[Federal Register Volume 84, Number 249 (Monday, December 30, 2019)]
[Rules and Regulations]
[Pages 71788-71792]
[FR Doc No: 2019-28069]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2019-0481; Product Identifier 2019-NM-058-AD; Amendment
39-21002; AD 2019-24-13]
RIN 2120-AA64

Airworthiness Directives; Airbus SAS Airplanes

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Final rule.

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SUMMARY: The FAA is adopting a new airworthiness directive (AD) for
certain Airbus SAS Model A318 series airplanes, Model A319-111, -112, -
113, -114, -115, -131, -132, and -133 airplanes; Model A320-211, -212,
-214, -216, -231, -232, and -233 airplanes; and Model A321-111, -112, -
131, -211, -212, -213, -231, and -232 airplanes. This AD was prompted
by a report that during a maintenance check, cracks were found in a
stiffener of a certain lateral window frame. This AD requires
repetitive high frequency eddy current (HFEC) inspections for cracking
of a stiffener of a certain lateral window frame, and applicable
related investigative and corrective actions, as specified in a
European Union Aviation Safety Agency (EASA) AD, which is incorporated
by reference. The FAA is issuing this AD to address the unsafe
condition on these products.

DATES: This AD is effective February 3, 2020.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of February 3,
2020.

ADDRESSES: For the material incorporated by reference (IBR) in this AD,
contact the EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany;
telephone +49 221 89990 1000; email<EMAIL_ADDRESS>internet
www.easa.europa.eu. You may find this IBR material on the EASA website
at https://ad.easa.europa.eu. You may view this IBR material at the
FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA.
For information on the availability of this material at the FAA, call
206-231-3195. It is also available in the AD docket on the internet at
https://www.regulations.gov by searching for and locating Docket No.
FAA-2019-0481.

Examining the AD Docket

    You may examine the AD docket on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2019-
0481; or in person at Docket Operations between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays. The AD docket contains
this final rule, the regulatory evaluation, any comments received, and
other information. The address for Docket Operations is U.S. Department
of Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Sanjay Ralhan, Aerospace Engineer,
International Section, Transport Standards Branch, FAA, 2200 South
216th St., Des Moines, WA 98198; telephone and fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Discussion

    The EASA, which is the Technical Agent for the Member States of the
European Union, has issued EASA AD 2019-0067R1, dated September 11,
2019 (``EASA AD 2019-0067R1'') (also referred to as the Mandatory
Continuing Airworthiness Information, or ``the MCAI''), to correct an
unsafe condition for certain Airbus SAS Model A318 series airplanes,
Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes;
Model A320-211, -212, -214, -215, -216, -231, -232, and -233 airplanes;
and Model A321-111, -112, -131, -211, -212, -213, -231, and -232
airplanes. Model A320-215 airplanes are not on the U.S. Register; this
AD therefore does not include those airplanes in the applicability.
    The FAA issued a notice of proposed rulemaking (NPRM) to amend 14
CFR part 39 by adding an AD that would apply to all Airbus SAS Model
A318 series airplanes, Model A319-111, -112, -113, -114, -115, -131, -
132, and -133 airplanes; Model A320-211, -212, -214, -216, -231, -232,
and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, -
231, and -232 airplanes. The NPRM published in the Federal Register on
June 24, 2019 (84 FR 29426). The NPRM was prompted by a report that
during a maintenance check, cracks were found in a stiffener of a
certain lateral window frame. The NPRM proposed to require repetitive
HFEC inspections for cracking of a stiffener of a certain lateral
window frame, and applicable related investigative and corrective
actions.
    The FAA is issuing this AD to address cracking of the horizontal
upper

stiffener of the lateral window frame, which could reduce the
structural integrity of the fuselage. See the MCAI for additional
background information.

Comments

    The FAA gave the public the opportunity to participate in
developing this final rule. The following presents the comments
received on the NPRM and the FAA's response to each comment.

Request To Revise the Applicability

    Emirates Airlines (EAD) requested that the FAA exclude Model A319-
115 VIP airplanes from the applicability. EAD commented that the
proposed inspection requirements are related to airworthiness
limitations (ALI) task 531105-02-1 and ALI task 531105-01-1. EAD also
commented that these ALI tasks are not applicable to Model A319-115 VIP
airplanes, and after reporting this to EASA, EASA confirmed that this
is correct. EAD stated that the EASA AD has been revised to remove
Model A319-115 VIP airplanes from the applicability.
    The FAA agrees with the commenter's request. This AD now references
EASA AD 2019-0067R1. The applicability in paragraph (c) of this AD is
now limited to the airplanes identified in AD 2019-0067R1, which
excludes certain Model A318 and A319 airplanes, including those
identified by EAD. It has been determined that certain Model A318 and
A319 airplane configurations could be removed from the applicability of
this AD as the compliance time for the initial inspection is beyond the
maintenance program publication trigger for those configurations.

Request To Clarify the Applicability

    Delta Airlines (DAL) asked whether all manufacturer serial numbers
are affected regardless of the applicability specified in EASA AD 2019-
0067. DAL stated that in ``Required Action(s) and Compliance Time(s)''
of EASA AD 2019-0067, operators are instructed to accomplish a special
detailed inspection of each affected part ``in accordance with'' the
instructions of the applicable service information. DAL commented that
the referenced service information is missing several airplane
manufacturer serial numbers.
    The FAA agrees to clarify. If there is a discrepancy between the
applicability of this AD and the effectivity of the service
information, then this AD takes precedence. As noted previously, the
applicability of this AD is now limited to the airplanes identified in
EASA AD 2019-0067R1. This AD has not been revised regarding this issue.

First Request To Revise the Compliance Time for Reporting

    American Airlines (AAL) and United Airlines (UAL) requested that
the compliance time for reporting be revised to match that of EASA AD
2019-0067, which is 90 days instead of 30 days as specified in the
proposed AD. AAL stated that the requirement to submit inspection
results within 30 days would put an undue burden on its operations.
    The FAA agrees with the commenters' request. The FAA's standard
compliance time for an AD reporting requirement is 30 days; however,
the FAA has determined that 90 days is acceptable for this AD.
Therefore, the compliance times in paragraphs (h)(3)(i) and (ii) of
this AD have been revised to 90 days, which matches the compliance time
for reporting in EASA AD 2019-0067R1.

Second Request To Revise the Compliance Time for Reporting

    DAL requested that the NPRM allow up to 30 days following the
return-to-service date of the visit instead of 30 days from the finding
to comply with the reporting requirement. DAL stated that while the
visit is ongoing, all of the paperwork remains with the airplane, so
while engineering may be aware of the finding, it may not yet have
access to the details of the finding or repair until after the visit is
closed and the files are sent to the central repository.
    The FAA disagrees with the commenter's request. Each operator has a
unique AD management program, which comprises methods for demonstrating
compliance with the AD in accordance with the applicable operational
regulations; therefore, the FAA cannot prescribe or modify an AD based
on an individual operator's unique methods of preparing the airplane
for compliance. As noted previously, the compliance time for reporting
has been changed from 30 to 90 days in this AD. In addition, operators
may request approval of an alternative method of compliance (AMOC)
using the procedures in paragraph (i)(1) of this AD to request a
different compliance time. This AD has not been revised regarding this
issue.

Request Regarding No Findings

    DAL requested that inspections with no findings not be required to
be reported.
    The FAA disagrees with the commenter's request. Reporting all
findings from the inspections is necessary to assess the extent of the
problem in the affected fleet and to develop any additional corrective
action that may be necessary. This AD has not been revised regarding
this issue.

Request To Include Methods for Reporting and OMB Control Number

    DAL requested that the FAA specifically include a ``Reporting
Requirements'' paragraph in the proposed AD and provide the largest
number of methods for submitting the report (e.g., email, fax, letter,
Airbus Tech Request, service bulletin reporting on the Airbus website).
DAL stated that the reporting requirement paragraph should also include
the ``AD Manual'' identifying the ``what, how, and when,'' and that the
``OMB 2120-0056 approved'' statement should be included in the
regulatory text of the proposed AD, instead of the preamble.
    The FAA would like to clarify that the specific reporting
requirements are specified in paragraph (h)(3) of this AD and paragraph
(7) of EASA AD 2019-0067R1. For clarification, this AD allows the
reporting methods that are specified in the service information
identified in EASA AD 2019-0067R1, including the methods mentioned by
DAL. When reporting is required, the FAA currently includes the OMB
Control Number in both the preamble and regulatory text of an AD. OMB
Control Number 2120-0056 is included in paragraph (i)(4) of this AD.
This AD has not been revised regarding this issue.

Request To Revise Certain Language in the Proposed AD

    DAL requested that the language in the proposed AD reflect the
corrosion inhibiting compound (CIC) control in the corrosion prevention
control program (CPCP) with a statement such as ``Reapplication of CICs
may be controlled by the operator's CPCP program instead of this SB''
or ``Reapplication of CICs is not an RC [Required for Compliance]
step.'' DAL stated that this proposed language could be added to the
``Requirements'' paragraph, the ``Exceptions to EASA AD 2019-0067''
paragraph, or the ``Other FAA AD Provisions'' paragraph in the proposed
AD.
    DAL commented that the service information states that all steps in
the ``Procedure and Test'' sections are RC. DAL added that some of
those procedural steps include re-applying CICs. DAL also stated that
the referenced service information is not related to corrosion, and
these steps might be part of the modification but should not be RC. DAL
commented that since the choice of CICs is under the operators' control
within their CPCP program, operators may have to request

approval of an AMOC to use their standard CIC rather than what is
specified in the service information. DAL also commented that an
operator may have to use an old or out-of-date CIC because it is listed
in older service information.
    The FAA disagrees with the commenter's request. The EASA and Airbus
approved the applicable protective finish as a required step to
mitigate the risk addressed in this AD, and the FAA agrees that this
step should be required. DAL has not proposed an alternative CIC or
justified the need for an alternative CIC to complete the protective
finish step. Each operator has its own unique CPCP, which may not
contain information relative to mitigating the risk addressed in this
AD. Operators may request approval of an AMOC using the procedures in
paragraph (i)(1) of this AD for using an alternative CIC. This AD has
not been revised regarding this issue.

Request To Work on the Airplane Under Certain Circumstances

    DAL requested that the FAA revise the proposed AD to allow work on
the airplane while it is on jacks, and to define when the operator can
or cannot move it (the jacks). DAL stated that since the accomplishment
of the proposed AD must be ``in accordance with'' the service
information, ``basic airplane configuration'' will result in
accomplishing the inspections while the airplane is not on jacks. DAL
also stated that it has many visits requiring the airplane to be jacked
and routinely accomplishes multiple tasks simultaneously during service
visits. DAL commented that requiring the service information to be
accomplished during that portion of the visit with the weight on wheels
limits the ability for the operator to perform the work.
    The FAA disagrees with the commenter's request. The FAA cannot
prescribe or modify an AD based on an individual operator's unique
methods of preparing the airplane for compliance. The FAA encourages
DAL to work with the FAA certificate management office in establishing
methods needed to prepare the airplane for AD-related work using either
Airbus service information, or equivalent, in accordance with DAL's
maintenance or inspection program. If necessary, operators may request
approval of an AMOC using the procedures specified in paragraph (i)(1)
of this AD. The AD has not been changed in this regard.

Conclusion

    The FAA reviewed the relevant data, considered the comments
received, and determined that air safety and the public interest
require adopting this final rule with the changes described previously
and minor editorial changes. The FAA has determined that these minor
changes:
     Are consistent with the intent that was proposed in the
NPRM for addressing the unsafe condition; and
     Do not add any additional burden upon the public than was
already proposed in the NPRM.
    The FAA also determined that these changes will not increase the
economic burden on any operator or increase the scope of this final
rule.

Related IBR Material Under 1 CFR Part 51

    EASA AD 2019-0067R1 describes procedures for repetitive HFEC
inspections of the horizontal upper stiffener of the lateral window
frame on the right-hand (RH) and left-hand (LH) sides for any cracking,
and applicable related investigative and corrective actions. This
material is reasonably available because the interested parties have
access to it through their normal course of business or by the means
identified in the ADDRESSES section.

Costs of Compliance

    The FAA estimates that this AD affects 1,291 airplanes of U.S.
registry. The FAA estimates the following costs to comply with this AD:

                                      Estimated Costs for Required Actions
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                                                                                Cost per       Cost on U.S.
                          Labor cost                              Parts cost        product         operators
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9 work-hours x $85 per hour = $765...........................              $0             $765         $987,615
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    The FAA estimates the following costs to do any necessary on-
condition actions that would be required based on the results of any
required actions. The FAA has no way of determining the number of
aircraft that might need these on-condition actions:

                Estimated Costs of On-Condition Actions *
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           Labor cost              Parts cost        Cost per product
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Up to 13 work-hours x $85 per                $0  Up to $1,105.
 hour = Up to $1,105.
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* Table does not include estimated costs for reporting and on-condition
  repairs. The FAA has received no definitive data that would enable the
  agency to provide cost estimates for the on-condition repairs
  specified in this AD.

    The FAA estimates that it would take about 1 work-hour per product
to comply with the on-condition reporting requirement in this AD. The
average labor rate is $85 per hour. Based on these figures, the FAA
estimates the cost of reporting the inspection results on U.S.
operators to be $85 per product.

Paperwork Reduction Act

    A federal agency may not conduct or sponsor, and a person is not
required to respond to, nor shall a person be subject to penalty for
failure to comply with a collection of information subject to the
requirements of the Paperwork Reduction Act unless that collection of
information displays a current valid OMB control number. The control
number for the collection of information required by this AD is 2120-
0056. The paperwork cost associated with this AD has been detailed in
the Costs of Compliance section of this document and includes time for
reviewing instructions, as well as completing and reviewing the
collection of information. Therefore, all reporting associated with
this AD is mandatory. Send comments regarding this burden estimate or
any

other aspect of this collection of information, including suggestions
for reducing this burden to Information Collection Clearance Officer,
Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX
76177-1524.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: ``General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.
    This AD is issued in accordance with authority delegated by the
Executive Director, Aircraft Certification Service, as authorized by
FAA Order 8000.51C. In accordance with that order, issuance of ADs is
normally a function of the Compliance and Airworthiness Division, but
during this transition period, the Executive Director has delegated the
authority to issue ADs applicable to transport category airplanes and
associated appliances to the Director of the System Oversight Division.

Regulatory Findings

    This AD will not have federalism implications under Executive Order
13132. This AD will not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Will not affect intrastate aviation in Alaska, and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

Adoption of the Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13   [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

2019-24-13 Airbus SAS: Amendment 39-21002; Docket No. FAA-2019-0481;
Product Identifier 2019-NM-058-AD.

(a) Effective Date

    This AD is effective February 3, 2020.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Airbus SAS airplanes identified in paragraphs
(c)(1) through (4) of this AD, certificated in any category, as
identified in European Union Aviation Safety Agency (EASA) AD 2019-
0067R1, dated September 11, 2019 (``EASA AD 2019-0067R1'').
    (1) Model A318-111, -112, -121, and -122 airplanes.
    (2) Model A319-111, -112, -113, -114, -115, -131, -132, and -133
airplanes.
    (3) Model A320-211, -212, -214, -216, -231, -232, and -233
airplanes.
    (4) Model A321-111, -112, -131, -211, -212, -213, -231, and -232
airplanes.

(d) Subject

    Air Transport Association (ATA) of America Code 53, Fuselage.

(e) Reason

    This AD was prompted by a report that during a maintenance
check, cracks were found in an upper stiffener of the lateral window
frame at the frame 4 upper attachment. The FAA is issuing this AD to
address cracking of the horizontal upper stiffener of the lateral
window frame, which could reduce the structural integrity of the
fuselage.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Requirements

    Except as specified in paragraph (h) of this AD: Comply with all
required actions and compliance times specified in, and in
accordance with, EASA AD 2019-0067R1.

(h) Exceptions to EASA AD 2019-0067R1

    (1) For purposes of determining compliance with the requirements
of this AD: Where EASA AD 2019-0067R1 refers to its effective date,
this AD requires using the effective date of this AD.
    (2) The ``Remarks'' section of EASA AD 2019-0067R1 does not
apply to this AD.
    (3) Paragraph (7) of EASA AD 2019-0067R1 specifies to report
certain inspection results to Airbus. For this AD, report those
inspection results at the applicable time specified in paragraph
(h)(3)(i) or (ii) of this AD.
    (i) If the inspection was done on or after the effective date of
this AD: Submit the report within 90 days after the inspection.
    (ii) If the inspection was done before the effective date of
this AD: Submit the report within 90 days after the effective date
of this AD.

(i) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International Section, Transport Standards Branch, FAA, has the
authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19,
send your request to your principal inspector or local Flight
Standards District Office, as appropriate. If sending information
directly to the International Section, send it to the attention of
the person identified in paragraph (j) of this AD. Information may
be emailed to<EMAIL_ADDRESS>Before using any
approved AMOC, notify your appropriate principal inspector, or
lacking a principal inspector, the manager of the local flight
standards district office/certificate holding district office.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain instructions from a manufacturer, the instructions must be
accomplished using a method approved by the Manager, International
Section, Transport Standards Branch, FAA; or EASA; or Airbus SAS's
EASA Design Organization Approval (DOA). If approved by the DOA, the
approval must include the DOA-authorized signature.
    (3) Required for Compliance (RC): For any service information
referenced in EASA AD 2019-0067R1 that contains RC procedures and
tests: Except as required by (i)(2) of this AD, RC procedures and
tests must be done to comply with this AD; any procedures or tests
that are not identified as RC are recommended. Those procedures and
tests that are not identified as RC may be deviated from using
accepted methods in accordance with the operator's maintenance or
inspection program without obtaining approval of an AMOC, provided
the procedures and tests identified as RC can be done and the
airplane can be put back in an airworthy condition. Any
substitutions or changes to procedures or tests identified as RC
require approval of an AMOC.
    (4) Paperwork Reduction Act Burden Statement: A federal agency
may not conduct or sponsor, and a person is not required to respond
to, nor shall a person be subject to a penalty for failure to comply
with a

collection of information subject to the requirements of the
Paperwork Reduction Act unless that collection of information
displays a current valid OMB Control Number. The OMB Control Number
for this information collection is 2120-0056. Public reporting for
this collection of information is estimated to be approximately 1
hour per response, including the time for reviewing instructions,
completing and reviewing the collection of information. All
responses to this collection of information are mandatory. Send
comments regarding this burden estimate or any other aspect of this
collection of information, including suggestions for reducing this
burden to Information Collection Clearance Officer, Federal Aviation
Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.

(j) Related Information

    For more information about this AD, contact Sanjay Ralhan,
Aerospace Engineer, International Section, Transport Standards
Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone
and fax<PHONE_NUMBER>.

(k) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless this AD specifies otherwise.
    (i) European Union Aviation Safety Agency (EASA) AD 2019-0067R1,
dated September 11, 2019.
    (ii) [Reserved]
    (3) For information about EASA AD 2019-0067R1, contact the EASA,
Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221
89990 6017; email<EMAIL_ADDRESS>internet www.easa.europa.eu.
You may find this EASA AD on the EASA website at https://ad.easa.europa.eu.
    (4) You may view this material at the FAA, Transport Standards
Branch, 2200 South 216th St., Des Moines, WA. For information on the
availability of this material at the FAA, call<PHONE_NUMBER>. This
material may be found in the AD docket on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-
2019-0481.
    (5) You may view this material that is incorporated by reference
at the National Archives and Records Administration (NARA). For
information on the availability of this material at NARA, email
<EMAIL_ADDRESS>or go to: https://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Des Moines, Washington, on December 4, 2019.
Michael Kaszycki,
Acting Director, System Oversight Division, Aircraft Certification
Service.
[FR Doc. 2019-28069 Filed 12-27-19; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 77, Number 118 (Tuesday, June 19, 2012)]
[Rules and Regulations]
[Pages 36390-36393]
[FR Doc No: 2012-14972]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 100

[Docket No. USCG-2012-0403]
RIN 1625-AA08

Special Local Regulations; Annual Bayview Mackinac Race

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

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SUMMARY: The Coast Guard is establishing a permanent Special Local
Regulations to provide for the safe control of vessel movement during
the start of the Annual Bayview Mackinac Race, commonly known as the
Port Huron to Mackinac Sail Race. This action is necessary to provide
for the safety of the general boating public and commercial shipping
during the start of the race.

DATES: This rule is effective July 21, 2012.

ADDRESSES: Comments and material received from the public, as well as
documents mentioned in this preamble, are part of docket [USCG-2012-
0403]. To view documents mentioned in this preamble as being available
in the docket, go to http://www.regulations.gov, type the docket number
in the ``SEARCH'' box, and click ``Search.'' You may visit the Docket
Management Facility, Department of Transportation, West Building Ground
Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590,
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
email or call Frank Jennings, Jr., Auxiliary and Boating Safety Branch,
Ninth Coast Guard District, 1240 East 9th Street, Cleveland, OH, via
email at<EMAIL_ADDRESS>or by phone at:<PHONE_NUMBER>. If
you have questions on viewing or submitting material to the docket,
call Renee V. Wright, Program Manager, Docket Operations, telephone
202-366-9826.

SUPPLEMENTARY INFORMATION:

Table of Acronyms

DHS Department of Homeland Security
FR Federal Register
NPRM Notice of Proposed Rulemaking

A. Regulatory History and Information

    On May 15, 2012, we published a notice of proposed rulemaking
(NPRM) entitled Special Local Regulations; Annual Bayview Mackinac Race
in the Federal Register (77 FR 28538). We received 0 comments on the
proposed rule. No public meeting was requested, and none was held.
    The Coast Guard recognizes that this final rule may be effective
less than 30 days after publication in the Federal Register. Under 5
U.S.C. 553(d)(3), an agency may issue a rule less than 30 days before
its effective date when the agency finds good cause to do so. For this
rule, the Coast Guard finds that good cause exists for publishing this
final rule less than 30 days before its effective date. Delaying the
effective date of this final rule would prevent its enforcement on the
scheduled day of the 2012 race and thus, would preclude the Coast Guard
from protecting spectators and vessels from the associated hazards,
which are discussed herein. The goal of delaying the effective date is
to allow the public time to prepare to comply with the new rule. In
this case, that goal is supported by the NPRM published in rule has
been met by the NPRM published in May of this year. In addition, this
race is a local institution and has been run every year since 1925. The
Coast Guard does not expect any member of the public to be unable to
comply with the rule because they did not have sufficient time to
prepare.

B. Basis and Purpose

    The Port Huron to Mackinac sail race (currently titled the ``Bell's
Beer Bayview Mackinac Race'') is an annual regatta that has taken place
since 1925. The race occurs in July of each year with a starting point
in Port Huron, MI. It is typical for more than 200 sailboats to take
part in this annual event. The Coast Guard's Ninth District Commander
has determined that the high concentration of participants and
spectators at the race's starting point poses extra and unusual hazards
to the boating public. The likely combination of recreational vessels
and sailing vessels gathered together in high concentrations within a
congested area known to have fast currents could lead to serious
boating injuries or fatalities.

C. Discussion of Rule

    In light of the extra and unusual hazards likely to occur at the
starting point of the Port Huron to Mackinac sail race, the Coast Guard
is establishing permanent Special Local Regulations. These Special
Local Regulations will be enforced in July of each year, and the exact
times and dates of enforcement will be published in the Federal
Register annually via a Notice of Enforcement.
    This Special Local Regulation will apply in the starting area of
the race in the vicinity of Port Huron, MI. Specifically, this
regulated area will include all U.S. navigable waters of the Black
River, St. Clair River and lower Lake Huron starting at: Latitude
042[deg]58'47'' N, longitude 082[deg]26'0'' W; then easterly to
latitude 042[deg]58'24'' N, longitude 082[deg]24'47'' W; then northward
along the International Boundary to latitude 043[deg]2'48'' N,
longitude 082[deg]23'47'' W; then westerly to the shoreline at
approximate location latitude 043[deg]2'48'' N, longitude
082[deg]26'48'' W; then southward along the U.S. shoreline to latitude
042[deg]58'54'' N, longitude 082[deg]26'1'' W; then back to the
beginning [DATUM: NAD 83].
    In order to ensure the safety of spectators and those vessels
participating in the race, the Coast Guard will patrol the regulated
area under the direction of a designated Coast Guard Patrol Commander
(PATCOM). Vessels desiring to transit the regulated area may do so but
only with prior approval of the PATCOM and only when so directed by
that individual. The PATCOM may be contacted on Channel 16 (156.8 MHZ)
by the call sign ``Coast Guard Patrol Commander.'' Vessels allowed
within the regulated area will be operated at a no wake speed and in a
manner that will not endanger participants in the event or any other
craft. These Special Local Regulations shall not apply to vessels
participating in the event or government vessels patrolling the
regulated area.
    In the event these Special Local Regulations affect shipping,
commercial vessels may request permission from the PATCOM to transit
the area of the event by hailing call sign ``Coast Guard Patrol
Commander'' on Channel 16 (156.8 MHZ).

D. Regulatory Analyses

    We developed this rule after considering numerous statutes and
executive orders related to rulemaking. Below we summarize our analyses
based on 13 of these statutes or executive orders.

1. Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f)
of Executive Order 12866, Regulatory Planning and Review, as
supplemented by Executive Order 13563, Improving Regulation and
Regulatory Review, and does not require an assessment of potential
costs and benefits under section 6(a)(3) of that Order. Executive Order
12866 or under section 1 of Executive Order 13563. The Office of
Management and Budget has not reviewed it under those Orders. It is not
``significant'' under the regulatory policies and procedures of the
Department of Homeland Security (DHS). We conclude that this rule is
not a significant regulatory action because we anticipate that it will
have minimal impact on the economy, will not interfere with other
agencies, will not adversely alter the budget of any grant or loan
recipients, and will not raise any novel legal or policy issues.
    This Special Local Regulation will be enforced for only seven hours
on a single day in July of each year. Also, the regulated area will be
a relatively small and only in effect at the race's starting point. It
is expected that during the annual enforcement of this Special Local
Regulation the majority of vessel traffic in the vicinity of the
regulated area will be recreational in nature. Furthermore, some vessel
traffic will be allowed to pass, albeit with caution and at a reduced
speed, through the regulated area with the permission of

the Coast Guard Patrol Commander. Finally, the Coast Guard expects that
public awareness of this event, along with the Coast Guard's regulation
of it, is particularly high. As mentioned above, this race has recurred
regularly since 1925, and the Coast Guard has regulated it for many
years with both permanent and temporary regulations. Despite the race's
long history, the Coast Guard still intends to issue maritime
advisories to current users of the affected waterways. On the whole,
local maritime interests are already well familiar with the effects of
this event and this Special Local Regulation.

2. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended, requires federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The Coast Guard
certifies under 5 U.S.C. 605(b) that this rule will not have a
significant economic impact on a substantial number of small entities.
    This rule will affect the following entities, some of which might
be small entities: The owners or operators of vessels intending to
transit or anchor in a portion of the Black River, St. Clair River, and
lower Lake Huron during the month of July each year. This Special Local
Regulations will not have a significant economic impact on a
substantial number of small entities for the same reasons discussed in
above Regulatory Planning and Review section.

3. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT
section above.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

4. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

5. Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and determined
that this rule does not have implications for federalism.

6. Unfunded Mandates Reform Act

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

7. Taking of Private Property

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

8. Civil Justice Reform

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

9. Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that may
disproportionately affect children.

10. Indian Tribal Governments

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

11. Energy Effects

    This action is not a ``significant energy action'' under Executive
Order 13211, Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use.

12. Technical Standards

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

13. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined
that this action is one of a category of actions that do not
individually or cumulatively have a significant effect on the human
environment. This rule involves the establishment of Special Local
Regulations and is therefore categorically excluded under figure 2-1,
paragraph (34)(h), of the Instruction. During the annual permitting
process for this event an environmental analysis will be conducted to
include the effects of these proposed Special Local Regulations. Thus,
no preliminary environmental analysis checklist or Categorical
Exclusion Determination (CED) are required for this proposed rulemaking
action. We seek any comments or information that may lead to the
discovery of a significant environmental impact from this proposed
rule.

List of Subjects in 33 CFR Part 100

    Marine safety, Navigation (water), Reporting and recordkeeping
requirements, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 100 as follows:

PART 100--SAFETY OF LIFE ON NAVIGABLE WATERS

0
1. The authority citation for part 100 continues to read as follows:

    Authority: 33 U.S.C. 1233.

0
2. Add Sec.  100.902 to read as follows:

Sec.  100.902  Special Local Regulations; Annual Bayview Mackinac Race.

    (a) Regulated area. These Special Local Regulations apply to all
U.S. navigable waters of the Black River, St. Clair River, and lower
Lake Huron, bound by a line starting at latitude 042[deg]58'47'' N,
longitude 082[deg]26'0'' W; then easterly to latitude 042[deg]58'24''
N, longitude 082[deg]24'47'' W; then northward along the International
Boundary to latitude 043[deg]2'48'' N, longitude 082[deg]23'47'' W;
then westerly to the shoreline at approximate location latitude
043[deg]2'48'' N, longitude 082[deg]26'48'' W; then southward along the
U.S. shoreline to latitude 042[deg]58'54'' N, longitude 082[deg]26'1''
W; then back to the beginning [DATUM: NAD 83].
    (b) Enforcement period. These Special Local Regulations will be
enforced annually at the commencement of the Bayview Mackinac Race. The
enforcement period will last approximately seven hours on a single day
each July. The Coast Guard will notify the public of the exact
enforcement date and times via a Notice of Enforcement published in the
Federal Register. Also, the Coast Guard may use marine broadcasts,
local notice to mariners, local news media, on-scene oral notice, and
broadcasts on VHF-FM marine radio Channel 16 (156.8 MHZ) to notify the
public of the exact dates and times of enforcement.
    (c) Special local regulations. (1) No vessel may enter the
regulated area established in paragraph (a) of this section without
prior approval from the Coast Guard's designated Patrol Commander
(PATCOM). The PATCOM may restrict vessel operation within the regulated
area to vessels having particular operating characteristics.
    (2) Vessels permitted to enter this regulated area must operate at
a no wake speed and in a manner that will not endanger race
participants or any other craft.
    (3) The PATCOM may direct the anchoring, mooring, or movement of
any vessel within this regulated area. A succession of sharp, short
signals by whistle or horn from vessels patrolling the area under the
direction of the PATCOM shall serve as a signal to stop. Vessels so
signaled shall stop and shall comply with the orders of the PATCOM.
Failure to do so may result in expulsion from the area, a Notice of
Violation for failure to comply, or both.
    (4) If it is deemed necessary for the protection of life and
property, the PATCOM may terminate at any time the marine event or the
operation of any vessel within the regulated area.
    (5) In accordance with the general regulations in Sec.  100.35 of
this part, the Coast Guard will patrol the regatta area under the
direction of a designated Coast Guard Patrol Commander (PATCOM). The
PATCOM may be contacted on Channel 16 (156.8 MHz) by the call sign
``Coast Guard Patrol Commander.''
    (6) The rules in this section shall not apply to vessels
participating in the event or to government vessels patrolling the
regulated area in the performance of their assigned duties.

    Dated: June 15, 2012.
M.N. Parks,
Rear Admiral, U.S. Coast Guard, Commander, Ninth Coast Guard District.
[FR Doc. 2012-14972 Filed 6-15-12; 11:15 am]
BILLING CODE 9110-04-P


[Federal Register: January 13, 2006 (Volume 71, Number 9)]
[Notices]
[Page 2286-2289]
[DOCID:fr13ja06-146]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53088; File No. SR-Phlx-2005-87]

Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing and Order Granting Accelerated Approval to a Proposed
Rule Change, and Amendment No. 1 Thereto Relating to the Exchange's
Covered Sale Fee and Exchange Rule 607

January 6, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 23, 2005, the Philadelphia Stock Exchange, Inc. (``Phlx''
or ``Exchange'') filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') the proposed rule change as described in
Items I and II below, which Items have been prepared by the Phlx. On
January 4, 2006, the Exchange filed Amendment No. 1 to the proposed
rule change.\3\ The Commission is publishing this notice to solicit
comments on the proposed rule change, as amended, from interested
persons, and is approving the amended proposal on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 made technical changes to the proposed rule
text.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Phlx proposes to change the title from the ``SEC Fee'' to
``Covered Sale Fee'' as it appears on the Exchange's Summary of Equity
Charges and the Nasdaq-100 Index Tracking StockSM Fee
Schedule (``Fee Schedule'').\4\ The Exchange also proposes to amend
Exchange Rule 607 to clarify the description of the Covered Sale Fee,
including renaming the title of Phlx Rule 607 to ``Covered Sale Fee''
and providing a more complete description of a new arrangement for
passing fees among Intermarket Trading System (``ITS'') participants.
Below is the text of the proposed rule change, as amended. Proposed new
language is in italics; proposed deletions are in brackets.
---------------------------------------------------------------------------

    \4\ The Nasdaq-100[reg], Nasdaq-100 Index[reg], Nasdaq[reg], The
Nasdaq Stock Market[reg], Nasdaq-100 SharesSM, Nasdaq-100
TrustSM, Nasdaq-100 Index Tracking StockSM,
and QQQSM are trademarks or service marks of The Nasdaq
Stock Market, Inc. (``Nasdaq'') and have been licensed for use for
certain purposes by the Phlx pursuant to a license agreement with
Nasdaq. The Nasdaq-100 Index[reg] (``Index'') is determined,
composed, and calculated by Nasdaq without regard to the Licensee,
the Nasdaq-100 TrustSM, or the beneficial owners of
Nasdaq-100 SharesSM. Nasdaq has complete control and sole
discretion in determining, comprising, or calculating the Index or
in modifying in any way its method for determining, comprising, or
calculating the Index in the future.

---------------------------------------------------------------------------
Rule 607.

 [Transaction] Covered Sale Fee
    Under Section 31 of the Securities Exchange Act of 1934, the
Exchange must pay certain fees to the Securities and Exchange
Commission (``Commission''). To help fund the Exchange's obligations to
the Commission under Section 31, a Covered Sale Fee is assessed by the
Exchange to members and member organizations. To the extent there may
be any excess monies collected under this Rule, the Exchange may retain
those monies to help fund its general operating expenses. [Every member
and member organization shall pay to the Exchange in such manner and at
such time as the Exchange shall direct, the fees specified in Section
31 of the Securities Exchange Act of 1934, and rules thereunder, for
all sales upon the Exchange of securities specified in

Section 31 of the Securities Exchange Act of 1934, and rules
thereunder.]
    Each member and member organization engaged in executing sale
transactions on the Exchange or executing transactions, which were
routed over the Intermarket Trading System, on another exchange during
any computational period shall pay a Covered Sale Fee equal to (i) the
Section 31 fee rate multiplied by (ii) the member's aggregate dollar
amount of covered sales.
    The Exchange may enter into arrangements with other exchanges to
pass the Covered Sale Fee among the applicable exchanges where the
Exchange has collected the Covered Sale Fee from its members and member
organizations for sale transactions executed on another exchange
through the Intermarket Trading System and when other exchanges have
collected the Covered Sale Fee from its members for sale transactions
executed on the Exchange through the Intermarket Trading System.
* * * * *
SUMMARY OF EQUITY CHARGES (p 2/3)*
* * * * *
[SEC FEE] Covered Sale Fee
    [The amount shall be determined by Section 31 of the Securities
Exchange Act of 1934.]
    Each member and member organization engaged in executing sale
transactions on the Exchange or executing transactions, which were
routed over the Intermarket Trading System, on another exchange during
any computational period shall pay a Covered Sale Fee equal to (i) the
Section 31 fee rate multiplied by (ii) the member's aggregate dollar
amount of covered sales.
* * * * *
NASDAQ-100 INDEX TRACKING STOCKSM FEE SCHEDULE
PHLX FEE SCHEDULE
* * * * *
[SEC FEE] Covered Sale Fee
    [The amount shall be determined by Section 31 of the Securities
Exchange Act of 1934.]
    Each member and member organization engaged in executing sale
transactions on the Exchange or executing transactions, which were
routed over the Intermarket Trading System, on another exchange during
any computational period shall pay a Covered Sale Fee equal to (i) the
Section 31 fee rate multiplied by (ii) the member's aggregate dollar
amount of covered sales.
* * * * *

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change, as
amended, and discussed any comments it received on the proposed rule
change, as amended. The text of these statements may be examined at the
places specified in Item III below. The Exchange has prepared
summaries, set forth in Sections A, B, and C below, of the most
significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of changing the name of the ``SEC Fee'' as it appears
on the Exchange's fee schedule and in Phlx Rule 607 is to conform with
the Commission's request to rename this fee to help clarify that
members and member organizations do not incur an obligation to the
Commission under Section 31 of the Act and to help minimize confusion
in connection with the Exchange's assessment of the fee. In addition,
the amendments to Rule 607 reflect the new arrangements with respect to
the passing of fees among ITS participants that each collects from its
respective members for transactions executed on another SRO through
ITS.

Background

    In late June 2004, the Commission established new procedures
governing the calculation, payment, and collection of fees and
assessments on securities transactions owed by national securities
exchanges and national securities associations (collectively ``SROs'')
to the Commission pursuant to Section 31 of the Act.\5\ In connection
with these new procedures, the Commission expressed its concern about
the manner in which SROs labeled the fees that they passed to their
members and the manner in which members labeled the fees passed to
their customers. Because Section 31 does not place an obligation on
members of covered SROs or their customers, the Commission stated its
belief that it is misleading to suggest that a customer or an SRO
member incurred an obligation to the Commission under Section 31.
Accordingly, the Commission requested that SROs take action to correct
any such misperception, which would include changing the title of the
``SEC Fee'' as it appears on the Exchange's fee schedule.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 49928 (June 28,
2004), 69 FR 41060 (July 7, 2004).
---------------------------------------------------------------------------

    Thus, in order to comply with the Commission's request and to
minimize any confusion relating to the assessment of the fee, the
Exchange proposes to rename its ``SEC Fee'' and Phlx Rule 607
``Transaction Fee'' to ``Covered Sale Fee.'' \6\
---------------------------------------------------------------------------

    \6\ Pursuant to Rule 31 under the Act, 17 CFR 240.31, a covered
sale is a sale of a security, other than an exempt sale or a sale of
a security future, occurring on a national securities exchange or by
or through any member of a national securities association otherwise
than on a national securities exchange.
---------------------------------------------------------------------------

ITS Collection

    In addition, the Exchange recently filed with, and received an SEC
order granting accelerated approval from, the Commission to enter into
arrangements with other participating SROs to pass certain fees they
have collected from members for transactions executed on another
exchange through the ITS.\7\ Participating SROs have entered into an
arrangement to pass fees among ITS participants that each participating
SRO has collected from its members for sale transactions executed on
another participating SRO through ITS. Pursuant to this new
arrangement, each ITS participant will determine whether it has
received and executed more in dollar value of covered sales than it has
originated and sent to each other ITS participant.\8\ One participating
SRO will then deduct the amount it owes another participating SRO and
will invoice only for the difference; however, the duty to report and
pay the Section 31 fee will remain with the ITS participant SRO on
which the sale was in fact transacted. It is anticipated that the
invoicing process will occur twice yearly to coincide with the March 15
and September 30 payment schedule for Section 31 fees set forth in the
Act.
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 52745 (November 7,
2005), 70 FR 69182, (November 14, 2005) (SR-Phlx-2005-64).
    \8\ For example, for the period September 2003 through August
2004, SRO A sent ITS commitments for covered sales whose dollar
value was $150 million to SRO B for execution. SRO A collected fees
from its members to fund its Section 31 obligation for those covered
sales executed on SRO B. Under the new procedures established by the
Commission for the calculation and collection of Section 31 fees on
such covered sales, SRO B, as the executing market center, is
obligated to pay the Section 31 fee to the Commission.

---------------------------------------------------------------------------

NSCC Collection and Computational Period

    The Exchange intends to have the National Securities Clearing
Corporation (``NSCC'') collect this fee (and other Exchange fees) for
the Exchange for certain members and member organizations and pay over
to the Exchange the funds collected in connection with equity
transactions, which should increase the efficiency in which this fee,
as well as other Exchange fees, are collected.\9\ Further, the Exchange
intends to have the Options Clearing Corporation (``OCC'') continue to
bill and collect this fee in connection with covered sales of
options.\10\
---------------------------------------------------------------------------

    \9\ Currently, NSCC collects the fee on the 23rd calendar day of
each month, provided that if such day is other than an NSCC
business/settlement day, on the next succeeding NSCC business/
settlement day. The Exchange implemented this collection practice in
November 2005, which covered transactions that occurred in October
2005. For equity transactions, the NSCC debits the Phlx member's or
member organization's clearing firm. If an Exchange member clears
through the Stock Clearing Corporation of Philadelphia (``SCCP''), a
Phlx subsidiary, the Exchange will debit the member's or member
organizations' margin account at SCCP.
    \10\ Currently, OCC and the options exchanges, including the
Phlx, have established arrangements whereby OCC tabulates the
aggregate amount of sales of options that occur on the exchanges,
based on data captured by OCC's systems. OCC then calculates the
Section 31 fees owed by the exchanges and, in turn, remits to the
Commission the Section 31 fees on behalf of these exchanges.
---------------------------------------------------------------------------

    The computational period, referred to in proposed Rule 607 above,
may change during the course of a year if there is a change in the
Section 31 fee rate.\11\ Thus, the amount of the Section 31 fee may
change during the year, which would, in turn, start a new computational
period. The Exchange determines whether a trade ``occurs'' before or
after a fee rate change so that the appropriate dollar amounts of
securities sales are multiplied by the correct fee rate.
---------------------------------------------------------------------------

    \11\ The Commission is required to adjust the securities
transaction fee rates on an annual basis, after consultation with
the Congressional Budget Office and the Office of Management and
Budget. The Commission may also be required to make a ``mid-year''
adjustment to the Section 31 fee rate.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is
consistent with and furthers the objective of Section 6(b)(4) of the
Act,\12\ which requires that the rules of an exchange provide for the
equitable allocation of reasonable dues, fees, and other charges among
its members and issuers and other persons using its facilities.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change, as
amended, will impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others

    No written comments were solicited or received with respect to the
proposed rule change, as amended.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, is consistent with the Act. Comments may be
submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to<EMAIL_ADDRESS>Please include

File Number SR-Phlx-2005-87 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-9303.

All submissions should refer to File Number SR-Phlx-2005-87. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments, all

written statements with respect to the proposed rule change, as
amended, that are filed with the Commission, and all written
communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for inspection and copying in the Commission's Public
Reference Room. Copies of such filing also will be available for
inspection and copying at the principal office of the Phlx. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-Phlx-2005-87 and should be
submitted on or before February 3, 2006.

IV. Commission's Findings and Order Granting Accelerated Approval of a
Proposed Rule Change and Amendment No. 1 Thereto

    The Commission finds that the proposed rule change, as amended, is
consistent with the Act and the rules and regulations thereunder
applicable to a national securities exchange.\13\ In particular, the
Commission believes that the proposal is consistent with Section
6(b)(4) of the Act,\14\ which requires that the rules of an exchange
provide for the equitable allocation of reasonable dues, fees, and
other charges among its members, issuers, and other persons using its
facilities.
---------------------------------------------------------------------------

    \13\ In approving this proposal, as amended, the Commission has
considered its impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
    \14\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    Under Section 19(b)(2) of the Act,\15\ the Commission may not
approve any proposed rule change prior to the thirtieth day after the
date of publication of the notice of filing thereof, unless the
Commission finds good cause for so doing. The Commission hereby finds
good cause for approving the proposed rule change, as amended, prior to
the thirtieth day after publishing notice of filing thereof in the
Federal Register. The Commission believes that such action is
consistent with the protection of investors and the public interest.
This proposal will make the Exchange's rules consistent with the
Commission's guidance on Section 31 without undue delay. The proposal
also codifies the current Exchange arrangement for passing the Covered
Sale Fees between the ITS participants. Therefore, the Commission
believes that proposed rule change, as amended, raises no new
regulatory issues and that a full notice-and-comment period is not
necessary.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\16\ that the proposed rule change, as amended (SR-Phlx-2005-87),
is hereby approved on an accelerated basis.
---------------------------------------------------------------------------

    \16\ Id.

---------------------------------------------------------------------------

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

    \17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
[FR Doc. E6-257 Filed 1-12-06; 8:45 am]

BILLING CODE 8010-01-P