[Federal Register Volume 76, Number 122 (Friday, June 24, 2011)]
[Rules and Regulations]
[Pages 37025-37028]
[FR Doc No: 2011-15765]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 595

[Docket No. NHTSA-2011-0079]
RIN 2127-AK77

Make Inoperative Exemptions; Vehicle Modifications To Accommodate
People With Disabilities, Side Impact Protection

AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).

ACTION: Final rule.

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

SUMMARY: This final rule amends regulations concerning vehicle
modifications which accommodate people with disabilities to update and
expand a reference in an exemption relating to the Federal motor
vehicle safety standard for side impact protection. The expanded
exemption facilitates the mobility of drivers and passengers with
disabilities.

DATES: Effective Date: August 23, 2011. As this final rule relieves the
regulatory burdens on certain entities and involves Federal Motor
Vehicle Safety Standard (FMVSS) requirements that have recently become
effective, the agency believes that the above effective date is
appropriate.
    Petitions for Reconsideration: Petitions for reconsideration of
this final rule must be received by the agency by August 8, 2011.

ADDRESSES: If you wish to petition for reconsideration of this rule,
you should refer in your petition to the docket number of this document
and submit your petition to: Administrator, National Highway Traffic
Safety Administration, 1200 New Jersey Avenue, SE., West Building,
Washington, DC 20590. The petition will be placed in the docket. Anyone
is able to search the electronic form of all documents received into
any of our dockets by the name of the individual submitting the comment
(or signing the comment, if submitted on behalf of an association,
business, labor union, etc.). You may review DOT's complete Privacy Act
Statement in the Federal Register published on April 11, 2000 (Volume
65, Number 70; Pages 19477-78).
    For access to the docket to read background documents or comments
received, go to http://www.regulations.gov and follow the online
instructions for accessing the docket. You may also visit DOT's Docket
Management Facility, 1200 New Jersey Avenue, SE., West Building Ground
Floor, Room W12-140, Washington, DC 20590-0001 for access to the
docket.

FOR FURTHER INFORMATION CONTACT: Gayle Dalrymple, NHTSA Office of Crash
Avoidance Standards, NVS-123, telephone<PHONE_NUMBER>), fax (202-493-
2739), or Jesse Chang, NHTSA Office of Chief Counsel, NCC-112,
telephone<PHONE_NUMBER>), fax<PHONE_NUMBER>). The mailing address for
these officials is: National Highway Traffic Safety Administration,
1200 New Jersey Avenue, SE., Washington, DC 20590.

SUPPLEMENTARY INFORMATION: This final rule amends 49 CFR Part 595,
Subpart C, ``Make Inoperative Exemptions, Vehicle Modifications to
Accommodate People With Disabilities,'' to update and expand a
reference in an exemption relating to FMVSS No. 214. The notice of
proposed rulemaking (NPRM) on which this final rule is based was
published on September 28, 2010 (75 FR 59674) (Docket No. NHTSA-2010-
0133).

Regulatory Background

    The National Traffic and Motor Vehicle Safety Act (49 U.S.C.
Chapter 301) (``Safety Act'') and NHTSA's regulations require vehicle
manufacturers to certify that their vehicles comply with all applicable
Federal motor vehicle safety standards (FMVSSs) (see 49 U.S.C. 30112;
49 CFR Part 567). A vehicle manufacturer, distributor, dealer, or
repair business generally may not knowingly make inoperative any part
of a device or element of design installed in or on a motor vehicle in
compliance with an applicable FMVSS (see 49 U.S.C. 30122). NHTSA has
the authority to issue regulations that exempt regulated entities from
the ``make inoperative'' provision (49 U.S.C. 30122(c)). The agency has
used that authority to promulgate 49 CFR Part 595 Subpart C, ``Make
Inoperative Exemptions, Vehicle Modifications to Accommodate People
with Disabilities.''
    49 CFR Part 595 Subpart C sets forth exemptions from the make
inoperative provision to permit, under limited circumstances, vehicle
modifications that take the vehicles out of compliance with certain
FMVSSs when the vehicles are modified to be used by persons with
disabilities after the first retail sale of the vehicle for purposes
other than resale. The regulation was promulgated to facilitate the
modification of motor vehicles so that persons with disabilities can
drive or ride in them. The regulation involves information and
disclosure requirements and limits the extent of modifications that may
be made.
    Under the regulation, a motor vehicle repair business that modifies
a vehicle to enable a person with a disability to operate or ride as a
passenger in the motor vehicle and that avails itself of the exemption
provided by 49 CFR Part 595 Subpart C must register itself with NHTSA.
The modifier is exempted from the make inoperative provision of the
Safety Act, but only to the extent that the modifications affect the
vehicle's compliance with the FMVSSs specified in 49 CFR 595.7(c) and
only to the extent specified in 595.7(c). Modifications that would take
the vehicle out of compliance with any other FMVSS, or with an FMVSS
listed in 595.7(c) but in a manner not specified in that paragraph are
not exempted by the regulation. The modifier must affix a permanent
label to the vehicle identifying itself as the modifier and the vehicle
as no longer complying with all FMVSS in effect at original
manufacture, and must provide and retain a document listing the FMVSSs
with which the vehicle no longer complies and indicating any reduction
in the load carrying capacity of the vehicle of more than 100 kilograms
(220 pounds).

2007 Amendments to FMVSS 214 and Effects on Exemption in Part 595
Subpart C

    Before today's final rule, 49 CFR Part 595 Subpart C set forth an
exemption from ``S5 of 49 CFR 571.214 [FMVSS No. 214] for the
designated seating position modified, in any cases in which the
restraint system and/or seat at that position must be changed to
accommodate a person with a disability.'' 49 CFR 595.7(c)(15). However,
the reference to S5 of FMVSS No. 214 became outdated as a result of a
2007 amendment to Standard 214. Prior to 2007, S5 had referred to the
dynamic performance requirements that vehicles must meet when subjected
to a

moving deformable barrier (MDB) test.\1\ In 2007, NHTSA upgraded FMVSS
No. 214 and reorganized the standard.\2\ The MDB test was redesignated
from S5 to S7 and was upgraded with the adoption of new technically-
advanced test dummies representing a 5th percentile adult female and a
50th percentile adult male and enhanced injury criteria.
---------------------------------------------------------------------------

    \1\ The MDB test simulates an intersection collision with one
vehicle being struck in the side by another vehicle.
    \2\ 72 FR 51908, September 11, 2007; response to petitions for
reconsideration, 73 FR 32473, June 9, 2003; 75 FR 12123, March 15,
2010.
---------------------------------------------------------------------------

    In addition, the 2007 rule added a new vehicle-to-pole test to the
standard (see S9, 49 CFR 571.214). The pole test simulates a vehicle
crashing sideways into narrow fixed objects, such as utility poles and
trees. The pole test requires vehicle manufacturers to assure head and
improved chest protection in side crashes for a wide range of occupant
sizes and over a broad range of seating positions. Manufacturers are
meeting the upgraded requirements of the standard by vehicle
modifications that include installing side air bags in vehicle seats
and/or door panels and side roof rails. The phase-in of the upgraded
MDB and pole test requirements began on September 1, 2010.

Petition for Rulemaking

    On February 12, 2009, Bruno Independent Living Aids (Bruno)
submitted a petition for rulemaking to expand the specified
requirements of FMVSS No. 214 referenced in Sec.  595.7. Bruno
manufactures a product line called ``Turning Automotive Seating (TAS)''
which replaces the seat installed by the original equipment
manufacturer (OEM). Bruno believes that their product affords disabled
persons a safer method of vehicle entry and exit when compared to using
a platform lift or entering and exiting unassisted. However, in their
petition, Bruno expressed concern that: ``* * * torso side air bags are
commonly installed in the outboard side of the OEM seat backrest'' and
would be removed when installing a TAS system. For these reasons, Bruno
sought in their petition to update Part 595 to maintain a similar
exemption from the MDB test (to reflect the new designation under S7),
and to expand Part 595 to allow an exemption from the new S9 vehicle-
to-pole test requirements.

NPRM and Response

    On September 28, 2010, NHTSA published an NPRM in the Federal
Register. In that document, we proposed to amend Sec.  595.7(c)(15) to
reference the upgraded MDB requirements and to expand the exemption to
include the pole test requirements. In support of the NPRM, the agency
expressed the belief that, due to the nature of the modifications,
there exists a continuing need for exemption from the MDB requirements
and that there is a need to exempt vehicles modified to accommodate
disabled persons from the pole test requirements.
    We recognized in the NPRM that the proposed exemption presents a
trade-off of substantial side impact protection in exchange for
continued mobility for people with disabilities and some enhancement in
easier and possibly safer vehicle entry and exit.\3\ Thus, we requested
comments on how the agency should proceed in order to achieve the
maximum safety benefit with the narrowest exemption possible to
accommodate the needs of disabled persons. However, the agency received
no comments on the NPRM.
---------------------------------------------------------------------------

    \3\ NHTSA estimated in the FMVSS No. 214 rulemaking that side
head and torso air bags result in a 24 percent reduction in fatality
risk for nearside occupants and an estimated 14 percent reduction in
fatality risk by torso bags alone. See Docket No. NHTSA-29134,
NHTSA's Final Regulatory Impact Analysis.)
---------------------------------------------------------------------------

The Final Rule

    The agency remains concerned about the negative effect an exemption
may have on the safety benefits afforded to disabled persons who
require modifications to their vehicles. However, we are unaware at
this time of any other reasonable alternatives that can appropriately
balance the mobility needs of people who must have vehicle
modifications to accommodate a disability with the MDB and pole test
requirements of FMVSS No. 214. Thus, for the reasons provided in the
NPRM, we amend Sec.  595.7(c)(15) to add references to both S7 and S9
and to remove any reference to S5.

MDB Test Requirements

    Since Sec.  595.7(c)(15)'s reference to S5 is no longer valid,
today's final rule updates that paragraph's reference from S5 to S7. We
believe that there is a continuing need for the exemption from the MDB
requirements. Since the upgraded FMVSS No. 214 incorporates enhanced
MDB requirements, compliance with these requirements could continue to
be affected by an alteration of the restraint system and/or the seat.
    Many vehicles will depend on side impact air bag technology to meet
all of the injury criteria of the standard when tested with the 5th
percentile female and 50th percentile male dummies. Since many
modifiers make alterations that include removing the side air bags in
vehicles designed to the new requirements, the agency believes that
these modifications could take the vehicles out of compliance with the
MDB test.
    The agency also believes that the compliance with the injury
criteria for the MDB test could be affected even if vehicle seats with
seat-mounted air bags are not removed but are instead changed in a less
significant way to accommodate a person with a disability (e.g., an OEM
seat is mounted on a 6-way power seat base). This is because
countermeasures that were designed to protect the occupant at the OEM
seating position that may no longer be as protective at the position at
which the seat is placed after the modification. Thus, NHTSA believes
that there is a continuing need to exempt modifiers from the MDB test
requirements for the purpose of accommodating persons with
disabilities.

Pole Test Requirements

    This final rule also expands Sec.  595.7(c)(15) to include S9 of
FMVSS No. 214. This change exempts modifications that affect the
vehicle's compliance with the pole test requirements of FMVSS No. 214
in any case in which the restraint system and/or seat position must be
changed to accommodate a person with a disability.
    Removing an OEM seat that has a side air bag and replacing it with
an aftermarket seat that does not would likely make inoperative the
system installed in compliance with FMVSS No. 214. Making some other
substantive modification of the OEM seat or restraint system to
accommodate a person with a disability could also affect the
measurement of the injury criteria specified in the standard. We
believe that an exemption from the make inoperative provision with
regard to the pole test in FMVSS No. 214 is needed to permit
modification of the vehicle's seating system to accommodate a person
with a disability. This is comparable to the position taken by NHTSA
with regard to the make inoperative exemption for frontal air bags
required by FMVSS No. 208. See 595.7(c)(14). Thus, we conclude today
that the inclusion of S9 of FMVSS No. 214 in Sec.  595.7(c)(15) is
needed.

Rulemaking Analyses and Notices

Executive Order 12866, Executive Order 13563, and DOT Regulatory
Policies and Procedures

    NHTSA has considered the impact of this rulemaking action under
Executive

Order 12866, Executive Order 13563, and the Department of
Transportation's regulatory policies and procedures. This rulemaking
document was not reviewed by the Office of Management and Budget under
E.O. 12866, ``Regulatory Planning and Review.'' It is not considered to
be significant under E.O. 12866 or the Department's Regulatory Policies
and Procedures (44 FR 11034; February 26, 1979). NHTSA has determined
that the effects are minor and that a regulatory evaluation is not
needed to support the subject rulemaking. Today's final rule imposes no
costs on the vehicle modification industry. If there is any effect, it
will be a cost savings due to the exemptions.

Regulatory Flexibility Act

    Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 et seq.,
as amended by the Small Business Regulatory Enforcement Fairness Act
(SBREFA) of 1996), whenever an agency is required to publish a notice
of proposed rulemaking or final rule, it must prepare and make
available for public comment a regulatory flexibility analysis that
describes the effect of the rule on small entities (i.e., small
businesses, small organizations, and small governmental jurisdictions).
No regulatory flexibility analysis is required if the head of an agency
certifies the rule will not have a significant economic impact on a
substantial number of small entities. SBREFA amended the Regulatory
Flexibility Act to require Federal agencies to provide a statement of
the factual basis for certifying that a rule will not have a
significant economic impact on a substantial number of small entities.
    NHTSA has considered the effects of this final rule under the
Regulatory Flexibility Act. Many dealerships and repair businesses
would be considered small entities, and some of these businesses modify
vehicles to accommodate individuals with disabilities. I certify that
this final rule does not have a significant economic impact on a
substantial number of small entities. While many dealers and repair
businesses are considered small entities, this exemption does not
impose any new requirements, but instead provides additional
flexibility. Therefore, the impacts on any small businesses affected by
this rulemaking would not be substantial.

Executive Order 13132 (Federalism)

    NHTSA has examined today's final rule pursuant to Executive Order
13132 (64 FR 43255; Aug. 10, 1999) and concluded that no additional
consultation with States, local governments, or their representatives
is mandated beyond the rulemaking process. The agency has concluded
that the final rule does not have sufficient federalism implications to
warrant consultation with State and local officials or the preparation
of a federalism summary impact statement. The final rule does not have
``substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government.'' Today's
final rule does not impose any additional requirements. Instead, it
lessens burdens on the exempted entities.
    NHTSA rules can have preemptive effect in two ways. First, the
National Traffic and Motor Vehicle Safety Act contains an express
preemption provision:

    When a motor vehicle safety standard is in effect under this
chapter, a State or a political subdivision of a State may prescribe
or continue in effect a standard applicable to the same aspect of
performance of a motor vehicle or motor vehicle equipment only if
the standard is identical to the standard prescribed under this
chapter.

49 U.S.C. 30103(b)(1). It is this statutory command by Congress that
preempts any non-identical State legislative and administrative law
address the same aspect of performance. However, this provision is not
relevant to this final rule as this rule does not involve the
establishing, amending or revoking or a Federal motor vehicle safety
standard.
    The express preemption provision described above is subject to a
savings clause under which ``[c]ompliance with a motor vehicle safety
standard prescribed under this chapter does not exempt a person from
liability at common law.'' 49 U.S.C. 30103(e) Pursuant to this
provision, State common law tort causes of action against motor vehicle
manufacturers that might otherwise be preempted by the express
preemption provision are generally preserved. However, the Supreme
Court has recognized the possibility, in some instances, of implied
preemption of State common law tort causes of action by virtue of
NHTSA's rules--even if not expressly preempted.
    This second way that NHTSA rules can preempt is dependent upon the
existence of an actual conflict between an FMVSS and the higher
standard that would effectively be imposed on motor vehicle
manufacturers if someone obtained a State common law tort judgment
against the manufacturer--notwithstanding the manufacturer's compliance
with the NHTSA standard. Because most NHTSA standards established by an
FMVSS are minimum standards, a State common law tort cause of action
that seeks to impose a higher standard on motor vehicle manufacturers
will generally not be preempted. However, if and when such a conflict
does exist--for example, when the standard at issue is both a minimum
and a maximum standard--the State common law tort cause of action is
impliedly preempted. See Geier v. American Honda Motor Co., 529 U.S.
861 (2000).
    Pursuant to Executive Order 13132, NHTSA has considered whether
this rule could or should preempt State common law causes of action.
The agency's ability to announce its conclusion regarding the
preemptive effect of one of its rules reduces the likelihood that
preemption will be an issue in any subsequent tort litigation.
    To this end, the agency has examined the nature (e.g., the language
and structure of the regulatory text) and objectives of today's rule
and finds that this rule merely increases flexibility for certain
exempted entities. As such, NHTSA does not intend that this rule
preempt state tort law that would effectively impose a higher standard
on motor vehicle manufacturers than that established by today's rule.
Establishment of a higher standard by means of State tort law would not
conflict with the exemption announced here. Without any conflict, there
could not be any implied preemption of a State common law tort cause of
action. Further, we are unaware of any State law or action that would
prohibit the actions that this final rule would permit.

Civil Justice Reform

    When promulgating a regulation, agencies are required under
Executive Order 12988 to make every reasonable effort to ensure that
the regulation, as appropriate: (1) Specifies in clear language the
preemptive effect; (2) specifies in clear language the effect on
existing Federal law or regulation, including all provisions repealed,
circumscribed, displaced, impaired, or modified; (3) provides a clear
legal standard for affected conduct rather than a general standard,
while promoting simplification and burden reduction; (4) specifies in
clear language the retroactive effect; (5) specifies whether
administrative proceedings are to be required before parties may file
suit in court; (6) explicitly or implicitly defines key terms; and (7)
addresses other important issues affecting clarity and general
draftsmanship of regulations.

    Pursuant to this Order, NHTSA notes as follows. The preemptive
effect of today's final rule is discussed above. NHTSA notes further
that there is no requirement that individuals submit a petition for
reconsideration or pursue other administrative proceeding before they
may file suit in court.

National Technology Transfer and Advancement Act

    Under the National Technology Transfer and Advancement Act of 1995
(NTTAA) (Pub. L. 104-113), ``all Federal agencies and departments shall
use technical standards that are developed or adopted by voluntary
consensus standards bodies, using such technical standards as a means
to carry out policy objectives or activities determined by the agencies
and departments.'' Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies, such as the Society of Automotive
Engineers (SAE). The NTTAA directs us to provide Congress, through OMB,
explanations when we decide not to use available and applicable
voluntary consensus standards. No voluntary standards exist regarding
this exemption for modification of vehicles to accommodate persons with
disabilities.

Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 requires agencies to
prepare a written assessment of the costs, benefits and other effects
of proposed or final rules that include a Federal mandate likely to
result in the expenditure by State, local or tribal governments, in the
aggregate, or by the private sector, of more than $100 million annually
(adjusted for inflation with base year of 1995). This exemption will
not result in expenditures by State, local or tribal governments, in
the aggregate, or by the private sector in excess of $100 million
annually.

National Environmental Policy Act

    NHTSA has analyzed today's final rule for the purposes of the
National Environmental Policy Act. The agency has determined that
implementation of today's final rule will not have any significant
impact on the quality of the human environment.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA), a person is not
required to respond to a collection of information by a Federal agency
unless the collection displays a valid OMB control number. Today's
final rule does not contain new reporting requirements or requests for
information beyond what is already required by 49 CFR part 595 subpart
C.

Plain Language

    Executive Order 12866 requires each agency to write all rules in
plain language. Application of the principles of plain language
includes consideration of the following questions:
     Have we organized the material to suit the public's needs?
     Are the requirements in the rule clearly stated?
     Does the rule contain technical language or jargon that
isn't clear?
     Would a different format (grouping and order of sections,
use of headings, paragraphing) make the rule easier to understand?
     Would more (but shorter) sections be better?
     Could we improve clarity by adding tables, lists, or
diagrams?
     What else could we do to make the rule easier to
understand?
    If you have any responses to these questions, please notify the
agency in writing.

Regulation Identifier Number (RIN)

    The Department of Transportation assigns a regulation identifier
number (RIN) to each regulatory action listed in the Unified Agenda of
Federal Regulations. The Regulatory Information Service Center
publishes the Unified Agenda in April and October of each year. You may
use the RIN contained in the heading at the beginning of this document
to find this action in the Unified Agenda.

List of Subjects in 49 CFR Part 595

    Motor vehicle safety, Motor vehicles.

    In consideration of the foregoing, we amend 49 CFR part 595 as
follows:

PART 595--MAKE INOPERATIVE EXEMPTIONS

0
1. The authority citation for part 595 continues to read as follows:

    Authority:  49 U.S.C. 322, 30111, 30115, 30117, 30122 and 30166;
delegation of authority at 49 CFR 1.50.

0
2. Amend Sec.  595.7 by revising paragraph (c)(15) to read as follows:

Sec.  595.7  Requirements for vehicle modifications to accommodate
people with disabilities.

* * * * *
    (c) * * *
    (15) S7 and S9 of 49 CFR 571.214, for the designated seating
position modified, in any cases in which the restraint system and/or
seat at that position must be changed to accommodate a person with a
disability.
* * * * *

    Issued on: June 16, 2011.
David L. Strickland,
Administrator.
[FR Doc. 2011-15765 Filed 6-23-11; 8:45 am]
BILLING CODE 4910-59-P


[Federal Register Volume 82, Number 239 (Thursday, December 14, 2017)]
[Notices]
[Pages 59037-59040]
[FR Doc No: 2017-26919]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82252; File No. SR-CHX-2017-08]

Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Notice of Filing of Amendment No. 2 to the Proposed Rule Change To
Amend the Schedule of Fees and Assessments To Adopt a Fee Schedule To
Establish Fees for Industry Members Related to the National Market
System Plan Governing the Consolidated Audit Trail

December 8, 2017.
    On May 3, 2017, Chicago Stock Exchange, Inc. (``Exchange'' or
``CHX'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to adopt a fee schedule to establish the fees for
Industry Members related to the National Market System Plan Governing
the Consolidated Audit Trail (``CAT NMS Plan''). The proposed rule
change was published in the Federal Register for comment on May 22,
2017.\3\ The Commission received seven comment letters on the proposed
rule change,\4\ and a response to comments from the CAT NMS Plan
Participants.\5\ On June 30, 2017, the Commission temporarily suspended
and initiated proceedings to determine whether to approve or disapprove
the proposed rule change.\6\ The Commission thereafter received seven
comment letters,\7\ and a response to comments from the
Participants.\8\ On November 9, 2017, the Exchange filed Amendment No.
1 to the proposed rule change.\9\ On November 9, 2017, the Commission
extended the time period within which to approve the proposed rule
change or disapprove the proposed rule change to January 14, 2018.\10\
On November 30, 2017, the Exchange filed Amendment No. 2 to the
proposed rule change, as described in Items I and II below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments from interested persons on Amendment No. 2.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 80691 (May 16,
2017), 82 FR 23344 (May 22, 2017) (``Original Proposal'').
    \4\ Since the CAT NMS Plan Participants' proposed rule changes
to adopt fees to be charged to Industry Members to fund the
consolidated audit trail are substantively identical, the Commission
is considering all comments received on the proposed rule changes
regardless of the comment file to which they were submitted. See
text accompanying notes 12-15 infra, for a list of the CAT NMS Plan
Participants. See Letter from Theodore R. Lazo, Managing Director
and Associate General Counsel, Securities Industry and Financial
Markets Association, to Brent J. Fields, Secretary, Commission
(dated June 6, 2017), available at: https://www.sec.gov/comments/sr-batsbzx-2017-38/batsbzx201738-1788188-153228.pdf; Letter from
Patricia L. Cerny and Steven O'Malley, Compliance Consultants, to
Brent J. Fields, Secretary, Commission (dated June 12, 2017),
available at: https://www.sec.gov/comments/sr-cboe-2017-040/cboe2017040-1799253-153675.pdf; Letter from Daniel Zinn, General
Counsel, OTC Markets Group Inc., to Eduardo A. Aleman, Assistant
Secretary, Commission (dated June 13, 2017), available at: https://www.sec.gov/comments/sr-finra-2017-011/finra2017011-1801717-153703.pdf; Letter from Joanna Mallers, Secretary, FIA Principal
Traders Group, to Brent J. Fields, Secretary, Commission (dated June
22, 2017), available at: https://www.sec.gov/comments/sr-cboe-2017-040/cboe2017040-1819670-154195.pdf; Letter from Stuart J. Kaswell,
Executive Vice President and Managing Director, General Counsel,
Managed Funds Association, to Brent J. Fields, Secretary, Commission
(dated June 23, 2017), available at: https://www.sec.gov/comments/sr-finra-2017-011/finra2017011-1822454-154283.pdf; and Letter from
Suzanne H. Shatto, Investor, to Commission (dated June 27, 2017),
available at: https://www.sec.gov/comments/sr-batsedgx-2017-22/batsedgx201722-154443.pdf. The Commission also received a comment
letter which is not pertinent to these proposed rule changes. See
Letter from Christina Crouch, Smart Ltd., to Brent J. Fields,
Secretary, Commission (dated June 5, 2017), available at: https://www.sec.gov/comments/sr-batsbzx-2017-38/batsbzx201738-1785545-153152.htm.
    \5\ See Letter from CAT NMS Plan Participants to Brent J.
Fields, Secretary, Commission (dated June 29, 2017), available at:
https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-1832632-154584.pdf.
    \6\ See Securities Exchange Act Release No. 81067 (June 30,
2017), 82 FR 31656 (July 7, 2017).
    \7\ See Letter from W. Hardy Callcott, Partner, Sidley Austin
LLP, to Brent J. Fields, Secretary, Commission (dated July 27,
2017), available at: https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2148338-157737.pdf; Letter from Kevin Coleman,
General Counsel and Chief Compliance Officer, Belvedere Trading LLC,
to Brent J. Fields, Secretary, Commission (dated July 28, 2017),
available at: https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2148360-157740.pdf; Letter from Joanna Mallers,
Secretary, FIA Principal Traders Group, to Brent J. Fields,
Secretary, Commission (dated July 28, 2017), available at: https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2151228-157745.pdf; Letter from Theodore R. Lazo, Managing Director and
Associate General Counsel, SIFMA, to Brent J. Fields, Secretary,
Commission (dated July 28, 2017), available at: https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2150977-157744.pdf; Letter
from Stuart J. Kaswell, Executive Vice President and Managing
Director, General Counsel, Managed Funds Association, to Brent J.
Fields, Secretary, Commission (dated July 28, 2017), available at:
https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2150818-157743.pdf; Letter from John Kinahan, Chief Executive
Officer, Group One Trading, L.P., to Brent J. Fields, Secretary,
Commission (dated August 10, 2017), available at: https://www.sec.gov/comments/sr-finra-2017-011/finra2017011-2214568-160619.pdf; Letter from Joseph Molluso, Executive Vice President and
CFO, Virtu Financial, to Brent J. Fields, Commission (dated August
18, 2017), available at: https://www.sec.gov/comments/sr-finra-2017-011/finra2017011-2238648-160830.pdf.
    \8\ See Letter from Michael Simon, Chair, CAT NMS Plan Operating
Committee, to Brent J. Fields, Commission, Secretary (dated November
2, 2017), available at https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2674608-161412.pdf.
    \9\ Amendment No. 1 to the proposed rule change replaced and
superseded the Original Proposal in its entirety. See Securities
Exchange Act Release No. 82251 (December 8, 2017).
    \10\ See Securities Exchange Act Release No. 82049 (November 9,
2017), 82 FR 53549 (November 16, 2017).
---------------------------------------------------------------------------

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

    On May 3, 2017, the Chicago Stock Exchange, Inc. (``Exchange'' or
``CHX'') filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') proposed rule change SR-CHX-2017-08 (the
``Original Proposal''), pursuant to which the Exchange proposed to
adopt a fee schedule to establish the fees for Industry Members related
to the National Market System Plan Governing the Consolidated Audit
Trail (the ``CAT NMS Plan'' or ``Plan'').\11\ On November 9, 2017, the
Exchange filed an amendment to the Original Proposal (``First
Amendment''). The Exchange files this proposed rule change (the
``Second Amendment'') to amend the Original Proposal as amended by the
First Amendment.
---------------------------------------------------------------------------

    \11\ Unless otherwise specified, capitalized terms used in this
fee filing are defined as set forth herein, the CAT Compliance Rule
Series, in the CAT NMS Plan, or the Original Proposal.
---------------------------------------------------------------------------

    The text of this proposed rule change is available on the
Exchange's website at (www.chx.com) and in the Commission's Public
Reference Room.

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 CHX included statements
concerning the purpose of and basis for the proposed rule changes and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The CHX 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 Changes

1. Purpose
    The Exchange, BOX Options Exchange LLC, Cboe BYX Exchange, Inc.,
Cboe BZX Exchange, Inc., Cboe

EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Cboe C2 Exchange, Inc.,
Cboe Exchange, Inc.,\12\ Financial Industry Regulatory Authority, Inc.
(``FINRA''), Investors' Exchange LLC, Miami International Securities
Exchange, LLC, MIAX PEARL, LLC, NASDAQ BX, Inc., Nasdaq GEMX, LLC,
Nasdaq ISE, LLC, Nasdaq MRX, LLC,\13\ NASDAQ PHLX LLC, The NASDAQ Stock
Market LLC, New York Stock Exchange LLC, NYSE American LLC,\14\ NYSE
Arca, Inc. and NYSE National, Inc.\15\ (collectively, the ``Plan
Participants'') \16\ filed with the Commission, pursuant to Section 11A
of the Exchange Act \17\ and Rule 608 of Regulation NMS thereunder,\18\
the CAT NMS Plan.\19\ The Plan Participants filed the Plan to comply
with Rule 613 of Regulation NMS under the Exchange Act. The Plan was
published for comment in the Federal Register on May 17, 2016,\20\ and
approved by the Commission, as modified, on November 15, 2016.\21\ The
Plan is designed to create, implement and maintain a consolidated audit
trail (``CAT'') that would capture customer and order event information
for orders in NMS Securities and OTC Equity Securities, across all
markets, from the time of order inception through routing,
cancellation, modification, or execution in a single consolidated data
source. The Plan accomplishes this by creating CAT NMS, LLC (the
``Company''), of which each Plan Participant is a member, to operate
the CAT.\22\ Under the CAT NMS Plan, the Operating Committee of the
Company (``Operating Committee'') has discretion to establish funding
for the Company to operate the CAT, including establishing fees that
the Plan Participants will pay, and establishing fees for Industry
Members that will be implemented by the Plan Participants (``CAT
Fees'').\23\ The Plan Participants are required to file with the SEC
under Section 19(b) of the Exchange Act any such CAT Fees applicable to
Industry Members that the Operating Committee approves.\24\
Accordingly, the Exchange submitted the Original Proposal to propose
the Consolidated Audit Trail Funding Fees, which would require Industry
Members that are Exchange members to pay the CAT Fees determined by the
Operating Committee.
---------------------------------------------------------------------------

    \12\ Note that Bats BYX Exchange, Inc., Bats BZX Exchange, Inc.,
Bats EDGA Exchange, Inc., Bats EDGX Exchange, Inc., LLC, C2 Options
Exchange, Incorporated, and Chicago Board Options Exchange,
Incorporated, have been renamed Cboe BYX Exchange, Inc., Cboe BZX
Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc.,
Cboe C2 Exchange, Inc., Cboe Exchange, Inc., respectively.
    \13\ ISE Gemini, LLC, ISE Mercury, LLC and International
Securities Exchange, LLC have been renamed Nasdaq GEMX, LLC, Nasdaq
MRX, LLC, and Nasdaq ISE, LLC, respectively. See Securities Exchange
Act Rel. No. 80248 (Mar. 15, 2017), 82 FR 14547 (Mar. 21, 2017);
Securities Exchange Act Rel. No. 80326 (Mar. 29, 2017), 82 FR 16460
(Apr. 4, 2017); and Securities Exchange Act Rel. No. 80325 (Mar. 29,
2017), 82 FR 16445 (Apr. 4, 2017).
    \14\ NYSE MKT LLC has been renamed NYSE American LLC. See
Securities Exchange Act Rel. No. 80283 (Mar. 21. 2017), 82 FR 15244
(Mar. 27, 2017).
    \15\ National Stock Exchange, Inc. has been renamed NYSE
National, Inc. See Securities Exchange Act Rel. No. 79902 (Jan. 30,
2017), 82 FR 9258 (Feb. 3, 2017).
    \16\ A ``Participant'' is a ``member'' of the Exchange for
purposes of the Act. See CHX Article 1, Rule 1(s). For clarity, the
term ``Plan Participant'' will be used herein when referring to
Participants of the Plan.
    \17\ 15 U.S.C. 78k-1.
    \18\ 17 CFR 242.608.
    \19\ See Letter from the Plan Participants to Brent J. Fields,
Secretary, Commission, dated September 30, 2014; and Letter from
Plan Participants to Brent J. Fields, Secretary, Commission, dated
February 27, 2015. On December 24, 2015, the Plan Participants
submitted an amendment to the CAT NMS Plan. See Letter from Plan
Participants to Brent J. Fields, Secretary, Commission, dated
December 23, 2015.
    \20\ Securities Exchange Act Rel. No. 77724 (Apr. 27, 2016), 81
FR 30614 (May 17, 2016).
    \21\ Securities Exchange Act Rel. No. 79318 (Nov. 15, 2016), 81
FR 84696 (Nov. 23, 2016) (``Approval Order'').
    \22\ The Plan also serves as the limited liability company
agreement for the Company.
    \23\ Section 11.1(b) of the CAT NMS Plan.
    \24\ Id.
---------------------------------------------------------------------------

    The Commission published the Original Proposal for public comment
in the Federal Register on May 22, 2017,\25\ and received comments in
response to the Original Proposal or similar fee filings by other Plan
Participants.\26\ On June 30, 2017, the Commission suspended, and
instituted proceedings to determine whether to approve or disapprove,
the Original Proposal.\27\ The Commission received seven comment
letters in response to those proceedings.\28\
---------------------------------------------------------------------------

    \25\ Exchange Act Rel. No. 80691 (May 16, 2017), 82 FR 23344
(May 22, 2017).
    \26\ For a summary of comments, see generally Securities
Exchange Act Rel. No. 81067 (June 30, 2017), 82 FR 31656 (July 7,
2017) (``Suspension Order'').
    \27\ Suspension Order.
    \28\ See Letter from Stuart J. Kaswell, Executive Vice
President, Managing Director and General Counsel, Managed Funds
Association, to Brent J. Fields, Secretary, SEC (July 28, 2017)
(``MFA Letter''); Letter from Theodore R. Lazo, Managing Director
and Associate General Counsel, SIFMA, to Brent J. Fields, Secretary,
SEC (July 28, 2017) (``SIFMA Letter''); Joanna Mallers, Secretary,
FIA Principal Traders Group, to Brent J. Fields, Secretary, SEC
(July 28, 2017) (``FIA Principal Traders Group Letter''); Letter
from Kevin Coleman, General Counsel & Chief Compliance Officer,
Belvedere Trading LLC, to Brent J. Fields, Secretary, SEC (July 28,
2017) (``Belvedere Letter''); Letter from W. Hardy Callcott, Sidley
Austin LLP, to Brent J. Fields, Secretary, SEC (July 27, 2017)
(``Sidley Letter''); Letter from John Kinahan, Chief Executive
Officer, Group One Trading, L.P., to Brent J. Fields, Secretary, SEC
(Aug. 10, 2017) (``Group One Letter''); and Letter from Joseph
Molluso, Executive Vice President, Virtu Financial, to Brent J.
Fields, Secretary, SEC (Aug. 18, 2017) (``Virtu Financial Letter'').
---------------------------------------------------------------------------

    In response to the comments on the Original Proposal, the Operating
Committee determined to make the following changes to the funding
model: (1) Adds two additional CAT Fee tiers for Equity Execution
Venues; (2) discounts the market share of Execution Venue ATSs
exclusively trading OTC Equity Securities as well as the market share
of the FINRA over-the-counter reporting facility (``ORF'') by the
average shares per trade ratio between NMS Stocks and OTC Equity
Securities (calculated as 0.17% based on available data from the second
quarter of June 2017) when calculating the market share of Execution
Venue ATS exclusively trading OTC Equity Securities and FINRA; (3)
discounts the Options Market Maker quotes by the trade to quote ratio
for options (calculated as 0.01% based on available data for June 2016
through June 2017) when calculating message traffic for Options Market
Makers; (4) discounts equity market maker quotes by the trade to quote
ratio for equities (calculated as 5.43% based on available data for
June 2016 through June 2017) when calculating message traffic for
equity market makers; (5) decreases the number of tiers for Industry
Members (other than the Execution Venue ATSs) from nine to seven; (6)
changes the allocation of CAT costs between Equity Execution Venues and
Options Execution Venues from 75%/25% to 67%/33%; (7) adjusts tier
percentages and recovery allocations for Equity Execution Venues,
Options Execution Venues and Industry Members (other than Execution
Venue ATSs); (8) focuses the comparability of CAT Fees on the
individual entity level, rather than primarily on the comparability of
affiliated entities; (9) commences invoicing of CAT Reporters as
promptly as possible following the latest of the operative date of the
Consolidated Audit Trail Funding Fees for each of the Plan Participants
and the operative date of the CAT NMS Plan amendment adopting CAT Fees
for Plan Participants; and (10) requires the proposed fees to
automatically expire two years from the operative date of the CAT NMS
Plan amendment adopting CAT Fees for Plan Participants. On November 9,
2017, the Exchange filed the First Amendment and proposed to amend the
Original Proposal to reflect these changes.
    The Exchange submits this Second Amendment to revise the proposal
as set

forth in the First Amendment to discount the OTC Equity Securities
market share of all Execution Venue ATSs trading OTC Equity Securities,
rather than applying the discount solely to those Execution Venue ATSs
that exclusively trade OTC Equity Securities, when calculating the
market share of Execution Venue ATS trading OTC Equity Securities. As
discussed in the First Amendment:

    The Operating Committee determined to discount the market share
of Execution Venue ATSs exclusively trading OTC Equity Securities as
well as the market share of the FINRA ORF in recognition of the
different trading characteristics of the OTC Equity Securities
market as compared to the market in NMS Stocks. Many OTC Equity
Securities are priced at less than one dollar--and a significant
number at less than one penny--per share and low-priced shares tend
to trade in larger quantities. Accordingly, a disproportionately
large number of shares are involved in transactions involving OTC
Equity Securities versus NMS Stocks. Because the proposed fee tiers
are based on market share calculated by share volume, Execution
Venue ATSs exclusively trading OTC Equity Securities and FINRA would
likely be subject to higher tiers than their operations may
warrant.\29\
---------------------------------------------------------------------------

    \29\ See Amendment No. 1 to SR-CHX-2016-08 (November 9, 2017) at
32.

The Operating Committee believes that this argument applies equally to
both Execution Venue ATSs exclusively trading OTC Equity Securities and
to Execution Venue ATSs that trade OTC Equity Securities as well as
other securities. Accordingly, the Exchange proposes to amend paragraph
(b)(2) of the Consolidated Audit Trail Funding Fees to apply the
discount to all Execution Venue ATSs trading OTC Equity Securities.
Specifically, the Exchange proposes to change the parenthetical
regarding the OTC Equity Securities discount in paragraph (b)(2) of the
proposed fee schedule from ``with a discount for Equity ATSs
exclusively trading OTC Equity Securities based on the average shares
per trade ratio between NMS Stocks and OTC Equity Securities'' to
``with a discount for OTC Equity Securities market share of Equity ATSs
trading OTC Equity Securities based on the average shares per trade
ratio between NMS Stocks and OTC Equity Securities.''
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b)(5) of the Act,\30\ which require,
among other things, that the Exchange's rules must be designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, and, in general, to protect
investors and the public interest, and not designed to permit unfair
discrimination between customers, issuers, brokers and dealer, and
Section 6(b)(4) of the Act,\31\ which requires that exchange rules
provide for the equitable allocation of reasonable dues, fees, and
other charges among members and issuers and other persons using its
facilities. The Exchange believes that the proposed change is
consistent with the Act, and that the proposed fees are reasonable,
equitably allocated and not unfairly discriminatory. In particular, the
Exchange believes that the proposed change would treat all Equity ATSs
trading OTC Equity Securities in a comparable manner when calculating
applicable fees. In addition, the fee structure takes into
consideration distinctions in securities trading operations of CAT
Reporters, including all ATSs trading OTC Equity Securities.
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78f(b)(5).
    \31\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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

    Section 6(b)(8) of the Act \32\ require that the Exchange's rules
not impose any burden on competition that is not necessary or
appropriate. The Exchange does not believe that the proposed rule
change will result in any burden on competition that is not necessary
or appropriate in furtherance of the purposes of the Act. As previously
described, the Exchange believes that the proposed rule change fairly
and equitably allocates costs among CAT Reporters. In particular, the
proposed fee schedule is structured to impose comparable fees on
similarly situated CAT Reporters. The Exchange believes that the
proposed change would treat all Equity ATSs trading OTC Equity
Securities in a comparable manner when calculating applicable fees. In
addition, the fee structure takes into consideration distinctions in
securities trading operations of CAT Reporters, including all ATSs
trading OTC Equity Securities. Moreover, the Operating Committee
believes that the proposed changes address certain competitive concerns
raised by commenters related to ATSs trading OTC Equity Securities.
---------------------------------------------------------------------------

    \32\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

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

    The Exchange set forth responses to comments received regarding the
Original Proposal in the First Amendment. In addition, the proposed
changes set forth in this Second Amendment further respond to comments
made regarding ATSs trading OTC Equity Securities.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposal, as
amended by Amendment No. 1 and Amendment No. 2, 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 email to [email protected]. Please include
File Number SR-CHX-2017-08 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-CHX-2017-08. This file
number should be included on the subject line if email 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 website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change 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 website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CHX-2017-08, and should

be submitted on or before January 4, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
---------------------------------------------------------------------------

    \33\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-26919 Filed 12-13-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: June 8, 2010 (Volume 75, Number 109)]
[Rules and Regulations]
[Page 32251-32253]
[DOCID:fr08jn10-1]

========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.

========================================================================

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2010-0250 Directorate Identifier 2010-CE-011-AD;
Amendment 39-16325; AD 2010-12-04]
RIN 2120-AA64

Airworthiness Directives; PILATUS Aircraft Ltd. Model PC-7
Airplanes

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

ACTION: Final Rule.

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

SUMMARY: We are adopting a new airworthiness directive (AD) for the
products listed above. This AD results from mandatory continuing
airworthiness information (MCAI) issued by an aviation authority of
another country to identify and correct an unsafe condition on an
aviation product. The MCAI describes the unsafe condition as:

    This Airworthiness Directive (AD) is prompted due to the
discovery of corrosion at the bonding strap connections on the left
and right lower longerons between fuselage frames 1 and 1A. The
possibility of corrosion is increased because of the high electrical
current flow between the tinned copper terminal lug of the bonding
strap and the aluminum longeron.
    Such a condition, if left uncorrected, could lead to failure of
the longeron and will prejudice the structural integrity of the
aircraft.

We are issuing this AD to require actions to correct the unsafe
condition on these products.

DATES: This AD becomes effective July 13, 2010.
    On July 13, 2010, the Director of the Federal Register approved the
incorporation by reference of certain publications listed in this AD.

ADDRESSES: You may examine the AD docket on the Internet at http://
www.regulations.gov or in person at the Document Management Facility,
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: Doug Rudolph, Aerospace Engineer, FAA,
Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri
64106; telephone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 to include an AD that would apply to the specified products.
That NPRM was published in the Federal Register on March 15, 2010 (75
FR 12150). That NPRM proposed to correct an unsafe condition for the
specified products. The MCAI states:

    This Airworthiness Directive (AD) is prompted due to the
discovery of corrosion at the bonding strap connections on the left
and right lower longerons between fuselage frames 1 and 1A. The
possibility of corrosion is increased because of the high electrical
current flow between the tinned copper terminal lug of the bonding
strap and the aluminum longeron.
    Such a condition, if left uncorrected, could lead to failure of
the longeron and will prejudice the structural integrity of the
aircraft.
    In order to correct and control the situation, this AD requires
a one time inspection of the longeron structure and the terminal
lugs of the bonding straps for signs of corrosion.

For left and right lower longerons where corrosion is found during the
inspection, the MCAI also requires repair of any longeron where
corrosion is found.

Comments

    We gave the public the opportunity to participate in developing
this AD. We considered the comment received. The commenter supports the
NPRM.

Conclusion

    We reviewed the available data, including the comment received, and
determined that air safety and the public interest require adopting the
AD as proposed.

Differences Between This AD and the MCAI or Service Information

    We have reviewed the MCAI and related service information and, in
general, agree with their substance. But we might have found it
necessary to use different words from those in the MCAI to ensure the
AD is clear for U.S. operators and is enforceable. In making these
changes, we do not intend to differ substantively from the information
provided in the MCAI and related service information.
    We might also have required different actions in this AD from those
in the MCAI in order to follow FAA policies. Any such differences are
highlighted in a Note within the AD.

Costs of Compliance

    We estimate that this AD will affect 10 products of U.S. registry.
We also estimate that it will take about 4.5 work-hours per product to
comply with the basic requirements of this AD. The average labor rate
is $85 per work-hour.
    Based on these figures, we estimate the cost of this AD to the U.S.
operators to be $3,825 or $383 per product.
    In addition, we estimate that any necessary follow-on actions will
take about 3 work-hours and require parts costing $500, for a cost of
$755 per product. We have no way of determining the number of products
that may need these actions.

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

Regulatory Findings

    We determined that this AD will not have federalism implications
under Executive Order 13132. This AD will not have a substantial direct
effect on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.
    For the reasons discussed above, I certify this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866;
    (2) Is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.
    We prepared a regulatory evaluation of the estimated costs to
comply with this AD and placed it in the AD Docket.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://
www.regulations.gov; or in person at the Docket Management Facility
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains the NPRM, the regulatory evaluation,
any comments received, and other information. The street address for
the Docket Office (telephone<PHONE_NUMBER>) is in the ADDRESSES
section. Comments will be available in the AD docket shortly after
receipt.

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

0
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 AD:

2010-12-04 PILATUS Aircraft Ltd.: Amendment 39-16325; Docket No.
FAA-2010-0250; Directorate Identifier 2010-CE-011-AD.

Effective Date

    (a) This airworthiness directive (AD) becomes effective July 13,
2010.

Affected ADs

    (b) None.

Applicability

    (c) This AD applies to Model PC-7 airplanes, all serial numbers,
certificated in any category.

Subject

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

Reason

    (e) The mandatory continuing airworthiness information (MCAI)
states:

    This Airworthiness Directive (AD) is prompted due to the
discovery of corrosion at the bonding strap connections on the left
and right lower longerons between fuselage frames 1 and 1A. The
possibility of corrosion is increased because of the high electrical
current flow between the tinned copper terminal lug of the bonding
strap and the aluminum longeron.
    Such a condition, if left uncorrected, could lead to failure of
the longeron and will prejudice the structural integrity of the
aircraft. In order to correct and control the situation, this AD
requires a one time inspection of the longeron structure and the
terminal lugs of the bonding straps for signs of corrosion.

For left and right lower longerons where corrosion is found during
the inspection, the MCAI also requires repair of any longeron where
corrosion is found.

Actions and Compliance

    (f) Unless already done, do the following actions:
    (1) Within the next 120 days after July 13, 2010 (the effective
date of this AD), perform a visual inspection of the forward bonding
points and the terminal lugs on the left and right lower longerons
between fuselage frames 1 and 1A for signs of corrosion. Do the
inspection following paragraphs 3.C.(1), (2), and (3) of PILATUS PC-
7 Service Bulletin No. 53-007, dated January 5, 2010.
    (2) If any signs of corrosion are found during the inspection
required in paragraph (f)(1) of this AD, prior to further flight,
perform corrective actions in accordance with the Accomplishment
Instructions in paragraph 3.D of PILATUS PC-7 SB No. 53-007, dated
January 5, 2010. If the corrosion damage is out of limits, record
the values; apply to PILATUS for a repair scheme at: PILATUS
AIRCRAFT LTD., Customer Service Manager, CH-6371 STANS, Switzerland;
telephone: +41 (0) 41 619 62 08; fax: +41 (0) 41 619 73 11; and
implement the repair scheme.

    Note 1: The Federal Office of Civil Aviation (FOCA), which is
the airworthiness authority for Switzerland, will work with PILATUS
in reviewing the results of the initial inspection as specified in
PILATUS PC-7 Service Bulletin No. 53-007, dated January 5, 2010.
From this, a repetitive inspection requirement or other action may
be established. The FAA will evaluate any such action and determine
whether further rulemaking is necessary.

FAA AD Differences

    Note 2: This AD differs from the MCAI and/or service information
as follows: No differences.

Other FAA AD Provisions

    (g) The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
Standards Office, FAA, has the authority to approve AMOCs for this
AD, if requested using the procedures found in 14 CFR 39.19. Send
information to Attn: Doug Rudolph, Aerospace Engineer, FAA, Small
Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri
64106; telephone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>. Before using
any approved AMOC on any airplane to which the AMOC applies, notify
your appropriate principal inspector (PI) in the FAA Flight
Standards District Office (FSDO), or lacking a PI, your local FSDO.
    (2) Airworthy Product: For any requirement in this AD to obtain
corrective actions from a manufacturer or other source, use these
actions if they are FAA-approved. Corrective actions are considered
FAA-approved if they are approved by the State of Design Authority
(or their delegated agent). You are required to assure the product
is airworthy before it is returned to service.
    (3) Reporting Requirements: For any reporting requirement in
this AD, under the provisions of the Paperwork Reduction Act (44
U.S.C. 3501 et seq.), the Office of Management and Budget (OMB) has
approved the information collection requirements and has assigned
OMB Control Number 2120-0056.

Related Information

    (h) Refer to MCAI FOCA AD HB-2010-001, dated February 12, 2010;
and PILATUS PC-7 Service Bulletin No. 53-007, dated January 5, 2010,
for related information.

Material Incorporated by Reference

    (i) You must use PILATUS PC-7 Service Bulletin No. 53-007, dated
January 5, 2010, to do the actions required by this AD, unless the
AD specifies otherwise.
    (1) The Director of the Federal Register approved the
incorporation by reference of this service information under 5
U.S.C. 552(a) and 1 CFR part 51.
    (2) For service information identified in this AD, contact
PILATUS AIRCRAFT LTD., Customer Service Manager, CH-6371 STANS,
Switzerland; telephone: +41 (0) 41 619 62 08; fax: +41 (0) 41 619 73
11; Internet: http://www.pilatus-aircraft.com.
    (3) You may review copies of the service information
incorporated by reference for this AD at the FAA, Central Region,
Office of the Regional Counsel, 901 Locust, Kansas City, Missouri
64106. For information on the availability of this material at the
Central Region, call<PHONE_NUMBER>.
    (4) You may also review copies of the service information
incorporated by reference for this AD at the National Archives and
Records Administration (NARA). For

information on the availability of this material at NARA, call (202)
741-6030, or go to: http://www.archives.gov/federal_register/code_
of_federal_regulations/ibr_locations.html.

    Issued in Kansas City, Missouri, on May 27, 2010.
Steven W. Thompson,
Acting Manager, Small Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2010-13400 Filed 6-7-10; 8:45 am]
BILLING CODE 4910-13-P