Federal Register / Vol. 76, No. 69 / Monday, April 11, 2011 / Rules and Regulations 19903 

Decision and Order which granted to 

the above 27 petitioners the requested 

180-day extension of the compliance 

date for recent amendments to the DOE 

test procedure for residential furnaces 

and boilers related to the standby mode 

and off mode energy consumption of 

these products. 

Recently, DOE received a petition 

dated February 17, 2011 from a 28th 

manufacturer, Viessmann 

Manufacturing Company, Inc., in which 

the manufacturer also requested the 

above-referenced 180-day extension. 

Viessmann Manufacturing Company’s 

petition recited many of the same 

arguments as the earlier petitioners 

regarding the undue hardship which the 

petitioner would face if the requested 

extension of the compliance date were 

not granted. DOE has determined that 

the petitioner has made its case and that 

the extension should be granted for the 

reasons stated in the March 31, 2011 

Decision and Order. 

II. Conclusion 

Although DOE received this petition 

well after February 17, 2011, the 

Department believes a number of 

factors, including international postal 

handling and Federal mail security 

screening, contributed to this delay in 

receipt of the petition from this 28th 

manufacturer. After review, DOE has 

decided to grant the petition. Through 

this correction notice, DOE is modifying 

its Decision and Order to add 

Viessmann Manufacturing Company, 

Inc., to the list of companies to whom 

the extension of the compliance date 

has been granted. 

Issued in Washington, DC, on April 5, 

2011. 

Kathleen Hogan, 

Deputy Assistant Secretary for Energy 

Efficiency, Office of Technology 

Development, Energy Efficiency and 

Renewable Energy. 

[FR Doc. 2011–8572 Filed 4–8–11; 8:45 am] 

BILLING CODE 6450–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 23 

[Docket No. CE310; Special Conditions No. 

23–250–SC 

Special Conditions: Diamond Aircraft 

Industry Model DA–40NG; Diesel Cycle 

Engine 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final special conditions; request 

for comments. 

SUMMARY: These special conditions are 

issued for the Diamond Aircraft 

Industry (DAI) GmbH model DA–40NG 

the Austro Engine GmbH model E4 

aircraft diesel engine (ADE) using 

turbine (jet) fuel. This airplane will have 

a novel or unusual design feature(s) 

associated with the installation of a 

diesel cycle engine utilizing turbine (jet) 

fuel. The applicable airworthiness 

regulations do not contain adequate or 

appropriate safety standards for this 

design feature. These special conditions 

contain the additional safety standards 

that the Administrator considers 

necessary to establish a level of safety 

equivalent to that established by the 

existing airworthiness standards. 

DATES: The effective date of these 

special conditions is April 1, 2011. 

We must receive your comments by 

May 11, 2011. 

ADDRESSES: Mail two copies of your 

comments to: Federal Aviation 

Administration, Regional Counsel, 

ACE–7, Attn: Rules Docket No. CE310, 

901 Locust, Kansas City, MO 64106. 

You may deliver two copies to the 

Regional Counsel at the above address. 

Mark your comments: Docket No. 

CE310. You may inspect comments in 

the Rules Docket weekdays, except 

Federal holidays, between 7:30 a.m. and 

4 p.m. 

FOR FURTHER INFORMATION CONTACT: 

Peter L. Rouse, Federal Aviation 

Administration, Small Airplane 

Directorate, Aircraft Certification 

Service, ACE–111, 901 Locust, Kansas 

City, Missouri, 816–329–4135, fax 816– 

329–4090. 

SUPPLEMENTARY INFORMATION: The FAA 

has determined that notice and 

opportunity for prior public comment 

hereon are impracticable because these 

procedures would significantly delay 

issuance of the design approval and 

thus delivery of the affected aircraft. In 

addition, the substance of these special 

conditions has been subject to the 

public comment process in several prior 

instances with no substantive comments 

received. The FAA therefore finds that 

good cause exists for making these 

special conditions effective upon 

issuance. 

Comments Invited 

We invite interested people to take 

part in this rulemaking by sending 

written comments, data, or views. The 

most helpful comments reference a 

specific portion of the special 

conditions, explain the reason for any 

recommended change, and include 

supporting data. We ask that you send 

us two copies of written comments. 

We will file in the docket all 

comments we receive, as well as a 

report summarizing each substantive 

public contact with FAA personnel 

about these special conditions. You can 

inspect the docket before and after the 

comment closing date. If you wish to 

review the docket in person, go to the 

address in the ADDRESSES section of this 

preamble between 7:30 a.m. and 4 p.m., 

Monday through Friday, except Federal 

holidays. 

We will consider all comments we 

receive by the closing date for 

comments. We will consider comments 

filed late if it is possible to do so 

without incurring expense or delay. We 

may change these special conditions 

based on the comments we receive. 

If you want us to let you know we 

received your comments on these 

special conditions, send us a preaddressed, stamped postcard on which 

the docket number appears. We will 

stamp the date on the postcard and mail 

it back to you. 

Background 

On May 11, 2010 Diamond Aircraft 

Industry GmbH applied for an 

amendment to Type Certificate No. 

A47CE to include the new Model DA– 

40NG with the Austro Engine GmbH 

Model E4 ADE. The Model DA–40NG, 

which is a derivative of the model DA– 

40 currently approved under Type 

Certificate No. A47CE, is a fully 

composite, four place, single-engine 

airplane with a cantilever low wing, 

T-tail airplane with the Austro Engine 

GmbH Model E4 diesel engine and an 

increased maximum takeoff gross 

weight from 1150 kilograms (kg) to 1280 

kg (2535 pounds (lbs) to 2816 lbs). 

In anticipation of the reintroduction 

of diesel engine technology into the 

small airplane fleet, the FAA issued 

Policy Statement PS–ACE100–2002–004 

on May 15, 2004, which identified areas 

of technological concern. Refer to this 

policy for a detailed summary of the 

FAA’s development of diesel engine 

requirements. 

The general areas of concern involve 

the power characteristics of the diesel 

engines, the use of turbine fuel in an 

airplane class that is typically powered 

by gasoline fueled engines and the 

vibration characteristics and failure 

modes of diesel engines. A review of the 

historical record of diesel engine use in 

aircraft and part 23 identified these 

concerns. The review identified specific 

regulatory areas requiring evaluation for 

applicability to diesel engine 

installations. These concerns are not 

considered universally applicable to all 

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19904 Federal Register / Vol. 76, No. 69 / Monday, April 11, 2011 / Rules and Regulations 

types of possible diesel engines and 

diesel engine installations. However, 

after reviewing the DAI installation, the 

Austro engine type, the Austro Control 

GmbH (ACG) requirements, and Policy 

Statement PS–ACE100–2002–004, the 

FAA issues these fuel system and 

engine related special conditions. The 

Austro engine has a Full Authority 

Digital Engine Control (FADEC), which 

also requires special conditions. The 

FADEC special conditions will be 

issued in a separate notice. 

Type Certification Basis 

Under the provisions of § 21.101, DAI 

must show that the model DA–40NG 

meets the applicable provisions of the 

regulations incorporated by reference in 

Type Certificate No. A47CE or the 

applicable regulations in effect on the 

date of application for the change to the 

model DA–40. The regulations 

incorporated by reference in the type 

certificate are commonly referred to as 

the ‘‘original type certification basis.’’ In 

addition, the certification basis includes 

special conditions and equivalent levels 

of safety for the following: 

Special Conditions: 

• Engine torque (Provisions similar to 

§ 23.361, paragraphs (b)(1) and (c)(3)). 

• Flutter (Compliance with § 23.629, 

paragraphs (e)(1) and (2)). 

• Powerplant—Installation 

(Provisions similar to § 23.901(d)(1) for 

turbine engines). 

• Powerplant—Fuel System—Fuel 

system with water saturated fuel 

(Compliance with § 23.951 

requirements). 

• Powerplant—Fuel System—Fuel 

system hot weather operation 

(Compliance with § 23.961 

requirements). 

• Powerplant—Fuel system—Fuel 

tank filler connection (Compliance with 

§ 23.973(f) requirements). 

• Powerplant—Fuel system—Fuel 

tank outlet (Compliance with § 23.977 

requirements). 

• Equipment—General—Powerplant 

Instruments (Compliance with § 23.1305 

requirements). 

• Operating Limitations and 

Information—Powerplant limitations— 

Fuel grade or designation (Compliance 

with § 23.1521(d) requirements). 

• Markings And Placards— 

Miscellaneous markings and placards— 

Fuel, oil, and coolant filler openings 

(Compliance with § 23.1557(c)(1) 

requirements). 

• Powerplant—Fuel system—FuelFreezing. 

• Powerplant Installation—Vibration 

levels. 

• Powerplant Installation—One 

cylinder inoperative. 

• Powerplant Installation—High 

Energy Engine Fragments. 

Equivalent level of safety for: 

• Cockpit controls—23.777(d) 

• Motion and effect of cockpit 

controls—23.779(b) 

• Liquid Cooling—Installation— 

23.1061 

• Ignition switches—23.1145 

If the Administrator finds that the 

applicable airworthiness regulations 

(i.e., 14 CFR part 23) do not contain 

adequate or appropriate safety standards 

for the model DA–40NG because of a 

novel or unusual design feature, special 

conditions are prescribed under the 

provisions of § 21.16. 

In addition to the applicable 

airworthiness regulations and special 

conditions, the model DA–40NG must 

comply with the fuel vent and exhaust 

emission requirements of 14 CFR part 

34 and the noise certification 

requirements of 14 CFR part 36. 

The FAA issues special conditions, as 

defined in § 11.19, under § 11.38, and 

become part of the type certification 

basis in accordance with § 21.101. 

Special conditions are initially 

applicable to the model for which they 

are issued. Should the type certificate 

for that model be amended later to 

include any other model that 

incorporates the same novel or unusual 

design feature, or should any other 

model already included on the same 

type certificate be modified to 

incorporate the same novel or unusual 

design feature, the special conditions 

would also apply to the other model. 

Novel or Unusual Design Features 

The model DA–40NG will incorporate 

the following novel or unusual design 

features: Installation of the Austro 

Engine GmbH Model E4 ADE diesel 

engine utilizing turbine (jet) fuel. 

Discussion 

Several major concerns were 

identified in developing FAA policy. 

These include installing the diesel 

engine and noting its vibration levels 

under both normal operating conditions 

and when one cylinder is inoperative. 

The concerns also include 

accommodating turbine fuels in airplane 

systems that have generally evolved 

based on gasoline requirements, 

anticipated use of a FADEC to control 

the engine, and appropriate limitations 

and indications for a diesel engine 

powered airplane. The general concerns 

associated with the aircraft diesel 

engine installation are as follows: 

• Installation and Vibration 

Requirements. 

• Fuel and Fuel System Related 

Requirements. 

• Limitations and Indications. 

Installation and Vibration 

Requirements: These special conditions 

include requirements similar to the 

requirements of § 23.901(d)(1) for 

turbine engines. In addition to the 

requirements of § 23.901 applied to 

reciprocating engines, the applicant will 

be required to construct and arrange 

each diesel engine installation to result 

in vibration characteristics that do not 

exceed those established during the type 

certification of the engine. These 

vibration levels must not exceed 

vibration characteristics that a 

previously certificated airframe 

structure has been approved for, unless 

such vibration characteristics are shown 

to have no effect on safety or continued 

airworthiness. The engine limit torque 

design requirements as specified in 

§ 23.361 are also modified. 

An additional requirement to consider 

vibration levels and/or effects of an 

inoperative cylinder was imposed. Also, 

a requirement to evaluate the engine 

design for the possibility of, or effect of, 

liberating high-energy engine fragments, 

in the event of a catastrophic engine 

failure, requirements was added. 

Fuel and Fuel System Related 

Requirements: Due to the use of turbine 

fuel, this airplane must comply with the 

requirements in § 23.951(c). 

Section 23.961 will be complied with 

using the turbine fuel requirements. 

These requirements will be 

substantiated by flight-testing as 

described in Advisory Circular AC 23– 

8B, Flight Test Guide for Certification of 

Part 23 Airplanes. 

This special condition specifically 

requires testing to show compliance to 

§ 23.961 and adds the possibility of 

testing non-aviation diesel fuels. 

To ensure fuel system compatibility 

and reduce the possibility of misfueling, 

and discounting the first clause of 

§ 23.973(f) referring to turbine engines, 

the applicant will comply with 

§ 23.973(f). 

Due to the use of turbine fuel, the 

applicant will comply with 

§ 23.977(a)(2), and § 23.977(a)(1) will 

not apply. ‘‘Turbine engines’’ will be 

interpreted to mean ‘‘aircraft diesel 

engine’’ for this requirement. An 

additional requirement to consider the 

possibility of fuel freezing was imposed. 

Due to the use of turbine fuel, the 

applicant will comply with 

§ 23.1305(c)(8). 

Due to the use of turbine fuel, the 

applicant must comply with 

§ 23.1557(c)(1)(ii). Section 

23.1557(c)(1)(ii) will not apply. 

‘‘Turbine engine’’ is interpreted to mean 

‘‘aircraft diesel engine’’ for this 

requirement. 

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Federal Register / Vol. 76, No. 69 / Monday, April 11, 2011 / Rules and Regulations 19905 

Limitations and Indications 

Section 23.1305(a) and § 23.1305(b)(2) 

will apply, except that propeller 

revolutions per minute (RPM) will be 

displayed. Sections 23.1305(b)(4), 

23.1305(b)(5), and 23.1305(b)(7) are 

deleted. Additional critical engine 

parameters for this installation that will 

be displayed include: 

(1) Power setting, in percentage, and 

(2) Fuel temperature. 

Due to the use of turbine fuel, the 

requirements for § 23.1521(d), as 

applicable to fuel designation for 

turbine engines, will apply. 

Applicability 

As discussed above, these special 

conditions are applicable to the model 

DA–40NG. Should DAI apply at a later 

date for a change to the type certificate 

to include another model incorporating 

the same novel or unusual design 

feature, the special conditions would 

apply to that model as well. 

Conclusion 

This action affects only certain novel 

or unusual design features on one model 

of airplanes. It is not a rule of general 

applicability, and it affects only the 

applicant who applied to the FAA for 

approval of these features on the 

airplane. 

The substance of these special 

conditions has been subjected to the 

notice and comment period in several 

prior instances and has been derived 

without substantive change from those 

previously issued. It is unlikely that 

prior public comment would result in a 

significant change from the substance 

contained herein. Therefore, because a 

delay would significantly affect the 

certification of the airplane, which is 

imminent, the FAA has determined that 

prior public notice and comment are 

unnecessary and impracticable, and 

good cause exists for adopting these 

special conditions upon issuance. The 

FAA is requesting comments to allow 

interested persons to submit views that 

may not have been submitted in 

response to the prior opportunities for 

comment described above. 

List of Subjects in 14 CFR Part 23 

Aircraft, Aviation safety, Signs and 

symbols. 

Citation 

The authority citation for these 

special conditions is as follows: 

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

44701; 14 CFR 21.16 and 21.17; and 14 CFR 

11.38 and 11.19. 

The Special Conditions 

Accordingly, pursuant to the 

authority delegated to me by the 

Administrator, the following special 

conditions are issued as part of the type 

certification basis for Diamond Aircraft 

Industry GmbH Model DA–40NG with 

the installation of the Austro Engine 

GmbH Model E4 aircraft diesel engine. 

1. Engine torque (Provisions similar to 

§ 23.361, paragraphs (b)(1) and (c)(3)): 

a. For diesel engine installations, the 

engine mounts and supporting structure 

must be designed to withstand the 

following: 

(1) A limit engine torque load 

imposed by sudden engine stoppage due 

to malfunction or structural failure. 

(a) The effects of sudden engine 

stoppage may alternatively be mitigated 

to an acceptable level by utilization of 

isolators, dampers clutches, and similar 

provisions, so unacceptable load levels 

are not imposed on the previously 

certificated structure. 

b. The limit engine torque to be 

considered under § 23.361(a) must be 

obtained by multiplying the mean 

torque by a factor of four for diesel cycle 

engines. 

(1) If a factor of less than four is used, 

it must be shown that the limit torque 

imposed on the engine mount is 

consistent with the provisions of 

§ 23.361(c). In other words, it must be 

shown that the use of the factors listed 

in § 23.361(c)(3) will result in limit 

torques on the mount that are equivalent 

to or less than those imposed by a 

conventional gasoline reciprocating 

engine. 

2. Flutter—(Compliance with § 23.629 

(e)(1) and (e)(2) requirements): 

The flutter evaluation of the airplane 

done in accordance with 14 CFR 23.629 

must include– 

(a) Whirl mode degree of freedom 

which takes into account the stability of 

the plane of rotation of the propeller 

and significant elastic, inertial, and 

aerodynamic forces, and 

(b) Propeller, engine, engine mount 

and airplane structure stiffness and 

damping variations appropriate to the 

particular configuration, and 

(c) The flutter investigation will 

include showing the airplane is free 

from flutter with one cylinder 

inoperative. 

3. Powerplant—Installation 

(Provisions similar to § 23.901(d)(1) for 

turbine engines): 

Considering the vibration 

characteristics of diesel engines, the 

applicant must comply with the 

following: 

a. Each diesel engine installation must 

be constructed and arranged to result in 

vibration characteristics that— 

(1) Do not exceed those established 

during the type certification of the 

engine; and 

(2) Do not exceed vibration 

characteristics that a previously 

certificated airframe structure has been 

approved for— 

(i) Unless such vibration 

characteristics are shown to have no 

effect on safety or continued 

airworthiness, or 

(ii) Unless mitigated to an acceptable 

level by utilization of isolators, dampers 

clutches, and similar provisions, so that 

unacceptable vibration levels are not 

imposed on the previously certificated 

structure. 

4. Powerplant—Fuel System—Fuel 

system with water saturated fuel 

(Compliance with § 23.951 

requirements): 

Considering the fuel types used by 

diesel engines, the applicant must 

comply with the following: 

a. Each fuel system for a diesel engine 

must be capable of sustained operation 

throughout its flow and pressure range 

with fuel initially saturated with water 

at 80° F and having 0.75cc of free water 

per gallon added and cooled to the most 

critical condition for icing likely to be 

encountered in operation. 

b. Methods of compliance that are 

acceptable for turbine engine fuel 

systems requirements of § 23.951(c) are 

also considered acceptable for this 

requirement. 

5. Powerplant—Fuel System—Fuel 

system hot weather operation 

(Compliance with § 23.961 

requirements): 

In place of compliance with § 23.961, 

the applicant must comply with the 

following: 

a. Each fuel system must be free from 

vapor lock when using fuel at its critical 

temperature, with respect to vapor 

formation, when operating the airplane 

in all critical operating and 

environmental conditions for which 

approval is requested. For turbine fuel, 

or for aircraft equipped with diesel 

cycle engines that use turbine or diesel 

type fuels, the initial temperature must 

be 110 °F, ¥0°, +5° or the maximum 

outside air temperature for which 

approval is requested, whichever is 

more critical. 

b. The fuel system must be in an 

operational configuration that will yield 

the most adverse, that is, conservative 

results. 

c. To comply with this requirement, 

the applicant must use the turbine fuel 

requirements and must substantiate 

these by flight-testing, as described in 

Advisory Circular AC 23–8B, Flight Test 

Guide for Certification of Part 23 

Airplanes. 

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19906 Federal Register / Vol. 76, No. 69 / Monday, April 11, 2011 / Rules and Regulations 

6. Powerplant—Fuel system—Fuel 

tank filler connection (Compliance with 

§ 23.973(f) requirements): 

In place of compliance with 

§ 23.973(e) and (f), the applicant must 

comply with the following: 

For airplanes that operate on turbine 

or diesel type fuels, the inside diameter 

of the fuel filler opening must be no 

smaller than 2.95 inches. 

7. Powerplant—Fuel system—Fuel 

tank outlet (Compliance with § 23.977 

requirements): 

In place of compliance with 

§ 23.977(a)(1) and (a)(2), the applicant 

will comply with the following: 

There must be a fuel strainer for the 

fuel tank outlet or for the booster pump. 

This strainer must, for diesel engine 

powered airplanes, prevent the passage 

of any object that could restrict fuel flow 

or damage any fuel system component. 

8. Equipment—General—Powerplant 

Instruments (Compliance with § 23.1305 

and 91.205 requirements): 

In place of compliance with 

§ 23.1305, the applicant will comply 

with the following: 

Below are required powerplant 

instruments: 

(a) A fuel quantity indicator for each 

fuel tank, installed in accordance with 

§ 23.1337(b). 

(b) An oil pressure indicator. 

(c) An oil temperature indicator. 

(d) A tachometer indicating propeller 

speed. 

(e) A coolant temperature indicator. 

(f) An indicating means for the fuel 

strainer or filter required by § 23.997 to 

indicate the occurrence of 

contamination of the strainer or filter 

before it reaches the capacity 

established in accordance with 

§ 23.997(d). 

Alternately, no indicator is required if 

the engine can operate normally for a 

specified period with the fuel strainer 

exposed to the maximum fuel 

contamination as specified in MIL– 

5007D. Additionally, provisions for 

replacing the fuel filter at this specified 

period (or a shorter period) are included 

in the maintenance schedule for the 

engine installation. 

(g) Power setting, in percentage. 

(h) Fuel temperature. 

(i) Fuel flow (engine fuel 

consumption). 

In place of compliance to § 91.205, 

comply with the following: 

The diesel engine has no manifold 

pressure gauge as required by § 91.205, 

in its place, the engine instrumentation 

as installed is to be approved as 

equivalent. The Type Certification Data 

Sheet (TCDS) is to be modified to show 

power indication will be accepted to be 

equivalent to the manifold pressure 

indication. 

9. Operating Limitations and 

Information—Powerplant limitations— 

Fuel grade or designation (Compliance 

with § 23.1521(d) requirements): 

Instead of compliance with 

§ 23.1521(d), the applicant must comply 

with the following: 

The minimum fuel designation (for 

diesel engines) must be established so it 

is not less than required for the 

operation of the engines within the 

limitations in paragraphs (b) and (c) of 

§ 23.1521. 

10. Markings and Placards— 

Miscellaneous markings and placards— 

Fuel, oil, and coolant filler openings 

(Compliance with § 23.1557(c)(1) 

requirements): 

Instead of compliance with 

§ 23.1557(c)(1), the applicant must 

comply with the following: 

Fuel filler openings must be marked 

at or near the filler cover with— 

For diesel engine-powered 

airplanes— 

(a) The words ‘‘Jet Fuel’’; and 

(b) The permissible fuel designations, 

or references to the Airplane Flight 

Manual (AFM) for permissible fuel 

designations. 

(c) A warning placard or note that 

states the following or similar: 

‘‘Warning—this airplane is equipped 

with an aircraft diesel engine; service 

with approved fuels only.’’ 

The colors of this warning placard 

should be black and white. 

11. Powerplant—Fuel system—FuelFreezing: 

If the fuel in the tanks cannot be 

shown to flow suitably under all 

possible temperature conditions, then 

fuel temperature limitations are 

required. These limitations will be 

considered as part of the essential 

operating parameters for the aircraft. 

Limitations will be determined as 

follows: 

(a) The takeoff temperature limitation 

must be determined by testing or 

analysis to define the minimum fuel 

cold-soaked temperature that the 

airplane can operate on. 

(b) The minimum operating 

temperature limitation must be 

determined by testing to define the 

minimum acceptable operating 

temperature after takeoff (with 

minimum takeoff temperature 

established in (1) above). 

12. Powerplant Installation— 

Vibration levels: 

Vibration levels throughout the 

engine operating range must be 

evaluated and: 

(a) Vibration levels imposed on the 

airframe must be less than or equivalent 

to those of the gasoline engine; or 

(b) Any vibration level higher than 

that imposed on the airframe by the 

replaced gasoline engine must be 

considered in the modification and the 

effects on the technical areas covered by 

the following paragraphs must be 

investigated: 

14 CFR part 23, §§ 23.251; 23.613; 

23.627; 23.629 (or CAR 3.159, as 

applicable to various models); 23.572; 

23.573; 23.574 and 23.901. 

Vibration levels imposed on the 

airframe can be mitigated to an 

acceptable level by utilization of 

isolators, damper clutches and similar 

provisions so that unacceptable 

vibration levels are not imposed on the 

previously certificated structure. 

13. Powerplant Installation—One 

cylinder inoperative: 

Tests or analysis, or a combination of 

methods, must show that the airframe 

can withstand the shaking or vibratory 

forces imposed by the engine if a 

cylinder becomes inoperative. Diesel 

engines of conventional design typically 

have extremely high levels of vibration 

when a cylinder becomes inoperative. 

Data must be provided to the airframe 

installer/modifier so either appropriate 

design considerations or operating 

procedures, or both, can be developed to 

prevent airframe and propeller damage. 

14. Powerplant Installation—High 

Energy Engine Fragments: 

It may be possible for diesel engine 

cylinders (or portions thereof) to fail 

and physically separate from the engine 

at high velocity (due to the high internal 

pressures). This failure mode will be 

considered possible in engine designs 

with removable cylinders or other nonintegral block designs. The following is 

required: 

(a) It must be shown that the engine 

construction type (massive or integral 

block with non-removable cylinders) is 

inherently resistant to liberating high 

energy fragments in the event of a 

catastrophic engine failure; or, 

(b) It must be shown by the design of 

the engine, that engine cylinders, other 

engine components or portions thereof 

(fragments) cannot be shed or blown off 

of the engine in the event of a 

catastrophic engine failure; or 

(c) It must be shown that all possible 

liberated engine parts or components do 

not have adequate energy to penetrate 

engine cowlings; or 

(d) Assuming infinite fragment 

energy, and analyzing the trajectory of 

the probable fragments and components, 

any hazard due to liberated engine parts 

or components will be minimized and 

the possibility of crew injury is 

eliminated. Minimization must be 

considered during initial design and not 

presented as an analysis after design 

completion. 

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Federal Register / Vol. 76, No. 69 / Monday, April 11, 2011 / Rules and Regulations 19907 

Issued in Kansas City, Missouri, on April 

1, 2011. 

John Colomy, 

Acting Manager, Small Airplane Directorate, 

Aircraft Certification Service. 

[FR Doc. 2011–8547 Filed 4–8–11; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 9522] 

RIN 1545–BG94 

Clarification of Controlled Group 

Qualification Rules 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final regulation. 

SUMMARY: This document contains a 

final regulation that applies to a 

controlled group of corporations. The 

regulation clarifies that a corporation 

that satisfies the controlled group rules 

for stock ownership and qualification is 

a member of such group, without regard 

to its status as a component member. 

DATES:

Effective Date: This regulation is 

effective on April 11, 2011. 

Applicability Date: For date of 

applicability, see § 1.1563–1(e). 

FOR FURTHER INFORMATION CONTACT: Grid 

Glyer (202) 622–7930 (not a toll-free 

number). 

SUPPLEMENTARY INFORMATION: 

Background and Explanation of 

Provisions 

This document contains an 

amendment to 26 CFR part 1. On 

September 29, 2009, a notice of 

proposed rulemaking (NPRM) regarding 

the controlled group qualification rules 

under § 1.1563–1 was published in the 

Federal Register (REG–135005–07; 74 

FR 49829). The NPRM proposed to 

amend § 1.1563–1 to clarify that a 

corporation described in section 1563(b) 

as an excluded member of a controlled 

group of corporations is nevertheless a 

member of the group. The NPRM further 

proposed to add an example 

demonstrating that a controlled group of 

corporations can consist solely of 

excluded members. 

One comment was received and no 

public hearing was requested or held. 

The public comment concerned the 

treatment of gross receipts between 

members of a controlled group of 

corporations for purposes of section 41, 

which provides a tax credit to taxpayers 

for increasing their research activities. 

In particular, the comment refers to CCA 

200233011, dated May 1, 2002. In that 

CCA, the IRS Office of Chief Counsel 

concluded first that a domestic 

corporation and its majority-owned 

foreign subsidiaries should be treated as 

a single taxpayer for purposes of 

sections 41(f)(1)(A)(i), 41(f)(5) and 

1563(a) because they were members of 

the same controlled group of 

corporations even though the foreign 

subsidiaries were treated as excluded 

members of the group. 

Second, the IRS Office of Chief 

Counsel concluded that, given the 

particular facts and circumstances of 

that case, the taxpayer should exclude 

sales to its majority-owned foreign 

subsidiaries when computing gross 

receipts for purposes of determining its 

base amount under section 41(c). The 

commenter requested guidance on the 

facts and circumstances that caused the 

IRS Office of Chief Counsel to exclude 

such sales in computing gross receipts. 

The IRS and the Treasury Department 

believe that the requested guidance is 

outside the scope of the NPRM, which 

only involves the first issue addressed 

in the CCA, and is consistent with the 

conclusion of the CCA on that issue. 

However, the final regulation makes 

one clarifying change. Paragraph 

(a)(1)(ii) of the proposed regulation 

states that in determining whether a 

corporation is included in a controlled 

group of corporations, section 1563(b) 

shall not be taken into account. Section 

1563(b) defines a component member, 

including an excluded member and an 

additional member. Paragraph (a)(1)(ii) 

as now revised will also provide that the 

underlying regulation, § 1.1563–1(b), 

which defines a component member, 

shall not be taken into account in 

determining the members of a 

controlled group. 

Special Analyses 

It has been determined that this 

regulation is not a significant regulatory 

action as defined in Executive Order 

12866. Therefore, a regulatory 

assessment is not required. It also has 

been determined that section 553(b) of 

the Administrative Procedure Act (5 

U.S.C. chapter 5) does not apply to this 

regulation and because this regulation 

does not impose a collection of 

information on small entities, the 

Regulatory Flexibility Act (5 U.S.C. 

chapter 6) does not apply. Pursuant to 

section 7805(f) this regulation has been 

submitted to the Chief Counsel for 

Advocacy of the Small Business 

Administration for comment on its 

impact on small business. 

Drafting Information 

The principal author of this regulation 

is Grid Glyer of the Office of Associate 

Chief Counsel (Corporate). However, 

other personnel from the IRS and the 

Treasury Department participated in its 

development. 

List of Subjects in 26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

Adoption of Amendments to the 

Regulations 

Accordingly, 26 CFR part 1 is 

amended as follows: 

PART 1—INCOME TAXES 

■ Paragraph 1. The authority citation 

for part 1 continues to read in part as 

follows: 

Authority: 26 U.S.C. 7805 * * * 

■ Par. 2. Section 1.1563–1 is amended 

by: 

■ 1. Redesignating paragraph (a)(1)(ii) as 

paragraph (a)(1)(iii) and adding new 

paragraph (a)(1)(ii). 

■ 2. Adding Example 4 to paragraph 

(b)(4). 

■ 3. Adding a sentence at the end of 

paragraph (e). 

The additions read as follows: 

§ 1.1563–1 Definition of controlled group 

of corporations and component members 

and related concepts. 

(a) * * * 

(1) * * * 

(ii) Special rules. In determining 

whether a corporation is included in a 

controlled group of corporations, 

section 1563(b) and paragraph (b) of this 

section shall not be taken into account. 

For rules defining a component member 

of a controlled group of corporations, 

including rules defining an excluded 

member and an additional member, see 

section 1563(b) and paragraph (b) of this 

section. 

* * * * * 

(b) * * * 

(4) * * * 

Example 4. Individual A owns all of the 

stock of corporations X, Y and Z. Each of 

these corporations is an S corporation. X, Y, 

and Z are each members of a brother-sister 

controlled group, even though each such 

corporation is treated as an excluded member 

of such group. See § 1.1563–1(b)(2)(ii)(C). 

* * * * * 

(e) Effective/Applicability date. * * * 

Paragraph (a)(1)(ii) of this section 

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