6194 Federal Register / Vol. 71, No. 25 / Tuesday, February 7, 2006 / Rules and Regulations 

Actions Compliance Procedures 

(3) If you choose not to utilize the Aero Advantage vacuum pump monitoring system per 

STC SA10126SC, then do the following: 

(i) Remove the Airplane Flight Manual Supplement (AFMS) for STC SA10126SC 

and the placard for the vacuum pump 

monitoring system. 

(ii) Complete the appropriate logbook entry 

and Form 337 to show that the airplane 

is no longer equipped with STC 

SA10126SC. 

Prior to further flight after removing any Aero 

Advantage ADV200 series vacuum pump.

Not Applicable. 

(4) If you choose to utilize the Aero Advantage 

vacuum pump monitoring system per STC 

SA10126SC, then do the following: 

(i) Connect the replacement vacuum pump 

to the vacuum pump monitoring system. 

(ii) Make the following notation to the front 

of the AFMS for STC SA10126SC: ‘‘The 

Aero Advantage vacuum pump was removed to comply with AD 2005–**–**, 

and this AFMS now gives instructions for 

the operation of the vacuum pump monitoring system with a replacement vacuum pump.’’

(iii) Attach a copy of the Phoenix Group 

Service Bulletin No. 05–01, dated November 22, 2005, to the AFMS for STC 

SA10126SC. 

Prior to further flight after removing any Aero 

Advantage ADV200 series vacuum pump.

Connect the vacuum pump monitoring system 

with the procedures in Phoenix Group, 

Service Bulletin No. 05–01, dated November 22, 2005. 

(5) Do not install any Aero Advantage ADV200 

series (P/Ns ADV211CC and ADV212CW) 

vacuum pump. 

As of March 10, 2006 (the effective date of 

this AD).

Not Applicable. 

May I Request an Alternative Method of 

Compliance? 

(f) The Manager, Special Certification 

Office, Rotorcraft Directorate, FAA, has the 

authority to approve alternative methods of 

compliance for this AD, if requested using 

the procedures found in 14 CFR 39.19. For 

information on any already approved 

alternative methods of compliance, contact 

Peter Hakala, Aerospace Engineer, Special 

Certification Office, Rotorcraft Directorate, 

FAA, 2601 Meacham Boulevard, Fort Worth, 

Texas 76193–0190; telephone: (817) 222–

5145; facsimile: (817) 222–5785. 

May I Get Copies of the Document 

Referenced in This AD? 

(g) If you choose to utilize the vacuum 

pump monitoring system, you must connect 

the replacement vacuum pump with the 

instructions in Phoenix Group, Service 

Bulletin No. 05–01, dated November 22, 

2005. The Director of the Federal Register 

approved the incorporation by reference of 

this service bulletin in accordance with 5 

U.S.C. 552(a) and 1 CFR part 51. To get a 

copy of this service information, contact 

Phoenix Group, 9608 Taxiway Dr., Granbury, 

TX 76049; e-mail: 

phoenixgroup2@yahoo.com. To review 

copies of this service information, go to the 

National Archives and Records 

Administration (NARA). For information on 

the availability of this material at NARA, go 

to: http://www.archives.gov/federal_register/ 

code_of_federal_regulations/ 

ibr_locations.html or call (202) 741–6030. To 

view the AD docket, go to the Docket 

Management Facility; U.S. Department of 

Transportation, 400 Seventh Street, SW., 

Nassif Building, Room PL–401, Washington, 

DC 20590–001 or on the Internet at http:// 

dms.dot.gov. The docket number is FAA–

200520440; Directorate Identifier 2005–CE–

05–AD. 

Issued in Kansas City, Missouri, on January 

26, 2006. 

David R. Showers, 

Acting Manager, Small Airplane Directorate, 

Aircraft Certification Service. 

[FR Doc. 06–957 Filed 2–6–06; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2005–22875; Directorate 

Identifier 2005–NM–179–AD; Amendment 

39–14469; AD 2006–03–05] 

RIN 2120–AA64 

Airworthiness Directives; Short 

Brothers Model SD3–60 SHERPA, 

SD3–SHERPA, and SD3–60 Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), Department of 

Transportation (DOT). 

ACTION: Final rule. 

SUMMARY: The FAA is superseding an 

existing airworthiness directive (AD), 

which applies to all Short Brothers 

Model SD3–60 and SD3-SHERPA 

airplanes. That AD currently requires an 

inspection of the fork end of the rear 

pintle pin on each main landing gear 

(MLG) to verify that sealant is properly 

applied and is undamaged, and related 

investigative/corrective actions if 

necessary. This new AD requires an 

additional inspection for correctly 

applied sealant on the MLG rear pintle 

pin assemblies, and related 

investigative/corrective actions if 

necessary. This AD also expands the 

applicability of the existing AD. This 

AD results from a new report of a 

cracked pintle pin fork end. We are 

issuing this AD to prevent stresscorrosion cracking and subsequent 

failure of the MLG. 

DATES: This AD becomes effective 

March 14, 2006. 

The Director of the Federal Register 

approved the incorporation by reference 

of certain publications listed in the AD 

as of March 14, 2006. 

On March 18, 1993 (58 FR 7983, 

February 11, 1993), the Director of the 

Federal Register approved the 

incorporation by reference of Shorts 

SD3–60 Service Bulletin SD360–32–33, 

dated August 7, 1992. 

ADDRESSES: You may examine the AD 

docket on the Internet at http:// 

dms.dot.gov or in person at the Docket 

Management Facility, U.S. Department 

of Transportation, 400 Seventh Street, 


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Federal Register / Vol. 71, No. 25 / Tuesday, February 7, 2006 / Rules and Regulations 6195 

SW., Nassif Building, room PL–401, 

Washington, DC. 

Contact Short Brothers, Airworthiness 

& Engineering Quality, P.O. Box 241, 

Airport Road, Belfast BT3 9DZ, 

Northern Ireland, for service 

information identified in this AD. 

FOR FURTHER INFORMATION CONTACT: Dan 

Rodina, Aerospace Engineer, 

International Branch, ANM–116, 

Transport Airplane Directorate, FAA, 

1601 Lind Avenue, SW., Renton, 

Washington 98055–4056; telephone 

(425) 227–2125; fax (425) 227–1149. 

SUPPLEMENTARY INFORMATION: 

Examining the Docket 

You may examine the airworthiness 

directive (AD) docket on the Internet at 

http://dms.dot.gov or in person at the 

Docket Management Facility office 

between 9 a.m. and 5 p.m., Monday 

through Friday, except Federal holidays. 

The Docket Management Facility office 

(telephone (800) 647–5227) is located on 

the plaza level of the Nassif Building at 

the street address stated in the 

ADDRESSES section. 

Discussion 

The FAA issued a notice of proposed 

rulemaking (NPRM) to amend 14 CFR 

part 39 to include an AD that 

supersedes AD 93–02–03, amendment 

39–8485 (58 FR 7983, February 11, 

1993). 

The existing AD applies to all Short 

Brothers Model SD3–60 and SD3–

SHERPA airplanes. That NPRM was 

published in the Federal Register on 

November 9, 2005 (70 FR 67949). That 

NPRM proposed to continue to require 

an inspection of the fork end of the rear 

pintle pin on each main landing gear 

(MLG) to verify that sealant is properly 

applied and is undamaged, and related 

investigative/corrective actions if 

necessary. That NPRM also proposed to 

require an inspection for correctly 

applied sealant on the MLG rear pintle 

pin assemblies, and related 

investigative/corrective actions if 

necessary; it also proposed to expand 

the applicability of the existing AD. 

Comments 

We provided the public the 

opportunity to participate in the 

development of this AD. No comments 

have been received on the NPRM or on 

the determination of the cost to the 

public. 

Conclusion 

We have carefully reviewed the 

available data and determined that air 

safety and the public interest require 

adopting the AD as proposed. 

Costs of Compliance 

The following table provides the 

estimated costs for U.S. operators to 

comply with this AD. 

ESTIMATED COSTS

Action Work hours Average labor 

rate per hour Parts Cost per airplane 

Number of 

U.S. 

pregistered 

airplanes 

Fleet cost 

Inspection—(required by AD 93–02–03) .... 1 $65 None ........... $65 42 $2,730 

Inspection—(new action) ............................ 1 65 None ........... 65 42 2,730 

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 have 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 that 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. 

See the ADDRESSES section for a location 

to examine the regulatory evaluation. 

List of Subjects in 14 CFR Part 39 

Air transportation, Aircraft, Aviation 

safety, Incorporation by reference, 

Safety. 

Adoption of the Amendment 

■ Accordingly, under the authority 

delegated to me by the Administrator, 

the FAA amends 14 CFR part 39 as 

follows: 

PART 39—AIRWORTHINESS 

DIRECTIVES 

■ 1. The authority citation for part 39 

continues to read as follows: 

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

§ 39.13 [Amended] 

■ 2. The Federal Aviation 

Administration (FAA) amends § 39.13 

by removing amendment 39–8485 (58 

FR 7983, February 11, 1993) and by 

adding the following new airworthiness 

directive (AD): 

2006–03–05 Short Brothers PLC: 

Amendment 39–14469. Docket No. 

FAA–2005–22875; Directorate Identifier 

2005–NM–179–AD. 

Effective Date 

(a) This AD becomes effective March 14, 

2006. 

Affected ADs 

(b) This AD supersedes AD 93–02–03. 

Applicability 

(c) This AD applies to all Shorts Model 

SD3–60 SHERPA, SD3–SHERPA, and SD3–

60 airplanes, certificated in any category. 

Unsafe Condition 

(d) This AD results from a new report of 

a cracked pintle pin fork end. We are issuing 

this AD to prevent stress-corrosion cracking 


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6196 Federal Register / Vol. 71, No. 25 / Tuesday, February 7, 2006 / Rules and Regulations 

and subsequent failure of the main landing 

gear (MLG). 

Compliance 

(e) You are responsible for having the 

actions required by this AD performed within 

the compliance times specified, unless the 

actions have already been done. 

Restatement of Requirements of AD 93–02–

03 

Inspection 

(f) For Model SD3–60 and SD3–SHERPA 

airplanes: Within 300 hours’ time-in-service 

or 30 days after March 18, 1993 (the effective 

date of AD 93–02–03), whichever occurs first, 

perform a visual inspection of the fork end 

of the rear pintle pin on each MLG to verify 

that an undamaged fillet of sealant is 

properly applied around the flanges of the 

bronze bushings, in accordance with Shorts 

SD3–60 Service Bulletin SD360–32–33, dated 

August 7, 1992. 

(1) If an undamaged fillet of properly 

applied sealant is found: No further action is 

required by this AD. 

(2) If no fillet of sealant is found at the joint 

line, or if a damaged fillet of sealant is found: 

Prior to the accumulation of 1,200 hours’

time-in-service or 120 days after 

accomplishing the inspection required by 

paragraph (f) of this AD, whichever occurs 

first, remove the bushings and perform a 

magnetic non-destructive testing (NDT) 

inspection to detect faults of the bores in the 

fork end, in accordance with the service 

bulletin. If faults are found as a result of the 

NDT inspection, prior to further flight, repair 

the fork end of the rear pintle pin in a 

manner approved by the Manager, 

International Branch, ANM–116, Transport 

Airplane Directorate, FAA. 

New Requirements of This AD 

Inspection 

(g) For all airplanes: Within 3 months after 

the effective date of this AD, do a general 

visual inspection of the MLG rear pintle pin 

assemblies for correctly applied sealant, in 

accordance with Shorts Service Bulletin 

SD360–32–37, SD3 Sherpa–32–5, or SD360 

Sherpa–32–4, all dated July 2004, as 

applicable. 

(1) If the sealant is applied correctly: This 

AD requires no further work. 

(2) If the sealant is applied incorrectly: 

Within 12 months after the effective date of 

this AD, do a magnetic flaw detection 

inspection to detect cracks of the rear pintle 

pin fork ends, in accordance with the service 

bulletin. If any cracked pintle pin fork end 

is found: Replace it before further flight with 

a serviceable part that has been inspected in 

accordance with the requirements of this AD. 

Note 1: For the purposes of this AD, a 

general visual inspection is: ‘‘A visual 

examination of an interior or exterior area, 

installation, or assembly to detect obvious 

damage, failure, or irregularity. This level of 

inspection is made from within touching 

distance unless otherwise specified. A mirror 

may be necessary to ensure visual access to 

all surfaces in the inspection area. This level 

of inspection is made under normally 

available lighting conditions such as 

daylight, hangar lighting, flashlight, or 

droplight and may require removal or 

opening of access panels or doors. Stands, 

ladders, or platforms may be required to gain 

proximity to the area being checked.’’

Note 2: The service bulletins identified in 

paragraph (g) of this AD refer to Messier 

Dowty Special Inspection Service Bulletin 

32–70SD, Revision 1, dated July 3, 1995, as 

an additional source of service information 

for the inspection and corrective actions. 

(h) If any crack is detected during any 

inspection required by this AD and the 

service information specifies to contact the 

manufacturer for repair instructions: Before 

further flight, repair using a method 

approved by either the Manager, 

International Branch, ANM–116, Transport 

Airplane Directorate, FAA; or the Civil 

Aviation Authority (CAA) (or its delegated 

agent). 

Alternative Methods of Compliance (AMOCs) 

(i)(1) The Manager, International Branch, 

ANM–116, Transport Airplane Directorate, 

FAA, has the authority to approve AMOCs 

for this AD, if requested in accordance with 

the procedures found in 14 CFR 39.19. 

(2) Before using any AMOC approved in 

accordance with § 39.19 on any airplane to 

which the AMOC applies, notify the 

appropriate principal inspector in the FAA 

Flight Standards Certificate Holding District 

Office. 

Related Information 

(j) British airworthiness directive G–2004–

0022, dated August 25, 2004, also addresses 

the subject of this AD. 

Material Incorporated by Reference 

(k) You must use the service information 

identified in Table 1 of this AD to perform 

the actions that are required by this AD, 

unless the AD specifies otherwise. 

TABLE 1.—ALL MATERIAL INCORPORATED BY REFERENCE

Shorts service bulletin Date 

SD3 Sherpa–32–5, including Messier Dowty Special Inspection Service Bulletin 32–70SD, Revision 1, dated July 3, 1995 ...... July 2004 

SD360 Sherpa–32–4, including Messier Dowty Special Inspection Service Bulletin 32–70SD, Revision 1, dated July 3, 1995 .. July 2004. 

SD360–32–33 ................................................................................................................................................................................... August 7, 1992. 

SD360–32–37, including Messier Dowty Special Inspection Service Bulletin 32–70SD, Revision 1, dated July 3, 1995 ............. July 2004. 

(1) The Director of the Federal Register 

approved the incorporation by reference of 

the documents identified in Table 2 of this 

AD in accordance with 5 U.S.C. 552(a) and 

1 CFR part 51. 

TABLE 2.—NEW MATERIAL INCORPORATED BY REFERENCE

Shorts service bulletin Date 

SD3 Sherpa–32–5, including Messier Dowty Special Inspection Service Bulletin 32–70SD, Revision 1, dated July 3, 1995 ...... July 2004. 

SD360 Sherpa–32–4, including Messier Dowty Special Inspection Service Bulletin 32–70SD, Revision 1, dated July 3, 1995 .. July 2004. 

SD360–32–37, including Messier Dowty Special Inspection Service Bulletin 32–70SD, Revision 1, dated July 3, 1995 ............. July 2004. 

(2) On March 18, 1993 (58 FR 7983, 

February 11, 1993), the Director of the 

Federal Register approved the incorporation 

by reference of Shorts SD3–60 Service 

Bulletin SD360–32–33, dated August 7, 1992. 

(3) Contact Short Brothers, Airworthiness & 

Engineering Quality, P.O. Box 241, Airport 

Road, Belfast BT3 9DZ, Northern Ireland, for 

a copy of this service information. You may 

review copies at the Docket Management 

Facility, U.S. Department of Transportation, 

400 Seventh Street SW., room PL–401, Nassif 

Building, Washington, DC; on the Internet at 

http://dms.dot.gov; or at the National 

Archives and Records Administration 

(NARA). For information on the availability 

of this material at the NARA, call (202) 741–

6030, or go to 

http://www.archives.gov/federal_register/

code_of_federal_regulations/

ibr_locations.html. 


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Federal Register / Vol. 71, No. 25 / Tuesday, February 7, 2006 / Rules and Regulations 6197 

Issued in Renton, Washington, on January 

24, 2006. 

Ali Bahrami, 

Manager, Transport Airplane Directorate, 

Aircraft Certification Service. 

[FR Doc. 06–992 Filed 2–6–06; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Parts 1 and 602 

[TD 9249] 

RIN 1545–AR82 

Escrow Funds and Other Similar 

Funds 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final regulations. 

SUMMARY: This document contains final 

regulations relating to the taxation and 

reporting of income earned on qualified 

settlement funds and certain other 

escrow accounts, trusts, and funds, and 

other related rules. The final regulations 

affect qualified settlement funds, escrow 

accounts established in connection with 

sales of property, disputed ownership 

funds, and the parties to these escrow 

accounts, trusts, and funds. 

DATES: Effective Date: These regulations 

are effective February 3, 2006. 

Applicability Dates: For dates of 

applicability, see §§ 1.468B–5(c), 

1.468B–7(f), and 1.468B–9(j). 

FOR FURTHER INFORMATION CONTACT: 

Richard Shevak or A. Katharine Jacob 

Kiss, (202) 622–4930 (not a toll-free 

number). 

SUPPLEMENTARY INFORMATION: 

Paperwork Reduction Act 

The collections of information 

contained in these final regulations have 

been reviewed and approved by the 

Office of Management and Budget in 

accordance with the Paperwork 

Reduction Act (44 U.S.C. 3507(d)) under 

control number 1545–1631. The 

collections of information in §§ 1.468B–

1(k)(2) and 1.468B–9(c)(2)(ii) are to 

obtain benefits and the collection of 

information in § 1.468B–9(g) is 

mandatory. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless the collection of information 

displays a valid control number 

assigned by the Office of Management 

and Budget. 

The estimated annual burden per 

respondent is .40 hours. 

Comments concerning the accuracy of 

this burden estimate and suggestions for 

reducing this burden should be sent to 

the Internal Revenue Service, Attn: IRS 

Reports Clearance Officer, 

SE:W:CAR:MP:T:T:SP, Washington, DC 

20224, and to the Office of Management 

and Budget, Attn: Desk Officer for the 

Department of the Treasury, Office of 

Information and Regulatory Affairs, 

Washington, DC 20503. 

Books or records relating to a 

collection of information must be 

retained as long as their contents may 

become material in the administration 

of any internal revenue law. Generally, 

tax returns and tax return information 

are confidential, as required by 26 

U.S.C. 6103. 

Background 

This document contains amendments 

to 26 CFR part 1 under section 468B of 

the Internal Revenue Code (Code). This 

document does not adopt § 1.468B–6 of 

a notice of proposed rulemaking (REG–

209619–93) published in the Federal 

Register on February 1, 1999 (64 FR 

4801), relating to the current taxation 

and reporting of income earned on 

qualified settlement funds and certain 

other escrow accounts, trusts, and 

funds, which is withdrawn and 

reproposed by a notice of proposed 

rulemaking published elsewhere in this 

issue of the Federal Register. This 

document also does not adopt § 1.468B–

8 of the notice of proposed rulemaking, 

which is reserved. 

Section 468B was added to the Code 

by section 1807(a)(7)(A) of the Tax 

Reform Act of 1986, Public Law 99–514 

(100 Stat. 2814), and was amended by 

section 1018(f) of the Technical and 

Miscellaneous Revenue Act of 1988, 

Public Law 100–647 (102 Stat. 3582). 

Section 468B(g) provides that nothing in 

any provision of law shall be construed 

as providing that an escrow account, 

settlement fund, or similar fund is not 

subject to current income taxation, and 

that the Secretary shall prescribe 

regulations providing for the taxation of 

such accounts or funds, whether as a 

grantor trust or otherwise. 

On December 23, 1992, final 

regulations (TD 8459) under section 

468B(g) concerning the taxation of 

qualified settlement funds (QSF) were 

published in the Federal Register (57 

FR 60983) (the QSF regulations). The 

QSF regulations do not address the 

taxation of other types of escrow 

accounts, trusts, or funds. The preamble 

to the QSF regulations states that future 

regulations would address the income 

tax treatment of accounts, trusts, or 

funds other than QSFs, specifically, 

escrow accounts used in the sale of 

property and section 1031 qualified 

escrow accounts. 

On February 1, 1999, the IRS and the 

Treasury Department published a notice 

of proposed rulemaking (REG–209619–

93) in the Federal Register (64 FR 4801) 

regarding the proposed income tax 

treatment of these other funds. The 

proposed regulations provide rules for 

taxing income earned by (1) qualified 

escrow accounts and qualified trusts 

used in deferred like-kind exchanges 

under section 1031, (2) pre-closing 

escrows used in sales or exchanges of 

real or personal property, (3) contingentat-closing escrows established on 

account of contingencies existing at the 

closing of certain sales of business or 

investment property, and (4) disputed 

ownership funds established under the 

jurisdiction of a court to hold money or 

property subject to disputed claims of 

ownership. Additionally, the proposed 

regulations provide rules permitting a 

transferor to a QSF to elect taxation of 

the QSF as a grantor trust. 

Written comments responding to the 

notice of proposed rulemaking were 

received. A public hearing was held on 

May 12, 1999. After consideration of the 

comments, the proposed regulations are 

adopted as revised by this Treasury 

decision. 

Explanation of Provisions and 

Summary of Comments 

1. Election To Treat a Qualified 

Settlement Fund as a Grantor Trust 

Under § 1.468B–1(k) 

The proposed regulations provide 

that, if there is only one transferor to a 

qualified settlement fund, the transferor 

may make an election to treat the 

qualified settlement fund as a grantor 

trust, all of which is treated as owned 

by the transferor (a grantor trust 

election). The election may be revoked 

only for compelling circumstances upon 

consent of the Commissioner by private 

letter ruling. 

Commentators recommended 

expanding the scope of the grantor trust 

election by allowing the election even if 

there are multiple transferors to a 

qualified settlement fund. Certain 

commentators suggested that this rule 

could be limited to situations in which 

all of the grantors are members of the 

same consolidated group. These 

comments were not adopted because 

they would result in undue complexity. 

For example, extending the grantor trust 

election to multiple-transferor trusts 

would require the allocation of items of 

income, deduction and credit (including 

capital gains and losses) among the 

various transferors. Although § 1.671–3 

of the Income Tax Regulations contains 


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