the last calculations required under these determined in section 957(a)). This day of the taxable year preceding the regulations, § 1.987–9 articulates the conformity rule is necessary to prevent transition date. As under the deferral records that taxpayers must keep. A taxpayers and certain related entities transition method, this deemed taxpayer must keep such records as are from taking inconsistent positions with termination is solely for purposes of sufficient to establish the section 987 respect to qualified business units transitioning to the foreign exchange QBU’s section 987 taxable income or which have unrecognized section 987 exposure pool method under section loss, its section 987 gain or loss, and the gains and losses. The IRS and the 987 and does not apply for any other transition method used for section 987 Treasury Department request comments purpose. Under the fresh start transition QBUs under § 1.987–10. Section 1.987– on concerns that may arise by the method, no section 987 gain or loss is 9(b) lists supplemental records that inclusion of certain controlled foreign determined or recognized on such must be maintained. corporations in the conformity rule. deemed termination. Rather, the Under the deferral transition method exchange rates used to determine the J. Section 1.987–10 Transition Rules of § 1.987–10(c)(3), section 987 gain or total amount of assets and liabilities The transition rules of § 1.987–10 loss is determined under the taxpayer’s deemed transferred from the owner to apply to a taxpayer that is the owner of prior section 987 method on the the section 987 QBU for the section 987 a section 987 QBU on the transition transition date as if all qualified QBU’s first taxable year are determined date. Such a taxpayer must transition to business units of the taxpayer solely with reference to the historic the foreign exchange exposure pool terminated on the last day of the taxable exchange rates on the day the assets method of these regulations whether or year preceding the transition date. The were acquired or liabilities entered into

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by the qualified business unit that was impact on a substantial number of small Drafting Information deemed terminated. Like the deferral entities. Accordingly, a regulatory The principal authors of the proposed transition method, if the taxpayer is not flexibility analysis is not required. The regulations are Jeffrey Dorfman and able to trace an exchange rate to a proposed section 987 regulations will Theodore Setzer of the Office of particular asset or liability, then the generally only affect large United States Associate Chief Counsel (International). exchange rate must be determined corporations with business units under a reasonable allocation method, operating in foreign jurisdictions. Thus, List of Subjects in 26 CFR Part 1 consistently applied, that takes into the number of affected small entities Income taxes, Reporting and account the aggregate basis of the QBU’s will not be substantial and any recordkeeping requirements. assets (and amount of liabilities). The economic impact on those entities in fresh start method is designed to complying with the collection of Withdrawal of Notice of Proposed prevent recognition of non-economic information would be minimal. Rulemaking currency gain or loss with respect to Pursuant to section 7805(f) of the Accordingly, under the authority of unremitted assets that are attributable to Internal Revenue Code, this notice of 26 U.S.C. 7805, the notice of proposed the qualified business unit. In the first proposed rulemaking will be submitted rulemaking (REG–208270–86) that was taxable year when the foreign exchange to the Chief Counsel for Advocacy of the published in the Federal Register on exposure pool method applies, the Small Business Administration for September 25, 1991 (56 FR 48457) is deemed contribution of marked assets to withdrawn. a section 987 QBU at the historic comment on its impact on small exchange rate when originally acquired businesses. Proposed Amendment to the potentially gives rise to section 987 gain Comments and Public Hearing Regulations or loss while the historic assets (also Accordingly, 26 CFR part 1 is Before the proposed regulations are translated at the historic exchange rate) proposed to be amended as follows: will not. adopted as final regulations, The transition method adopted by the consideration will be given to any PART 1—INCOME TAXES taxpayer must be disclosed in written (a signed original and eight (8) accordance with the rules provided in copies) or electronic comments that are Paragraph 1. The authority citation § 1.987–10(c)(6). submitted timely to the IRS. The IRS for part 1 continues to read in part as follows: Proposed Effective Date and the Treasury Department request comments on the clarity of the proposed Authority: 26 U.S.C. 987, 989(c), 6601 and These regulations are proposed to be rules and how they can be made easier 7805 * * * effective as follows. These regulations to understand. All comments will be shall generally apply to taxable years Par. 2. Section 1.861–9T is amended available for public inspection and beginning one year after the first day of as follows: copying. the first taxable year following the date 1. Paragraph (g)(2)(ii)(A)(1) is revised. of publication of a Treasury decision A public hearing has been scheduled 2. Paragraph (g)(2)(vi) is added. adopting this rule as a final regulation for November 21, 2006, beginning at 10 The revisions read as follows: a.m. in the Auditorium, Internal in the Federal Register. A taxpayer may § 1.861–9T Allocation and apportionment elect to apply these regulations to Revenue Service, New Carrollton of interest expense (temporary). taxable years beginning after the date of Federal Building, 5000 Ellin Road, publication of a Treasury decision Lanham, MD 20706. In addition, all * * * * * adopting this rule as a final regulation visitors must present photo (g) * * * in the Federal Register. Such election is identification to enter the building. (2) * * * binding on all members that file a Because of access restrictions, visitors (ii) * * * (A) * * * consolidated return with the taxpayer will not be admitted beyond the (1) Section 987 QBU. In the case of a section 987 QBU, the tax book value and any controlled foreign corporation, immediate entrance area more than 30 shall be determined by applying the as defined in section 957, in which the minutes before the hearing starts. For rules of paragraphs (g)(2)(i) and (3) of taxpayer owns more than 50 percent of information about having your name this section to the beginning of year and the voting power or stock (as placed on the building access list to end of year functional currency amount determined in section 957(a)). Pending attend the hearing, see the FOR FURTHER finalization, the IRS and the Treasury of assets. The beginning of year INFORMATION CONTACT section of this functional currency amount of assets Department would consider positions preamble. consistent with these proposed shall be determined by reference to the The rules of 26 CFR 601.601(a)(3) regulations to be reasonable functional currency amount of assets apply to the hearing. Persons who wish constructions of the statute. computed under § 1.987–4(d)(1)(i)(B) to present oral comments must submit and (e) on the last day of the preceding Special Analyses electronic or written comments by taxable year. The end of year functional It has been determined that this notice December 6, 2006 and an outline of the currency amount of assets shall be of proposed rulemaking is not a topics to be discussed and time to be determined by reference to the significant regulatory action as defined devoted on each topic (a signed original functional currency amount of assets in Executive Order 12866. Therefore, a and eight (8) copies) by October 31, computed under § 1.987–4(d)(1)(i)(A) regulatory assessment is not required. It 2006. A period of 10 minutes will be and (e) on the last day of the current has also been determined that section allotted to each person for making taxable year. The beginning of year and 553(b) of the Administrative Procedure comments. An agenda showing the end of year functional currency amount Act (5 U.S.C. chapter 5) does not apply scheduling of the speakers will be of assets, as so determined within each to these regulations. It is hereby prepared after the deadline for receiving grouping must then be averaged as certified that the collection of outlines has passed. Copies of the provided in paragraph (g)(2)(i) of this information contained in this regulation agenda will be available free of charge section. will not have a significant economic at the hearing. * * * * *

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(vi) Effective date. Generally, § 1.985–5 Adjustments required upon relevant items. Except as otherwise paragraph (g)(2)(ii)(A)(1) of this section change in functional currency. provided in this section, the new shall apply to taxable years beginning (a) In general. This section applies in functional currency adjusted basis of one year after the first day of the first the case of a taxpayer, qualified property and the new functional taxable year following the date of business unit (QBU) or section 987 QBU currency amount of liabilities and any publication of a Treasury decision as defined in § 1.987–1(b)(2) changing other relevant items (for example, items adopting this rule as a final regulation from one functional currency (old described in section 988(c)(1)(B)(iii)) in the Federal Register. If a taxpayer functional currency) to another shall equal the product of the amount of makes an election under § 1.987–11(b), functional currency (new functional the old functional currency adjusted then the effective date of paragraph currency). A taxpayer, QBU, or section basis or amount multiplied by the new (g)(2)(ii)(A)(1) of this section with 987 QBU subject to the rules of this functional currency/old functional respect to the taxpayer shall be section shall make the adjustments set currency spot exchange rate on the last consistent with such election. forth in the 3-step procedure described day of the taxable year ending before the * * * * * in paragraphs (b) through (e) of this year of change (spot rate). section. Except as otherwise provided in (d) Step 3A Additional adjustments Par. 3. Section 1.985–1 is amended as this section, the adjustments shall be that are necessary when a QBU or follows: made on the last day of the taxable year section 987 QBU changes functional 1. Paragraph (d)(2), second sentence; ending before the year of change as currency—(1) QBU changing to a and paragraph (f), Example 9 and defined in § 1.481–1(a)(1). Gain or loss functional currency other than the Example 10(i), ninth sentence are required to be recognized under owner’s functional currency—(i) Rule. If revised. paragraphs (b), (d)(2), (e)(2), and a QBU or section 987 QBU changes to 2. Paragraph (f), Example 11 is (e)(4)(iii) of this section is not subject to a functional currency other than the removed. section 481 and, therefore, the full owner’s functional currency, the owner 3. Paragraph (f), Example 12 is amount of the gain or loss must be and section 987 QBU shall make the redesignated as Example 11. included in income or earnings and adjustments set forth in either paragraph 4. Paragraph (g) is added. profits on the last day of the taxable year (d)(1)(ii) or (d)(1)(iii) of this section for The revisions and addition read as ending before the year of change. Except purposes of section 987. follows: as provided in § 1.985–6, a QBU or (ii) Where prior to the change the section 987 QBU with a functional section 987 QBU and owner had § 1.985–1 Functional currency. currency for its first taxable year different functional currencies. If the * * * * * beginning in 1987 that is different from section 987 QBU and the owner had (d) * * * the currency in which it had kept its different functional currencies prior to (2) * * * The amount of income or books and records for United States the change, the owner and section 987 loss or earnings and profits (or deficit in accounting and tax accounting purposes QBU shall make the following earnings and profits) of each QBU in its for its prior taxable year shall apply the adjustments in the year of change. functional currency shall then be principles of this section for purposes of (A) Determining the owner functional translated into the foreign corporation’s computing the relevant functional currency net value of the section 987 functional currency under the currency items, such as earnings and QBU under § 1.987–4(d)(1)(i)(B)—(1) principles of section 987. profits, basis of an asset, and amount of Historic items. For purposes of * * * * * a liability, as of the first day of a determining the owner functional (f) Examples. *** taxpayer’s first taxable year beginning in currency net value of the section 987 1987. However, a QBU that changes to QBU for the year of change under Example (9). (i) The facts are the same as the dollar pursuant to § 1.985–1(b)(2) § 1.987–4(d)(1)(i)(B), the owner or in Example (7). In addition, assume that in section 987 QBU shall first translate the 1987 branch A has items of earnings of 100 after 1987 shall apply § 1.985–7. FC and branch B has items of earnings of 100 (b) Step 1 Taking into account section 987 historic items from the LC as determined under section 987. S exchange gain or loss on certain section QBU’s old functional currency into its translates branch A’s and branch B’s items of 988 transactions. The taxpayer, QBU or owner’s functional currency using the earnings and profits into its functional section 987 QBU shall recognize or historic exchange rate as defined in currency under the principles of section 987. otherwise take into account for all § 1.987–1(c)(3). The owner or section Example (10). (i) * * * Assume that B’s purposes of the Internal Revenue Code 987 QBU shall then translate the section items of income of 200 DCs when properly the amount of any unrealized exchange 987 historic items as defined in § 1.987– translated under the principles of section 987 gain or loss attributable to a section 988 1(e) from the owner’s functional is equal to 100 LCs. * * * transaction (as defined in section currency into the QBU’s new functional * * * * * 988(c)(1)(A), (B), and (C)) that, after currency using the spot exchange rate (g) Effective date. Generally, the applying section 988(d), is denominated between the section 987 QBU’s new revisions to the second sentence of in terms of or determined by reference functional currency and the owner’s paragraph (d)(2), Example 9, and to the new functional currency. The functional currency on the last day of Example 10 shall apply to taxable years amount of such gain or loss shall be the taxable year ending before the year beginning one year after the first day of determined without regard to the of change. the first taxable year following the date limitations of section 988(b) (that is, (2) Marked items. For purposes of of publication of a Treasury decision whether any gain or loss would be determining the owner functional adopting this rule as a final regulation realized on the transaction as a whole). currency net value of the section 987 in the Federal Register. If a taxpayer The character and source of such gain QBU for the year of change under makes an election under § 1.987–11(b), or loss shall be determined under § 1.987–4(d)(1)(i)(B), the owner or then the effective date of these revisions section 988. section 987 QBU shall translate the with respect to the taxpayer shall be (c) Step 2 Determining the new section 987 QBU’s section 987 marked consistent with such election. functional currency basis of property items as defined in § 1.987–1(d) from Par 4. Section 1.985–5 is revised to and the new functional currency the section 987 QBU’s old functional read as follows: amount of liabilities and any other currency into the QBU’s new functional

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currency using the new functional corporation (within the meaning of currency net value of the section 987 currency/old functional currency spot section 957 or section 953(c)(1)(B)) QBU for the year of change under exchange rate on the last day of the changing its functional currency to the § 1.987–4(d)(1)(i)(B), the owner or taxable year ending before the year of dollar shall recognize foreign currency section 987 QBU shall translate the change. gain or loss computed under section QBU’s section 987 marked items from (B) Net unrecognized section 987 gain 986(c) as if all previously taxed earnings the owner’s old functional currency into or loss. No adjustment to the owner’s and profits, if any, (including amounts the owner’s new functional currency net unrecognized section 987 gain or attributable to pre-1987 taxable years using the new functional currency/old loss is necessary. that were translated from dollars into functional currency spot exchange rate (iii) Where prior to the change the functional currency in the foreign on the last day of the taxable year QBU and the taxpayer had the same corporation’s first post-1986 taxable ending before the year of change. functional currency. If a QBU with the year) were distributed immediately (B) Translation of net unrecognized same functional currency of the prior to the change. Such a shareholder taxpayer is changing to a new functional section 987 gain or loss. The owner shall also recognize gain or loss shall translate any net unrecognized currency different from the taxpayer, attributable to the corporation’s paid-in and as a result of the change the section 987 gain or loss determined capital to the same extent, if any, that under § 1.987–4 from its old functional taxpayer will be an owner of a section such gain or loss would be recognized 987 QBU (see § 1.987–1), the taxpayer currency into its new functional under the regulations under section currency using the new functional and section 987 QBU shall become 367(b) if the corporation was liquidated subject to section 987 for the year of currency/old functional currency spot completely. exchange rate on the last day of the change and subsequent years. (3) Taxpayers that are not (2) Section 987 QBU changing to the taxable year ending before the year of corporations. [Reserved]. owner’s functional currency. If a section change. (4) Adjustments to a section 987 987 QBU changes its functional QBU’s balance sheet and net (ii) Taxpayer with the same functional currency to its owner’s functional accumulated unrecognized section 987 currency as its QBU changing to a currency, the section 987 QBU shall be gain or loss when an owner changes different functional currency. If a treated as if it terminated on the last day functional currency—(i) Owner taxpayer with the same functional of the taxable year ending before the changing to a functional currency other currency as its QBU changes to a new year of change. See §§ 1.987–5 and functional currency and as a result of 1.987–8 for the effect of a termination. than the section 987 QBU’s functional currency. If an owner changes to a the change the taxpayer will be an (e) Step 3B Additional adjustments owner of a section 987 QBU (see that are necessary when a taxpayer/ functional currency that differs from the functional currency of its section 987 § 1.987–1), the taxpayer and section 987 owner changes functional currency (1) QBU shall become subject to section 987 Corporations. The amount of a QBU, the owner shall make the following adjustments in the year of for the year of change and subsequent corporation’s new functional currency years. earnings and profits and the amount of change. its new functional currency paid-in (A) Determining the owner functional (iii) Owner changing to the same capital shall equal the product of the old currency net value of the section 987 functional currency as the section 987 functional currency amounts of such QBU under § 1.987–4(d)(1)(i)(B)—(1) QBU. If an owner changes to the same items multiplied by the spot rate. The Historic items. For purposes of functional currency as its section 987 foreign income taxes and accumulated determining the owner functional QBU, such section 987 QBU shall be profits or deficits in accumulated profits currency net value of the section 987 treated as if it terminated on last day of of a foreign corporation that were QBU for the year of change under the taxable year ending before the year maintained in foreign currency for § 1.987–4(d)(1)(i)(B), the owner shall of change. See §§ 1.987–5 and 1.987–8 purposes of section 902 and that are first translate the QBU’s section 987 for the effect of a termination. attributable to taxable years of the historic items into the owner’s old (f) Examples. The provisions of this foreign corporation beginning before functional currency at the historic section are illustrated by the following January 1, 1987, also shall be translated exchange rate as defined in § 1.987– example: 1(c)(3). The owner shall then translate into the new functional currency at the Example. S, a calendar year foreign the section 987 historic items into its spot rate. corporation, is wholly owned by domestic (2) Collateral consequences to a new functional currency using the new corporation P. The Commissioner granted United States shareholder of a functional currency/old functional permission to change S’s functional currency corporation changing to the United currency spot rate on the last day of the from the LC to the FC beginning January 1, States dollar as its functional currency. taxable year ending before the year of 1993. The LC/FC exchange rate on December A United States shareholder (within the change. 31, 1992, is 1 LC/2 FC. The following shows meaning of section 951(b) or section (2) Marked items. For purposes of how S must convert the items on its balance 953(c)(1)(A)) of a controlled foreign determining the owner functional sheet from the LC to the FC.

LC 12 FC

Assets: Cash on hand ...... 40,000 80,000 Accounts Receivable ...... 10,000 20,000 Inventory ...... 100,000 200,000 100,000 FC Bond (100,000 LC historical basis) ...... 1 50,000 100,000 Fixed assets: Property ...... 200,000 400,000 Plant ...... 500,000 1,000,000 Accumulated Depreciation ...... (200,000) (400,000) Equipment ...... 1,000,000 2,000,000

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LC 12 FC

Accumulated Depreciation ...... (400,000) (800,000)

Total Assets ...... 1,300,000 2,600,000 Liabilities: Accounts Payable ...... 50,000 100,000 Long-term Liabilities ...... 400,000 800,000 Paid-in-Capital ...... 800,000 1,600,000 Retained Earnings ...... 2 50,000 100,000

Total Liabilities and Equity ...... 1,300,000 2,600,000 1 Under paragraph (b) of this section, S will recognize a 50,000 LC loss (100,000 LC basis—50,000 LC value) on the bond resulting from the change in functional currency. Thus, immediately before the change, S’s basis in the FC bond (taking into account the loss) is 50,000 LC. 2 The amount of S’s LC retained earnings reflects the 50,000 LC loss on the bond.

(g) Effective date. Generally, this with subchapter K. Section 1.987–8 purposes of section 987, leasing regulation shall apply to taxable years provides rules regarding the termination companies, finance coordination beginning one year after the first day of of a section 987 QBU. Section 1.987–9 centers, regulated investment the first taxable year following the date provides rules regarding the companies and real estate investment of publication of a Treasury decision recordkeeping required under section trusts). Further, these rules do not apply adopting this rule as a final regulation 987. Section 1.987–10 provides to trusts, estates and S corporations. in the Federal Register. If a taxpayer transition rules. Section 1.987–11 (2) Definition of a section 987 QBU— makes an election under § 1.987–11(b), provides the effective date of these (i) In general. A section 987 QBU is an then the effective date of this regulation regulations. eligible QBU, as defined in paragraph with respect to the taxpayer shall be (b) Scope of section 987 and (b)(3) of this section, that has a consistent with such election. definitions—(1) Taxpayers subject to functional currency different from its Par. 5. Sections 1.987–1 through section 987—(i) In general. Except as owner. The functional currency of an 1.987–4 and §§ 1.987–6 through 1.987– provided in paragraphs (b)(1)(ii) and eligible QBU shall be determined under 11 are added and § 1.987–5 is revised to (iii) of this section, an individual or § 1.985–1, taking into account all of the read as follows: corporation is subject to section 987 if QBU’s activities before the application such person is an owner (as defined in of § 1.987–7. § 1.987–1 Scope, definitions and special paragraphs (b)(4) and (5) of this section) (ii) Section 987 QBU grouping rules. of an eligible QBU (as defined in election—(A) In general. Except as (a) In general. These regulations paragraph (b)(3) of this section) that is provided in paragraphs (b)(2)(ii)(B)(1) provide rules for determining the a section 987 QBU (as defined in through (3) of this section, an owner taxable income or loss of a taxpayer paragraph (b)(2) of this section). Such may elect pursuant to paragraph (f) of with respect to a section 987 qualified individual or corporation, and any this section to treat, solely for purposes business unit (section 987 QBU) as section 987 QBU owned by such person, of section 987, all section 987 QBUs defined in paragraph (b)(2) of this must comply with these regulations. with the same functional currency as a section. Further, these regulations (ii) De minimis rule for certain single section 987 QBU. provide rules for determining the indirectly owned section 987 QBUs. An (B) Special grouping rules for section timing, amount, character and source of individual or corporation that owns a 987 QBUs owned indirectly through a section 987 gain or loss recognized with section 987 QBU indirectly through a partnership—(1) In general. An owner respect to a section 987 QBU. This section 987 partnership may elect not to may elect to treat all section 987 QBUs section addresses the scope of these apply these regulations for purposes of with the same functional currency regulations and provides certain taking into account the section 987 gain owned indirectly though a single definitions and special rules. Section or loss of such section 987 QBU if the section 987 partnership as a single 1.987–2 provides rules for attributing individual or corporation owns, directly section 987 QBU. assets and liabilities and items of or indirectly, less than five percent of (2) Election not available to group income, gain, deduction, and loss to an either the total capital or the total profits section 987 QBUs owned indirectly eligible QBU and a section 987 QBU. It interest in the section 987 partnership through different partnerships. An also provides rules regarding transfers as determined on the date of acquisition owner cannot elect to treat multiple and the translation of items transferred of such interest or on the date such section 987 QBUs with the same to a section 987 QBU. Section 1.987–3 interest is increased or decreased. For functional currency as a single section provides rules for determining and purposes of this paragraph (b)(1)(ii), 987 QBU if such QBUs are owned translating the section 987 taxable ownership of a capital or profits interest indirectly through different section 987 income or loss of a taxpayer with in a partnership shall be determined in partnerships. respect to a section 987 QBU. Section accordance with the rules for (3) Election not available to group 1.987–4 provides rules for determining constructive ownership of stock section 987 QBUs owned directly and net unrecognized section 987 gain or provided in section 267(c), other than indirectly. An owner cannot elect to loss. Section 1.987–5 provides rules section 267(c)(3). See § 1.987–3 for treat multiple section 987 QBUs with regarding the recognition of section 987 purposes of determining the section 987 the same functional currency owned gain or loss. Section 1.987–6 provides taxable income or loss attributable to directly, and indirectly through a rules regarding the character and source such section 987 QBU. section 987 partnership, as a single of section 987 gain or loss. Section (iii) Inapplicability to certain entities. section 987 QBU. 1.987–7 provides rules with respect to These regulations do not apply to banks, (3) Definition of an eligible QBU—(i) partnerships and rules necessary to insurance companies and similar In general. The term eligible QBU means coordinate the provisions of section 987 financial entities (including, solely for activities of an individual, corporation,

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partnership, or an entity disregarded as 7 are considered to be a section 987 interests in DE2. The only activities of DE1 an entity separate from its owner for QBU of such partner, provided such are Business A activities and holding the U.S. Federal income tax purposes (DE), partner has a functional currency interests in DE2. DE2 owns Business B and if— different from that of such eligible QBU. Business C. For purposes of this example, (A) The activities constitute a trade or (ii) Section 987 partnership. A section Business B does not maintain books and records that are separate from its owner, DE2. business as defined in § 1.989(a)–1(c); 987 partnership is a partnership that has Instead, the activities of Business B are (B) A separate set of books and one or more section 987 branches. reflected on the books and records of DE2, records is maintained as defined in (iii) Section 987 DE. A section 987 DE which are maintained in Japanese yen. In § 1.989(a)–1(d) with respect to the is a DE that has one or more section 987 addition, Business C has the U.S. dollar as its activities, and assets and liabilities used branches. functional currency, maintains books and in conducting such activities are (7) Examples. The following examples records that are separate from the books and reflected on such books and records illustrate the principles of paragraph (b) records of DE2, and is an eligible QBU. under § 1.987–2(b); and of this section. Except as otherwise (ii) Analysis. (A) Pursuant to paragraph (C) The activities are not subject to the provided, the following facts are (b)(3)(ii) of this section, DE1 and DE2 are not eligible QBUs. Pursuant to paragraph (b)(3)(i) Dollar Approximate Separate assumed for purposes of these of this section, the Business B and Business Transactions Method (DASTM) rules of examples. X is a domestic corporation, C activities of DE2, and the Business A § 1.985–3. has the U.S. dollar as its functional activities of DE1, are eligible QBUs. (ii) Exclusion of DEs and certain currency, and uses the calendar year as Moreover, pursuant to paragraph (b)(4) of this QBUs. A DE itself is not an eligible QBU its taxable year. Business A and section, DE1 is not the owner of the Business (even though a DE may have activities Business B are eligible QBUs, maintain A, Business B, or Business C eligible QBUs, that qualify as an eligible QBU). In books and records that are separate from and DE2 is not the owner of the Business B addition, an eligible QBU shall include the books and records of the entity that or Business C eligible QBUs. Instead, a QBU defined in § 1.989(a)–1(b) only if owns such eligible QBUs, and have the pursuant to paragraph (b)(4)(i) of this section, X is the direct owner of the Business A, the requirements contained in euro and the Japanese yen, respectively, Business B, and Business C eligible QBUs. paragraphs (b)(3)(i)(A) through (C) of as their functional currencies. Finally, (B) Because Business A and Business B are this section are satisfied with respect to DE1 and DE2 are entities that are eligible QBUs with functional currencies that such QBU. Thus, for example, neither a disregarded as entities separate from are different than the functional currency of corporation nor a partnership itself is an their owner for U.S. tax purposes, have X, Business A and Business B are section 987 eligible QBU (even though a corporation no assets or liabilities, and conduct no QBUs as defined in paragraph (b)(2) of this and a partnership may have activities activities. section. Therefore, X, and these QBUs, are that qualify as an eligible QBU). subject to section 987. Under paragraph Example 1. (i) Facts. X owns Business A (b)(6)(iii) of this section, DE1 and DE2 are (4) Definition of the term ‘‘owner’’. and the interests in DE1. DE1 maintains a For purposes of section 987, only an section 987 DEs. separate set of books and records that are (C) The Business C eligible QBU has the individual or corporation may be an kept in British pounds. DE1 owns British same functional currency as X. Therefore, the owner of an eligible QBU. An individual pounds and 100% of the stock of a foreign Business C eligible QBU is not a section 987 or corporation is an owner of an eligible corporation, FC. DE1 is liable on a pound- QBU. As a result, X is not subject to section QBU if— denominated obligation to a lender that was 987 with respect to its Business C eligible (i) Direct ownership. The individual incurred to acquire the stock of FC. The FC QBU. stock, the pounds, and the liability incurred or corporation is the tax owner of the Example 3. (i) Facts. X owns DE1. DE1 to acquire the FC stock are recorded on DE1’s owns Business A and Business B. For assets and liabilities of an eligible QBU separate books and records. DE1 has no other purposes of this example, assume Business B as defined in paragraph (b)(3) of this assets or liabilities and conducts no activities has the euro as its functional currency. section; or (other than holding the FC stock and (ii) Indirect ownership. In the case of servicing its liability). (ii) Analysis. (A) Pursuant to paragraph an individual or corporation that is a (ii) Analysis. (A) Pursuant to paragraph (b)(3)(ii) of this section, DE1 is not an eligible QBU. Moreover, pursuant to paragraph (b)(4) partner in a partnership, the individual (b)(4)(i) of this section, X is the direct owner of Business A because it is the tax owner of of this section, DE1 is not the owner of the or corporation is allocated, under Business A or Business B eligible QBUs. § 1.987–7, all or a portion of the assets the assets and liabilities of such business. Because Business A is an eligible QBU with Instead, pursuant to paragraph (b)(4)(i) of this and liabilities of an eligible QBU of such a functional currency that is different from section, X is the direct owner of the Business partnership. the functional currency of its owner, X, A and Business B eligible QBUs. (5) Exception with respect to an Business A is a section 987 QBU, as defined (B) Business A and Business B constitute eligible QBU or section 987 QBU of an in paragraph (b)(2) of this section. As a result, two separate eligible QBUs with the euro as owner. The term owner for section 987 X and its section 987 QBU, Business A, are their respective functional currency. purposes does not include an eligible subject to section 987. Accordingly, Business A and Business B are QBU or a section 987 QBU of an owner. (B) Holding the stock of FC and pounds, section 987 QBUs of X. X may elect to treat Business A and Business B as a single section For example, a section 987 branch, as and servicing a single liability, does not constitute a trade or business within the 987 QBU pursuant to paragraph (b)(2)(ii)(A) defined in paragraph (b)(6)(i) of this meaning of § 1.989(a)–1(c). Because the of this section. If such election is made, section is not an owner of another activities of DE1 do not constitute a trade or pursuant to paragraph (b)(4)(i) of this section, section 987 branch, regardless of its business within the meaning of § 1.989(a)– X is the direct owner of the Business AB functional currency. 1(c), such activities are not an eligible QBU. section 987 QBU that includes the activities (6) Other definitions. Solely for In addition, pursuant to paragraph (b)(3)(ii) of both the Business A section 987 QBU and purposes of section 987, the following of this section, DE1 is not an eligible QBU. the Business B section 987 QBU. In addition, definitions shall apply. As a result, neither DE1 nor its activities pursuant to paragraph (b)(4) of this section, (i) Section 987 branch. A section 987 qualify as a section 987 QBU of X. Therefore, DE1 is not treated as the owner of the branch is an eligible QBU of an neither the activities of DE1 nor DE2 are Business AB section 987 QBU. X, and its AB section 987 QBU, are subject to section 987. individual, partnership, DE, or subject to section 987. For the foreign currency treatment of payments on DE1’s Under paragraph (b)(6)(iii) of this section, corporation, all or a portion of which is pound-denominated liability, see §§ 1.987– DE1 is a section 987 DE. a section 987 QBU. Assets and liabilities 2(b)(4) and 1.988–1(a)(4). Example 4. (i) Facts. X is a partner in P, of an eligible QBU of a partnership that Example 2. (i) Facts. X owns the interests a partnership. FC, a controlled foreign are allocated to a partner under § 1.987– in DE1. DE1 owns Business A and the corporation (as defined in section 957(a)) of

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X with the Japanese yen as its functional spot rate means the rate determined for determining the yearly average currency, is the only other partner in P. P under the principles of § 1.988–1(d)(1), exchange rate must be consistently owns DE1 and Business A. DE1 owns (2) and (4) on the relevant day. applied by the taxpayer. Business B. (ii) Election to use a spot rate (3) Historic exchange rate—(i) In (ii) Analysis. (A) Pursuant to paragraph convention—(A) In general. In lieu of (b)(3)(ii) of this section, P and DE1 are not general. Except as otherwise provided eligible section 987 QBUs. Moreover, the spot rate determined in paragraph in these regulations, the historic pursuant to paragraph (b)(4) of this section, (c)(1)(i) of this section, an owner may exchange rate shall be— neither P nor DE1 is the owner of the elect under paragraph (f) of this section (A) In the case of an asset that is Business A eligible QBU or the Business B to use a spot rate convention that transferred to a section 987 QBU, the eligible QBU for section 987 purposes. reasonably approximates the rate in spot rate as defined in paragraphs Instead, pursuant to paragraph (b)(4)(ii) of paragraph (c)(1)(i) of this section. A spot (c)(1)(i) and (ii) of this section on the this section, X and FC are indirect owners of rate convention may be determined with day of transfer; the Business A eligible QBU and the respect to a rate at the beginning of a (B) In the case of an asset that is Business B eligible QBU to the extent they reasonable period, the end of a acquired by a section 987 QBU (other are allocated assets and liabilities of such reasonable period, an average of spot businesses under § 1.987–7. Under than by a transfer to a section 987 QBU paragraphs (b)(6)(ii) and (iii) of this section, rates for a reasonable period, or by described in paragraph (c)(3)(i)(A) of respectively, P is a section 987 partnership reference to spot and forward rates for this section), the spot rate as defined in and DE1 is a section 987 DE. a reasonable period. For example, in paragraphs (c)(1)(i) and (ii) of this (B) Because Business A and Business B are lieu of the spot rate determined in section on the day the asset is acquired; eligible QBUs with a different functional paragraph (c)(1)(i) of this section, the (C) In the case of a liability that is currency than X, the portions of Business A spot rate for all transactions during a entered into by a section 987 QBU, the and Business B allocated to X under § 1.987– monthly period can be determined spot rate as defined in paragraphs 7 are section 987 QBUs of X. As a result, X pursuant to the following conventions: (c)(1)(i) and (ii) of this section on the and its section 987 QBUs are subject to the spot rate at the beginning of the day the liability is entered into; and section 987. current month or at the end of the (C) Because the Business A eligible QBU (D) In the case of a liability that is has a different functional currency than FC, preceding month; the monthly average transferred to a section 987 QBU, the the portion of the Business A eligible QBU of daily spot rates for the current or spot rate as defined in paragraphs that is allocated to FC under § 1.987–7 is a preceding month; or an average of the (c)(1)(i) and (ii) of this section on the section 987 QBU, and FC and its section 987 beginning and ending spot rates for the day the liability is transferred. QBU are subject to section 987. However, the current or preceding month. Similarly, (ii) Changed functional currency. In Business B eligible QBU has the same in lieu of the spot rate determined in the case of a section 987 QBU that functional currency as FC. Therefore, the paragraph (c)(1)(i) of this section, the previously changed its functional portion of the Business B eligible QBU that spot rate can be determined pursuant to currency, § 1.985–5 shall be taken into is allocated to FC, under § 1.987–7, is not a an average of the spot rate and the 30- account in determining the historic section 987 QBU. As a result, FC is not day forward rate on a day of the subject to section 987 with respect to its exchange rate for an item. Business B eligible QBU. preceding month. Use of a spot rate (d) Section 987 marked item. A Example 5. (i) Facts. X owns all of the convention that is consistent with the section 987 marked item is an asset interests in DE1. DE1 owns Business A. DE1 owner’s convention used for financial (section 987 marked asset) or liability owns all of the interests in DE2. DE2 owns accounting purposes is presumed to (section 987 marked liability) that— Business B. DE2 owns all of the interests in reasonably approximate the rate in (1) Is reflected on the books and DE3, an entity disregarded as an entity paragraph (c)(1)(i) of this section. The records of a section 987 QBU under separate from its owner. DE3 owns Business Commissioner can rebut this § 1.987–2(b); C, which is an eligible QBU with the Russian presumption if use of such a convention (2) Would be a section 988 transaction ruble as its functional currency. results in a significant distortion of if such item were held or entered into (ii) Analysis. Pursuant to (b)(3)(ii) of this income or loss under the facts and section, DE1, DE2 and DE3 are not eligible directly by the owner of the section 987 QBUs. Pursuant to paragraph (b)(3)(i) of this circumstances. QBU; and section, the Business A, Business B and (B) Election does not apply with (3) Is not a section 988 transaction Business C activities are eligible QBUs. respect to section 988 transactions. The with respect to the section 987 QBU. Moreover, pursuant to paragraph (b)(4) of this election to use a spot rate convention set (e) Section 987 historic item—(1) In section, X is the direct owner of the Business forth in paragraph (c)(1)(ii)(A) of this general. A section 987 historic item is A, Business B and Business C eligible QBUs. section does not apply to section 988 an asset (section 987 historic asset) or Pursuant to paragraph (b)(5) of this section, transactions of a section 987 QBU. liability (section 987 historic liability) an eligible QBU is not an owner of another (2) Yearly average exchange rate. that— eligible QBU. Accordingly, the Business A Notwithstanding § 1.989(b)–1, for (i) Is reflected on the books and eligible QBU is not the owner of the Business purposes of section 987, the yearly B eligible QBU, and the Business B eligible records of a section 987 QBU under average exchange rate is a rate § 1.987–2(b); and QBU is not the owner of the Business C determined by the owner that represents eligible QBU. Since the Business A, Business (ii) Is not a section 987 marked item B, and Business C eligible QBUs each has a an average exchange rate for the taxable as defined in paragraph (d) of this different functional currency than X, such year (or, if the section 987 QBU is sold section. eligible QBUs are section 987 QBUs of X. As or terminated prior to the close of the (2) Example. The following example a result, X and its section 987 QBUs are taxable year, such portion of the taxable illustrates the application of paragraphs subject to section 987. Under paragraphs year) computed under any reasonable (d) and (e) of this section: (b)(6)(iii) of this section, DE1, DE2 and DE3 method. For example, an owner may are section 987 DEs. determine the yearly average exchange Example. X is a domestic corporation with the dollar as its functional currency. X owns (c) Exchange rates. Solely for rate based on a daily, monthly or all the interests in UK DE, a section 987 DE purposes of section 987, the following quarterly averaging convention, whether that owns a section 987 branch having the definitions shall apply. weighted or unweighted, and may take pound as its functional currency. Items (1) Spot rate—(i) In general. Except as into account forward rates for a period reflected on the branch’s balance sheet otherwise provided in this section, the not to exceed three months. The method include £100 of cash, $25 of cash, a building

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with a basis of £1,000, a truck with a basis to have satisfied the timeliness section 987 QBU for purposes of of £75, a computer with a basis of £10, a 60 requirement with respect to such computing the section 987 taxable day receivable for ¥15 and a note payable of election if the owner is able to income of such section 987 QBU, and of £500. Under paragraph (d) of this section, the demonstrate to the Area Director, Field the owner of such section 987 QBU. £100 of cash and the £500 note payable are Examination, Small Business/Self Paragraph (c) of this section defines a section 987 marked items. The other items are section 987 historic items under this Employed or the Director, Field transfer for purposes of section 987. paragraph (e). Operations, Large and Mid-Size Paragraph (d) of this section provides Business (Director) having jurisdiction translation rules for transfers to a (f) Elections—(1) In general. Elections of the taxpayer’s return for the taxable section 987 QBU. made under section 987 shall be treated year, that such failure was due to (b) Attribution of items to an eligible as methods of accounting and, except as reasonable cause and not willful QBU—(1) General rules. Except as otherwise provided in this paragraph (f), neglect. The previous sentence shall provided in paragraphs (b)(2) and (3) of are governed by the general rules only apply if, once the owner becomes this section, items are attributable to an concerning changes in methods of aware of the failure, the owner attaches eligible QBU to the extent they are accounting. the election, as well as a written reflected on the separate set of books (2) Persons making the election—(i) In statement setting forth the reasons for and records, as defined in § 1.989(a)– general. Except as provided in the failure to timely comply, to an 1(d), of the eligible QBU. For purposes paragraphs (f)(2)(ii) and (iii) of this amended income tax return that amends of this section, the term ‘‘item’’ refers to section, elections regarding section 987 the return to which the election should assets and liabilities, and items of shall be made by the owner as defined have been attached under the rules of income, gain, deduction, and loss. Items in paragraph (b)(4) of this section. this paragraph (f). In determining that are attributed to an eligible QBU (ii) Controlled foreign corporations. whether the owner has reasonable pursuant to this section must be Where a section 987 QBU is held by a cause, the Director shall consider adjusted to conform to U.S. tax controlled foreign corporation, elections whether the taxpayer acted reasonably principles as provided in § 1.987–4(e). shall be made in accordance with and in good faith. Whether the taxpayer These attribution rules apply solely for §§ 1.952–2(c)(2)(iv) and 1.964–1(c) by its acted reasonably and in good faith will purposes of section 987. For example, controlling U.S. shareholders. be determined after considering all the the allocation and apportionment of (iii) Foreign corporations that are not facts and circumstances. The Director interest expense under section 864(e) is controlled foreign corporations. Where a shall notify the owner in writing within independent of the rules under section section 987 QBU is held by a foreign 120 days of the filing if it is determined 987. corporation that is not a controlled that the failure to comply was not due (2) Exceptions for non-portfolio stock, foreign corporation, elections shall be to reasonable cause, or if additional time interests in partnerships, and certain made in accordance with the principles will be needed to make such acquisition indebtedness—(i) General of § 1.964–1(c) by the majority domestic determination. If the Director fails to rule. Except as provided in paragraph corporate shareholders. notify the owner within 120 days of the (b)(2)(ii) of this section, the following (3) When elections must be made. An filing, the owner shall be considered to shall not be considered to be on the election under section 987 must be have demonstrated to the Director that books and records of a an eligible QBU: made with respect to a section 987 QBU such failure was due to reasonable cause (A) Stock of a corporation (whether for the first taxable year in which the and not willful neglect. domestic or foreign). election is relevant in determining the (7) Revocation of election—(i) In (B) An interest in a partnership section 987 taxable income or loss, or general. Elections under section 987 (whether domestic or foreign). section 987 gain or loss, of the section cannot be revoked without the consent (C) A liability that was incurred to 987 QBU. of the Commissioner. The acquire the stock or an interest in a (4) Manner of making elections. Commissioner will consider allowing partnership described in paragraphs Elections shall be made under section the revocation of an election if the (b)(2)(i)(A) or (B) of this section, 987 by attaching a statement to the taxpayer can demonstrate significantly respectively. timely filed tax return of the owner, or (D) Income, gain, deduction, or loss changed circumstance or such other other applicable person, for the first arising from the items described in circumstances that in the judgment of taxable year in which the owner intends paragraphs (b)(2)(i)(A) through (C) of the Commissioner clearly demonstrates the election to be effective. The this section. For example, a section 951 a substantial non-tax business reason for statement must be dated and titled inclusion with respect to stock of a revoking the election. ‘‘Election(s) Under Section 987,’’ must (ii) Exception in the case of certain foreign corporation that is described in indicate the regulation section that acquisitions. [Reserved]. paragraph (b)(2)(i)(A) of this section authorizes the election(s), and must shall not be considered to be on the clearly describe the election(s) being § 1.987–2 Attribution of items to a section books and records of the eligible QBU. made. Each section 987 election must 987 QBU; the definition of a transfer and (ii) Portfolio stock. Paragraph remain a part of the books and records related rules. (b)(2)(i)(A) of this section shall not of the taxpayer and be available to the (a) Scope and general principles. apply to stock of a corporation (whether IRS upon request. Paragraph (b) of this section provides domestic or foreign) reflected on the (5) Consent of the Commissioner. rules for attributing assets and books and records, within the meaning Elections made in accordance with the liabilities, and items of income, gain, of paragraph (b)(1) of this section, of an rules of this paragraph (f) shall be deduction, and loss, to an eligible QBU eligible QBU provided the owner of the considered made with the consent of the and a section 987 QBU. Assets and eligible QBU owns less than 10 percent Commissioner. liabilities are attributed to an eligible of the total voting power or value of all (6) Failure to make election. If an QBU, all or a portion of which is a classes of stock of such corporation. For owner is permitted to file an election section 987 QBU for purposes of section purposes of this paragraph (b)(2)(ii), pursuant to this paragraph (f), but fails 987. Items of income, gain, deduction, section 318(a) shall be applied in to make such election in a timely and loss are attributed to an eligible determining ownership, except that in manner, the owner shall be considered QBU all or a portion of which is a applying section 318(a)(2)(C), the phrase

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‘‘10 percent’’ is used instead of the is not regarded for Federal tax purposes section, the term disregarded phrase ‘‘50 percent.’’ (that is, a transaction between a DE and transaction means a transaction that is (3) Adjustments to items reflected on its owner). not regarded for U.S. Federal tax the books and records—(i) General rule. (iii) Factors indicating tax avoidance. purposes. For purposes of this If a principal purpose of recording (or For purposes of paragraph (b)(3)(i) of paragraph (c), a disregarded transaction failing to record) an item on the books this section, relevant factors which may shall be treated as including the and records of an eligible QBU is the indicate that a principal purpose of recording of an asset or liability on one avoidance of U.S. tax under section 987, recording (or failing to record) an item set of books and records, if the recording the Commissioner may allocate any item on the books and records of an eligible is the result of such asset or liability between or among the eligible QBU, the QBU is the avoidance of U.S. tax under being removed from another set of books owner of such eligible QBU, and any section 987 are— and records of the same person or entity other persons, entities (including (A) The presence or absence of an (including a DE or partnership). disregarded entities), or other QBUs item on the books and records that is (iii) Items derived from disregarded within the meaning of § 1.989(a)–1(b) disregarded as transitory due to a transactions ignored. For purposes of (including eligible QBUs). A transaction circular flow of cash or other property; section 987, disregarded transactions may have such a principal purpose even (B) The presence or absence of an shall not give rise to items of income, though the tax avoidance purpose is item on the books and records that is the gain, deduction, or loss that must be outweighed by other purposes when result of one or more transactions that taken into account in determining taken together. For purposes of this do not have economic substance; section 987 taxable income or loss paragraph (b)(3)(i), relevant factors for (C) The presence or absence of an under § 1.987–3. determining whether such U.S. tax item on the books and records that (3) Transfers of assets to and from avoidance is a principal purpose of results in the taxpayer (or person related indirectly owned section 987 QBUs—(i) recording (or failing to record) an item to the taxpayer as defined in section Contributions to partnerships. Solely for on the books and records of an eligible 267(b) or 707(b)) having offsetting purposes of section 987, an asset shall QBU shall include, but are not limited positions in the functional currency of be treated as transferred to an indirectly to, the factors set forth in paragraphs a section 987 QBU; and owned section 987 QBU if, and to the (b)(3)(ii) and (iii) of this section. The (D) The absence of any or all of the extent, the asset is contributed to the presence or absence of any factor, or of factors listed in paragraphs (b)(3)(ii)(A) section 987 partnership that carries on a particular number of factors, is not through (E) of this section. the section 987 QBU provided that determinative. Moreover, the weight (4) Assets and liabilities of a immediately following such given to any factor (whether or not set partnership or DE that are not attributed contribution, the asset is reflected on forth in paragraphs (b)(3)(ii) and (iii) of to an eligible QBU. Neither a the books and records of the section 987 this section) depends on the particular partnership nor a DE is an eligible QBU QBU within the meaning of paragraph case. and, thus, cannot be a section 987 QBU. (b) of this section. For purposes of this (ii) Factors indicating no tax See § 1.987–1(b)(2) and (3). As a result, paragraph (c)(3)(i), deemed avoidance. For purposes of paragraph a partnership or DE may own assets and contributions under section 752 shall be (b)(3)(i) of this section, relevant factors liabilities that are not attributed to an disregarded. which may indicate that the recording eligible QBU (or a section 987 QBU) as (ii) Distributions from partnerships. (or failing to record) an item on the provided under this paragraph (b) and, Solely for purposes of section 987, an books and records of an eligible QBU therefore, are not subject to section 987. asset shall be treated as transferred from does not have as a principal purpose the For the foreign currency treatment of an indirectly owned section 987 QBU if, avoidance of U.S. tax under section 987 such assets or liabilities, see § 1.988– and to the extent, the section 987 include the recording (or not recording) 1(a)(4). partnership that carries on the section of an item: (c) Transfers to and from section 987 987 QBU distributes the asset to a (A) For a significant and bona fide QBUs—(1) In general. The following partner provided that, immediately business purpose. rules apply for purposes of determining prior to such distribution, the asset was (B) In a manner that is consistent with whether there is a transfer of an asset or reflected on the books and records of the economics of the underlying a liability from the owner to a section such section 987 QBU within the transaction. 987 QBU, or from such section 987 QBU meaning of paragraph (b) of this section. (C) In accordance with generally to the owner. These rules apply solely For purposes of this paragraph (c)(3)(ii), accepted accounting principles (or for purposes of section 987. deemed distributions under section 752 similar comprehensive body of (2) Disregarded transactions—(i) shall be disregarded. professional accounting standards). General rule. Solely for purposes of (4) Transfers of liabilities to and from (D) In a manner that is consistent with section 987, an asset or liability shall be indirectly owned section 987 QBUs—(i) the treatment of similar items from year treated as transferred to a section 987 Assumptions of partner liabilities. to year. QBU if, as a result of a disregarded Solely for purposes of section 987, a (E) In accordance with accepted transaction, such asset or liability is liability shall be treated as transferred to conditions or practices in the particular reflected on the books and records of the an indirectly owned section 987 QBU if, trade or business of the eligible QBU. section 987 QBU within the meaning of and to the extent, the section 987 (F) In a manner that is consistent with paragraph (b) of this section. Similarly, partnership assumes such liability, an explanation of existing internal an asset or liability shall be treated as provided that immediately following accounting policies that is evidenced by transferred from a section 987 QBU if, such assumption, the liability is documentation contemporaneous with as a result of a disregarded transaction, reflected on the books and records of the the timely filing of a return for the such asset or liability is not reflected on section 987 QBU within the meaning of taxable year. the books and records of the section 987 paragraph (b) of this section. (G) As a result of a transaction QBU within the meaning of paragraph (ii) Assumptions of partnership between legal entities (that is, the (b) of this section. liabilities. Solely for purposes of section transfer of an asset, or the assumption (ii) Definition of a disregarded 987, a liability shall be treated as of a liability), even if such transaction transaction. For purposes of this transferred from an indirectly owned

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section 987 QBU if, and to the extent, the books and records of the entity that books and records. Following the sale, the the owner assumes such liability of the owns such eligible QBUs, and have the cash and equipment will be used in Business section 987 partnership provided that euro and the yen, respectively, as their A and Business B, respectively. As a result immediately prior to such assumption, functional currencies. Finally, it is of such sale, the equipment is removed from the books and records of Business A, and is the liability was reflected on the books assumed that DE1 and DE2 are entities recorded on the books and records of and records of the section 987 QBU that are disregarded as entities separate Business B. Similarly, as a result of the sale, within the meaning of paragraph (b) of from their owner for U.S. tax purposes. the cash is removed from the books and this section. For purposes of determining whether records of Business B, and is recorded on the (5) Acquisitions and dispositions of any of the transfers in these examples books and records of Business A. interests in DEs and partnerships. result in remittances, see § 1.987–5. (ii) Analysis. (A) The sale of equipment Solely for purposes of section 987, an between DE1 and DE2 is not regarded for Example 1. Transfer to a directly owned asset or liability shall be treated as Federal tax purposes and therefore is a section 987 QBU. (i) Facts. X owns 100 disregarded transaction. As a result, such sale transferred to a section 987 QBU if, as percent of the interests in DE1. DE1 owns a result of an acquisition (including by is not taken into account under this section Business A. X owns £100 that are not and does not give rise to an item of income, contribution) or disposition of an reflected on the books and records of gain, deduction or loss pursuant to paragraph interest in a section 987 partnership or Business A. Business A is in need of (c)(2)(iii) of this section. However, the cash section 987 DE, such asset or liability is additional capital and, as a result, X loans the and equipment exchanged by DE1 and DE2 reflected on the books and records of the £100 to DE1 (to be used in Business A) in in connection with the sale must be taken section 987 QBU. Similarly, an asset or exchange for a note. into account under this paragraph (c). (ii) Analysis. (A) The loan from X to DE1 (B) The sale of the equipment is a liability shall be treated as transferred is not regarded for U.S. federal tax purposes from a section 987 QBU if, as a result disregarded transaction and, as a result of and therefore is a disregarded transaction. As such disregarded transaction, the equipment of an acquisition or disposition of an a result, the Business A note held by X, and interest in a section 987 partnership or ceases to be reflected on the books and the liability of DE1 under the note, are not records of Business A, and becomes reflected taken into account under this section. section 987 DE, the asset or liability is on the books and records of Business B. However, the £100 of cash that was loaned not reflected on the books and records Therefore, there has been a transfer of the from X to DE1 (and used in Business A) of the section 987 QBU. equipment from DE1’s Business A section pursuant to the note must be taken into (6) Changes in form of ownership. For 987 QBU owned by X to X, and a subsequent account under this paragraph (c). purposes of this paragraph (c), mere transfer of such equipment from X to DE2’s (B) The loan of ÷100 from X to DE1 is a changes in form of ownership of an Business B section 987 QBU, owned by X. disregarded transaction and, as a result of (C) As a result of the sale of equipment eligible QBU shall not result in a such disregarded transaction, the ÷100 is (that is, the disregarded transaction), the cash transfer to or from a section 987 QBU. reflected on the books and records of proceeds cease to be reflected on the books Instead, the determination of whether a Business A. Therefore, there has been a transfer has occurred in such case shall transfer of ÷100 from X to Business A. See and records of Business B, and become be made under paragraph (c)(5) of this § 1.988–1(a)(10)(ii) for the application of reflected on the books and records of section 988 to X as a result of the loan. Business A. Therefore, there has been a section. For example, a transaction with transfer of the cash from DE2’s Business B respect to an eligible QBU that causes a Example 2. Transfer to a directly owned section 987 QBU. (i) Facts. X owns Business section 987 QBU owned by X to X, and a direct owner of the eligible QBU to subsequent transfer of such cash from X to become an indirect owner of such A and Business B. X owns equipment that is used in Business A and is reflected on the DE1’s Business A section 987 QBU, owned eligible QBU, shall not, except to the books and records of Business A. Because by X. extent provided in paragraph (c)(5) of Business A has excess manufacturing Example 4. Transactions between directly this section, result in a transfer to or capacity and X intends to expand the and indirectly owned section 987 QBUs. (i) from a section 987 QBU. See for manufacturing capacity of Business B, the Facts. X owns 50% of the interest in P, a example, Rev. Rul. 99–5 (1999–1 CB equipment formerly used in Business A partnership. Y owns the other 50% interest 434), Rev. Rul. 99–6 (1999–1 CB 432), discontinues being used in Business A and in P. P owns 100% of the interests in DE1 begins being used in Business B. As a result and DE2. DE1 owns Business A and DE2 see § 601.601(d)(2) of this chapter, and owns Business B. X and Y each have a 50% section 708 and the applicable of such equipment being used by Business B, the equipment is removed from the books allocable share of the assets and liabilities of regulations. and records of Business A, and is recorded Business A and Business B, as determined (7) Application of general tax law on the books and records of Business B. under § 1.987–7, that constitute section 987 principles. General tax law principles, (ii) Analysis. As a result of Business B QBUs. In connection with Business A, DE1 including the circular cash flow, step- using the equipment formerly used by licenses intangible property to both DE2 and transaction, and substance-over-form Business A, the equipment ceases to be X. X enters into the license agreement in a doctrines, apply for purposes of reflected on the books and records of transaction other than in its capacity as a determining whether there is a transfer Business A, and becomes reflected on the partner of P and, therefore, the license is of an asset or liability under this books and records of Business B. As a result, considered as occurring between P and one such entries constitute a disregarded who is not a partner within the meaning of paragraph (c). section 707(a). DE2 uses the intangible (8) Interaction with § 1.988–1(a)(10). transaction. Therefore, there has been a transfer of the equipment from the Business property in Business B. Pursuant to the See § 1.988–1(a)(10) for rules regarding A section 987 QBU to X, and a transfer by license agreement, X and DE2 pay a ÷30 and the treatment of an intra-taxpayer X of such equipment to the Business B ÷50 royalty, respectively, to DE1. transfer of a section 988 transaction. section 987 QBU. (ii) Analysis. (A) The license from DE2 to (9) Examples. The following examples Example 3. Intercompany sale of property DE1 is not regarded for U.S. tax purposes illustrate the principles of this between two section 987 QBUs. (i) Facts. X and, as a result, royalty payments under the paragraph (c). For purposes of these owns DE1 and DE2. DE1 and DE2 own license are disregarded transactions. Thus, examples, it is assumed that X and Y are Business A and Business B, respectively. DE1 neither the payment nor the receipt of the domestic corporations, have the dollar owns equipment that is used in Business A royalty pursuant to the license agreement gives rise to an item of income, gain, as their functional currency, and use the and is reflected on the books and records of Business A. For business reasons, DE1 sells deduction or loss pursuant to paragraph calendar year as their taxable year. It is a portion of the equipment used in Business (c)(2)(iii) of this section. However, the ÷50 of also assumed that Business A and A to DE2 for cash. The cash used by DE2 to cash that is paid from DE2 to DE1 pursuant Business B are eligible QBUs, maintain acquire the equipment was generated by to the license agreement must be taken into books and records that are separate from Business B and was reflected on Business B’s account under this paragraph (c).

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(B) As a result of the royalty payment from purchases the 50% interest in DE1. Y’s is used in Business A) constitutes a section DE2 to DE1, ÷50 ceases being reflected on the purchase of 50% of X’s interest in DE1 is 987 QBU. As a result of Y’s acquisition of a books and records of Business B, and treated as the purchase of 50% of Business 50% interest in DE1, 50% of the assets and becomes reflected on the books and records A, which is treated as held directly by X for liabilities of Business A are reflected on the of Business A. Accordingly, there has been a Federal tax purposes. Immediately after the books and records of Y’s section 987 QBU transfer of ÷25 from the Business B section deemed purchase of 50% of Business A, X and, therefore, are treated as if they are 987 QBUs of X and Y, to X and Y, and Y are treated as contributing their transferred by Y to such section 987 QBU. respectively. Similarly, there has been a respective interests in Business A to a Example 8. Termination of a partnership transfer of ÷25 from X and Y to their partnership. See Rev. Rul. 99–5 (situation 1), under section 708(b). (i) Facts. X owns 60% respective Business A section 987 QBUs. (1999–1 CB 434). See § 601.601(d)(2) of this of the interest in P, a partnership. Y owns the (C) The ÷30 royalty payment from X to DE1 chapter. For purposes of this paragraph (c), other 40% interest in P. P owns Business A. is not a disregarded transaction because it is these deemed transactions are not taken into X and Y have a 60% and 40% allocable share regarded for U.S. Federal tax purposes. As a account. of the assets and liabilities of Business A, result, it gives rise to an item of income and (B) As a result of Y’s acquisition of 50% respectively, as determined under § 1.987–7, deduction that must be taken into account in of X’s interest in DE1, a section 987 DE, 50% that constitute section 987 QBUs. On computing taxable income or loss of Business of the assets and liabilities of Business A December 31, year 1, X sells a 50% interest A pursuant to § 1.987–3. In addition, the ceased being reflected on the books and in P to Y. After such sale, X and Y own 10% payment does not give rise to a transfer as records of X’s section 987 QBU. As a result, and 90%, respectively, in P. In addition, after defined in this paragraph (c). such amounts are treated as if they are such sale, X and Y have a 10% and 90% Example 5. Acquisition of an interest in a transferred from X’s section 987 QBU to X. allocable share of the assets and liabilities of partnership. (i) Facts. X owns 50% of the (C) As a result of Y’s acquisition of 50% Business A, respectively, as determined interest in P, a partnership. Y owns the other of the interest in DE1, a section 987 DE, Y under § 1.987–7. 50% interest in P. P owns Business A. X and was allocated 50% of the assets and (ii) Analysis. (A) X’s sale of 50% of the Y each have a 50% allocable share of the liabilities of Business A. Because Y and interests in P to Y causes P to terminate assets and liabilities of Business A as Business A have different functional pursuant to section 708(b). As a result of determined under § 1.987–7, that constitute currencies, Y’s portion of the Business A such termination, P is treated as if it section 987 QBUs. On December 31, year 1, assets and liabilities constitutes a section 987 contributes all of its assets and liabilities to Z, a domestic corporation with the dollar as QBU. Moreover, 50% of the assets and a new partnership in exchange for an interest its functional currency, contributes cash to P liabilities of Business A are reflected on the in the new partnership; and, immediately in exchange for a 20% interest in P. The cash books and records of Y’s section 987 QBU as thereafter, P distributes 10% and 90% of the Z contributes to P is not used in Business A a result of Y’s acquisition of the 50% interest interests in the new partnership to X and Y, and is not reflected on Business A’s books in DE1. Therefore, 50% of the assets and respectively, in liquidation of P. See § 1.708– and records (but is instead reflected on P’s liabilities of Business A are treated as 1(b)(4). For purposes of this paragraph (c), books and records). Immediately after Z’s transferred by Y to Y’s section 987 QBU. these deemed transactions are not taken into contribution of cash to P, Z has a 20% Example 7. Conversion of a DE to a account. allocable share of the assets and liabilities of partnership through a contribution. (i) Facts. (B) As a result of Y’s acquisition of a 50% Business A as determined under § 1.987–7. In X owns 100% of the interests in DE1. DE1 interest in P from X, 50% of the assets and addition, immediately following such owns Business A. On December 31, year 1, liabilities of Business A ceased being contribution X and Y each own a 40% Y contributes property to DE1 in exchange reflected on the books and records of X’s interest in P and have a 40% allocable share for an interest in DE1. The property section 987 QBU and become reflected on the of the assets and liabilities of Business A, as transferred by Y to DE1 is used in Business books and records of Y’s section 987 QBU. determined under § 1.987–7, that constitute A and is reflected on the books and records As a result, 50% of the Business A assets are section 987 QBUs. of Business A. Immediately after such treated as if they are transferred from X’s (ii) Analysis. (A) As a result of Z’s contribution, X and Y each have a 50% section 987 QBU to X. Further, 50% of the acquisition of an interest in P, a section 987 allocable share of the assets and liabilities of Business A assets are treated as if they are partnership, 10% of the assets and liabilities Business A as determined under § 1.987–7. transferred by Y to Y’s section 987 QBU. of Business A ceased being reflected on the (ii) Analysis. (A) For Federal tax purposes Example 9. Transfer of section 987 QBU to books and records of both X’s and Y’s section DE1 is converted to a partnership when Y a partnership. (i) Facts. X owns Business A. 987 QBUs. As a result, such amounts are contributes property to DE1 in exchange for On December 31, year 1, X and Y form P, a treated as if they are transferred from such a 50% interest in DE1. Y’s contribution is partnership. X transfers Business A to P in section 987 QBUs to X and Y. treated as a contribution to a partnership in exchange for a 50% interest in P. Y transfers (B) As a result of Z’s acquisition of the exchange for an ownership interest in the property to P in exchange for the other 50% interest in P, a section 987 partnership, Z was partnership. X is treated as contributing all interest in P. The property Y transfers to P allocated 20% of the assets and liabilities of of Business A to the partnership in exchange is not used in Business A and is not reflected Business A. Because Z and Business A have for a partnership interest. See Rev. Rul. 99– on the books and records of Business A (but different functional currencies, Z’s portion of 5 (situation 2), (1999–1 CB 434). See is instead reflected on the books and records the Business A assets and liabilities § 601.601(d)(2) of this chapter. For purposes of P). After the formation of P, Business A constitutes a section 987 QBU. Moreover, of this paragraph (c), these deemed continues to be an eligible QBU. In addition, 20% of the assets and liabilities of Business transactions are not taken into account. after the formation of P, X and Y each have A are reflected on the books and records of (B) As a result of Y’s acquisition of a 50% a 50% allocable share of the assets and Z’s section 987 QBU as a result of Z’s interest in DE1, 50% of the assets and liabilities of Business A, respectively, as acquisition of the interest in P. Therefore, liabilities of Business A ceased being determined under § 1.987–7. 20% of the assets and liabilities of Business reflected on the books and records of X’s (ii) Analysis. As a result of X contributing A are treated as transferred from Z to Z’s section 987 QBU, and 50% of the assets Business A to P, 50% of the assets and section 987 QBU. contributed by Y to DE1 are reflected on the liabilities of Business A ceased being Example 6. Conversion of a DE to a books and records of such section 987 QBU. reflected on the books and records of X’s partnership through a sale of an interest. (i) As a result, 50% of the Business A assets are section 987 QBU, and became reflected on Facts. X owns 100% of the interests in DE1. treated as if they are transferred from X’s the books and records of Y’s section 987 DE1 owns Business A. On December 31, year section 987 QBU to X. Further, 50% of the QBU. As a result, 50% of the Business A 1, Y acquires 50% of the DE1 interests from assets contributed by Y to DE1 are treated as assets are treated as if they are transferred X for cash. Immediately after such if they are transferred by X to X’s section 987 from X’s section 987 QBU to X. Further, 50% acquisition, Y has a 50% allocable share of QBU. of the Business A assets are treated as if they the assets and liabilities of Business A as (C) Because Y and Business A have are transferred from Y to Y’s section 987 determined under § 1.987–7. different functional currencies, Y’s portion of QBU. (ii) Analysis. (A) For Federal tax purposes the Business A assets and liabilities Example 10. Contribution of assets to a DE1 is converted to a partnership when Y (including the property contributed by Y that corporation. (i) Facts. X owns Business A. On

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December 31, year 1, X forms Z, a domestic pursuant to paragraph (c) of this section, the rate as defined in § 1.987–1(c)(1)(i) and corporation. X and Z do not file a IRS will scrutinize the transaction and may (ii) on the day of transfer. If the asset consolidated tax return. X contributes 50% of disregard the ÷100 purported transfer from transferred is denominated in (or its Business A assets and liabilities to Z in Business A to X for purposes of section 987. determined by reference to) the exchange for 100% of the stock of Z. The Z Example 14. Offsetting positions in section stock is recorded on the books and records 987 QBUs. (i) Facts. X owns Business A and functional currency of the section 987 of Business A. After the contribution, X Business B. Business A and Business B each QBU (for example, cash or note continues to operate Business A, and has the euro as its functional currency. X has denominated in the functional currency Business A continues to maintain separate not made a grouping election under § 1.987– of the section 987 QBU), no translation books and records from X. 1(b)(2)(ii). On January 1, year 1, X borrowed is required. (ii) Analysis. Even though the Z stock is ÷1,000 from a third party lender, recorded (ii) Liabilities. Except as otherwise recorded on the books and records of the liability with respect to the borrowing on provided in this section, a liability of Business A, it is not reflected on the books the books and records of Business A, and the owner that is transferred to a section and records for purposes of section 987 ÷ recorded the 1,000 of borrowed cash on the 987 QBU, shall be translated into the pursuant to paragraph (b)(2) of this section. books and records of Business B. On As a result, there has been a transfer of 50% December 31, year 2, when Business A has section 987 QBU’s functional currency of the assets and liabilities of Business A to $100 of net unrecognized section 987 loss at the spot rate (as defined in § 1.987– X, and a subsequent transfer of such assets and Business B has $100 of net unrecognized 1(c)(1)(i) and (ii)) on the day of transfer. and liabilities to Z. The answer would be the section 987 gain resulting from the change in If the liability transferred is same even if X and Z filed a consolidated exchange rates with respect to the liability denominated in (or determined by return. and the ÷1,000 cash, X terminates the reference to) the functional currency of Example 11. Transfers pursuant to general Business A section 987 QBU. tax principles. (i) Facts. X owns 100 percent the section 987 QBU, no translation is (ii) Analysis. Because Business A and required. of the stock of Y. Y owns 100 percent of the Business B have offsetting positions in the interests in DE1. DE1 owns Business A. X euro, the IRS will scrutinize the transaction (2) Items denominated in the owner’s owns ÷100. Because Business A is in need of to determine if a principal purpose of functional currency. Transactions additional capital, X transfers the ÷100 to Y recording the euro-denominated liability and described in section 988(c)(1)(i) and (ii) as a contribution to capital and, as a result the borrowed euros on the books and records and section 988(c)(1)(C) that are of such transfer, Business A records ÷100 on of Business A and Business B, respectively, denominated in (or determined by its separate books and records. Y did not was the avoidance of tax under section 987. reference to) the owner’s functional record the ÷100 on its separate books and If such a principal purpose is present, the records. currency and that are attributable to a Commissioner may reallocate the items (that section 987 QBU under paragraph (b) of (ii) Analysis. As a result of the contribution is, the euros and the euro-denominated ÷ ÷ of 100 from X to Y, the 100 is reflected on liability) between Business A, Business B, this section, shall not be translated and the books and records of Business A. and X, to reflect the economic substance of shall be carried on the balance sheet Pursuant to paragraph (c)(7) of this section, the transaction. described in § 1.987–4(e) in the owner’s ÷ the 100 is treated as if it was transferred first Example 15. Offsetting positions with functional currency. ÷ from X to Y. Therefore, the 100 recorded on respect to a section 987 QBU and a section the books and records of Business A is 988 transaction. (i) Facts. X owns DE1, and § 1.987–3 Determination of section 987 treated as a transfer from Y to Business A, DE1 owns Business A. On January 1, year 1, taxable income or loss of an owner of a even though there was no transaction X borrows ÷1,000 from a third party lender section 987 QBU. between Y and Business A. See also § 1.988– and records the liability with respect to the (a) Determination of the section 987 1(a)(10)(ii) for the application of section 988 borrowing on its books and records. X taxable income or loss of an owner of a to Y as a result of the transaction. contributes the ÷1,000 loan proceeds to DE1 Example 12. Circular transfers. (i) Facts. X section 987 QBU. Except as otherwise and the ÷1,000 are reflected on the books and owns Business A. On December 30, year 1, provided in this section, the section 987 records of Business A. On December 31, year Business A purports to transfer ÷100 to X. On taxable income or loss of an owner with 2, when Business A has $100 of net January 2, year 2, X purports to transfer ÷50 respect to a section 987 QBU shall be unrecognized section 987 loss resulting from to Business A. On January 4, year 2, X the ÷1,000 cash received from the borrowing, determined in accordance with purports to transfer another ÷50 to Business paragraphs (a)(1) and (a)(2) of this A. As of the end of year 1, X has an and the euro-denominated borrowing, if repaid, would result in $100 of gain under section. unrecognized section 987 loss with respect to (1) In general—(i) Determination of Business A, such that a remittance, if section 988, X terminates the Business A respected, would result in recognition of a section 987 QBU. each item of income, gain, deduction or foreign currency loss under section 987. (ii) Analysis. Because X and Business A loss in the section 987 QBU’s functional (ii) Analysis. Because the transfers by have offsetting positions in the euro, the currency. Except as otherwise provided Business A are offset by a transfer from X that Internal Revenue Service will scrutinize the in this section, the section 987 QBU occurred in close temporal proximity, transaction to determine whether a principal shall determine each item of income, pursuant to paragraph (c) of this section, the purpose of recording the borrowed euros on gain, deduction or loss attributable to IRS will scrutinize the transaction and may the books and records of Business A, or not recording the corresponding euro- such QBU under § 1.987–2(b) in its disregard the purported transfers to and from functional currency under U.S. tax Business A for purposes of section 987. denominated liability on the books and Example 13. Transfers without economic records of Business A, was the avoidance of principles. substance. (i) Facts. X owns Business A and tax under section 987. If such a principal (ii) Translation of items into the Business B. On January 1, year 1, Business purpose is present, the Commissioner may owner’s functional currency. The owner A purports to transfer ÷100 to X. On January reallocate the items (that is, the euros and the shall translate each item determined 4, year 1, X purports to transfer ÷100 to euro-denominated liability) between under this paragraph (a)(1) into its Business B. The account in which Business Business A and X to reflect the economic functional currency as provided in B deposited the ÷100 is used to pay the substance of the transaction. paragraph (b) of this section. operating expenses and other costs of (d) Translation of items transferred to (2) Determination in the case of a Business A. As of the end of year 1, X has a section 987 QBU—(1) In general—(i) section 987 QBU owned indirectly an unrecognized section 987 loss with Assets. Except as otherwise provided in through a partnership—(i) In general. respect to Business A, such that a remittance, if respected, would result in recognition of a this section, the adjusted basis of an Except as otherwise provided in this foreign currency loss under section 987. asset transferred to a section 987 QBU paragraph (a)(2), the taxable income or (ii) Analysis. Because Business A continues shall be translated into the section 987 loss of a section 987 partnership, and to have use of the transferred property, QBU’s functional currency at the spot the distributive share of any owner that

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is a partner in such partnership, shall be the taxable year, the following exchange § 1.987–2(b) that is denominated in (or determined in accordance with the rates shall apply with respect to such determined by reference to) the owner’s provisions of subchapter K of this sale or other disposition: functional currency shall not be chapter. (A) Amount realized—(1) In general. translated and shall be taken into (ii) Determination of each item of Except as otherwise provided in account by the section 987 QBU under income, gain, deduction or loss in the paragraph (b)(2)(ii)(A)(2), the exchange U.S. tax principles in the owner’s eligible QBU’s functional currency. rate to be used in translating the amount functional currency. Except as otherwise provided in this realized of such property shall be the (d) Items of income, gain, deduction section, the section 987 partnership rate provided in paragraph (b)(1) of this or loss that are denominated in a shall determine each item of income, section for the taxable year. nonfunctional currency (other than the gain, deduction or loss reflected on the (2) Certain section 987 marked assets. functional currency of the owner). An books and records of each of its eligible In the case of a section 987 marked asset item of income, gain, deduction or loss QBUs under § 1.987–2(b) in the (other than cash) that was held on the attributable to a section 987 QBU under functional currency of each such QBU. first day of the taxable year, the § 1.987–2(b) that is denominated in (or (iii) Allocation of items of income, exchange rate to be used in translating determined by reference to) a gain, deduction or loss of an eligible the amount realized shall be the rate nonfunctional currency (other than the QBU. The section 987 partnership shall used for such asset in determining the owner’s functional currency) shall be allocate the items of income, gain, owner functional currency net value of translated into the section 987 QBU’s deduction or loss of each eligible QBU the section 987 QBU under § 1.987– functional currency at the spot rate as among its partners in accordance with 4(d)(1)(i)(B) for the preceding taxable defined in § 1.987–1(c)(1)(i) and (ii) on each partner’s distributive share of such year. However, in the case of a section the day such item is properly taken into income, gain, deduction, or loss as 987 marked asset (other than cash) account. determined under subchapter K of this transferred to the section 987 QBU or (e) Section 988 transactions—(1) In chapter. acquired by the section 987 QBU during general. Except as provided in (iv) Translation of items into the the taxable year, the exchange rate to be paragraph (e)(2) of this section, section owner’s functional currency. To the used in translating the amount realized 988 shall apply to the section 988 extent such items are reflected on the shall be the spot rate, as defined in transactions attributable to a section 987 books and records of a section 987 QBU § 1.987–1(c)(1)(i) and (ii), for the day QBU under § 1.987–2(b), and the timing of a partner to whom they are allocated, transferred or acquired. of any gain or loss shall be determined the partner shall adjust the items to (B) Adjusted basis—(1) In general. under the applicable provisions of the conform to U.S. tax principles and Except as otherwise provided in Internal Revenue Code. Such translate the items into the partner’s paragraph (b)(2)(ii)(B)(2), the exchange transactions are section 987 historic functional currency as provided in rate to be used in translating the items as defined in § 1.987–1(e). paragraph (b) of this section. adjusted basis of such property shall be (2) Certain transactions denominated (b) Exchange rates to be used in the historic exchange rate as determined in (or determined by reference to) the translating items of income, gain, under § 1.987–1(c)(3) for such asset. owner’s functional currency are not deduction or loss of a section 987 QBU (2) Certain section 987 marked assets. section 988 transactions. Transactions into the owner’s functional currency— In the case of a section 987 marked asset described in section 988(c)(1)(A)(i) and (1) In general. Except as otherwise (other than cash) that was held on the (ii) and section 988(c)(1)(C) that are provided in this section, the exchange first day of the taxable year, the denominated in (or determined by rate to be used by an owner in exchange rate to be used in translating reference to) the owner’s functional translating an item of income, gain, its adjusted basis shall be the rate used currency and that are attributable to a deduction, or loss of a section 987 QBU for such asset in determining the owner section 987 QBU under § 1.987–2(b) as determined in § 1.987–2(b) into the functional currency net value of the shall not be treated as section 988 owner’s functional currency shall be the section 987 QBU under § 1.987– transactions to such QBU. Thus, no yearly average exchange rate as defined 4(d)(1)(i)(B) for the preceding taxable currency gain or loss shall be recognized in § 1.987–1(c)(2) for the taxable year. year. However, in the case of a section by a section 987 QBU under section 988 Alternatively, the owner may elect 987 marked asset (other than cash) with respect to such items. under § 1.987–1(f) to use the spot rate as transferred to the section 987 QBU or (f) Examples. The following examples defined in § 1.987–1(c)(1)(i) and (ii) for acquired by the section 987 QBU during illustrate the application of this section: the day each item is properly taken into the taxable year, the exchange rate to be account. used in translating the adjusted basis of Example 1. (i) U.S. Corp is a domestic (2) Exceptions—(i) Depreciation, such asset shall be the spot rate, as corporation with the dollar as its functional depletion, and amortization deductions. defined in § 1.987–1(c)(1)(i) and (ii), for currency. U.S. Corp owns French DE, a section 987 DE that has a section 987 branch The exchange rate to be used by the the day transferred or acquired. with the euro as its functional currency. For owner in translating deductions (3) Gain or loss on the sale, exchange purposes of paragraph (b)(1) of this section, allowable with respect to section 987 or other disposition of an interest in a U.S. Corp uses the yearly average exchange historic assets (as defined in § 1.987– section 987 partnership. For purposes of rate under § 1.987–1(c)(2) to translate items 1(e)) for depreciation, depletion, and determining the adjusted basis of a of income, gain, deduction or loss where amortization under the pertinent partner’s interest in a section 987 such rate is appropriate. U.S. Corp also provisions of the Code shall be the partnership and computing gain or loss properly elects to use a spot rate convention historic exchange rate as determined recognized on the sale, exchange or under § 1.987–1(c)(1)(ii) where the spot rate under § 1.987–1(c)(3) for the property to other disposition of such interest, see is otherwise required. Under this convention, items booked during a particular month are which such deductions are attributable. § 1.987–7. translated at the average of the spot rates on (ii) Gain or loss from the sale of (c) Items of income, gain, deduction the first and last day of the preceding month property. In the case of gain or loss or loss that are denominated in the (the ‘‘convention rate’’). Accordingly, gross recognized on a sale or other disposition functional currency of the owner. An sales income is translated at the yearly of property that is reflected on the books item of income, gain, deduction or loss average exchange rate and under paragraph and records of a section 987 QBU during attributable to a section 987 QBU under (b)(2)(ii)(B) of this section the basis of assets

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acquired during a month is translated into ÷1 = $1.05. For the taxable year 2009, French purchase price for each inventory unit is dollars at the convention rate. Assume that DE sells 1,200 units of inventory for a sales ÷1.50. Thus, French DE’s dollar gross sales the yearly average exchange rate for 2009 is price of ÷3 per unit. Assume that the will be computed as follows:

GROSS SALES

÷ ÷/$ 2009 ave. Month # of units exchange rate $

Jan ...... 100 300 ÷1=$1.05 315 Feb ...... 200 600 ÷1=$1.05 630 March ...... 0 0 ÷1=$1.05 0 April ...... 200 600 ÷1=$1.05 630 May ...... 100 300 ÷1=$1.05 315 June ...... 0 0 ÷1=$1.05 0 July ...... 100 300 ÷1=$1.05 315 Aug ...... 100 300 ÷1=$1.05 315 Sept ...... 0 0 ÷1=$1.05 0 Oct ...... 0 0 ÷1=$1.05 0 Nov ...... 100 300 ÷1=$1.05 315 Dec ...... 300 900 ÷1=$1.05 945

1,200 3,600 ...... 3,780

OPENING INVENTORY AND PURCHASES

÷ ÷/$ convention Month # of units exchange rate $

Opening inventory from 2008 ...... 100 150 ÷1=$1.00 150 Purchases: Jan ...... 300 450 ÷1=$1.00 450 Feb ...... 0 0 ÷1=$1.05 0 March ...... 0 0 ÷1=$1.03 0 April ...... 300 450 ÷1=$1.02 459 May ...... 0 0 ÷1=$1.04 0 June ...... 0 0 ÷1=$1.05 0 July ...... 300 450 ÷1=$1.06 477 Aug ...... 0 0 ÷1=$1.05 0 Sept ...... 0 0 ÷1=$1.06 0 Oct ...... 0 0 ÷1=$1.07 0 Nov ...... 300 450 ÷1=$1.08 486 Dec ...... 0 0 ÷1=$1.08 0

Total Purchases ...... 1,200 1,800 ...... 1,872

(ii) French DE uses a first in first out November ($324). Thus, French DE’s cost of Example 2. (i) The facts are the same as in method of accounting for inventory (FIFO). goods sold is $1,860. French DE’s opening Example 1 except that for purposes of Thus, for 2009, French DE is considered to inventory for 2010 is 100 units of inventory paragraph (b)(1) of this section, U.S. Corp have sold the 100 units of opening inventory with a dollar basis of $162. properly elects to use a spot rate convention ($150), the 300 units purchased in January (iii) Accordingly, for purposes of section under § 1.987–1(c)(1)(ii) to translate items of ($450), the 300 units purchased in April 987 French DE has gross income in dollars income, gain, deduction or loss where such ($459), the 300 units purchased in July ($477) rate is appropriate. Thus, French DE’s dollar of $1,920 ($3,780–$1,860). and 200 of the 300 units purchased in gross sales will be computed as follows:

GROSS SALES

÷ ÷/$ convention Sales # of units exchange rate $

Jan ...... 100 300 ÷1=$1.00 300 Feb ...... 200 600 ÷1=$1.05 630 March ...... 0 0 ÷1=$1.03 0 April ...... 200 600 ÷1=$1.02 612 May ...... 100 300 ÷1=$1.04 312 June ...... 0 0 ÷1=$1.05 0 July ...... 100 300 ÷1=$1.06 318 Aug ...... 100 300 ÷1=$1.05 315 Sept ...... 0 0 ÷1=$1.06 0 Oct ...... 0 0 ÷1=$1.07 0 Nov ...... 100 300 ÷1=$1.08 324 Dec ...... 300 900 ÷1=$1.08 972

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GROSS SALES—Continued

÷ ÷/$ convention Sales # of units exchange rate $

1,200 3,600 ...... 3,783

(ii) As in Example 1, French DE’s cost of of ÷1 = $1.05. Accordingly the expenses are QBU shall be determined by the owner goods sold is $1,860. translated as follows: rental expense of $525, annually as provided in paragraph (b) of (iii) Accordingly, for purposes of section salary expense of $315 and utilities expense this section in the owner’s functional 987 French DE has gross income in dollars of $105. of $1,923 ($3,783¥$1,860). Example 8. The facts are the same as in currency. Only assets and liabilities Example 3. The facts are the same as in Example 7 except that U.S. Corp properly reflected on the books and records of the Example 1 except that French DE sold raw elects under paragraph (b)(1) of this section section 987 QBU under § 1.987–2(b) land on November 1, 2009 for ÷10,000. The to use the spot rate to translate items of shall be taken into account. yearly average rate for 2009 was ÷1=$1.05. income and expense. Assume that the (b) Calculation of net unrecognized The land was purchased on October 16, 2007 convention rate for March 2009 is ÷1 = $1.03. section 987 gain or loss of a section 987 for ÷8,000 when the convention rate was Under these facts, U.S. Corp translates the QBU. Net unrecognized section 987 gain ÷1=$1.00. Under paragraph (a)(1) of this ÷500 of rental expense, ÷300 of salary section, French DE will determine the expense and ÷100 of utilities expense at the or loss of a section 987 QBU for a amount realized and basis in euros. Under convention rate of ÷1 = $1.03. Accordingly, taxable year shall equal the sum of— paragraph (a)(1)(ii) of this section, the the expenses are translated as follows: rental (1) The section 987 QBU’s net amount realized is translated into dollars at expense of $515, salary expense of $309 and accumulated unrecognized section 987 the yearly average exchange rate for 2009 as utilities expense of $103. gain or loss for all prior taxable years to provided in paragraph (b)(2)(ii)(A) of this Example 9. The facts are the same as in which these regulations apply as × section (÷10,000 $1.05 = $10,500) and the Example 1 except that during 2009, French determined in paragraph (c) of this DE incurred ÷100 of depreciation expense basis at the convention rate for 2007 as section; and provided in paragraph (b)(2)(ii)(B) of this with respect to a truck. The truck was section and § 1.987–1(c)(3) ÷8,000 × $1 = purchased on January 15, 2008, when the (2) The section 987 QBU’s $8,000). Accordingly, the amount of gain convention rate was ÷1 = $1.02. Under unrecognized section 987 gain or loss reported by U.S. Corp on the sale of the land paragraph (b)(2)(i) of this section, the ÷100 of for the current taxable year as is $2,500 ($10,500¥$8,000). depreciation is translated into dollars at the determined in paragraph (d) of this Example 4. The facts are the same as in historic exchange rate. Since U.S. Corp has section. Example 3 except that U.S. Corp properly properly elected to use a spot rate (c) Net accumulated unrecognized convention, depreciation will be translated in elects under paragraph (b)(1) of this section section 987 gain or loss for all prior to use the spot rate to translate items of accordance with the convention. income, gain, deduction or loss. Accordingly, Accordingly, U.S. Corp translates the ÷100 of taxable years. A section 987 QBU’s net the amount realized will be translated at the depreciation to equal $102. accumulated unrecognized section 987 convention rate on the day of sale. Assume Example 10. (i) The facts are the same as gain or loss for all prior taxable years is that the convention rate for November 2009 in Example 1 except that on January 12, the aggregate of the amounts determined is ÷1 = $1.08. Under these facts, the amount 2009, French DE performed services for a under paragraph (d) of this section for realized is $10,800 (÷10,000 × $1.08) and the U.K. person and received £10,000 in all prior years to which these basis on the day of purchase $8,000 (÷8,000 compensation. The exchange rate on January × 12, 2009, was £1 = ÷1.25. Under paragraph regulations apply, reduced by the $1.00). The amount of gain reported by U.S. amounts taken into account under Corp on the sale of the land is $2,800 (d) of this section, French DE will translate ($10,800 ¥$8,000). such income into euros at the spot rate on § 1.987–5 upon a remittance for all such Example 5. The facts are the same as in January 12, 2009. Accordingly, French DE prior taxable years. This amount shall Example 1 except that on September 15, will take into account ÷12,500 of income include amounts appropriately 2009, French DE provides services to an from services in 2009. Under paragraph (b)(1) considered as net unrecognized unrelated customer and receives a cash of this section, U.S. Corp translates the exchange gain or loss under the payment of ÷2,000 on that day. Under ÷12,500 item of income into dollars at the transition rules of § 1.987–10. yearly average euro to dollar exchange rate. paragraph (b)(1) of this section, U.S. Corp (d) Calculation of unrecognized translates the ÷2,000 item of income into Assume that such exchange rate is ÷1 = dollars at the yearly average exchange rate of $1.10. Accordingly, U.S. Corp translates the section 987 gain or loss of a section 987 ÷1 = $1.05. Accordingly, U.S. Corp will ÷12,500 income from services to equal QBU for a taxable year. The report income of $2,100 from providing $13,750. unrecognized section 987 gain or loss of services. (ii) On October 16, 2009, French DE a section 987 QBU for a taxable year Example 6. The facts are the same as in disposes of the £10,000 for ÷10,000. Under shall be determined under paragraphs Example 5 except that U.S. Corp properly section 988(c)(1)(C), the disposition is a (d)(1) through (7) of this section as elects under paragraph (b)(1) of this section section 988 transaction. Under § 1.988– follows: 2(a)(2), French DE will realize a loss of to use the spot rate to translate items of (1) Step 1: Determine the change in income, gain, deduction or loss. Assume that ÷2,500 (÷10,000 amount realized less the convention rate for September 2009 is ÷1 ÷12,500 basis). Under paragraph (b)(1) of this the owner functional currency net value = $1.06. Under these facts, U.S. Corp section, U.S. Corp translates the ÷2,500 loss of the section 987 QBU for the taxable translates the ÷2,000 item of income into into dollars at the yearly average euro to year ¥(i) In general. The change in the dollars at the convention rate of ÷1 = $1.06. dollar exchange rate. Assume that such owner functional currency net value of Accordingly, U.S. Corp will report income of exchange rate is ÷1 = $1.05. Accordingly, the section 987 QBU for the taxable year $2,120 from providing services. U.S. Corp translates the ÷2,500 section 988 shall equal— loss to equal $2,625. Example 7. The facts are the same as in (A) The owner functional currency Example 1 except that on March 31, 2009, net value of the section 987 QBU, French DE incurs ÷500 of rental expense, § 1.987–4 Determination of net ÷300 of salary expense and ÷100 of utilities unrecognized section 987 gain or loss of a determined in the functional currency expense. Under paragraph (b)(1) of this section 987 QBU. of the owner under paragraph (e) of this section, U.S. Corp translates these items of (a) In general. The net unrecognized section, on the last day of the current expense at the yearly average exchange rate section 987 gain or loss of a section 987 taxable year; less

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(B) The owner functional currency net the spot exchange rate, as defined in § 1.987–3 for the taxable year, the value of the section 987 QBU, § 1.987–1(c)(1), on the day of transfer. aggregate amount determined in determined in the functional currency (B) In the case of a transfer of a paragraphs (d)(1) through (d)(5) of this of the owner under paragraph (e) of this section 987 historic asset, the historic section shall be increased by such section on the last day of the preceding exchange rate for such asset as defined section 987 taxable loss. taxable year. This amount shall be zero in § 1.987–1(c)(3). (7) Step 7: Decrease the aggregate in the case of the QBU’s first taxable (3) Step 3: Decrease the aggregate amount determined in steps 1 through year. amount determined in steps 1 and 2 by 5 by the section 987 taxable income of (ii) Year section 987 QBU is the owner’s transfers to the section 987 the section 987 QBU for the taxable terminated. If a section 987 QBU is QBU—(i) In general. The aggregate year. In the case of section 987 taxable terminated under the rules of § 1.987–8 amount determined in paragraphs (d)(1) income of the section 987 QBU during an owner’s taxable year, the and (d)(2) of this section shall be computed under § 1.987–3 for the owner functional currency net value of decreased by the total amount of assets taxable year, the aggregate amount the section 987 QBU as provided in transferred from the owner to the determined in paragraphs (d)(1) through paragraph (d)(1)(i)(A) of this section section 987 QBU during the taxable year (d)(5) of this section shall be decreased shall be determined on the day the determined in the functional currency by such section 987 taxable income. section 987 QBU is terminated. of the owner as provided in paragraph (e) Determination of the owner (2) Step 2: Increase the aggregate (d)(3)(ii) of this section. functional currency net value of a (ii) Total of all amounts transferred amount determined in step 1 by the section 987 QBU—(1) In general. The from the owner to the section 987 QBU assets transferred from the section 987 owner functional currency net value of during the taxable year. The total QBU to its owner–(i) In general. The a section 987 QBU on the last day of a amount of assets transferred from the aggregate amount determined in taxable year shall equal the aggregate owner to the section 987 QBU for the paragraph (d)(1) of this section shall be amount of the QBU’s functional taxable year shall equal the aggregate increased by the total amount of assets currency and the basis of each asset on of— described in paragraph (d)(2)(ii) of this the section 987 QBU’s balance sheet on (A) The total amount of functional that day, less the aggregate amount of section transferred from the section 987 currency of the owner transferred to the each liability on the section 987 QBU’s QBU to the owner during the taxable section 987 QBU during the taxable balance sheet on that day translated, if year translated into the owner’s year; and necessary, into the owner’s functional functional currency as provided in (B) The adjusted basis, determined in currency as provided in paragraph (e)(2) paragraph (d)(2)(iii) of this section. the functional currency of the owner, of of this section. Such amount shall be (ii) Assets transferred from the section any asset transferred to the section 987 determined as follows: 987 QBU to the owner during the QBU during the taxable year (after (i) The owner, or section 987 QBU on taxable year. The assets transferred from taking into account § 1.988–1(a)(10)). behalf of the owner, shall prepare a the section 987 QBU to the owner for (4) Step 4: Decrease the aggregate balance sheet for the relevant date from the taxable year shall equal the amount determined in steps 1 through the section 987 QBU’s books and aggregate of— 3 by the amount of liabilities transferred records (within the meaning of (A) The amount of the section 987 from the section 987 QBU to the owner. § 1.989(a)–1(d)) as recorded in the QBU’s functional currency and the The aggregate amount determined in section 987 QBU’s functional currency adjusted basis of any section 987 paragraphs (d)(1) through (d)(3) of this showing all assets and liabilities marked asset (as defined in § 1.987– section shall be decreased by the reflected on such books and records as 1(d)) transferred from the section 987 aggregate amount of liabilities provided in § 1.987–2(b). Assets and QBU to the owner during the taxable transferred from the section 987 QBU to liabilities denominated in the functional year determined in the functional the owner. The amount of such currency of the owner shall be reflected currency of the section 987 QBU and liabilities shall be translated into the on the balance sheet in the owner’s translated into the owner’s functional functional currency of the owner at the functional currency. currency as provided in paragraph spot exchange rate, as defined in (ii) The owner, or section 987 QBU on (d)(2)(iii)(A) of this section; and § 1.987–1(c)(1), on the day of transfer. behalf of the owner, shall make (B) The adjusted basis of any section (5) Step 5: Increase the aggregate adjustments necessary to conform the 987 historic asset (as defined in § 1.987– amount determined in steps 1 through items reflected on the balance sheet 1(e)) transferred to the owner during the 4 by amount of liabilities transferred described in paragraph (e)(1)(i) of this taxable year determined in the from the owner to the section 987 QBU. section to United States generally functional currency of the section 987 The aggregate amount determined in accepted accounting principles and tax QBU and translated into the owner’s paragraphs (d)(1) through (d)(4) of this accounting principles. functional currency as provided in section shall be increased by the (iii) The owner, or section 987 QBU paragraph (d)(2)(iii)(B) of this section. aggregate amount of liabilities on behalf of the owner, shall translate Such amount shall be adjusted to take transferred by the owner to the section the asset and liability amounts on the into account the proper translation of 987 QBU. The amount of such liabilities adjusted balance sheet described in depreciation, depletion and shall be translated into the functional paragraph (e)(1)(ii) of this section into amortization as provided in § 1.987– currency of the owner, if required, at the the functional currency of the owner in 3(b)(2)(i). spot exchange rate, as defined in accordance with paragraph (e)(2) of this (iii) Translation of amounts § 1.987–1(c)(1)(i) and (ii), on the day of section. Assets and liabilities transferred from the section 987 QBU to transfer. denominated in the functional currency the owner. In the case of a transfer from (6) Step 6: Increase the aggregate of the owner are not translated. the section 987 QBU to an owner of any amount determined in steps 1 through (2) Translation of balance sheet items asset the following exchange rates shall 5 by the section 987 taxable loss of the into the owner’s functional currency. be used: section 987 QBU for the taxable year. In The amount of the section 987 QBU’s (A) In the case of an amount described the case of a section 987 taxable loss of functional currency, the basis of an in paragraph (d)(2)(ii)(A) of this section, the section 987 QBU computed under asset, or the amount of a liability (other

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than an asset or liability reflected on the Branch and raw land with a basis of $500. Japan Branch determined in dollars on the balance sheet in the functional currency Japan Branch immediately purchases last day of 2009, less the owner functional of the owner) shall be translated as ¥100,000 with the $1,000. On the same day, currency net value of Japan Branch ¥ follows: Japan Branch borrows 10,000. Assume that determined in dollars on the last day of the for the taxable year 2009, Japan Branch earns preceding taxable year. (i) Section 987 marked item. A section ¥2,000 per month (total of ¥12,000 for the six 987 marked item as defined in § 1.987– (A) The owner functional currency net month period from July 1, 2009, through value of Japan Branch determined in dollars 1(d) shall be translated into the owner’s December 31, 2009) for providing services on the last day of the current taxable year is functional currency at the spot exchange and incurs ¥333.33 per month (total of ¥2,000 determined under paragraph (e) of this when rounded for the six month period from rate as defined in § 1.987–1(c)(1)(i) and section. Such amount is the aggregate of the (ii) on the last day of the taxable year. July 1, 2009, through December 31, 2009) of related expenses. Assume that all items of basis of each asset on Japan Branch’s balance (ii) Section 987 historic item. A sheet on December 31, 2009, less the section 987 historic item as defined in income earned and expenses incurred by Japan Branch during 2009 are received and aggregate of the amount of each liability on § 1.987–1(e) shall be translated into the paid, respectively, in yen. Further, assume the Japan Branch’s balance sheet on that day, owner’s functional currency at the that the ¥12,000 of income when properly translated into dollars as provided in historic exchange rate as defined in translated under the monthly convention paragraph (e)(2) of this section. § 1.987–1(c)(3). equals $109.08 and that the ¥2,000 of related (B) For this purpose, Japan Branch will (f) Examples. The provisions of this expenses equal $18.18. Thus, Japan Branch’s show the following assets and liabilities on section are illustrated by the following income translated into dollars equals $90.90. its balance sheet for December 31, 2009: examples. Unless otherwise indicated, Assume that the spot exchange rate on the (1) Cash of ¥120,000 [($1,000 transferred all items are assumed to be reflected on December 1, 2009, is $1 = ¥120 (¥1 = and immediately converted to ¥100,000) + the books and records, within the $0.00833). ¥10,000 borrowed + ¥12,000 income from (ii) Under paragraph (a) of this section, services ¥ ¥2,000 of expenses]. meaning of § 1.987–2(b), of the relevant U.S. Corp must compute the net section 987 QBU. (2) Raw land with a basis of ¥50,000. unrecognized section 987 gain or loss of (3) Liabilities of ¥10,000. Example 1. (i) U.S. Corp is a calendar year Japan Branch for 2009. Since this is Japan (C) Under paragraph (e)(2) of this section, domestic corporation with the dollar as its Branch’s first taxable year, the net U.S. Corp will translate these items as unrecognized section 987 gain or loss as functional currency. On July 1, 2009, U.S. follows. The cash of ¥120,000 is a section 987 defined under paragraph (b) of this section is Corp establishes Japan Branch that has the marked asset and the ¥10,000 liability is a the branch’s unrecognized section 987 gain yen as its functional currency. Japan Branch section 987 marked liability as defined in is a section 987 QBU of U.S. Corp. U.S. Corp or loss for 2009 as determined in paragraph § 1.987–1(d). These items are translated into properly elects to use a spot rate convention (d) of this section. The calculation under under § 1.987–1(c)(1)(ii) with respect to Japan paragraph (d) of this section is made as dollars on December 31, 2009, using the spot Branch. Under this convention, the spot rate follows: rate on December 1, 2009 of ¥1 =$ 0.00833. for any transaction occurring during a month (iii) Step 1. Under paragraph (d) of this The raw land is a section 987 historic asset is the spot rate on the first day of the month. section, U.S. Corp must determine the change as defined in § 1.987–1(e) and is translated U.S. Corp also elects under § 1.987–3(b)(1) to in the owner functional currency net value of into the dollars at the convention rate for the use this convention to translate items of Japan Branch for the year 2009 in dollars. day of transfer (¥1 = $0.01). Thus, the owner income, gain, deduction, or loss into dollars. The change in the owner functional currency functional currency net value of Japan On July 1, 2009, when $1 = ¥100 (or ¥1 = net value of Japan Branch for 2009 is equal Branch on December 31, 2009, in dollars is $0.01), U.S. Corp transfers $1,000 to Japan to the owner functional currency net value of $1,416.60 determined as follows:

Asset Amount in ¥ Translation rate Amount in $

Cash ...... 4 120,000 12/01/09 spot convention rate on 12/31/09 of 999.60 ¥1=$0.00833. Land ...... 50,000 Historic rate on 7/1/09 of ¥1=$0.01 ...... 500.00

Total assets ...... 1,499.60 Liability: Bank Loan...... 10,000 12/01/09 spot convention rate on 12/31/09 of ¥1 = 83.30 $0.00833.

Total liabilities ...... 83.30 Owner functional currency net value of Japan Branch on ...... 1,416.30 December 31, 2009 in dollars.

(D) Under paragraph (d)(1) of this section, Accordingly, the change in owner functional change in the $1,416.30 determined in step the change in owner functional currency net currency net value of Japan Branch for 2009 1. value of Japan Branch for 2009 is equal to the is $1,416.30. (v) Step 3. Under paragraph (d)(3) of this owner functional currency net value of the (iv) Step 2. Under paragraph (d)(2) of this section, the aggregate amount determined in branch determined in dollars on December section, the aggregate amount determined in paragraphs (d)(1) and (2) of this section (steps 31, 2009 ($1,416.30) less the owner paragraph (d)(1) of this section (step 1) is 1–2) is decreased by the total amount of functional currency net value of the branch increased by the total amount of assets assets transferred from the owner to the determined in dollars on the last day of the described in paragraph (d)(2)(ii) of this section 987 QBU during the taxable year as preceding taxable year. Since this is the first section transferred from the section 987 QBU determined in paragraph (d)(3)(ii) of this taxable year of Japan Branch, the owner to the owner during the taxable year section in dollars. On July 1, 2009, U.S. Corp functional currency net value of Japan translated into the owner’s functional transferred to Japan Branch $1,000 (which Branch determined in dollars on the last day currency as provided in paragraph (d)(2)(iii) Japan Branch immediately converted into of the preceding taxable year is zero under of this section. Since no such amounts were ¥100,000) and raw land with a basis of $500 paragraph (d)(1)(i)(B) of this section. transferred under these facts, there is no (equal to ¥50,000 on the day of transfer).

4 Opening cash of ¥100,000 + ¥10,000 borrowed + ¥12,000 income from services ¥ ¥2,000 expenses.

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Thus, the step 2 amount of $1,416.30 is Kingdom through UK Branch. UK Branch has (B) Plant purchased in May 2007 with an reduced by $1,500.00 to equal ($83.70). the pound as its functional currency and is adjusted basis of £1000; (vi) Steps 4, 5 and 6. Since no liabilities a section 987 QBU. U.S. Corp properly elects (C) A machine purchased in May 2007 were transferred by U.S. Corp to Japan to use a spot rate convention under § 1.987– with an adjusted basis of £200; Branch or vice versa, the amount determined 1(c)(1)(ii). Under this convention, the spot (D) Inventory of 100 units manufactured in after applying paragraphs (d)(1) through rate for any transaction occurring during a December 2008 with a basis of £100; (d)(5) of this section is ($83.70). Further, month is the average of the pound spot rate (E) Portfolio stock (as defined in § 1.987– paragraph (d)(6) of this section does not and the 30-day forward rate for pounds on 2(b)(2)(ii)) in ABC Corporation purchased in apply since Japan Branch does not have a the next-to-last Thursday of the preceding September 2008 with a basis of £158; and section 987 taxable loss. month. Pursuant to § 1.987–3(b)(1), U.S. Corp (F) $50 acquired in 2008 (and held in a (vii) Step 7. Under paragraph (d)(7) of this section, the aggregate amount determined uses the yearly average exchange rate as non-interest bearing account). after applying paragraphs (d)(1) through defined in § 1.987–1(c)(2) to translate items With respect to liabilities, UK Branch has (d)(5) of this section (steps 1–5) is decreased of income, gain, deduction, or loss into £50 of long-term debt entered into in 2007 by the section 987 taxable income of Japan dollars for the taxable year, where with F Bank, an unrelated bank. The plant, Branch of $90.90. Accordingly, the appropriate. The yearly average exchange machine, inventory, stock and dollars are unrecognized section 987 loss of Japan rate for 2009 was £1 = $1.05. The closing section 987 historic assets as defined in Branch for 2009 is $174.60 balance sheet of UK Branch for the prior year § 1.987–1(e). The cash of £100 and long-term (¥$83.70¥$90.90). (2008) reflected the following assets and debt are section 987 marked items as defined Example 2. (i) U.S. Corp, a calendar year liabilities. With respect to assets, UK Branch under § 1.987–1(d). Assume the U.S. Corp domestic corporation with the dollar as its held— translated UK Branch’s 2008 closing balance functional currency, operates in the United (A) Cash of £100; sheet as follows:

Assets Amount in £ Translation Rate Amount in $

Cash ...... 100 Spot convention rate in Dec. 2008 £1 = $1 ...... 100.00 Plant ...... 1,000 Historic rate-2007 May convention rate £1= $0.90 ...... 900.00 Machine ...... 200 Historic rate-2007 May convention rate £1= $0.90 ...... 180.00 Stock ...... 158 Historic rate-2008 Sept. convention rate £1= $.95 ...... 150.00 Inventory ...... 100 Historic rate-2008 Dec. convention rate £1 = $1 ...... 100.00 Dollars ...... $50 Dollars are not translated ...... 50.00

Total assets ...... 1,480.00 Liabilities: Bank Loan ...... £50 Spot convention rate in Dec. 2008 £1 = $1 ...... 50.00

Total liabilities ...... 50.00 2008 ending owner functional cur- ...... 1,430 rency net value (in dollars).

(ii) UK Branch uses the first in first out translated at the December 2009 monthly and paid, respectively, in pounds. The yearly method of accounting for inventory. In 2009, convention rate is $110; that depreciation average exchange rate for 2009 is £1 = $1.05. UK Branch sold 100 units of inventory for a with respect to the plant is £33 and for the Under § 1.987–3, UK Branch’s section 987 5 total of £300 and purchased another 100 machine £40 ; and that UK Branch incurred taxable income or loss is determined as units of inventory in December 2009 for £30 of business expenses during 2009. follows: £100. Assume that the dollar basis of the Assume all items of income earned and inventory purchased in December 2009 when expenses incurred during 2009 are received

Item Amount in £ Translation Rate Amount in $

Gross receipts ...... 300 2009 yearly ave. rate £1 = $1.05 ...... 315.00 Less: COGS ...... (100) Historic rate-Dec. 2008 convention rate £1= $1 ...... (100.00)

Gross income ...... 200 ...... 215.00 Dep: Plant ...... (33) Historic rate-May 2007 convention rate £1= $0.90 ...... (29.70) Machine ...... (40) Historic rate-May 2007 convention rate £1= $0.90 ...... (36.00) Other expenses ...... (30) 2009 yearly ave. rate £1 = $1.05 ...... (31.50)

Total expenses ...... 97.20 Section 987 taxable income ...... 117.80

Accordingly, UK Branch has $117.80 of convention exchange rate for December 2009 (iv) The unrecognized section 987 gain or section 987 taxable income. is £1 = $1.10. Finally, assume that U.S. loss of UK Branch for 2009 is determined as (iii) Assume that in December 2009, UK Corp’s net accumulated unrecognized section follows: Branch transferred $20 and £30 to U.S. Corp 987 gain or loss for all prior taxable years as (A) Step 1: Determine the change in owner and that U.S. Corp transferred a computer determined in paragraph (c) of this section is functional currency net value of UK Branch. with a basis of $10 to UK Branch. The $30. Under paragraph (d)(1) of this section, the

5 The depreciation assumptions are for illustrative purposes only and may not be consistent with true depreciation rates.

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change in owner functional currency net Branch determined under paragraph (e) of The owner functional currency net value of value for the taxable year must be this section on the last day of 2009, less the UK Branch on December 31, 2009, and the determined. This amount is equal to the owner functional currency net value of UK change in owner functional currency net owner functional currency net value of UK Branch determined on the last day of 2008. value is determined as follows:

Asset Amount in £ Translation rate Amount in $

Cash ...... 6 240 Spot convention rate in Dec. 2009 £1 = $1.10 ...... 264.00 Plant ...... 7 967 Historic rate-May 2007 convention rate £1 = $0.90 ...... 870.30 Machine ...... 8160 Historic rate-May 2007 convention rate £1 = $0.90 ...... 144.00 Inventory ...... 100 Historic rate—Dec. 2009 convention rate £1 = $1.10 ...... 110.00 Computer ...... 9 Historic rate—Dec. 2009 convention rate £1 = $1.10 ...... 10.00 Stock ...... 158 Historic rate—Sept. 2008 convention rate £1 = $.95 ...... 150.00 Dollars ...... 9 $ 30 Dollars are not translated ...... 30.00

Total assets ...... 1,578.30 Liability: Bank Loan ...... £50 Spot convention rate in Dec. 2009 £1 = $1.10 ...... 55.00

Total liabilities ...... 55.00 2009 ending owner functional cur- ...... 1,523.30 rency net value (in dollars). Less: 2008 ending owner functional ...... ($1,430.00) currency net value (in dollars).

Change in owner functional currency ...... 93.30 net value.

(B) Step 2: Increase the aggregate amount step 1 must be increased by the total amount provided in paragraph (d)(2)(iii) of this described in step 1 by each owner’s share of of assets described in paragraph (d)(2)(ii) of section. The amount of assets transferred assets transferred by the section 987 QBU to this section transferred from UK Branch to from UK Branch to U.S. Corp during 2009 is its owners. Under paragraph (d)(2) of this U.S. Corp during the taxable year, translated determined as follows: section, the aggregate amount determined in into U.S. Corp’s functional currency as

Asset Amount in £ Translation rate Amount in $

£30 currency ...... 30 Spot convention rate in Dec. 2009 £1 = $1.10 ...... 33.00 $20 currency ...... $20 Dollars are not translated ...... 20.00

Total ...... 53.00

(C) Step 3: Decrease the aggregate amount amount determined in steps 1 and 2 must be paragraph (d)(3)(ii) of this section. The described in steps 1 and 2 by the owner’s decreased by the total amount of all assets amount of assets transferred from U.S. Corp transfers to the section 987 QBU. Under transferred from U.S. Corp to UK Branch to UK Branch is determined as follows: paragraph (d)(3) of this section, the aggregate during the taxable year as determined in

Asset Amount in £ Translation rate Amount in $

Computer ...... £9 Spot convention rate in Dec. 2009 £1 = $1.10 ...... $10.00

Total ...... 10.00

(D) Step 4: Decrease the aggregate amount determined in steps 1 through 4 must be (G) Step 7: Decrease the aggregate amount determined in steps 1 through 3 by the increased by the aggregate amount of determined in steps 1 through 5 by the amount of liabilities transferred by the liabilities transferred by U.S. Corp to UK section 987 taxable income of the section 987 section 987 QBU to the owner. Under Branch. Under these facts, such amount is $0. QBU for the taxable year. Under paragraph paragraph (d)(4) of this section, the aggregate (F) Step 6: Increase the aggregate amount (d)(7) of this section, the aggregate amount amount determined in steps 1 through 3 must determined in steps 1 through 5 by the determined in steps 1 through 5 must be be decreased by the aggregate amount of section 987 taxable loss of the section 987 decreased by the section 987 taxable income liabilities transferred by UK Branch to U.S. QBU for the taxable year. Under paragraph of UK Branch. The amount of UK Branch’s Corp. Under these facts, such amount is $0. (d)(6) of this section, the aggregate amount taxable income, as determined above, is (E) Step 5: Increase the aggregate amount determined in steps 1 through 5 must be $117.80. increased by the section 987 taxable loss of determined in steps 1 through 4 by the (v) Summary. Taking steps 1 through 7 into amount of liabilities transferred by the owner UK Branch. Since UK Branch had no such account, the amount of U.S. Corp’s to the section 987 QBU. Under paragraph taxable loss in 2009, paragraph (d)(6) of this unrecognized section 987 gain or loss with (d)(5) of this section, the aggregate amount section does not apply.

6 £100 on the closing 2008 balance sheet plus 7 £1,000 on the closing 2008 balance sheet less 9 Dollars are reduced by $20 transferred to U.S. £300 gross receipts less £100 inventory cost, less £33 depreciation. Corp. £30 of additional expenses, less £30 transferred to 8 £200 on the closing 2008 balance sheet less £40 U.S. Corp. depreciation.

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respect to UK Branch in 2009 is computed as follows:

Step Amount in $ Balance

1 ...... + 93.30 $93.30 2 ...... + 53.00 146.30 3 ...... ¥10.00 136.30 4 ...... ¥0 136.30 5 ...... + 0 136.30 6 ...... + 0 136.30 7 ...... ¥117.80 18.50

Thus, U.S. Corp’s unrecognized section (i) The total of all amounts transferred a transfer of assets from the owner to the 987 gain in 2009 with respect to U.K. Branch from the section 987 QBU to the owner section 987 QBU in an amount equal to is $18.50. As of the end of 2009, before taking during the taxable year, as determined the amount of such liabilities. into account the recognition of any section in paragraph (d) of this section; over (f) Determination of owner’s adjusted 987 gain or loss under § 1.987–5, U.S. Corp’s basis in transferred assets—(1) In net unrecognized section 987 gain is $48.50 (ii) The total of all amounts (i.e., $30 accumulated from prior years, plus transferred from the owner to the general. The owner’s adjusted basis in $18.50 in 2009). section 987 QBU during the taxable an asset received in a transfer from the year, as determined in paragraph (e) of section 987 QBU (whether or not such § 1.987–5 Recognition of section 987 gain this section. transfer is made in connection with a or loss. (2) Day when a remittance is remittance as defined in paragraphs (c) (a) Recognition of section 987 gain or determined. An owner’s remittance of this section) shall be determined loss by the owner of a section 987 QBU. from a section 987 QBU shall be under the rules prescribed in paragraphs The taxable income of an owner of a determined on the last day of the (f)(2) through (f)(4) of this section. section 987 QBU shall include the owner’s taxable year (or, if earlier, on (2) Section 987 marked asset. The owner’s section 987 gain or loss the day the section 987 QBU is basis of a section 987 marked asset shall recognized with respect to the section terminated under § 1.987–8). be determined in the owner’s functional 987 QBU for the taxable year. For any (3) Termination. A termination of a currency and shall be the same as the taxable year, the owner’s section 987 section 987 QBU as determined under amount determined under § 1.987– gain or loss recognized with respect to § 1.987–8 is treated as a remittance of all 4(d)(2)(ii)(A). a section 987 QBU shall be equal to— the gross assets of the section 987 QBU (3) Section 987 historic asset. The (1) The owner’s net unrecognized to the owner on the date of such basis of a section 987 historic asset shall section 987 gain or loss of the section termination. See § 1.987–8(d). be determined in the owner’s functional 987 QBU determined under § 1.987–4 Accordingly, the remittance proportion currency and shall be the same as the on the last day of such taxable year (or, in the case of a termination is 1. amount determined under § 1.987– if earlier, on the day the section 987 (d) Total of all amounts transferred 4(d)(2)(ii)(B). QBU is terminated under § 1.987–8); from the section 987 QBU to the owner (4) Partner’s adjusted basis in multiplied by for the taxable year. For purposes of distributed assets. See also section 732 (2) The owner’s remittance proportion paragraph (c)(1)(i) of this section, the and § 1.987–7 for purposes of for the taxable year, as determined total of all amounts transferred from the determining an owner’s adjusted basis under paragraph (b) of this section. section 987 QBU to the owner for the of an asset distributed from a section (b) Remittance proportion. The taxable year shall be determined in the 987 QBU owned indirectly through a owner’s remittance proportion with owner’s functional currency under section 987 partnership. respect to a section 987 QBU for a § 1.987–4(d)(2) with reference to the (g) Examples. The following examples taxable year is the quotient, equal to— adjusted basis of the assets transferred. illustrate the calculation of section 987 (1) The remittance, as determined Solely for this purpose, the amount of gain or loss under this section: under paragraph (c) of this section, to liabilities transferred from the owner to Example 1. (i) U.S. Corp, a calendar year the owner from the section 987 QBU for the section 987 QBU determined under domestic corporation with the dollar as its such taxable year; divided by § 1.987–4(d)(5) shall be treated as a functional currency, operates in the U.K. (2) The total adjusted basis of the transfer of assets from the section 987 through U.K. DE, an entity disregarded as an gross assets of the section 987 QBU as QBU to the owner in an amount equal entity separate from its owner under of the end of the taxable year (or, if to the amount of such liabilities. §§ 301.7701–1 through 301.7701–3 of this chapter. U.K. DE has a section 987 branch terminated prior to the end of such (e) Total of all amounts transferred (U.K. section 987 branch) with the pound as taxable year under § 1.987–8, the day of from the owner to the section 987 QBU its functional currency. During year 2, the termination) that are reflected on its for the taxable year. For purposes of following transfers took place between U.S. year-end balance sheet (or, if terminated paragraph (c)(1)(ii) of this section, the Corp and U.K. section 987 branch. On prior to the end of such taxable year total of all amounts transferred from the January 5, year 2, U.S. Corp transferred to under § 1.987–8, the balance sheet on owner to the section 987 QBU for the U.K. section 987 branch $300 (which the the day terminated), translated into the taxable year shall be determined in the branch used during the year to purchase owner’s functional currency as provided owner’s functional currency under services). On March 5, year 2, U.K. section in § 1.987–4(e)(2) and increased by the § 1.987–4(d)(3) with reference to the 987 branch transferred a machine to U.S. Corp. Assume that the pound adjusted basis amount of the remittance. adjusted basis of the assets transferred. of the machine when properly translated into (c) Remittance—(1) Definition. A Solely for this purpose, the amount of dollars under §§ 1.987–4(d)(2)(ii)(B) and remittance shall be determined in the liabilities transferred from the section paragraph (d) of this section is $500. On owner’s functional currency and shall 987 QBU to the owner determined November 1, year 2, U.K. section 987 branch equal the excess, if any, of— under § 1.987–4(d)(4) shall be treated as transferred pound cash to U.S. Corp. Assume

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that the dollar amount of the pounds when Total gross assets + re- amount of the remittance for year 2 in the properly translated under § 1.987– mittance ...... 5,850 owner’s functional currency on the last day 4(d)(2)(ii)(A) and paragraph (d) of this section of year 2. The amount of the remittance for (C) Computation of remittance proportion. is $2,300. On December 7, year 2, U.S Corp year 2 is $220 determined as follows: Under paragraph (b) of this section, U.K. transferred a truck to U.K. section 987 branch Transfers from U.K. section 987 branch to section 987 branch must compute the with an adjusted basis of $2,000. U.S. Corp in dollars: remittance proportion as follows: (ii) Assume that at the end of year 2, U.K. Amount of remittance ...... $500 Cash (U.K. pounds) ...... $300 section 987 branch holds assets, properly Cash (U.S. dollars) ...... 20 translated into the owner’s functional Total basis of U.K. section 987 branch’s gross assets at end of currency pursuant to § 1.987–4(e)(2), 320 consisting of a computer with a pound Year 2, increased by amount adjusted basis equivalent to $500, a truck of remittance ...... 5,850 Transfers from U.S. Corp to U.K. section with a pound adjusted basis equivalent to Remittance/gross assets ...... 0.085 987 branch in dollars: $2,000, and pound cash equivalent to $2,850. Remittance proportion ...... 0.085 Computer ...... $100 In addition, assume that U.K. section 987 (D) Computation of section 987 gain or Computation of amount of re- branch has a pound liability entered into in loss. The amount of U.S. Corp’s section 987 mittance: year 1 with Bank A. The liability, when gain or loss that must be recognized with Aggregate transfers from U.K. translated into the owner functional currency respect to U.K. section 987 branch is section 987 branch to U.S. pursuant to § 1.987–4(e)(2), is equivalent to determined under paragraph (a) of this Corp ...... $320 $200. All such assets and liabilities are section. Less: aggregate transfers from reflected on the books and records of U.K. Net unrecognized section 987 U.S. Corp to U.K. branch ...... ($100) section 987 branch. Assume that the net gain ...... $80 unrecognized section 987 gain for U.K. Remittance proportion ...... × 0.085 Total remittance: ...... $220 section 987 branch as determined under Computation of amount of remittance: § 1.987–4 as of the last day of year 2 is $80. U.S. Corp’s section 987 gain Aggregate transfers from U.K. (iii) U.S. Corp’s section 987 gain with for Year 2: ...... $6.80 respect to U.K. section 987 branch is section 987 branch to U.S. determined as follows: Example 2. U.S. Corp, a calendar year Corp ...... $320 (A) Computation of amount of remittance. domestic corporation with the dollar as its Less: aggregate transfers from Under paragraphs (c)(1) and (2) of this functional currency, operates in the U.K. U.S. Corp to U.K. branch ...... 100 section, U.S. Corp must determine the through U.K. DE, an entity disregarded as an amount of the remittance for year 2 in the entity separate from its owner. U.K. DE has Total remittance: ...... 220 a section 987 branch (U.K. section 987 owner’s functional currency (dollars) on the (B) Computation of branch gross assets last day of year 2. The amount of the branch) with the pound as its functional currency. During year 2, the following plus remittance. Under paragraph (b)(2) of remittance for year 2 is $500, determined as this section, U.K. section 987 branch must follows: transfers took place between U.S. Corp and U.K. section 987 branch. On March 1, year determine the total basis of its gross assets as Transfers from U.K. section 987 branch to are reflected on its year-end balance sheet U.S. Corp in dollars: 2, U.S. Corp transferred to U.K. section 987 branch a computer with a basis of $100. On translated into dollars and must increase this Machine ...... $500 November 1, year 2, U.K. section 987 branch amount by the amount of the remittance. Cash (U.K. pounds) ...... 2,300 transferred pounds to U.S. Corp. Assume that Total pound basis of U.K. section 987 the dollar amount of the pounds when branch’s gross assets translated into dollars $2,800 properly translated under § 1.987– at end of Year 2: Transfers from U.S. Corp to U.K. section 4(d)(2)(ii)(A) and paragraph (d) of this section Plant ...... $1,000 987 branch in dollars: is $300. On the same day, U.K. section 987 Cash (U.K. pounds) ...... 100 Cash (U.S. dollars) ...... $300 branch transferred of $20 to U.S. Corp. Inventory ...... 100 Truck ...... 2,000 (ii) Assume that at the end of year 2, U.K. Machine ...... 200 section 987 branch holds assets translated (as Computer ...... 100 2,300 necessary) into the owner functional Portfolio Stock ...... 150 currency pursuant to § 1.987–4(e)(2) Computation of amount of remittance: consisting of a plant with a pound adjusted Total gross assets ...... 1,650 Aggregate transfers from U.K. basis equivalent $1,000, pound cash Remittance ...... 220 section 987 branch to U.S. equivalent to $100, a machine with a pound Corp ...... $2,800 adjusted basis equivalent to $200, portfolio Total gross assets + remit- Less: aggregate transfers from stock (within the meaning of § 1.987– tance ...... 1,870 U.S. Corp to U.K. section 987 2(b)(2)(ii)) in ABC Corporation with a pound (C) Computation of remittance proportion. branch ...... (2,300) adjusted basis equivalent to $150, inventory of 100 units with an aggregate pound Under paragraph (b) of this section, U.K. section 987 branch must compute the Total remittance ...... 500 adjusted basis equivalent to $100 and a computer with a pound adjusted basis remittance proportion as follows: (B) Computation of branch gross assets equivalent to $100. In addition, assume that Amount of remittance ...... $220 plus remittance. Under paragraph (b)(2) of U.K. section 987 branch has a pound liability Total basis of U.K. section 987 this section, U.K. section 987 branch must that it entered into with Bank A in year 1. branch’s gross assets at tend of determine the total basis of its gross assets When properly translated into dollars year 2, increased by amount of that are reflected on its year-end balance pursuant to § 1.987–4(e)(2) the principal remittance ...... 1,870 sheet translated into the owner’s functional amount of the liability is equal to $500. All Remittance/gross assets ...... 0.118 currency, and must increase this amount by such assets and liabilities are reflected on the Remittance proportion ...... 0.118 the amount of the remittance. books and records of U.K. section 987 Total basis of U.K. section 987 branch’s branch. Assume that the net unrecognized (D) Computation of section 987 gain or gross assets at end of year 2 plus remittance 987 gain for U.K. section 987 branch as loss. The amount of U.S. Corp’s section 987 in dollars: determined under § 1.987–4 as of the last day gain or loss that must be recognized with Computer ...... $500 of year 2 is $100. respect to U.K. section 987 branch is Cash (U.K. pounds) ...... 2,850 (iii) U.S. Corp’s section 987 gain with determined under paragraph (a) of this Truck ...... 2,000 respect to U.K. section 987 branch is section. determined as follows: Net unrecognized section 987 Total gross assets ...... 5,350 (A) Computation of amount of remittance. gain ...... $100.00 Remittance ...... 500 Under paragraphs (c)(1) and (2) of this Remittance proportion ...... × 0.118 section, U.S. Corp must determine the

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U.S. Corp’s section 987 gain § 1.987–7 Section 987 partnerships. partnership under section 705, an for year 2 ...... 11.80 (a) In general. In the case of an owner individual or corporation that owns a that is a partner in a section 987 section 987 QBU indirectly through a § 1.987–6 Character and source of section 987 gain or loss. partnership, this section provides rules section 987 partnership shall treat any for determining the owner’s share of section 987 gain or loss of such section (a) Ordinary income or loss. Section assets and liabilities of a section 987 987 QBU as gain or loss of the section 987 gain or loss is ordinary income or QBU owned indirectly, as described in 987 partnership. Any adjustments to the loss for Federal income tax purposes. § 1.987–1(b)(4)(ii), through a section 987 adjusted basis of a partner’s interest in (b) Source and character of section partnership. In addition, this section such section 987 partnership required 987 gain or loss—(1) In general. Except provides rules coordinating these under this paragraph (c)(1)(ii)(B) of this as otherwise provided in this section, regulations with subchapter K of section shall occur prior to determining the owner of a section 987 QBU must chapter 1 of the Internal Revenue Code. the effect under the Internal Revenue determine the source and character of (b) Assets and liabilities of an eligible Code of any sale, exchange, distribution section 987 gain or loss in the year of QBU or a section 987 QBU held or other event. a remittance under the rules of this indirectly through a partnership. A (iii) Adjustments for contributions paragraph (b) for all purposes of the partner’s share of the assets and and distributions. For purposes of Internal Revenue Code, including liabilities reflected under § 1.987–2(b) making adjustments to the partner’s sections 904(d), 907 and 954. on the books and records of an eligible adjusted basis in its interest in a section QBU or a section 987 QBU owned 987 partnership, as a result of any (2) Method required to characterize indirectly through a partnership shall be contributions or distributions (including and source section 987 gain or loss. The determined in a manner that is deemed contributions and distributions owner must use the asset method set consistent with the manner in which the under section 752) between the section forth in § 1.861–9T(g) to characterize partners have agreed to share the 987 partnership and the owner of a and source section 987 gain or loss. The economic benefits and burdens (if any), section 987 QBU owned indirectly modified gross income method corresponding to the assets and through the partnership, such amounts described in § 1.861–9T(j) cannot be liabilities, taking into account the rules will be taken into account in the used. and principles of sections 701 through owner’s functional currency. (3) Method required to characterize 761, and the applicable regulations, (iv) Determination of deemed and source section 987 gain or loss with including section 704(b) and § 1.701–2. distributions and contributions under respect to regulated investment (c) Coordination with subchapter K— section 752—(A) Increase in partner’s companies and real estate investment (1) Partner’s adjusted basis in its liabilities. For purposes of determining trusts. [Reserved]. partnership interest—(i) In general. the amount of any increase in a partner’s share of the liabilities of the (c) Example. The following example Except as provided in this paragraph, a partner’s adjusted basis in its section partnership, or any increase in the illustrates the application of this 987 partnership interest shall be partner’s individual liabilities by reason section. maintained in the functional currency of of the assumption by such partner of a Example. CFC is a controlled foreign that partner and shall not be adjusted as liability of the partnership, which are corporation as defined in section 957 a result of any fluctuations in the value reflected on the books and records of a with the Swiss franc (Sf) as its of the partner’s functional currency and section 987 QBU owned indirectly functional currency. CFC holds all the the functional currency of any section through such partnership and which are interest in a section 987 DE as defined 987 QBU owned indirectly through the denominated in a functional currency in § 1.987–1(b)(6)(iii) that has a section section 987 partnership. different from the partner’s, the amount 987 branch with significant operations (ii) Adjustments for section 987 of such liabilities shall be translated in Germany (German Branch). German taxable income or loss and section 987 into the functional currency of the Branch has the euro as its functional gain or loss—(A) Section 987 taxable partner using the spot rate (as defined currency. For the year 2009, CFC income or loss. A partner’s share of the in § 1.987–1(c)(1)(i) and (ii)) on the date recognizes section 987 gain of Sf10,000 items of income, gain, deduction or loss of such increase. under §§ 1.987–4 and 1.987–5. Applying taken into account in calculating section (B) Decrease in partner’s liabilities. the rules of this section, German Branch 987 taxable income or loss of a section For purposes of determining the amount has total average assets of Sf1,000,000 987 QBU, determined under § 1.987–3, of any decrease in a partner’s share of which generate income as follows: held indirectly through a section 987 the liabilities of the partnership which Sf750,000 of assets that generate foreign partnership shall be treated as income were reflected on the books and records source general limitation income under or loss of the section 987 partnership of a section 987 QBU owned indirectly section 904(d)(1)(I), none of which is through which the partner indirectly through such partnership and which are subpart F income under section 952; owns the interest. As a result, the denominated in a functional currency and Sf250,000 of assets that generate partner’s allocable share of the items of different from the partner’s functional foreign source passive income under income, gain, deduction or loss taken currency, the amount of such liabilities section 904(d)(1)(B), all of which is into account in calculating section 987 shall be translated into the functional subpart F income. Under paragraph (b) taxable income or loss of the section 987 currency of the partner using the of this section, Sf7,500 (Sf750,000/ QBU shall be taken into account, historic rate (as defined in § 1.987– Sf1,000,000 × Sf10,000) of the section following conversion into the partner’s 1(c)(3)) for the date on which such 987 gain will be treated as foreign functional currency, in determining the liabilities increased the partner’s source general limitation income which appropriate adjustments to the partner’s adjusted basis in its partnership interest is not subpart F income and Sf2,500 adjusted basis in its partnership interest under section 752. (Sf250,000/Sf1,000,000 × Sf10,000) will under section 705. (2) Special rule for determining gain be treated as foreign source passive (B) Section 987 gain or loss. Solely for or loss on the sale, exchange or other income which is subpart F income. All purposes of determining the appropriate disposition of an interest in a section of the section 987 gain is treated as adjustments to a partner’s adjusted basis 987 partnership. For purposes of ordinary income. in its interest in a section 987 determining the amount realized by a

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partner in a section 987 partnership on interest in all items of partnership income liability incurred by PRS and the economic the sale, exchange, or other disposition and loss. benefits of the non-depreciable property of that partner’s interest in such (ii) Calculation of net unrecognized section securing such liability, both of which are partnership, the amount of liabilities 987 gain or loss. Under paragraph (b) of this reflected on the books and records of QBUx section, A and B are each allocated 50 from under § 1.987–2(b), A is allocated, for reflected on the books and records of a eligible QBUx. This amount is reflected on purposes of applying § 1.987–4(d), both the section 987 QBU (in a functional the balance sheet of the section 987 QBU of £50 liability and the non-depreciable currency different from such partner) A and B, respectively, for purposes of property with an adjusted tax basis of £50. from which that partner is relieved as a determining the unrecognized section 987 Under § 1.987–4(d), A’s net unrecognized result of such disposition, and which gain or loss under § 1.987–4. Pursuant to section 987 gain is $0, and B’s net are included in the amount realized § 1.987–4(d), the net unrecognized section unrecognized section 987 gain is $25. pursuant to section 752(d), shall be 987 gain of A’s section 987 QBU and B’s (iii) Determination of partner’s adjusted translated into the partner’s functional section 987 QBU is $25. basis in PRS. Pursuant to paragraph (c)(1)(i) Example 2. Computation of owner’s net of this section and section 985(a), A and B currency using the historic exchange unrecognized section 987 gain or loss. (i) must determine the adjusted bases in their rate (as determined under § 1.987– Facts. The facts are the same as Example 1, PRS partnership interests in U.S. dollars. 1(c)(3)) for the date on which such except that in addition to the £100 Under sections 722, 752(a) and paragraph liabilities increased the partner’s contributed by A and B, PRS incurred a £50 (c)(1)(iv) of this section, A’s adjusted basis is adjusted basis in its partnership interest recourse liability from an unrelated third increased by the U.S. dollar amount of the under section 752. party on January 1, 2007. The liability and deemed contribution determined using the (d) Examples. The purpose of the the £50 are both reflected on the books and spot rate for the date on which such liability records of QBUx under § 1.987–2(b). Under was incurred. Therefore, A will increase the following examples is to illustrate the section 752, and the regulations thereunder, adjusted basis in its PRS partnership interest application of section 987 to A and B bear the economic risk of loss with by $50. partnerships and their partners. The respect to the £50 recourse debt equally. Example 4. Computation of owner’s share examples are not meant to be a (ii) Calculation of net unrecognized section of items of section 987 taxable income. (i) comprehensive interpretation of the 987 gain or loss. Under paragraph (b) of this Facts. The facts are the same as in Example step-by-step computations involved in section, A and B are each allocated £75 from 1, except that during 2007 PRS earns £50 computing net unrecognized section 987 QBUx. In addition, under paragraph (b) of which are reflected on the books and records gain or loss. Thus, for the sake of this section, A and B are each allocated £25 of QBUx. In accordance with the partnership simplicity, the examples only calculate of the liability of QBUx because the agreement, the £50 are allocated equally economic burden of such liability, taking into between A and B. section 987 gain or loss by reference to account sections 701 through 761 of the (ii) Calculation of section 987 taxable certain identified assets and liabilities, Code, is borne equally by A and B. Under income or loss. Under § 1.987–3, A and B’s rather than by all the assets and § 1.987–4(d), A and B each have net allocable share of the taxable income of liabilities of the section 987 QBU (as is unrecognized section 987 gain of $25. QBUx, as determined by PRS, and adjusted required under these regulations). See (iii) Determination of partner’s adjusted to conform to U.S. tax principles, is £25 each. § 1.987–4 and the examples therein for basis in PRS. Pursuant to paragraph (c)(1)(i) Under § 1.987–3, A and B must convert their step-by-step computations for of this section and section 985(a), A and B allocable share of the £25 into U.S. dollars determining the unrecognized section must determine the adjusted basis in their using the yearly average exchange rate for the 987 gain or loss of the owner of a PRS partnership interests in U.S. dollars. year, in accordance with § 1.987–1(c)(2). As Under sections 722, 752(a) and paragraph a result, A and B each take into account as section 987 QBU. (c)(1)(iv)(A) of this section, the adjusted bases their respective distributive share of PRS Example 1. Computation of an owner’s net in such interests are increased by the U.S. income $31.25. Under paragraph (c)(1)(ii)(A) unrecognized section 987 gain or loss. (i) dollar amount of a deemed contribution of this section, section 985(a) and section Facts. PRS is a partnership which owns determined using the spot rate for the date 705, such amounts, as reflected in U.S. QBUx, an eligible QBU, operating in the on which such liability was incurred. dollars, will be taken into account in United Kingdom. QBUx has the pound as its Therefore, A and B will increase the adjusted determining any adjustments to the adjusted functional currency determined under basis in their PRS partnership interests by bases of A’s and B’s partnership interests. In § 1.985–1 taking into account all of QBUx’s $25. addition, such amounts will be taken into activities before application of this section. Example 3. Computation of owner’s net account in calculating, under § 1.987–4, the PRS has two equal partners that are domestic unrecognized section 987 gain or loss. (i) unrecognized section 987 gain or loss of the corporations, A and B, each with the U.S. Facts. The facts are the same as Example 2, section 987 QBUs of A and B. dollar as its functional currency. The except as follows: On January 1, 2007, Example 5. Computation of owner’s share portions of QBUx allocated to A and B under instead of incurring a £50 recourse liability, of items of section 987 taxable income. (i) paragraph (b) of this section are section 987 PRS incurred a £50 nonrecourse liability Facts. The facts are the same as in Example QBUs of A and B because under § 1.987– from an unrelated third party, which was 4, except A and B agree to allocate the £50 1(b)(2), such portions are allocated from an secured by and used to purchase non- of income to A. Assume for purposes of this eligible QBU with a different functional depreciable real property located in the example that such allocation has substantial currency than A and B, respectively. Assume United Kingdom. Under the partnership economic effect as provided under section that PRS has no items of section 987 taxable agreement, A and B agree to share all items 704(b). income or loss for 2007. On January 1, 2007, of partnership income and loss equally, (ii) Calculation of section 987 taxable A and B each contribute $50 to PRS. PRS except that A guaranteed the nonrecourse income or loss. Under § 1.987–3, A and B’s immediately converts the $100 into £100. liability and, in addition, the partnership allocable share of the taxable income of The £100 is reflected, in accordance with agreement provides that A will be allocated QBUx, as determined by PRS, and adjusted § 1.987–2(b), on the books and records of any gain from the sale or exchange of the to conform to U.S. tax principles, is £50 and QBUx. On January 1, 2007, the spot rate is non-depreciable property. Further, the £0, respectively. Under § 1.987–3, A and B $1 = £1. On December 31, 2007, the spot rate partnership agreement provides that in the must convert their allocable share into U.S. is $1.50 = £1. Pursuant to § 1.987–3(b)(1), A event the partnership liquidates prior to dollars using the yearly average exchange and B use the yearly average exchange rate, satisfying the liability, the non-depreciable rate for the year, in accordance with § 1.987– as defined in § 1.987–1(c)(2), to translate property shall be distributed to A. 1(c)(2). As a result, A and B must each take items of income, gain, deduction, or loss into (ii) Calculation of net unrecognized section into account as their respective distributive dollars for the taxable year. Assume the 987 gain or loss. Under paragraph (b) of this share of PRS income $62.50 and $0, yearly average exchange rate is $1.25 = £1 ($1 section, A and B are each allocated £50 from respectively. Under paragraph (c)(1)(ii)(A) of = £.80). Under the PRS partnership eligible QBUx. In addition, because A bears this section, section 985(a) and section 705, agreement, A and B each have an equal the economic burden of the nonrecourse such amounts, as reflected in U.S. dollars,

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will be taken into account in determining any § 1.987–2(c), pursuant to the same Example 1. Cessation of operations. (i) adjustments to the adjusted bases of A’s and transaction; Facts. DC, a domestic corporation, has a sales B’s respective partnership interests. In (3) A foreign corporation that is a office in Country X (Country X Branch) that addition, such amounts will be taken into controlled foreign corporation (as is a section 987 QBU. DC closes its Country account in calculating, under § 1.987–4, the X Branch. unrecognized section 987 gain or loss of the defined in section 957) that is the owner (ii) Analysis. The cessation of the activities section 987 QBUs of A and B. of a section 987 QBU ceases to be a of the Country X Branch causes a termination Example 6. Election by de minimis partner controlled foreign corporation; or of the section 987 QBU under paragraph to not take into account section 987 gain or (4) The owner of such section 987 (b)(1) of this section. loss. (i) Facts. The facts are the same as in QBU ceases to exist (including in Example 2. Incorporation of section 987 Example 1, except assume that A owns, connection with a transaction described QBU. (i) Facts. DC, a domestic corporation, directly or indirectly, less than 5% of the in section 381(a)). has a branch in Country X (Country X total capital and profits interest in PRS and, (c) Transactions described in section Branch) that is a section 987 QBU. DC as a result, is eligible to elect, under § 1.987– transfers all the assets and liabilities of 1(b)(1)(ii) not to apply the provisions of the 381(a)—(1) Liquidations. A termination Country X Branch to DS, a domestic regulations under section 987 for purposes of does not occur when the owner of a corporation, in exchange for stock of DS in taking into account the section 987 gain or section 987 QBU ceases to exist in a a transaction qualifying under section 351. loss of A’s section 987 QBU. Assume further liquidation described in section 332, (ii) Analysis. Country X Branch terminates that A makes such election. On January 1, except in the following cases: pursuant to paragraph (b)(1) of this section 2008, A sells its interest to an unrelated third (i) The distributor is a domestic because the Country X Branch ceases to be party, C, for $75. corporation and the distributee is a an eligible QBU of DC. (ii) Determination of partner’s adjusted foreign corporation. Example 3. Cessation of controlled foreign basis in PRS. Pursuant to paragraph (c)(1)(i) (ii) The distributor is a foreign corporation status. (i) Facts. DC, a domestic of this section and section 985(a), A must corporation, owns all of the stock of FC, a determine the adjusted basis of its PRS corporation and the distributee is a controlled foreign corporation as defined in partnership interest in U.S. dollars. A’s basis domestic corporation. section 957. FC has a section 987 QBU. FA, in PRS is $50, the amount of its contribution (iii) The distributor and the a foreign corporation owned solely by foreign to PRS. distributee are both foreign corporations persons, purchases all of the FC stock. FC (iii) Sale of partnership interest by A. and the functional currency of the will not constitute a controlled foreign Under section 1001, A’s amount realized on distributee is the same as the functional corporation after the transaction. the sale of the partnership interest to C is currency of the distributor’s section 987 (ii) Analysis. Because FC ceases to qualify $75. A’s adjusted basis of its PRS partnership QBU. as a controlled foreign corporation after the interest is $50, the amount of A’s sale of the FC stock, FC’s section 987 QBU contribution to PRS, unadjusted by the (2) Reorganizations. A termination does not occur when the owner of the terminates pursuant to paragraph (b)(3) of fluctuations between the pound and the U.S. this section. dollar. A’s gain on the sale of the partnership section 987 QBU ceases to exist in a Example 4. Section 332 liquidation. (i) interest is $25. reorganization described in section Facts. DC, a domestic corporation, operates 381(a)(2), except in the following cases: in Country X through FC, a wholly-owned § 1.987–8 Termination of a section 987 (i) The transferor is a domestic QBU. foreign corporation organized under the laws corporation and the acquiring of Country X. FC also has a branch in (a) Scope. This section provides rules corporation is a foreign corporation. Country Y (Country Y Branch) that is a regarding the termination of a section (ii) The transferor is a foreign section 987 QBU. Pursuant to a liquidation 987 QBU. Paragraph (b) of this section corporation and the acquiring described in section 332, FC transfers all of provides general rules for determining corporation is a domestic corporation. its assets and liabilities to DC. (ii) Analysis. FC’s liquidation is a when a termination occurs. Paragraph (iii) The transferor is a controlled (c) of this section provides exceptions to termination as provided in paragraph (b)(4) foreign corporation immediately before of this section because FC ceases to exist. The the general termination rules for certain the transfer and the acquiring transactions described in section 381(a). exception for certain section 332 liquidations corporation is a foreign corporation that provided under paragraph (c)(1) of this Paragraph (d) of this section provides is not a controlled foreign corporation section does not apply because DC is a certain effects of terminations. immediately after the transfer. domestic corporation and FC is a foreign Paragraph (e) of this section contains (iv) The transferor and the acquiring corporation. See paragraph (c)(1)(ii) of this examples that illustrate the principles of corporation are foreign corporations and section. this section. the functional currency of the acquiring Example 5. Transfers to and from section (b) In general. Except as provided in 987 QBU pursuant to the same transaction. corporation is the same as the functional paragraph (c) of this section, a section (i) Facts. DC1, a domestic corporation, owns currency of the transferor’s section 987 987 QBU terminates when— Entity A, a DE. Entity A conducts a business QBU. (1) Its activities cease, such that it no in Country X and that business is an eligible (d) Effect of terminations. A longer meets the definition of an eligible QBU and a section 987 QBU (Country X termination of a section 987 QBU as QBU) of DC1. DC2, a domestic corporation, QBU as defined in § 1.987–1(b)(3); contributes property to Entity A in exchange (2) Substantially all (within the determined in this section is treated as a remittance of all the gross assets of the for a 95% interest in Entity A. The property meaning of section 368(a)(1)(C)) of the DC2 contributes to Entity A is used in the section 987 QBU’s assets are transferred section 987 QBU to its owner. As a result, any net unrecognized section 987 business conducted by the Country X QBU from such section 987 QBU to its owner, and is reflected on its books and records as as provided under § 1.987–2(c). For gain or loss of the section 987 QBU is provided under § 1.987–2(b). Moreover, purposes of this paragraph (b)(2), the recognized. See § 1.987–5. For purposes Entity A is converted to a partnership as a amount of assets transferred from the of the preceding sentence, the amount of result of the contribution. See Rev. Rul. 99– section 987 QBU to its owner as a result net unrecognized section 987 gain or 5 (situation 2), (1999–1 CB 434). See of a transaction (for example, a loss is determined as of the date of § 601.601(d)(2) of this chapter. Also, as a termination by closing the books and result of the contribution, and pursuant to contribution of property to a DE or a § 1.987–2(c)(5), 95% of the assets and partnership) as provided under § 1.987– records of the section 987 QBU on that date. liabilities on the books and records of DC1’s 2(c) shall be reduced by assets that are section 987 QBU are deemed to be transferred from the owner to such (e) Examples. The following examples transferred from such QBU to DC1, and DC1 section 987 QBU, as provided under illustrate the principles of this section: is deemed to transfer to such QBU 5% of the

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property, as determined under § 1.987–7, (9) The amount of the unrecognized taxpayer’s return for the taxable year contributed by DC2 to Entity A. section 987 gain or loss for the taxable shall determine the appropriate (ii) Analysis. As a result of the contribution year. transition method. of property from DC2 to Entity A, assets were (10) The amount of the net (2) Conformity rules. The taxpayer transferred from DC1’s section 987 QBU to unrecognized section 987 gain or loss at (including all members that file a DC1. Similarly, assets were transferred from DC1 to its section 987 QBU as a result of the the close of the taxable year. consolidated return that includes that contribution. Accordingly, for purposes of (11) If a remittance is made, the taxpayer), and any controlled foreign determining whether substantially all the average tax book value of assets as corporation as defined in section 957 in assets of Country X QBU were transferred determined under § 1.861–9T(g). which the taxpayer owns more than 50 from DC1’s section 987 QBU as provided (12) The transition information percent of the voting power or stock (as under paragraph (b)(2) of this section, the required to be determined under determined in section 957(a)), must assets transferred from DC1’s section 987 § 1.987–10(c)(2)(v). consistently apply the same transition QBU to DC1 under § 1.987–2(c) are reduced (c) Retention of records. The records method for each qualified business unit by the amount of assets transferred from DC1 required by this section must be kept at subject to section 987 owned on the to such section 987 QBU pursuant to the all times available for inspection by the contribution. transition date. Internal Revenue Service, and shall be (3) Deferral transition method—(i) In § 1.987–9 Recordkeeping requirements. retained so long as the contents thereof general. Pursuant to the deferral (a) In general. A taxpayer that is an may become material in the transition method prescribed by this owner of a section 987 QBU shall keep administration of the Internal Revenue paragraph (c)(3), section 987 gain or loss such reasonable records as are sufficient Code. must be determined on the transition date under the taxpayer’s prior section to establish the QBU’s section 987 § 1.987–10 Transition rules. taxable income or loss and section 987 987 method as if all qualified business (a) Scope—(1) In general. These gain or loss. See section 987 and section units of the taxpayer subject to section transition rules shall apply to any 6001 and the applicable regulations. 987 (taking into account the conformity (b) Supplemental information. An taxpayer that is an owner of a section rules of paragraph (c)(2) of this section) owner’s obligation to maintain records 987 QBU pursuant to § 1.987–1(b)(4) on terminated on the last day of the taxable under section 6001 and paragraph (a) of the transition date (as defined in year preceding the transition date. This this section is not satisfied unless the paragraph (b) of this section). A deemed termination applies solely for following information is maintained in taxpayer to whom this section applies purposes of this section. Any section such records: must transition from the method 987 gain or loss determined with respect (1) The amount of the items of previously used by such taxpayer to to a section 987 QBU under the income, gain, deduction or loss comply with section 987 (the ‘‘prior preceding sentence shall not be attributed to each section 987 QBU of section 987 method’’) to the method recognized on the transition date but the owner in the functional currency of prescribed by these regulations pursuant shall be considered as net unrecognized the section 987 QBU. to the rules set forth in paragraph (c) of section 987 gain or loss of the section (2) The amount of assets and this section. 987 QBU in the first taxable year for liabilities attributed to each section 987 (2) Limitation where the prior method which these regulations are effective (in QBU of the owner in the functional was unreasonable. Notwithstanding addition to any net unrecognized currency of the QBU. paragraph (a)(1) of this section, if the section 987 gain or loss otherwise (3) The exchange rates used to prior section 987 method was determined for such taxable year). translate items of income, gain, unreasonable (including the case where Recognition of net unrecognized section deduction or loss of each section 987 the taxpayer failed to make the 987 gain or loss determined under the QBU into the owner’s functional determinations required under section preceding sentence is governed by currency. If a spot rate convention is 987 for any open taxable year), then the § 1.987–5 for periods after the transition used, the manner in which such taxpayer must apply the rules of date. The owner of a qualified business convention is determined. paragraph (c)(4) of this section (and unit that is deemed to terminate under (4) The exchange rates used to cannot apply the rules of paragraph these rules is treated as having translate the assets and liabilities of (c)(3) of this section) to transition to the transferred all of the assets and each section 987 QBU into the owner’s method prescribed by these regulations. liabilities attributable to such qualified functional currency. If a spot rate (b) Transition date. The transition business unit to a new section 987 QBU convention is used, the manner in date is the first day of the first taxable on the transition date. which such convention is determined. year to which these regulations apply to (ii) Translation rates used to (5) The amount of the items of a taxpayer. determine the amount of assets and income, gain, deduction or loss (c) Transition methods and liabilities transferred from the owner to attributed to each section 987 QBU of corresponding rules—(1) In general. the section 987 QBU for the section 987 the owner translated into the functional Except as provided in paragraph (a)(2) QBU’s first taxable year beginning on currency of the owner. of this section, a taxpayer must the transition date. The exchange rates (6) The amount of assets and transition from its prior method to the used to determine the amount of assets liabilities attributed to each section 987 method prescribed by these regulations and liabilities transferred from the QBU of the owner translated into the under the ‘‘deferral transition method’’ owner to the section 987 QBU on the functional currency of the owner. of paragraph (c)(3) of this section or the transition date (for example, for (7) The amount of assets and ‘‘fresh start transition method’’ of purposes of making calculations under liabilities transferred by the owner to a paragraph (c)(4) of this section. If a § 1.987–4) under the deferral transition section 987 QBU determined in the taxpayer fails to comply with the rules method in this paragraph (c)(3) shall be functional currency of the owner. of this section, the Area Director, Field determined with reference to the (8) The amount of assets and Examination, Small Business/Self historic exchange rates on the day the liabilities transferred by the section 987 Employed or the Director, Field assets were acquired or liabilities QBU to the owner determined in the Operations, Large and Mid-Size entered into by the qualified business functional currency of the owner. Business having jurisdiction of the unit deemed terminated, adjusted to

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take into account any gain or loss cannot result in taking into account Example 1. Deferral transition method. (i) determined under paragraph (c)(3)(i) of section 987 gain or loss with respect to U.S. Corp is a domestic corporation with the this section. See Examples 1 and 2 of an asset or liability attributable to a dollar as its functional currency. U.S. Corp paragraph (d) of this section. period prior to the transition date more owns UK Branch, a branch with the pound (4) Fresh start transition method—(i) than once. as its functional currency. UK Branch was In general. Pursuant to the fresh start (6) Reporting. The taxpayer must formed on January 1, 2006. U.S. Corp uses transition method prescribed by this attach a statement to its return for the the method prescribed in the 1991 proposed paragraph (c)(4), on the transition date first taxable year beginning on the section 987 regulations to determine the all qualified business units of the transition date providing the following section 987 gain or loss of UK Branch. U.S. taxpayer subject to section 987 (taking information: Corp contributed £6,000 to UK Branch on into account the conformity rules of (i) A description of each qualified January 1, 2006. On the same day, UK Branch bought a truck for £4,000 and a computer for paragraph (c)(2) of this section) are business unit to which these rules £1,000. Assume that the spot rate on January deemed terminated on the last day of apply, the qualified business unit’s 1, 2006, is £1 = $1. UK Branch had profits the taxable year preceding the transition owner and its principal place of determined under § 1.987–1(b)(1)(i) through date. This deemed termination applies business, and a description of the prior (iii) of the 1991 proposed section 987 solely for purposes of this section. No method used by the taxpayer to regulations of £250 in each taxable year of section 987 gain or loss is determined or determine section 987 gain or loss with 2006, 2007, 2008, and 2009. Assume that the recognized on such deemed respect to such qualified business unit. average exchange rates used to translate UK termination. The owner of a qualified (ii) The transition method used by the Branch’s profits under the 1991 proposed business unit that is deemed to taxpayer under paragraph (c) of this section 987 regulations were as follows: terminate under this method is treated section for each qualified business unit. 2006—£1 = $1.10; 2007—£1 = $1.20; 2008— as having transferred all of the assets (iii) If the taxpayer uses the deferral £1 = $1.30; 2009—£1 = $1.40. UK Branch and liabilities attributable to such transition method prescribed in makes no remittances to U.S. Corp in any qualified business unit to a section 987 paragraph (c)(3) of this section with year. On January 1, 2010, UK Branch QBU on the transition date. respect to a qualified business unit, an transitions to the method provided in (ii) Translation rates used to explanation of the method used to §§ 1.987–1 through 1.987–11 of these determine the amount of assets and determine section 987 gain or loss. regulations pursuant to paragraph (a) of this liabilities transferred from the owner to (iv) If the taxpayer uses the deferral section. U.S. Corp chooses to use the deferral the section 987 QBU for the section 987 transition method prescribed in transition method of paragraph (c)(3) of this QBU’s first taxable year on the paragraph (c)(3) of this section with section in transitioning from its prior section transition date. The exchange rates used respect to a qualified business unit, the 987 method (the method set forth in the 1991 to determine the amount of assets and amount treated as net unrecognized proposed section 987 regulations) to the liabilities transferred from the owner to section 987 gain or loss under paragraph method prescribed in the §§ 1.987–1 through the section 987 QBU on the transition (c)(3)(i) of this section. 1.987–11 of these regulations. The spot rate date (for example, for purposes of (v) The method used by the taxpayer on December 31, 2009, is £1 = $2. making calculations under § 1.987–4) for determining the exchange rates used (ii) Pursuant to paragraph (c)(3) of this section, U.S. Corp must determine UK under the fresh start transition method to translate the basis of assets and the Branch’s section 987 gain or loss on January of this paragraph (c)(4) shall be amount of liabilities of a section 987 1, 2010 using its prior section 987 method determined with reference to the QBU into the functional currency of the (the method prescribed under the 1991 historic exchange rates on the day the owner on the transition date as provided proposed section 987 regulations), as if UK assets were acquired or liabilities in paragraphs (c)(3)(ii) and (c)(4)(ii) of Branch terminated on December 31, 2009. On entered into by the qualified business this section for purposes of applying December 31, 2009, UK Branch has an equity unit deemed terminated. See Example 3 these regulations. pool of £7,000 and a basis pool of $7,250 of paragraph (d) of this section. (d) Examples. The principles of this determined under the 1991 proposed section (5) Double counting prohibited. The section are illustrated by the following 987 regulations based on the following transition method used by the taxpayer examples: amounts:

Asset Amount in £ Translation rate Amount in $

Cash ...... £1,000 Spot rate on 1/1/06 of £1=$1 ...... $1,000 Cash ...... 250 Ave. rate for 2006 of £1=$1.10 ...... 275 Cash ...... 250 Ave. rate for 2007 of £1=$1.20 ...... 300 Cash ...... 250 Ave. rate for 2008 of £1=$1.30 ...... 325 Cash ...... 250 Ave. rate for 2009 of £1=$1.40 ...... 350 Truck ...... *4,000 Spot rate on 1/1/06 of £1=$1 ...... 4,000 Computer ...... *1,000 Spot rate on 1/1/06 of £1=$1 ...... 1,000

Total assets ...... 7,000 ...... 7,250 Liabilities ...... 0 ...... 0 * Depreciation not taken into account for purposes of this example.

Accordingly, under § 1.987–3(h)(3)(i) of the Multiplied by spot rate on Section 987 gain ...... 6,750 1991 proposed section 987 regulations, UK date of deemed termination Branch determines its section 987 gain or of £1=$2 ...... ×$2 (iii) Under paragraph (c)(3)(i) of this loss on December 31, 2009, as follows: section, U.S. Corp does not recognize the 14,000 $6,750 of section 987 gain determined on the Equity Pool on 12/31/09 ...... £7,000 Spot Value of Equity Pool ...... 14,000 transition date. Instead, the $6,750 will be Less 100% of Basis Pool ...... (7,250) treated as net unrecognized section 987 gain of UK Branch for 2010 and subsequent years

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(in addition to any net unrecognized section Branch on the transition date, U.S. Corp must deemed contributed by U.S. Corp to UK 987 gain or loss otherwise determined at the adjust the historic exchange rates attributable Branch on the transition date using the same close of 2010 and subsequent years). to such assets to take into account UK spot rate it used to determine UK Branch’s Recognition of net unrecognized section 987 Branch’s section 987 gain determined under section 987 gain on the deemed termination gain or loss is governed by § 1.987–5. paragraph (c)(3) of this section. Under these date of December 31, 2009. Accordingly, on (iv) Pursuant to paragraph (c)(3)(ii) of this facts, where all of UK Branch’s assets are January 1, 2010, U.S. Corp translates the section, when computing the exchange rates considered to generate deferred section 987 assets deemed contributed (cash is segregated used to determine the amount of assets and gain, U.S. Corp takes into account this for ease of illustration) to UK Branch as liabilities transferred from U.S. Corp to UK section 987 gain by translating the assets follows:

Asset Amount in £ Translation rate Amount in $

Cash ...... £1,000 Spot rate on 12/31/09 of £1=$2 ...... $2,000 Cash ...... 250 Spot rate on 12/31/09 of £1=$2 ...... 500 Cash ...... 250 Spot rate on 12/31/09 of £1=$2 ...... 500 Cash ...... 250 Spot rate on 12/31/09 of £1=$2 ...... 500 Cash ...... 250 Spot rate on 12/31/09 of £1=$2 ...... 500 Truck ...... 4,000 Spot rate on 12/31/09 of £1=$2 ...... 8,000 Computer ...... 1,000 Spot rate on 12/31/09 of £1=$2 ...... 2,000

Total assets ...... 7,000 ...... 14,000 Liabilities ...... 0 ...... 0

Example 2. Deferral transition method. (i) remaining of £1,000 with a translated basis (iv) Under paragraph (c)(3)(i) of this The facts are the same as in Example 1 equal to $1,000; a truck of £4,000 with a section, U.S. Corp does not recognize the except that U.S. Corp and UK Branch use an translated basis equal to $4,000; and a $750 of section 987 gain determined on the ‘‘earnings only’’ approach to determine computer of £1,000 with a translated basis transition date. Instead, the $750 will be section 987 gain or loss prior to the transition equal to $1,000). treated as net unrecognized section 987 gain date. Under this approach, U.S. Corp (iii) Pursuant to paragraph (c)(3)(i) of this of UK Branch for 2010 and subsequent years maintains a basis and equity pool for UK section, U.S. Corp must determine UK (in addition to any net unrecognized section Branch’s earnings and a separate basis and Branch’s section 987 gain or loss on January 987 gain or loss otherwise determined at the equity pool for UK Branch’s capital. Section 1, 2010, using its prior section 987 method close of 2010 and subsequent years). 987 gain or loss is only recognized on (the ‘‘earnings only’’ method), as if UK Recognition of net unrecognized section 987 remittances of earnings (but not with respect Branch terminated on December 31, 2009. gain or loss is governed by § 1.987–5. to capital) under principles similar to those Using principles similar to § 1.987–3(h) of (v) Pursuant to paragraph (c)(3)(ii) of this of the 1991 proposed section 987 regulations. the 1991 proposed section 987 regulations section, when computing the exchange rates Remittances are first considered as with respect to the earnings equity and basis used to determine the amount of assets and distributed from the earnings equity pool and liabilities transferred from U.S. Corp to UK pool, U.S. Corp would determine $750 of then from the capital equity pool. For Branch on the transition date, U.S. Corp must section 987 gain as follows: purposes of this example, this method is adjust the historic exchange rates attributable assumed to be a reasonable section 987 Earnings Equity Pool on to such assets to take into account UK method and does not violate § 1.987–10(a)(2). 12/31/09 ...... £1,000 Branch’s section 987 gain determined under (ii) Using principles similar to those set Multiplied by spot rate on paragraph (c)(3) of this section. Under these forth in § 1.987–2 of the 1991 proposed date of deemed termination facts, U.S. Corp may reasonably take into section 987 regulations, the earnings equity of £1=$2 ...... × $2 account UK Branch’s section 987 gain by pool of UK Branch is £1,000 (£250 earned in translating those UK Branch’s assets that each taxable year of 2006, 2007, 2008 and $2,000 generated such gain using the same spot rate 2009) and the corresponding earnings basis Spot Value of Earnings Equity it used to determine UK Branch’s section 987 pool is $1,250 ($275 in 2006, $300 in 2007, Pool ...... $2,000 gain on the termination date of December 31, $325 in 2008 and $350 in 2009). The capital Less 100% of Earnings Basis 2009 and by determining the translation rate equity pool is £6,000 and the corresponding Pool ...... ($1,250) of other assets by reference to the traced basis capital basis pool is $6,000 (contributed cash of such assets. Accordingly, on January 1, of £6,000 translated to equal $6,000—which Section 987 gain ...... $750 2010, U.S. Corp translates the deemed U.S. Corp can trace to contributed cash contributions to UK Branch as follows:

Asset Amount in £ Translation rate Amount in $

Contributed Cash ...... £1,000 Spot rate on 1/1/06 of £1=$1 ...... $1,000 Cash ...... 250 Spot rate on 12/31/09 of £1=$2 ...... 500 Cash ...... 250 Spot rate on 12/31/09 of £1=$2 ...... 500 Cash ...... 250 Spot rate on 12/31/09 of £1=$2 ...... 500 Cash ...... 250 Spot rate on 12/31/09 of £1=$2 ...... 500 Truck ...... 4,000 Spot rate on 1/1/06 of £1=$1 ...... 4,000 Computer ...... 1,000 Spot rate on 1/1/06 of £1=$1 ...... 1,000

Total assets ...... 7,000 ...... 8,000 Liabilities ...... 0 ...... 0

(vi) If UK Branch was not able to trace January 1, 2010, under paragraph (c)(3)(ii) of basis and the $750 of deferred section 987 historic dollar basis as set forth in paragraph this section, U.S. Corp would be required to gain to the UK Branch assets. (v) of this Example 2, when translating the use exchange rates that take into account a Example 3. Fresh start transition method. assets deemed contributed to UK Branch on reasonable allocation of the aggregate historic (i) The facts are the same as in Example 1,

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except that U.S. Corp chooses to use the fresh UK Branch is deemed to terminate on existing on the date the assets were acquired start transition method of paragraph (c)(4) of December 31, 2009. However, no section 987 by UK Branch pursuant to paragraph (c)(4)(ii) this section in transitioning from the 1991 gain or loss will be determined or recognized. of this section. Accordingly, U.S. Corp proposed regulations to the method On January 1, 2010, when translating the translates the assets deemed contributed prescribed in the current regulations. assets deemed contributed to UK Branch, (cash is segregated for ease of illustration) to Pursuant to paragraph (c)(4)(i) of this section, U.S. Corp will use the historic exchange rates UK Branch as follows:

Asset Amount in £ Translation rate Amount in $

Contributed Cash ...... £1000 Spot rate on 1/1/06 of £1=$1 ...... $1,000 Cash ...... 250 Ave. rate for 2006 of £1=$1.10 ...... 275 Cash ...... 250 Ave. rate for 2004 of £1=$1.20 ...... 300 Cash ...... 250 Ave. rate for 2005 of £1=$1.30 ...... 325 Cash ...... 250 Ave. rate for 2006 of £1=$1.40 ...... 350 Truck ...... 4000 Spot rate on 1/1/06 of £1=$1 ...... 4,000 Computer ...... 1000 Spot rate on 1/1/06 of £1=$1 ...... 1,000

Total assets ...... 7000 ...... 7,250 Liabilities ...... 0 ...... 0

(ii) If UK Branch was not able to trace (a) * * * (iv) Example. The following example historic dollar basis as set forth in paragraph (3) Certain transactions of a section illustrates the application of paragraph (i) of this Example 3, when translating the (a)(4) of this section: assets deemed contributed to UK Branch on 987 QBU denominated in the functional January 1, 2010, under paragraph (c)(3)(ii) of currency of the owner are not treated as Example. Liability held through a this section, U.S. Corp would be required to section 988 transactions. Transactions partnership. (i) Facts. P, a foreign use exchange rates that take into account a described in § 1.987–3(e)(2) (regarding partnership, has two equal partners, X and Y. reasonable allocation of the aggregate historic certain transactions that are X is a domestic corporation with the dollar basis of the UK Branch assets. as its functional currency. Y is a foreign denominated in the functional currency corporation that has the yen as its functional § 1.987–11 Effective date. of the owner of a section 987 QBU) are currency. On January 1, year 1, P borrowed (a) In general. Except as otherwise not treated as section 988 transactions to yen and issued a note to the lender that provided in this section, these a section 987 QBU. Thus, no currency obligated P to pay interest and repay regulations shall apply to taxable years gain or loss shall be recognized by a principal to the lender in yen. Also on beginning one year after the first day of section 987 QBU under section 988 with January 1, year 1, P used the yen it borrowed from the lender to acquire 100% of the stock the first taxable year following the date respect to such items. of F, a foreign corporation, from an unrelated of publication of a Treasury decision (4) Treatment of assets and liabilities person. P also holds an eligible section 987 adopting this rule as a final regulation of a partnership or DE that are not QBU (within the meaning of § 1.987–1(b)(3)) in the Federal Register. attributed to an eligible QBU—(i) Scope. that has the yen as its functional currency. (b) Election to apply these regulations This paragraph (a)(4) applies to assets P maintains one set of books and records. The assets and liabilities of the eligible QBU to taxable years beginning after the date and liabilities of a partnership, or of an of publication of a Treasury decision are reflected on the P books and records as entity disregarded as an entity separate provided under § 1.987–2(b). The F stock adopting this rule as a final regulation from its owner for U.S. Federal income in the Federal Register. A taxpayer may held by P, and the yen liability incurred to tax purposes (DE), that are not acquire the F stock, are also recorded on the elect to apply these regulations to attributable to an eligible QBU (within books and records of P, but are not reflected taxable years beginning after the date of the meaning of § 1.987–1(b)(3)) as on such books and records for purposes of publication of a Treasury decision provided under § 1.987–2(b). section 987 pursuant to § 1.987–2(b)(2)(i)(A) adopting this rule as a final regulation and (C), respectively. in the Federal Register. Such election (ii) Partnerships. For purposes of (ii) Analysis. X’s portion of the assets and shall be binding on all members that file applying section 988 and the applicable liabilities of the eligible QBU owned by P is a consolidated return with the taxpayer regulations to transactions involving the a section 987 QBU. Y’s portion of the assets and any controlled foreign corporation, assets and liabilities described in and liabilities of the eligible QBU owned by paragraph (a)(4)(i) of this section that P is not a section 987 QBU because Y and as defined in section 957, in which the the eligible QBU have the same functional taxpayer owns more than 50 percent of are held by a partnership, the owners of currency. Because the F stock and yen- the voting power or stock (as the partnership (within the meaning of denominated liability incurred to acquire determined in section 957(a)). An § 1.987–1(b)(4)) shall be treated as such stock are not reflected on the books and election made under this paragraph owning their share of such assets and records of the eligible QBU, they are not shall be made in accordance with liabilities. Section 1.987–7(b) shall subject to section 987. In addition, because § 1.987–1(f). apply for purposes of determining an the F stock and the yen-denominated liability Par. 6. Section 1.988–1 is amended owner’s share of such assets or incurred to acquire such stock are held by P liabilities. (but not attributable to P’s eligible QBU), X by: and Y are treated as owning their share of 1. Adding paragraphs (a)(3) and (a)(4). (iii) Disregarded entities. For purposes such stock and liability, determined under 2. Revising paragraph (a)(10)(ii). of applying section 988 and the § 1.987–7(b), for purposes of applying section 3. Adding two sentences to the end of applicable regulations to transactions 988. As a result, P’s becoming the obligor paragraph (i). under the portion of the yen-denominated The additions and revision read as involving the assets and liabilities described in paragraph (a)(4)(i) of this note that is treated as being an obligation of follows: X is a section 988 transaction pursuant to section that are held by a DE, the owner paragraphs (a)(1)(ii), (a)(2)(ii) and (a)(3) of § 1.988–1 Certain definitions and special of the DE (within the meaning of this section. Similarly, the disposition of yen rules. § 1.987–1(b)(4)) shall be treated as on payments of interest and principal on the * * * * * owning all of such assets and liabilities. liability, to the extent such yen are treated as

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owned by X, are section 988 transactions described in this paragraph (a)(10)(ii) under § 1.987–11(b), then the effective under paragraphs (a)(1)(i) and (a)(3) of this that does not have a significant business date of paragraph (b)(2)(i) with respect section. P’s becoming the obligor under Y’s purpose, the Commissioner, may defer to the taxpayer shall be consistent with portion of the yen-denominated note, and Y’s portion of the yen disposed of in connection such gain or loss. such election. with payments on such note, are not section * * * * * * * * * * 988 transactions because Y has the yen as its (i) * * * Generally, the revisions to Par. 8. Section 1.989(a)–1 is amended functional currency. paragraphs (a)(3), (a)(4), (a)(5), and as follows: (5) [Reserved]. (a)(10)(ii) of this section shall apply to 1. The last sentence of paragraph * * * * * taxable years beginning one year after (b)(2)(i) is revised. (10) * * * the first day of the first taxable year 2. Paragraph (b)(4) is added. (ii) Certain transfers. (A) Exchange following the date of publication of a The revision and addition reads as gain or loss with respect to Treasury decision adopting this rule as follows: nonfunctional currency or any item a final regulation in the Federal described in paragraph (a)(2) of this Register. If a taxpayer makes an election § 1.989(a)–1 Definition of a qualified section entered into with another under § 1.987–11(b), then the effective business unit. taxpayer shall be realized upon a date of the revisions to paragraphs (b) * * * transfer (as defined under § 1.987–2(c)) (a)(3), (a)(4), and (a)(10)(ii) of this (2) * * * of such currency or item from an owner section with respect to the taxpayer (i) Persons—* * * A trust or estate is to a section 987 QBU or from a section shall be consistent with such election. a QBU of the beneficiary. 987 QBU to the owner where as a result Par. 7. Section 1.988–4 is amended by of such transfers the currency or other revising paragraph (b)(2) to read as * * * * * such item— follows: (4) Effective date. Generally, the (i) Loses its character as revisions to paragraph (b)(2)(i) of this nonfunctional currency or an item § 1.988–4 Source of gain or loss realized section shall apply to taxable years described in paragraph (a)(2) of this on a section 988 transfer. beginning one year after the first day of section; or * * * * * the first taxable year following the date (ii) Where the source of the exchange (b) * * * of publication of a Treasury decision gain or loss could be altered absent the (2) Proper reflection on the books of adopting this rule as a final regulation application of this paragraph (a)(10)(ii). the taxpayer or qualified business in the Federal Register. If a taxpayer (B) Such exchange gain or loss shall unit—(i) In general. For purposes of makes an election under § 1.987–11(b), be computed in accordance with paragraph (b)(1) of this section, the then the effective date of the revisions § 1.988–2 (without regard to § 1.988– principles of § 1.987–2(b) shall apply in to paragraph (b)(2)(i) of this section with 2(b)(8) as if the nonfunctional currency determining whether an asset, liability, respect to the taxpayer shall be or item described in paragraph (a)(2) of or item of income or expense is reflected consistent with such election. this section had been sold or otherwise on the books of a qualified business * * * * * transferred at fair market value between unit. unrelated taxpayers. For purposes of the (ii) Effective date. Generally, § 1.989(c)–1 [Removed] preceding sentence, a taxpayer must use paragraph (b)(2)(i) of this section shall Par. 9. Section 1.989(c)–1 is removed. a translation rate that is consistent with apply to taxable years beginning one the translation conventions of the year after the first day of the first taxable Mark E. Matthews, section 987 QBU to which or from year following the date of publication of Deputy Commissioner for Services and which, as the case may be, the item is a Treasury decision adopting this rule as Enforcement. being transferred. In the case of a gain a final regulation in the Federal [FR Doc. 06–7250 Filed 9–6–06 8:45 am] or loss incurred in a transaction Register. If a taxpayer makes an election BILLING CODE 4830–01–P

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Part III

State Justice Institute Grant Guideline; Notice

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STATE JUSTICE INSTITUTE • Direct a national program of following entities and types of financial assistance designed to assure organizations: Grant Guideline that each citizen of the United States is A. State and local courts and their agencies (42 U.S.C. 10705(b)(1)(A)). AGENCY: State Justice Institute. provided ready access to a fair and effective system of justice; Each application for funding from a ACTION: Proposed Grant Guideline. • Foster coordination and State or local court must be approved, SUMMARY: This Guideline sets forth the cooperation with the Federal judiciary; consistent with State law, by the State’s administrative, programmatic, and • Promote recognition of the Supreme Court or its designated agency financial requirements attendant to importance of the separation of powers or council. The latter shall receive all Fiscal Year 2007 State Justice Institute doctrine to an independent judiciary; Institute funds awarded to such courts grants, cooperative agreements, and and and be responsible for assuring proper contracts. • Encourage education for judges and administration of Institute funds, in accordance with section VII.C.2. of this DATES: September 7, 2006. support personnel of State court systems through national and State Guideline. FOR FURTHER INFORMATION CONTACT: organizations, including universities. B. National nonprofit organizations Kevin Linskey, Executive Director, State controlled by, operating in conjunction Justice Institute, 1650 King St. (Suite To accomplish these broad objectives, the Institute is authorized to provide with, and serving the judicial branches 600), Alexandria, VA 22314, (703) 684– of State governments (42 U.S.C. 6100 X201. funds to State courts, national organizations which support and are 10705(b)(1)(B)). SUPPLEMENTARY INFORMATION: Pursuant supported by State courts, national C. National nonprofit organizations to the State Justice Institute Act of 1984, judicial education organizations, and for the education and training of judges 42 U.S.C. 10701, et seq., as amended, other organizations that can assist in and support personnel of the judicial the Institute is authorized to award improving the quality of justice in the branch of State governments (42 U.S.C. grants, cooperative agreements, and State courts. 10705(b)(1)(C)). An applicant is contracts to State and local courts, considered a national education and nonprofit organizations, and others for The Institute is supervised by a Board of Directors appointed by the President, training applicant under section the purpose of improving the quality of 10705(b)(1)(C) if: justice in the State courts of the United with the consent of the Senate. The Board is statutorily composed of six 1. The principal purpose or activity of States. the applicant is to provide education Pending appropriations legislation judges; a State court administrator; and four members of the public, no more and training to State and local judges passed by the House (H.R. 5672) would and court personnel; and appropriate $2,000,000 for SJI in fiscal than two of whom can be of the same political party. 2. The applicant demonstrates a year (FY) 2007; the Senate-passed record of substantial experience in the version of the bill proposes to Through the award of grants, contracts, and cooperative agreements, field of judicial education and training. appropriate $4,500,000. D. Other eligible grant recipients (42 the Institute is authorized to perform the Regardless of the final amount U.S.C. 10705 (b)(2)(A)–(D)). following activities: provided to SJI for FY 2007, the 1. Provided that the objectives of the A. Support research, demonstrations, Institute’s Board of Directors intends to project can be served better, the Institute special projects, technical assistance, solicit grant applications across the is also authorized to make awards to: range of grant programs available. and training to improve the a. Nonprofit organizations with The following Grant Guideline is administration of justice in the State expertise in judicial administration; adopted by the State Justice Institute for courts; b. Institutions of higher education; FY 2007: B. Provide for the preparation, c. Individuals, partnerships, firms, publication, and dissemination of corporations (for-profit organizations Table of Contents information regarding State judicial must waive their fees); and I. The Mission of the State Justice Institute systems; d. Private agencies with expertise in II. Eligibility for Award C. Participate in joint projects with judicial administration. III. Scope of the Program Federal agencies and other private 2. The Institute may also make awards IV. Applications grantors; V. Application Review Procedures to State or local agencies and VI. Compliance Requirements D. Evaluate or provide for the institutions other than courts for VII. Financial Requirements evaluation of programs and projects to services that cannot be adequately VIII. Grant Adjustments determine their impact upon the quality provided through nongovernmental Appendix A SJI Libraries: Designated Sites of criminal, civil, and juvenile justice arrangements (42 U.S.C. 10705(b)(3)). and Contacts and the extent to which they have E. Inter-agency Agreements. The Appendix B Grant Application Forms (Forms contributed to improving the quality of Institute may enter into inter-agency A, B, C, D, and Disclosure of Lobbying justice in the State courts; Activities) agreements with Federal agencies (42 Appendix C Line-Item Budget Form (Form E) E. Encourage and assist in furthering U.S.C. 10705(b)(4)) and private funders Appendix D Scholarship Application Forms judicial education; and, to support projects consistent with the (Forms S1 and S2) F. Encourage, assist, and serve in a purposes of the State Justice Institute consulting capacity to State and local Act. I. The Mission of the State Justice justice system agencies in the Institute development, maintenance, and III. Scope of the Program The Institute was established by Pub. coordination of criminal, civil, and SJI is offering five types of grants in L. 98–620 to improve the administration juvenile justice programs and services. FY 2007: Project Grants, Technical of justice in the State courts of the Assistance (TA) Grants, Curriculum United States. Incorporated in the State II. Eligibility for Award Adaptation and Training (CAT) Grants, of Virginia as a private, nonprofit The Institute is authorized by Scholarships, and Partner Grants. corporation, the Institute is charged, by Congress to award grants, cooperative Effective immediately, SJI will no longer statute, with the responsibility to: agreements, and contracts to the award Continuation Grants to extend

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previous or future Project or Partner and ideas developed to relevant related cases. The Institute is Grants. audiences in State and local judicial particularly interested in projects that systems, or provide technical assistance would develop and evaluate judicial A. Project Grants to facilitate the adaptation of effective branch education programs addressing Project Grants are intended to support programs and procedures in other State elder law and related issues. innovative education and training, and local jurisdictions. d. Performance Standards and research and evaluation, demonstration, A project will be identified as a Outcome Measures. This category and technical assistance projects that Special Interest project if it meets the includes projects that will develop and can improve the administration of four criteria set forth above and it falls measure performance standards and justice in State courts nationwide. within the scope of the Board- outcomes for all aspects of court Project Grants may ordinarily not designated Special Interest program operations. The Institute is particularly exceed $300,000; however, grants in categories listed below. interested in projects that take the excess of $200,000 are apt to be rare, The order of listing does not imply National Center for State Courts’ and awarded only to support projects any ordering of priorities among the ‘‘CourTools’’ to the next level. Other likely to have a significant national categories. initiatives designed to further impact. Grant periods for Project Grants a. Court Budgeting. Unlike the professionalize court staff and ordinarily may not exceed 36 months. legislative and executive branches, the operations, or to objectively evaluate the No Continuation Grants will be judiciary seems to weather regular costs and benefits and cost-effectiveness awarded. periods of budgetary feast and famine. of problem solving courts, are also Applicants for Project Grants will be This has proven very disruptive to court welcome. required to contribute a cash match of staffing, services, technology e. Defending the Institution. The not less than 50% of the total cost of the investment, and professional education perils facing courts today include proposed project. In other words, grant and development. The Institute is attacks on our system of justice and awards by SJI must be matched at least interested in pursuing ‘‘how to’’ projects judges and catastrophes natural and dollar for dollar by grant applicants. that focus on ‘‘best practices’’ regarding manmade. The Institute is seeking Applicants may contribute the required budget structure and formulation, proposals to address each. cash match directly or in cooperation sources of revenue, inter-branch Attacks on courts and judges have with third parties. relations, and other methods that increased. These attacks are often not Prospective applicants should contribute to stabilizing court budgets scrutinized because many citizens in carefully review Section VI.8. (matching and improving their long-term financial this country lack education or requirements) and Section VI.16.a. (non- prospects. knowledge about the role of the courts supplantation) of the guidelines prior to b. Courts and the Media. Recent in our system of government. The beginning the application process. If repeated public attacks on courts have Institute remains interested in questions arise, applicants are strongly gone largely unanswered, because supporting the creation of public encouraged to consult with the Institute. judges were unwilling and/or courts education projects that would develop As set forth in Section I., the Institute were unable to respond effectively. No and test materials that judges and court is authorized to fund projects one is better prepared than a judge to leaders can use to inform community addressing a broad range of program describe decision-making on the bench groups and constituencies about the areas. Though the Board is likely to within the law and the Constitution. nature and importance of Federalism, favor Project Grant applications focused The Institute is interested in projects separation and balance of powers, and on the Special Interest program that explore the role of judge as public judicial independence. In addition, as categories described below, potential commentator within ethical and mentioned above, projects that would applicants are also encouraged to bring professional bounds. The Institute is improve the relationship between courts to the attention of the Institute also interested in judicial education or and the media are encouraged. innovative projects outside those other programs that prepare judges and Catastrophes, natural and manmade, categories. Funds will not be made court officials to serve as spokesmen in can destroy the ability of our courts to available for the ordinary, routine short notice, high profile circumstances, help provide law and order. The Board operation of court systems or programs especially in situations where courts is interested in: (1) Continuity of in any of these areas. lack dedicated press secretaries. Finally, operations proposals that go beyond the Institute is interested in promoting planning and table top exercises to 1. Special Interest Program Categories initiatives that improve relations include ‘‘no notice’’ drills and ‘‘red The Institute is interested in funding between the judiciary and the media, team’’ exercises involving all personnel both innovative programs and programs since much of the recent rancor between integral to court operations, including of proven merit that can be replicated in the two seems based on unfamiliarity those from outside agencies such as other jurisdictions. The Institute is with one another’s duties, sheriffs’ offices, (2) innovative and especially interested in funding projects responsibilities, and limitations. In secure court security information- that: particular, the Institute is interested in sharing projects that piggyback on, or • Formulate new procedures and proposals that focus on cultivating trust otherwise exploit, existing capabilities techniques, or creatively enhance and open communication between the and technologies (because new existing procedures and techniques; Third Branch and the Fourth Estate on resources for new systems are apt to be • Address aspects of the State judicial a day-to-day basis, because dialogue limited), and (3) piloting a low cost systems that are in special need of between strangers is rarely started and ‘‘virtual’’ 24/7 threat center netting serious attention; never sustained in a crisis. Federal, State, and local court security • Have national significance by c. Elder Issues. This category includes first responders with analysts developing products, services, and research, demonstration, evaluation, conducting real-time threat assessments techniques that may be used in other and education projects designed to (replacing costly ‘‘bricks and mortar’’ States; and improve management of guardianship, proposals). • Create and disseminate products probate, fraud, Americans with Though ‘‘Managing Self-Represented that effectively transfer the information Disability Act, and other types of elder- Litigation’’, ‘‘Application of Technology

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in the Courts’’, and ‘‘Children and house personnel, designed to prepare extraordinary circumstances, no grant Families in Court’’ are no longer listed judges and court personnel for recently will continue for more than five years. as Special Interest program categories, adopted innovations, reforms, and/or Partner Grants are subject to the same the SJI Board retains a keen interest in new technologies by grantee courts. cash match requirement as Project these areas and would welcome ground CAT Grants may not exceed $20,000. Grants. In other words, grant awards by breaking proposals in all three. Grant periods for CAT Grants ordinarily SJI must be matched at least dollar for Project Grant application procedures may not exceed 12 months. The SJI dollar. Applicants may contribute the can be found in section IV.A. Board intends to reserve up to $100,000 required cash match directly or in B. Technical Assistance (TA) Grants for CAT Grants. cooperation with third parties (note: a Applicants for CAT Grants will be Federal third party may contribute no TA Grants are intended to provide required to contribute a match of not more than 49% of the total cost of a State or local courts, particularly small, less than 50% of the grant amount project and only to purchase a service, rural, or impoverished urban courts or requested, of which 20% must be cash. not as a grantee’s match). regional court associations, with In other words, a grantee seeking a Partner Grant application procedures sufficient support to obtain expert $20,000 CAT grant must provide a can be found in section IV.E. assistance to diagnose a problem, $10,000 match, of which up to $8,000 develop a response to that problem, and IV. Applications can be in-kind and not less than $2,000 implement any needed changes. TA must be cash. Applicants considering A. Project Grants Grants may not exceed $30,000, and cash matches well in excess of $2,000 shall only cover the cost of obtaining the An application for a Project Grant should consider applying for Project services of expert consultants. Examples must include an application form; Grants and are strongly urged to consult of expenses not covered by TA Grants budget forms (with appropriate with the Institute prior to applying. The include the salaries, benefits, travel, or documentation); a project abstract and Institute may waive the match and cash training costs of full- or part-time court program narrative; a disclosure of match requirements in extraordinary employees. Grant periods for TA Grants lobbying form, when applicable; and circumstances (see section VI.A.8.). ordinarily may not exceed 24 months. In certain certifications and assurances calculating project duration, applicants CAT Grant application procedures (see below). See Appendix B for the are cautioned to fully consider the time can be found in section IV.C. Project Grant application forms. For a required to issue a request for proposals, D. Scholarships for Judges and Court summary of the application process, negotiate a contract with the selected Managers visit the Institute’s Web site provider, and execute the project. The (www.statejustice.org) and click on On- SJI Board intends to reserve up to Scholarships are intended to enhance Line Tutorials, then Project Grant. the skills, knowledge, and abilities of $250,000 for TA Grants. Sufficient funds 1. Forms will be reserved each quarter to assure State court judges and court managers the availability of TA Grants throughout by enabling them to attend out-of-State, a. Application Form (Form A). The the year. or to enroll in online, educational and application form requests basic Applicants for TA Grants will be training programs sponsored by national information regarding the proposed required to contribute a match of not and State providers that they could not project, the applicant, and the total less than 50% of the grant amount otherwise attend or take online because amount of funding requested from the requested, of which 20% must be cash. of limited State, local, and personal Institute. It also requires the signature of In other words, a grantee seeking a budgets. Scholarships may not exceed an individual authorized to certify on $30,000 TA grant must provide a $1,500. The SJI Board intends to reserve behalf of the applicant that the $15,000 match, of which up to $12,000 up to $250,000 for scholarships. information contained in the can be in-kind and not less than $3,000 Sufficient funds will be reserved each application is true and complete; that must be cash. Applicants considering quarter to assure the availability of submission of the application has been cash matches well in excess of $3,000 scholarships throughout the year. authorized by the applicant; and that if should consider applying for Project Scholarship application procedures funding for the proposed project is Grants and are strongly urged to consult can be found in section IV.D. approved, the applicant will comply with the requirements and conditions of with the Institute prior to applying. The E. Partner Grants Institute may waive the match and cash the award, including the assurances set match requirements in extraordinary Partner Grants are intended to allow forth in Form D. circumstances (see section VI.A.8.). SJI and Federal, State, or local agencies b. Certificate of State Approval (Form TA Grant application procedures can or foundations, trusts, or other private B). An application from a State or local be found in section IV.B. entities to combine financial resources court must include a copy of Form B in pursuit of common interests. Though signed by the State’s Chief Justice or C. Curriculum Adaptation and Training many, if not most, Partner Grants will Chief Judge, the director of the (CAT) Grants fall under the Special Interest program designated agency, or the head of the CAT Grants are intended to: (1) categories cited in section III.A., designated council. The signature Enable courts and regional or national proposals addressing other emerging or denotes that the proposed project has court associations to modify and adapt high priority court-related problems will been approved by the State’s highest model curricula, course modules, or be considered on a case-by-case basis. court or the agency or council it has conference programs to meet States’ or SJI and its financial partners may set designated. It denotes further that if the local jurisdictions’ educational needs; any level for Partner Grants, subject to Institute approved funding for the train instructors to present portions or the entire amount of the grant being project, the court or the specified all of the curricula; and pilot-test them available at the time of the award; designee will receive, administer, and to determine their appropriateness, applicants for Partner Grants may be accountable for the awarded funds. quality, and effectiveness, or (2) conduct request any amount of funding. Grant c. Budget Form (Form C). Applicants judicial branch education and training periods for Partner Grants ordinarily must submit a Form C. In addition to programs, led by either expert or in- may not exceed 36 months. Absent Form C, applicants must provide a

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detailed budget narrative providing an c. Need for the Project. If the project not been chosen, how they would be explanation of the basis for the is to be conducted in any specific identified and their cooperation estimates in each budget category (see location(s), the applicant should discuss obtained; and how the program or subsection A.4. below). the particular needs of the project site(s) procedures would be implemented and If funds from other sources are to be addressed by the project and why monitored. required to conduct the project, either as those needs are not being met through (d) For technical assistance projects, match or to support other aspects of the the use of existing programs, the applicant should explain the types project, the source, current status of the procedures, services, or other resources. of assistance that would be provided; request, and anticipated decision date If the project is not site-specific, the the particular issues and problems for must be provided. applicant should discuss the problems which assistance would be provided; d. Assurances (Form D). This form that the proposed project would how requests would be obtained and the lists the statutory, regulatory, and policy address, and why existing programs, type of assistance determined; how requirements with which recipients of procedures, services, or other resources suitable providers would be selected Institute funds must comply. cannot adequately resolve those and briefed; how reports would be e. Disclosure of Lobbying Activities. problems. The discussion should reviewed; and the cost to recipients. Applicants other than units of State or include specific references to the (2) Evaluation. Every project must local government are required to relevant literature and to the experience include an evaluation plan to determine disclose whether they, or another entity in the field. whether the project met its objectives. that is part of the same organization as d. Tasks, Methods and Evaluations. The evaluation should be designed to the applicant, have advocated a position (1) Tasks and Methods. The applicant provide an objective and independent before Congress on any issue, and to should delineate the tasks to be assessment of the effectiveness or identify the specific subjects of their performed in achieving the project usefulness of the training or services lobbying efforts (see section VI.A.7.). objectives and the methods to be used provided; the impact of the procedures, for accomplishing each task. For technology, or services tested; or the 2. Project Abstract example: validity and applicability of the research The abstract should highlight the (a) For research and evaluation conducted. In addition, where purposes, goals, methods, and projects, the applicant should include appropriate, the evaluation process anticipated benefits of the proposed the data sources, data collection should be designed to provide ongoing project. It should not exceed 1 single- strategies, variables to be examined, and or periodic feedback on the spaced page on 81⁄2 by 11 inch paper. analytic procedures to be used for effectiveness or utility of the project in conducting the research or evaluation order to promote its continuing 3. Program Narrative and ensuring the validity and general improvement. The plan should present The program narrative for an applicability of the results. For projects the qualifications of the evaluator(s); application may not exceed 25 double- involving human subjects, the describe the criteria that would be used spaced pages on 81⁄2 by 11 inch paper. discussion of methods should address to evaluate the project’s effectiveness in Margins must be at least 1 inch, and the procedures for obtaining meeting its objectives; explain how the type size must be at least 12-point and respondents’ informed consent, evaluation would be conducted, 12 cpi. The pages should be numbered. ensuring the respondents’ privacy and including the specific data collection This page limit does not include the freedom from risk or harm, and and analysis techniques to be used; forms, the abstract, the budget narrative, protecting others who are not the discuss why this approach would be and any appendices containing resumes subjects of research but would be appropriate; and present a schedule for and letters of cooperation or affected by the research. If the potential completion of the evaluation within the endorsement. Additional background exists for risk or harm to human proposed project period. material should be attached only if it is subjects, a discussion should be The evaluation plan should be essential to impart a clear included that explains the value of the appropriate to the type of project understanding of the proposed project. proposed research and the methods to proposed. For example: Numerous and lengthy appendices are be used to minimize or eliminate such (a) An evaluation approach suited to strongly discouraged. risk. many research projects is a review by an The program narrative should address (b) For education and training advisory panel of the research the following topics: projects, the applicant should include methodology, data collection a. Project Objectives. The applicant the adult education techniques to be instruments, preliminary analyses, and should include a clear, concise used in designing and presenting the products as they are drafted. The panel statement of what the proposed project program, including the teaching/ should be comprised of independent is intended to accomplish. In stating the learning objectives of the educational researchers and practitioners objectives of the project, applicants design, the teaching methods to be used, representing the perspectives affected should focus on the overall and the opportunities for structured by the proposed project. programmatic objective (e.g., to enhance interaction among the participants; how (b) The most valuable approaches to understanding and skills regarding a faculty would be recruited, selected, evaluating educational or training specific subject, or to determine how a and trained; the proposed number and programs reinforce the participants’ certain procedure affects the court and length of the conferences, courses, learning experience while providing litigants) rather than on operational seminars, or workshops to be conducted useful feedback on the impact of the objectives (e.g., provide training for 32 and the estimated number of persons program and possible areas for judges and court managers, or review who would attend them; the materials to improvement. One appropriate data from 300 cases). be provided and how they would be evaluation approach is to assess the b. Program Areas to Be Covered. The developed; and the cost to participants. acquisition of new knowledge, skills, applicant should note the Special (c) For demonstration projects, the attitudes, or understanding through Interest category or categories that are applicant should include the participant feedback on the seminar or addressed by the proposed project (see demonstration sites and the reasons training event. Such feedback might section III.A.). they were selected, or if the sites have include a self-assessment of what was

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learned along with the participant’s proposed project period. The (2) Types of Products and Press response to the quality and effectiveness management plan must also provide for Releases. The type of product to be of faculty presentations, the format of the submission of Quarterly Progress prepared depends on the nature of the sessions, the value or usefulness of the and Financial Reports within 30 days project. For example, in most instances, material presented, and other relevant after the close of each calendar quarter the products of a research, evaluation, factors. Another appropriate approach (i.e., no later than January 30, April 30, or demonstration project should include would be to use an independent July 30, and October 30). an article summarizing the project observer who might request both verbal Applicants should be aware that the findings that is publishable in a journal and written responses from participants Institute is unlikely to approve a limited serving the courts community in the program. When an education extension of the grant period without nationally, an executive summary that project involves the development of very good cause. Therefore, the would be disseminated to the project’s curricular materials, an advisory panel management plan should be as realistic primary audience, or both. Applicants of relevant experts can be coupled with as possible and fully reflect the time proposing to conduct empirical research a test of the curriculum to obtain the commitments of the proposed project or evaluation projects with national reactions of participants and faculty as staff and consultants. import should describe how they would indicated above. f. Products. The program narrative in make their data available for secondary (c) The evaluation plan for a the application should contain a analysis after the grant period (see demonstration project should description of the products to be section VI.A.14.a.). encompass an assessment of program developed (e.g., training curricula and The curricula and other products effectiveness (e.g., how well did it materials, audiotapes, videotapes, developed through education and work?); user satisfaction, if appropriate; DVDs, computer software, CD–ROM training projects should be designed for the cost-effectiveness of the program; a disks, articles, guidelines, manuals, use outside the classroom so that they process analysis of the program (e.g., reports, handbooks, benchbooks, or may be used again by the original was the program implemented as books), including when they would be participants and others in the course of designed, and/or did it provide the submitted to the Institute. The budget their duties. In addition, recipients of project services intended to the targeted should include the cost of producing grants must prepare a press release population?); the impact of the program and disseminating the product to each describing the project and announcing (e.g., what effect did the program have in-State SJI library (see Appendix A), the results, and distribute the release to on the court, and/or what benefits State chief justice, State court a list of national and State judicial resulted from the program?); and the administrator, and other appropriate branch organizations. SJI will provide replicability of the program or judges or court personnel. components of the program. press release guidelines and a list of (d) For technical assistance projects, (1) Dissemination Plan. The recipients to grantees at least 30 days applicants should explain how the application must explain how and to before the end of the grant period. quality, timeliness, and impact of the whom the products would be (3) Institute Review. Applicants must assistance provided would be disseminated; describe how they would submit a final draft of all written grant determined, and develop a mechanism benefit the State courts, including how products to the Institute for review and for feedback from both the users and they could be used by judges and court approval at least 30 days before the providers of the technical assistance. personnel; identify development, products are submitted for publication Evaluation plans involving human production, and dissemination costs or reproduction. For products in a subjects should include a discussion of covered by the project budget; and videotape or CD–ROM format, the procedures for obtaining present the basis on which products and applicants must provide for Institute respondents’ informed consent, services developed or provided under review of the product at the treatment, ensuring the respondents’ privacy and the grant would be offered to the courts script, rough-cut, and final stages of freedom from risk or harm, and community and the public at large (i.e., development, or their equivalents. No protecting others who are not the whether products would be distributed grant funds may be obligated for subjects of the evaluation but would be at no cost to recipients, or if costs are publication or reproduction of a final affected by it. Other than the provision involved, the reason for charging grant product without the written of confidentiality to respondents, recipients and the estimated price of the approval of the Institute (see section human subject protection issues product) (see section VI.A.11.b.). VI.A.11.e.). ordinarily are not applicable to Ordinarily, applicants should schedule (4) Acknowledgment, Disclaimer, and participants evaluating an education all product preparation and distribution Logo. Applicants must also include in program. activities within the project period. all project products a prominent e. Project Management. The applicant A copy of each product must be sent acknowledgment that support was should present a detailed management to the library established in each State received from the Institute and a plan, including the starting and to collect the materials developed with disclaimer paragraph based on the completion date for each task; the time Institute support (see Appendix A). example provided in section commitments to the project of key staff Applicants proposing to develop web- VI.A.11.a.2. of the Guideline. The ‘‘SJI’’ and their responsibilities regarding each based products should provide for logo must appear on the front cover of project task; and the procedures that sending a hard-copy document to the a written product, or in the opening would ensure that all tasks are SJI-designated libraries and other frames of a video, unless the Institute performed on time, within budget, and appropriate audiences to alert them to approves another placement. at the highest level of quality. In the availability of the Web site or g. Applicant Status. An applicant that preparing the project time line, Gantt electronic product (i.e., a written report is not a State or local court and has not Chart, or schedule, applicants should with a reference to the Web site). received a grant from the Institute make certain that all project activities, Fifteen (15) copies of all project within the past three years should state including publication or reproduction of products must be submitted to the whether it is either a national non-profit project products and their initial Institute, along with an electronic organization controlled by, operating in dissemination, would occur within the version in .html or .pdf format. conjunction with, and serving the

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judicial branches of State governments, Lobbying Activities Form, which would be dedicated to new or additional or a national non-profit organization for documents whether they, or another duties related to the project. the education and training of State court entity that is a part of the same b. Fringe Benefit Computation. The judges and support personnel (see organization as the applicant, have applicant should provide a description section II.). If the applicant is a advocated a position before Congress on of the fringe benefits provided to nonjudicial unit of Federal, State, or any issue, and identifies the specific employees. If percentages are used, the local government, it must explain subjects of their lobbying efforts (see authority for such use should be whether the proposed services could be Appendix B). presented, as well as a description of the adequately provided by non- k. Letters of Cooperation or Support. elements included in the determination governmental entities. If the cooperation of courts, of the percentage rate. h. Staff Capability. The applicant organizations, agencies, or individuals c. Consultant/Contractual Services should include a summary of the other than the applicant is required to and Honoraria. The applicant should training and experience of the key staff conduct the project, the applicant describe the tasks each consultant members and consultants that qualify should attach written assurances of would perform, the estimated total them for conducting and managing the cooperation and availability to the amount to be paid to each consultant, proposed project. Resumes of identified application, or send them under the basis for compensation rates (e.g., staff should be attached to the separate cover. To ensure sufficient time the number of days multiplied by the application. If one or more key staff to bring them to the Board’s attention, daily consultant rates), and the method members and consultants are not known letters of support sent under separate for selection. Rates for consultant at the time of the application, a cover must be received by the deadlines services must be set in accordance with description of the criteria that would be set below in subsection A.5. section VII.I.2.c. Prior written Institute used to select persons for these approval is required for any consultant 4. Budget Narrative positions should be included. The rate in excess of $800 per day; Institute applicant also should identify the The budget narrative should provide funds may not be used to pay a person who would be responsible for the basis for the computation of all consultant more than $1,100 per day. managing and reporting on the financial project-related costs. When the Honorarium payments must be justified aspects of the proposed project. proposed project would be partially in the same manner as consultant i. Organizational Capacity. supported by grants from other funding payments. Applicants that have not received a sources, applicants should make clear d. Travel. Transportation costs and grant from the Institute within the past what costs would be covered by those per diem rates must comply with the three years should include a statement other grants. Additional background policies of the applicant organization. If describing their capacity to administer information or schedules may be the applicant does not have an grant funds, including the financial attached if they are essential to established travel policy, then travel systems used to monitor project obtaining a clear understanding of the rates must be consistent with those expenditures (and income, if any), and proposed budget. Numerous and established by the Institute or the a summary of their past experience in lengthy appendices are strongly Federal Government (a copy of the administering grants, as well as any discouraged. Institute’s travel policy is available resources or capabilities that they have The budget narrative should cover the upon request). The budget narrative that would particularly assist in the costs of all components of the project should include an explanation of the successful completion of the project. and clearly identify costs attributable to rate used, including the components of Unless requested otherwise, an the project evaluation. Under OMB the per diem rate and the basis for the applicant that has received a grant from grant guidelines incorporated by estimated transportation expenses. The the Institute within the past three years reference in this Guideline, grant funds purpose of the travel should also be should describe only the changes in its may not be used to purchase alcoholic included in the narrative. organizational capacity, tax status, or beverages. e. Equipment. Grant funds may be financial capability that may affect its a. Justification of Personnel used to purchase only the equipment capacity to administer a grant. Compensation. The applicant should set necessary to demonstrate a new If the applicant is a non-profit forth the percentages of time to be technological application in a court or organization (other than a university), it devoted by the individuals who would that is otherwise essential to must also provide documentation of its staff the proposed project, the annual accomplishing the objectives of the 501(c) tax-exempt status as determined salary of each of those persons, and the project. Equipment purchases to support by the Internal Revenue Service and a number of work days per year used for basic court operations ordinarily will copy of a current certified audit report. calculating the percentages of time or not be approved. The applicant should For purposes of this requirement, daily rates of those individuals. The describe the equipment to be purchased ‘‘current’’ means no earlier than two applicant should explain any deviations or leased and explain why the years prior to the present calendar year. from current rates or established written acquisition of that equipment is If a current audit report is not organizational policies. If grant funds essential to accomplish the project’s available, the Institute will require the are requested to pay the salary and goals and objectives. The narrative organization to complete a financial related costs for a current employee of should clearly identify which capability questionnaire, which must be a court or other unit of government, the equipment is to be leased and which is signed by a Certified Public Accountant. applicant should explain why this to be purchased. The method of Other applicants may be required to would not constitute a supplantation of procurement should also be described. provide a current audit report, a State or local funds in violation of 42 Purchases of automated data processing financial capability questionnaire, or U.S.C. 10706(d)(1). An acceptable equipment must comply with section both, if specifically requested to do so explanation may be that the position to VII.I.2.b. by the Institute. be filled is a new one established in f. Supplies. The applicant should j. Statement of Lobbying Activities. conjunction with the project or that the provide a general description of the Non-governmental applicants must grant funds would support only the supplies necessary to accomplish the submit the Institute’s Disclosure of portion of the employee’s time that goals and objectives of the grant. In

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addition, the applicant should provide application package consisting of Form perform, and how would they be the basis for the amount requested for A; Form B, if the application is from a accomplished? Which organization or this expenditure category. State or local court, or a Disclosure of individual would be hired to provide g. Construction. Construction Lobbying Form, if the applicant is not the assistance, and how was this expenses are prohibited except for the a unit of State or local government; consultant selected? If a consultant has limited purposes set forth in section Form C; the Application Abstract; the not yet been identified, what procedures VI.A.16.b. Any allowable construction Program Narrative; the Budget and criteria would be used to select the or renovation expense should be Narrative; and any necessary consultant (applicants are expected to described in detail in the budget appendices. follow their jurisdictions’ normal narrative. Letters of application may be procedures for procuring consultant h. Telephone. Applicants should submitted at any time. Applications will services)? What specific tasks would the include anticipated telephone charges, be considered on a rolling basis. consultant(s) and court staff undertake? distinguishing between monthly charges Applications received less than 30 days What is the schedule for completion of and long distance charges in the budget before a quarterly Board meeting will be each required task and the entire narrative. Also, applicants should considered at the next Board meeting. project? How would the applicant provide the basis used to calculate the Please mark Project Application on the oversee the project and provide monthly and long distance estimates. application package envelope and send guidance to the consultant, and who at i. Postage. Anticipated postage costs it to: State Justice Institute, 1650 King the court or regional court association for project-related mailings, including Street, Suite 600, Alexandria, VA 22314. would be responsible for coordinating distribution of the final product(s), Receipt of each application will be all project tasks and submitting should be described in the budget acknowledged by letter or email. quarterly progress and financial status narrative. The cost of special mailings, b. Applicants submitting more than reports? such as for a survey or for announcing one application may include material If the consultant has been identified, a workshop, should be distinguished that would be identical in each the applicant should provide a letter from routine operational mailing costs. application in a cover letter. This from that individual or organization The bases for all postage estimates material will be incorporated by documenting interest in and availability should be included in the budget reference into each application and for the project, as well as the narrative. counted against the 25-page limit for the consultant’s ability to complete the j. Printing/Photocopying. Anticipated program narrative. A copy of the cover assignment within the proposed time costs for printing or photocopying letter should be attached to each copy frame and for the proposed cost. The project documents, reports, and of the application. consultant must agree to submit a publications should be included in the B. Technical Assistance (TA) Grants detailed written report to the court and budget narrative, along with the bases the Institute upon completion of the used to calculate these estimates. 1. Application Procedures technical assistance. k. Indirect Costs. Recoverable indirect For a summary of the application c. Likelihood of Implementation. costs are limited to no more than 75% procedures for TA Grants, visit the What steps have been or would be taken of a grantee’s direct personnel costs, i.e. Institute’s Web site to facilitate implementation of the salaries plus fringe benefits (see section (www.statejustice.org) and click On-Line consultant’s recommendations upon VII.I.4.). Tutorials, then Technical Assistance completion of the technical assistance? Applicants should describe the Grant. For example, if the support or indirect cost rates applicable to the In lieu of formal applications, cooperation of specific court officials or grant in detail. If costs often included applicants for TA Grants may submit, at committees, other agencies, funding within an indirect cost rate are charged any time, an original and three copies of bodies, organizations, or a court other directly (e.g., a percentage of the time of a detailed letter describing the proposed than the applicant would be needed to senior managers to supervise project project. Letters from individual trial or adopt the changes recommended by the activities), the applicant should specify appellate courts must be signed by the consultant and approved by the court, that these costs are not included within presiding judge or manager of that court. how would they be involved in the its approved indirect cost rate. These Letters from State court systems must be review of the recommendations and rates must be established in accordance signed by the Chief Justice or State development of the implementation with section VII.I.4. If the applicant has Court Administrator. Letters from plan? an indirect cost rate or allocation plan regional court associations must be d. Support for the Project from the approved by any Federal granting signed by the president of the State Supreme Court or its Designated agency, a copy of the approved rate association. Agency or Council. If a State or local agreement must be attached to the court submits a request for technical application. 2. Application Format assistance, it must include written l. Match. Applicants that do not Although there is no prescribed form concurrence on the need for the contemplate making matching for the letter, or a minimum or technical assistance. This concurrence contributions continuously throughout maximum page limit, letters of may be a copy of SJI Form B (see the course of the project or on a task-by- application should include the Appendix B) signed by the Chief Justice task basis must provide a schedule following information: of the State Supreme Court or the Chief within 30 days after the beginning of the a. Need for Funding. What is the Justice’s designee, or a letter from the project period indicating at what points critical need facing the applicant? How State Chief Justice or designee. The during the project period the matching would the proposed technical assistance concurrence may be submitted with the contributions would be made (see help the applicant meet this critical applicant’s letter or under separate sections VI.A.8., and VII.E.1.). need? Why cannot State or local cover prior to consideration of the resources fully support the costs of the application. The concurrence also must 5. Submission Requirements required consultant services? specify whether the State Supreme a. Every applicant must submit an b. Project Description. What tasks Court would receive, administer, and original and three copies of the would the consultant be expected to account for the grant funds, if awarded,

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or would designate the local court or a (www.statejustice.org) and click on On- (5) Chief Justice’s Concurrence. Local specified agency or council to receive Line Tutorials, then Curriculum courts should attach a concurrence form the funds directly. Adaptation and Training Grant. signed by the Chief Justice of the State In lieu of formal applications, or his or her designee. (See Appendix B, 3. Budget and Matching State applicants should submit an original Form B.) Contribution and three photocopies of a detailed b. For training assistance: A completed Form E, ‘‘Line-Item letter. (1) Need for Funding. What is the Budget Form’’ (see Appendix C), and 2. Application Format court reform or initiative prompting the budget narrative must be included with need for training? How would the the letter requesting technical Although there is no prescribed proposed training help the applicant assistance. The estimated cost of the format for the letter, or a minimum or implement planned changes at the technical assistance services should be maximum page limit, letters of court? Why cannot State or local broken down into the categories listed application should include the resources fully support the costs of the on the budget form rather than following information: a. For adaptation required training? of a curriculum: aggregated under the Consultant/ (2) Project Description. What tasks Contractual category. (1) Project Description. What is the title of the model curriculum to be would the trainer(s) be expected to The budget narrative should provide perform, and how would they be the basis for all project-related costs, adapted and who originally developed it? Why is this education program accomplished? Which organization or including the basis for determining the individual would be hired, if in-house estimated consultant costs, if needed at the present time? What are the project’s goals? What are the personnel are not the trainers, to compensation of the consultant is provide the training, and how was the required (e.g., the number of days per learning objectives of the adapted curriculum? What program components trainer selected? If a trainer has not yet task times the requested daily been identified, what procedures and consultant rate). Applicants should be would be implemented, and what types of modifications, if any, are anticipated criteria would be used to select the aware that consultant rates above $800 in length, format, learning objectives, trainer? [Note: Applicants are expected per day must be approved in advance by teaching methods, or content? Who to follow their jurisdictions’ normal the Institute, and that no consultant will would be responsible for adapting the procedures for procuring consultant be paid more than $1,100 per day from model curriculum? Who would the services.] What specific tasks would the Institute funds. In addition, the budget participants be, how many would there trainer and court staff or regional court should provide for submission of two be, how would they be recruited, and association members undertake? What copies of the consultant’s final report to from where would they come (e.g., from presentation methods will be used? the Institute. a single local jurisdiction, from across What is the schedule for completion of Recipients of TA Grants do not have the State, from a multi-State region, each required task and the entire to submit an audit report but must from across the nation)? project? How would the applicant maintain appropriate documentation to (2) Need for Funding. Why are oversee the project and provide support expenditures (see section sufficient State or local resources guidance to the trainer, and who at the VI.A.3.). unavailable to fully support the court or affiliated with the regional 4. Submission Requirements modification and presentation of the court association would be responsible for coordinating all project tasks and Letters of application may be model curriculum? What is the potential for replicating or integrating the adapted submitting quarterly progress and submitted at any time. Applications will financial status reports? be considered on a rolling basis. curriculum in the future using State or local funds, once it has been If the trainer has been identified, the Applications received less than 30 days applicant should provide a letter from before a quarterly Board meeting will be successfully adapted and tested? (3) Likelihood of Implementation. that individual or organization considered at the next Board meeting. What is the proposed timeline, documenting interest in and availability If the support or cooperation of including the project start and end for the project, as well as the trainer’s agencies, funding bodies, organizations, dates? On what date(s) would the ability to complete the assignment or courts other than the applicant would judicial branch education program be within the proposed time frame and for be needed in order for the consultant to presented? What process would be used the proposed cost. The trainer must perform the required tasks, written to modify and present the program? agree to submit a detailed written report assurances of such support or Who would serve as faculty, and how to the court and the Institute upon cooperation should accompany the were they selected? What measures completion of the technical assistance. application letter. Support letters also would be taken to facilitate subsequent (3) Likelihood of Implementation. may be submitted under separate cover; presentations of the program? [Note: What steps have been or would be taken however, to ensure that there is Ordinarily, an independent evaluation to coordinate the implementation of the sufficient time to bring them to the of a curriculum adaptation project is not new reform, initiative, etc. and the attention of the Board’s Technical required; however, the results of any training to support the same? For Assistance Grant Committee, letters sent evaluation should be included in the example, if the support or cooperation under separate cover must be received final report.] of specific court or regional court by the same date as the technical (4) Expressions of Interest by Judges association officials or committees, assistance request being supported. and/or Court Personnel. Does the other agencies, funding bodies, C. Curriculum Adaptation and Training proposed program have the support of organizations, or a court other than the (CAT) Grants the court system or association applicant would be needed to adopt the leadership, and of judges, court reform and initiate the training 1. Application Procedures managers, and judicial branch education proposed, how would they be involved For a summary of the application personnel who are expected to attend? in the review of the recommendations procedures for CAT Grants, visit the [Note: Applicants may demonstrate this and development of the implementation Institute’s Web site by attaching letters of support.] plan?

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(4) Support for the Project from the including taxes). Transportation organization of which the applicant is a State Supreme Court or its Designated expenses may include round-trip coach member does not qualify as an out-of- Agency or Council. If a State or local airfare or train fare. Scholarship State educational program for court submits an application, it must recipients are strongly encouraged to scholarship purposes, even though it include written concurrence on the take advantage of excursion or other may include workshops or other need for the technical assistance. This special airfares (e.g., reductions offered training sessions. concurrence may be a copy of SJI Form when a ticket is purchased 21 days in Applicants are encouraged not to wait B (see Appendix B) signed by the Chief advance of the travel date) when making for the decision on a scholarship to Justice of the State Supreme Court or the their travel arrangements. Recipients register for an educational program they Chief Justice’s designee, or a letter from who drive to a program site may receive wish to attend. $.445/mile up to the amount of the the State Chief Justice or designee. The 3. Forms concurrence may be submitted with the advanced-purchase round-trip airfare applicant’s letter or under separate between their homes and the program a. Scholarship Application—Form S1 cover prior to consideration of the sites. Funds to pay tuition, (Appendix D). The Scholarship application. The concurrence also must transportation, and lodging expenses in Application requests basic information specify whether the State Supreme excess of $1,500 and other costs of about the applicant and the educational Court would receive, administer, and attending the program—such as program the applicant would like to account for the grant funds, if awarded, conference fees, meals, materials, attend. It also addresses the applicant’s or would designate the local court or a transportation to and from airports, and commitment to share the skills and specified agency or council to receive local transportation (including rental knowledge gained with local court the funds directly. cars)—at the program site must be colleagues and to submit an evaluation obtained from other sources or borne by of the program the applicant attends. 4. Budget and Matching State the scholarship recipient. Scholarship The Scholarship Application must bear Contribution applicants are encouraged to check the original signature of the applicant. Applicants should attach a copy of other sources of financial assistance and Faxed or photocopied signatures will budget Form E (see Appendix C) and a to combine aid from various sources not be accepted. budget narrative (see subsection A.4. whenever possible. b. Scholarship Application above) that describes the basis for the A scholarship is not transferable to Concurrence—Form S2 (Appendix D). computation of all project-related costs another individual. It may be used only Judges and court managers applying for and the source of the match offered. for the course specified in the scholarships must submit the written application unless the applicant’s concurrence of the Chief Justice of the 5. Submission Requirements request to attend a different course that State’s Supreme Court (or the Chief Letters of application may be meets the eligibility requirements is Justice’s designee) on the Institute’s submitted at any time. Applications will approved in writing by the Institute. Judicial Education Scholarship be considered on a rolling basis. Decisions on such requests will be made Concurrence form (see Appendix D). Applications received less than 30 days within 30 days after the receipt of the The signature of the presiding judge of before a quarterly Board meeting will be request letter. the applicant’s court cannot be considered at the next Board meeting. 2. Eligibility Requirements substituted for that of the Chief Justice For curriculum adaptation requests, or the Chief Justice’s designee. Court applicants should allow at least 60 days For a summary of the scholarship managers, other than elected clerks of between the Board meeting and the date award process, visit the Institute’s Web court, also must submit a letter of of the proposed program to allow site at www.statejustice.org and click on support from their immediate sufficient time for needed planning. For On-Line Tutorials, then Scholarship. supervisors. a. Recipients. Scholarships can be example, a court that plans to conduct awarded only to full-time judges of State 4. Submission Requirements an education program in June 2007 or local trial and appellate courts; full- should submit its application no later Scholarship applications must be time professional, State, or local court than 30 days before the Board’s winter submitted during the periods specified personnel with management (March) meeting. below: responsibilities; and supervisory and January 1 and February 23, 2007, for D. Scholarships management probation personnel in programs beginning between April 1 judicial branch probation offices. Senior 1. Limitations and June 30, 2007; judges, part-time judges, quasi-judicial April 2 and May 25, 2007 for An applicant may apply for a hearing officers including referees and programs beginning between July 1 and scholarship for only one educational commissioners, administrative law September 30, 2007; program during any given application judges, staff attorneys, law clerks, line July 2 and August 24, 2007 for cycle. Applicants may not receive more staff, law enforcement officers, and programs beginning between October 1 than one scholarship in a three-year other executive branch personnel are and December 31, 2007; and period unless the course specifically not eligible to receive a scholarship. October 1 and November 30, 2007 for assumes multi-year participation or the b. Courses. A scholarship can be programs beginning between January 1 course is part of a graduate degree awarded only for: (1) A course and March 31, 2008. program in judicial studies in which the presented in a State other than the one No exceptions or extensions will be applicant is currently enrolled (neither in which the applicant resides or works, granted. Applications sent prior to the exception should be taken as a or (2) an online course. The course must beginning of an application period will commitment on the part of the SJI Board be designed to enhance the skills of new be treated as having been sent one week to approve serial scholarships). or experienced judges and court after the beginning of that application Scholarship funds may be used only managers; or be offered by a recognized period. All the required items must be to cover the costs of tuition, graduate program for judges or court received for an application to be transportation, and reasonable lodging managers. The annual or mid-year considered. If the Concurrence form or expenses (not to exceed $150 per night, meeting of a State or national letter of support is sent separately from

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the application, the postmark date of the (10) The demonstration of cooperation (5) Expressions of interest by the last item to be sent will be used in and support of other agencies that may judges and/or court personnel who applying the above criteria. be affected by the project. would be directly involved in or All applications should be sent by (11) The proposed project’s affected by the project. mail or courier (not fax or e-mail) to: relationship to one of the Special b. For training assistance: Scholarship Program Coordinator, State Interest categories set forth in section (1) Whether the training would Justice Institute, 1650 King Street, Suite III.A. address a critical need of the court or 600, Alexandria, VA 22314. b. In determining which projects to association; support, the Institute will also consider (2) The soundness of the training E. Partner Grants whether the applicant is a State court, approach to the problem; SJI and its funding partners may a national court support or education (3) The qualifications of the trainer(s) meld, pick and choose, or waive their organization, a non-court unit of to be hired, or the specific criteria that application procedures, grant cycles, or government, or other type of entity will be used to select the trainer(s); grant requirements to expedite the eligible to receive grants under the (4) The commitment of the court or award of jointly-funded grants targeted Institute’s enabling legislation (see association to the training program; and at emerging or high priority problems section II.); the availability of financial (5) The reasonableness of the confronting State and local courts. As assistance from other sources for the proposed budget. often as not, SJI may solicit brief project; the amount of the applicant’s The Institute will also consider factors proposals from potential grantees to match; the extent to which the proposed such as the reasonableness of the shop among fellow financial partners as project would also benefit the Federal amount requested, compliance with a first step. Should SJI be chosen as the courts or help State courts enforce match requirements, diversity of subject lead grant manager, Project Grant Federal constitutional and legislative matter, geographic diversity, the level of application procedures will apply to the requirements; and the level of appropriations available in the current proposed Partner Grant. As with Project appropriations available to the Institute year, and the amount expected to be Grants, Partner Grants will be targeted at in the current year and the amount available in succeeding fiscal years. expected to be available in succeeding initiatives likely to have a significant 4. Scholarships national impact. fiscal years. Scholarships will be approved only 2. Technical Assistance (TA) Grant V. Application Review Procedures for programs that either (1) enhance the Applications A. Preliminary Inquiries skills of judges and court managers; or TA Grant applications will be rated (2) are part of a graduate degree program The Institute staff will answer on the basis of the following criteria: for judges or court personnel. inquiries concerning application a. Whether the assistance would Scholarships will be awarded on the procedures. The staff contact will be address a critical need of the applicant; basis of: named in the Institute’s letter or e-mail b. The soundness of the technical a. The date on which the application acknowledging receipt of the assistance approach to the problem; and concurrence (and support letter, if application. c. The qualifications of the required) were sent (‘‘first come, first consultant(s) to be hired, or the specific B. Selection Criteria serve’’); criteria that will be used to select the b. The unavailability of State or local 1. Project Grant Applications consultant(s); funds or scholarship funds from another d. The commitment of the court or a. Project Grant applications will be source to cover the costs of attending association to act on the consultant’s the program, or participating online; rated on the basis of the criteria set forth recommendations; and below. The Institute will accord the e. The reasonableness of the proposed c. The absence of educational greatest weight to the following criteria: budget. programs in the applicant’s State (1) The soundness of the The Institute also will consider factors addressing the topic(s) covered by the methodology; such as the level and nature of the educational program for which the (2) The demonstration of need for the match that would be provided, diversity scholarship is being sought; project; of subject matter, geographic diversity, d. Geographic balance among the (3) The appropriateness of the the level of appropriations available to recipients; proposed evaluation design; the Institute in the current year, and the e. The balance of scholarships among (4) If applicable, the key findings and amount expected to be available in educational providers and programs; recommendations of the most recent succeeding fiscal years. f. The balance of scholarships among evaluation and the proposed responses the types of courts and court personnel to those findings and recommendations; 3. Curriculum Adaptation and Training (trial judge, appellate judge, trial court (5) The applicant’s management plan (CAT) Grant Applications administrator) represented; and and organizational capabilities; CAT Grant applications will be rated g. the level of appropriations available (6) The qualifications of the project’s on the basis of the following criteria: to the Institute in the current year and staff; a. For curriculum adaptation projects: the amount expected to be available in (7) The products and benefits (1) The goals and objectives of the succeeding fiscal years. resulting from the project, including the proposed project; The postmark or courier receipt will extent to which the project will have (2) The need for outside funding to be used to determine the date on which long-term benefits for State courts across support the program; the application form and other required the nation; (3) The appropriateness of the items were sent. (8) The degree to which the findings, approach in achieving the project’s 5. Partner Grants procedures, training, technology, or educational objectives; other results of the project can be (4) The likelihood of effective It seems probable that the selection transferred to other jurisdictions; implementation and integration of the criteria for Partner Grants will be driven (9) The reasonableness of the modified curriculum into ongoing by the collective priorities of the proposed budget; and educational programming; and ‘‘bankers’ roundtable’’ that forms

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around this grant-making opportunity partner’s procedures, a mix of both, or additional policies governing the use of and the collective assessments of entirely unique procedures. All Partner Institute grant funds. These statutory roundtable participants regarding the Grants will have to be approved by the and policy requirements are set forth needs and capabilities of court and Board of Directors on whatever schedule below. court-related organizations. Having makes sense at the time. A. Recipients of Project Grants settled on priorities, SJI and its financial partners will likely contact the courts or D. Return Policy 1. Advocacy court-related organizations most Unless a specific request is made, No funds made available by the acceptable as pilots, laboratories, unsuccessful applications will not be Institute may be used to support or consultants, or the like. Should SJI be returned. Applicants are advised that conduct training programs for the chosen as the lead grant manager, Institute records are subject to the purpose of advocating particular Project Grant application review provisions of the Federal Freedom of nonjudicial public policies or procedures will apply to the proposed Information Act, 5 U.S.C. 552. encouraging nonjudicial political Partner Grant. E. Notification of Board Decision activities (42 U.S.C. 10706(b)). C. Review and Approval Process 1. The Institute will send written 2. Approval of Key Staff 1. Project Grant Applications notice to applicants concerning all If the qualifications of an employee or Board decisions to approve, defer, or The Institute’s Board of Directors will consultant assigned to a key project staff deny their respective applications. For review the applications competitively. position are not described in the all applications (except scholarships), The Institute staff will prepare a application or if there is a change of a the Institute also will convey the key narrative summary and a rating sheet person assigned to such a position, the issues and questions that arose during assigning points for each relevant recipient must submit a description of the review process. A decision by the selection criterion. The staff will present the qualifications of the newly assigned Board to deny an application may not be the narrative summaries and rating person to the Institute. Prior written sheets to the Board for its review. The appealed, but it does not prohibit approval of the qualifications of the new Board will review all application resubmission of a proposal based on person assigned to a key staff position summaries and decide which projects it that application in a subsequent funding must be received from the Institute will fund. The decision to fund a project cycle. The Institute will also notify the before the salary or consulting fee of is solely that of the Board of Directors. State court administrator when grants that person and associated costs may be The Chairman of the Board will sign are approved by the Board to support paid or reimbursed from grant funds. projects that will be conducted by or approved awards on behalf of the 3. Audit Institute. involve courts in that State. 2. The Institute intends to notify each Recipients of project and continuation 2. Technical Assistance (TA) and scholarship applicant of the Board grants must provide for an annual fiscal Curriculum Adaptation and Training committee’s decision within 30 days audit which includes an opinion on (CAT) Grant Applications after the close of the relevant whether the financial statements of the The Institute staff will prepare a application period. grantee present fairly its financial narrative summary of each application F. Response to Notification of Approval position and its financial operations are and a rating sheet assigning points for in accordance with generally accepted each relevant selection criterion. The With the exception of those approved accounting principles (see section VII.K. Board of Directors has delegated its for scholarships, applicants have 30 for the requirements of such audits). authority to approve TA and CAT days from the date of the letter notifying Scholarship recipients, Curriculum Grants to the committee established for them that the Board has approved their Adaptation and Training Grants, and each program. The committee will application to respond to any revisions Technical Assistance Grants are not review the applications competitively. requested by the Board. If the requested required to submit an audit, but they The Chairman of the Board will sign revisions (or a reasonable schedule for must maintain appropriate approved awards on behalf of the submitting such revisions) have not documentation to support all Institute. been submitted to the Institute within expenditures. 30 days after notification, the approval 3. Scholarships may be rescinded and the application 4. Budget Revisions A committee of the Institute’s Board presented to the Board for Budget revisions among direct cost of Directors will review scholarship reconsideration. In the event an issue categories that: (a) Transfer grant funds applications quarterly. The Board of will only be resolved after award, such to an unbudgeted cost category, or (b) Directors has delegated its authority to as the selection of a consultant, the final individually or cumulatively exceed approve scholarships to the committee award document will include a Special five percent of the approved original established for the program. The Condition that will require additional budget or the most recently approved committee will review the applications grantee reporting and Institute review revised budget require prior Institute competitively. In the event of a tie vote, and approval. Special Conditions, in the approval. Failure to comply with these the Chairman will serve as the tie- form of incentives or sanctions, may requirements could result in the breaker. also be used in situations where past termination of a grantee’s award. The Chairman of the Board will sign poor performance by a grantee approved awards on behalf of the necessitates increased grant oversight. 5. Conflict of Interest Institute. Personnel and other officials VI. Compliance Requirements connected with Institute-funded 4. Partner Grants The State Justice Institute Act programs must adhere to the following SJI’s internal process for the review contains limitations and conditions on requirements: and approval of Partner Grants will grants, contracts, and cooperative a. No official or employee of a depend upon negotiations with fellow agreements awarded by the Institute. recipient court or organization shall financiers. SJI may use its procedures, a The Board of Directors has approved participate personally through decision,

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approval, disapproval, recommendation, the passage or defeat of any legislation The match requirement may be the rendering of advice, investigation, or by Federal, State or local legislative waived in exceptionally rare otherwise in any proceeding, bodies (42 U.S.C. 10706(a)). circumstances upon the request of the application, request for a ruling or other b. It is the policy of the Board of Chief Justice of the highest court in the determination, contract, grant, Directors to award funds only to support State or the highest ranking official in cooperative agreement, claim, applications submitted by organizations the requesting organization and controversy, or other particular matter that would carry out the objectives of approval by the Board of Directors (42 in which Institute funds are used, their applications in an unbiased U.S.C. 10705(d)). The Board of Directors where, to his or her knowledge, he or manner. Consistent with this policy and encourages all applicants to provide the she or his or her immediate family, the provisions of 42 U.S.C. 10706, the maximum amount of cash and in-kind partners, organization other than a Institute will not knowingly award a match possible, even if a waiver is public agency in which he or she is grant to an applicant that has, directly approved. The amount and nature of serving as officer, director, trustee, or through an entity that is part of the match are criteria in the grant selection partner, or employee or any person or same organization as the applicant, process (see section V.B.1.b.). advocated a position before Congress on organization with whom he or she is 9. Nondiscrimination negotiating or has any arrangement the specific subject matter of the concerning prospective employment, application. No person may, on the basis of race, sex, national origin, disability, color, or has a financial interest. 8. Matching Requirements b. In the use of Institute project funds, creed be excluded from participation in, an official or employee of a recipient All grantees other than scholarship denied the benefits of, or otherwise court or organization shall avoid any recipients are required to provide a subjected to discrimination under any action which might result in or create match. A match is the portion of project program or activity supported by the appearance of: costs not borne by the Institute. Match Institute funds. Recipients of Institute (1) Using an official position for includes both cash and in-kind funds must immediately take any private gain; or contributions. Cash match is the direct measures necessary to effectuate this (2) affecting adversely the confidence outlay of funds by the grantee or a third provision. of the public in the integrity of the party to support the project. Examples 10. Political Activities Institute program. of cash match are the dedication of c. Requests for proposals or funds to support a new employee or No recipient may contribute or make invitations for bids issued by a recipient purchase new equipment to carry out available Institute funds, program of Institute funds or a subgrantee or the project or the application of project personnel, or equipment to any political subcontractor will provide notice to income (e.g., tuition or the proceeds of party or association, or the campaign of prospective bidders that the contractors sales of grant products) generated any candidate for public or party office. who develop or draft specifications, during the grant period to grant costs. Recipients are also prohibited from requirements, statements of work, and/ In-kind match consists of using funds in advocating or opposing or requests for proposals for a proposed contributions of time and/or services of any ballot measure, initiative, or procurement will be excluded from current staff members, space, supplies, referendum. Officers and employees of bidding on or submitting a proposal to etc., made to the project by the grantee recipients shall not intentionally compete for the award of such or others (e.g., advisory board members) identify the Institute or recipients with procurement. working directly on the project or that any partisan or nonpartisan political portion of the grantee’s Federally activity associated with a political party 6. Inventions and Patents approved indirect cost rate that exceeds or association, or the campaign of any If any patentable items, patent rights, the Guideline’s limit of permitted candidate for public or party office (42 processes, or inventions are produced in charges (75% of salaries and benefits). U.S.C. 10706(a)). the course of Institute-sponsored work, Under normal circumstances, such fact shall be promptly and fully allowable match may be incurred only 11. Products reported to the Institute. Unless there is during the project period. When a. Acknowledgment, Logo, and a prior agreement between the grantee appropriate, and with the prior written Disclaimer. (1) Recipients of Institute and the Institute on disposition of such permission of the Institute, match may funds must acknowledge prominently items, the Institute shall determine be incurred from the date of the Board on all products developed with grant whether protection of the invention or of Directors’ approval of an award. funds that support was received from discovery shall be sought. The Institute Match does not include the time of the Institute. The ‘‘SJI’’ logo must will also determine how the rights in participants attending an education appear on the front cover of a written the invention or discovery, including program. The amount and nature of product, or in the opening frames of a rights under any patent issued thereon, required match depends on the type video product, unless another shall be allocated and administered in grant (see section III.). placement is approved in writing by the order to protect the public interest The grantee is responsible for Institute. This includes final products consistent with ‘‘Government Patent ensuring that the total amount of match printed or otherwise reproduced during Policy’’ (President’s Memorandum for proposed is actually contributed. If a the grant period, as well as reprintings Heads of Executive Departments and proposed contribution is not fully met, or reproductions of those materials Agencies, February 18, 1983, and the Institute may reduce the award following the end of the grant period. A statement of Government Patent Policy). amount accordingly, in order to camera-ready logo sheet is available maintain the ratio originally provided from the Institute upon request. 7. Lobbying for in the award agreement (see section (2) Recipients also must display the a. Funds awarded to recipients by the VII.E.1.). following disclaimer on all grant Institute shall not be used, indirectly or The Board of Directors looks favorably products: ‘‘This [document, film, directly, to influence Executive Orders upon any unrequired match contributed videotape, etc.] was developed under or similar promulgations by Federal, by applicants when making grant [grant/cooperative agreement] number State or local agencies, or to influence decisions. SJI-[insert number] from the State

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Justice Institute. The points of view others to use, the materials for purposes properly identified, whether the expressed are those of the [author(s), consistent with the State Justice material is in a verbatim or extensive filmmaker(s), etc.] and do not Institute Act. paraphrase format. necessarily represent the official d. Distribution. In addition to the 12. Prohibition Against Litigation position or policies of the State Justice distribution specified in the grant Support Institute.’’ application, grantees shall send: b. Charges for Grant-Related (1) Fifteen (15) copies of each final No funds made available by the Products/Recovery of Costs. (1) When product developed with grant funds to Institute may be used directly or Institute funds fully cover the cost of the Institute, unless the product was indirectly to support legal assistance to developing, producing, and developed under either a Technical parties in litigation, including cases disseminating a product (e.g., a report, Assistance or a Curriculum Adaptation involving capital punishment. and Training Grant, in which case curriculum, videotape, or software), the 13. Reporting Requirements product should be distributed to the submission of 2 copies is required; field without charge. When Institute (2) An electronic version of the a. Recipients of Institute funds other funds only partially cover the product in .html or .pdf format to the than scholarships must submit development, production, or Institute; and Quarterly Progress and Financial Status dissemination costs, the grantee may, (3) One copy of each final product Reports within 30 days of the close of with the Institute’s prior written developed with grant funds to the each calendar quarter (that is, no later approval, recover its costs for library established in each State to than January 30, April 30, July 30, and developing, producing, and collect materials prepared with Institute October 30). The Quarterly Progress disseminating the material to those support. A list of the libraries is Reports shall include a narrative requesting it, to the extent that those contained in Appendix A. Labels for description of project activities during costs were not covered by Institute these libraries are available on the the calendar quarter, the relationship funds or grantee matching Institute’s Web site, between those activities and the task contributions. www.statejustice.org. schedule and objectives set forth in the (2) Applicants should disclose their (4) Bound copies of products, rather approved application or an approved intent to sell grant-related products in than hard copies in ring binders, to SJI adjustment thereto, any significant the application. Grantees must obtain depository libraries, where possible and problem areas that have developed and the written prior approval of the cost-effective. Grantees that develop how they will be resolved, and the Institute of their plans to recover project web-based electronic products must activities scheduled during the next costs through the sale of grant products. send a hard-copy document to the SJI- reporting period. Failure to comply with Written requests to recover costs designated libraries and other the requirements of this provision could ordinarily should be received during the appropriate audiences to alert them to result in the termination of a grantee’s grant period and should specify the the availability of the Web site or award. nature and extent of the costs to be electronic product. Recipients of b. The quarterly Financial Status recouped, the reason that such costs Technical Assistance and Curriculum Report must be submitted in accordance were not budgeted (if the rationale was Adaptation and Training Grants are not with section VII.H.2. of this Guideline. not disclosed in the approved required to submit final products to A final project Progress Report and application), the number of copies to be State libraries. Financial Status Report shall be sold, the intended audience for the (5) A press release describing the submitted within 90 days after the end products to be sold, and the proposed project and announcing the results to a of the grant period in accordance with sale price. If the product is to be sold list of national and State judicial branch section VII.L.1. of this Guideline. for more than $25, the written request organizations provided by the Institute. 14. Research also should include a detailed e. Institute Approval. No grant funds itemization of costs that will be may be obligated for publication or a. Availability of Research Data for recovered and a certification that the reproduction of a final product Secondary Analysis. Upon request, costs were not supported by either developed with grant funds without the grantees must make available for Institute grant funds or grantee written approval of the Institute. secondary analysis a diskette(s) or data matching contributions. Grantees shall submit a final draft of tape(s) containing research and (3) In the event that the sale of grant each written product to the Institute for evaluation data collected under an products results in revenues that exceed review and approval. The draft must be Institute grant and the accompanying the costs to develop, produce, and submitted at least 30 days before the code manual. Grantees may recover the disseminate the product, the revenue product is scheduled to be sent for actual cost of duplicating and mailing or must continue to be used for the publication or reproduction to permit otherwise transmitting the data set and authorized purposes of the Institute- Institute review and incorporation of manual from the person or organization funded project or other purposes any appropriate changes required by the requesting the data. Grantees may consistent with the State Justice Institute. Grantees must provide for provide the requested data set in the Institute Act that have been approved by timely reviews by the Institute of format in which it was created and the Institute (see section VII.G.). videotape, DVD or CD–ROM products at analyzed. c. Copyrights. Except as otherwise the treatment, script, rough cut, and b. Confidentiality of Information. provided in the terms and conditions of final stages of development or their Except as provided by Federal law other an Institute award, a recipient is free to equivalents. than the State Justice Institute Act, no copyright any books, publications, or f. Original Material. All products recipient of financial assistance from SJI other copyrightable materials developed prepared as the result of Institute- may use or reveal any research or in the course of an Institute-supported supported projects must be originally- statistical information furnished under project, but the Institute shall reserve a developed material unless otherwise the Act by any person and identifiable royalty-free, nonexclusive and specified in the award documents. to any specific private person for any irrevocable right to reproduce, publish, Material not originally developed that is purpose other than the purpose for or otherwise use, and to authorize included in such products must be which the information was obtained.

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Such information and copies thereof 17. Suspension or Termination of the preferred qualifications or shall be immune from legal process, and Funding experience of those selected as faculty, shall not, without the consent of the After providing a recipient reasonable developed under the grant at the person furnishing such information, be notice and opportunity to submit conclusion of the grant period, along admitted as evidence or used for any written documentation demonstrating with a final report that includes any purpose in any action, suit, or other why fund termination or suspension evaluation results and explains how the judicial, legislative, or administrative should not occur, the Institute may grantee intends to present the proceedings. terminate or suspend funding of a educational program in the future, as c. Human Subject Protection. Human project that fails to comply substantially well as two copies of the consultant’s or subjects are defined as individuals who with the Act, the Guideline, or the terms trainer’s report. are participants in an experimental and conditions of the award (42 U.S.C. C. Scholarship Recipients procedure or who are asked to provide 10708(a)). information about themselves, their 1. Scholarship recipients are 18. Title to Property attitudes, feelings, opinions, and/or responsible for disseminating the experiences through an interview, At the conclusion of the project, title information received from the course to questionnaire, or other data collection to all expendable and nonexpendable their court colleagues locally and, if technique. All research involving personal property purchased with possible, throughout the State (e.g., by human subjects shall be conducted with Institute funds shall vest in the recipient developing a formal seminar, circulating the informed consent of those subjects court, organization, or individual that the written material, or discussing the and in a manner that will ensure their purchased the property if certification is information at a meeting or conference). privacy and freedom from risk or harm made to and approved by the Institute Recipients also must submit to the and the protection of persons who are that the property will continue to be Institute a certificate of attendance at not subjects of the research but would used for the authorized purposes of the the program, an evaluation of the be affected by it, unless such procedures Institute-funded project or other educational program they attended, and and safeguards would make the research purposes consistent with the State a copy of the notice of any scholarship impractical. In such instances, the Justice Institute Act. If such certification funds received from other sources. A Institute must approve procedures is not made or the Institute disapproves copy of the evaluation must be sent to designed by the grantee to provide such certification, title to all such the Chief Justice of the scholarship human subjects with relevant property with an aggregate or individual recipient’s State. A State or local information about the research after value of $1,000 or more shall vest in the jurisdiction may impose additional their involvement and to minimize or Institute, which will direct the requirements on scholarship recipients. eliminate risk or harm to those subjects disposition of the property. 2. To receive the funds authorized by due to their participation. B. Recipients of Technical Assistance a scholarship award, recipients must submit a Scholarship Payment Voucher 15. State and Local Court Applications (TA) and Curriculum Adaptation and Training (CAT) Grants (Form S3) together with a tuition statement from the program sponsor, a Each application for funding from a Recipients of TA and CAT Grants transportation fare receipt (or statement State or local court must be approved, must comply with the requirements of the driving mileage to and from the consistent with State law, by the State’s listed in section VI.A. (except the recipient’s home to the site of the Supreme Court, or its designated agency requirements pertaining to audits in educational program), and a lodging or council. The Supreme Court or its subsection A.3. above and product receipt. designee shall receive, administer, and dissemination and approval in Scholarship Payment Vouchers must be accountable for all funds awarded on subsection A.11.d. and e. above) and the be submitted within 90 days after the the basis of such an application (42 reporting requirements below: end of the course which the recipient U.S.C. 10705(b)(4)). 1. Technical Assistance (TA) Grant attended. 16. Supplantation and Construction Reporting Requirements 3. Scholarship recipients are encouraged to check with their tax Recipients of TA Grants must submit To ensure that funds are used to advisors to determine whether the to the Institute one copy of a final report supplement and improve the operation scholarship constitutes taxable income that explains how it intends to act on of State courts, rather than to support under Federal and State law. basic court services, funds shall not be the consultant’s recommendations, as used for the following purposes: well as two copies of the consultant’s D. Partner Grants a. To supplant State or local funds written report. The compliance requirements for supporting a program or activity (such 2. Curriculum Adaptation and Training Partner Grant recipients will depend as paying the salary of court employees (CAT) Grant Reporting Requirements upon the agreements struck between the who would be performing their normal Recipients of CAT Grants must submit grant financiers and between lead duties as part of the project, or paying one copy of the agenda or schedule, financiers and grantees. Should SJI be rent for space which is part of the outline of presentations and/or relevant the lead, the compliance requirements court’s normal operations); instructor’s notes, copies of overhead for Project Grants will apply. b. To construct court facilities or transparencies, power point VII. Financial Requirements structures, except to remodel existing presentations, or other visual aids, facilities or to demonstrate new exercises, case studies and other A. Purpose architectural or technological background materials, hypotheticals, The purpose of this section is to techniques, or to provide temporary quizzes, and other materials involving establish accounting system facilities for new personnel or for the participants, manuals, handbooks, requirements and offer guidance on personnel involved in a demonstration conference packets, evaluation forms, procedures to assist all grantees, or experimental program; or and suggestions for replicating the subgrantees, contractors, and other c. Solely to purchase equipment. program, including possible faculty or organizations in:

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1. Complying with the statutory financial records, and refunding D. Accounting System requirements for the award, expenditures disallowed by audits. The grantee is responsible for disbursement, and accounting of funds; 2. Responsibilities of State Supreme establishing and maintaining an 2. Complying with regulatory Court adequate system of accounting and requirements of the Institute for the internal controls and for ensuring that financial management and disposition a. Each application for funding from an adequate system exists for each of its of funds; a State or local court must be approved, subgrantees and contractors. An 3. Generating financial data to be used consistent with State law, by the State’s acceptable and adequate accounting in planning, managing, and controlling Supreme Court, or its designated agency system: projects; and or council. 1. Properly accounts for receipt of 4. Facilitating an effective audit of b. The State Supreme Court or its funds under each grant awarded and the funded programs and projects. designee shall receive all Institute funds expenditure of funds for each grant by B. References awarded to such courts; be responsible category of expenditure (including matching contributions and project Except where inconsistent with for assuring proper administration of income); specific provisions of this Guideline, the Institute funds; and be responsible for 2. Assures that expended funds are following circulars are applicable to all aspects of the project, including applied to the appropriate budget Institute grants and cooperative proper accounting and financial record- category included within the approved agreements under the same terms and keeping by the subgrantee. These grant; conditions that apply to Federal responsibilities include: 3. Presents and classifies historical grantees. The circulars supplement the (1) Reviewing Financial Operations. costs of the grant as required for requirements of this section for The State Supreme Court or its designee budgetary and evaluation purposes; accounting systems and financial should be familiar with, and 4. Provides cost and property controls record-keeping and provide additional periodically monitor, its subgrantees’ to assure optimal use of grant funds; guidance on how these requirements financial operations, records system, 5. Is integrated with a system of may be satisfied (circulars may be and procedures. Particular attention internal controls adequate to safeguard obtained on the OMB Web site at should be directed to the maintenance the funds and assets covered, check the www.whitehouse.gov/omb). of current financial data. accuracy and reliability of the 1. Office of Management and Budget (2) Recording Financial Activities. accounting data, promote operational (OMB) Circular A–21, Cost Principles The subgrantee’s grant award or contract efficiency, and assure conformance with for Educational Institutions. obligation, as well as cash advances and 2. Office of Management and Budget any general or special conditions of the other financial activities, should be grant; (OMB) Circular A–87, Cost Principles recorded in the financial records of the for State and Local Governments. 6. Meets the prescribed requirements State Supreme Court or its designee in for periodic financial reporting of 3. Office of Management and Budget summary form. Subgrantee expenditures (OMB) Circular A–88, Indirect Cost operations; and should be recorded on the books of the 7. Provides financial data for Rates, Audit and Audit Follow-up at State Supreme Court or evidenced by Educational Institutions. planning, control, measurement, and report forms duly filed by the evaluation of direct and indirect costs. 4. Office of Management and Budget subgrantee. Matching contributions (OMB) Circular A–102, Uniform provided by subgrantees should E. Total Cost Budgeting and Accounting Administrative Requirements for likewise be recorded, as should any Accounting for all funds awarded by Grants-in-Aid to State and Local project income resulting from program the Institute must be structured and Governments. operations. executed on a Total Project Cost basis. 5. Office of Management and Budget (3) Budgeting and Budget Review. The That is, total project costs, including (OMB) Circular A–110, Grants and State Supreme Court or its designee Institute funds, State and local matching Agreements with Institutions of Higher should ensure that each subgrantee shares, and any other fund sources Education, Hospitals and Other Non- prepares an adequate budget as the basis included in the approved project budget Profit Organizations. for its award commitment. The State serve as the foundation for fiscal 6. Office of Management and Budget Supreme Court should maintain the administration and accounting. Grant (OMB) Circular A–122, Cost Principles details of each project budget on file. applications and financial reports for Non-profit Organizations. require budget and cost estimates on the 7. Office of Management and Budget (4) Accounting for Match. The State basis of total costs. (OMB) Circular A–128, Audits of State Supreme Court or its designee will and Local Governments. ensure that subgrantees comply with the 1. Timing of Matching Contributions 8. Office of Management and Budget match requirements specified in this Guideline (see section VI.A.8.). Matching contributions need not be (OMB) Circular A–133, Audits of applied at the exact time of the Institutions of Higher Education and (5) Audit Requirement. The State obligation of Institute funds. Ordinarily, Other Non-profit Institutions. Supreme Court or its designee is the full matching share must be C. Supervision and Monitoring required to ensure that subgrantees meet obligated during the award period; Responsibilities the necessary audit requirements set however, with the written permission of forth by the Institute (see sections K. the Institute, contributions made 1. Grantee Responsibilities below and VI.A.3.). following approval of the grant by the All grantees receiving awards from (6) Reporting Irregularities. The State Institute’s Board of Directors but before the Institute are responsible for the Supreme Court, its designees, and its the beginning of the grant may be management and fiscal control of all subgrantees are responsible for counted as match. Grantees that do not funds. Responsibilities include promptly reporting to the Institute the contemplate making matching accounting for receipts and nature and circumstances surrounding contributions continuously throughout expenditures, maintaining adequate any financial irregularities discovered. the course of a project, or on a task-by-

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task basis, are required to submit a 3. Maintenance 4. Income From the Sale of Grant schedule within 30 days after the Products beginning of the project period Grantees and subgrantees are expected to see that records of different If the sale of products occurs during indicating at what points during the the project period, the income may be project period the matching fiscal years are separately identified and maintained so that requested treated as cash match with the prior contributions will be made. If a written approval of the Institute. The proposed cash or in-kind match is not information can be readily located. Grantees and subgrantees are also costs and income generated by the sales fully met, the Institute may reduce the must be reported on the Quarterly award amount accordingly to maintain obligated to protect records adequately against fire or other damage. When Financial Status Reports and the ratio of grant funds to matching documented in an auditable manner. funds stated in the award agreement. records are stored away from the grantee’s/subgrantee’s principal office, a Whenever possible, the intent to sell a 2. Records for Match written index of the location of stored product should be disclosed in the application or reported to the Institute All grantees must maintain records records should be on hand, and ready in writing once a decision to sell that clearly show the source, amount, access should be assured. products has been made. The grantee and timing of all matching 4. Access must request approval to recover its contributions. In addition, if a project product development, reproduction, has included, within its approved Grantees and subgrantees must give and dissemination costs as specified in budget, contributions which exceed the any authorized representative of the section VI.A.11.b. required matching portion, the grantee Institute access to and the right to must maintain records of those examine all records, books, papers, and 5. Other contributions in the same manner as it documents related to an Institute grant. Other project income shall be treated does Institute funds and required G. Project-Related Income in accordance with disposition matching shares. For all grants made to instructions set forth in the grant’s terms State and local courts, the State Records of the receipt and disposition and conditions. Supreme Court has primary of project-related income must be responsibility for grantee/subgrantee H. Payments and Financial Reporting maintained by the grantee in the same compliance with the requirements of Requirements manner as required for the project funds this section (see subsection C.2. above). that gave rise to the income and must be 1. Payment of Grant Funds F. Maintenance and Retention of reported to the Institute (see subsection The procedures and regulations set Records H.2. below). The policies governing the forth below are applicable to all All financial records, including disposition of the various types of Institute grant funds and grantees. supporting documents, statistical project-related income are listed below. a. Request for Advance or Reimbursement of Funds. Grantees will records, and all other information 1. Interest pertinent to grants, subgrants, receive funds on a ‘‘check-issued’’ basis. cooperative agreements, or contracts A State and any agency or Upon receipt, review, and approval of a under grants, must be retained by each instrumentality of a State, including Request for Advance or Reimbursement organization participating in a project institutions of higher education and by the Institute, a check will be issued for at least three years for purposes of hospitals, shall not be held accountable directly to the grantee or its designated examination and audit. State Supreme for interest earned on advances of fiscal agent. A request must be limited Courts may impose record retention and project funds. When funds are awarded to the grantee’s immediate cash needs. maintenance requirements in addition to subgrantees through a State, the The Request for Advance or to those prescribed in this section. subgrantees are not held accountable for Reimbursement, along with the interest earned on advances of project instructions for its preparation, will be 1. Coverage funds. Local units of government and included in the official Institute award The retention requirement extends to nonprofit organizations that are grantees package. books of original entry, source must refund any interest earned. b. Termination of Advance and documents supporting accounting Grantees shall ensure minimum Reimbursement Funding. When a transactions, the general ledger, balances in their respective grant cash grantee organization receiving cash subsidiary ledgers, personnel and accounts. advances from the Institute: payroll records, canceled checks, and (1) Demonstrates an unwillingness or related documents and records. Source 2. Royalties inability to attain program or project documents include copies of all grant goals, or to establish procedures that The grantee/subgrantee may retain all and subgrant awards, applications, and will minimize the time elapsing royalties received from copyrights or required grantee/subgrantee financial between cash advances and other works developed under projects or and narrative reports. Personnel and disbursements, or cannot adhere to from patents and inventions, unless the payroll records shall include the time guideline requirements or special terms and conditions of the grant and attendance reports for all conditions; provide otherwise. individuals reimbursed under a grant, (2) Engages in the improper award subgrant or contract, whether they are 3. Registration and Tuition Fees and administration of subgrants or employed full-time or part-time. Time contracts; or and effort reports are required for Registration and tuition fees may be (3) Is unable to submit reliable and/ consultants. considered as cash match with the prior or timely reports; the Institute may written approval of the Institute. terminate advance financing and require 2. Retention Period Estimates of registration and tuition the grantee organization to finance its The three-year retention period starts fees, and any expenses to be offset by operations with its own working capital. from the date of the submission of the the fees, should be included in the Payments to the grantee shall then be final expenditure report. application budget forms and narrative. made by check to reimburse the grantee

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for actual cash disbursements. In the 2. Costs Requiring Prior Approval during the preceding two years by any event the grantee continues to be a. Pre-agreement Costs. The written Federal granting agency on the basis of deficient, the Institute may suspend prior approval of the Institute is allocation methods substantially in reimbursement payments until the required for costs considered necessary accord with those set forth in the deficiencies are corrected. In extreme but which occur prior to the start date applicable cost circulars must be cases, grants may be terminated. of the project period. submitted to the Institute. c. Principle of Minimum Cash on b. Equipment. Grant funds may be (2) Where flat rates are accepted in Hand. Grantees should request funds used to purchase or lease only that lieu of actual indirect costs, grantees based upon immediate disbursement equipment essential to accomplishing may not also charge expenses normally requirements. Grantees should time the goals and objectives of the project. included in overhead pools, e.g., their requests to ensure that cash on The written prior approval of the accounting services, legal services, hand is the minimum needed for Institute is required when the amount of building occupancy and maintenance, disbursements to be made immediately automated data processing (ADP) etc., as direct costs. or within a few days. equipment to be purchased or leased b. Establishment of Indirect Cost exceeds $10,000 or software to be 2. Financial Reporting Rates. To be reimbursed for indirect purchased exceeds $3,000. a. General Requirements. To obtain costs, a grantee must first establish an c. Consultants. The written prior financial information concerning the appropriate indirect cost rate. To do approval of the Institute is required use of funds, the Institute requires that this, the grantee must prepare an when the rate of compensation to be grantees/subgrantees submit timely paid a consultant exceeds $800 a day. indirect cost rate proposal and submit it reports for review. Institute funds may not be used to pay to the Institute within three months b. Due Dates and Contents. A a consultant more than $1,100 per day. after the start of the grant period to Financial Status Report is required from d. Budget Revisions. Budget revisions assure recovery of the full amount of all grantees, other than scholarship among direct cost categories that (i) allowable indirect costs. The rate must recipients, for each active quarter on a transfer grant funds to an unbudgeted be developed in accordance with calendar-quarter basis. This report is cost category or (ii) individually or principles and procedures appropriate due within 30 days after the close of the cumulatively exceed five percent (5%) to the type of grantee institution calendar quarter. It is designed to of the approved original budget or the involved as specified in the applicable provide financial information relating to most recently approved revised budget OMB Circular. Institute funds, State and local matching require prior Institute approval (see shares, project income, and any other c. No Approved Plan. If an indirect section VIII.A.1.). sources of funds for the project, as well cost proposal for recovery of indirect as information on obligations and 3. Travel Costs costs is not submitted to the Institute within three months after the start of the outlays. A copy of the Financial Status Transportation and per diem rates Report, along with instructions for its grant period, indirect costs will be must comply with the policies of the irrevocably disallowed for all months preparation, is included in each official grantee. If the grantee does not have an Institute Award package. If a grantee prior to the month that the indirect cost established written travel policy, then proposal is received. requests substantial payments for a travel rates must be consistent with project prior to the completion of a those established by the Institute or the J. Procurement and Property given quarter, the Institute may request Federal Government. Institute funds Management Standards a brief summary of the amount may not be used to cover the 1. Procurement Standards requested, by object class, to support the transportation or per diem costs of a Request for Advance or Reimbursement. member of a national organization to For State and local governments, the 3. Consequences of Non-Compliance attend an annual or other regular Institute has adopted the standards set With Submission Requirement meeting of that organization. forth in Attachment O of OMB Circular Failure of the grantee to submit 4. Indirect Costs A–102. Institutions of higher education, required financial and progress reports hospitals, and other non-profit These are costs of an organization that organizations will be governed by the may result in suspension or termination are not readily assignable to a particular of grant payments. standards set forth in Attachment O of project but are necessary to the OMB Circular A–110. I. Allowability of Costs operation of the organization and the performance of the project. The cost of 2. Property Management Standards 1. General operating and maintaining facilities, Except as may be otherwise provided depreciation, and administrative The property management standards in the conditions of a particular grant, salaries are examples of the types of as prescribed in Attachment N of OMB cost allowability is determined in costs that are usually treated as indirect Circulars A–102 and A–110 apply to all accordance with the principles set forth costs. Although the Institute’s policy Institute grantees and subgrantees in OMB Circulars A–21, Cost Principles requires all costs to be budgeted except as provided in section VI.A.18. Applicable to Grants and Contracts with directly, it will accept indirect costs if All grantees/subgrantees are required to Educational Institutions; A–87, Cost a grantee has an indirect cost rate be prudent in the acquisition and Principles for State and Local approved by a Federal agency as set management of property with grant Governments; and A–122, Cost forth below. However, recoverable funds. If suitable property required for Principles for Non-profit Organizations. indirect costs are limited to no more the successful execution of projects is No costs may be recovered to liquidate than 75% of a grantee’s direct personnel already available within the grantee or obligations incurred after the approved costs (salaries plus fringe benefits). subgrantee organization, expenditures of grant period. Circulars may be obtained a. Approved Plan Available. (1) A grant funds for the acquisition of new on the OMB Web site at copy of an indirect cost rate agreement property will be considered www.whitehouse.gov/omb. or allocation plan approved for a grantee unnecessary.

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K. Audit Requirements indicate the exact balance of A. Grant Adjustments Requiring Prior unobligated funds. Any unobligated/ Written Approval 1. Implementation unexpended funds will be deobligated The following grant adjustments Each recipient of a Project Grant must from the award by the Institute. Final require the prior written approval of the provide for an annual fiscal audit. This payment requests for obligations Institute: requirement also applies to a State or incurred during the award period must local court receiving a subgrant from the be submitted to the Institute prior to the 1. Budget revisions among direct cost State Supreme Court. The audit may be end of the 90-day close-out period. categories that (a) transfer grant funds to of the entire grantee or subgrantee Grantees on a check-issued basis, who an unbudgeted cost category or (b) organization or of the specific project have drawn down funds in excess of individually or cumulatively exceed funded by the Institute. Audits their obligations/expenditures, must five percent (5%) of the approved conducted in accordance with the return any unused funds as soon as it is original budget or the most recently Single Audit Act of 1984 and OMB determined that the funds are not approved revised budget (see section Circular A–128, or OMB Circular A–133, required. In no case should any unused VII.I.2.d.). will satisfy the requirement for an funds remain with the grantee beyond 2. A change in the scope of work to annual fiscal audit. The audit must be the submission date of the final be performed or the objectives of the conducted by an independent Certified Financial Status Report. project (see subsection D. below). Public Accountant, or a State or local 3. A change in the project site. b. Final Progress Report. This report agency authorized to audit government 4. A change in the project period, agencies. Grantees must send two copies should describe the project activities during the final calendar quarter of the such as an extension of the grant period of the audit report to the Institute. and/or extension of the final financial or Grantees that receive funds from a project and the close-out period, including to whom project products progress report deadline (see subsection Federal agency and satisfy audit E. below). requirements of the cognizant Federal have been disseminated; provide a 5. Satisfaction of special conditions, if agency must submit two copies of the summary of activities during the entire required. audit report prepared for that Federal project; specify whether all the agency to the Institute in order to satisfy objectives set forth in the approved 6. A change in or temporary absence the provisions of this section. application or an approved adjustment of the project director (see subsections have been met and, if any of the F. and G. below). 2. Resolution and Clearance of Audit objectives have not been met, explain 7. The assignment of an employee or Reports why not; and discuss what, if anything, consultant to a key staff position whose Timely action on recommendations could have been done differently that qualifications were not described in the by responsible management officials is might have enhanced the impact of the application, or a change of a person an integral part of the effectiveness of an project or improved its operation. assigned to a key project staff position audit. Each grantee must have policies These reporting requirements apply at (see section VI.A.2.). and procedures for acting on audit the conclusion of every grant other than 8. A change in or temporary absence recommendations by designating a scholarship. of the person responsible for managing officials responsible for: (1) Follow-up, and reporting on the grant’s finances. (2) maintaining a record of the actions 2. Extension of Close-Out Period 9. A change in the name of the grantee taken on recommendations and time Upon the written request of the organization. schedules, (3) responding to and acting 10. A transfer or contracting out of on audit recommendations, and (4) grantee, the Institute may extend the close-out period to assure completion of grant-supported activities (see submitting periodic reports to the subsection H. below). Institute on recommendations and the grantee’s close-out requirements. 11. A transfer of the grant to another actions taken. Requests for an extension must be submitted at least 14 days before the recipient. 3. Consequences of Non-Resolution of end of the close-out period and must 12. Preagreement costs (see section Audit Issues explain why the extension is necessary VII.I.2.a.). Ordinarily, the Institute will not make and what steps will be taken to assure 13. The purchase of automated data a subsequent grant award to an that all the grantee’s responsibilities processing equipment and software (see applicant that has an unresolved audit will be met by the end of the extension section VII.I.2.b.). report involving Institute awards. period. 14. Consultant rates (see section Failure of the grantee to resolve audit VIII. Grant Adjustments VII.I.2.c.). questions may also result in the 15. A change in the nature or number suspension or termination of payments All requests for programmatic or of the products to be prepared or the for active Institute grants to that budgetary adjustments requiring manner in which a product would be organization. Institute approval must be submitted by distributed. the project director in a timely manner L. Close-Out of Grants B. Requests for Grant Adjustments (ordinarily 30 days prior to the 1. Grantee Close-Out Requirements implementation of the adjustment being All grantees must promptly notify Within 90 days after the end date of requested). All requests for changes their SJI program managers, in writing, the grant or any approved extension from the approved application will be of events or proposed changes that may thereof (see subsection L.2. below), the carefully reviewed for both consistency require adjustments to the approved following documents must be submitted with this Guideline and the project design. In requesting an to the Institute by grantees (other than enhancement of grant goals and adjustment, the grantee must set forth scholarship recipients): objectives. Failure to submit the reasons and basis for the proposed a. Financial Status Report. The final adjustments in a timely manner may adjustment and any other information report of expenditures must have no result in the termination of a grantee’s the program manager determines would unliquidated obligations and must award. help the Institute’s review.

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C. Notification of Approval/Disapproval qualifications of the proposed Kevin Linskey, Executive Director (ex If the request is approved, the grantee individual are not approved in advance officio). by the Institute. will be sent a Grant Adjustment signed Kevin Linskey, by the Executive Director or his or her H. Transferring or Contracting Out of Executive Director. designee. If the request is denied, the Grant-Supported Activities grantee will be sent a written Appendix A—SJI Libraries: Designated explanation of the reasons for the No principal activity of a grant- Sites and Contacts denial. supported project may be transferred or Alabama contracted out to another organization D. Changes in the Scope of the Grant Supreme Court Library without specific prior approval by the Major changes in scope, duration, Institute. All such arrangements must be Mr. Timothy A. Lewis, State Law Librarian, training methodology, or other formalized in a contract or other written Alabama Supreme Court, Judicial Building, significant areas must be approved in 300 Dexter Avenue, Montgomery, AL advance by the Institute. A grantee may agreement between the parties involved. 36104, (334) 242–4347, make minor changes in methodology, Copies of the proposed contract or [email protected] agreement must be submitted for prior approach, or other aspects of the grant Alaska to expedite achievement of the grant’s approval of the Institute at the earliest objectives with subsequent notification possible time. The contract or agreement Anchorage Law Library of the SJI program manager. must state, at a minimum, the activities Ms. Cynthia S. Fellows, State Law Librarian, to be performed, the time schedule, the Alaska State Court Law Library, 303 K E. Date Changes policies and procedures to be followed, Street, Anchorage, AK 99501, (907) 264– A request to change or extend the the dollar limitation of the agreement, 0583, [email protected] grant period must be made at least 30 and the cost principles to be followed in Arizona days in advance of the end date of the determining what costs, both direct and Supreme Court Library grant. A revised task plan should indirect, will be allowed. The contract accompany a request for an extension of or other written agreement must not Ms. Lani Orosco, Staff Assistant, Arizona the grant period, along with a revised Supreme Court, Staff Attorney’s Office, affect the grantee’s overall responsibility budget if shifts among budget categories Library, 1501 W. Washington, Suite 445, for the direction of the project and will be needed. A request to change or Phoenix, AZ 85007, (602) 542–5028, extend the deadline for the final accountability to the Institute. [email protected] financial report or final progress report State Justice Institute Board of Arkansas must be made at least 14 days in Directors advance of the report deadline (see Administrative Office of the Courts section VII.L.2.). Robert A. Miller, Chairman, Chief Mr. James D. Gingerich, Director, Justice (ret.), Supreme Court of South Administrative Office of the Courts, F. Temporary Absence of the Project Dakota, Pierre, SD. Supreme Court of Arkansas, Justice Director Building, 625 Marshall Street, Little Rock, Whenever an absence of the project Joseph F. Baca, Vice-Chairman, Chief AR 72201, (501) 682–9400, director is expected to exceed a Justice (ret.), New Mexico Supreme [email protected] Court, Albuquerque, NM. continuous period of one month, the California plans for the conduct of the project Sandra A. O’Connor, Secretary, States director’s duties during such absence Attorney of Baltimore County, Administrative Office of the Courts must be approved in advance by the Towson, MD. Mr. William C. Vickrey, Administrative Institute. This information must be Director of the Courts, Administrative Keith McNamara, Esq., Executive Office of the Courts, 455 Golden Gate provided in a letter signed by an Committee Member, McNamara & authorized representative of the grantee/ Avenue, San Francisco, CA 94102, (415) McNamara, Columbus, OH. 865–4235, [email protected] subgrantee at least 30 days before the departure of the project director, or as Terrence B. Adamson, Esq., Executive Colorado Vice-President, The National soon as it is known that the project Supreme Court Library director will be absent. The grant may Geographic Society, Washington, DC. be terminated if arrangements are not Ms. Linda Gruenthal, Deputy Supreme Court Robert N. Baldwin, Executive Vice Law Librarian, 2 East 14th Avenue, Denver, approved in advance by the Institute. President and General Counsel, CO 80203, (303) 837–3720, G. Withdrawal of/Change in Project National Center for State Courts, [email protected] Director Richmond, VA. Connecticut Carlos R. Garza, Esq., Administrative If the project director relinquishes or State Library expects to relinquish active direction of Judge (ret.), Round Rock, TX. the project, the Institute must be Ms. Denise D. Jernigan, Law Librarian, Sophia H. Hall, Administrative Connecticut State Library, 231 Capitol notified immediately. In such cases, if Presiding Judge, Circuit Court of Cook Avenue, Hartford, CT 06106, (860) 757– the grantee/subgrantee wishes to County, Chicago, IL. 6598, [email protected] terminate the project, the Institute will forward procedural instructions upon Tommy Jewell, Presiding Children’s Delaware Court Judge (ret.), Albuquerque, NM. notification of such intent. If the grantee Administrative Office of the Courts Arthur A. McGiverin, Chief Justice (ret.), wishes to continue the project under the Mr. Michael E. McLaughlin, Deputy Director, direction of another individual, a Supreme Court of Iowa, Ottumwa, IA. Administrative Office of the Courts, Carvel statement of the candidate’s State Office Building, 820 North French qualifications should be sent to the Street, 11th Floor, P.O. Box 8911, Institute for review and approval. The Wilmington, DE 19801, (302) 577–8481 grant may be terminated if the [email protected]

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District of Columbia Kentucky the Courts/Probation, 521 South 14th St., Suite 200, Lincoln, NE 68508–2707, (402) Executive Office, District of Columbia Courts State Law Library 471–3072 (office)/(402) 471–3071 (fax), Ms. Anne B. Wicks, Executive Officer, Ms. Vida Vitagliano, Cataloging and Research [email protected] District of Columbia Courts, 500 Indiana Librarian, Kentucky Supreme Court Nevada Avenue, NW., Suite 1500, Washington, DC Library, 700 Capitol Avenue, Suite 200, 20001, (202) 879–1700, [email protected] Frankfort, KY 40601, (502) 564–4185, National Judicial College [email protected] Florida Mr. Randall Snyder, Law Librarian, National Louisiana Judicial College, Judicial College Building, Administrative Office of the Courts MS 358, Reno, NV 89557, (775) 327–8278, State Law Library Ms. Elisabeth H. Goodner, State Courts [email protected] Ms. Carol Billings, Director, Louisiana Law Administrator, Office of the State Courts Library, Louisiana Supreme Court New Hampshire Administrator, Florida Supreme Court, Building, 400 Royal Street, New Orleans, New Hampshire Law Library Supreme Court Building, 500 South Duval LA 70130, (504) 310–2401, Ms. Mary Searles, Technical Services Law Street, Tallahassee, FL 32399, (850) 922– [email protected] 5081, [email protected] Librarian, New Hampshire Law Library, Maine Supreme Court Building, One Noble Drive, Georgia Concord, NH 03301–6160, (603) 271–3777, State Law and Legislative Reference Library Administrative Office of the Courts [email protected] Ms. Lynn E. Randall, State Law Librarian, 43 Mr. David Ratley, Director, Administrative State House Station, Augusta, ME 04333, New Jersey Office of the Courts, 244 Washington (207) 287–1600, New Jersey State Library Street, S.W., Suite 300, Atlanta, GA 30334, [email protected] Mr. Thomas O’Malley, Supervising Law (404) 656–5171, [email protected] Maryland Librarian, New Jersey State Law Library, Hawaii 185 West State Street, P.O. Box 520, State Law Library Trenton, NJ 08625–0250, (609) 292–6230, Supreme Court Library Mr. Steve Anderson, Director, Maryland State [email protected] Ms. Ann Koto, State Law Librarian, The Law Library, Court of Appeal Building, 361 New Mexico Supreme Court Law Library, 417 South Rowe Boulevard, Annapolis, MD 21401, King St., Room 119, Honolulu, HI 96813, (410) 260–1430, Supreme Court Library (808) 539–4964, [email protected] Mr. Thaddeus Bejnar, Librarian, Supreme [email protected] Massachusetts Court Library, Post Office Drawer L, Santa Fe, NM 87504, (505) 827–4850 Idaho Middlesex Law Library New York AOC Judicial Education Library/State Law Ms. Linda Hom, Librarian, Middlesex Law Library Library, Superior Court House, 40 Supreme Court Library Mr. Richard Visser, State Law Librarian, Thorndike Street, Cambridge, MA 02141, Ms. Barbara Briggs, Law Librarian, Syracuse Idaho State Law Library, Supreme Court (617) 494–4148, [email protected] Supreme Court Law Library, 401 Building, 451 West State St., Boise, ID Michigan Montgomery Street, Syracuse, NY 13202, 83720, (208) 334–3316, (315) 671–1150, [email protected] Michigan Judicial Institute [email protected] North Carolina Dawn F. McCarty, Director, Michigan Judicial Illinois Institute, P.O. Box 30205, Lansing, MI Supreme Court Library Supreme Court Library 48909, (517) 373–7509, Mr. Thomas P. Davis, Librarian, North [email protected] Ms. Brenda Larison, Supreme Court of Carolina Supreme Court Library, 500 Illinois Library, 200 East Capitol Avenue, Minnesota Justice Building, 2 East Morgan Street, Raleigh, NC 27601, (919) 733–3425, Springfield, IL 62701–1791, (217) 782– State Law Library (Minnesota Judicial Center) 2425, [email protected] [email protected] Ms. Barbara L. Golden, State Law Librarian, North Dakota Indiana G25 Minnesota Judicial Center, 25 Rev. Dr. Martin Luther King Jr. Boulevard, St. Paul, Supreme Court Library Supreme Court Library MN 55155, (612) 297–2089, Ms. Terri L. Ross, Supreme Court Librarian, Ms. Marcella Kramer, Assistant Law [email protected] Librarian, Supreme Court Law Library, 600 Supreme Court Library, State House, Room East Boulevard Avenue, Dept. 182, 2nd 316, Indianapolis, IN 46204, (317) 232– Mississippi Floor, Judicial Wing, Bismarck, ND 58505– 2557, [email protected] Mississippi Judicial College 0540, (701) 328–2229, Iowa Hon. Leslie G. Johnson, Executive Director, [email protected] Mississippi Judicial College, P.O. Box Northern Mariana Islands Administrative Office of the Court 8850, University, MS 38677, (662) 915– Dr. Jerry K. Beatty, Director of Judicial 5955, [email protected] Supreme Court of the Northern Mariana Islands Branch Education, Iowa Judicial Branch, Montana Iowa Judicial Branch Building, 1111 East Ms. Margarita M. Palacios, Director of Courts, Court Avenue, Des Moines, IA 50319, (515) State Law Library Supreme Court of the Commonwealth of 242–0190, [email protected] Ms. Judith Meadows, State Law Librarian, the Northern Mariana Islands, P.O. Box Kansas State Law Library of Montana, P.O. Box 502165, Saipan, MP 96950, (670) 235– 203004, Helena, MT 59620, (406) 444– 9700, [email protected] Supreme Court Library 3660, [email protected] Ohio Mr. Fred Knecht, Law Librarian, Kansas Nebraska Supreme Court Library, Kansas Judicial Supreme Court Library Center, 301 S.W. 10th Avenue, Topeka, KS Administrative Office of the Courts Mr. Ken Kozlowski, Director, Law Library, 66612, (785) 296–3257, Mr. Philip D. Gould, Director, Judicial Supreme Court of Ohio, 65 South Front [email protected] Branch Education, Administrative Office of Street, 11th Floor, Columbus, OH 43215–

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3431, (614) 387–9666, 57501, (605) 773–4898, 98504–0751, (360) 357–2136 [email protected] [email protected] [email protected] Oklahoma Tennessee West Virginia Administrative Office of the Courts Tennessee State Law Library Supreme Court of Appeals Library Mr. Howard W. Conyers, State Court Hon. Cornelia A. Clark, Executive Director, Ms. Kaye Maerz, State Law Librarian, West Administrator, Administrative Office of the Administrative Office of the Courts, 511 Virginia Supreme Court of Appeals Courts, 1915 North Stiles Avenue, Suite Union Street, Suite 600, Nashville, TN Library, 1900 Kanawha Boulevard East, 305, Oklahoma City, OK 73105, (405) 521– 37219 (615) 741–2687, 2450, [email protected] [email protected] Building 1, Room E–404, Charleston, WV 25305 (304) 558–2607, Oregon Texas [email protected] Administrative Office of the Courts State Law Library Wisconsin Ms. Kingsley W. Click, State Court Mr. Marcelino A. Estrada, Director, State Law Administrator, Oregon Judicial Library, P.O. Box 12367, Austin, TX 78711, State Law Library Department, Supreme Court Building, 1163 (512) 463–1722, Ms. Jane Colwin, State Law Librarian, State State Street, Salem, OR 97301, (503) 986– [email protected] Law Library, 120 M.L.K. Jr. Boulevard, 5500, [email protected] U.S. Virgin Islands Madison, WI 53703, (608) 261–2340, Pennsylvania [email protected] Library of the Territorial Court of the Virgin State Library of Pennsylvania Islands (St. Thomas) Wyoming Ms. Kathleen Kline, Collection Management Librarian, The Library, Territorial Court of Librarian, State Library of Pennsylvania, Wyoming State Law Library the Virgin Islands, Post Office Box 70, Bureau of State Library, 333 Market Street, Charlotte Amalie, St. Thomas, Virgin Ms. Kathy Carlson, Law Librarian, Wyoming Harrisburg, PA 17126–1745, (717) 787– Islands 00804 State Law Library, Supreme Court 5718, [email protected] Building, 2301 Capitol Avenue, Cheyenne, Utah Puerto Rico WY 82002 (307) 777–7509, [email protected] Office of Court Administration Utah State Judicial Administration Library Alfredo Rivera-Mendoza, Esq., Director, Area Ms. Jessica Van Buren, Utah State Library, National 450 South State Street, P.O. Box 140220, of Planning and Management, Office of American Judicature Society Court Administration, P.O. Box 917, Hato Salt Lake City, UT 84114–0220, (801) 238– Rey, PR 00919 7991 [email protected] Ms. Deborah Sulzbach, Acquisitions Librarian, Drake University, Law Library, Rhode Island Vermont Opperman Hall, 2507 University Avenue, Roger Williams University Supreme Court of Vermont Des Moines, IA 50311–4505, (515) 271– Ms. Gail Winson, Director of Law Library/ Mr. Paul J. Donovan, Law Librarian, Vermont 3784, [email protected] Associate Professor of Law, Roger Williams Department of Libraries, 109 State Street, National Center for State Courts University, School of Law Library, 10 Pavilion Office Building, Montpelier, VT Metacom Avenue, Bristol, RI 02809, 401/ 05609, (802) 828–3268 Ms. Joan Cochet, Library Specialist, National 254–4531, [email protected] [email protected] Center for State Courts, 300 Newport South Carolina Virginia Avenue, Williamsburg, VA 23185–4147, (757) 259–1826 [email protected] Coleman Karesh Law Library (University of Administrative Office of the Courts South Carolina School of Law) Ms. Gail Warren, State Law Librarian, JERITT Mr. Steve Hinckley, Director, Coleman Virginia State Law Library, Supreme Court Dr. Maureen E. Conner, Executive Director, Karesh Law Library, University of South of Virginia, 100 North Ninth Street, 2nd The JERITT Project, Michigan State Carolina, Main and Green Streets, Floor Richmond, VA 23219–2335 (804) University, 1407 S. Harrison Road, Suite Columbia, SC 29208, (803) 777–5944, 786–2075, [email protected] 330 Nisbet, East Lansing, MI 48823–5239, [email protected] Washington (517) 353–8603, (517) 432–3965 (fax), South Dakota [email protected] Web site: http:// Washington State Law Library jeritt.msu.edu State Law Library Ms. Kay Newman, State Law Librarian, BILLING CODE 6820–SC–P Librarian, South Dakota State Law Library, Washington State Law Library, Temple of 500 East Capitol, Pierre, South Dakota Justice, P.O. Box 40751, Olympia, WA

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[FR Doc. 06–7398 Filed 9–6–06; 8:45 am] BILLING CODE 6820–SC–C

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Part IV

Department of Commerce Bureau of Industry and Security

15 CFR Parts 740, 743, 772 and 774 December 2005 Wassenaar Arrangement Plenary Agreement Implementation; Final Rule

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DEPARTMENT OF COMMERCE make them consistent with the Addition of Croatia, Estonia, Latvia, amendments made to implement the Lithuania, Malta, and South Africa Bureau of Industry and Security Wassenaar Arrangement’s decisions. In April–June 2005, consultations DATES: Effective Date: This rule is resulted in decisions to admit Croatia, 15 CFR Parts 740, 743, 772 and 774 effective September 7, 2006. Estonia, Latvia, Lithuania and Malta to [Docket No. 060807211–6211–01] FOR FURTHER INFORMATION CONTACT: For the Wassenaar Arrangement as new Participating States, and in December RIN 0694–AD 73 questions of a general nature contact Sharron Cook, Office of Exporter 2005 at the Plenary meeting, South December 2005 Wassenaar Services, Bureau of Industry and Africa was added as a new Participating Arrangement Plenary Agreement Security, U.S. Department of Commerce State. To reflect this change, this rule Implementation: Categories 1, 2, 3, 5 at (202) 482–2440 or E-Mail: adds Croatia, Estonia, Latvia, Lithuania, Part I (Telecommunications), 5 Part II [email protected]. Malta, and South Africa to the list of (Information Security), 6, 8, and 9 of For questions of a technical nature Wassenaar Arrangement Participating the Commerce Control List; contact: States in Supplement No. 1 to Part 743 Wassenaar Reporting Requirements; Category 1: Bob Teer 202–482–4749. of the EAR. Definitions; and Certain New or Category 2: George Loh 202–482– Expansion or New Export Controls Expanded Export Controls 3570. New or expanded anti-terrorism (AT) Category 3: Brian Baker 202–482– AGENCY: controls imposed by this rule. This rule Bureau of Industry and 5534. Security, Commerce. imposes a unilateral U.S. license Category 5 Part 1: Joe Young 202– requirement to export and reexport ACTION: Final rule. 482–4197. commodities (and related software and Category 5 Part 2: Joe Young 202– SUMMARY: The Bureau of Industry and technology) controlled under ECCNs Security (BIS) maintains the Commerce 482–4197. 1E998, 2B006.b.1.d, 2D001, 2E001, Control List (CCL), which identifies Category 6: Chris Costanzo 202–482– 2E002, 2E201, 5A001.f, 5A002.a.9, items subject to Department of 0718. 5D001, 5D002 , 5E001, 5E002, 6A006.b, Commerce export controls. This final Categories 7 and 8: Dan Squire 202– 6D003.f, 6E003.f, 9A012.b, 9B010, rule revises the Export Administration 482–3710. 9E001, 9E003.a.11 for AT reasons to Regulations (EAR) to implement Categories 8 and 9: Gene Christensen Cuba, Iran, North Korea, Sudan and changes made to the Wassenaar 202–482–2984. Syria, in addition to the national Arrangement’s List of Dual-Use Goods Comments regarding the collections of security controls imposed to implement and Technologies (Wassenaar List), and information associated with this rule, the Wassenaar Arrangement’s decisions, Statements of Understanding including suggestions for reducing the because under Section 6(j) of the Export maintained and agreed to by burden, should be sent to OMB Desk Administration Act of 1979 a license is governments participating in the Officer, New Executive Office Building, required for items that could make a Wassenaar Arrangement on Export Washington, DC 20503—Attention: significant contribution to the military Controls for Conventional Arms and David Rostker; and to the Office of potential of such country or could Dual-Use Goods and Technologies Administration, Bureau of Industry and enhance the ability of such country to (Wassenaar Arrangement, or WA.) The Security, Department of Commerce, support acts of international terrorism. Wassenaar Arrangement advocates 14th and Pennsylvania Avenue, NW., There is a general policy of denial for implementation of effective export Room 6883, Washington, DC 20230. applications to terrorism supporting controls on strategic items with the SUPPLEMENTARY INFORMATION: countries, as set forth in Part 742 of the objective of improving regional and EAR. In addition, certain of these Background international security and stability. To countries are also subject to embargoes, accommodate the changes to the In July 1996, the United States and as set forth in Part 746 of the EAR and Wassenaar List, this rule revises the thirty-three other countries gave final Supplement No. 1 to Part 736 of the EAR by amending certain entries that approval to the establishment of a new EAR for Syria. A license is also required are controlled for national security multilateral export control arrangement, for the export and reexport of these reasons in Categories 1, 2, 3, 5 Part I called the Wassenaar Arrangement on items to specially designated terrorists (Telecommunications), 5 Part II Export Controls for Conventional Arms and foreign terrorist organizations, as set (Information Security), 6, 8, and 9, and and Dual-Use Goods and Technologies forth in Part 744 of the EAR; license by amending the EAR Definitions. (Wassenaar Arrangement or WA). The applications to these parties are The purpose of this final rule is to Wassenaar Arrangement contributes to reviewed under a general policy of make the necessary changes to the CCL, regional and international security and denial. definitions of terms used in the EAR, stability by promoting transparency and New or expanded significant items and Wassenaar reporting requirements greater responsibility in transfers of (SI) controls imposed by this rule. to implement Wassenaar List revisions conventional arms and dual-use goods Through the adoption of revisions by that were agreed upon in the December and technologies, thus preventing WA, this rule imposes foreign policy 2005 Wassenaar Arrangement Plenary destabilizing accumulations of such controls pursuant to section 6 of the Meeting. In addition, this rule adds items. Participating states have Export Administration Act of 1979, as Croatia, Estonia, Latvia, Lithuania, committed to exchange information on amended to export and reexport South Africa, and Malta to the list of exports of dual-use goods and technology required for the Wassenaar participating states in the technologies to non-participating states development, production or overhaul of EAR, which brings the total number of for the purposes of enhancing commercial aircraft engines controlled participating states to 40. transparency and assisting in under ECCN 9E003.a.11 for SI reasons to This rule also adds or expands developing common understandings of all countries, except Canada, in addition unilateral U.S. controls and national the risks associated with the transfers of to the national security controls security controls on certain items to these items. imposed to implement the Wassenaar

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Arrangement’s decisions. Applications of the EAR, and Supplement No. 1 to controlled on the Wassenaar List of to export and reexport this technology Part 736 of the EAR for Syria. Dual-Use Goods and Technologies. will be reviewed on a case-by-case basis The licensing policy for national Note: This rule adds technology for to determine whether the export or security controlled items exported or commodities controlled by ECCNs 1B999, reexport is consistent with U.S. national reexported to any country except a 1C995, 1C996, 1C997, and 1C999 to ECCN security and foreign policy interests. For country in Country Group D:1 (see 1E998, which is controlled for antiterrorism designated terrorism-supporting Supplement No. 1 to Part 740 of the reasons (AT:1). countries or embargoed countries, the EAR) is to approve license applications ECCN 1E998 is added to maintain AT applicable licensing policies are found unless there is a significant risk that the controls on technology for the in Parts 742 and 746 of the EAR, and items will be diverted to a country in development or production of materials Supplement No. 1 to Part 736 of the Country Group D:1. The general policy that were controlled under 1C008.c.1 EAR for Syria. for exports and reexport of items to Country Group D:1 is to approve license and are now controlled by ECCN 1C998. New or expanded NS Column 2 In addition, references to ECCNs 1B999, controls imposed by this rule. This rule applications when BIS determines, on a case-by-case basis, that the items are for 1C995, 1C996, 1C997, and 1C999 have imposes a license requirement under been moved from ECCN 1E001 to ECCN section 742.4(a) of the EAR for exports civilian use or would otherwise not make a significant contribution to the 1E998 to maintain AT controls on and reexports of commodities (and technology for the development or related software and technology) military potential of the country of destination that would prove production of processing equipment and described in ECCNs 2B006.b.1.d, materials described in these ECCNs. 5A001.f, 6A006.b, to destinations that detrimental to the national security of are not Country Group A:1 destinations, the United States. Category 2—Materials Processing or that are not cooperating countries Revisions to the Commerce Control List ECCN 2B002 is amended by adding to (see Supplement No. 1 to Part 740 of the This rule revises a number of entries the heading ‘‘(see List of Items EAR). These destinations have an ‘‘X’’ on the Commerce Control List (CCL) to Controlled),’’ and adding parameters for indicated in NS column 2 on the implement the December 2005 agreed control of numerically controlled Commerce Country Chart of revisions to the Wassenaar List of Dual- machine tools using a Supplement No. 1 to Part 738 of the Use Goods and Technologies. This rule Magnetorheological finishing (MRF) EAR. The purpose of the controls is to also revises language to provide a process. ensure that these items do not make a complete or more accurate description contribution to the military potential of Note: MRF tools are mostly used for optical of controls. A description of the specific such destination countries that would components; therefore optical parameters amendments to the CCL pursuant to the were selected to describe the capability of the prove detrimental to the national December 2005 Wassenaar Agreement is machines. One set of such parameters are security of the United States. For provided below. The ECCNS affected, as form and finish; form referring to the shape designated terrorism-supporting described below, are 1C008, 1C998, of the optic and finish to the surface countries or embargoed countries, the 1E001, 1E998, 2B002, 2B006, 2E201, roughness. A form value describes how close applicable licensing policies are found the actual shape of the optic is to the design 3A001, 3B001, 3B991, 3E001, 5A001, in Parts 742 and 746 of the EAR, and and finish value describes how smooth the 5A002, 5A991, 5D001, 5D991, 6A006, Supplement No. 1 to Part 736 of the surface is. MRF tools, such as interferometers 6D003, 6E003, 8A002, 9A001, 9A012, EAR for Syria. and profilers are typically used to measure 9B010 (New), 9D001, 9D002, 9D004, form, while profilometers and scatterometers New or expanded NS Column 1 9E001, 9E002, and 9E003. are used to measure finish. controls imposed by this rule. This rule imposes a license requirement under Category 1—Materials, Chemicals, ECCN 2B006 is amended by: section 742.4(a) of the EAR for exports ‘‘Microorganisms,’’ and Toxins a. Revising the NP paragraph in the and reexports to all destinations, except ECCN 1C008 is amended by removing License Requirements section, to except Canada, of commodities (and related and reserving 1C008.c.1, because foreign 2B006.b.1.d from NP controls because software and technology) described in availability has been proven, and electronic assemblies do not appear ECCNs 2D001, 2E001, 2E002, 5A002.a.9, continued national security control under the Nuclear Suppliers Group 5D002, 5E002, 6D003.f, 6E003.f, cannot be justified any longer. Annex item 1.B.3; 9A012.b, 9B010, 9D001 and 9D002 (only ECCN 1C998 is added to continue b. Adding paragraph 2B006.b.1.d to software for the development and antiterrorism (AT) controls on polyether control electronic assemblies specially production of equipment classified ether ketone (PEEK), which was designed to provide feedback capability under ECCN 9B010), 9E001 (only removed from 1C008.c.1. Therefore, the in systems controlled by 2B006.b.1.c; technology for the development of materials no longer controlled under and equipment under ECCNs 9A012 and ECCN 1C008 continue to be controlled c. Revising the Note to 2B006.b.1. 9B010), and 9E003.a.11. These for AT reasons under ECCN 1C998 for Note: The combination of control and destinations have an ‘‘X’’ indicated in exports and reexports to designated decontrol lead to the possibility of an NS column 1 on the Commerce Country terrorism-supporting countries, as set ineffective control. These revisions together Chart of Supplement No. 1 to Part 738. forth in Parts 742 and 746 of the EAR, will enhance the effectiveness of control by The purpose of the controls is to ensure and as indicated in AT Column 1 of the explicitly controlling certain specially that these items do not make a Commerce Country Chart in designed components. Equipment under contribution to the military potential of Supplement No. 1 to Part 738 of the 2B006 is controlled for national security any other country or combination of EAR. reasons (NS:2), nuclear nonproliferation countries that would prove detrimental ECCN 1E001 is amended by revising reasons (NP:1), and antiterrorism reasons (AT:1); Related software for the development, to the national security of the United the heading to exclude control of production, or use of 2B006 commodities is States. For designated terrorism- development and production controlled for national security reasons supporting countries or embargoed technology for ECCNs 1B999, 1C995, (NS:1) and antiterrorism reasons (AT:1) countries, the applicable licensing 1C996, 1C997, 1C998, and 1C999, under ECCN 2D001; related technology for policies are found in Parts 742 and 746 because none of these technologies are the development or production of 2B006

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commodities is controlled for national ECCN 3A991 is amended by: thickness uniform to less than 2.5% security reasons (NS:1) and antiterrorism a. Revising 3A991.c, because the rule across a distance of 200 mm or more reasons (AT:1) under ECCNs 2E001 and entitled, ‘‘December 2004 Wassenaar (previously controlled under ECCN 2E002 respectively; related technology for the Arrangement Plenary Agreement 3B001.a.1.a). use of 2B006 commodities is controlled for Implementation: Categories 1, 2, 3, 4, 5 ECCN 3E001 is amended by: nuclear proliferation reasons (NP:1) and antiterrorism reasons (AT:1) under ECCN Part I (telecommunications), 6, 7, 8, and a. Removing the text in the CIV 2E201. 9 of the Commerce Control List; paragraph of the License Exception Wassenaar Reporting Requirements; section and replacing it with ‘‘N/A’’, as ECCN 2E201 is amended by: Definitions; and Certain New or it is no longer necessary because of the a. Revising the heading to remove Expanded Export Controls’’ that was agreed upon deletions in 3A001 by the ECCN 2B008, because no international published in the Federal Register on Wassenaar Arrangement; and export control regime has controlled July 15, 2005 (70 FR 41094) modified b. Revising the heading to add ‘‘use’’ technology for this ECCN; the 3A001.a.5 entry for analog-to-digital exceptions from this technology control b. Adding to the end of the heading converters by revising the total over commodities in ECCN 3C992, the phrase ‘‘for NP reasons’’ to assure conversion time in ns to output rate in because this technology is not that ECCN 2E201 only controls use million words per second, however, the controlled on the Wassenaar List of technology for NP controlled portions of 3A991.c entry was not appropriately Dual-Use Goods and Technologies. the ECCNs listed in the heading; and adjusted to conform with this revision. Note: This rule adds ECCN 3C992 to the c. Revising the NP paragraph in the Therefore, this rule revises the output License Requirements section to remove heading of ECCN 3E991 to maintain rate to millions of words per second in antiterrorism (AT:1) controls on the the reference to 2B008. 3A991.c. technology for the development , production Category 3—Electronics b. Removing 3A991.j.2 (rechargeable or use of commodities described in ECCN cells and batteries) because it was 3C992. ECCN 3A001 is amended by: erroneously created, and is a duplicate a. Revising the CIV paragraph in the entry to 3A001.e.1.b. Because of this Note: The equipment no longer controlled License Exception section by replacing removal, paragraph 3A991.j.1 will under ECCNs 3A001.a.3.c and 3B001.a.1.a, related software under ECCNs 3D001 and reference to 3A001.a.3.b with 3A001.a.3, become 3A991.j to conform with the because this rule moves 3A001.a.3.b to 3D002, and related technology under ECCNs structure format of the CCL. 3E001 continues to be controlled for 3A001.a.3; and removing the reference ECCN 3B001 is amended by: to 3A001.a.3.c, because this rule deletes antiterrorism reasons under ECCNs a. Removing 3B001.a.1.a, because 3A991.a.3, 3B991.b.1.d.1, 3D991, and 3E991 this paragraph. certain EPI tools are not a critical respectively, for exports and reexports to b. Removing 3A001.a.3.c technology in the semiconductor designated terrorism-supporting countries, as (interconnects), because they cannot be manufacturing process and are not a key set forth in Parts 742 and 746 of the EAR and effectively controlled, as they are now enabler in the production of as indicated in AT Column 1 of the integrated into mass market products. semiconductors. Commerce Country Chart. Also note, that c. Incorporating 3A001.a.3.b into b. Revising the formula for minimum technology for the development and 3A001.a.3 to revise the format of resolvable feature size in the technical production of microprocessor microcircuits, 3A001.a.3. micro computer microcircuits and note following 3B001.f.1.b by replacing microcontroller microcircuits having a d. Revising the Note 2 to 3A001.b.2 to the ‘‘Fm’’ with ‘‘nm’’ to conform with avoid incorrect interpretation that it is composite theoretical performance (CTP) of the corresponding entry in the 530 MTOPS or more and an arithmetic logic only relevant if the device spans more Wassenaar Arrangement’s List of Dual- unit with an access width of 32 bits or more than one entire range. Use Goods and Technologies. continue to be controlled for national e. Adding the word ‘‘Discrete’’ before security reasons under ECCN 3E002. 3A001.b.3, which reads ‘‘Microwave Note: For equipment no longer controlled transistors having any of the following:’’ under ECCN 3B001.a.1.a, related software ECCN 3E991 is amended by revising controlled under 3D001 and 3D002, and to add clarification. the heading to add technology controls related technology controlled under 3E001, for development, production, or use of f. Revising the Note to 3A001.b.3 there remains a license requirement under (Microwave transistors) to add ECCNs 3B991.b.1.d.1, 3D991, and 3E991, specific processing equipment described clarification and avoid respectively, for exports and reexports to in 3A991, and materials controlled by misinterpretation. designated terrorism-supporting countries, as 3C992 (positive resists designed for g. Revising the operation frequency set forth in Parts 742 and 746 of the EAR and semiconductor lithography * * *), for microwave sold state amplifiers and as indicated in AT Column 1 of the because this technology warrants anti- microwave assemblies/modules Commerce Country Chart. terrorism (AT) controls. containing microwave amplifiers from ECCN 3B991 is amended by: Category 5—Part I— ‘‘3 GHz’’ to ‘‘3.2 GHz’’ in 3A001.b.4.f. a. Revising the ‘‘unit’’ paragraph in Telecommunications This change was made for consistency the List of Items Controlled section to ECCN 5A001 is amended by: with the parameter in 3A001.b.2.a provide instructions to input dollar a. Adding the phrase ‘‘, as follows (see (MMIC amplifiers), 3A001.b.3.a value in the unit block on a license List of Items Controlled)’’ to the (transistors) and 3A001.b.4.a (solid state application for components and amplifiers). heading. accessories; b. Revising the License Requirements h. Revising Note 2 to 3A001.b.4 to b. Redesignating paragraphs section to reflect that there is a license avoid incorrect interpretation that it is 3B991.b.1.d.1 and 3B991.b.1.d.2 as requirement for jamming equipment only relevant if the device spans more 3B991.b.1.d.2 and 3B991.b.1.d.3 described in newly added paragraph than one entire range. respectively; i. Adding a Technical Note to c. Adding a new paragraph 5A001.f to countries that have an ‘‘X’’ in 3A001.b.4.f.3 to eliminate ambiguity in 3B991.b.1.d.1 to maintain AT controls NS Column 2 of the Commerce Country the case of amplifiers having for stored program controlled Chart in Supplement No.1 of Part 738. performance both above and below the equipment for epitaxial growth capable Note: 5A001.f is eligible for License frequency threshold. of producing a silicon layer with a Exceptions LVS, GBS, and CIV, if the criteria

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in Part 740 of the EAR for the license Note: In 2004, the Wassenaar Expert’s ECCN 5D991 is amended by revising exception authorizing the export or reexport Group determined that ECCN 7A007 was not the heading and the ‘‘items’’ paragraph has been met and none of the license navigation or avionics equipment and in the List of Items Controlled section to exception restrictions of § 740.2 apply to the belonged instead in Category 5 Part 1; it was add reference to the software removed transaction. determined that the equipment controlled by that ECCN should be placed in a revised from 5D001.c.3 (‘‘Software’’, other than Note: Related software for the paragraph 5A001.e. In the course of the in machine-executable form, specially development, production, or use of this discussion, it was also found that the level designed for ‘‘dynamic adaptive equipment is controlled for national security of the ECCN 7A007 control was set so high routing’’). reasons (NS:1) and antiterrorism reasons as to not control systems of potential (AT:1) under ECCN 5D001, and related concern. In addition, the ECCN 7A007 Category 5—Part 2—Information technology for the development, production, control text is technology-specific. Security or use of this equipment is controlled for Previously, the text in 5A001.e was found ECCN 5A002 is amended by: national security reasons (NS:1) and to only control one specific, highly-advanced a. Adding a sentence to the ‘‘Related system. The revised text of ECCN 5A001.e is antiterrorism reasons (AT:1) under ECCN Controls’’ paragraph of the List of Items 5E001. written in an effort to set forth provisions that control systems of concern and support Controlled section to note that 5A002 c. Adding ‘‘or antennae’’ to the Unit a level playing field in the global does not control commodities eligible paragraph of the List of Items Controlled marketplace. Advanced DF systems, which for the Cryptography Note (Category 5 section. can direction-find against short-duration Part 2 Note 3). signals and frequency-hopping radios are of b. Adding the phrase ‘‘not controlled d. Revising the second note following particular concern because they can be used 5A001.a.3 to add the phrase ‘‘designed in 5A002.a.6.’’ to 5A002.a.5 to avoid by military forces of countries of concern to overlapping controls with the new or modified for use’’ to conform with locate and target advanced tactical the corresponding entry in the communications equipment. parameters in 5A002.a.6. Wassenaar Arrangement’s List of Dual- Because the system accuracy of a direction c. Adding new control parameters to Use Goods and Technologies. finder is directly related to the antenna 5A002.a.6, including adding networked identification code to the type of codes e. Adding the phrase ‘‘not controlled geometry of the direction finder, and thus does not imply a high degree of know-how, that could be generated using in 5A001.b.4’’ to 5A001.b.3 to avoid this revision is based on the control cryptographic techniques. Also adding overlapping controls with the new parameter ‘‘Instantaneous bandwidth’’, control characteristics for systems using parameters in 5A001.b.4. which is the decisive factor for direction ultra-wideband modulation techniques, f. Revising 5A001.b.4 (radio finding against frequency-hopping radios and i.e., A bandwidth exceeding 500 MHz; equipment employing ultra-wideband signals of the short duration type. or a ‘‘fractional bandwidth’’ of 20% or modulation techniques) so that it would i. Adding paragraph 5A001.f to more. be independent of the modulation control sophisticated cellular phone Note: Following WA agreement reached on technique employed in ultra-wideband jamming equipment. Equipment of this (UWB) (i.e., not limited to ‘‘time revised text for 5A001.b.3 and 5A001.b.4 in type is capable of selectively jamming Category 5 Part 1, to control new ultra modulation’’ (TM)). Today, in addition cellular phone communications, which wideband techniques that had appeared on to TM–UWB, Direct Sequence-Spread can pose a national security threat. the market, agreement was reached by WA on Spectrum (DS–SS) and Multi-Band ECCN 5A991 is amended by: consequential changes in 5A002.a.5 & Orthogonal Frequency Division a. Adding the definition of 5A002.a.6.in Category 5 Part 2. Multiplex (MB–OFDM) have appeared ‘Asynchronous transfer mode’ (‘ATM’) d. Adding paragraph 5A002.a.9 to add as different modulation techniques for to the related definitions paragraph of controls for quantum cryptography UWB. Because of the emergence of DS– the List of Items Controlled section; and because it represents advancement in SS and MB–OFDM, the previously b. Replacing the double quotes with cryptography that can improve standing text of 5A001.b.4 and single quotes around the term information security in two important 5A002.a.6, were limited to TM–UWB, ‘Asynchronous transfer mode’ (‘ATM’) ways: (1) It may be used in conjunction which created a loophole. in paragraph 5A991.c.12, to signify that with digital cryptography to securely g. Adding a Technical Note 2 for the definition is found in the related distribute shared keys for a digital 5A001.b.6, because the bandwidth of definitions section of 5A991 and no symmetric algorithm and (2) it may audio-coding (20–22,000 Hz) overlaps longer in Part 772 of the EAR. make for a fast and highly secure ‘‘one- the bandwidth of voice-coding (300– ECCN 5D001 is amended by: time-pad’’ cipher. A Technical Note that 3,400 Hz), and the scope of control in a. Moving 5D001.c.1 into 5D001.c; describes quantum cryptography is also the context of 5A001.b.6 is only adopted b. Deleting the reserved paragraph added to this paragraph. to ‘‘voice coding.’’ It is necessary to 5D001.c.2; and clearly indicate that ‘‘voice coding’’ c. Removing 5D001.c.3, because Note: This equipment under ECCN controlled in 5A001.b.6 is a voice- consensus was reached to delete 5A002.a.9 is controlled for encryption items coding technique that uses voice-coding 5D001c3 controlling the source code (EI) reasons, national security reasons (NS:1) algorithms that are based on peculiar specially designed for dynamic adaptive and antiterrorism reasons (AT:1). Related software for the development, production, human voice characteristics. routing. This technology has become widely available due to the recent and use of this equipment is controlled for h. Adding a descriptor ‘‘Radio’’ to expansion of packet telecommunication encryption items (EI) reasons, national make it ‘‘Radio direction finding networks, such as the internet. security reasons (NS:1), and antiterrorism equipment’’ in 5A001.e; changing the reasons (AT:1) under ECCN 5D002; related ‘‘Instantaneous bandwidth’’ from ‘‘1 Note: The software removed from ECCN technology for the development, production, MHz or more’’ to ‘‘10 MHz or more’’ in 5D001.c.3, and related technology under and use of this equipment is controlled for 5A001.e.1; and replacing the parallel ECCN 5E001 continue to be controlled for encryption items (EI) reasons, national processing parameter with the antiterrorism (AT:1) reasons under ECCNs security reasons (NS:1), and antiterrorism 5D991 and 5E991 respectively, for exports reasons (AT:1) under ECCN 5E002. capability to find a line of bearing (LOB) and reexports to designated terrorism- to non-cooperating radio transmitters supporting countries, as set forth in Parts 742 e. Adding a new paragraph c.4 to the with a signal duration of less than 1 ms and 746 of the EAR and as indicated in AT Note at the top of the items paragraph in 5A001.e.3. Column 1 of the Commerce Country Chart. in the List of Items Controlled section of

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5A002 to clarify that model-based (NS:2) and antiterrorism reasons (AT:1); 744.3 ‘‘Restrictions on Certain Rocket simulation software that is specially Related software for magnetic and electric Systems (including ballistic missile designed and limited to protect field sensors is controlled for national systems and space launch vehicles and libraries, design attributes, or associated security reasons (NS:1) and antiterrorism sounding rockets) and Unmanned Air data for the design of semiconductor reasons (AT:1) under ECCN 6D003; and related technology for magnetic and electric Vehicles (including cruise missile devices or integrated circuits, is not field sensors is controlled for national systems, target drones and controlled under the corresponding security reasons (NS:1) and antiterrorism reconnaissance drones) End-Uses.’’ software entry ECCN 5D002. The Note reasons (AT:1) under ECCN 6E003. d. Redesignating paragraphs 9A012.a describes software for which the and 9A012.b as 9A012.a.1 and underlying encryption functionality is Category 8—Marine 9A012.a.2. for specific purposes such as protection e. Adding a new paragraph 9A012.b of intellectual property, and the ECCN 8A002 is amended by adding a for associated systems, equipment and underlying encryption functionality decontrol note in 8A002.f for digital components. (including the protected libraries, cameras specially designed for consumer purposes, other than those Note: Related software for the development design attributes or associated data) is and production of equipment controlled not directly accessible to the end-user. employing electronic image multiplication techniques. This note under ECCN 9A012 is controlled for national f. Moving an existing nota bene security reasons (NS:1) and antiterrorism (‘‘NB’’) so that it immediately follows was added because of the foreign reasons (AT:1) under ECCN 9D001 and the text of Note d to ECCN 5A002, to availability of digital cameras. 9D002 respectively; software specially conform with the corresponding entry Category 9—Propulsion Systems, Space designed or modified for the ‘‘use’’ of full authority digital electronic engine controls in the Wassenaar Arrangement’s List of Vehicles and Related Equipment Dual-Use Goods and Technologies. (FADEC) for propulsion systems controlled ECCN 9A001 is amended by: by 9A012 is controlled for antiterrorism Category 6—Sensors a. Revising the ‘‘unit’’ paragraph in reasons (AT:1) under ECCN 9D003; and ECCN 6A006 is amended by: the List of Items Controlled section to related technology for the development of read ‘‘number’’ instead of ‘‘Equipment this equipment is controlled for national a. Revising the heading to add newly security reasons (NS:1) and antiterrorism controlled ‘‘underwater electric field in number; parts and accessories in $ reasons (AT:1) under ECCN 9E001. sensors;’’ value.’’ b. Revising ‘‘6A006.c’’ to read b. Revising paragraph 2 in the Note to ECCN 9B010 is added to control ‘‘6A006.d’’ in the LVS paragraph in the 9A001.a, because it was discovered that ‘‘equipment specially designed for the License Exceptions section, because the International Civil Aviation production of ‘‘UAVs’’ and associated magnetic compensation systems, as well Organization (ICAO) issues a document systems, equipment and components as compensation systems for underwater equivalent to a civil Type Certificate controlled by 9A012.’’ electric field sensors are now controlled that the participating members of The Participating States of the under 6A006.d; Wassenaar found acceptable for export Wassenaar Arrangement agreed to c. Revising the ‘‘Related Controls’’ control purposes. Reference to that control equipment, software and paragraph in the List of Items Controlled document has been added to paragraph technology for the conversion of aircraft section to add an exemption from 2.a within the Note to 9A001.a. The for UAV operation, because of attempts control for instruments controlled by approval of the design of certain types by countries of concern to acquire such 6A006 that are used for ‘‘fishery of aircraft, engines and propellers is conversion capability for conventional applications,’’ such as research on fish signified by the issue of a Type arms and terrorism purposes. reproduction. Certificate. In general there will be a Note: Equipment under 9B010 is controlled d. Redesignating 6A006.b (magnetic Type Certificate Data Sheet (TCDS) for national security reasons (NS:1) and gradiometers) as 6A006.c; associated with each Type Certificate antiterrorism reasons (AT:1); Related e. Adding a new paragraph 6A006.b to issued. The TCDS records the basis of software for the development and production control Underwater Electric Field certification, the designation of each of this equipment is controlled for national Sensors, because they now have civil approved variant and general security reasons (NS:1) and antiterrorism applications, such as underwater information concerning the design. reasons (AT:1) under ECCN 9D001 and exploration, salvage, and biological and ECCN 9A012 is amended by: 9D002 respectively; software specially medical sciences, and no longer are designed or modified for the ‘‘use’’ of full a. Revising the heading to add double authority digital electronic engine controls strictly used in military applications, quotes around the term ‘‘unmanned (FADEC) for propulsion systems controlled such as detection of submarines and aerial vehicles’’ to indicate that this is by 9B010 is controlled for antiterrorism underwater mines. a term now defined in Part 772. Also, reasons (AT:1) under ECCN 9D003; and ECCN 6D003 is amended by: adding the abbreviation ‘‘UAV’’ to the related technology for the development and a. Revising 6D003.f from reading heading. production of this equipment is controlled ‘‘Magnetometers.’’ to read ‘‘Magnetic b. Revising the heading to add for national security reasons (NS:1) and and Electric Field Sensors’’ in associated systems, equipment, and antiterrorism reasons (AT:1) under ECCN conformance with new paragraph components, because Wassenaar has 9E001 and 9E002 respectively. 6A006.b. agreed to expand this ECCN entry. It ECCNs 9D001 and 9D002 have been b. Revising 6D003.f.1 and 6D003.f.2 was determined that it would be amended by revising the License by adding ‘‘and electric field’’ in prudent for the control of conventional Requirement section in each to add conformance with new paragraph arms to place export controls on the ECCN 9B010 to the NS paragraph. 6A006.b. associated systems, equipment, and ECCN 9D004 is amended by adding a ECCN 6E003 is amended by revising components used for remote controlling new paragraph 9D004.e to control the title of 6E003.f from or guidance of the UAV or to convert a ‘‘software’’ specially designed or ‘‘Magnetometers’’ to read ‘‘Magnetic and manned aircraft to an UAV. modified for the ‘‘use’’ of ‘‘UAVs’’ and Electric Field Sensors.’’ c. Revising the Related Controls associated systems, equipment and Note: Equipment under 6A006 is paragraph of the List of Items Controlled components controlled by 9A012. controlled for national security reasons section to add a reference to section ECCN 9E001 has been amended by:

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a. Revising the heading to include 9E002 for the production of equipment commodities and software to non- 9A012; and in 9A011. government end-users in countries not b. Adding 9A012 and 9B010 to the NS Therefore, 6E001 technology for the listed in Supplement No. 3 to Part 740 paragraph in the License Requirement development of software in ECCNs of the EAR under License Exception section. 6D001 (specially designed for the ENC. Quantum cryptography items are ECCN 9E002 is amended by removing ‘‘production’’ or ‘‘development’’ of not eligible for export or reexport to the License Requirement Note that equipment in 6A008.1.3 or 6B008) and ‘‘government end-users’’ under License refers to Wassenaar reporting 6D003; 9D001 for the development of Exception ENC outside the countries requirements in section 743.1 of the equipment controlled by 9A011; 9D002 listed in Supplement No. 3 to Part 740 EAR, because this ECCN is not eligible specially designed or modified for the of the EAR, because of the provisions of for License Exceptions GBS, CIV, TSR, production of equipment controlled by § 740.17(b)(3)(i)(B) and LVS, CTP, or GOV and therefore does 9A011, 9D001 or 9D002 for the § 740.17(b)(2)(iii)(E) of the EAR. To not require Wassenaar reporting. development or production of 9A011; receive written authorization from the ECCN 9E003 is amended by revising and 9E002 for the production of Bureau of Industry and Security (BIS) to 9E003.a.11 to remove the qualifiers, equipment in 9A011, which are listed export your encryption items under (i.e., ‘‘wide chord’’ and ‘‘without part- on the Wassenaar Arrangement’s Very License Exception ENC, you must span support’’), so that ‘‘technology’’ Sensitive List, are no longer eligible for submit an encryption review request to ‘‘required’’ for the ‘‘development’’ or License Exception GOV when consigned BIS and the ENC Encryption Request ‘‘production’’ of all types of hollow fan to and for the official use of any agency Coordinator. For guidance on applying blades for gas turbine engines are of a cooperating government within the for authorization under License controlled for NS:1, SI, and AT:1 territory of any cooperating government, Exception ENC go to BIS’s Web page reasons. The advantage of using this or when consigned to and for the official http://www.bis.doc.gov/encryption/ type of blade is weight saving, stress use of a diplomatic or consular mission enc.htm. reduction and an element of foreign of a cooperating government located in object damage protection. any country in Country Group B of Section 743.1 ‘‘Wassenaar Supplement No. 1 to Part 740 of the Arrangement’’ Section 740.11 and Supplement No. 1 to EAR. Section 740.11—License Exception GOV § 743.1 is amended by: Section 740.17 ‘‘License Exception • Deleting ECCN 2B003 from the Note This rule amends section 740.11 ENC’’ to paragraph (c)(1)(ii) to conform to the (a)(2)(vi)(G) to add 9A011 as it relates to Wassenaar Sensitive List. This relates to This rule amends the introductory ECCN 9D001 software, and to add a new Wassenaar reporting requirements for paragraph (a)(2)(vi)(H) to cover software paragraph and paragraphs (a), (b)(1), and (b)(2) to state that newly controlled ECCNS 2D001, 2E001, and 2E002. controlled by ECCN 9D002, specially • Removing 5A001.b.5 from designed or modified for the quantum cryptography items described in 5A002.a.9 of the Commerce Control paragraph (c)(1)(v), because BIS does ‘‘production’’ of equipment controlled not need to require reporting for by ECCN 9A011. These items may not List (CCL) in Supplement No. 1 to Part 774 of the EAR are eligible for License commodities that are not eligible for be exported or reexported for official License Exceptions GBS, CIV, TSR, LVS, international safeguard use by the Exception ENC. Paragraph (a) of Section 740.17 of the EAR authorizes certain CTP, or GOV. BIS can get the necessary International Atomic Energy Agency information to fulfill U.S. obligations for (IAEA) and the European Atomic Energy exports, reexports, and technical assistance to countries listed in reporting to the Wassenaar Arrangement Community (EURATOM) under License from license application data. Exception GOV to destinations other Supplement No. 3 to Part 740 of the • Adding 5A001.b.5 under the than Austria, Belgium, Canada, EAR under License Exception ENC. The 5B001.a in paragraph (c)(1)(v), because Denmark, Finland, France, Germany, countries in Supplement No. 3 to Part 5B001.a is specially designed for Greece, Ireland, Italy, Luxembourg, the 740 represent the European Union’s 5A001.b.5, is eligible for license Netherlands, Portugal, Spain, Sweden, ‘‘license-free zone’’ and include: exception and is on the Wassenaar and the United Kingdom. Austria, Australia, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Arrangement’s Sensitive List. Supplement No. 1 to section 740.11 is • amended to: Finland, France, Germany, Greece, Adding 5D001.a entry in paragraph a. Add 6D001 (specially designed for Hungary, Ireland, Italy, Japan, Latvia, (c)(1)(v), because software for the the ‘‘production’’ or ‘‘development’’ of Lithuania, Luxembourg, Malta, development or production of equipment in 6A008.1.3 or 6B008) and Netherlands, New Zealand, Norway, equipment, components, or accessories 6D003.a to paragraphs (a)(1)(vii)(D) and Poland, Portugal, Slovakia, Slovenia, classified under 5B001.a is on the (b)(1)(vii)(D), which relate to 6E001 Spain, Sweden, Switzerland, and the Wassenaar Arrangement’s Sensitive List technology; United Kingdom. Paragraph (b) of and is eligible for License Exceptions b. Add ECCN 9A011 to (a)(1)(vi)(G) Section 740.17 of the EAR authorizes CIV and TSR. This addition is necessary that relates to 9D001 software; exports and reexports destined to U.S. in order for the United States to fulfill c. Add a new paragraph (a)(1)(vi)(H) subsidiaries under License Exception its reporting obligations to the to cover software controlled by ECCN ENC and, for other end-users, exports Wassenaar Arrangement. 9D002, specially designed or modified and reexports to countries not listed in • Adding 6A002.a.1.a, 6A002.a.1.b, for the ‘‘production’’ of equipment Supplement No. 3 to Part 740 of the 6A002.a.2.a (changing 350 uA/Im to 700 controlled by ECCN 9A011; EAR. (This rule renames this Paragraph uA/Im in 6A002.a.2.a.3.a), 6A002.a.3, d. Add to paragraph (a)(1)(vii)(G) (b) to make clear the scope of this 6A002.c, 6A002.e; 6A003.b.3, 9A011, 9D001 and 9D002 as they relate paragraph.) Paragraph (b)(1) of Section 6A003.b.4, and 6A006.a to paragraph to the development and production of 740.17 of the EAR authorizes exports (c)(1)(vi), because these commodities are 9A011, and as they relate to ECCN and reexports of encryption items for on the Wassenaar Arrangement’s 9E001; and U.S. subsidiaries. Paragraph (b)(2) of Sensitive List and are eligible for license e. Add a new paragraph (a)(1)(vii)(H) Section 740.17 of the EAR authorizes exception under the EAR. This addition to cover technology controlled by ECCN exports and reexports of encryption is necessary in order for the United

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States to fulfill its reporting obligations This rule adds a reference to Category carries a burden hour estimate of 58 to the Wassenaar Arrangement. 2 in the definition for ‘‘Electronic minutes for a manual or electronic • Revising 6A006.g to 6A006.d in assembly,’’ because of the addition of submission. The other of the collections paragraph (c)(1)(vi), because this controls on electronic assemblies in has been approved by OMB under paragraph has moved under ECCN 2B006.b.1. control number 0694–0106, ‘‘Reporting 6A006. This rule removes the definition for and Recordkeeping Requirements under • Removing 6D003.a from paragraph ‘‘time-modulated ultra-wideband,’’ the Wassenaar Arrangement,’’ and (c)(1)(vi), because that ECCN is not because the Wassenaar Arrangement carries a burden hour estimate of 21 eligible for License Exceptions LVS, agreed to remove it from 5A001.b.4 and minutes for a manual or electronic GBS, CIV, APP, TSR, or GOV. 5A002.a.6, and instead use the submission. Send comments regarding • Removing 6A006.h from paragraph undefined term ‘‘ultra-wideband these burden estimates or any other (c)(1)(vi), because this paragraph has modulation techniques.’’ aspect of these collections of been removed from 6A006 by agreement This rule adds the definition for information, including suggestions for of the Wassenaar Arrangement. ‘‘unmanned aerial vehicle’’ (‘‘UAV’’) to reducing the burden, to OMB Desk • Adding a note to paragraph section 772.1, which is used in ECCNs Officer, New Executive Office Building, (c)(1)(vi) to clarify the reporting 9A012 and newly added ECCN 9B010. Washington, DC 20503; and to the requirement for 6A002.a.3. In addition, UAVs are addressed in • Office of Administration , Bureau of Redesignating paragraphs (c)(1)(vii) section 744.3 of the EAR. Industry and Security, Department of and (c)(1)(viii) as paragraphs (c)(1)(viii) Although the Export Administration Commerce, 14th and Pennsylvania and (c)(1)(ix), in order to add a new Act expired on August 20, 2001, the Avenue, NW., Room 6883, Washington, paragraph (c)(1)(vii) to cover Category 7: President, through Executive Order DC 20230. 7D002; 7D003.c, d.1 to d.4, and d.7; 13222 of August 17, 2001, 3 CFR, 2001 3. This rule does not contain policies 7E001; and 7E002, because these Comp., p. 783 (2002), as extended by the with Federalism implications as that commodities are on the Wassenaar Notice of August 3, 2006, 71 FR 44551 term is defined under E.O. 13132. Arrangement’s Sensitive List and are (August 7, 2006), has continued the 4. The provisions of the eligible for license exception under the Export Administration Regulations in Administrative Procedure Act (5 U.S.C. EAR. This addition is necessary in order effect under the International 553) requiring notice of proposed for the United States to fulfill its Emergency Economic Powers Act. rulemaking, the opportunity for public reporting obligations to the Wassenaar Saving Clause participation, and a delay in effective Arrangement. date, are inapplicable because this • Adding 9D001 (for 9B001.b and Shipments of items removed from regulation involves a military and 9E003 as described in this paragraph), license exception eligibility or eligibility foreign affairs function of the United 9D002 (for 9B001.b), 9D004.a, 9D004.c, for export without a license as a result States (5 U.S.C. 553(a)(1)). Further, no 9E001 for technology controlled for NS of this regulatory action that were on other law requires that a notice of reasons, 9E002, 9E003.a.2, a.3.b, a.3.c, dock for loading, on lighter, laden proposed rulemaking and an a.4, a.5, a.8, and a.9 to newly designated aboard an exporting carrier, or en route opportunity for public comment be paragraph (c)(1)(ix), because these aboard a carrier to a port of export, on given for this final rule. Because a commodities are on the Wassenaar September 7, 2006, pursuant to actual notice of proposed rulemaking and an Arrangement’s Sensitive List and are orders for export to a foreign opportunity for public comment are not eligible for license exception under the destination, may proceed to that required to be given for this rule under EAR. This addition is necessary in order destination under the previous license the Administrative Procedure Act or by for the United States to fulfill its exception eligibility or without a license any other law, the analytical reporting obligations to the Wassenaar so long as they have been exported from requirements of the Regulatory Arrangement. the United States before October 10, Flexibility Act (5 U.S.C. 601 et seq.) are This rule revises the title to 2006. Any such items not actually not applicable. Therefore, this Supplement No. 1 to Part 743 of the exported before midnight, on October regulation is issued in final form. EAR from ‘‘Wassenaar Arrangement 10, 2006, require a license in accordance Although there is no formal comment Member Countries’’ to ‘‘Wassenaar with this regulation. Arrangement Participating States,’’ period, public comments on this Rulemaking Requirements because this is the term used by the regulation are welcome on a continuing Wassenaar Arrangement to address its 1. This final rule has been determined basis. Comments should be submitted to members. to be not significant for purposes of E.O. Sharron Cook, Office of Exporter In addition, this rule adds Croatia, 12866. Services, Bureau of Industry and Estonia, Latvia, Lithuania, Malta, and 2. Notwithstanding any other Security, Department of Commerce, P.O. South Africa to the list of Wassenaar provision of law, no person is required Box 273, Washington, DC 20044. Arrangement Participating States in to respond to, nor shall any person be List of Subjects Supplement No. 1 to Part 743 of the subject to a penalty for failure to comply EAR, because they were recently with a collection of information, subject 15 CFR Part 740 admitted to the Wassenaar to the requirements of the Paperwork Administrative practice and Arrangement. Reduction Act of 1995 (44 U.S.C. 3501 procedure, Exports, Reporting and et seq.) (PRA), unless that collection of recordkeeping requirements. Definitions in Part 772 information displays a currently valid This rule removes the definition for Office of Management and Budget 15 CFR Part 743 ‘‘Asynchronous transfer mode’’ (OMB) Control Number. This rule Administrative practice and (‘‘ATM’’) from section 772.1 of the EAR, involves two collections of information procedure, Reporting and recordkeeping and moves it to the related definitions subject to the PRA. One of the requirements. paragraph in the List of Items Controlled collections has been approved by OMB section of ECCN 5A991, because the under control number 0694–0088, 15 CFR Part 772 term is only referred to in 5A991.c.12. ‘‘Multi-Purpose Application,’’ and Exports.

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15 CFR Part 774 (D) Controlled by 6E001 for the PART 743—[AMENDED] ‘‘development’’ of equipment or ‘‘software’’ Exports, Reporting and recordkeeping in 6A001.a.1.b.1, 6A001.a.2.a.1, I 5. The authority citation for Part 743 requirements. 6A001.a.2.a.2, 6A001.a.2.a.3, 6A001.a.2.a.5, is revised to read as follows: I Accordingly, Parts 740, 743, 772 and 6A001.a.2.a.6, 6A001.a.2.b, 6A001.a.2.c, 774 of the Export Administration 6A001.a.2.e, 6A001.a.2.f, 6A002.a.1.c, Authority: 50 U.S.C. app. 2401 et seq.; Pub. Regulations (15 CFR Parts 730–799) are 6A008.1.3, 6B008, 6D001 (specially designed L. 106–508; 50 U.S.C. 1701 et seq.; Notice of for the ‘‘production’’ or ‘‘development’’ of August 3, 2006, 71 FR 44551 (August 7, amended as follows: equipment in 6A008.1.3 or 6B008), or 2006). 6D003.a as described in paragraph (a)(1) of PART 740—[AMENDED] I 6. Section 743.1 is amended by: this Supplement; and I a. Revising the note to paragraph I 1. The authority citation for Part 740 * * * * * (c)(1)(ii), as set forth below; continues to read as follows: (G) Controlled by 9E001 for the I b. Revising paragraphs (c)(1)(v), and ‘‘development’’ of equipment or ‘‘software’’ Authority: 50 U.S.C. app. 2401 et seq.; 50 (c)(1)(vi), as set forth below; in 9A011, 9D001 for the ‘‘development’’ of I U.S.C. 1701 et seq.; Sec. 901–911, Pub. L. 9A011, or 9D002 for the ‘‘production’’ of c. Redesignating paragraphs (c)(1)(vii) 106–387; E.O. 13026, 61 FR 58767, 3 CFR, 9A011; and and (viii) as (viii) and (ix); 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, (H) Controlled by 9E002 for the I d. Adding a new paragraph (c)(1)(vii) 3 CFR, 2001 Comp., p. 783; Notice of August ‘‘production’’ of equipment in 9A011; and as set forth below; and 3, 2006, 71 FR 44551 (August 7, 2006). * * * * * I e. Revising newly designated I 2. Section 740.11 is amended by (b) * * * paragraphs (c)(1)(viii) and (c)(1)(ix) to revising (a)(2)(vi)(G) and adding a (1) * * * read as follows: paragraph (a)(2)(vi)(H) to read as (vi) * * * follows: (F) Controlled by 8D001, specially § 743.1 Wassenaar Arrangement. designed for the ‘‘development’’ or * * * * * § 740.11 Governments, International ‘‘production’’ of equipment controlled by (c) * * * Organizations, and International 8A001.b, 8A001.d, or 8A002.o.3.b; (1) * * * Inspections Under the Chemical Weapons (G) Controlled by 9D001, specially Convention (GOV). designed or modified for the ‘‘development’’ (ii) * * * * * * * * of equipment or ‘‘technology’’ controlled by Note to paragraph (c)(1)(ii): Reports for 9A011, 9E003.a.1, or 9E003.a.3.a; and 2D001, are for ‘‘software’’, other than that (a) * * * (H) Controlled by 9D002, specially (2) * * * controlled by 2D002, specially designed for designed or modified for the ‘‘production’’ of the ‘‘development’’ or ‘‘production’’ of the (vi) * * * equipment controlled by 9A011; µ (G) Controlled by 9D001, specially equipment in 2B001.a or .b (changing 6 m to (vii) * * * 5.1µm in 2B001.a.1 and 2B001.b.1.a; and (D) Controlled by 6E001 for the designed or modified for the adding ‘‘a positioning accuracy with ‘‘all ‘‘development’’ of equipment or ‘‘software’’ ‘‘development’’ of equipment or compensations available’’ equal to or less in 6A001.a.1.b.1, 6A001.a.2.a.1, ‘‘technology’’ controlled by 9A011, (better) than 5.1µm along any linear axis’’ to 6A001.a.2.a.2, 6A001.a.2.a.3, 6A001.a.2.a.5, 9E003.a.1, or 9E003.a.3.a; and the existing text for 2B001.b.2) of the 6A001.a.2.a.6, 6A001.a.2.b, 6A001.a.2.c, (H) Controlled by 9D002, specially 6A001.a.2.e, 6A001.a.2.f, 6A002.a.1.c, Commerce Control List (CCL). designed or modified for the 6A008.1.3, 6B008, 6D001 (specially designed Reports for 2E001, are for ‘‘technology’’ ‘‘production’’ of equipment controlled for the ‘‘production’’ or ‘‘development’’ of according to the General Technology Note for by 9A011. equipment in 6A008.1.3 or 6B008), or ‘‘development’’ of ‘‘software’’ as described in this paragraph for 2D001, or for the * * * * * 6D003.a as described in paragraph (a)(1) of µ this Supplement; and equipment in 2B001.a or .b (changing 6 m to I 3. Supplement No. 1 to 740.11 is 5.1µm in 2B001.a.1 and 2B001.b.1.a; and amended by: * * * * * adding ‘‘a positioning accuracy with ‘‘all (H) Controlled by 9E002 for the production I a. Revising paragraphs (a)(1)(vi)(F) compensations available’’ equal to or less of 9A011; and µ and (a)(1)(vi)(G), as set forth below; (better) than 5.1 m along any linear axis’’ to * * * * * I b. Adding paragraphs (a)(1)(vi)(H) and the existing text for 2B001.b.2) of the CCL. I Reports for 2E002, are for ‘‘technology’’ (b)(1)(vi)(H), as set forth below; and 4. Section 740.17 is amended by: according to the General Technology Note for I I c. Revising paragraphs (a)(1)(vii)(D), a. Revising the phrase ‘‘by ECCNs ‘‘production’’ of the equipment in 2B001.a or (a)(1)(vii)(G), (a)(1)(vii)(H), (b)(1)(vi)(F), 5A002.a.1, .a.2, .a.5, and .a.6, 5B002, .b (changing 6µm to 5.1µm in 2B001.a.1 and (b)(1)(vi)(G), (b)(1)(vii)(D), and and 5D002’’ to read ‘‘by ECCNs 2B001.b.1.a; and adding ‘‘a positioning (b)(1)(vii)(H) to read as follows: 5A002.a.1, .a.2, .a.5, .a.6, and .a.9, accuracy with ‘‘all compensations available’’ 5B002, and 5D002’’ in the introductory equal to or less (better) than 5.1µm along any Supplement No. 1 to Section 740.11— paragraph; linear axis’’ to the existing text for 2B001.b.2) Additional Restrictions on Use of I b. Revising the heading of paragraph of the CCL. License Exception GOV (b) to read as set forth below; and (a) * * * I c. Revising the phrase ‘‘ECCNs * * * * * (1) * * * 5A002.a.1, .a.2, .a.5, or .a.6,’’ to read (v) Category 5: 5A001.b.3; 5B001.a (vi) * * * ‘‘ECCNs 5A002.a.1, .a.2, .a.5, .a.6, or (items specially designed for 5A001.b.3 (F) Controlled by 8D001, specially .a.9,’’ in paragraphs (a) introductory and b.5); 5D001.a (specially designed for designed for the ‘‘development’’ or text, (b)(1) introductory text, and (b)(2) the ‘‘development’’ or ‘‘production’’ of ‘‘production’’ of equipment controlled by introductory text. equipment, function, or features in 8A001.b, 8A001.d, or 8A002.o.3.b; 5A001.b.3 or 5B001.a as described in (G) Controlled by 9D001, specially § 740.17 Encryption Commodities and this paragraph) and 5D001.b (specially designed or modified for the ‘‘development’’ Software (ENC). designed or modified to support of equipment or ‘‘technology’’ controlled by * * * * * ‘‘technology’’ under 5E001.a as 9A011, 9E003.a.1, or 9E003.a.3.a; and (b) Exports and reexports for U.S. (H) Controlled by 9D002,specially designed described in this paragraph); and or modified for the ‘‘production’’ of subsidiaries and to countries not listed 5E001.a (for the ‘‘development’’ or equipment controlled by 9A011; in Supplement No. 3 to this part. ‘‘production’’ of equipment, function, (vii) * * * * * * * * features, or ‘‘software’’ in 5A001.b.3,

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5B001.a, 5D001.a or 5D001.b as paragraph), 9D002 (for 9B001.b), 30 U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42 described in this paragraph); 9D004.a, 9D004.c, 9E001 for technology U.S.C. 6212; 43 U.S.C. 1354; 46 U.S.C. app. (vi) Category 6: 6A001.a.1.b (changing controlled for NS reasons, 9E002, 466c; 50 U.S.C. app. 5; Sec. 901–911, Pub. L. 10 kHz to 5 kHz and adding the text ‘‘or 9E003.a.2, a.3.b, a.3.c, a.4, a.5, a.8, and 106–387; Sec. 221, Pub. L. 107–56; E.O. a sound pressure level exceeding 224 dB a.9. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. (reference 1 µPa at 1 m) for equipment 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 * * * * * Comp., p. 783; Notice of August 3, 2006, 71 with an operating frequency in the band I 7. Supplement No. 1 to Part 743 is FR 44551 (August 7, 2006). from 5 kHz to 10 kHz inclusive’’ to the amended by: existing text in 6A001.a.1.b.1) , and I a. Revising the heading of the Supplement No. 1 to Part 774 .a.2.d; 6A002.a.1.a, 6A002.a.1.b, Supplement to read as set forth below; [Amended] 6A002.a.2.a (changing 350 uA/Im to 700 and I uA/Im in 6A002.a.2.a.3.a), 6A002.a.3, I b. Adding Croatia, Estonia, Latvia, 11. In Supplement No. 1 to Part 774 6A002.b, 6A002.c, 6A002.e; 6A003.b.3, Lithuania, Malta, and South Africa in (the Commerce Control List), Category 6A003.b.4; 6A004.c and .d; 6A006.a, alphabetical order. 1—Materials, Chemicals, 6A006.d (excluding compensators Microorganisms, and Toxins, Export which provide only absolute values of Supplement No. 1 to Part 743— Control Classification Number (ECCN) the earth’s magnetic field as output (i.e., Wassenaar Arrangement Participating 1C008 is amended by revising the the frequency bandwidth of the output States ‘‘items’’ paragraph in the List of Items extends from DC to at least 0.8 Hz); * * * * * Controlled section, to read as follows: 6A008.d, .h, and .k; 6D001 (for 6A004.c 1C008 Non-fluorinated polymeric and .d and 6A008.d, .h, and .k); 6E001 PART 772—[AMENDED] substances, as follows (see List of Items (for equipment and software listed in Controlled). I 8. The authority citation for Part 772 this paragraph); and 6E002 (for * * * * * equipment listed in this paragraph); continues to read as follows: Authority: 50 U.S.C. app. 2401 et seq.; 50 List of Items Controlled Note to paragraph (c)(1)(vi): The reporting U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, Unit: *** requirement for 6A002.a.3 excludes the 3 CFR, 2001 Comp., p. 783; Notice of August Related Controls: *** following ‘‘focal plane arrays’’: 3, 2006, 71 FR 44551 (August 7, 2006). Related Definitions: *** a. Platinum Silicide having less than I 9. Section 772.1 is amended as Items: 10,000 elements; follows: a. Non-fluorinated polymeric substances, b. Iridium Silicide; I as follows: a. By removing the definition a.1. Bismaleimides; c. Indium Antimonide or Lead ‘‘Asynchronous transfer mode’’ Selenide having less than 256 elements; a.2. Aromatic polyamide-imides; (‘‘ATM’’) and the separate entry for the a.3. Aromatic polyimides; d. Indium Arsenide; acronym ‘‘ATM.’’ a.4. Aromatic polyetherimides having a e. Lead Sulphide; I b. By revising the phrase ‘‘(Cat 3, 4, glass transition temperature (Tg) exceeding f. Indium Gallium Arsenide; and 5)’’ to read ‘‘(Cat 2, 3, 4, and 5) in 513K (240 °C). g. Mercury Cadmium Telluride, as the definition ‘‘Electronic assembly.’’ Note: 1C008.a does not control non-fusible follows: I c. By removing the definition ‘‘time- compression molding powders or molded 1. ‘Scanning Arrays’ having any of the modulated ultra-wideband.’’ forms. following: I d. By adding the definition b. Thermoplastic liquid crystal copolymers a. 30 elements or less; or ‘‘unmanned aerial vehicles’’ (‘‘UAVs’’) having a heat distortion temperature b. Incorporating time delay-and- in alphabetic order after the definition exceeding 523 K (250 °C) measured according integration within the element and for ‘‘United States airline,’’ to read as to ISO 75–3 (2004), or national equivalents, having 2 elements or less; 2 follows: with a load of 1.82 N/mm and composed of: 2. ‘Staring Arrays’ less than 256 b.1. Any of the following: elements; § 772.1 Definitions of Terms as Used in the b.1.a. Phenylene, biphenylene or Technical Notes: Export Administration Regulations (EAR). naphthalene; or ‘Scanning Arrays’ are defined as * * * * * b.1.b. Methyl, tertiary-butyl or phenyl ‘‘focal plane arrays’’ designed for use Unmanned aerial vehicle (‘‘UAV’’). substituted phenylene, biphenylene or with a scanning optical system that naphthalene; and (Cat 9) Any ‘‘aircraft’’ capable of b.2. Any of the following acids: images a scene in a sequential manner initiating flight and sustaining to produce an image. b.2.a. Terephthalic acid; controlled flight and navigation without b.2.b. 6-hydroxy-2 naphthoic acid; or ‘Staring Arrays’ are defined as ‘‘focal any human presence on board. In b.2.c. 4-hydroxybenzoic acid; plane arrays’’ designed for use with a addition, according to section 744.3 of c. Polyarylene ether ketones, as follows: non-scanning optical system that images the EAR, unmanned air vehicles, which c.1. [RESERVED] a scene. are the same as ‘‘unmanned aerial c.2. Polyether ketone ketone (PEKK); h. Gallium Arsenide or Gallium vehicles,’’ include, but are not limited c.3. Polyether ketone (PEK); Aluminum Arsenide quantum well to, cruise missile systems, target drones c.4. Polyether ketone ether ketone ketone having less than 256 elements; and reconnaissance drones. (PEKEKK) d. Polyarylene ketones; (vii) Category 7: 7D002; 7D003.c, d.1 * * * * * to d.4, and d.7; 7E001; and 7E002; e. Polyarylene sulphides, where the arylene group is biphenylene, triphenylene (viii) Category 8: 8A001.c; 8A002.b PART 774—[AMENDED] or combinations thereof; (for 8A001.b, .c, .d), .h, .j, .o.3, and .p; f. Polybiphenylenethersulphone having a I 8D001 (for commodities listed in this 10. The authority citation for Part 774 glass transition temperature (Tg) exceeding paragraph); 8D002; 8E001 (for continues to read as follows: 513 K (240 °C). commodities listed in this paragraph); Authority: 50 U.S.C. app. 2401 et seq.; 50 Technical Note: The glass transition and 8E002.a; and U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C. temperature (Tg) for 1C008 materials is (ix) Category 9: 9B001.b, 9D001 (for 7430(e); 18 U.S.C. 2510 et seq.; 22 U.S.C. determined using the method described in 9B001.b and 9E003 as described in this 287c, 22 U.S.C. 3201 et seq., 22 U.S.C. 6004; ISO 11357–2 (1999) or national equivalents.

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I 12. In Supplement No. 1 to Part 774 List of Items Controlled length in mm) tested according to ISO (the Commerce Control List), Category Unit: N/A 10360–2 (2001); 1—Materials, Chemicals, Related Controls: N/A b. Linear and angular displacement Microorganisms, and Toxins, is Related Definitions: N/A measuring instruments, as follows: Items: b.1. Linear displacement measuring amended by adding Export Control instruments having any of the following: Classification Number (ECCN) 1C998 The list of items controlled is contained in the ECCN heading. Technical Note: For the purpose of after ECCN 1C997 and before ECCN 2B006.b.1 ‘‘linear displacement’’ means the 1C999, to read as follows: I 15. Supplement No. 1 to Part 774 (the change of distance between the measuring 1C998 Non-fluorinated polymeric Commerce Control List), Category 2— probe and the measured object. substances, not controlled by 1C008, as Materials Processing, Export Control b.1.a. Non-contact type measuring systems follows (see List of Items Controlled). Classification Number (ECCN) 2B002 is with a ‘‘resolution’’ equal to or less (better) amended by revising the heading and than 0.2 µm within a measuring range up to License Requirements the ‘‘items’’ paragraph in the List of 0.2 mm; Reason for Control: AT Items Controlled section to read as b.1.b. Linear voltage differential transformer systems having all of the follows: Control(s) Country chart following characteristics: 2B002 Numerically controlled machine b.1.b.1. ‘‘Linearity’’ equal to or less (better) AT applies to entire entry .... AT Column 1. tools using a magnetorheological finishing than 0.1% within a measuring range up to 5 (MRF) process equipped to produce non- mm; and License Exceptions spherical surfaces and having any of the b.1.b.2. Drift equal to or less (better) than following characteristics (See List of Items 0.1% per day at a standard ambient test room LVS: N/A Controlled). temperature ±1 K; or GBS: N/A * * * * * b.1.c. Measuring systems having all of the CIV: N/A following: List of Items Controlled List of Items Controlled b.1.c.1. Containing a ‘‘laser’’; and Unit: *** b.1.c.2. Maintaining, for at least 12 hours, Unit: Kilograms ± Related Controls: *** over a temperature range of 1 K around a Related Controls: N/A Related Definitions: *** standard temperature and at a standard Related Definitions: N/A Items: pressure, all of the following: Items: a. Finishing the form to less (better) than b.1.c.2.a. A ‘‘resolution’’ over their full µ a. Polyether ether ketone (PEEK); 1.0 µm; or scale of 0.1 m or less (better); and b. [RESERVED]. b. Finishing to a roughness less (better) b.1.c.2.b. A ‘‘measurement uncertainty’’ equal to or less (better) than (0.2 + L/2,000) I than 100 nm rms. 13. In Supplement No. 1 to Part 774 µm (L is the measured length in mm); (the Commerce Control List), Category I 16. Supplement No. 1 to Part 774 (the b.1.d. ‘‘Electronic assemblies’’ specially 1—Materials, Chemicals, Commerce Control List), Category 2— designed to provide feedback capability in Microorganisms, and Toxins, Export Materials Processing, Export Control systems controlled by 2B006.b.1.c. Control Classification Number (ECCN) Classification Number (ECCN) 2B006 is Note: 2B006.b.1 does not control 1E001 is amended by revising the amended by revising the heading, the measuring interferometer systems, with an heading, to read as follows: License Requirement section, and the automatic control system that is designed to use no feedback techniques, containing a 1E001 ‘‘Technology’’ according to the ‘‘unit’’ and the ‘‘items’’ paragraphs in ‘‘laser’’ to measure slide movement errors of General Technology Note for the the List of Items Controlled section to machine-tools, dimensional inspection ‘‘development’’ or ‘‘production’’ of items read as follows: machines or similar equipment. controlled by 1A001.b, 1A001.c, 1A002, 2B006 Dimensional inspection or b.2. Angular displacement measuring 1A003, 1A004, 1A005, 1A101, 1B (except measuring systems, equipment, and instruments having an ‘‘angular position 1B999), or 1C (except 1C355, 1C980 to ‘‘electronic assemblies’’, as follows (see List deviation’’ equal to or less (better) than 1C984, 1C988, 1C990, 1C991, 1C992, 1C995 of Items Controlled). 0.00025 °; to 1C999). Note: 2B006.b.2 does not control optical License Requirements * * * * * instruments, such as autocollimators, using I 14. In Supplement No. 1 to Part 774 Reason for Control: NS, NP, AT collimated light (e.g., laser light) to detect (the Commerce Control List), Category angular displacement of a mirror. 1—Materials, Chemicals, Control(s) Country chart c. Equipment for measuring surface irregularities, by measuring optical scatter as Microorganisms, and Toxins, Export NS applies to entire entry ... NS Column 2. Control Classification Number (ECCN) a function of angle, with a sensitivity of 0.5 NP applies to 2B006.a and NP Column 1. nm or less (better). 1E998 is added after 1E994, to read as .b, except 2B006.b.1.d. follows: AT applies to entire entry .... AT Column 1. I 17. Supplement No. 1 to Part 774 (the 1E998 ‘‘Technology’’ for the Commerce Control List), Category 2— ‘‘development’’ or ‘‘production’’ of * * * * * Materials Processing, Export Control processing equipment controlled by 1B999, List of Items Controlled Classification Number (ECCN) 2E201 is and materials controlled by 1C995, 1C996, amended by revising the heading and 1C997, 1C998, and 1C999. Unit: Equipment in number, electronic assemblies in $ value the License Requirement section to read License Requirements Related Controls: *** as follows: Reason for Control: AT Related Definitions: *** 2E201 ‘‘Technology’’ according to the Items: General Technology Note for the ‘‘use’’ of Control(s) Country chart a. Computer controlled or ‘‘numerically equipment or ‘‘software’’ controlled by controlled’’ co-ordinate measuring machines 2A225, 2A226, 2B001, 2B006, 2B007.b, AT applies to entire entry .... AT Column 1. (CMM), having a three dimensional length 2B007.c, 2B201, 2B204, 2B206, 2B207, (volumetric) maximum permissible error of 2B209, 2B225 to 2B232, 2D002, 2D201 or indication (MPEE) at any point within the 2D202 for NP reasons. License Exceptions operating range of the machine (i.e., within CIV: N/A the length of axes) equal to or less (better) License Requirements TSR: N/A than (1.7 + L/1,000) µm (L is the measured Reason for Control: NP, CB, AT

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Control(s) Country chart the integrated circuit will be used in a.6.c. Optical waveguides; unknown, Fast Fourier Transform (FFT) a.7. Field programmable logic devices NP applies to entire entry ... NP Column 1. processors, electrical erasable programmable having any of the following: CB applies to ‘‘technology’’ CB Column 2. read-only memories (EEPROMs), flash a.7.a. An equivalent usable gate count of for valves controlled by memories or static random-access memories more than 30,000 (2 input gates); 2A226 that meet or ex- (SRAMs), having any of the following: a.7.b. A typical ‘‘basic gate propagation ceed the technical param- a.2.a. Rated for operation at an ambient delay time’’ of less than 0.1 ns; or ° eters in 2B350.g. temperature above 398 K (125 C); a.7.c. A toggle frequency exceeding 133 AT applies to entire entry .... AT Column 1. a.2.b. Rated for operation at an ambient MHz; ¥ ° temperature below 218 K ( 55 C); or Note: 3A001.a.7 includes: Simple * * * * * a.2.c. Rated for operation over the entire Programmable Logic Devices (SPLDs), ambient temperature range from 218 K I 18. In Supplement No. 1 to Part 774 Complex Programmable Logic Devices (¥55 °C) to 398 K (125 °C); (CPLDs), Field Programmable Gate Arrays (the Commerce Control List), Category Note: 3A001.a.2 does not apply to (FPGAs), Field Programmable Logic Arrays 3—Electronics, Export Control integrated circuits for civil automobile or (FPLAs), and Field Programmable Classification Number (ECCN) 3A001 is railway train applications. Interconnects (FPICs). amended revising the ‘‘CIV’’ paragraph a.3. ‘‘Microprocessor microcircuits’’, N.B.: Field programmable logic devices are in the License Exceptions section, and ‘‘micro-computer microcircuits’’ and also known as field programmable gate or the ‘‘items’’ paragraph in the List of microcontroller microcircuits, manufactured field programmable logic arrays. Items Controlled section, to read as from a compound semiconductor and a.8. [RESERVED] follows: operating at a clock frequency exceeding 40 a.9. Neural network integrated circuits; MHz; a.10. Custom integrated circuits for which 3A001 Electronic components, as follows the function is unknown, or the control (see List of Items Controlled). Note: 3A001.a.3 includes digital signal processors, digital array processors and status of the equipment in which the * * * * * digital coprocessors. integrated circuits will be used is unknown to the manufacturer, having any of the License Exceptions a.4. Storage integrated circuits following: LVS: * * * manufactured from a compound a.10.a. More than 1,000 terminals; GBS: * * * semiconductor; a.10.b. A typical ‘‘basic gate propagation CIV: Yes for 3A001.a.3, a.4, a.7, and a.11. a.5. Analog-to-digital and digital-to-analog delay time’’ of less than 0.1 ns; or converter integrated circuits, as follows: List of Items Controlled a.10.c. An operating frequency exceeding 3 a.5.a. Analog-to-digital converters having GHz; Unit: *** any of the following: a.11. Digital integrated circuits, other than Related Controls: *** a.5.a.1. A resolution of 8 bit or more, but those described in 3A001.a.3 to 3A001.a.10 Related Definitions: *** less than 10 bit, an output rate greater than and 3A001.a.12, based upon any compound Items: 500 million words per second; semiconductor and having any of the a. General purpose integrated circuits, as a.5.a.2 A resolution of 10 bit or more, but following: follows: less than 12 bit, with an output rate greater a.11.a. An equivalent gate count of more Note 1: The control status of wafers than 200 million words per second; than 3,000 (2 input gates); or (finished or unfinished), in which the a.5.a.3. A resolution of 12 bit with an a.11.b. A toggle frequency exceeding 1.2 function has been determined, is to be output rate greater than 50 million words per GHz; evaluated against the parameters of 3A001.a. second; a.12. Fast Fourier Transform (FFT) a.5.a.4. A resolution of more than 12 bit but processors having a rated execution time for Note 2: Integrated circuits include the equal to or less than 14 bit with an output an N-point complex FFT of less than (N log2 following types: rate greater than 5 million words per second; N)/20,480 ms, where N is the number of ‘‘Monolithic integrated circuits’’; or points; ‘‘Hybrid integrated circuits’’; a.5.a.5. A resolution of more than 14 bit ‘‘Multichip integrated circuits’’; with an output rate greater than 1 million Technical Note: When N is equal to 1,024 ‘‘Film type integrated circuits’’, including points, the formula in 3A001.a.12 gives an words per second. µ silicon-on-sapphire integrated circuits; a.5.b. Digital-to-analog converters with a execution time of 500 s. ‘‘Optical integrated circuits’’. resolution of 12 bit or more, and a ‘‘settling b. Microwave or millimeter wave a.1. Integrated circuits, designed or rated as time’’ of less than 10 ns; radiation hardened to withstand any of the components, as follows: Technical Notes: b.1. Electronic vacuum tubes and cathodes, following: 1. A resolution of n bit corresponds to a × 3 as follows: a.1.a. A total dose of 5 10 Gy (Si), or quantization of 2n levels. higher; 2. The number of bits in the output word × 6 Note 1: 3A001.b.1 does not control tubes a.1.b. A dose rate upset of 5 10 Gy (Si)/ is equal to the resolution of the analogue-to- s, or higher; or designed or rated for operation in any digital converter. frequency band which meets all of the a.1.c. A fluence (integrated flux) of 3. The output rate is the maximum output × 13 following characteristics: neutrons (1 MeV equivalent) of 5 10 n/ rate of the converter, regardless of cm2 or higher on silicon, or its equivalent for architecture or oversampling. Vendors may (a) Does not exceed 31.8 GHz; and other materials; also refer to the output rate as sampling rate, (b) Is ‘‘allocated by the ITU’’ for radio- Note: 3A001.a.1.c does not apply to Metal conversion rate or throughput rate. It is often communications services, but not for radio- Insulator Semiconductors (MIS). specified in megahertz (MHz) or mega determination. a.2. ‘‘Microprocessor microcircuits’’, samples per second (MSPS). ‘‘microcomputer microcircuits’’, 4. For the purpose of measuring output Note 2: 3A001.b.1 does not control non- microcontroller microcircuits, storage rate, one output word per second is ‘‘space-qualified’’ tubes which meet all the integrated circuits manufactured from a equivalent to one Hertz or one sample per following characteristics: compound semiconductor, analog-to-digital second. converters, digital-to-analog converters, a.6. Electro-optical and ‘‘optical integrated (a) An average output power equal to or electro-optical or ‘‘optical integrated circuits’’ circuits’’ designed for ‘‘signal processing’’ less than 50 W; and designed for ‘‘signal processing’’, field having all of the following: (b) Designed or rated for operation in any programmable logic devices, neural network a.6.a. One or more than one internal frequency band which meets all of the integrated circuits, custom integrated circuits ‘‘laser’’ diode; following characteristics: for which either the function is unknown or a.6.b. One or more than one internal light (1) Exceeds 31.8 GHz but does not exceed the control status of the equipment in which detecting element; and 43.5 GHz; and

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(2) Is ‘‘allocated by the ITU’’ for radio- b.3. Discrete microwave transistors having Note 2: The control status of an item whose communications services, but not for radio- any of the following: rated operating frequency includes determination. b.3.a. Rated for operation at frequencies frequencies listed in more than one b.1.a. Traveling wave tubes, pulsed or exceeding 3.2 GHz up to and including 6 frequency range, as defined by 3A001.b.4.a continuous wave, as follows: GHz and having an average output power through 3A001.b.4.e, is determined by the b.1.a.1. Operating at frequencies exceeding greater than 60W (47.8 dBm); lowest average output power control 31.8 GHz; b.3.b. Rated for operation at frequencies threshold. b.1.a.2. Having a cathode heater element exceeding 6 GHz up to and including 31.8 b.5. Electronically or magnetically tunable with a turn on time to rated RF power of less GHz and having an average output power band-pass or band-stop filters having more than 3 seconds; greater than 20W (43 dBm); than 5 tunable resonators capable of tuning b.1.a.3. Coupled cavity tubes, or b.3.c. Rated for operation at frequencies across a 1.5:1 frequency band (f /f ) in derivatives thereof, with a ‘‘fractional exceeding 31.8 GHz up to and including 37.5 max min less than 10 µs having any of the following: bandwidth’’ of more than 7% or a peak GHz and having an average output power b.5.a. A band-pass bandwidth of more than power exceeding 2.5 kW; greater than 0.5W (27 dBm); 0.5% of center frequency; or b.1.a.4. Helix tubes, or derivatives thereof, b.3.d. Rated for operation at frequencies b.5.b. A band-stop bandwidth of less than with any of the following characteristics: exceeding 37.5 GHz up to and including 43.5 0.5% of center frequency; b.1.a.4.a. An ‘‘instantaneous bandwidth’’ of GHz and having an average output power b.6. [RESERVED] more than one octave, and average power greater than 1W (30 dBm); or b.7. Mixers and converters designed to (expressed in kW) times frequency b.3.e. Rated for operation at frequencies extend the frequency range of equipment (expressed in GHz) of more than 0.5; exceeding 43.5 GHz. described in 3A002.c, 3A002.e or 3A002.f b.1.a.4.b. An ‘‘instantaneous bandwidth’’ of Note: The control status of a transistor one octave or less, and average power beyond the limits stated therein; whose rated operating frequency includes (expressed in kW) times frequency b.8. Microwave power amplifiers frequencies listed in more than one (expressed in GHz) of more than 1; or containing tubes controlled by 3A001.b and frequency range, as defined by 3A001.b.3.a b.1.a.4.c. Being ‘‘space qualified’’; having all of the following: through 3A001.b.3.e, is determined by the b.1.b. Crossed-field amplifier tubes with a b.8.a. Operating frequencies above 3 GHz; lowest average output power control gain of more than 17 dB; b.8.b. An average output power density threshold. b.1.c. Impregnated cathodes designed for exceeding 80 W/kg; and electronic tubes producing a continuous b.4. Microwave solid state amplifiers and b.8.c. A volume of less than 400 cm3; emission current density at rated operating microwave assemblies/modules containing Note: 3A001.b.8 does not control conditions exceeding 5 A/cm2; microwave amplifiers having any of the equipment designed or rated for operation in following: b.2. Microwave monolithic integrated any frequency band which is ‘‘allocated by b.4.a. Rated for operation at frequencies circuits (MMIC) power amplifiers having any the ITU’’ for radio-communications services, exceeding 3.2 GHz up to and including 6 of the following: but not for radio-determination. b.2.a. Rated for operation at frequencies GHz and with an average output power exceeding 3.2 GHz up to and including 6 greater than 60W (47.8 dBm) with a c. Acoustic wave devices, as follows, and GHz and with an average output power ‘‘fractional bandwidth’’ greater than 15%; specially designed components therefor: greater than 4W (36 dBm) with a ‘‘fractional b.4.b. Rated for operation at frequencies c.1. Surface acoustic wave and surface bandwidth’’ greater than 15%; exceeding 6 GHz up to and including 31.8 skimming (shallow bulk) acoustic wave b.2.b. Rated for operation at frequencies GHz and with an average output power devices (i.e., ‘‘signal processing’’ devices exceeding 6 GHz up to and including 16 GHz greater than 15W (42 dBm) with a ‘‘fractional employing elastic waves in materials), having and with an average output power greater bandwidth’’ greater than 10%; any of the following: than 1W (30 dBm) with a ‘‘fractional b.4.c. Rated for operation at frequencies c.1.a. A carrier frequency exceeding 2.5 bandwidth’’ greater than 10%; exceeding 31.8 GHz up to and including 37.5 GHz; b.2.c. Rated for operation at frequencies GHz; c.1.b. A carrier frequency exceeding 1 GHz, exceeding 16 GHz up to and including 31.8 b.4.d. Rated for operation at frequencies but not exceeding 2.5 GHz, and having any GHz and with an average output power exceeding 37.5 GHz up to and including 43.5 of the following: greater than 0.8W (29 dBm) with a ‘‘fractional GHz and with an average output power c.1.b.1. A frequency side-lobe rejection bandwidth’’ greater than 10%; greater than 1W (30 dBm) with a ‘‘fractional exceeding 55 dB; b.2.d. Rated for operation at frequencies bandwidth’’ greater than 10%; c.1.b.2. A product of the maximum delay exceeding 31.8 GHz up to and including 37.5 b.4.e. Rated for operation at frequencies time and the bandwidth (time in µs and GHz; exceeding 43.5 GHz; or bandwidth in MHz) of more than 100; b.2.e. Rated for operation at frequencies b.4.f. Rated for operation at frequencies c.1.b.3. A bandwidth greater than 250 exceeding 37.5 GHz up to and including 43.5 above 3.2 GHz and all of the following: MHz; or GHz and with an average output power b.4.f.1. An average output power (in watts), c.1.b.4. A dispersive delay of more than 10 greater than 0.25W (24 dBm) with a P, greater than 150 divided by the maximum µs; or ‘‘fractional bandwidth’’ greater than 10%; or operating frequency (in GHz) squared [P > c.1.c. A carrier frequency of 1 GHz or less, 2 2 b.2.f. Rated for operation at frequencies 150 W*GHz fGHz ]; having any of the following: exceeding 43.5 GHz. b.4.f.2. A fractional bandwidth of 5% or c.1.c.1. A product of the maximum delay µ Note 1: 3A001.b.2 does not control greater; and time and the bandwidth (time in s and broadcast satellite equipment designed or b.4.f.3. Any two sides perpendicular to one bandwidth in MHz) of more than 100; rated to operate in the frequency range of another with length d (in cm) equal to or less c.1.c.2. A dispersive delay of more than 10 µ 40.5 to 42.5 GHz. than 15 divided by the lowest operating s; or frequency in GHz [d ≤15 cm*GHz / f ]. c.1.c.3. A frequency side-lobe rejection Note 2: The control status of the MMIC GHz Technical Note: 3.2 GHz should be used as exceeding 55 dB and a bandwidth greater whose rated operating frequency includes than 50 MHz; the lowest operating frequency (fGHz ) in the frequencies listed in more than one c.2. Bulk (volume) acoustic wave devices frequency range, as defined by 3A001.b.2.a formula in 3A001.b.4.f.3., for amplifiers that have a rated operation range extending (i.e., ‘‘signal processing’’ devices employing through 3A001.b.2.f, is determined by the elastic waves) that permit the direct lowest average output power control downward to 3.2 GHz and below [d ≤ processing of signals at frequencies threshold. 15cm*GHz/3.2 fGHz]. N.B.: MMIC power amplifiers should be exceeding 1 GHz; Note 3: Notes 1 and 2 following the evaluated against the criteria in 3A001.b.2. c.3. Acoustic-optic ‘‘signal processing’’ Category 3 heading for A. Systems, devices employing interaction between Equipment, and Components mean that Note 1: 3A001.b.4. does not control acoustic waves (bulk wave or surface wave) 3A001.b.2. does not control MMICs if they broadcast satellite equipment designed or and light waves that permit the direct are specially designed for other applications, rated to operate in the frequency range of processing of signals or images, including e.g., telecommunications, radar, automobiles. 40.5 to 42.5 GHz. spectral analysis, correlation or convolution;

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d. Electronic devices and circuits Resonance Imaging (MRI) medical c.4. A resolution of more than 14 bit with containing components, manufactured from equipment. an output rate greater than 500 thousand ‘‘superconductive’’ materials specially e.3.a. Energy delivered during the words per second. designed for operation at temperatures below discharge exceeding 10 kJ in the first second; d. Field programmable logic devices the ‘‘critical temperature’’ of at least one of e.3.b. Inner diameter of the current having either of the following: the ‘‘superconductive’’ constituents, with any carrying windings of more than 250 mm; and d.1. An equivalent gate count of more than of the following: e.3.c. Rated for a magnetic induction of 5000 (2 input gates); or d.1. Current switching for digital circuits more than 8 T or ‘‘overall current density’’ d.2. A toggle frequency exceeding 100 using ‘‘superconductive’’ gates with a in the winding of more than 300 A/mm2; MHz; product of delay time per gate (in seconds) f. Rotary input type shaft absolute position e. Fast Fourier Transform (FFT) processors and power dissipation per gate (in watts) of encoders having any of the following: having a rated execution time for a 1,024 less than 10¥14 J; or f.1. A resolution of better than 1 part in point complex FFT of less than 1 ms. d.2. Frequency selection at all frequencies 265,000 (18 bit resolution) of full scale; or f. Custom integrated circuits for which using resonant circuits with Q-values f.2. An accuracy better than ±2.5 seconds either the function is unknown, or the exceeding 10,000; of arc. control status of the equipment in which the e. High energy devices, as follows: integrated circuits will be used is unknown e.1. Batteries and photovoltaic arrays, as I 19. In Supplement No. 1 to Part 774 to the manufacturer, having any of the follows: (the Commerce Control List), Category following: Note: 3A001.e.1 does not control batteries 3—Electronics, Export Control f.1. More than 144 terminals; or with volumes equal to or less than 27 cm3 Classification Number (ECCN) 3A991 is f.2. A typical ‘‘basic propagation delay (e.g., standard C-cells or R14 batteries). amended revising the ‘‘items’’ paragraph time’’ of less than 0.4 ns. g. Traveling wave tubes, pulsed or e.1.a. Primary cells and batteries having an in the List of Items Controlled section, continuous wave, as follows: energy density exceeding 480 Wh/kg and to read as follows: g.1. Coupled cavity tubes, or derivatives rated for operation in the temperature range thereof; ¥ ° 3A991 Electronic devices and from below 243 K ( 30 C) to above 343 K g.2. Helix tubes, or derivatives thereof, ° components not controlled by 3A001. (70 C); with any of the following: e.1.b. Rechargeable cells and batteries * * * * * g.2.a. An ‘‘instantaneous bandwidth’’ of having an energy density exceeding 150 Wh/ List of Items Controlled half an octave or more; and kg after 75 charge/discharge cycles at a Unit: *** g.2.b. The product of the rated average discharge current equal to C/5 hours (C being output power (expressed in kW) and the the nominal capacity in ampere hours) when Related Controls: *** Related Definitions: *** maximum operating frequency (expressed in operating in the temperature range from GHz) of more than 0.2; below 253 K (¥20 °C) to above 333 K (60 °C); Items: a. ‘‘Microprocessor microcircuits’’, g.2.c. An ‘‘instantaneous bandwidth’’ of Technical Note: Energy density is obtained ‘‘microcomputer microcircuits’’, and less than half an octave; and by multiplying the average power in watts microcontroller microcircuits having any of g.2.d. The product of the rated average (average voltage in volts times average the following: output power (expressed in kW) and the current in amperes) by the duration of the a.1. A ‘‘composite theoretical performance’’ maximum operating frequency (expressed in discharge in hours to 75% of the open circuit (‘‘CTP’’) of 6,500 million theoretical GHz) of more than 0.4; voltage divided by the total mass of the cell operations per second (MTOPS) or more and h. Flexible waveguides designed for use at (or battery) in kg. an arithmetic logic unit with an access width frequencies exceeding 40 GHz; e.1.c. ‘‘Space qualified’’ and radiation of 32 bit or more; i. Surface acoustic wave and surface hardened photovoltaic arrays with a specific a.2. A clock frequency rate exceeding 25 skimming (shallow bulk) acoustic wave power exceeding 160 W/m2 at an operating MHz; or devices (i.e., ‘‘signal processing’’ devices temperature of 301 K (28 °C) under a a.3. More than one data or instruction bus employing elastic waves in materials), having tungsten illumination of 1 kW/m2 at 2,800 K or serial communication port that provides a either of the following: (2,527 °C); direct external interconnection between i.1. A carrier frequency exceeding 1 GHz; e.2. High energy storage capacitors, as parallel ‘‘microprocessor microcircuits’’ with or follows: a transfer rate of 2.5 Mbyte/s. i.2. A carrier frequency of 1 GHz or less; e.2.a. Capacitors with a repetition rate of b. Storage integrated circuits, as follows: and less than 10 Hz (single shot capacitors) b.1. Electrical erasable programmable read- i.2.a. A frequency side-lobe rejection having all of the following: only memories (EEPROMs) with a storage exceeding 55 Db; e.2.a.1. A voltage rating equal to or more capacity; i.2.b. A product of the maximum delay than 5 kV; b.1.a. Exceeding 16 Mbits per package for time and bandwidth (time in microseconds e.2.a.2. An energy density equal to or more flash memory types; or and bandwidth in MHz) of more than 100; or than 250 J/kg; and b.1.b. Exceeding either of the following i.2.c. A dispersive delay of more than 10 microseconds. e.2.a.3. A total energy equal to or more limits for all other EEPROM types: j. Primary cells and batteries having an than 25 kJ; b.1.b.1. Exceeding 1 Mbit per package; or energy density exceeding 350 Wh/kg and e.2.b. Capacitors with a repetition rate of b.1.b.2. Exceeding 256 kbit per package rated for operation in the temperature range 10 Hz or more (repetition rated capacitors) and a maximum access time of less than 80 from below 243 K (¥30 °C) to above 343 K having all of the following: ns; (70 °C); e.2.b.1. A voltage rating equal to or more b.2. Static random access memories (SRAMs) with a storage capacity: than 5 kV; Note: 3A991 .j does not control batteries b.2.a. Exceeding 1 Mbit per package; or 3 e.2.b.2. An energy density equal to or more with volumes equal to or less than 27 cm b.2.b. Exceeding 256 kbit per package and than 50 J/kg; (e.g., standard C-cells or UM–2 batteries). a maximum access time of less than 25 ns; e.2.b.3. A total energy equal to or more c. Analog-to-digital converters having any Technical Note: Energy density is obtained than 100 J; and of the following: by multiplying the average power in watts e.2.b.4. A charge/discharge cycle life equal c.1. A resolution of 8 bit or more, but less (average voltage in volts times average to or more than 10,000; than 12 bit, with an output rate greater than current in amperes) by the duration of the e.3. ‘‘Superconductive’’ electromagnets and 100 million words per second; discharge in hours to 75 percent of the open solenoids specially designed to be fully c.2. A resolution of 12 bit with an output circuit voltage divided by the total mass of charged or discharged in less than one rate greater than 5 million words per second; the cell (or battery) in kg. second, having all of the following: c.3. A resolution of more than 12 bit but k. ‘‘Superconductive’’ electromagnets or Note: 3A001.e.3 does not control equal to or less than 14 bit with an output solenoids specially designed to be fully ‘‘superconductive’’ electromagnets or rate greater than 500 thousand words per charged or discharged in less than one solenoids specially designed for Magnetic second; or minute, having all of the following:

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Note: 3A991.k does not control List of Items Controlled c.2.b. Designed for generating less than ‘‘superconductive’’ electromagnets or Unit: ** * 0.04 particles/cm2 with a measurable particle solenoids designed for Magnetic Resonance Related Controls: *** size greater than 0.1 µm in diameter; Imaging (MRI) medical equipment. Related Definitions: *** d. Plasma enhanced CVD equipment, as k.1. Maximum energy delivered during the Items: follows: discharge divided by the duration of the a. Equipment designed for epitaxial d.1. Equipment with cassette-to-cassette discharge of more than 500 kJ per minute; growth, as follows: operation and load-locks, and designed k.2. Inner diameter of the current carrying a.1. Equipment capable of producing a according to the manufacturer’s windings of more than 250 mm; and layer of any material other than silicon with specifications or optimized for use in the ± k.3. Rated for a magnetic induction of more a thickness uniform to less than 2.5% across production of semiconductor devices with than 8T or ‘‘overall current density’’ in the a distance of 75 mm or more; critical dimensions of 180 nm or less; 2 a.2. Metal organic chemical vapor winding of more than 300 A/mm . d.2. Equipment specially designed for deposition (MOCVD) reactors specially l. Circuits or systems for electromagnetic equipment controlled by 3B001.e. and energy storage, containing components designed for compound semiconductor designed according to the manufacturer’s manufactured from ‘‘superconductive’’ crystal growth by the chemical reaction specifications or optimized for use in the materials specially designed for operation at between materials controlled by 3C003 or temperatures below the ‘‘critical 3C004; production of semiconductor devices with temperature’’ of at least one of their a.3. Molecular beam epitaxial growth critical dimensions of 180 nm or less; ‘‘superconductive’’ constituents, having all of equipment using gas or solid sources; e. Automatic loading multi-chamber the following: b. Equipment designed for ion central wafer handling systems, having all of l.1. Resonant operating frequencies implantation, having any of the following: the following: exceeding 1 MHz; b.1. A beam energy (accelerating voltage) e.1. Interfaces for wafer input and output, l.2. A stored energy density of 1 MJ/M3 or exceeding 1 MeV; to which more than two pieces of more; and b.2. Being specially designed and semiconductor processing equipment are to l.3. A discharge time of less than 1 ms; optimized to operate at a beam energy be connected; and m. Hydrogen/hydrogen-isotope thyratrons (accelerating voltage of less than 2 keV); e.2. Designed to form an integrated system b.3. Direct write capability; or of ceramic-metal construction and rate for a in a vacuum environment for sequential b.4. A beam energy of 65 keV or more and peak current of 500 A or more; a beam current of 45 mA or more for high multiple wafer processing; n. Digital integrated circuits based on any energy oxygen implant into a heated Note: 3B001.e. does not control automatic compound semiconductor having an semiconductor material ‘‘substrate’’; equivalent gate count of more than 300 (2 robotic wafer handling systems not designed c. Anisotropic plasma dry etching to operate in a vacuum environment. input gates). equipment, as follows: I c.1. Equipment with cassette-to-cassette f. Lithography equipment, as follows: 20. In Supplement No. 1 to Part 774 f.1. Align and expose step and repeat (the Commerce Control List), Category operation and load-locks, and having any of the following: (direct step on wafer) or step and scan 3—Electronics, Export Control c.1.a. Designed or optimized to produce (scanner) equipment for wafer processing Classification Number (ECCN) 3B001 is critical dimensions of 180 nm or less with using photo-optical or X-ray methods, having amended revising the ‘‘items’’ paragraph ±5% 3 sigma precision; or any of the following: in the List of Items Controlled section, c.1.b. Designed for generating less than f.1.a. A light source wavelength shorter to read as follows: 0.04 particles/cm2 with a measurable particle than 245 nm; or µ size greater than 0.1 m in diameter; f.1.b. Capable of producing a pattern with 3B001 Equipment for the manufacturing c.2. Equipment specially designed for of semiconductor devices or materials, as a minimum resolvable feature size of 180 nm equipment controlled by 3B001.e. and having or less; follows (see List of Items Controlled), and any of the following: specially designed components and c.2.a. Designed or optimized to produce Technical Note: The minimum resolvable accessories therefor. critical dimensions of 180 nm or less with feature size is calculated by the following * * * * * ±5% 3 sigma precision; or formula:

Where the K factor = 0.45 I 21. In Supplement No. 1 to Part 774 a. Equipment specially designed for the MRF = minimum resolvable feature size. (the Commerce Control List), Category manufacture of electron tubes, optical f.2. Equipment specially designed for mask 3—Electronics, Export Control elements and specially designed components making or semiconductor device processing Classification Number (ECCN) 3B991 is therefor controlled by 3A001 or 3A991; using deflected focused electron beam, ion amended revising the ‘‘units’’ and b. Equipment specially designed for the beam or ‘‘laser’’ beam, having any of the ‘‘items’’ paragraphs in the List of Items manufacture of semiconductor devices, following: Controlled section, to read as follows: integrated circuits and ‘‘electronic f.2.a. A spot size smaller than 0.2 µm; assemblies’’, as follows, and systems 3B991 Equipment not controlled by f.2.b. Being capable of producing a pattern incorporating or having the characteristics of 3B001 for the manufacture of electronic with a feature size of less than 1 µm; or such equipment: components and materials, and specially f.2.c. An overlay accuracy of better than Note: 3B991.b also controls equipment ± µ designed components and accessories 0.20 m (3 sigma); therefor. used or modified for use in the manufacture g. Masks and reticles designed for * * * * * of other devices, such as imaging devices, integrated circuits controlled by 3A001; electro-optical devices, acoustic-wave h. Multi-layer masks with a phase shift List of Items Controlled devices. layer. Unit: Equipment in number, and b.1. Equipment for the processing of Note: 3B001.h. does not control multi-layer components and accessories in $ value materials for the manufacture of devices and masks with a phase shift layer designed for Related Controls: *** components as specified in the heading of the fabrication of memory devices not Related Definitions: *** 3B991.b, as follows: controlled by 3A001. Items:

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Note: 3B991 does not control quartz b.1.h.2.a. End-point detection, other than b.1.m. ‘‘Stored program controlled’’ furnace tubes, furnace liners, paddles, boats optical emission spectroscopy types; equipment using ‘‘lasers’’ for the repair or (except specially designed caged boats), b.1.h.2.b. Reactor operational (etching) trimming of ‘‘monolithic integrated circuits’’ bubblers, cassettes or crucibles specially pressure of 26.66 Pa or less; or with either of the following characteristics: designed for the processing equipment b.1.h.2.c. Cassette-to-cassette and load b.1.m.1. Positioning accuracy less than ±1 controlled by 3B991.b.1. locks wafer handling; micrometer; or b.1.m.2. Spot size (kerf width) less than 3 b.1.a. Equipment for producing Notes: 1. ‘‘Batch types’’ refers to machines micrometer. polycrystalline silicon and materials not specially designed for production b.2. Masks, mask ‘‘substrates’’, mask- controlled by 3C001; processing of single wafers. Such machines can process two or more wafers making equipment and image transfer b.1.b. Equipment specially designed for equipment for the manufacture of devices purifying or processing III/V and II/VI simultaneously with common process parameters, e.g., RF power, temperature, etch and components as specified in the heading semiconductor materials controlled by of 3B991, as follows: 3C001, 3C002, 3C003, or 3C004, except gas species, flow rates. crystal pullers, for which see 3B991.b.1.c 2. ‘‘Single wafer types’’ refers to machines Note: The term ‘‘masks’’ refers to those below; specially designed for production processing used in electron beam lithography, X-ray b.1.c. Crystal pullers and furnaces, as of single wafers. These machines may use lithography, and ultraviolet lithography, as follows: automatic wafer handling techniques to load well as the usual ultraviolet and visible a single wafer into the equipment for photo-lithography. Note: 3B991.b.1.c does not control processing. The definition includes b.2.a. Finished masks, reticles and designs diffusion and oxidation furnaces. equipment that can load and process several therefor, except: b.1.c.1. Annealing or recrystallizing wafers but where the etching parameters, e.g., b.2.a.1. Finished masks or reticles for the equipment other than constant temperature RF power or end point, can be independently production of unembargoed integrated furnaces employing high rates of energy determined for each individual wafer. circuits; or transfer capable of processing wafers at a rate b.1.i. ‘‘Chemical vapor deposition’’ (CVD) b.2.a.2. Masks or reticles, having both of exceeding 0.005 m2 per minute; equipment, e.g., plasma-enhanced CVD the following characteristics: b.1.c.2. ‘‘Stored program controlled’’ (PECVD) or photo-enhanced CVD, for b.2.a.2.a. Their design is based on crystal pullers having any of the following semiconductor device manufacturing, having geometries of 2.5 micrometer or more; and characteristics: either of the following capabilities, for b.2.a.2.b. The design does not include b.1.c.2.a. Rechargeable without replacing deposition of oxides, nitrides, metals or special features to alter the intended use by the crucible container; polysilicon: means of production equipment or b.1.c.2.b. Capable of operation at pressures b.1.i.1. ‘‘Chemical vapor deposition’’ ‘‘software’’; above 2.5 × 105 Pa; or equipment operating below 105 Pa; or b.2.b. Mask ‘‘substrates’’ as follows: b.1.c.2.c. Capable of pulling crystals of a b.1.i.2. PECVD equipment operating either b.2.b.1. Hard surface (e.g., chromium, diameter exceeding 100 mm; below 60 Pa (450 millitorr) or having silicon, molybdenum) coated ‘‘substrates’’ b.1.d. ‘‘Stored program controlled’’ automatic cassette-to-cassette and load lock (e.g., glass, quartz, sapphire) for the equipment for epitaxial growth having any of wafer handling; preparation of masks having dimensions exceeding 125 mm × 125 mm; or the following characteristics: Note: 3B991.b.1.i does not control low b.2.b.2. ‘‘Substrates’’ specially designed for b.1.d.1. Capable of producing a silicon pressure ‘‘chemical vapor deposition’’ X-ray masks; layer with a thickness uniform to less than (LPCVD) systems or reactive ‘‘sputtering’’ b.2.c. Equipment, other than general ±2.5% across a distance of 200 mm or more; equipment. b.1.d.2. Capable of producing a layer of any purpose computers, specially designed for b.1.j. Electron beam systems specially computer aided design (CAD) of material other than silicon with a thickness designed or modified for mask making or uniformity across the wafer of equal to or semiconductor devices or integrated circuits; ± semiconductor device processing having any b.2.d. Equipment or machines, as follows, better than 3.5%; or of the following characteristics: b.1.d.3. Rotation of individual wafers for mask or reticle fabrication: b.1.j.1. Electrostatic beam deflection; b.2.d.1. Photo-optical step and repeat during processing; b.1.j.2. Shaped, non-Gaussian beam profile; b.1.e. Molecular beam epitaxial growth cameras capable of producing arrays larger b.1.j.3. Digital-to-analog conversion rate than 100 mm × 100 mm, or capable of equipment; exceeding 3 MHz; b.1.f. Magnetically enhanced ‘sputtering’ producing a single exposure larger than 6 b.1.j.4. Digital-to-analog conversion mm × 6 mm in the image (i.e., focal) plane, equipment with specially designed integral accuracy exceeding 12 bit; or load locks capable of transferring wafers in or capable of producing line widths of less b.1.j.5. Target-to-beam position feedback than 2.5 micrometer in the photoresist on the an isolated vacuum environment; control precision of 1 micrometer or finer; b.1.g. Equipment specially designed for ion ‘‘substrate’; implantation, ion-enhanced or photo- Note: 3B991.b.1.j does not control electron b.2.d.2. Mask or reticle fabrication enhanced diffusion, having any of the beam deposition systems or general purpose equipment using ion or ‘‘laser’’ beam scanning electron microscopes. lithography capable of producing line widths following characteristics: of less than 2.5 micrometer; or b.1.g.1. Patterning capability; b.1.k. Surface finishing equipment for the b.2.d.3. Equipment or holders for altering b.1.g.2. Beam energy (accelerating voltage) processing of semiconductor wafers as masks or reticles or adding pellicles to exceeding 200 keV; follows: remove defects; b.1.g.3 Optimized to operate at a beam b.1.k.1. Specially designed equipment for energy (accelerating voltage) of less than 10 backside processing of wafers thinner than Note: 3B991.b.2.d.1 and b.2.d.2 do not keV; or 100 micrometer and the subsequent control mask fabrication equipment using b.1.g.4. Capable of high energy oxygen separation thereof; or photo-optical methods which was either implant into a heated ‘‘substrate’’; b.1.k.2. Specially designed equipment for commercially available before the 1st b.1.h. ‘‘Stored program controlled’’ achieving a surface roughness of the active January, 1980, or has a performance no better equipment for the selective removal (etching) surface of a processed wafer with a two- than such equipment. by means of anisotropic dry methods (e.g., sigma value of 2 micrometer or less, total b.2.e. ‘‘Stored program controlled’’ plasma), as follows: indicator reading (TIR); equipment for the inspection of masks, b.1.h.1. Batch types having either of the Note: 3B991.b.1.k does not control single- reticles or pellicles with: following: side lapping and polishing equipment for b.2.e.1. A resolution of 0.25 micrometer or b.1.h.1.a. End-point detection, other than wafer surface finishing. finer; and optical emission spectroscopy types; or b.1.l. Interconnection equipment which b.2.e.2. A precision of 0.75 micrometer or b.1.h.1.b. Reactor operational (etching) includes common single or multiple vacuum finer over a distance in one or two pressure of 26.66 Pa or less; chambers specially designed to permit the coordinates of 63.5 mm or more; b.1.h.2. Single wafer types having any of integration of any equipment controlled by Note: 3B991.b.2.e does not control general the following: 3B991 into a complete system; purpose scanning electron microscopes

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except when specially designed and 3A992), 3B (except 3B991 or 3B992) or 3C Note: 5A001.a.3 applies only to electronic instrumented for automatic pattern (except 3C992). equipment. inspection. * * * * * Note: 5A001.a.2 and 5A001.a.3 do not b.2.f. Align and expose equipment for License Exceptions apply to equipment designed or modified for wafer production using photo-optical or X- use on board satellites. ray methods, e.g., lithography equipment, CIV: N/A TSR: * * * b. Telecommunication transmission including both projection image transfer equipment and systems, and specially equipment and step and repeat (direct step * * * * * designed components and accessories on wafer) or step and scan (scanner) therefor, having any of the following equipment, capable of performing any of the I 23. In Supplement No. 1 to Part 774 (the Commerce Control List), Category characteristics, functions or features: following functions: b.1 Being underwater communications 3—Electronics, Export Control Note: 3B991.b.2.f does not control photo- systems having any of the following optical contact and proximity mask align and Classification Number (ECCN) 3E991 is characteristics: expose equipment or contact image transfer amended revising the heading, to read b.1.a. An acoustic carrier frequency outside equipment. as follows: the range from 20 kHz to 60 kHz; b.2.f.1. Production of a pattern size of less 3E991 ‘‘Technology’’ for the b.1.b. Using an electromagnetic carrier than 2.5 micrometer; ‘‘development’’, ‘‘production’’, or ‘‘use’’ of frequency below 30 kHz; or b.2.f.2. Alignment with a precision finer electronic devices or components controlled b.1.c. Using electronic beam steering than ±0.25 micrometer (3 sigma); by 3A991, general purpose electronic techniques; b.2.f.3. Machine-to-machine overlay no equipment controlled by 3A992, or b.2. Being radio equipment operating in the better than ±0.3 micrometer; or manufacturing and test equipment 1.5 MHz to 87.5 MHz band and having any b.2.f.4. A light source wavelength shorter controlled by 3B991 or 3B992, or materials of the following characteristics: than 400 nm; controlled by 3C992. b.2.a. Incorporating adaptive techniques b.2.g. Electron beam, ion beam or X-ray * * * * * providing more than 15 dB suppression of an equipment for projection image transfer I interfering signal; or capable of producing patterns less than 2.5 24. In Supplement No. 1 to Part 774 b.2.b. Having all of the following: micrometer; (the Commerce Control List), Category b.2.b.1. Automatically predicting and Note: For focused, deflected-beam systems 5—Telecommunications and selecting frequencies and ‘‘total digital (direct write systems), see 3B991.b.1.j or b.10. ‘‘Information Security’’, Part I— transfer rates’’ per channel to optimize the Telecommunications, Export Control b.2.h. Equipment using ‘‘lasers’’ for direct transmission; and write on wafers capable of producing Classification Number (ECCN) 5A001 is b.2.b.2. Incorporating a linear power patterns less than 2.5 micrometer. amended by revising the Heading, the amplifier configuration having a capability to b.3. Equipment for the assembly of License Requirements section and the support multiple signals simultaneously at integrated circuits, as follows: ‘‘items’’ paragraph in the List of Items an output power of 1 kW or more in the b.3.a. ‘‘Stored program controlled’’ die Controlled section, to read as follows: frequency range of 1.5 MHz or more but less bonders having all of the following than 30 MHz, or 250 W or more in the 5A001 Telecommunications systems, characteristics: frequency range of 30 MHz or more but not equipment, and components, as follows (see exceeding 87.5 MHz, over an ‘‘instantaneous b.3.a.1. Specially designed for ‘‘hybrid List of Items Controlled). integrated circuits’; bandwidth’’ of one octave or more and with b.3.a.2. X-Y stage positioning travel License Requirements an output harmonic and distortion content of × better than ¥80 dB; exceeding 37.5 37.5 mm; and Reason for Control: NS, AT b.3.a.3. Placement accuracy in the X-Y b.3. Being radio equipment employing ± ‘‘spread spectrum’’ techniques, including plane of finer than 10 micrometer; Control(s) Country chart b.3.b. ‘‘Stored program controlled’’ ‘‘frequency hopping’’ techniques, not controlled in 5A001.b.4., having any of the equipment for producing multiple bonds in NS applies to 5A001.a, and NS Column 1. a single operation (e.g., beam lead bonders, following characteristics: .e. b.3.a. User programmable spreading codes; chip carrier bonders, tape bonders); NS applies to 5A001.b, .c, NS Column 2. b.3.c. Semi-automatic or automatic hot cap or .d, and .f. b.3.b. A total transmitted bandwidth which sealers, in which the cap is heated locally to AT applies to entire entry .... AT Column 1. a higher temperature than the body of the is 100 or more times the bandwidth of any package, specially designed for ceramic one information channel and in excess of 50 License Requirement Notes: See § 743.1 of microcircuit packages controlled by 3A001 kHz; the EAR for reporting requirements for Note: 5A001.b.3.b does not control radio and that have a throughput equal to or more exports under License Exceptions. than one package per minute. equipment specially designed for use with Note: 3B991.b.3 does not control general * * * * * civil cellular radio-communications systems. purpose resistance type spot welders. List of Items Controlled Note: 5A001.b.3 does not control equipment operating at an output power of b.4. Filters for clean rooms capable of Unit: Equipment or antennae in number; 1.0 Watt or less. providing an air environment of 10 or less cable and fiber in meters/feet, components particles of 0.3 micrometer or smaller per and accessories in $ value b.4. Being radio equipment employing 3 0.02832 m and filter materials therefor. Related Controls: *** ultra-wideband modulation techniques, Related Definitions: *** having user programmable channelizing I 22. In Supplement No. 1 to Part 774 Items: codes, scrambling codes, or network (the Commerce Control List), Category a. Any type of telecommunications identification codes, having any of the 3—Electronics, Export Control equipment having any of the following following characteristics: Classification Number (ECCN) 3E001 is characteristics, functions or features: b.4.a.A bandwidth exceeding 500 MHz; or amended revising the heading and CIV a.1. Specially designed to withstand b.4.b.A ‘‘fractional bandwidth’’ of 20% or paragraph in the License Exceptions transitory electronic effects or more; b.5. Being digitally controlled radio section, to read as follows: electromagnetic pulse effects, both arising from a nuclear explosion; receivers having all of the following: 3E001 ‘‘Technology’’ according to the a.2. Specially hardened to withstand b.5.a. More than 1,000 channels; General Technology Note for the gamma, neutron or ion radiation; or b.5.b. A ‘‘frequency switching time’’ of less ‘‘development’’ or ‘‘production’’ of a.3. Specially designed to operate outside than 1 ms; equipment or materials controlled by 3A the temperature range from 218 K (¥55 °C) b.5.c. Automatic searching or scanning of (except 3A292, 3A980, 3A981, 3A991 or to 397 K (124 °C). a part of the electromagnetic spectrum; and

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b.5.d. Identification of the received signals N.B.: For GNSS jamming equipment see b. Telecommunication transmission or the type of transmitter; or the Munitions List. equipment and systems, and specially designed components and accessories Note: 5A001.b.5 does not control radio I 25. In Supplement No. 1 to Part 774 therefor, having any of the following equipment specially designed for use with (the Commerce Control List), Category civil cellular radio-communications systems. characteristics, functions or features: 5—Telecommunications and b.6. Employing functions of digital ‘‘signal Note: Telecommunication transmission ‘‘Information Security’’, Part I— equipment: processing’’ to provide voice coding output at Telecommunications, Export Control rates of less than 2,400 bit/s. Classification Number (ECCN) 5A991 is a. Categorized as follows, or combinations thereof: Technical Notes: 1. For variable rate voice amended by revising the ‘‘related 1. Radio equipment (e.g., transmitters, coding, 5A001.b.6 applies to the voice coding definitions’’ and the ‘‘items’’ paragraphs receivers and transceivers); output of continuous speech. in the List of Items Controlled section, 2. Line terminating equipment; 2. For the purpose of 5A001.b.6, ‘‘voice to read as follows: 3. Intermediate amplifier equipment; coding’’ is defined as the technique to take 4. Repeater equipment; samples of human voice and then convert 5A991 Telecommunication equipment, not controlled by 5A001. 5. Regenerator equipment; these samples of human voice and then 6. Translation encoders (transcoders); convert these samples into a digital signal * * * * * 7. Multiplex equipment (statistical taking into account specific characteristics of List of Items Controlled mutiplex included); human speech. 8. Modulators/demodulators (modems); c. Optical fiber communication cables, Unit: *** 9. Transmultiplex equipment (see CCITT optical fibers and accessories, as follows: Related Controls: *** Rec. G701); c.1. Optical fibers of more than 500 m in Related Definitions: (1) ‘‘Asynchronous 10. ‘‘Stored program controlled’’ digital length specified by the manufacturer as being transfer mode’’ (‘‘ATM’’) is a transfer mode crossconnection equipment; capable of withstanding a proof test tensile in which the information is organized into 11. ‘‘Gateways’’ and bridges; stress of 2 × 109 N/m2 or more; cells; it is asynchronous in the sense that the 12. ‘‘Media access units’’; and recurrence of cells depends on the required b. Designed for use in single or multi- Technical Note: Proof Test: on-line or off- or instantaneous bit rate. (2) ‘‘Bandwidth of line production screen testing that channel communication via any of the one voice channel’’ is data communication following: dynamically applies a prescribed tensile equipment designed to operate in one voice stress over a 0.5 to 3 m length of fiber at a 1. Wire (line); channel of 3,100 Hz, as defined in CCITT 2. Coaxial cable; running rate of 2 to 5 m/s while passing Recommendation G.151. (3) between capstans approximately 150 mm in 3. Optical fiber cable; ‘‘Communications channel controller’’ is the 4. Electromagnetic radiation; or diameter. The ambient temperature is a physical interface that controls the flow of nominal 293 K (20 °C) and relative humidity 5. Underwater acoustic wave propagation. synchronous or asynchronous digital b.1. Employing digital techniques, 40%. Equivalent national standards may be information. It is an assembly that can be used for executing the proof test. including digital processing of analog signals, integrated into computer or and designed to operate at a ‘‘digital transfer c.2. Optical fiber cables and accessories telecommunications equipment to provide rate’’ at the highest multiplex level exceeding designed for underwater use. communications access. (4) ‘‘Datagram’’ is a 45 Mbit/s or a ‘‘total digital transfer rate’’ Note: 5A001.c.2 does not control standard self-contained, independent entity of data exceeding 90 Mbit/s; civil telecommunication cables and carrying sufficient information to be routed Note: 5A991.b.1 does not control accessories. from the source to the destination data terminal equipment without reliance on equipment specially designed to be N.B. 1: For underwater umbilical cables, earlier exchanges between this source and integrated and operated in any satellite and connectors thereof, see 8A002.a.3. destination data terminal equipment and the system for civil use. N.B. 2: For fiber-optic hull penetrators or transporting network. (5) ‘‘Fast select’’ is a b.2. Modems using the ‘‘bandwidth of one connectors, see 8A002.c. facility applicable to virtual calls that allows voice channel’’ with a ‘‘data signaling rate’’ d. ‘‘Electronically steerable phased array data terminal equipment to expand the exceeding 9,600 bits per second; antennae’’ operating above 31.8 GHz. possibility to transmit data in call set-up and b.3. Being ‘‘stored program controlled’’ clearing ‘‘packets’’ beyond the basic Note: 5A001.d does not control digital cross connect equipment with ‘‘digital capabilities of a virtual call. (6) ‘‘Gateway’’ is transfer rate’’ exceeding 8.5 Mbit/s per port. ‘‘electronically steerable phased array the function, realized by any combination of antennae’’ for landing systems with b.4. Being equipment containing any of the equipment and ‘‘software’’, to carry out the following: instruments meeting ICAO standards conversion of conventions for representing, covering microwave landing systems (MLS). b.4.a. ‘‘Network access controllers’’ and processing or communicating information their related common medium having a e. Radio direction finding equipment used on one system into the corresponding, ‘‘digital transfer rate’’ exceeding 33 Mbit/s; or operating at frequencies above 30 MHz and but different conventions used in another b.4.b. ‘‘Communication channel having all of the following characteristics, system. (7) ‘‘Integrated Services Digital controllers’’ with a digital output having a and specially designed components therefor: Network’’ (ISDN) is a unified end-to-end ‘‘data signaling rate’’ exceeding 64,000 bit/s e.1. ‘‘Instantaneous bandwidth’’ of 10 MHz digital network, in which data originating per channel; or more; and from all types of communication (e.g., voice, e.2. Capable of finding a line of bearing text, data, still and moving pictures) are Note: If any uncontrolled equipment (LOB) to non-cooperating radio transmitters transmitted from one port (terminal) in the contains a ‘‘network access controller’’, it with a signal duration of less than 1 ms. exchange (switch) over one access line to and cannot have any type of telecommunications f. Jamming equipment specially designed from the subscriber. (8) ‘‘Packet’’ is a group interface, except those described in, but not or modified to intentionally and selectively of binary digits including data and call controlled by 5A991.b.4. interfere with, deny, inhibit, degrade or control signals that is switched as a b.5. Employing a ‘‘laser’’ and having any of seduce cellular mobile telecommunication composite whole. The data, call control the following characteristics: services, having any of the following signals, and possible error control b.5.a. A transmission wavelength characteristics, and specially designed information are arranged in a specified exceeding 1,000 nm; or components therefore: format. b.5.b. Employing analog techniques and f.1. Simulating the functions of Radio Items: having a bandwidth exceeding 45 MHz; Access Network (RAN) equipment; or a. Any type of telecommunications Note: 5A991.b.5.b does not control f.2. Detecting and exploiting specific equipment, not controlled by 5A001.a, commercial TV systems. characteristics of the mobile specially designed to operate outside the telecommunications protocol employed (e.g., temperature range from 219 K (¥54 °C) to b.5.c. Employing coherent optical GSM). 397 K (124 °C). transmission or coherent optical detection

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techniques (also called optical heterodyne or Note: 5A991.c does not preclude the exceeding 19.7 GHz and assemblies and homodyne techniques); evaluation and appropriate actions taken by components therefor, n.e.s. b.5.d. Employing wavelength division the receiving switch or unrelated user I multiplexing techniques; or message traffic on a D channel of ISDN. 26. In Supplement No. 1 to Part 774 b.5.e. Performing ‘‘optical amplification’’; c.3. Routing or switching of ‘‘datagram’’ (the Commerce Control List), Category b.6. Radio equipment operating at input or packets; 5—Telecommunications and output frequencies exceeding: c.4. Routing or switching of ‘‘fast select’’ ‘‘Information Security’’, Part I— b.6.a. 31 GHz for satellite-earth station packets; Telecommunications, Export Control applications; or Note: The restrictions in 5A991.c.3 and c.4 Classification Number (ECCN) 5D001 is b.6.b. 26.5 GHz for other applications; do not apply to networks restricted to using amended by revising the ‘‘items’’ Note: 5A991.b.6. does not control only ‘‘network access controllers’’ or to paragraph in the List of Items Controlled equipment for civil use when conforming ‘‘network access controllers’’ themselves. section, to read as follows: with an International Telecommunications c.5. Multi-level priority and pre-emption 5D001 ‘‘Software’’, as described in the Union (ITU) allocated band between 26.5 for circuit switching; List of Items Controlled. GHz and 31 GHz. Note: 5A991.c.5 does not control single- b.7. Being radio equipment employing any level call preemption. * * * * * of the following: c.6. Designed for automatic hand-off of List of Items Controlled b.7.a. Quadrature-amplitude-modulation cellular radio calls to other cellular switches Unit: *** (QAM) techniques above level 4 if the ‘‘total or automatic connection to a centralized Related Controls: *** digital transfer rate’’ exceeds 8.5 Mbit/s; subscriber data base common to more than Related Definitions: *** b.7.b. QAM techniques above level 16 if one switch; Items: the ‘‘total digital transfer rate’’ is equal to or c.7. Containing ‘‘stored program a. ‘‘Software’’ specially designed or less than 8.5 Mbit/s; or controlled’’ digital cross connect equipment modified for the ‘‘development’’, b.7.c. Other digital modulation techniques with ‘‘digital transfer rate’’ exceeding 8.5 ‘‘production’’ or ‘‘use’’ of equipment, and having a ‘‘spectral efficiency’’ exceeding Mbit/s per port. functions or features controlled by 5A001 or 3 bit/s/Hz; c.8. ‘‘Common channel signaling’’ 5B001. Notes: 1. 5A991.b.7 does not control operating in either non-associated or quasi- b. ‘‘Software’’ specially designed or equipment specially designed to be associated mode of operation; modified to support ‘‘technology’’ controlled integrated and operated in any satellite c.9. ‘‘Dynamic adaptive routing’’; by 5E001. system for civil use. Note: 5A991.c.10 does not control packet c. Specific ‘‘software’’ specially designed 2. 5A991.b.7 does not control radio relay switches or routers with ports or lines not or modified to provide characteristics, equipment for operation in an ITU allocated exceeding the limits in 5A991.c.10. functions or features of equipment controlled band: c.10. Being packet switches, circuit by 5A001 or 5B001. a. Having any of the following: switches and routers with ports or lines d. ‘‘Software’’ specially designed or a.1. Not exceeding 960 MHz; or exceeding any of the following: modified for the ‘‘development’’ of any of the a.2. With a ‘‘total digital transfer rate’’ not c.10.a. A ‘‘data signaling rate’’ of 64,000 following telecommunication transmission or exceeding 8.5 Mbit/s; and bit/s per channel for a ‘‘communications switching equipment: b. Having a ‘‘spectral efficiency’’ not channel controller’’; or d.1. Equipment employing digital exceeding 4 bit/s/Hz. Note: 5A991.c.10.a does not control techniques, including designed to operate at b.8. Providing functions of digital ‘‘signal multiplex composite links composed only of a ‘‘total digital transfer rate’’ exceeding 15 processing’’ as follows: communication channels not individually Gbit/s; b.8.a. Voice coding at rates less than 2,400 controlled by 5A991.b.1. Technical Note: For switching equipment bit/s; c.10.b. A ‘‘digital transfer rate’’ of 33 Mbit/ the ‘‘total digital transfer rate’’ is measured at b.8.b. Employing circuitry that s for a ‘‘network access controller’’ and the highest speed port or line. incorporates ‘‘user-accessible related common media; d.2. Equipment employing a ‘‘laser’’ and programmability’’ of digital ‘‘signal c.11. ‘‘Optical switching’’; having any of the following: processing’’ circuits exceeding the limits of c.12. Employing ‘‘Asynchronous Transfer d.2.a. A transmission wavelength 4A003.b. Mode’’ (‘‘ATM’’) techniques. exceeding 1750 nm; or c. ‘‘Stored program controlled’’ switching d. Optical fibers and optical fiber cables of d.2.b. Employing analog techniques and equipment and related signaling systems, more than 50 m in length designed for single having a bandwidth exceeding 2.5 GHz; having any of the following characteristics, mode operation; Note: 5D001.d.2.b. does not control functions or features, and specially designed e. Centralized network control having all of ‘‘software’’ specially designed or modified for components and accessories therefor: the following characteristics: the ‘‘development’’ of commercial TV Note: Statistical multiplexers with digital e.1. Receives data from the nodes; and systems. input and digital output which provide e.2. Process these data in order to provide d.3. Equipment employing ‘‘optical switching are treated as ‘‘stored program control of traffic not requiring operator switching’’; or decisions, and thereby performing ‘‘dynamic controlled’’ switches. d.4. Radio equipment employing adaptive routing’’; c.1. ‘‘Data (message) switching’’ equipment quadrature-amplitude-modulation (QAM) or systems designed for ‘‘packet-mode Note: 5A991.e does not preclude control of techniques above level 256. operation’’ and assemblies and components traffic as a function of predictable statistical I therefor, n.e.s. traffic conditions. 27. In Supplement No. 1 to Part 774 c.2. Containing ‘‘Integrated Services Digital f. Phased array antennae, operating above (the Commerce Control List), Category Network’’ (ISDN) functions and having any of 10.5 GHz, containing active elements and 5—Telecommunications and the following: distributed components, and designed to ‘‘Information Security’’, Part I— c.2.a. Switch-terminal (e.g., subscriber line) permit electronic control of beam shaping Telecommunications, Export Control interfaces with a ‘‘digital transfer rate’’ at the and pointing, except for landing systems Classification Number (ECCN) 5D991 is highest multiplex level exceeding 192,000 with instruments meeting International Civil amended by revising the heading and bit/s, including the associated signaling Aviation Organization (ICAO) standards ‘‘items’’ paragraph in the List of Items channel (e.g., 2B+D); or (microwave landing systems (MLS)). Controlled section, to read as follows: c.2.b. The capability that a signaling g. Mobile communications equipment, message received by a switch on a given n.e.s., and assemblies and components 5D991 ‘‘Software’’ specially designed or channel that is related to a communication therefor; or modified for the ‘‘development’’, on another channel may be passed through h. Radio relay communications equipment ‘‘production’’ or ‘‘use’’ of equipment to another switch. designed for use at frequencies equal to or controlled by 5A991 and 5B991, and

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dynamic adaptive routing software as (b) Information stored in encrypted form a.2. Designed or modified to perform described in the List of Items Controlled. on media (e.g., in connection with the cryptanalytic functions; * * * * * protection of intellectual property rights) a.3. [RESERVED] where the media is offered for sale in a.4. Specially designed or modified to List of Items Controlled identical sets to the public; reduce the compromising emanations of Unit: *** (3) Copying control of copyright protected information-bearing signals beyond what is Related Controls: *** audio/video data; or necessary for health, safety or Related Definitions: *** (4) Encryption and/or decryption for electromagnetic interference standards; Items: protection of libraries, design attributes, or a.5. Designed or modified to use a. ‘‘Software’’, other than in machine- associated data for the design of cryptographic techniques to generate the executable form, specially designed for semiconductor devices or integrated circuits; spreading code for ‘‘spread spectrum’’ ‘‘dynamic adaptive routing’’. (d) Cryptographic equipment specially systems, not controlled in 5A002.a.6., b. [RESERVED] designed and limited for banking use or including the hopping code for ‘‘frequency money transactions; hopping’’ systems; I 28. In Supplement No. 1 to Part 774 N.B.: The term ‘‘money transactions’’ a.6. Designed or modified to use (the Commerce Control List), Category includes the collection and settlement of cryptographic techniques to generate 5—Telecommunications and fares or credit functions. channelizing codes, scrambling codes or ‘‘Information Security’’, Part 2— (e) Portable or mobile radiotelephones for network identification codes, for systems civil use (e.g., for use with commercial civil Information Security, Export Control using ultra-wideband modulation techniques, cellular radio communications systems) that having any of the following characteristics: Classification Number (ECCN) 5A002 is are not capable of end-to-end encryption. a.6.a. A bandwidth exceeding 500 MHz; or amended by revising the ‘‘related (f) Cordless telephone equipment not a.6.b. A ‘‘fractional bandwidth’’ of 20% or controls’’ and the ‘‘items’’ paragraphs in capable of end-to-end encryption where the more; the List of Items Controlled section, to maximum effective range of unboosted a.7. [RESERVED] read as follows: cordless operation (e.g., a single, unrelayed a.8. Communications cable systems hop between terminal and home basestation) designed or modified using mechanical, 5A002 Systems, equipment, application is less than 400 meters according to the electrical or electronic means to detect specific ‘‘electronic assemblies’’, modules manufacturer’s specifications. surreptitious intrusion; and integrated circuits for ‘‘information Technical Note: Parity bits are not a.9. Designed or modified to use ‘‘quantum security’’, as follows (see List of Items included in the key length. cryptography.’’ Controlled), and other specially designed components therefor. a. Systems, equipment, application specific Technical Notes: ‘‘electronic assemblies’’, modules and 1. ‘Quantum cryptography’ A family of * * * * * integrated circuits for ‘‘information security’’, techniques for the establishment of a shared List of Items Controlled as follows, and other specially designed key for ‘‘cryptography’’ by measuring the components therefor: quantum-mechanical properties of a physical Unit: *** N.B.: For the control of global navigation system (including those physical properties Related Controls: 5A002 does not control satellite systems receiving equipment explicitly governed by quantum optics, the items listed in paragraphs (a) through (f) containing or employing decryption (e.g., quantum field theory, or quantum in the Note in the items paragraph of this GPS or GLONASS) see 7A005. electrodynamics). entry. These items are instead controlled a.1. Designed or modified to use 2. ‘‘Quantum cryptography’’ is also known under ECCN 5A992. 5A002 does not control ‘‘cryptography’’ employing digital techniques as quantum key distribution (QKD). commodities eligible for the Cryptography performing any cryptographic function other Note (Category 5 Part 2 Note 3). than authentication or digital signature I 29. In Supplement No. 1 to Part 774 Related Definitions: *** having any of the following: (the Commerce Control List), Category Items: Technical Notes: 6—Sensors, Export Control Note: 5A002 does not control the 1. Authentication and digital signature Classification Number (ECCN) 6A006 is following. However, these items are instead functions include their associated key amended by revising the heading, the controlled under 5A992: management function. ‘‘LVS’’ paragraph in the License (a) ‘‘Personalized smart cards’’: 2. Authentication includes all aspects of Exceptions section, and the ‘‘related access control where there is no encryption (1) Where the cryptographic capability is controls’’ and ‘‘items’’ paragraphs in the restricted for use in equipment or systems of files or text except as directly related to excluded from control paragraphs (b) through the protection of passwords, Personal List of Items Controlled section, to read (f) of this Note; or Identification Numbers (PINs) or similar data as follows: (2) For general public-use applications to prevent unauthorized access. 6A006 ‘‘Magnetometers’’, ‘‘magnetic where the cryptographic capability is not 3. ‘‘Cryptography’’ does not include gradiometers’’, ‘‘intrinsic magnetic user-accessible and it is specially designed ‘‘fixed’’ data compression or coding gradiometers’’, underwater electric field and limited to allow protection of personal techniques. sensors, and compensation systems, and data stored within. Note: 5A002.a.1 includes equipment specially designed components therefor, as N.B.: If a ‘‘personalized smart card’’ has designed or modified to use ‘‘cryptography’’ follows (see List of Items Controlled). multiple functions, the control status of each employing analog principles when * * * * * function is assessed individually. implemented with digital techniques. (b) Receiving equipment for radio a.1.a. A ‘‘symmetric algorithm’’ employing License Exceptions broadcast, pay television or similar restricted a key length in excess of 56-bits; or LVS: $1500, N/A for 6A006.a.1; audience broadcast of the consumer type, a.1.b. An ‘‘asymmetric algorithm’’ where ‘‘Magnetometers’’ and subsystems defined in without digital encryption except that the security of the algorithm is based on any 6A006.a.2 using optically pumped or nuclear exclusively used for sending the billing or of the following: precession (proton/Overhauser) having a program-related information back to the a.1.b.1. Factorization of integers in excess ‘‘noise level’’ (sensitivity) lower (better) than broadcast providers. of 512 bits (e.g., RSA); 2 pT rms per square root Hz; and 6A006.d. (c) Equipment where the cryptographic a.1.b.2. Computation of discrete logarithms GBS: * * * capability is not user-accessible and which is in a multiplicative group of a finite field of CIV: * * * specially designed and limited to allow any size greater than 512 bits (e.g., Diffie-Hellman of the following: over Z/pZ); or List of Items Controlled (1) Execution of copy-protected ‘‘software’’; a.1.b.3. Discrete logarithms in a group Unit:*** (2) Access to any of the following: other than mentioned in 5A002.a.1.b.2 in Related Controls: See also 6A996. This (a) Copy-protected contents stored on read- excess of 112 bits (e.g., Diffie-Hellman over entry does not control instruments specially only media; or an elliptic curve); designed for fishery applications or

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biomagnetic measurements for medical List of Items Controlled Items: diagnostics. Unit: *** a. Acoustics. None. Related Definitions:*** Related Controls: *** b. Optical sensors. None. Items: Related Definitions: *** c. Cameras. None. a. ‘‘Magnetometers’’ and subsystems, as Items: d. Optics, ‘‘technology’’, as follows: follows: a. Acoustics ‘‘software’’, as follows: d.1. Optical surface coating and treatment a.1. Using ‘‘superconductive’’ (SQUID) a.1. ‘‘Software’’ specially designed for ‘‘technology’’ ‘‘required’’ to achieve ‘‘technology’’ and having any of the acoustic beam forming for the ‘‘real time uniformity of 99.5% or better for optical following characteristics: processing’’ of acoustic data for passive coatings 500 mm or more in diameter or a.1.a. SQUID systems designed for reception using towed hydrophone arrays; major axis length and with a total loss × ¥3 stationary operation, without specially a.2. ‘‘Source code’’ for the ‘‘real time (absorption and scatter) of less than 5 10 ; designed subsystems designed to reduce in- processing’’ of acoustic data for passive N.B.: See also 2E003.f. motion noise, and having a ‘‘noise level’’ reception using towed hydrophone arrays; d.2. Optical fabrication ‘‘technology’’ using (sensitivity) equal to or lower (better) than 50 a.3. ‘‘Software’’ specially designed for single point diamond turning techniques to fT (rms) per square root Hz at a frequency of acoustic beam forming for the ‘‘real time produce surface finish accuracies of better 1 Hz; or processing’’ of acoustic data for passive than 10 nm rms on non-planar surfaces 2 a.1.b. SQUID systems having an in-motion- reception using bottom or bay cable systems; exceeding 0.5 m ; magnetometer ‘‘noise level’’ (sensitivity) a.4. ‘‘Source code’’ for the ‘‘real time e. Lasers. ‘‘Technology’’ ‘‘required’’ for the lower (better) than 20 pT (rms) per square processing’’ of acoustic data for passive ‘‘development’’, ‘‘production’’ or ‘‘use’’ of root Hz at a frequency of 1 Hz and specially reception using bottom or bay cable systems. specially designed diagnostic instruments or designed to reduce in-motion noise; b. Optical sensors. None. targets in test facilities for ‘‘SHPL’’ testing or a.2. Using optically pumped or nuclear c. Cameras. None. testing or evaluation of materials irradiated precession (proton/Overhauser) ‘‘technology’’ d. Optics. None. by ‘‘SHPL’’ beams; having a ‘‘noise level’’ (sensitivity) lower e. Lasers. None f. Magnetic and Electric Field Sensors. (better) than 20 pT (rms) per square root Hz; f. Magnetic and Electric Field Sensors None. a.3. Using fluxgate ‘‘technology’’ having a ‘‘software’’, as follows: g. Gravimeters. None. ‘‘noise level’’ (sensitivity) equal to or lower f.1. ‘‘Software’’ specially designed for h. Radar. None. (better) than 10 pT (rms) per square root Hz magnetic and electric field compensation I 32. In Supplement No. 1 to Part 774 at a frequency of 1 Hz; systems for magnetic sensors designed to a.4. Induction coil ‘‘magnetometers’’ operate on mobile platforms; (the Commerce Control List), Category having a ‘‘noise level’’ (sensitivity) lower f.2. ‘‘Software’’ specially designed for 8—Marine, Export Control Classification (better) than any of the following: magnetic and electric field anomaly detection Number (ECCN) 8A002 is amended by a.4.a. 0.05 nT rms/square root Hz at on mobile platforms; revising the ‘‘items’’ paragraph in the frequencies of less than 1 Hz; g. Gravimeters. ‘‘Software’’ specially List of Items Controlled section, to read ¥ a.4.b. 1 × 10 3 nT rms/square root Hz at designed to correct motional influences of as follows: frequencies of 1 Hz or more but not gravity meters or gravity gradiometers; exceeding 10 Hz; or h. Radar ‘‘software’’, as follows: 8A002 Systems and equipment, as a.4.c. 1 × 10¥4 nT rms/square root Hz at h.1. Air Traffic Control ‘‘software’’ follows (see List of Items Controlled). frequencies exceeding 10 Hz; application ‘‘programs’’ hosted on general * * * * * a.5. Fiber optic ‘‘magnetometers’’ having a purpose computers located at Air Traffic List of Items Controlled ‘‘noise level’’ (sensitivity) lower (better) than Control centers and capable of any of the 1 nT rms per square root Hz; following: Unit:*** b. Underwater electric field sensors having h.1.a. Processing and displaying more than Related Controls:*** a ‘‘noise level’’ (sensitivity) lower (better) 150 simultaneous ‘‘system tracks’’; or Related Definitions: *** than 8 nanovolt per meter per square root Hz h.1.b. Accepting radar target data from Items: when measured at 1 Hz. more than four primary radars; a. Systems and equipment, specially c. ‘‘Magnetic gradiometers’’ as follows: h.2. ‘‘Software’’ for the design or designed or modified for submersible c.1. ‘‘Magnetic gradiometers’’ using ‘‘production’’ of radomes which: vehicles, designed to operate at depths multiple ‘‘magnetometers’’ controlled by h.2.a. Are specially designed to protect the exceeding 1,000 m, as follows: 6A006.a; ‘‘electronically steerable phased array a.1. Pressure housings or pressure hulls c.2. Fiber optic ‘‘intrinsic magnetic antennae’’ controlled by 6A008.e.; and with a maximum inside chamber diameter gradiometers’’ having a magnetic gradient h.2.b. Result in an antenna pattern having exceeding 1.5 m; field ‘‘noise level’’ (sensitivity) lower (better) an ‘‘average side lobe level’’ more than 40 dB a.2. Direct current propulsion motors or than 0.3 nT/m rms per square root Hz; below the peak of the main beam level. thrusters; c.3. ‘‘Intrinsic magnetic gradiometers’’, Technical Note: ‘‘Average side lobe level’’ a.3. Umbilical cables, and connectors using ‘‘technology’’ other than fiber-optic in 6D003.h.2.b is measured over the entire therefor, using optical fiber and having ‘‘technology’’, having a magnetic gradient array excluding the angular extent of the synthetic strength members; field ‘‘noise level’’ (sensitivity) lower (better) main beam and the first two side lobes on b. Systems specially designed or modified than 0.015 nT/m rms per square root Hz; and either side of the main beam. for the automated control of the motion of submersible vehicles controlled by 8A001 d. Compensation systems for magnetic and I Underwater Electric Field Sensors resulting 31. In Supplement No. 1 to Part 774 using navigation data and having closed loop in a performance equal to or better than the (the Commerce Control List), Category servo-controls: control parameters of 6A006.a, 6A006.b, and 6—Sensors, Export Control b.1. Enabling a vehicle to move within 10 6A006.c. Classification Number (ECCN) 6E003 is m of a predetermined point in the water I amended by revising the ‘‘items’’ column; 30. In Supplement No. 1 to Part 774 b.2. Maintaining the position of the vehicle (the Commerce Control List), Category paragraph in the List of Items Controlled section, to read as follows: within 10 m of a predetermined point in the 6—Sensors, Export Control water column; or Classification Number (ECCN) 6D003 is 6E003 Other ‘‘technology’’, as follows b.3. Maintaining the position of the vehicle amended by revising the ‘‘items’’ (see List of Items Controlled). within 10 m while following a cable on or paragraph in the List of Items Controlled * * * * * under the seabed; section, to read as follows: c. Fiber optic hull penetrators or List of Items Controlled connectors; 6D003 Other ‘‘software’’, as follows (see Unit: *** d. Underwater vision systems, as follows: List of Items Controlled). Related Controls: *** d.1. Television systems and television * * * * * Related Definitions: *** cameras, as follows:

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d.1.a. Television systems (comprising for use with submersible vehicles, having any j.4.b. Specially designed exhaust systems camera, monitoring and signal transmission of the following: which discharge the products of combustion equipment) having a limiting resolution i.1. Systems which control the manipulator against a pressure of 100 kPa or more; when measured in air of more than 800 lines using the information from sensors which k. Skirts, seals and fingers, having any of and specially designed or modified for measure the torque or force applied to an the following: remote operation with a submersible vehicle; external object, or tactile sense between the k.1. Designed for cushion pressures of d.1.b. Underwater television cameras manipulator and an external object; or 3,830 Pa or more, operating in a significant having a limiting resolution when measured i.2. Controlled by proportional master- wave height of 1.25 m (Sea State 3) or more in air of more than 1,100 lines; slave techniques or by using a dedicated and specially designed for surface effect d.1.c. Low light level television cameras computer, and having 5 degrees of freedom vehicles (fully skirted variety) controlled by specially designed or modified for of movement or more; 8A001.f; or underwater use containing all of the Note: Only functions having proportional k.2. Designed for cushion pressures of following: control using positional feedback or by using 6,224 Pa or more, operating in a significant d.1.c.1. Image intensifier tubes controlled a dedicated computer are counted when wave height of 3.25 m (Sea State 5) or more by 6A002.a.2.a; and determining the number of degrees of and specially designed for surface effect d.1.c.2. More than 150,000 ‘‘active pixels’’ freedom of movement. vehicles (rigid sidewalls) controlled by per solid state area array; j. Air independent power systems, 8A001.g; Technical Note: Limiting resolution in specially designed for underwater use, as l. Lift fans rated at more than 400 kW television is a measure of horizontal follows: specially designed for surface effect vehicles resolution usually expressed in terms of the j.1. Brayton or Rankine cycle engine air controlled by 8A001.f or 8A001.g; maximum number of lines per picture height independent power systems having any of m. Fully submerged subcavitating or discriminated on a test chart, using IEEE the following: supercavitating hydrofoils specially designed Standard 208/1960 or any equivalent j.1.a. Chemical scrubber or absorber for vessels controlled by 8A001.h; standard. systems specially designed to remove carbon n. Active systems specially designed or modified to control automatically the sea- d.2. Systems, specially designed or dioxide, carbon monoxide and particulates induced motion of vehicles or vessels modified for remote operation with an from recirculated engine exhaust; controlled by 8A001.f, 8A001.g, 8A001.h or underwater vehicle, employing techniques to j.1.b. Systems specially designed to use a 8A001.i; minimize the effects of back scatter, monoatomic gas; o. Propellers, power transmission systems, including range-gated illuminators or ‘‘laser’’ j.1.c. Devices or enclosures specially power generation systems and noise systems; designed for underwater noise reduction in reduction systems, as follows: e. Photographic still cameras specially frequencies below 10 kHz, or special o.1. Water-screw propeller or power designed or modified for underwater use mounting devices for shock mitigation; or transmission systems, as follows, specially below 150 m having a film format of 35 mm j.1.d. Systems specially designed: designed for surface effect vehicles (fully or larger, and having any of the following: j.1.d.1. To pressurize the products of skirted or rigid sidewall variety), hydrofoils e.1. Annotation of the film with data reaction or for fuel reformation; or small waterplane area vessels controlled provided by a source external to the camera; j.1.d.2. To store the products of the by 8A001.f, 8A001.g, .8A001.h or 8A001.i: e.2. Automatic back focal distance reaction; and o.1.a. Supercavitating, super-ventilated, correction; or j.1.d.3. To discharge the products of the partially-submerged or surface piercing e.3. Automatic compensation control reaction against a pressure of 100 kPa or propellers rated at more than 7.5 MW; specially designed to permit an underwater more; o.1.b. Contrarotating propeller systems camera housing to be usable at depths j.2. Diesel cycle engine air independent rated at more than 15 MW; exceeding 1,000 m; systems, having all of the following: o.1.c. Systems employing pre-swirl or post- f. Electronic imaging systems, specially j.2.a. Chemical scrubber or absorber swirl techniques for smoothing the flow into designed or modified for underwater use, systems specially designed to remove carbon a propeller; capable of storing digitally more than 50 dioxide, carbon monoxide and particulates o.1.d. Light-weight, high capacity (K factor exposed images; from recirculated engine exhaust; j.2.b. Systems specially designed to use a exceeding 300) reduction gearing; Note: 8A002.f does not control digital monoatomic gas; o.1.e. Power transmission shaft systems, cameras specially designed for consumer j.2.c. Devices or enclosures specially incorporating ‘‘composite’’ material purposes, other than those employing designed for underwater noise reduction in components, capable of transmitting more electronic image multiplication techniques. frequencies below 10 kHz or special than 1 MW; g. Light systems, as follows, specially mounting devices for shock mitigation; and o.2. Water-screw propeller, power designed or modified for underwater use: j.2.d. Specially designed exhaust systems generation systems or transmission systems g.1. Stroboscopic light systems capable of that do not exhaust continuously the designed for use on vessels, as follows: a light output energy of more than 300 J per products of combustion; o.2.a. Controllable-pitch propellers and flash and a flash rate of more than 5 flashes j.3. Fuel cell air independent power hub assemblies rated at more than 30 MW; per second; systems with an output exceeding 2 kW o.2.b. Internally liquid-cooled electric g.2. Argon arc light systems specially having any of the following: propulsion engines with a power output designed for use below 1,000 m; j.3.a. Devices or enclosures specially exceeding 2.5 MW; h. ‘‘Robots’’ specially designed for designed for underwater noise reduction in o.2.c. ‘‘Superconductive’’ propulsion underwater use, controlled by using a frequencies below 10 kHz or special engines, or permanent magnet electric dedicated computer, having any of the mounting devices for shock mitigation; or propulsion engines, with a power output following: j.3.b. Systems specially designed: exceeding 0.1 MW; h.1. Systems that control the ‘‘robot’’ using j.3.b.1. To pressurize the products of o.2.d. Power transmission shaft systems, information from sensors which measure reaction or for fuel reformation; incorporating ‘‘composite’’ material force or torque applied to an external object, j.3.b.2. To store the products of the components, capable of transmitting more distance to an external object, or tactile sense reaction; and than 2 MW; between the ‘‘robot’’ and an external object; j.3.b.3. To discharge the products of the o.2.e. Ventilated or base-ventilated or reaction against a pressure of 100 kPa or propeller systems rated at more than 2.5 MW; h.2. The ability to exert a force of 250 N more; o.3. Noise reduction systems designed for or more or a torque of 250 Nm or more and j.4. Stirling cycle engine air independent use on vessels of 1,000 tons displacement or using titanium based alloys or ‘‘fibrous or power systems, having all of the following: more, as follows: filamentary’’ ‘‘composite’’ materials in their j.4.a. Devices or enclosures specially o.3.a. Systems that attenuate underwater structural members; designed for underwater noise reduction in noise at frequencies below 500 Hz and i. Remotely controlled articulated frequencies below 10 kHz or special consist of compound acoustic mounts for the manipulators specially designed or modified mounting devices for shock mitigation; and acoustic isolation of diesel engines, diesel

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generator sets, gas turbines, gas turbine paragraphs in the List of Items and Related Equipment, Export Control generator sets, propulsion motors or Controlled section, to read as follows: Classification Number (ECCN) 9D001 is propulsion reduction gears, specially 9A012 Non-military ‘‘unmanned aerial amended by revising the License designed for sound or vibration isolation, Requirement section, to read as follows: having an intermediate mass exceeding 30% vehicles,’’ (‘‘UAVs’’), associated systems, of the equipment to be mounted; equipment and components as follows. (see 9D001 ‘‘Software’’ specially designed or o.3.b. Active noise reduction or List of Items Controlled). modified for the ‘‘development’’ of cancellation systems, or magnetic bearings, * * * * * equipment or ‘‘technology’’ controlled by 9A specially designed for power transmission List of Items Controlled (except 9A018, 9A990 or 9A991), 9B (except systems, and incorporating electronic control 9B990 or 9B991) or 9E003. systems capable of actively reducing Unit: *** equipment vibration by the generation of Related Controls: See the U.S. Munitions License Requirements anti-noise or anti-vibration signals directly to List Category VIII (22 CFR Part 121). Also see Reason for Control: NS, MT, AT the source; section 744.3 of the EAR. Related Definitions: *** p. Pumpjet propulsion systems having a Control(s) Country chart power output exceeding 2.5 MW using Items: a. ‘‘UAVs’’ having any of the following: divergent nozzle and flow conditioning vane NS applies to ‘‘software’’ for NS Column 1. techniques to improve propulsive efficiency a.1. An autonomous flight control and items controlled by 9A001 or reduce propulsion-generated underwater- navigation capability (e.g., an autopilot with to 9A003, 9A012, 9B001 radiated noise. an Inertial Navigation System); or to 9B010, 9E003. q. Self-contained, closed or semi-closed a.2. Capability of controlled flight out of MT applies to ‘‘software’’ for MT Column 1. circuit (rebreathing) diving and underwater the direct visual range involving a human swimming apparatus. operator (e.g., televisual remote control). equipment controlled by 9A106.a and .b, or 9B116 Note: 8A002.q does not control an b. Associated systems, equipment and components as follows: for MT reasons. individual apparatus for personal use when AT applies to entire entry .... AT Column 1. accompanying its user. b.1. Equipment specially designed for remotely controlling the ‘‘UAVs’’ controlled I 33. In Supplement No. 1 to Part 774 by 9A012.a.; License Requirement Notes: See § 743.1 of (the Commerce Control List), Category b.2. Guidance or control systems, other the EAR for reporting requirements for 9—Propulsion Systems, Space Vehicles than those controlled in Category 7, specially exports under License Exceptions. designed for integration into ‘‘UAVs’’ and Related Equipment, Export Control controlled by 9A012.a.; * * * * * Classification Number (ECCN) 9A001 is b.3. Equipment and components specially I amended by revising the ‘‘unit’’ and designed to convert a manned ‘‘aircraft’’ to a 37. In Supplement No. 1 to Part 774 ‘‘items’’ paragraphs in the List of Items ‘‘UAV’’ controlled by 9A012.a. (the Commerce Control List), Category Controlled section, to read as follows: Note: 9A012 does not control model 9—Propulsion Systems, Space Vehicles and Related Equipment, Export Control 9A001 Aero gas turbine engines aircraft. Classification Number (ECCN) 9D002 is incorporating any of the ‘‘technologies’’ I controlled by 9E003.a, as follows (see List of 35. In Supplement No. 1 to Part 774 amended by revising the License Items Controlled). (the Commerce Control List), Category Requirement section, to read as follows: 9—Propulsion Systems, Space Vehicles * * * * * 9D002 ‘‘Software’’ specially designed or and Related Equipment, Export Control modified for the ‘‘production’’ of equipment List of Items Controlled Classification Number (ECCN) 9B010 is controlled by 9A (except 9A018, 9A990, or Unit: Number added following ECCN 9B009, to read as 9A991) or 9B (except 9B990 or 9B991). Related Controls:** * follows: Related Definitions: *** License Requirements 9B010 Equipment specially designed for Items: the production of ‘‘UAVs’’ and associated Reason for Control: NS, MT, AT a. Incorporating any of the technologies systems, equipment and components controlled by 9E003.a.; or controlled by 9A012. Control(s) Country chart Note: 9A001.a. does not control aero gas turbine engines which meet all of the License Requirements NS applies to ‘‘software’’ for NS Column 1. following: Reason for Control: NS, AT equipment controlled by 1. Certified by the civil aviation authority 9A001 to 9A003, 9A012, in a country listed in Supplement No. 1 to Control(s) Country chart 9B001 to 9B010, or Part 743; and 9E003. 2. Intended to power non-military manned NS applies to entire entry ... NS Column 1. MT applies to ‘‘software’’ for MT Column 1. aircraft for which one of the following has AT applies to entire entry .... AT Column 1. equipment controlled by been issued by a Participating State listed in 9B116 for MT reasons. Supplement No. 1 to Part 743 for the aircraft License Exceptions AT applies to entire entry .... AT Column 1. with this specific engine type. a. A civil Type Certificate; or LVS: N/A b. An equivalent document recognized by GBS: N/A License Requirement Notes: See § 743.1 of the International Civil Aviation Organization CIV: N/A the EAR for reporting requirements for (ICAO). List of Items Controlled exports under License Exceptions. b. Designed to power an aircraft designed Unit: Equipment in number; parts and to cruise at Mach 1 or higher for more than * * * * * accessories in $ value 30 minutes. Related Controls: N/A I 38. In Supplement No. 1 to Part 774 I 34. In Supplement No. 1 to Part 774 Related Definitions: N/A (the Commerce Control List), Category (the Commerce Control List), Category Items: 9—Propulsion Systems, Space Vehicles 9—Propulsion Systems, Space Vehicles The list of items controlled is contained in and Related Equipment, Export Control the ECCN heading. and Related Equipment, Export Control Classification Number (ECCN) 9D004 is Classification Number (ECCN) 9A012 is I 36. In Supplement No. 1 to Part 774 amended by revising the ‘‘items’’ amended by revising the ‘‘heading;’’ and (the Commerce Control List), Category paragraph in the List of Items Controlled the ‘‘related controls’’ and the ‘‘items’’ 9—Propulsion Systems, Space Vehicles section, to read as follows:

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9D004 Other ‘‘software’’, as follows (see License Requirement Notes: See § 743.1 of a.10.c. Propelling nozzles; or List of Items Controlled). the EAR for reporting requirements for Note 1: Adjustable flow path geometry and * * * * * exports under License Exceptions. associated control systems in 9E003.a.10 do * * * * * not include inlet guide vanes, variable pitch List of Items Controlled fans, variable stators or bleed valves for Unit: *** I 40. In Supplement No. 1 to Part 774 compressors. Related Controls: *** (the Commerce Control List), Category Note 2: 9E003.a.10 does not control Related Definitions: *** 9—Propulsion Systems, Space Vehicles ‘‘development’’ or ‘‘production’’ Items: and Related Equipment, Export Control ‘‘technology’’ for adjustable flow path a. 2D or 3D viscous ‘‘software’’ validated Classification Number (ECCN) 9E003 is geometry for reverse thrust. with wind tunnel or flight test data required amended by revising the items a.11. Hollow fan blades; for detailed engine flow modelling; paragraph of the List of Items Controlled b. ‘‘Technology’’ ‘‘required’’ for the b. ‘‘Software’’ for testing aero gas turbine section, to read as follows: ‘‘development’’ or ‘‘production’’ of any of the engines, assemblies or components, specially following: designed to collect, reduce and analyze data 9E003 Other ‘‘technology’’, as follows b.1. Wind tunnel aero-models equipped in real time, and capable of feedback control, (see List of Items Controlled). with non-intrusive sensors capable of including the dynamic adjustment of test * * * * * transmitting data from the sensors to the data acquisition system; or articles or test conditions, as the test is in List of Items Controlled progress; b.2. ‘‘Composite’’ propeller blades or c. ‘‘Software’’ specially designed to control Unit: *** propfans capable of absorbing more than directional solidification or single crystal Related Controls: *** 2,000 kW at flight speeds exceeding Mach Related Definitions: *** casting; 0.55; Items: d. ‘‘Software’’ in ‘‘source code’’, ‘‘object c. ‘‘Technology’’ ‘‘required’’ for the a. ‘‘Technology’’ ‘‘required’’ for the ‘‘development’’ or ‘‘production’’ of gas code’’ or machine code required for the ‘‘use’’ ‘‘development’’, ‘‘production’’ of any of the turbine engine components using ‘‘laser’’, of active compensating systems for rotor following gas turbine engine components or water jet, ECM or EDM hole drilling blade tip clearance control. systems: processes to produce holes having any of the Note: 9D004.d does not control ‘‘software’’ a.1. Gas turbine blades, vanes or tip following sets of characteristics: embedded in uncontrolled equipment or shrouds made from directionally solidified c.1. All of the following: required for maintenance activities (DS) or single crystal (SC) alloys having (in c.1.a. Depths more than four times their associated with the calibration or repair or the 001 Miller Index Direction) a stress- diameter; updates to the active compensating clearance rupture life exceeding 400 hours at 1,273 K c.1.b. Diameters less than 0.76 mm; and control system. (1,000 °C) at a stress of 200 MPa, based on c.1.c. Incidence angles equal to or less than ° e. ‘‘Software’’ specially designed or the average property values; 25 ; or a.2. Multiple domed combustors operating modified for the ‘‘use’’ of ‘‘UAVs’’ and c.2. All of the following: at average burner outlet temperatures associated systems, equipment and c.2.a. Depths more than five times their exceeding 1,813 K (1,540 °C) or combustors components controlled by 9A012. diameter; incorporating thermally decoupled c.2.b. Diameters less than 0.4 mm; and combustion liners, non-metallic liners or ° I c.2.c. Incidence angles of more than 25 ; 39. In Supplement No. 1 to Part 774 non-metallic shells; (the Commerce Control List), Category Technical Note: For the purposes of a.3. Components manufactured from any of 9E003.c, incidence angle is measured from a 9—Propulsion Systems, Space Vehicles the following: plane tangential to the airfoil surface at the and Related Equipment, Export Control a.3.a. Organic ‘‘composite’’ materials ° point where the hole axis enters the airfoil Classification Number (ECCN) 9E001 is designed to operate above 588 K (315 C); surface. amended by revising the Heading and a.3.b. Metal ‘‘matrix’’ ‘‘composite’’, ceramic ‘‘matrix’’, intermetallic or intermetallic d. ‘‘Technology’’ ‘‘required’’ for the the License Requirement section, to read ‘‘development’’ or ‘‘production’’ of helicopter as follows: reinforced materials controlled by 1C007; or a.3.c. ‘‘Composite’’ material controlled by power transfer systems or tilt rotor or tilt 9E001 ‘‘Technology’’ according to the 1C010 and manufactured with resins wing ‘‘aircraft’’ power transfer systems; General Technology Note for the controlled by 1C008. e. ‘‘Technology’’ for the ‘‘development’’ or ‘‘production’’ of reciprocating diesel engine ‘‘development’’ of equipment or ‘‘software’’ a.4. Uncooled turbine blades, vanes, tip- ground vehicle propulsion systems having all controlled by 9A001.c, 9A004 to 9A012, 9B shrouds or other components designed to of the following: (except 9B990 or 9B991), or 9D (except operate at gas path temperatures of 1,323 K e.1. A box volume of 1.2 m3 or less; 9D990 or 9D991). (1,050 °C) or more; a.5. Cooled turbine blades, vanes or tip- e.2. An overall power output of more than License Requirements shrouds, other than those described in 750 kW based on 80/1269/EEC, ISO 2534 or national equivalents; and Reason for Control: NS, MT, AT 9E003.a.1, exposed to gas path temperatures of 1,643 K (1,370 °C) or more; e.3. A power density of more than 700 kW/ m3 of box volume; Control(s) Country chart a.6. Airfoil-to-disk blade combinations using solid state joining; Technical Note: Box volume: the product NS applies to ‘‘technology’’ NS Column 1. a.7. Gas turbine engine components using of three perpendicular dimensions measured for items controlled by ‘‘diffusion bonding’’ ‘‘technology’’ controlled in the following way: 9A001.c, 9A012, 9B001 to by 2E003.b; Length: The length of the crankshaft from 9B010, 9D001 to 9D004 a.8. Damage tolerant gas turbine engine front flange to flywheel face; for NS reasons. rotating components using powder Width: The widest of the following: MT applies to ‘‘technology’’ MT Column 1. metallurgy materials controlled by 1C002.b; a. The outside dimension from valve cover for items controlled by a.9. Full authority digital electronic engine to valve cover; 9B001, 9B002, 9B003, control (FADEC) for gas turbine and b. The dimensions of the outside edges of 9B004, 9B005, 9B007, combined cycle engines and their related the cylinder heads; or 9B105, 9B106, 9B116, diagnostic components, sensors and specially c. The diameter of the flywheel housing. 9B117, 9D001, 9D002, designed components; Height: The largest of the following: 9D003, and 9D004 for MT a.10. Adjustable flow path geometry and a. The dimension of the crankshaft center- reasons. associated control systems for: line to the top plane of the valve cover (or AT applies to entire entry .... AT Column 1. a.10.a. Gas generator turbines; cylinder head) plus twice the stroke; or a.10.b. Fan or power turbines; b. The diameter of the flywheel housing.

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f. ‘‘Technology’’ ‘‘required’’ for the f.2.b. A mass flow in the range from 30 to output diesel engines for solid, gas phase or ‘‘production’’ of specially designed 130 kg per minute; and liquid film (or combinations thereof) cylinder components, as follows, for high output f.2.c. Variable flow area capability within wall lubrication, permitting operation to diesel engines: the compressor or turbine sections; temperatures exceeding 723 K (450 °C), f.1. ‘‘Technology’’ ‘‘required’’ for the f.3. ‘‘Technology’’ ‘‘required’’ for the measured on the cylinder wall at the top ‘‘production’’ of engine systems having all of ‘‘production’’ of fuel injection systems with the following components employing a specially designed multifuel (e.g., diesel or limit of travel of the top ring of the piston. ceramics materials controlled by 1C007: jet fuel) capability covering a viscosity range h. ‘‘Technology’’ not otherwise controlled f.1.a Cylinder liners; from diesel fuel (2.5 cSt at 310.8 K (37.8 °C)) in 9E003.a.1 through a.10 and currently used f.1.b. Pistons; down to gasoline fuel (0.5 cSt at 310.8 K in the ‘‘development’’, ‘‘production’’, or f.1.c. Cylinder heads; and (37.8 °C)), having both of the following: overhaul of hot section parts and components f.1.d. One or more other components f.3.a. Injection amount in excess of 230 of civil derivatives of military engines (including exhaust ports, turbochargers, mm3 per injection per cylinder; and controlled on the U.S. Munitions List. valve guides, valve assemblies or insulated f.3.b. Specially designed electronic control fuel injectors); features for switching governor Dated: August 28, 2006. f.2. ‘‘Technology’’ ‘‘required’’ for the characteristics automatically depending on Matthew S. Borman, ‘‘production’’ of turbocharger systems, with fuel property to provide the same torque Deputy Assistant Secretary for Export single-stage compressors having all of the characteristics by using the appropriate Administration. following: sensors; f.2.a. Operating at pressure ratios of 4:1 or g. ‘‘Technology’’ ‘‘required’’ for the [FR Doc. 06–7385 Filed 9–6–06 8:45 am] higher; development’’ or ‘‘production’’ of high BILLING CODE 3510–33–P

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Reader Aids Federal Register Vol. 71, No. 173 Thursday, September 7, 2006

CUSTOMER SERVICE AND INFORMATION CFR PARTS AFFECTED DURING SEPTEMBER

Federal Register/Code of Federal Regulations At the end of each month, the Office of the Federal Register General Information, indexes and other finding 202–741–6000 publishes separately a List of CFR Sections Affected (LSA), which aids lists parts and sections affected by documents published since Laws 741–6000 the revision date of each title. 52421, 52423 3 CFR Presidential Documents 71 ...... 51993, 52426, 52740, Executive orders and proclamations 741–6000 Proclamations: 52741 The United States Government Manual 741–6000 7463 (See Notice of 91...... 52250, 52287 September 5, Other Services 121...... 52287 2006) ...... 52733 125...... 52287 Electronic and on-line services (voice) 741–6020 8044...... 52281 135...... 52287 Privacy Act Compilation 741–6064 8045...... 52283 Proposed Rules: Public Laws Update Service (numbers, dates, etc.) 741–6043 Executive Orders: 25...... 52755 TTY for the deaf-and-hard-of-hearing 741–6086 13411...... 52729 39...... 52300 Administrative Orders: 71...... 52502 Notices: ELECTRONIC RESEARCH 91...... 52382 Notice of September 5, 121...... 52382 World Wide Web 2006 ...... 52733 125...... 52382 Presidential Full text of the daily Federal Register, CFR and other publications Determinations: 15 CFR is located at: http://www.gpoaccess.gov/nara/index.html No. 2006-19 of August 736...... 52426 Federal Register information and research tools, including Public 17, 2006 ...... 51973 740...... 52956 Inspection List, indexes, and links to GPO Access are located at: No. 2006-21 of August 743...... 52956 http://www.archives. gov/federallregister 21, 2006 ...... 51975 772...... 52956 774...... 52428, 52956 E-mail 6 CFR Proposed Rules: FEDREGTOC-L (Federal Register Table of Contents LISTSERV) is 29...... 52262 922...... 52757, 52758 an open e-mail service that provides subscribers with a digital form of the Federal Register Table of Contents. The digital form 7 CFR 16 CFR of the Federal Register Table of Contents includes HTML and 6...... 51977 Proposed Rules: PDF links to the full text of each document. 800...... 52403 1307...... 52758 To join or leave, go to http://listserv.access.gpo.gov and select 810...... 52403 1410...... 52758 Online mailing list archives, FEDREGTOC-L, Join or leave the list 916...... 51982 1500...... 52758 (or change settings); then follow the instructions. 917...... 51982 1515...... 52758 983...... 51985 PENS (Public Law Electronic Notification Service) is an e-mail 985...... 52735 17 CFR service that notifies subscribers of recently enacted laws. 1219...... 52285 Proposed Rules: To subscribe, go to http://listserv.gsa.gov/archives/publaws-l.html 1437...... 52738 4...... 52211 and select Join or leave the list (or change settings); then follow Proposed Rules: the instructions. 246...... 52209 19 CFR FEDREGTOC-L and PENS are mailing lists only. We cannot 457...... 52013 101...... 52288 1000...... 52502 respond to specific inquiries. 21 CFR 1001...... 52502 Reference questions. Send questions and comments about the 1005...... 52502 520...... 51995 Federal Register system to: [email protected] 1006...... 52502 522...... 51995 The Federal Register staff cannot interpret specific documents or 1007...... 52502 558...... 51995, 52429 regulations. 1030...... 52502 1308...... 51996 1032...... 52502 Proposed Rules: FEDERAL REGISTER PAGES AND DATE, SEPTEMBER 1033...... 52502 1306...... 52724 1124...... 52502 26 CFR 51973–52284...... 1 1126...... 52502 52285–52402...... 5 1131...... 52502 1...... 52430 52403–52732...... 6 301...... 52444 11 CFR 602...... 52430 52733–52980...... 7 Proposed Rules: Proposed Rules: 100...... 52295 1...... 52876 13 CFR 28 CFR Proposed Rules: 94...... 52446 120...... 52296 Proposed Rules: 20...... 52302 14 CFR 13...... 52406 29 CFR 21...... 52250 2700...... 52211 23...... 52407 39 ...... 51988, 51990, 52410, 32 CFR 52413, 52415, 52416, 52418, 706...... 52741

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2002...... 52743 33 CFR 117...... 52744 38 CFR 3 ...... 52290, 52455, 52744 4...... 52457 40 CFR 52 ...... 52460, 52464, 52467, 52656, 52659, 52664, 52670, 52698, 52703 180 ...... 51998, 52003, 52483, 52487 710...... 52494 Proposed Rules: 52...... 52504 63...... 52624 264...... 52624 266...... 52624 41 CFR 102–76...... 52498 42 CFR Proposed Rules: 422...... 52014 43 CFR 4100...... 52012 47 CFR 1...... 52747 90...... 52747, 52750 95...... 52747 49 CFR 1...... 52751 544...... 52291 Proposed Rules: 171...... 52017 172...... 52017 173...... 52017 174...... 52017 178...... 52017 195...... 52504 579...... 52040 50 CFR 404...... 52874 648...... 52499 679 ...... 52500, 52501, 52754 Proposed Rules: 16...... 52305 648...... 52519, 52521 660...... 52051

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REMINDERS Fireworks safety standards; Significant new uses— The items in this list were COMMENTS DUE NEXT comments due by 9-11- Mercury; comments due editorially compiled as an aid WEEK 06; published 7-12-06 [FR by 9-11-06; published to Federal Register users. E6-10881] 7-11-06 [FR E6-10858] Inclusion or exclusion from AGRICULTURE DEFENSE DEPARTMENT FEDERAL DEPOSIT this list has no legal DEPARTMENT Privacy Act; implementation; INSURANCE CORPORATION significance. Agricultural Marketing comments due by 9-12-06; Membership advertisement: Service published 7-14-06 [FR 06- New insurance logo to be Grapes grown in southeastern 06011] used by all insured RULES GOING INTO California and imported ENVIRONMENTAL depository institutions, EFFECT SEPTEMBER 7, table grapes; comments due PROTECTION AGENCY etc.; comments due by 9- 2006 by 9-11-06; published 7-11- Air quality implementation 15-06; published 7-17-06 06 [FR E6-10769] plans; approval and [FR 06-06261] National Organic Program: promulgation; various FEDERAL RESERVE COMMERCE DEPARTMENT Livestock; National List of States: SYSTEM Industry and Security Allowed and Prohibited Michigan; comments due by Bureau Substances; amendments; Depository institutions; reserve 9-14-06; published 8-15- requirements (Regulation D): Export administration comments due by 9-15- 06 [FR E6-13345] regulations: 06; published 7-17-06 [FR Bankers’ banks; exemption 06-06103] Montana; comments due by from reserve Commerce Control List— 9-11-06; published 7-12- requirements; criteria; AGRICULTURE 06 [FR 06-06096] Wassenaar Arrangement DEPARTMENT interpretation; comments South Dakota; comments Plenary Agreement Federal Crop Insurance due by 9-13-06; published due by 9-13-06; published implementation; Corporation 8-14-06 [FR E6-13235] Categories 1-9 8-14-06 [FR E6-13165] Crop insurance regulations: HEALTH AND HUMAN revisions; reporting Confidential business SERVICES DEPARTMENT requirements, Common crop insurance information and data Children and Families definitions, and new or regulations; basic provisions, and various transfer; comments due by Administration expanded export 9-11-06; published 9-5-06 crop insurance provisions; Foster Care Independence Act controls; published 9-7- [FR E6-14643] amendments; comments of 1999; implementation: 06 Meetings: due by 9-12-06; published Chafee Foster Care FEDERAL 7-14-06 [FR 06-05962] FIFRA Scientific Advisory Independence Program; COMMUNICATIONS AGRICULTURE Panel; comments due by National Youth in COMMISSION DEPARTMENT 9-13-06; published 9-1-06 Transition Database; Radio services, special: Food and Nutrition Service [FR E6-14537] comments due by 9-12- Private land mobile radio Child nutrition programs: Pesticide programs: 06; published 7-14-06 [FR services— Uniform Federal Assistance Plant incorporated 06-06005] 800 MHz band; public regulations; technical protectorants; procedures HEALTH AND HUMAN safety interference amendments; comments and requirements— SERVICES DEPARTMENT proceeding; published due by 9-11-06; published Bacillus thuringiensis Food and Drug 9-7-06 7-13-06 [FR 06-06185] Cry1A.105 protein and Administration COMMERCE DEPARTMENT genetic material NATIONAL ARCHIVES AND Food for human consumption: Foreign-Trade Zones Board necessary for RECORDS ADMINISTRATION production in corn; Infant formula; current good Applications, hearings, manufacturing practice, Records management: determinations, etc.: tolerance requirement exemption; comments quality control procedures, Systematic declassification Georgia etc.; comments due by 9- review of foreign Eastman Kodak Co.; x-ray due by 9-15-06; published 7-17-06 [FR 15-06; published 8-1-06 government information; film, color paper, digital [FR E6-12268] general guidelines; media, inkjet paper, E6-11245] published 9-7-06 entertainment imaging, Bacillus thuringiensis HEALTH AND HUMAN SERVICES DEPARTMENT TRANSPORTATION and health imaging; Cry2Ab2 protein and National Institutes of Health DEPARTMENT Open for comments genetic material until further notice; necessary for Privacy Act; implementation; Organization, functions, and published 7-25-06 [FR production in corn; comments due by 9-13-06; authority delegations: E6-11873] tolerance requirement published 8-14-06 [FR E6- Research and Innovative COMMERCE DEPARTMENT exemption; comments 13211] due by 9-15-06; Technology Administrator, National Oceanic and HOMELAND SECURITY published 7-17-06 [FR Federal Highway Atmospheric Administration DEPARTMENT Administrator, Federal E6-11249] Fishery conservation and Railroad Administrator, et Coast Guard management: Pesticides; tolerances in food, al.; published 9-7-06 animal feeds, and raw Regattas and marine parades: Magnuson-Stevens Act Patapsco River, Inner TRANSPORTATION provisions— agricultural commodities: DEPARTMENT Bentazon, etc.; comments Harbor, Baltimore, MD; Bering Sea and Aleutian marine events; comments Federal Aviation Islands Catcher due by 9-12-06; published 7-14-06 [FR E6-11016] due by 9-15-06; published Administration Processor Capacity 8-16-06 [FR E6-13494] Superfund program: Airworthiness directives: Reduction Program; comments due by 9-11- National oil and hazardous HOMELAND SECURITY Bombardier; published 8-23- 06; published 8-11-06 substances contingency DEPARTMENT 06 [FR 06-06844] plan priorities list; Federal Emergency McDonnell Douglas; CONSUMER PRODUCT comments due by 9-13- Management Agency published 8-3-06 SAFETY COMMISSION 06; published 8-14-06 [FR Disaster assistance: Rolls-Royce Corp.; Federal Hazardous E6-13298] Public assistance eligibility; published 8-3-06 Substances Act: Toxic substances: comments due by 9-12-

VerDate Aug 31 2005 21:59 Sep 06, 2006 Jkt 208001 PO 00000 Frm 00003 Fmt 4712 Sfmt 4711 E:\FR\FM\07SECU.LOC 07SECU sroberts on PROD1PC70 with RULES iv Federal Register / Vol. 71, No. 173 / Thursday, September 7, 2006 / Reader Aids

06; published 7-14-06 [FR by 9-11-06; published 6- session of Congress which Milton Post Office’’. (Aug. 17, E6-11128] 13-06 [FR 06-05319] have become Federal laws. It 2006; 120 Stat. 776) Airworthiness directives: may be used in conjunction HOUSING AND URBAN H.R. 5107/P.L. 109–277 DEVELOPMENT Boeing; comments due by with ‘‘PLUS’’ (Public Laws DEPARTMENT 9-15-06; published 8-1-06 Update Service) on 202–741– To designate the facility of the Manufactured home installation [FR E6-12302] 6043. This list is also United States Postal Service program; comment period Glasflugel; comments due available online at http:// located at 1400 West Jordan extension; comments due by by 9-11-06; published 8- www.archives.gov/federal- Street in Pensacola, Florida, 9-14-06; published 8-16-06 11-06 [FR E6-13134] register/laws.html. as the ‘‘Earl D. Hutto Post Office Building’’. (Aug. 17, [FR E6-13382] Rolls-Royce Deutschland Ltd The text of laws is not 2006; 120 Stat. 777) Manufactured home installation & Co KG; comments due published in the Federal program; establishment; by 9-11-06; published 7- Register but may be ordered H.R. 5169/P.L. 109–278 comments due by 9-14-06; 11-06 [FR E6-10772] in ‘‘slip law’’ (individual To designate the facility of the published 6-14-06 [FR 06- Rolls-Royce plc; comments pamphlet) form from the United States Postal Service 05389] due by 9-11-06; published Superintendent of Documents, located at 1310 Highway 64 INTERIOR DEPARTMENT 7-11-06 [FR E6-10771] U.S. Government Printing NW. in Ramsey, Indiana, as Office, Washington, DC 20402 Fish and Wildlife Service Schempp-Hirth GmbH & Co. the ‘‘Wilfred Edward ‘Cousin (phone, 202–512–1808). The Endangered and threatened KG; comments due by 9- Willie’ Sieg, Sr. Post Office’’. text will also be made species: 11-06; published 8-10-06 (Aug. 17, 2006; 120 Stat. 778) Critical habitat [FR E6-13017] available on the Internet from designations— Class D airspace; comments GPO Access at http:// H.R. 5540/P.L. 109–279 www.gpoaccess.gov/plaws/ Peck’s Cave amphipod due by 9-15-06; published index.html. Some laws may To designate the facility of the and Comal Springs 8-11-06 [FR 06-06861] not yet be available. United States Postal Service dryopid beetle and riffle Class E airspace; comments located at 217 Southeast 2nd beetle; comments due due by 9-15-06; published H.R. 4646/P.L. 109–273 Street in Dimmitt, Texas, as 8-11-06 [FR 06-06858] by 9-15-06; published To designate the facility of the the ‘‘Sergeant Jacob Dan 7-17-06 [FR 06-06182] TREASURY DEPARTMENT United States Postal Service Dones Post Office’’. (Aug. 17, NUCLEAR REGULATORY Alcohol and Tobacco Tax located at 7320 Reseda 2006; 120 Stat. 779) COMMISSION and Trade Bureau Boulevard in Reseda, H.R. 4/P.L. 109–280 Byproduct material; expanded Alcohol; viticultural area California, as the ‘‘Coach John definition; comments due by designations: Wooden Post Office Building’’. Pension Protection Act of 9-11-06; published 7-28-06 Alexander Valley, Sonoma (Aug. 17, 2006; 120 Stat. 773) 2006 (Aug. 17, 2006; 120 Stat. 780) [FR 06-06477] County, CA; comments H.R. 4811/P.L. 109–274 SECURITIES AND due by 9-15-06; published To designate the facility of the Last List August 17, 2006 EXCHANGE COMMISSION 7-17-06 [FR E6-11080] United States Postal Service Financial reporting matters: Snake River Valley, ID and located at 215 West Industrial Periodic reports of non- OR; comments due by 9- Park Road in Harrison, accelerated filers and 15-06; published 7-17-06 Arkansas, as the ‘‘John Paul Public Laws Electronic newly public companies; [FR E6-11078] Hammerschmidt Post Office Notification Service comments due by 9-14- VETERANS AFFAIRS Building’’. (Aug. 17, 2006; 120 (PENS) 06; published 8-15-06 [FR DEPARTMENT Stat. 774) E6-13277] Adjudication; pensions, H.R. 4962/P.L. 109–275 STATE DEPARTMENT compensation, dependency, To designate the facility of the PENS is a free electronic mail Passports: etc.: United States Postal Service notification service of newly Surcharge on applicable Home school programs; located at 100 Pitcher Street enacted public laws. To fees; comments due by 9- dependent entitlement to in Utica, New York, as the subscribe, go to http:// 13-06; published 8-14-06 monetary benefits; ‘‘Captain George A. Wood listserv.gsa.gov/archives/ [FR E6-13300] definitions; comments due Post Office Building’’. (Aug. publaws-l.html TRANSPORTATION by 9-11-06; published 7- 17, 2006; 120 Stat. 775) 13-06 [FR E6-10969] Note: This service is strictly DEPARTMENT H.R. 5104/P.L. 109–276 for E-mail notification of new Federal Aviation To designate the facility of the laws. The text of laws is not Administration LIST OF PUBLIC LAWS United States Postal Service available through this service. Airspace: located at 1750 16th Street PENS cannot respond to Objects affecting navigable This is a continuing list of South in St. Petersburg, specific inquiries sent to this airspace; comments due public bills from the current Florida, as the ‘‘Morris W. address.

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